AIG is hardly the only company giving bonuses to executives who have failed miserably at their jobs. Chicago is chock full of examples where compensation doesn't appear to be linked to performance.
"Despite plunging stock values and shrinking profits, most CEOs of Chicago's biggest companies got substantial raises and many pocketed seven-figure bonuses in 2008, plus hefty stock incentives to cash in big time when business turns around," Crain's Chicago Business reports.
"Local CEOs typically saw their base salaries increase by 3.3% to 11.1%, according to compensation data from annual proxy statements now coming into the Securities and Exchange Commission from the Chicago area's 25 largest publicly traded companies. Promotions meant raises of 20% to 40% for top execs at Motorola Inc., Sears Holdings Corp. and Fortune Brands Inc."
Crain's names some names.
- Walgreens' Jeffrey Rein, now departed, received $1.4 million in bonuses and incentives.
- Deere & Co.'s Robert Lane pulled in $6.9 million.
- Sara Lee's Brenda Barnes saw her salary jump 15 percent, to $1.15 million (on top of $2 million in cash incentives).
- ADM's Patricia Woertz saw her stock awards triple, to more than $10 million; her $1.2 million salary get a 7.7 percent hike; and got a $3 million cash bonus.
Crain's notes that "rank-and-file workers at many companies face stagnant wages, pay cuts or layoffs."
Maybe that's what the executives are being rewarded for.