Giant insurance company AIG has decided to award its former CEO, Martin Sullivan, a termination package worth $47 million. Yes, this is the same Martin Sullivan who presided over a record loss of more than $13 billion in the past two quarters and a tumble in stock value of 47 percent. For all of this, his package includes a $4 million bonus for the past year’s work -that is, if you can call watching this much money fly out the window work.
Don’t try this at home, kids. It can only be done by miraculously lucky CEOs who have made it into the cozy club run by disengaged boards comprised of equally lucky past and current CEOs, where real world ideas about performance and pay, about value and results, about good judgment and common sense, apply to many parts of the company. Too often, the boardroom is not one of them.