Marketplace Scratch Pad

I quit, now cut me a check

Scott Jagow Dec 31, 2009

In what world can someone quit their job and get paid millions of dollars in severance pay? I think you already know the answer.

AIG’s top lawyer Anastastia Kelly resigned yesterday, effective immediately. She’s expected to take home severance of around $3 million to $4 million. She resigned for “good reason,” which was that her base salary was reduced by the government. Suzanne Folsom, AIG’s chief compliance officer, also left the company.

Kelly tried to lead a rebellion against the government limits on pay, but that effort fizzled. More from Businessweek:

“General counsel are supposed to be setting a prime example of good ethics at a company, not acting as carpetbaggers as they leave,” Frank Glassner, chief executive officer of Veritas Executive Compensation Consultants LLC, said yesterday in an interview. “This severance pay is ridiculous.”

But 24/7 Wall Street makes the point:

No one from the outside wants to go work at AIG. Can you imagine getting a call from a headhunter…. “Hi, now before you hang up I want you to think about this. How would you like to be an executive at AIG?”….. “Well, sure there are just a few restrictions and there is going to be constant scrutiny and criticism from, well, everyone.”… “Sure, there are some restrictions on your pay, well, or, if not, it will end up in the newspapers.”…

Some may say “good riddance” on these departures. Taxpayers and politicians do have the right to be more than upset with AIG. There are only billions and billions of reasons as to why. But someone still has to run the company even if the only goal is so that taxpayers do not get trounced. It is very unlikely that these positions can be run by charitable social workers in New York.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.