AIG
Compensation Management is not for Sissies
Monday, August 17th, 2009 | Compensation Plans, EIM | No Comments
Any of us who have had the pleasure of being responsible for compensation management can relate to some of the recent events at AIG, albeit on a smaller and hopefully less dramatic scale. If you’re not up to speed, this article will give you the scenario.
Here are some key excerpts:
The disclosures came as AIG was lambasted for about $450 million in bonus payments planned for employees at a business unit that lost $40.5 billion last year. The unit’s woes pushed the company to near-collapse, forcing the government bailout.
“Something is terribly wrong with this picture, and the reckless behavior at AIG must stop immediately,” said Rep. Elijah Cummings (D., Md.), in a statement Sunday. He called on AIG’s government-appointed chief executive, Edward Liddy, to resign over the bonus-payments issue.
The reason we can relate is because this basic scenario occurs regularly at every company that uses variable pay to incent performance. That is, sometimes people achieve on their plans even though the business overall is suffering. And in many cases we have people who qualify for large payouts even though they clearly don’t deserve them. › Continue reading
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Recession Driving Non-Cash Incentives?
Thursday, March 19th, 2009 | Callidus, Compensation Plans, EIM, Non cash incentive | No Comments
Callidus and IncentOne describe a move by companies to use more non-cash based incentives mixed in with traditional cash based rewards in a jointly released article earlier this week. The headline indicates Challenging Economic Times as a driver. We did not hear much about this strategy from the customers we spoke to during our recent informal survey on the topic, well, unless you would describe job insecurity as a non-cash incentive. Admittedly though, it makes sense: if you don’t have the cash, try using non-cash motivators. Perhaps AIG should have pursued this. Is your company introducing more non-cash incentives into compensation plans in reaction to the tough economy?
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