Patch_W_Adams's St Louis Blog

CEO Rejects $22M Parachute; Will Others Follow?

Robert Willumstad Opted Out of His AIG Severance Package; Will Other Execs Do the Same or Will the Law Do It for Them?

 By ALICE GOMSTYN
ABC NEWS Business Unit
Sept. 23, 2008

Who in his right mind would walk way from an eight-figure severance package? Try Robert Willumstad.

Former AIG CEO Robert Willumstad, citing shareholder and employees losses that resulted from AIG's... Former AIG CEO Robert Willumstad, citing shareholder and employees losses that resulted from AIG's drop in shares, has declined to accept $22 million in severance from the ailing insurance giant. If proposed federal legislation is passed, other top executives could give up some of their compensation too -- albeit, not voluntarily. (ABC News)

Willumstad, 63, served as the chief executive officer of ailing insurance giant American International Group from June until he was replaced earlier this month. He was eligible for a severance package of $22 million, but in a Sunday e-mail to his successor, Edward Liddy, he said that he would decline the package.

"I prefer not to receive severance payments while shareholders and employees have lost considerable value in their AIG shares," he wrote in an e-mail, according to a person familiar with the situation.

Given this year's turmoil in the stock and credit markets, AIG is far from the only firm to see massive drops in share value. But don't expect executives from other financial firms to follow Willumstad's example, at least not voluntarily, said Robert Reich, the former U.S. labor secretary under President Clinton and a professor of public policy at the University of California at Berkeley.

To read the Whole Story Go To:

http://abcnews.go.com/Business/MarketTalk/story?id=
5861458&page=1