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If I Were the CEO of AIG: My Letter About Bonuses

If I Were the CEO of AIG: My Letter About Bonuses

by Frank Roche on March 18, 2009

in Business, Communication, Economy

If I were AIG CEO Edward M. Liddy, here’s the letter I’d send to employees:

March 18, 2009

To: AIG Employees

From: Edward M. Liddy, CEO

Re: Bonuses, Profitability, and Ethics

Colleagues,

I’m not going to beat around the bush: There won’t be any bonuses this year. None.

Let’s talk about why.

Starting Today, We’re Going to Do the Right Thing
We did a lot of things wrong. We took too many risks with other peoples’ money. We weren’t diligent. And when we took massive risks, we weren’t vigilant. We didn’t do the right thing.

Starting today, we’re going to do the right thing. Every day. That starts with being honest with you and with the American people, who have given us over $165 billion dollars. Read that number again: $165 billion.

Doing the right thing means doing good business. It means understanding everything we do. It means not hiding behind a cloak of secrecy. It means making decisions every day that you’d be proud to tell your mother about.

We’re Going to Pay for Performance
We didn’t perform. No performance, no bonuses, no exceptions.

It’s not that hard to figure out. We squandered a lot of money. We didn’t perform as a business. When we’re profitable again, we’ll pay bonuses. Until that time, we’ll pay market-based salaries.

We’re Going to Eliminate Some Jobs
I know you heard me talk in the media about the need to attract and retain talent. That’s right — talent. We want the right people at AIG. Right now, we have the wrong people in some jobs. They won’t be working with us.

Rebuilding AIG is going to take new thinking. It’s not going to be fixed by the very people who got us into this mess by taking massive risks and then acting like they didn’t know what was happening when it all collapsed. Right now, I’m meeting with the SVPHR and other senior officers to talk about who will be going. We’ll be making that announcement in the next 24 hours.

Good People Will Want to Be with a Company That Does the Right Thing
Bonuses are good when performance warrants it. I know some of you will be saying that we’re going to kill the company if we let people go. I say there’s lot of really talented people out there who can help us right away. People who are motivated to do the right thing and want to be part of rebuilding an international company back into a company we can all be proud of. In fact, I want to hear from people like that myself. If you have what it takes and are ethical beyond reproach, you’re who we want here. Please send me an email at edward.liddy@aig.com. I promise to get right back to you. Myself.

We can do this the right way. Today is the first step. I want people who are proud to be doing the right thing. Paying undeserved bonuses isn’t the right thing. I’m glad I said it. Doing the right thing is always the right thing to do.

Signed,

Ed

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