Maurice "Hank" Greenberg, the former chief executive of American International Group, said the executives who recently received bonuses do not deserve them because they lost money for the company.
In an interview last night on PBS Television's "The Charlie Rose Show," Mr. Greenberg said the executives at AIG Financial Products who produced the losses should not receive money.
He said the bonus arrangement with the group was that AIG Corporation would put up a portion of money for investing and AIGFP would put up the other half. He said it is unfathomable how, after losing money, the company should be paying executives anything.
"Why would you then give them a bonus to make up for what they lost?" asked Mr. Greenberg. "Where is the equality of that?"
He said there was no reason to provide an incentive to retain these executives because they have nowhere to go, and if they did leave they "could have been replaced very quickly."
Mr. Greenberg, who was forced out of his job in 2005 over an accounting scandal but retains a considerable stockholding in his old company, said that after AIG lost its "triple-A" rating it should have stopped trading in credit default swaps.
He added that if the company had done so it would be fine today, commenting that the problem at AIG is not that it is losing money, but that it is bleeding dollars to put up collateral for credit default swap losses.
He was also critical of the need for so much money being poured into the company, saying that other forms of collateral could be used, including government guarantees, adding that contracts should be negotiated.
The liquidation of AIG, he continued, makes no sense, since the sale of the assets would have to be done at bargain basement prices. The government, he continued, should be concentrating on rebuilding the company and extending the loan period to allow for the rebuilding.
"What have you achieved [by breaking up AIG]?" asked Mr. Greenberg. "You've taken the greatest insurance company in the history of this country and destroyed it."
On the current global economic crisis, Mr. Greenberg observed, "We have not confronted what we are living with now in our lifetime."
He added that it is difficult to predict when this might end, calling any timeline "speculation." With obtaining credit still difficult and consumers not spending, the public will be much more conservative than in the past.
"It will be a lifetime before people will feel comfortable again," Mr. Greenberg remarked. "We are on new ground."
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