AIG Restricts Exec Compensation, CEO Gets A Dollar

CHARLOTTE, N.C._American International Group Inc. said Tuesday it is limiting how much it pays its top executives, including granting a $1 salary for this year and the same for 2009 to its Chief Executive Edward Liddy.

The decision is one of many broader moves made by the troubled New York-based insurer, which has been under pressure to restrict executive pay since accepting billions in government assistance to save it from collapse. AIG has received about $150 billion so far, more than any other company.

It was once the world’s largest insurer with customers around the globe, and regulators feared the possible effect an AIG collapse would have had on the world’s financial system.

The company said there will be no 2008 annual bonuses and no salary increases through 2009 for AIG’s top seven officers and no salary increases through 2009 for the 50 next-highest AIG executives.

“We believe these actions demonstrate that we are focused on overcoming our financial challenges so AIG can return value to taxpayers and shareholders,” Liddy said in a statement.

AIG shares fell 9 cents, or 5 percent, to $1.68 in midday trading.

The announcement comes after New York Attorney General Andrew Cuomo sent a letter to Liddy earlier this month saying AIG should be “completely transparent” about its compensation plans for 2008.

In mid-September, the Federal Reserve said it would offer two loans totaling $123 billion to AIG to help the insurer stave off bankruptcy. AIG was later allowed to access another $20.9 billion through the Fed’s “commercial paper” program. And earlier this month, the government announced new financial assistance to the company.

In a letter to Cuomo on Tuesday, Liddy said AIG is “extremely grateful” for the support it has received from American taxpayers, and said the company does “recognize the obligation we have to use that support to help AIG recover, contribute to the economy and repay taxpayers.”

AIG also said no taxpayer dollars will be used for any annual bonuses or future cash performance awards for AIG’s top management positions.

Liddy, who joined the company in mid-September, will not receive an annual bonus this year or next, although he may be eligible for a special bonus for “extraordinary performance” payable in 2010, the company said.

Earlier this month, AIG ended 14 voluntary deferred compensation programs, resulting in $500 million of payouts due in the first quarter of 2009.

The company said it made the move to prevent employees from having to leave to collect deferred pay. The old plans had been set up so that employees could defer pay voluntarily and collect it when they left AIG, no matter the reason.

Several struggling financial institutions have announced in recent weeks that they are canceling bonuses for top executives, including Goldman Sachs, the Swiss bank UBS and the British bank Barclays.

Cuomo has praised those moves and suggested that other Wall Street institutions should follow suit, especially those receiving federal bailout money.

Posted in UBI NEWS

U installing solar panels

A new project to help the University of Utah go green is going to take a lot of green in the short term.

The U is getting its first solar panels ever. But at a cost of $90,000, minus a $30,000 state grant, it’ll take 65 years for the U to see the payback.

Energy department program manager Jay Sisam is glad for the help. “It actually offset about $30,000 of the cost, or roughly 33 percent, making it feasible for us to do, particularly since this project is mostly installed as a demonstration project,” he said.

Even with the up-front costs, Sisam believes there’s value in leading the way. “If it weren’t for maybe paying the high cost up front, I don’t know that we would see development to a point where solar panels would be more available,” he said.

Sisam also points out that one reason it will take so long for the solar panels to pay for themselves is that the University pays much less for its power than the average residential customer, in part because the U does so much of its own maintenance. He says the upshot is that it would take the U about twice as long to see a payback from solar panels as it would a residential power customer.

Sisam says you also have to consider the savings of a project including solar panels in light of other savings performed as part of that same project. For example, the panels installed on the Turpin Services building are part of a remodel that includes using daylight to reduce the amount of electricity consumed by traditional lighting.

Posted in UBI NEWS

Hotel occupancy rates decline

SALT LAKE CITY (AP) — Hotel occupancy rates — a key indicator of the health of the state’s tourism industry — declined nearly 5 percent in Utah last month compared with last year.

Figures from the Rocky Mountain Lodging Association show the statewide occupancy rate in October was 62.2 percent, down from 66.8 percent in 2007.

Salt Lake County saw a decline from 72.1 percent in 2007 to 66.8 percent last month.

Larry Hansen, executive director of the Utah Hotel & Lodging Association, says he’s not happy about the decline, but says Utah is still fortunate to be doing better than it was following the Sept. 11 attacks.

In 2001, occupancy rates across Utah were about 54 percent

Posted in UBI NEWS