Last Updated Jun 19, 2008 12:56 PM EDT
Sullivan was kicked out of office this week after shareholders and investors complained that the insurance and financial giant posted two quarters of gigantic losses. According to figures from The Corporate Library, Sullivan's payout package is worth $68 million, despite his less-than stellar performance.
Of course, Sullivan had a hard act to follow. He had been COO of AIG when infamous founder and CEO Maurice "Hank" Greenberg was forced out in 2005 after a still-curious go-round with Eliot Spitzer. The hard-charging former New York Attorney General and Governor, of course, recently resigned after a scandal involving a prostitute. Prosecutor Spitzer made plenty of noise about Greenberg, setting the stage for Greenberg's departure, but never got around to having him indicted.
Sullivan had a tough task from the beginning. He had to restate several years' worth of earnings, paid out $1.64 billion for fraud and bid-rigging issues, and got stuck in the mud of the subprime mortgage swamp.
This February, AIG posted a $5.3 billion quarterly loss, the biggest ever until that was exceeded by the next quarterly loss of $7.8 billion. On June 15, AIG announced that Sullivan would be replaced as CEO by Chairman Robert Willumstad.
One could argue that Sullivan was playing a stacked deck, but then, he didn't exactly rescue AIG, did he? So why the big parachute? Once again, the fires of executive compensation excess are being stoked and The Corner Office will keep you abreast. Look for future posts to deal with "Say on Pay" according to Democratic presidential candidate Barack Obama among other issues.