However, the news about the billions of dollars in
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Study: Case Compensation Controversies at AIG 1. What types of work behaviors did AIG intended to encourage through its retention bonus plan? Through its retention bonus plan AIG intended to encourage two types of work behaviors from their employees. The first and most important work behavior was loyalty to the company. Although the Financial Products unit was being shut down, the company came up with the...
Compensation problems have been highlighted in much of the coverage of the financial crisis, including a number of reports from the Institution of International Finance. (See, for example, Report of the IIF Committee on the Market Best Practices: Principles of Conduct & Best Practice Recommendations, Financial Services Industry Response to the Market Turmoil of 2007-2008.) These reports have made some sensible recommendations relating to executive compensation practices, mostly aimed at aligning compensation incentives with risk-adjusted performance and providing for recourse when the rewarded performance later results in undesirable outcomes.
However, the news about the billions of dollars