We here in Oregon are getting a double dose of undeserved bonus outrage. Most attention is being given to $165 million in payments to AIG employees who oversaw the crazy financial dealings that led to the company's near collapse.
But let's not lose sight of our own local corporate outrageousness: Portland General Electric's CEO, Peggy Fowler, is retiring after being given a final pay package of $4.5 million and a retirement plan of $790,000 a year.
Our electricity comes to us via the excessively expensive graces of PGE. We've been trying to save energy by using compact fluorescent bulbs, wrapping duct pipes, replacing old windows, and adding more insulation.
But our monthly electricity bill keeps going up regardless, because PGE raises rates faster than we're able to cut down on our usage. Which makes Fowler's golden parachute deeply irritating, since we and other PGE customers are paying for it.
As the Oregonian article says:
Ratepayer advocates described the pay package as one more sign of a bloated cost structure at PGE, and said it betrayed a lack of accountability at a time when the utility is raising rates and thousands of customers are losing their jobs.
"What this shows is that there's no such thing as an economic downturn for the management of a monopoly utility," said Bob Jenks, executive director of the Citizen's Utility Board. "This is the highest cost utility in the region. They raised rates last year. At a time when the economy is suffering, where's the impact on the utility?"
The parallels between AIG and PGE are interesting -- beyond the fact that both companies have a three letter abbreviated name.
Back in 2003, in "The Public Fleecing by PGE," the Oregon Public Power Coalition said:
In 2002, PGE/Enron paid almost $1 million in retention bonuses to the company’s top five executives. PGE's CEO Peggy Fowler was paid a salary of $346,000, a performance-based bonus of $200,000 and a retention bonus of $400,000, for a total of $946,000 for 2002. In comparison, the head of the Los Angeles PUD makes $200,000 annually. The Oregonian wrote in a May 1, 2003 editorial (Adding insult to injury at PGE) criticizing PGE executive bonuses, "But it's the wrong tactic for a company whose workers lost their 401(k) savings in worthless Enron stock. And it's an insult to customers hit with 30 percent and 50 percent power rate increases."
Fowler and PGE have been blazing the outrageous bonus trail for AIG -- which also is out to reward its employees for costing the public huge amounts of money via incompetent managerial decisions.
Today we learned that much of AIG's taxpayer-supplied $170 billion went to pay overseas firms that had insured their mortgage-backed investments with AIG. When the securities went bad, they wanted their money.
Only problem was, AIG had neglected to put aside funds to back the insurance that had been issued. Seems like someone at the country's largest insurance company would have thought of this.
But hey, no problem! AIG just ponied up to the public trough and asked the federal government for a bailout. To prevent a world financial meltdown, the feds had to fork over the money.
And now the shameless incompetents at AIG want to reward the people who engineered this disaster with $165 million in bonus and retention payments. Shades of PGE.
AIG is claiming that the bonuses are needed to retain key employees in the company's financial products unit. As the New York Times says:
That unit was the source of the financial derivatives blamed for the near-collapse at the heart of the economy’s downturn.
On the radio today I heard someone say, "If these are the best and the brightest, then what AIG needs are the worst and dumbest."
Right on. Why the heck should the taxpayers, who own 80% of AIG after all of the government bailouts, fork out more money to keep people who should be fired?
And why should PGE customers, like my wife and me, pay Peggy Fowler many millions of dollars for raising our electricity rates considerably above those of other utilities in the Northwest?
[Update: Here's a clever idea from a congressman -- add a surtax that would only apply to the AIG bonuses, thereby effectively taxing them out of existence and returning the money to government. Excellent.]