Martin Sullivan, Minute by Minute

American International Group is bestowing some lovely parting gifts on former chief executive Martin Sullivan. It laid out the details in an 8-K report filed Tuesday with the Securities and Exchange Commission.

And what details! A cool $15 million just for walking out the door, along with $4 million in prorated bonus and, for good measure, long-term stock and cash incentives worth roughly $28 million. Total: $47 million.

(This, by the way, doesn't count an additional $17 million in pension payments and deferred-compensation. Paul Hodgson of the corporate governance firm Corporate Library estimated the value of those additional assets in a Financial Times article.)

Granted, Sullivan joined AIG when he was 17 and has worked at the firm for 37 years. But he was C.E.O. for only three years and three months. A total of 1,190 days.

So, even if we leave out his pension and deferred compensation -- not to mention his regular salary ($1 million in 2007) and annual bonuses ($3.6 million in 2007; $10.1 million in 2006) -- AIG was very generous to someone who was roundly considered a not-very-successful C.E.O.

That $47 million severance package works out to $276,470.59 per week every week during his disappointing tenure. That's nearly $39,500 per day -- $1,645 per hour, 24 hours a day, seven days a week. And, remember, this is just the severance pay.

What did the shareholders get out the deal? AIG stock closed at $61.92 a share on the day Sullivan was promoted to the corner office in March 2005. It closed at $34.01 on the day he left last month.

That's a 45 percent decline, about three times the decline of the NYSE Financial Index over the same period. Does that justify a platinum parachute?

For the time that Sullivan will be rewarded with his $40,000-a-day severance package, shareholders suffered an aggregate decline in the value of their stock of about $58.4 million per day.

That, by the way, works out to more than $2.4 million per hour, $40,555 per minute, $676 per second.

by Mark Stein

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