By Andrew L. Jaffee

There are good corporate executives, who care about their companies, employees, and shareholders; and there are bad ones, driven mainly by their own greed, thinking only of personal perks and big pay checks. The malfeasant executives helped to create the current worldwide financial crisis — all with the help of consumers with bad credit histories, borrowing beyond their means. There are respectable executives, like AIG’s CEO Edward Liddy, who are willing to make personal sacrifices in the interest of rebuilding their firms, and then there are narcissists like the top guns at Ford, Chrysler, and GM, who can’t see past their own greed.

Banks, brokers, and investment houses across the globe are facing major financial problems, mainly because of silly investments (speculation) in “risky subprime mortgages made to people with tarnished credit or low incomes.” Some of the largest and well-known banks are struggling and/or verging on the brink of insolvency, like Citigroup, JPMorgan Chase & Co., Bank of America Corp., and AIG. Companies like Ford, GM, and Chrysler are similarly struggling, not directly due to the sub-prime mortgage meltdown, but because of continuous, faulty decision-making, and the greedy and opaque practices of their unionized work-forces. There are several corporate executives, role-models for other managers, who are smart enough to make very strong, symbolic gestures, and forgo personal aggrandizement for the sake of their companies. From CNNMoney.com entitled, “AIG chief slashes salary to $1:”

AIG Chief Executive Edward Liddy agreed to slash his annual salary to $1 as part of a series of voluntary pay restrictions by top executives tied to a massive $150 billion government bailout.

AIG (AIG, Fortune 500) will also forgo bonuses this year and eliminate pay increases through 2009 for the firm’s top executives.

Liddy will get paid $1 per year for 2008 and 2009, with his compensation consisting entirely of equity payments. While he will not receive bonuses during those years, he will be eligible in 2010 for “extraordinary performance.” He will also be ineligible for severance payments.

“This action by the senior management team demonstrates not only that we understand our obligation to taxpayers and shareholders, but also that we are committed to the future success of this organization,” said Liddy in a statement.

In addition to Liddy, Paula Reynolds, whom AIG hired as chief restructuring officer in October, will receive no salary or bonuses in 2008. From 2009 onward, any compensation above her base pay will be tied to the progress of AIG’s restructuring.

“It is only fair that top executives, who benefit the most when firms do well, should also bear the burden of the difficult economic consequences their firms now face,” said New York state Attorney General Andrew Cuomo in response to a letter from Liddy informing him of the pay cuts.

Cuomo had voiced concern about AIG’s expenditures in October after it was reported that the company had spent $440,000 on a weekend meeting at a resort. Subsequently, AIG immediately cancelled 160 events, worth an estimated $8 million. …

In all probability, Liddy and Reynolds have sufficient cash reserves and investments to live comfortably, but the important point is the gesture they are making to show a commitment to their companies, employees, and shareholders — and to taxpayers who are lending their hard-earned dollars to help prop these firms up via the current federal bailout program.

In contrast, we have the heads of Chrysler, Ford, and GM, seemingly ignorant of, or too arrogant to care about public relations, flaunting their corporate perks while their companies face bankruptcy. From the Washington Post in the article, “Auto Execs Fly Corporate Jets to D.C., Tin Cups in Hand:”

There are 24 daily nonstop flights from Detroit to the Washington area. Richard Wagoner, Alan Mulally and Robert Nardelli probably should have taken one of them.

Instead, the chief executives of the Big Three automakers opted to fly their company jets to the capital for their hearings this week before the Senate and House — an ill-timed display of corporate excess for a trio of executives begging for an additional $25 billion from the public trough this week.

“There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,” Rep. Gary L. Ackerman (D-N.Y.) advised the pampered executives at a hearing yesterday. “It’s almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo. . . . I mean, couldn’t you all have downgraded to first class or jet-pooled or something to get here?”

The Big Three said nothing, which prompted Rep. Brad Sherman (D-Calif.) to rub it in. “I’m going to ask the three executives here to raise their hand if they flew here commercial,” he said. All still at the witness table. “Second,” he continued, “I’m going ask you to raise your hand if you’re planning to sell your jet . . . and fly back commercial.” More stillness. “Let the record show no hands went up,” Sherman grandstanded.

By now, the men were probably wishing they had driven — and other members of the House Financial Services Committee weren’t done riding the CEOs over their jets. “You traveled in a private jet?” Rep. Nydia M. Velázquez (D-N.Y.) contributed. Rep. Patrick T. McHenry (R-N.C.) felt the need to say that “I’m not an opponent of private flights by any means, but the fact that you flew in on your own private jet at tens of thousands itself dollars of cost just for you to make your way to Washington is a bit arrogant before you ask the taxpayers for money.”

It was a display of stone-cold tone-deafness by the automaker chiefs. In their telling, they have no responsibility for the auto industry’s current mess. Threatening the nation with economic Armageddon if they are not given government aid, they spent much of the session declaring what a fine job they’ve been doing in Detroit. …

What flagrant self-absorption and lack of empathy — enough to cause revulsion and nausea. These goons are so arrogant that they won’t even admit to 30 years of well-documented inflexibility in the face of foreign competition, and their companies’ history of idiotic decision-making.

If you were a shareholder or customer of such institutions, would you as a shareholder vote for any of these guys or buy their companies’ products and services? I wouldn’t.