A Fool’s Attempt at Due Diligence – Loss of life savings and more

For those of you who read this blog or have stumbled upon it by means of your layman “due diligence”, please read further.  Due Diligence is not for the inexperienced and cannot come from the credence good community (See credence goods).  Due Diligence must not be attempted, it must be undertaken.  And if this does not happen correctly, you might as well end up with the undertaker!  If you purchase due diligence from a credence good provider, you’re an idiot!  That’s what I said, an I-D-I-O-T!  If you buy it from a lawyer who is benefiting from the decision because he sells his services to people in the industry he’s investigating, then you’ve been had.  If you do it yourself with the lack of knowledge, you’ve been had.  If you hire a consultant that has something to gain or operates within the industry, you’re being hoodwinked.  Even if you hire someone or take advice from someone who is not gaining from the relationship and they have not been in the industry, you’re going to lose.

“So Bloody, if I cannot do it myself and I cannot hire one who is in the industry, to whom do I turn?”

Great question, I say.  Great question.  So to whom do you go?  Well, that in and of itself should make you so gunshy that you run in the other direction with great speed.  But if you’re like 99.9% of the majority of blokes who still believes that franchising can provide you with “the freedom of owning your own business without having to do the groundbreaking”, you deserve to lose your life savings and more.  Anyone who sets out to do due diligence and comes to the conclusion that franchising is any safer than opening up one’s own business, did a piss poor job of due diligence.  The statistics are there for everyone to see.  It’s called the Internet!

The golden rule to due diligence is:  When you find something that smells, don’t eat it! It’s not good for you no matter how much sugar you put on it!

Due diligence of a franchise is as important as proving a business plan to a potential investor.  When it comes to a franchise, you are the investor and if you eff up, you’re going to lose it all!  So don’t be so stupid and don’t give the franchisor the benefit of the doubt.  Be an effing Missouri mule and MAKE THEM PROVE EVERY BLOODY THING THEY SAY TO YOU!  IF THEY CANNOT, THEY ARE LYING!  IF THEY TELL YOU YOU WILL MAKE $50,000 A MONTH, MAKE THEM PUT IT IN WRITING!  IF THEY REFUSE, TELL THEM THEY ARE LIARS AND LEAVE!

It only takes one subtle thing to go wrong and you will be completely broke and most likely without for the rest of your life.  The banks don’t care, the lawyers don’t care, the government doesn’t care and damned if I know why I care.  Maybe it’s because I’ve been there and don’t want you to have to go through what I had to in order to find out the ugly side of franchising.

Oh, one more thing; if you find any franchisor that will stand behind the asinine claims they make and put it in writing, send it to me or comment on it.  I have yet to find a single one that will.  Ever hear of a carnival?  There’s a reason they come into town at night, set up their tents and leave in a week!  Franchisors are the direct descendants of gypsies and carnival operators.

Bloody

Getting the Zor’s attention

Visit BlueMauMau and you can read rants and arguments all day.  Sad to say, they are one of the few sites that encourage the criticism as opposed to so many others that spin franchising as an entrepreneurial venture (not!) and somehow are still able to sleep at night selling more and more displaced corporate or vets down the river with their silver tongues.  If you’re a franchisee who’s been destroyed, what else do you have to do?  You can bitch and moan and the lawyers will simply tell you you’re effed up because you signed the freakin’ document, idiot!  

Or maybe you’re a lawyer and you’ve finally come to the realization that you’re the one who is effed because by the time the franchisee figures out he needs help, he’s broke and you have no market!  And if you play both sides of the fence, then you have no say.  Pick a side or get the hell out of the way lawyers!  For you to continue taking even prospective franchisee money in exchange for due diligence on a single company is a travesty!  As I said in a post on BlueMauMau, what happens if the company is not worthy of investing in, do you then charge your prospective franchisee client another $5,000 to vet a second company to come to the same result?  

Maybe you’re a broker who is bottom surfing for that stupid bloke who is vulnerable and gullible and stupid enough to be so tight that he won’t pay a lawyer to do his due diligence for him and he believes you are dealing in “good faith”. Ha!  You’re all missing the boat and for those of you who are too stupid to figure out that there is no traditional recourse for the injustice, poor poor pitiful you!  If you’ve read this far and you’re not one of the three above, then there is still great hope.  The truth hurts like hell, but real people don’t let that stop them.  It doesn’t come without great sacrifice.  Put your passion to work in fighting the system the same way you fight to keep your business in spite of the wickidness of the franchisors we all have come to know so well.  See what Eric Schlosser says in the epilogue of Fast Food Nation:

page 268…When McDonald’s demanded ground beef free of lethal pathogens, the five companies that manufacture its hamburger patties increased their investment in new equipment and microbial testing.  If McDonald’s were to demand higher wages and safer working conditions for meatpacking workers, its suppliers would provide them.  

page 267…The right pressure applied to the fast food industry in the right way could produce change faster than any act of Congress. The United Students Against Sweatshops and other activist groups have brought widespread attenton to the child labor, low wages, and hazardous working conditions in Asian factories that make sneakers for Nike.

Are you getting it yet people?  No franchisor can abuse those who refuse to be abused when they show up in force and refuse in a position of unity and solidarity.  To continue trying to fight these things in the courts, class action lawsuits, contract negotiations or arbitration allows all the wrongdoers to hide in the shadows and continue their acts of evil against all franchisees.  If franchisees were to stop listening to those who point them at the court system or lawyers or other conventional stupidity, and start finding ways to expose the franchisors for what they are – con artists – and expose this to the press and the media with validity, there is traction!

Wake up America.  We didn’t earn our freedom trying to argue in the British courts, we took it by force and cunning.  Nothing short of this type of action will ever bring justice to a system that is corrupt, insolent, insulated and sheltered by politicians, lobbyists and government officials.   Reason doesn’t work for those who love their money.  The threat or the act of taking their money is the only option left in getting their attention!  

 

Bloody

Franchisor: Hiring Your VP of Sales

Qualifications to look for when hiring your VP of sales:

1. #1 qualifier is one-time sales pro – the likes of subprime mortgage stars, real estate brokers used to abusing agents, timeshare salespeople or large company schmucks who are used to spinning without ever having to deliver.
2. #2 qualifier is “yes” man capability.  Never hire anyone who thinks for themselves.  This will come back to haunt you.  Those who think will question and that is bad.  You don’t want anyone who thinks, you just want those who are motivated by money.  Your VP must always be in submission to you, but always in control and carrying the big stick with your prospective franchisees.
3. #3 is bring in those who have the ability to threaten behind closed doors.  Fear is the greatest attribute of franchising.  The fear of retribution is your greatest weapon against the franchisee.  Your VP of sales/business development must be able to carry themselves as though they know what they’re doing, yet be able to threaten individual franchisees into submission.
4. Finally, your VP’s job is to sell franchises, all the while giving off the air that they care about the franchisees’ success and needs (but never really doing anything about these).  Your VP must know how to lie without being caught.  You must stay insulated from the sales process.  Your job is to let him do the dirty work and you only show up to pat the bloke on the back for his “great” decision.  The VP’s primary job is to sell the franchisee and then turn over the blokes to administrative help who are so low level that the franchisee gets frustrated and resorts to his own devices.  A great VP is arrogant and convincing, with the ability to walk away from the relationship after the sale is made.  His job is to get the blokes in the corral and nothing more.  Remember, his job is selling franchises while giving off the impression that he knows the business and he cares (all the while he doesn’t).
5. He must be a great speaker but say nothing.  A great presenter, but forcing the onus on the franchisee.  He must be a great schmoozer to give off the impression that he lives the life of Reilly.  He must be the life of the party, but absent when the shit hits the fan.
6. Finally, you don’t want him anywhere near franchisees who have signed on.  They are in the corral.  They’re bagged and tagged.  Keep him the hell away.  His job is finding the naive and the vulnerable and introducing them to a taste of the good life.   After all, you’re selling financial independence , but they’re selling themselves into indentured servitude.

Bloody

A Day in the Life of Becoming a Franchisor

Now for the perfect job, the franchisor:

1. Hijack a concept that sells (regardless of profit), create an alternative product with not a creative bone in your body or differentiator (other than price) to separate yourself from the leader.  Good models are Subway/Quiznos, Dunkin Donuts/Tim Hortons, Gold’s/Curves, Taco Bell/Taco Johns, McDonald’s/Burger King, Red Lobster/Long John Silvers, Dominos/Papa Johns, Midas/Meineke, Kinkos/UPS Store, Carvel/Baskin Robbins.
   
2. Find a big franchisor law firm that writes bullet-proof UFOCs/FDDs.  “Put in two CYA clauses for every claim your broker will make.”
   
3. Get a referral from your law firm for that less-than-respectable banker that can build a contract based on UCC and not common law.
4. Sell the concept to unsuspecting franchisees who are naive and in a place of vulnerability (immigrants mostly, displaced corporate America , mom and pop hopefuls) to finance your venture (mostly because anyone with a brain won’t touch such a business plan).
   
5. Then watch the money come in.  Schedule your 12 weeks of vacation per year, buy your VIP box at your favorite stadium and start shopping for yachts.  It’s only a matter of time until you have the cash flow to live like a king.
   
6. With some of that initial franchisee deal money, hire some bloke who can’t otherwise make it in the real world to be your marketing officer (sort of like Quiznos hired Steinfort, some young 30 something who’s only experience was in telecommunications!).
   
7. Introduce them to the other brilliant creative minds on Madison Ave. and the party will now begin!  All you have to do is attend dog-and-pony shows, make a decision and whatever you choose is paid for by the franchisee!
8. If you need more ad money, simply raise the rates on your ad royalties and make it retroactive to every FDD/UFOC (that confirms it’s coming out of the franchisee pockets of course). No one can object because if they do, you can pull their franchise!
   
9. Cut an ironclad kickback agreement with your vendors and dictate to each franchisee that they have to buy from that vendor.  If they refuse, threaten to pull their franchise and thus their livelihood.
   
10. Hire average salespeople (yes men) who will do exactly as you instruct them in coloring the truth just enough to the franchisees to get them to sign.  Those from the mortgage industry, timeshare sales, car sales and any other large ticket, one time products make great fits.  They’re used to instilling the confidence necessary to maket the sales and because it’s only one-time, they don’t have to worry about repeat sales.  Salespeople with integrity and honesty are considered bad prospects.
    
11. Spend all your time building your marketing programs to sell more franchises, letting the other stuff work itself out.  You don’t need rockstars for this, average blokes from the local community do just fine.  If you hire too much IQ, you suffer someone questioning your motives and the long term.  Remember, your job is to sell franchises, not worry about how they do as a business.  If they fail, you have the opportunity to sell another in the same region.  And because you the majority of your money on the initial sale, their success or failure is absolutely of no concern to you.

Stop by tomorrow to learn how to build your internal staff to accommodate your new high roller lifestyle.  We’ll teach you just what type of people can help you build your kingdom with the life savings of the naive who are seeking to survive.

Bloody

Quiznos Torpedoes It’s Franchisees!

Quiznos wasn’t happy with giving away its franchisee’s money with the unannounced 1,000,000 free subs, they’ve now risen to an all new low by dropping the bar on sandwiches from $5 to $4.  So how did this come about?  Well, it starts with your young and less than knowledgeable (no clue on human nature, past historical ramifications of such actions) marketing person, Ms. Rebecca Steinfort:

“The reality is that we are a challenger brand,” Chief Marketing Officer Rebecca Steinfort said in an interview. “Our main competition is Subway, which is an 800-pound gorilla. We may be 200 pounds, but they’re 800.” – AdAge article by Emily Bryson York

Now who pays for the reduction in profits?  Why the franchisees of course!  Check out the next statement:

At Quiznos, marketing failed to drive traffic and closed stores. The chain now has about 4,500 locations worldwide, by Ms. Steinfort’s estimate. The company is private and does not disclose sales figures. – – AdAge article by Emily Bryson York

What a great job!  I can try and try and try until I get it right, because I don’t have to absorb the cost of my actions!  The franchisees take all the grief.  I get to sit in the VIP box at the Yankees games while those miserable blokes deliver sandwiches 24/7!  The franchisees are simply collateral damage.

Question for Ms Steinfort: If stores go out of business selling a $5.00 sub, then how many more will go out selling a $4 sub?  Let’s view Ms Steinfort’s experience/profile on LinkedIn:

When one scans education, it’s quite respectable (Princeton, Harvard Business), though still wet-behind-the ears on experience.  But look a little further and you see Ms Steinfort came from Level 3 Communications claiming a title of corporate strategy, and it’s labeled as (Restaurants Industry).  Folks, Level 3 is a telecommunications firm which barely survived the dotcom bust, the telecom meltdown (thanks to a billion dollar bailout by Warren Buffett).  IT’S NOT in the RESTAURANT BUSINESS.  Can you spell L-I-A-R?  Does this speak volumes as to how desperate Quiznos is and how no one will work for them who does have a brain?  Ms Steinfort has found a place to play with absolute immunity from prosecution!  Obviously, she couldn’t make it in the telecommunications market as Level 3’s stock topped out at $120.00 about the time Ms. Steinfort started, immediately dropped below $10 in a freefall, never to recover.  Today Level 3 is selling for a paltry $.95  (having realized a low of .76 the last 12 months).

So tell me people, wouldn’t you rather have someone selling your sandwiches whose background is in telecommunications?  And wouldn’t you rather it be someone who ran the previous company into the toilet (stock prices from $120.00 to $.016!)?  When is America going to wake up and realize that the franchisors and Madison Avenue are no different than Wall St., AIG or Bernie Madoff!  They’re the elite and you, main street America are the idiots falling for the ruse!  Prediction:  Quiznos will continue to be the “Sprint” of sub shops without any hope of being purchased (there’s only one Wal-Mart folks).  They will die a wikid slow death at the likes of boneheads like Ms. Steinfort and Mr. Schaden.

Bloody

Playing for keeps!

Tell me when this article was written:

The franchising industry is in a looking glass mirror – peer inside and you see the big picture in reverse. When the Canadian economy is absolutely racing, new franchising muddles along. When the general economy tanks, franchising hits top gear.

“When middle managers get parachuted out of their regular jobs, then they start to think about buying themselves a job,” explains Gord Metcalfe, president of Francon Canada, a Toronto consultancy that charts the franchising industry on behalf of private clients like the big banks.

Franchises have appeal because an investor gets to buy into a pat hand, rather than attempting to crank up a no-name business from scratch. “You get to buy a trademark and proven managerial systems – what’s known as ‘the back of the house’” says Metcalfe.

Sounds easy, but the woods are full of people who plunged their savings into a franchise and wish they hadn’t. The complexity of the financing/royalty arrangements, the vagaries of location and the shifting sands of public taste mean buying a franchise is very much a dice toss, just like a regular startup.

What’s your guess – 2005?  2006?  You’re all wrong!  It’s from an article in the Toronto Star back in 2001!

Franchising fraud is timeless.  There is never an end to the debauchery of screwing people out of their money.  Timeshares come and go.  Other scams have shelf life.  Not franchising.  McDonald’s has been ripping people off since the first days of formulation by Ray Kroc.  In spite of the 15 million dollar class action lawsuit awarded to Snap-On wives in 2006, Snap-On is on the Entreprenuer Top 100 every year.  Where are these blokes getting their data?  NOWHERE! I SAY! NOWHERE!  They are simply believing everything the carney barking, under-the-table dealing franchisors have to say.  What a great system.  Get Entrepreneur magazine in your back pocket by buying advertising, tell them you’re great and they’ll put you in the top 100!  Whatever happened to truth, accountability, audit trails, integrity and honesty?  Well folks, none of those virtues are resident in the franchisor’s house.  He’s just another Bernie Madoff when it comes to virtue.  He doesn’t care if you go bankrupt or lose your home. He doesn’t care if you get divorced or widowed by suicide!  After all, what better business to be in than one where you actually make more money when people fail than when they succeed?  For those of you who don’t know what I’m talking about, look up “churning” in previous blog posts or simply google  “churning and franchising”.

Wake up people!  It’s just like when you played marbles for “keeps” as a kid.  You ain’t gettin’ your marbles back!  The only safe way to keep them in the bag, is to never take them out!

What Can One Man Do?

Is anyone else tired of the spineless comments yet?  Comments won’t get it done. The brokers, franchisor-friendly lawyers and franchisors are quite happy with the status quo.  They have rarely come up against a threat they couldn’t stifle, muffle, silence or destroy.  Why is that?  Why haven’t we, the pitiful franchisee figured out how to get the franchisor the eff out of our lives? It’s not technology or the times, people.  The minutemen figured it out and they didn’t have cars, 401Ks or great academic degrees.  It’s not smarts people, it’s balls and a backbone!

Franchisees, we have no one to blame but ourselves.  We condemn the pigs of franchising and big box retailing, and we shop at Wal-Mart, Home Depot and McDonald’s.  We want the freedom without the cost!  We bitch and moan about the economy, yet we contribute to the tyranny.  Has anyone figured out that the freakin’ American Dream is a hoax?  The Declaration of Independence states:

“that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government…” 

And oh how pissed we are when the franchisor can weasel out of every claim he made when he puts a contract in front of you that takes everything right mentioned above in the Declaration away from us!  And then we go to a generalist lawyer who knows nothing about franchising?  And then we give up when he fails, takes more of our money?

These are not conventional times.  Conventional means don’t work.  They haven’t for decades.  What makes you think they will today? People, if your faith is in the American Dream, Bernie Madoff, Mr. Stanford or President Obama, move on and surf somewhere else?  You don’t have balls or a backbone!  But for those of you who do, let’s get on with it!  Start by refusing to give these bastards any more of our money.  Stop fueling the big box boys and giving money to the franchise system.  Renegotiate your contracts and refuse to pay until your rights are restored! Start putting your franchisor on the hot seat and holding him accountable!  Isn’t it time you got something for your money, your sunk costs, your sweat?

Here are some numbers from the top 100 franchises of Entrepreneur Magazine – 2008 – you might want to consider:

• 215,768 US Franchise owners
• 11,102 Canadian Franchise owners
• 120,108 Foreign Franchise owners
• 346,978 Franchise owners in total

Average Franchisor has less than 10 executives and less than 100 employees – are you getting it people?

Franchisee Owners (just owners) – 346,978  v  Franchisors 10,000 total employees

The numbers are 29:1 in favor of the FRANCHISEE – Stand up and be counted!!!!!!!!!  It’s our money they’re taking, it’s our money they’re using to live their playboy lives, take bonuses to buy their fancy cars and yachts and mansions.  It’s our money they use to promote the brand and then tell you to get lost when they decide they want to go a different direction!  Check out the latest Domino’s commercial if you doubt me….every time you buy a domino’s special, you take money out of your neighbor’s pocket, your kid’s school budget and eseentially you rob your neighbor of a fair wage!

Bloody

Harold Brown on Franchising…nothing has changed in nearly 30 years!

“Does any principle in our law have more universal application than the doctrine that courts will not enforce transactions in which the relative positions of the parties are such that one has unconscionably taken advantage of the necessities of the other?…The law is not so primitive that it sanctions every injustice except brute force and downright fraud.  More specifically, the courts generally refuse to lend themselves to the enforcement of a ‘bargain’ in which one party has unjustly taken advantage of the economic necessities of the other.” – Justice Felix Frankfurter  (November 15, 1882 – February 22, 1965)

It would be difficult to find a business relationship to which such standards are more applicable than franchising.  Although hundreds of different industries use franchising, certain common denominators exist.  Variations are minor and do not affect the overall picture.  The basic problem is a marked, intentional, and constantly emphasized disparity in the parties’ positions.  The franchisor combines the roles of father, teacher, and drill sergeant, while the franchisee becomes son, pupil, and buck private.  At the core of the relationship is the franchisor’s contractual control over every aspect of the franchisee’s business.  Franchisors claim that so long as a franchisee has had an opportunity to study the agreement, perhaps with the advice of counsel, he should be bound by its terms.  – Harold Brown

Taken from Franchising by Harold Brown First Edition 1981

Want to buy a Blogging Franchise? Send me a check, stupid!

Franchisors are taking franchising to a whole new level.  See how they’re selling a store by which people shop for franchises!  Tell me Main Street is not that stupid?  They must be because according to the article, 10 fools have already signed up! Gives a whole new credence to “one born every minute…..”

And recently a commentor on Bloody Franchise shared how he paid $20,000 for the privilege of selling franchises through “Business Alliance“!  After two years, not a single sale.  But the leads were good – NOT!

Anyone want to buy a franchise setting up blogs?  It’s free to everyone else, but if you give me $10,000, I’ll show you all the ropes, hold your hand and reassure you it’s the right thing to do!!!!!

Wake up America.  Your parents didn’t raise you to be so gullible!  There aren’t many carnivals around, but with franchising, who needs them!  Why work to separate the mark from his $20.00 when you can take him for his life savings and then some!

Bring back small business or throw the idiots out of these franchise companies, the courts and the banking systems and replace them with a few good men and women!!!!!!!

Bloody

Who is involved in AIG?

I usually write on franchising, but the AIG has lots of ties to franchising that most of you don’t know about.  But see for yourself by clicking on one of the maps below.  Dig deeper but be forewarned, it will make you mad as hell! 

In addition, the bailout monies are being used to pay bonuses to the slugs that ruined our economy.  Just so all of you know who knows who, here’s a map of all of their bedfellows which will amaze you!  (Note the William J. Clinton Foundation is on first level!  Is Billy spending your taxpayer bailout money to further his cause?)

http://www.muckety.com/saved-map/AIG/3558BDD4DB47997E5E17D268EED8EB8F.map

Their other divisions

http://www.muckety.com/saved-map/AiG-Subdivisions/C47E4098FBD4062B66589469C179D23D.map

Their board of directors:

http://www.muckety.com/saved-map/AIG-Directors/AC48489B89648235DFA37BF1CC0F8FB2.map

Their lobbyis is Ogilvy Government Relations = here is Ogilvy’s client list…..

http://www.muckety.com/saved-map/Ogilvy-Lobby-Customers/D99ED1857FEB1AAC9764A07CBD875FCF.map

Find more – drill down and find out how many of these companies are getting your money!!!!!!  If this pisses you off, send a letter to your congress and show them this post. 

Bloody

PS – a listing of the “important people” most likely getting the bonuses you are hearing about…..If they’re your neighbor, go knock and the door and tell them you’re pissed!!!!!!

VP Foreign General Insurance	Alexander R. Baugh
President and CEO, Korea, AIG General Insurance	Brad Bennett
Lead Director	Stephen F. Bollenbach Age 66
Vice Chairman Transition Planning and Chief Administrative Officer; Chairman, HSB	Richard H. Booth Age 61
Managing Director and Head Institutional Sales, Americas, AIG Investments	John T. Boyce
EVP and COO, AIG Domestic Accident and Health	Susan M. Clarke
SVP; Chairman, President, and CEO, AIG Companies in Japan and Korea	Robert W. Clyde
VP and Controller	Joseph D. Cook
Director	Dennis D. Dammerman Age 63
President and CEO Personal Auto	Anthony J. DeSantis
SVP Financial Services; Interim President and CEO Financial Products	William N. Dooley Age 56
SVP and Casualty Actuary	Frank H. Douglas
EVP AIG Property Casualty Group; President, AIG Commercial Insurance Group	John Q. Doyle
President and CEO, Lexington Insurance Company	Peter J. Eastwood
Director	Martin S. Feldstein Age 69
Vice Chairman, Global Economic Strategies	Jacob A. Frenkel Age 64
VP and Treasurer	Robert A. Gender
VP and Director Investor Relations	Charlene M. Hamrah
EVP and COO, AIG Environmental	Kimberly Hanna
President, AIU Accident and Health Division	Jose A. Hernandez
EVP and CFO	David L. Herzog Age 49
SVP and Head, Asset Management Restructuring	Jeffrey J. Hurd
Chairman and CEO, AIG Global Risk Management	Louis P. Iglesias
President and CEO, AIG Environmental	Russell Johnston
SVP and Chief Human Resources Officer	Andrew J. Kaslow Age 58

Vice Chairman Legal, Human Resources, Corporate Communications and Corporate Affairs	Anastasia D. Kelly Age 59
VP, Life Insurance	Jeffrey M. Kestenbaum
SVP and Chief Risk Officer	Robert E. Lewis Age 57
Chairman and CEO	Edward M. Liddy Age 63
SVP and Chief Investment Officer	Monika Machon Age 48
EVP Life Insurance	Rodney O. Martin Age 56, $682,000 salary, $1,106,500 bonus
Director	George L. Miles Age 67
EVP; President and CEO, AIG Property Casualty Group	Kristian P. Moor Age 49, $664,423 salary, $1,201,250 bonus
VP Global Energy	Ralph W. Mucerino
Chairman and CEO, Global Investment Group	Win J. Neuger Age 59, $942,000 salary, $1,223,000 bonus
Director	Suzanne Nora Johnson Age 51
President, AIG Environmental	John O’Brien
Director	Morris W. Offit Age 72
Director	James F. Orr Age 65
President Consumer Finance Group	Rick Pfeiffer
President and COO, American Life Insurance Company	Joyce A. Phillips Age 47
President, AIG Europe, S.A., and President, AIU Continental European Region	Julio A. Portalatin
Vice Chairman and Chief Restructuring Officer	Paula R. Reynolds Age 52
SVP and Director Internal Audit	Michael E. Roemer
Director	Virginia M. Rometty Age 50
Chief Claims Officer, General Insurance	Charles R. Schader
Regional VP, AIG International Retirement Services – Asia	Timothy P. Schiltz Age 47
VP Domestic General Insurance; SVP and CFO, Domestic Brokerage Group	Robert S. Schimek
SVP Strategic Planning	Brian T. Schreiber Age 43
SVP, Secretary, and Deputy General Counsel	Kathleen E. Shannon Age 59

VP, Foreign General Insurance	Michael L. Sherman
President, AIG Executive Liability	Michael W. Smith
Director	Michael H. Sutton Age 67
VP, Life Insurance and Retirement Services	Christopher J. Swift
President AIG Small Business	Vincent C. Tizzio
VP Life Insurance	Seiki Tokuni
Senior Vice Chairman, Life Insurance and Director	Edmund S. W. Tse Age 70, $848,776 salary, $1,863,960 bonus
VP Life Insurance	Andreas Vassiliou
EVP, Foreign General Insurance; President and CEO, American International Underwriters	Nicholas C. Walsh Age 58
VP Rating Agency Relations	Teri L. Watson
SVP Domestic General Insurance	Mark T. Willis
EVP Retirement Services; President and CEO, SunAmerica	Jay S. Wintrob Age 51, $775,000 salary, $1,742,500 bonus
President, AIG Excess Casualty Group	Douglas Worman