rssFrom an AIG Executive, the Other Side of the Story
Wednesday, March 25, 2009 at 9:11 am
- 74 Comments
This resignation letter in The New York Times today from an AIG executive in the financial products unit explaining the bonus controversy from his point of view probably will be flying around the blogosphere today. In the letter to AIG CEO Edward Liddy, the executive, Jake DeSantis, says it’s not public shame that prompted his move to resign and to donate his bonus. DeSantis said he stayed with the company for an annual salary of $1 and a sense of loyalty - he had nothing to do with the credit default swaps that tanked the firm — and yet he’s been vilified.
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
DeSantis also aims at Liddy directly:
I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.
But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.
This tidbit on Liddy’s timing is particularly interesting:
At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.
Read it for yourself, and decided whether DeSantis deserves your sympathy. But whether or not you agree with his side of the story, it’s worth hearing. In the outrage and anger of last week, not everyone’s voice was heard.
74 Comments
Comment posted March 25, 2009 @ 7:01 am
The end of year bonuses are usually defined by management through a pool. The size of the pool is based on the firms complete earnings and profitability. If one side of the firm fails the ENTIRE firm suffers. That is what a team is about. Maybe if everyone at AIG were under the assumption of all for one and one for all then the CDS team would have been better watched. Sorry Mr. DeSantis, but your COMPANY screwed up and maybe you should help fix it for the rest of America and not just yourself. BTW I've been on Wall Street for 24 years and when the traders screwed up the support staff took the reductions in bonus, but we kept working for the team. So I've been taking the business losses for years in my bonuses while you guys got rewarded for screwing up. Grow Up!
Comment posted March 25, 2009 @ 7:27 am
I am afraid that DeSantis is protesting too much. When you work for an organization, you cannot claim immunity for yourself against the faults of one division or another even if you were not associated with those divisions and you were not directly responsible for any mishaps that happened. You stood together or fell together, especially if you were occupying some senior -level executive position in the organizational hierarchy. Executives who were responsible for the CDS debacle and left the organization in the lurch were deserving of as much condemnation as the senior officers on a ship on fire jumping into the first lifeboat lowered from the deck. Let us remember in this context that thousands of innocent employees Enron who had nothing to do with the shenanigans orchestrated by Ken Lay, Jeff Skilling and their co-conspirators lost their jobs and all their savings for no fault of theirs.
Comment posted March 25, 2009 @ 8:15 am
The self glorification that drips from the column is absolutely nauseating: “I am proud of everything I have done”, “After 12 months of hard work”, “after 11 years of dedicated, honorable service”, etc. And he INTENDS to donate it. Get back to me when you actually do so, fellah.
What a piece of work.
Comment posted March 25, 2009 @ 8:51 am
Dear Mr. DeSantis,
As a taxpayer, and a defacto part owner of your failed employer, I would like to take this opportunity to gladly accept your resignation.
You, and those like you, apparently are oblivious to the fact that your employer is crumbling, and is presently only propped up by the U.S. Government. Had the Government permitted AIG to become insolvent, you would have certainly been facing a substantial likelihood of having the bonus contract nullified by a bankruptcy judge. And, you likely would have been looking elsewhere for employment anyway while the failing company reorganized.
In other words, you only had the opportunity to continue in your present position because of the American taxpayers–the same ones that you so roundly criticize in your resignation letter.
While you claim to have some sympathy for those in need, you clearly don't understand them. If you did, you would grasp why your receipt of a nearly $750,000 “bonus” from what has essentially become a ward of the federal government is so offensive to taxpayers in a country where the median family income is approximately $48,000. If “guilt” is an insufficient motivator to return the grossly unwarranted bonus, perhaps you should give shame a try.
Like you, I was raised by a schoolteacher and a blue collar worker. Like you, I worked hard and got through schools on scholarships. Like you, I have put in more than my share of 10/12/14 hour (and more) work days. Unlike you, I would never dream of taking an almost $750,000 bonus from taxpayer dollars, when that money could be used to help the unemployed, the homeless, or the hungry. Finally, unlike you, I would never be so pretentious to claim to be betrayed or victimized by the legitimate public outrage over this situation.
Please clean out your desk. Security will take your key, and will show you to the door.
Sincerely,
The Management.
Comment posted March 25, 2009 @ 9:59 am
In every recession there are plenty of long time workers who lose their jobs because of the poor decisions of other people in the company even though they did their jobs well. They don't get a 7 figure retention bonus or a year's notice and that they will be laid off so they can save up. The entitlement mentality is appalling – if he thinks the claim that “I didn't do anything wrong, why should I have a pay cut/layoff?” is going to win him sympathy in the wider world he's got a lot to learn.
Comment posted March 25, 2009 @ 9:41 pm
One of my favorite responses to this guy so far – funny and spot on, and includes a Smurf reference.
Comment posted March 26, 2009 @ 4:41 am
One of my favorite responses to this guy so far – funny and spot on, and includes a Smurf reference.
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