Today, Jake DeSantis, a high-level executive in A.I.G.'s Financial Products unit, from whence the economy-destroying credit default swaps came, has a op-ed in The New York Times -- actually his resignation letter to A.I.G. CEO Edward Liddy. Everyone concerned about the bonus issue owes it to themselves to read all of DeSantis's piece.
In brief, he writes that: his job at A.I.G. had nothing to do with the swaps or any other aspect of the business that imploded; his work returned handsome profits; the people responsible for the offending swaps are long gone from the company; he and others in the Financial Products unit agreed a year ago in exchange for the contracted bonus payments to stay on and work long hours to help rescue company's remaining assets, in part, so A.I.G. could pay back the taxpayers; he personally was asked to stay and work for a salary of a dollar a year, with the prospect of the big bonus as his compensation; the company and Liddy assured DeSantis and his colleagues on numerous occasions that the company would honor its commitments to them and stand behind them.
Despite all that, Congress, the media and two state attorneys general bellowed and threatened, Liddy caved, and everyone wants DeSantis to return the money or pay the penalty of "exposure" in a heated atmosphere. DeSantis is resigning instead, seeing no further reason to keep working 14-hour days. He's pledging to pay the after-tax portion of his bonus -- whatever that works out to be after Congress is through -- to charities that help people hurt by the economic downturn.
Assuming what he says is true, the guy makes a good case for himself, and I don't blame him for quitting. I still believe there should not have been any room for bonuses in a company that has swallowed $170 billion of our money to avert bankruptcy. On the other hand, this should have been made clear long ago and more appropriate forms and levels of compensation worked out. Stringing people like DeSantis along so he works for a year and then gets smacked by the government is simply wrong.
What do you think? Post a comment.