AIG Exec Resignation The NY Times op-ed page

 

Thursday, Mar 26,2009, 11:46:07 AM   Click:

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CHARLOTTE, NC_An American International Group Inc. executive who received a retention bonus of more than $ 742,000 after taxes _ resigned publicly in an Op-Ed column in The New York Times.

Jake DeSantis, an Executive Vice President at AIG Financial Products in the division, said Wednesday he is leaving the company and will donate all his bonus to charity. The letter, addressed to the CEO of AIG, Edward Liddy, Liddy has criticized, among other things, accepting payments, but called bonus "uncomfortable" as he testified before the disapproval of the members of Congress.

"We have financial products in the unit have been betrayed by AIG and are unfairly persecuted by politicians," says DeSantis, who was head of business development for commodities. "In response, I will now leave the company and give all of my post-tax payment of retention for those who suffer from the global economic downturn. My intention is to keep money not myself .

He added: "I take this action, after 11 years of loyal, honorable service to AIG. I can no longer perform my duties effectively in this dysfunctional, or am I being paid to do."

New York-based AIG has been strongly criticized by the government and the public offficial after granting $ 165 million in bonuses this month. The retention bonuses, payments to employees to maintain a value of quitting, have been paid if the employee had a great year or a terrible.

Premiums were awarded to employees of the financial products division, a unit that issued derivatives called credit default swaps that helped sink AIG as a whole last year.

"Ed is very sensitive to the frustration expressed in this letter and believes that the recent vilification and harassment of employees of AIG is unfair and unjustified", says spokesman Mark Herr AIG in a statement by e-mail to Associated Press.

Attempts to reach DeSantis were unsuccessful.

Two days after AIG received its first injection from the government in mid-September, AIG appointed Liddy, former chairman of Allstate Corp., as President and Chief Executive Officer succeeding Robert WILLUMSTAD who resigned after three months of work.

Liddy Congress last week, said that the maintenance payments _ ranging from $ 1,000 to nearly $ 6.5 million _ are not his idea and called the "unpleasant" Liddy himself is not receiving a premium and the design is just $ 1 per year salary. Bonuses were promised in contracts with employees that AIG has signed early last year, well before the time, Treasury Secretary Henry Paulson asked Liddy to take charge of the company.


"I have great respect for the civic duty that you are now to the performance of AIG," DeSantis wrote in the letter. "You are as blameless for the loss of credit default swaps, as I am . AIG has invested heavily in credit default swaps, insurance contracts for high-risk bonds and other investments.

Even so, DeSantis said he was disappointed and frustrated at what he called Liddy the lack of support.

"I and many others in the unit that you feel cheated not to stand for us in the face of truth and the unjust accusations of some members of Congress last Wednesday and the press over our payments, "DeSantis wrote in the letter which was sent Tuesday to Liddy.

DeSantis noted that Liddy had agreed to accelerate three months the payment of more than one quarter of the bonus money. "This means to us for your support, and was hardly something you could do if he really found the contracts" unpleasant, "he said.

Congress Liddy said last week that some of these employees were willing to donate money, and Monday, New York Attorney General Andrew Cuomo said 15 of the 20 recipients of premiums agreed to return their money. In total, approximately $ 50 million of the $ 165 million will be returned, Cuomo said Monday the office.

AIG has expressed concern in May that the company be unable to attract and retain talented employees if they feel that their pay is subject to adjustment by the government.

A spokesman for AIG said Monday that a "handful" of senior executives resigned from the financial products division, and there will probably be more resignations to come.

AIG collapsed near last September because he was heavily in the insurance of securities backed by mortgages, the risky investments that have led to hundreds of billions of dollars in losses incurred by banks and other financial institutions around the world.

Since September, the government gave AIG $ 182.5 billion, maintaining that without assistance, AIG would fail, new disrupingt already affected by the markets and cause more damage to the economy. In return for the aid, the government has taken almost 80 percent of the capital of AIG.



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