AIG Exec exit public will not be the last

 

Friday, Mar 27,2009, 2:38:45 PM   Click:

Copyright 2009 TheStreet.com, Inc.All Rights Reserved
TheStreet.com

25 March 2009 Wednesday 19:59 PM EST

SECTION: NEWS & ANALYSIS; Financial Services

LENGTH: 1179 words


TITLE: AIG Exec public will not be the last

Signature: Lauren LaCapra, TheStreet.com Staff Reporter



Policies and a gallery of media blitz on premiums to receive funds from the government has created a flight of talent is not to help the industry recover, human resources experts say.

Jake DeSantis, an Executive Vice President of American International Group (AIG: NYSE) maligned financial products unit, fought back on Wednesday against what he called misplaced anger and a lack of support from supervisors pledged to defend employees.

DeSantis has released his letter of resignation to the op-ed pages of The New York Times, just days after CEO Edward Liddy said that the Congress $ 165 million in bonuses paid to AIG executives have been "unpleasant" and the House of Representatives passed a bill that would essentially wipe punitive payments through taxes.

In his letter, DeSantis noted that the shares and units, he supervised constantly booked profits in many cases, "over 100 million dollars per year. In his 11 years in business, DeSantis claims to have never handled one of the credit default swaps that AIG has done, and said he had won $ 742,006.40 after tax payment of premiums that he has been the long hours he had during 2008.

"As most of us have done nothing wrong, guilt is not a motivation for the presentation of our results," said DeSantis. "We worked 12 months under these contracts and now deserve to be paid as promised. None of us should be fooled by our payments, no more than a plumber should be misled, having fixed the pipe, but an electrician negligently causing a fire that burns the house. "


Of course, Americans losing their jobs and looking for retirement homes evaporate probably little reason to be sensitive to this view. If taxpayer dollars are not used for the proposal of the employer in trouble, DeSantis and his peers in May did not have to work those long 12 months, or to fight for their compensation, because AIG would probably have collapsed .

But what's done is done and the government spent over $ 170 billion to save AIG. The company must now dismantle its complex back to basics and reduce what remains of its toxic assets, while remaining competitive in the business world who have remained healthy and profitable.

Government dollars alone will not transform AIG. The company must retain employees with know-how - whether for sale of a business, unwinding of credit default swaps or sale of life insurance policies. These people do not work for free, and have little incentive to stay in a society where the compensation is arbitrarily reduced, morale is low, and their employees, badges would be a scarlet letter.

Senator Charles Grassley (R., Iowa) went so far as to suggest that AIG executives suicide last week. Grassley later recanted his statement, but this kind of invective, is that employees have been forced to hire security guards to protect their homes and families after receiving death threats and buses full of taxpayers anger in the tail aisles.

Even executives and talent professionals who remain out of loyalty to the firm or a sense of duty to help the country's financial system has undergone intense pressure. This was evidenced by the harsh interrogation Liddy before Congress on the bonus last week, and the resignation of Freddie Mac (FRE: NYSE) CEO David Moffett, who left to seek a new job in the banking world, after months of hampered by political considerations.

"The greatest asset - especially for a financial services company - is its people," explains Clark Beecher, a principal at professional services firm Magellan International. "This is not bank online, book on height of their services, or any of these items - these are the people behind them. If you lose these people, you are essentially limited companies the ability to exist and put an additional risk for the taxpayer dollars, not help them repay. "

AIG seems to agree. If the company does not answer specific questions about DeSantis start, but released the following statement.

"Ed is very sensitive to the frustration expressed in this letter and believes that the recent vilification and harassment of employees of the AIG is unfair and unjustified. As Ed mentioned in his testimony before Congress, most employees of the FP ' s nothing to do with credit default swaps that have been at the heart of the liquidity crisis of society. FP employees continue to perform the work requested specific risks and relax in the FP business. They reduced trade 44,000 to 28,000 - nearly 40%. "

AIG does not leave the actual figures for the different units, but it was reported that the number of 400 people once worked in its financial services division.

"I do not think that what is above," says spokesman Peter Tulupman. "We have said that other people [DeSantis] have resigned, but that's about it."

AIG is not alone in its struggle to maintain the best and brightest. Although there are no industry figures and companies not to comment publicly on the number of their best in their class, have left in the conduct of research sources that large companies say TARP recipients are become one of the most talented mid-range competitors and small businesses.

Others take a break for a new career, or leaving companies to start their own business, with clients, they developed their years on Wall Street.

There have been numerous reports of an apparent leak of the talents of the Bank of America (BAC: NYSE), a newly-acquired Merrill Lynch Unit - similar to what happened at U.S. Trust years, sources say. At Wells Fargo (WFC: NYSE) said it slash Wachovia investment bank bonuses 90% Many of these employees headed for the hills. And anyone who has done through Citigroup (C: NYSE) tens of thousands of layoffs last year are not willing to stay for the rest that have been announced.


"I saw a stream of people that go to companies that have received funding for the TARP or more small businesses, where they can control their destiny," said Pete Deragon, director of specialized financial services and the Executive search firm Stanton Chase. "But you sell yourself instead of selling the large plate behind you."

Deragon said that large companies are "very good targets for staff" and that the TARP albatross rejected white-shoe firms like Goldman Sachs (GS: NYSE) and Morgan Stanley (MS: NYSE) to be as "opportunistic" in About snatching the best talent as they were in the past. At the other end of the spectrum, UBS (UBS: NYSE) was the hiring of hundreds of advisers to other companies.

Beecher added that mid-range banks like SunTrust (STI: NYSE) or regions (RF: NYSE) are also "look at as an opportunity to get the big boys."

Unfortunately for taxpayers, the big boys like AIG, Bofa and Citi are the companies in which the government has the largest stake. The sooner we get a way to cancel the lady that was forged, the sooner they pay us back.

LOAD-DATE: March 26, 2009

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