The Mindset of an AIG executive

Posted by: Diane Brady on March 25, 2009

A few things struck me in the “resignation letter” of Jake DeSantis, an executive vice president of the American International Group’s financial products unit. (People don’t normally forward their letters of resignation to The New York Times)

First, of course, is his justified sense of outrage at having been abandoned by his boss, AIG chief Ed Liddy, before Congress and at having his bonus essentially taken away. “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.”

But a few other sentences stand out in my mind as emblematic of the mindset that has created some of this mess.

“I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G.” The list of who to vilify grows ever smaller. Even colleagues in the financial products unit are determined to distance themselves from the credit default swaps. These were highly profitable products produced by highly compensated (and, I would guess, much celebrated) people when times were good. Now, it would appear that a handful of largely anonymous—and now departed—executives are responsible for AIG’s downfall, not an institution that fostered and rewarded a culture of risk.

“The profitability of the businesses with which I was associated clearly supported my compensation.” This is the argument that has so many people feeling so angry. Just because you write enough transactions to rack up, say, $100 million in profits for your firm doesn’t mean you’re automatically entitled to millions in compensation. By that logic, producing millions in losses should send you reaching into your own pocket to repay your salary. For too long, there have been excessive rewards for short-term profits and little if any incentive to protect against the downside.

“I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise.” How could anyone have lived through the last six months at AIG and thought there wouldn’t be a strong reaction to bonuses? This is a company that would have been bankrupt if not for taxpayer support. Would everyone have immediately fled if not for the guarantee of millions in compensation? (And to where? Despite the claim of abandoned job offers, I don’t know of a firm that’s expanding in the financial products arena at the moment.) Everyone at AIG should have been conscious of the impact that public disclosure of these bonuses would have.

“None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.” True, but if a house has burned down and the owners are left financially destitute, the plumber may have a hard time getting his full pay. And if you’re both part of the same company that carelessly causes the house to burn down, you may get much less.

“I know that because of hard work I have benefited more than most during the economic boom.” If there was a correlation between hard work and pay, then many people in this country would be far richer than those on Wall Street.

“Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.” But not you, right?

“That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget.” While the instincts are noble, the reality is that taxpayers now own most of AIG. Giving money back to the company is essentially tantamount to helping people suffering from the downturn.

“I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood.” Indeed.

Reader Comments

HiNetReturn

March 25, 2009 12:06 PM

I don't see what everyone is so upset about. This is the perfect example of "trickle down". Us poor taxpayers give our hard earned money to Wall Street executives because obviously they can use the money more wisely than we can.

random

March 25, 2009 12:21 PM

It may be true that he's not directly responsible with credit default swaps. Not his unit, never worked there, never had anything to do with it.

But then with who does the responsibility lie? Corporations are very good at covering up problems and silently paying people who caused a great deal of turmoil with their decisions to quietly go away. It's very likely that we'll never know the staff responsible for running AIG into the ground.

Then again, AIG was being investigated for an Enron-type accounting scheme under Hank Greenberg and the culture does reward reckless behavior as long as it brings in the big bucks at the end of the quarter...

Rob

March 25, 2009 12:23 PM

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.

BTB

March 25, 2009 12:24 PM

This article is a good rebuttal of what was an impassioned attempt to turn the tides of hostile public sentiment.

And you make a good point: the DeSantis letter fails to acknowledge that the seat he leaves behind is on a ship that is both sinking and badly built.

What we are seeing is the Tycos. The Worldcomms and the Enrons, and everything that has continued both before and since, finally coming to a screeching halt.

Trouble is, the foxes have left the henhouse, and we're the farmers trying to shovel the s--t

Bob Wolfe

March 25, 2009 12:24 PM

This is a poor little rich girl story. Maybe Mr. DeSantis can go out and buy himself a HUMMER to make things better...

EMNEMNEM

March 25, 2009 12:24 PM

Only in America can profiteering be privatized, debt socialized, and the guilty party feel victimized.

Bob

March 25, 2009 12:27 PM

Jake DeSantis obviously has a heart and has taken stock in the troubles everyone of us our currently feeling. There is a mindset though that troubles me. The "my division" mindset is the same as "oh these vacations/retreats come out of another money account, not the tarp account". But much more important is this fact....who in their right mind would say, with everything crashing down around them and knowing that govt money was going to be needed, would say "Pay you millions to stay and help. We are broke but we will find that money for you."...and who would believe a company would honor that contract in these times. There is enough blame, arrogance and stupidity to go around for everyone.

Diane

March 25, 2009 12:28 PM

Random, you're exactly right. Nobody seems to be taking any responsibility for the AIG mess. It's not the fault of a few people. It's the fault of the culture. And Mr. DeSantis seems to think he should just carry on, bonus as usual.

Holly Garfield

March 25, 2009 12:33 PM

The executive vice president of the unit that has caused the most damage to the global economy is not responsible for the actions of that unit? This ought to fuel the outrage even more. This letter is like throwing premium gas by the barrel on a bonfire. ISO 9000 management principles state that at any one facility there is one, and only one, person who bears ultimate responsibility for everything at that facility. And the higher up the ladder, the more responsibility a person has. The top tier is responsible to make sure that no rogue units or people get out of control. That is a basic function of upper management. At what reads like the number two position in the FP unit he is certainly involved and responsible for assuring that no rogues are within the FP unit. And the statement of overpaid executives matches my definition of greed. Someone is greedy of they make more than I do. But I am not greedy because I work hard and deserve whatever I make. What I make is irrelevant.

Rob

March 25, 2009 12:37 PM

Brilliant insights Diane Brady. Thank you!

LadyBlue

March 25, 2009 12:37 PM

Thank you for setting the example. Now if the remainder of the extremely overpaid executives in our American Corporations will follow your example, then corporate america will be helping fix the problems at hand.

Martin

March 25, 2009 12:40 PM

Poor baby, now his ski trip in Europe is going to be cancelled, he might just have to settle for Lake Tahoe, CA.

What an injustice, poor baby, he is not going to cry because he can't afford a Jaguar, he might just have to settle with a Acura.

Bastard!

RodG

March 25, 2009 12:50 PM

"If there was a correlation between hard work and pay, then many people in this country would be far richer than those on Wall Street."

Amen!

Heidi

March 25, 2009 12:57 PM

Mr. DeSantis is totally out of touch.

I too have worked many 10 - 14 hours days. And like many others in this country, I doubt my lifetime earnings, over these last 30 years, exceed the gross amount of the bonus Mr. DeSantis received.

KD

March 25, 2009 12:57 PM

I have noticed there is a particular mindset - if something good happens to me, darnit, I worked hard for that. If something bad happens to me, that was bad luck - not anything I did. However, if something good happens to someone else - that was just luck, they didn't earn it. And if something bad happens to someone else, they must have deserved it. Mr. De Santis appears to personify that. I agree with Holly's assessment. VP indeed...And, by the way, doesn't really sound like he's leaving. It's just a publicity stunt - poor, poor AIG executives.

irv

March 25, 2009 12:59 PM

The really interesting thing is that all of these people don't even get the insanity or the truth of the situation.
They in their arrogance think they ever deserved to be compensated to the extent they were to begin with. They can't acknowledge that its all a house of mirrors. Wall Street is not real, there is nothing tangible there just peoples opinions of what something is worth. Thats why the market crashes one day and soars the next. These guys and girls have cashed in on an economy that no longer produces anything real. Just a facade of money being made on inflated notions of worth. They sucker us in and when we are they toss us out and rebuy our mistakes at highly discounted terms because they know their stupidity will be bailed out by the Fed and with our tax dollars. When we screw up we get fired and maybe 2 weeks severence pay. When they screw up they still want their retention bonuses. Like the poor CEO of Ford. Poor guy got his salary cut to $13 million. Not bad for a company that makes products no one wants and is teetering on failure and bankruptcy. Maybe he'll get so mad that I can take his place. I'd do it for $10M

A.L.

March 25, 2009 12:59 PM

Me, me, me! That's the mindset of an AIG executive.
If Mr. DeSantis was hoping to elicit some kind of public sympathy with this stunt, he chose the wrong tone for his letter. This letter is all about HIM and what HE was expecting and what HE was entitled to and what HE didn't get. Did he speak up when malfeasance was happening IN HIS SAME UNIT at AIG? Did he make any attempt to stop the risky trading? I would imagine not. Like most corporate lackeys feeding at the trough he probably kept his head down and his mouth shut, and collected his millions. This is akin to a captain of one ship standing by and watching his sister ship sink, and then throwing up his hands and saying "well, MY ship is still afloat." Did Mr. DeSantis do anything to prevent tragedy? I don't think his hands are as clean as he seems to think they are. This is selfishness of the highest order, and it represents everything that is wrong with our country AND the reason why AIG ended up in this mess in the first place.Too many people like Mr. DeSantis who are just concerned about themselves and what THEY should be getting and not at all concerned about the people who got screwed out of the deal. My father has an annuity with AIG and we were concerned, for quite some time, he was going to lose HALF of his hard-earned savings, which he needs for retirement. What about people like my father, Mr. DeSantis? What about the people who lost everything when AIG tanked? I have absolutely no sympathy for people like this. If there was any justice in the world they would have to move out of their million-dollar homes and live in a tent city somewhere, like the people who have been victimized by this crisis. NEWS FLASH for Mr. DeSantis: NO ONE OWES YOU ANYTHING. ESPECIALLY not the American taxpayer.

sirius

March 25, 2009 1:03 PM

AIG is part of the US, so by extension, you should also be responsible for the collapse of AIG? Why should you be paid more than $1? And if businessweek.com collapse because of drop in readership, you should not only resign but pay back the shareholders of businessweek.com? Are you sure you are ready to do that?

Stella

March 25, 2009 1:06 PM

Hey, Mr. Rick Santelli, why don't you give us a little cathartic diatribe about this "loser" – he is also trying to get his paws on your taxes, and unlike the homeowners you trashed, he is actually supposed to know about the financial environment and about navigating its “potential” dangers...

Diane

March 25, 2009 1:12 PM

A.L.
You raise a good point. At no point in the letter does he mention whether he thought his colleagues were engaging in risky behavior, or whether these credit default swaps were irresponsible. Was that part of his job? No. But he's so quick to distance himself from all that was wrong in that unit without acknowledging that he was part of a small tight-knit business that engaged in recklessly risky behavior.

Elainea Oliver

March 25, 2009 1:13 PM

A Leadership Health Tip
March 25,2009

The pandemonium of a AIG executive who made choices based on the culture of the organization he was dedicated to serving. This executive belonged to the ranking machine of AIG, the catalyst of decision making and contributed as well as other to the demise of a corrupt and vile leadership. One of the main effective and successful attribute of a leader is integrity, another is emotional intelligence which consists of self awarenes, self management, social awareness and social skill. The forgetfulness and the lack of a leader to govern and strengthening their personal and professional value system in the corporate arena will ultimately lead to self destruction and contribute to the demise of others in the long run. Beware, of your associated system of values and the dark side of neglecting soul searching techniques on a continuous basis to remove the old and harmful radials and replace yourself with a wholesome diet of enriched values and attributes and an enhanced style of management.
Please send comments to oliverelainea@yahoo.com

Elainea Oliver

jbi

March 25, 2009 1:13 PM

Thanks, Diane - Nice analysis. Nothing wrong with the guy resigning after all the vilification, but he should have had someone less tone-deaf read it before sending it to the NYT.

aurum79

March 25, 2009 1:13 PM

Our business education system, of which this poor sinner was obviously a victim, is what needs a bailout. Since when did making money out of money become a meaninful goal for anyone but the super rich? The recent events should expose the fantasy that the imaginary wealth being created by these moral cretins benefits society and humankind.

And what the hell kind of a name is "Jake" anyway? Who calls themselves that? I've only heard the name in two other context. First, it was used in The Sting by Robert Redford to describe the setup for the con going well. Second, Jake breaks on trucks carrying hazardous waste are illegal in many states - they are dangerous dodges designed to skirt the regulations as these trucks blow through small American towns. These breaks have killed people. Perfect name for a lying, scheming obfuscator - makes it sound like everything's OK?

John

March 25, 2009 1:17 PM

Um, if it would appear there is a position open. I do not particulary like my job & it pays less than 50K a year. I would gladly take the office once occupied by Mr. DeSantis. Also, if we do not produce, I do not want a bonus

Thanks

samsneeze

March 25, 2009 1:17 PM

All the AIG execs deserve their bonuses, they trick the fed's to bail them out with our tax dollars.

aurum79

March 25, 2009 1:20 PM

Our business education system, of which this poor sinner was obviously a victim, is what needs a bailout. Since when did making money out of money become a meaninful goal for anyone but the super rich? The recent events should expose the fantasy that the imaginary wealth being created by these moral cretins benefits society and humankind.

And what the heck kind of a name is "Jake" anyway? Who calls themselves that? I've only heard the name in two other context. First, it was used in The Sting by Robert Redford to describe the setup for the con going well. Second, Jake breaks on trucks carrying hazardous waste are illegal in many states - they are dangerous dodges designed to skirt the regulations as these trucks blow through small American towns. These breaks have killed people. Perfect name for a lying, scheming obfuscator - makes it sound like everything's OK...

Joe

March 25, 2009 1:22 PM

BTB,

Just to clarify, Tyco didn't have the same situation as Enron. Tyco has an executive embezzle money from his company, but the company still survived and has even thrived since his departure. They still exist today and are doing quite well. Their former leader...not so much.

Hope Kaplan, for David Peirez, of Reisman, Peirez, Reisman in Garden City, NY

March 25, 2009 1:22 PM

 DeSantis may have breached his confidentially agreement.
 DeSantis may have violated A.I.G. personnel policy by publishing this letter.
 Was Desantis under contractual agreement that barred him from disparaging the company? This letter could be interpreted as being in violation of that agreement.

Ronald

March 25, 2009 1:22 PM

Perhaps elected officials should also give up their salary for not putting in place good policies and regulations in the firsat place. How come they haven't voluntarily done that. They are also getting paid to do the work that they should have done so that they don't have to clean up the mess.

Jimbo

March 25, 2009 1:23 PM

Dear Mr. DeSantis,

Good riddance! May the rest of your days on Earth be filled with abject loneliness and inconsolable despair. May your soul roast for eternity in the fiery pits of Hell!

(Are you starting to "get it" now, Mr. DeSantis?)

Ronaldo

March 25, 2009 1:26 PM

Hasta la vista Baby! Let the whole bunch of them quit. Let them get a real job. I understand McDonald's is looking for good people. I think they have McDonald's in the Hamptons, or upstate in NY. I think they also have Food Stamps, there also. But, if you sell your Million Dollar home, maybe you won't need them. Just Go Away and STFU.

AnonObserver

March 25, 2009 1:28 PM

He's got a bad mindset, a sense of entitlement, and an out-of-touch sense of what a fair compensation package in America is worth, but he also has an interesting point.

Many of the comments here point out that the US government, and by extension we the taxpayers, is now the majority stakeholder in this company. However, let's be clear that this is not the same as owner. The gov't has the largest single vote in any decision, but due process of presenting the questions and allowing the votes to be cast must be observed. If the gov't "owned" the company, it would no longer be publicly traded.

But i digress. Jake DeSantis had a binding contract with the management of his company, and his company has now reneged on that contract, because of pressure from its largest shareholder. The management has failed to live up to its half of the contract. The opposite of this would have been if Mr Desantis had asked for all of his compensation up front, then demanded to renegotiate his responsibilities.

His valid point is that regardless of how the contract is now perceived, both he and the management entered into it in good faith, and as he has lived up to his half of the contract, the management should as well.

As the largest stakeholder, the gov't can take this opportunity to rightfully say "that is the dumbest thing i ever heard of" and vote for decisions that will prevent this from happening in the future at this company. But it cannot under the existing rules of the shareholder agreement arbitrarily and unilaterally take back compensation. At most, it can instruct the management to renegotiate the contract with Mr DeSantis, and if it is unsatisfied with the results, it can replace the management with a new group.

Right now we are all as a country hurt, scared, upset, and disengendered. But this is precisely the time when we must adhere to and enforce the laws of this country. We cannot let our anger force us into making decisions or enacting new laws that we will regret later. We are at risk of creating the financial equivalent of the Patriot Act.

Randy

March 25, 2009 1:28 PM

If the government had kept its nose out of AIG, (regardless of the impact to employees, stockholders, counterparties, et al.), we wouldn't need to debate the correctness of these bonuses.

Sorry Jake, but that ship has sailed, and yes, we do feel we have an interest in how our dollars are spent.

angie

March 25, 2009 1:29 PM

oh the horror of being away from my family 10, 12, 14 hours while making millions....

and if my company fails, please bail me out with a big fat bonus....

such hardship done unto me & my family....

what a crybaby!!!!

Alias

March 25, 2009 1:30 PM

How many AIG employees have been let go from the company since last September? Have any of them made such drama-queen displays of self-absorption in public? (Note to "Jake" -- those employees didn't have anything to do with CDOs, either).

Ray

March 25, 2009 1:31 PM

This man is a patriot. He has just done what many of us would like to do in this age of class warfare.

Doug Wilder

March 25, 2009 1:33 PM

Most people here are a bunch of self righteous hypocrits just like congress. If you're so damn smart; why don't you start your own businesses and make it work. The guy worked for $1 dollar per year and was expecting his retention bonus to make up for the his salary. Do you know the difference between a retention and performance bonus? Morons.

Tim_CA

March 25, 2009 1:34 PM

Ms. Brady writes..."“The profitability of the businesses with which I was associated clearly supported my compensation.” This is the argument that has so many people feeling so angry. Just because you write enough transactions to rack up, say, $100 million in profits for your firm doesn’t mean you’re automatically entitled to millions in compensation. By that logic, producing millions in losses should send you reaching into your own pocket to repay your salary. For too long, there have been excessive rewards for short-term profits and little if any incentive to protect against the downside."

Automatically? The guy had a friggin' contract spelling out EXACTLY what he was entitled to. Further...you write for a news-weekly, what exactly are your qualifications for determining what anyone but a hack, lightweight writer should earn? When you write a boneheaded article that's rejected, do you reimburse Business Week for the time you spent working on it?

This article has no meat, is incredibly childish, and was written from a populist perspective, period.

Signed - An Informed Independent

TestUser

March 25, 2009 1:35 PM

It all comes down to this:

If we need these guys to run the company and safeguard the billions we've dumped into AIG, reneging on their compensation is throwing the baby out with the bathwater.

If we don't need them, we've saved less than 1% of the bailout money.

Seems like a bad bet, but the people get what the people want.

Mark

March 25, 2009 1:35 PM

Diane,

Excellent insights!

mayy I add, that I think what Mr. DeSantis misapprehends is that the only reason AIG exists today as an institution capable of paying that 3/4 million dollar bonus to him is because it was bailed out by taxpayer dollars. If things would have been allowed to run their natural course, there would be no AIG today, hence no bonus.

My family and friends who used to work at other companies that have gone under would love to have Mr. DeSantis problem -- being deprived of a bonus -- instead of being left with not only no bonus, but also no job at all, because the companies no longer exist.

I can sympathize with Mr. DeSantis, it may be unfair that he is taking the hit for this situation. But the sad reality is that that is true for many of the rest of us too -- and we have been deprived of much more than him, because the government did not come and rescue our companies like it did his. He appears to be completely self absorbed in his own situation, and totally uncomprehending that there are a vast number of Americans who have been financially "punished" far worse for things that are clearly equally far less their fault, than what he has as an executive VP in the AIG division that is responsible for his company's problems. Because he seems completely tone deaf to this, that he actually by all rights should have been out of a job 6 months ago had the company gone bankrupt, my sympathy for him is very limited.

John

March 25, 2009 1:40 PM

What vindictive people.
First you blame a single division of AIG for credit default swaps, when it is not AIG that caused the prices of houses to go down to cause the CDS to be worthless. Sorry people but SH*T HAPPENS! Look at the history of financial panics and depressions: 1636, 1721, 1835, 1907, 1929, 1974, 1987, 2000, just to name the big ones.

Next you fault the guy for working for $1, and the contractual promise of a later payment. (It ain't a bonus!) Hell if every company failed to fulfill contractual promises like Congress is doing, the entire system would go up in smoke.

How would you like it if Congress came back and said we don't like you, you owe us 90% taxes for the last 5 years on all your earnings. We will conveniently ignore the Constitution of the US that says that we can't pass ex post facto laws and we will not comply with the 14th Ammendment that guarantees equal treatment for all people. Last time such governmental shenanigans took place on such a scale was in 1776.

Just why in hell should any private company go into business with the US and buy into the bailout plan, when Congress has demonstrated that they are not trustworthy and will not fulfill contractual obligations?

Go for it Jake. You obviously have a talent. Start your own company, preferably offshore, make billions trading and thumb your nose at the world.
PS Thank you for your service for this last year.

v

March 25, 2009 1:43 PM

The research scientist who develops a block busting drug has to assign the patent to the company. He has little reward. He is hired to develop the drug anyway.

HedgeFundAli

March 25, 2009 1:44 PM

I understand a certain level of outrage but get high SATs, great grades, great GMAT or GRE and into a great grad school and be savvy and smart enough to make the cut to get a job at AIG, an eleite I-Bank or hedge fund before you disparage. Because if you didn't do this you are not really qualified to say I work as a plumber but he made more money. Nothing against plumbers or non financial services people. I worked on Wall Street, made less than Jack, am now in between jobs. I'm not asking for sympathy but at least I am motivated and smart enough to know I can make money. These are not cushy jobs. Its hard work folks. Part of the problem is jealousy complex by "main street," and a bunch of proliticians who seve as nothing more than prostitutes for public opnion.

JIM

March 25, 2009 1:44 PM

Mr. DeSantis

BYE !

Chris

March 25, 2009 1:44 PM

OK, I understand outrage, but the bonus money was clearly described in the bill that went before CONGRESS. It's human nature to try to get your best deal from your employer. In this case, the defacto employer was congress and congress was apparently asleep at the wheel as this bail-out bill was rushed through. Rage should be directed toward our congress who explicitly approved these bonuses in a written contract. We need to focus on our government, as the $165M bonuses are just a drop in the bucket of cash they are throwing around in these scary days.

Bailey Hankins

March 25, 2009 1:44 PM

Dear Mr. DeSantis,

You are understandably upset because you worked all year for ONE DOLLAR and now the U.S. Taxpayer doesn't want to honor your $750,000 bonus, which you feel really entitled to, because you worked hard!

You should be publicly caned and then executed, you piece of garbage.

Masshole

March 25, 2009 1:46 PM

I can't believe not one comment is aimed at the government. Wake up people to the biggest Ponzi scheme going. Democrat or Republican, take your pick, the federal government is the problem. For those of you who think the money is too much, get over yourself and seek out some real estate in Northeast. Don't write in unless you really know what you are talking about and can compare apples to apples, and oranges to oranges.

pk

March 25, 2009 1:48 PM

Tell it to the people working for Circuit City. This is hard-hitting capitalism, Friend.

Elliot

March 25, 2009 1:49 PM

Why doesn't anyone complain about the outrageous compensation of entertainers and athletes. Am I missing something about Western culture?

Kevin

March 25, 2009 1:49 PM

"If there was a correlation between hard work and pay, then many people in this country would be far richer than those on Wall Street."

Hard work does not just mean in your adult life over 30. Most Wall Street professionals were were doing calculus in high school while these other so-called "hard workers" were getting drunk and smoking marijuana. Hard work in your adult life can't always make up for a lazy childhood (where your future is primarily determined).

Declaration of Interdependence

March 25, 2009 1:49 PM

The world's bastion of capitalist ethos now reveals itself to be a hotbed of righteous, madly knitting DeFarges.

As usual, it's only the romantic symbol of individualist national principle that is madly waved like some Old Inglorious - and the principle can be damned if the reality doesn't live up. Qu'elle surprise!

In fact, the bottom line is still "If I didn't win, someone has to pay.", while the Free Enterprise flag is being burned on main streets all over the nation.

Maybe, at last, you will see that at locally, as well as globally, we are all affected by each others' choices. Welcome to earth.

Mike

March 25, 2009 1:52 PM

We are ordered to take part in class warfare by politicians who knew all about the bonuses for months and agreed to the bonuses but don't want us to question our beloved Senators & Congressmen for being complicit in the payment of bonuses. Senator Dodd & Mr. Geitner should both resign. Mr. Liddy should have told Congress to find some other fool to take the beatings it wants to dish out. Every politician who voted for the legislation that allowed the bonuses should resign.

tom

March 25, 2009 1:52 PM

~If there was a correlation between hard work and pay, then many people in this country would be far richer than those on Wall Street.~

Stop the populist nonsense. Anyone can break their backs hauling bricks all day, or plowing fields. Markets dictate what people get paid. Just because it is a different kind of work than what a lot of other people do doesn't mean it isn't hard.

They get paid a lot because in addition to their skills they have incredible stress and pressure to succeed.

How much quality time do these people get to spend with their families.

For a lot of these people their job becomes their life and they get compensated for that sacrifice while your average "hard working" union hack brick layer is finished the second the clock strikes 5.

Anyone can make all the money they want. Get the skills, and make the sacrifices that are needed. Most people don't want that. Most people want to go home and drool in front of american idol and do other things to numb their brains. They get compensated appropriately.

Lee

March 25, 2009 1:52 PM

"The list of who to vilify grows ever smaller." ... Why are you bent on finding people to blame? And how do you justify blaming A for something B did? Do you have any evidence that Santelli should be vilified?

"Just because you write enough transactions to rack up, say, $100 million in profits for your firm doesn’t mean you’re automatically entitled to millions in compensation."... Who exactly are you to decide how a privately held company should compensate its employees?

"This is a company that would have been bankrupt if not for taxpayer support."... True, except it wasn't taxpayer support. Taxpayers didn't want any bailout, government bureaucrats, whose campaigns are fueled by companies like AIG, did. If anyone deserves vilification, it's congress.

"the plumber may have a hard time getting his full pay."... so if he could get the pay he is contractually owed, you're saying he shouldn't, just to make sure he gets screwed too?

"If there was a correlation between hard work and pay, then many people in this country would be far richer than those on Wall Street."... You're right, but different skill sets earn different amounts, and the market decides what people's skills are worth. Not you, and not congress.

"But not you, right?"... If you're that jealous of his earnings, you should've picked a different career.

"Giving money back to the company is essentially tantamount to helping people suffering from the downturn."... The money would go back to the government, if taxed at 90% (which is unconstitutional under Article 1 Section 9 anyway, but hey we're mad so screw the Constitution). On what planet is the government more efficient at helping people than charitable organizations?

barry

March 25, 2009 1:52 PM

It's interesting that there are no comments defending this guy. You would think that the readers of Business Week would be a bit more on the side of our corporate leaders, but these readers are brandishing their pitchforks and flaming torches as much as what you would find in "Mother Jones" or the "Daily Socialist". Times have indeed changed!

Richard

March 25, 2009 1:52 PM

AnonObserver made one of the only comments on this post that has any real intelligence behind it.

Masshole

March 25, 2009 1:53 PM

I can't believe not one person is pointing their finger in the direction of the government. The federal government is the biggest Ponzi scheme going. Democrat or Republican, they are all the same, just a different focus. Those of you that are so appalled by the amounts these individuals made, go check out some real estate in the Northeast of this country...not the boonies, but where the jobs are, and then start doing some simple math. Stop writing about things you know nothing about, and are just green with envy over....

Mike

March 25, 2009 1:54 PM

Jake's analogy about the plumber and the electrician is appropriate. Why did the plumber not enable the fire suppression system so that the damage caused by the electrical fire was minimized? The plumber was not cheated, but should share in the lia bility.

If Jake had looked further than the money he was stuffing in his own pockets, he would have noticed there were serious problems with what he and his company were doing.

Stella

March 25, 2009 1:54 PM

Dear Sirius, regarding your comment:

"AIG is part of the US, so by extension, you should also be responsible for the collapse of AIG?"

It's a bit more complicated than that. Think about it as a complex organism, and imagine that all the organs are involved in a complex division of labor to keep the entire body going seamlessly - if your appendix fails, you generally don't say "my entire body sucks," you tell the appendix bie-bie and move on...

disgruntled taxpayer

March 25, 2009 1:55 PM

That's all right. He probably made so many millions during the "good times" that he doesn't have to work again for his entire life, so good riddance. The only smart thing he said was how they were all overpaid to begin with, and some of the pay they got for "stellar performance" was what got us into trouble in the first place.

Fed up

March 25, 2009 1:55 PM

There is nothing more corrupt than government and it seems that everyone just needs a wagon to jump on. What tax payers don't understand is that the more AIG is dumped on, the greater the risk of collapse. It is in the tax payer's interest that AIG survives.

Stand behind your investment and don't always believe what you hear. AIG employs 130,000 people world wide and a only a handful get bonuses. Every large corporation pays big bonuses to their executives...are you all that surprised. The regular joes are there just doing their jobs for little pay and no bonuses...and guess what...they are tax payers too. So come on people, look at the big picture, your politicians are living the high life, wining and dining, using private jets on your tax dollar.

Roland

March 25, 2009 1:56 PM

Bye bye!

Foo

March 25, 2009 1:56 PM

How many others would complain if (1) your bosses were two-faced, (2) the attorney general was putting your life at risk by releasing your name to an angry mob, (3) you lost money as part of something you had nothing to do with, or (4) you gave up taking a job at a safer company for money and then were asked to give the money back?

Yes, Mr. DeSantis can earn a lot of money doing the work he does. And he admits it. He doesn't argue that he isn't overpaid. Does this not give him the right to make the same complaints you would in his shoes?

He's not trying to profit from the situation. After losing money in AIG stock, after having his reputation tarnished by working at a company that helped wreck the US economy, he's giving the money to help those hurt by his own company.

I think, given his talent, he's been dealt a sh*tty hand of cards. And he's doing the most honorable thing - he's both forcing the company and government to keep their end of the bargain they made AND making sure he does not profit from it.

Kudos to Mr. DeSantis.

ctobserver

March 25, 2009 1:56 PM

One description of the terms of the contract (http://www.nytimes.com/2009/03/25/opinion/25desantis.html) describes the conditions of the "retention award"; namely, that if you leave, you don't get your bonus unless you leave "for a good reason", essentially.

So, inquiring minds want to know -- is Jake DeSantis's departure "for a good reason" according to the contract? Can he keep the bonus?

Or does the very act of Jake DeSantis leaving AND keeping his money demonstrate that these contracts in reality have less to do with retaining talent than the term "retention award" might suggest?

Steve

March 25, 2009 1:57 PM

Wow – just the fact this guy felt compelled to resign publicly shows his measure of self importance. People work hard every day and companies go under. This knucklehead somehow thinks he is deserves to be exempted from life’s turns and twists. His letter really does say it all!

THOMAS

March 25, 2009 1:57 PM

Bad analogy,the electrician probably had insurance,so the house was rebuilt,the plumber was paid (twice!)and they all were wiser for the experience.

Luke

March 25, 2009 1:58 PM

Several years ago, I was called by my employer to demo a corporate jet to an AIG executive. He was purchasing it at a cost of $20,000,000 so that his wife would not have to fly on an airline to their other home in Maui. Apparently first class seating among the unwashed was just too much for her. He spent about 30 minutes checking the aircraft out, and said that he was going to buy it. Wonder where he is today.

NS

March 25, 2009 1:58 PM

I am not sure about the justification of Mr. DeSantis. However, I do feel that:
1. He has worked for the full year with $1 pay when he really did not have to. Had he left, maybe his division would be fine.. but then again.. maybe not. 2. Instead of canning the salaries, the commission plans should have been canned. I am not comfortable with the idea of 750K in commissions when most probably, his income was probably around 200K.

Is he really wrong in demanding compensation for his work? Yes, I understand the situation of the company and the taxpayers but I ask each and every one of you on this board. If you worked the year for $1, would you not want compensation? Again, I do admit that 750K maybe too much but then who decides what that?

GTH

March 25, 2009 1:59 PM


You babies quit whining. You bail out corporations and you get what you deserve. Now you don't know how to manage the business? Tough SHT!

Dmn right this is class warfare. It's what you get for "redistribution of wealth". All you something for nothingers can take a flying leap off a tall cliff. Lemming up right now!

Don't work, don't wait, don't dream in America! Liberty, freedom and pursuit of happiness are DEAD.

Aaron

March 25, 2009 1:59 PM

Sorry, but you have far too much confidence and trust in the government Diane.

If you really think that the government is some noble enterprise of the people and is representing our interests in regard to the AIG bonuses, then you are being naive.

The bonuses were protected months ago in the law Congress passed, the money would have passed directly into the hands of the people when the AIG execs spent it purchasing goods and services (as opposed to returning to the black hole that is the government), and ultimately, these bonuses account for less than 1% of the money AIG received.

If you don't think the bonuses should have been paid, then fine, but they are the tip of the iceberg when discussing the AIG mess and are of fairly small concern.

The real lesson to execs of large banks is financial failure. And the government has eliminated that prospect entirely on the backs of the taxpayers.

The government is in a back scratching club with the leaders of our nations largest banks, Jake DeSantis just isn't an inside member, so he lost his bonus. Make no mistake though, the government is not helping AIG for the people of America, they are doing it to ensure that their future power and wealth and that of their friends and colleagues is maintained. And they could care less about you and me and our families.

This is the same type of short term, protectionist mentality that has existed for years and led to our current economic problem. The people leading the charge on this are putting off the pain until tomorrow, they won't have to deal with it, that will be left for another generation, and in the meantime, they will be stinking rich.

If you don't want Jake DeSantis to whine about losing his bonus, fine, but as rich as he is, he's a relatively small fish in this game. Keep your eye on the real picture.

JJoe

March 25, 2009 2:00 PM

The article and all of the comments demonstrate a belief of entitlement on the basis of being an American. How sad.

Dick J

March 25, 2009 2:00 PM

I used to work on software projects that helped a development program at my employer earn several billion dollars of revenue per year. I never expected to receive a fraction of a billion dollars as a salary bonus!

And at this same company, when we toiled on a product that failed in the marketplace, we didn't get a bonus. Sometimes we got re-assigned to another project and sometimes there were layoffs.

Eliathan

March 25, 2009 2:03 PM

It's a free world, so farewell.
I have the feeling that the argument that retention pay is supposed to keep the "talents" is empty and a bluff. Those who think they are too good for their "miserable" pay can walk. The world will find other talents.
No one is irreplaceable, not at the top, not at the bottom.
So long, and God bless you

Anon

March 25, 2009 2:03 PM

AA

Vince

March 25, 2009 2:04 PM

I've read that employees at AIG feel betrayed and hated by the American public, that the company has hired security for them... what?! Now the taxpayer has to pay for security to protect them from...uh, taxpayers?
AIG wants to change their name like Philip Morris did to Altria. How about 'Aidos, Inc.' from the greek goddess of "the feeling of shame which restrains men from wrong".
Class Warfare is here to stay fellow Americans and Corporate America has its self to blame.... truly idiotic, insane and deserving.

fedup

March 25, 2009 2:07 PM

Can anyone answer this question for me? How can Congress crucify the AIG execs for accepting "retention bonuses" when AIG is broke, and at the same time write themselves pay raises and have "golden parachute" retirement plans when the COUNTRY is broke?

JK

March 25, 2009 2:07 PM

"
John
March 25, 2009 01:17 PM
Um, if it would appear there is a position open. I do not particulary like my job & it pays less than 50K a year. I would gladly take the office once occupied by Mr. DeSantis. Also, if we do not produce, I do not want a bonus
Thanks
"
Why don't you go play professional baseball . You can make millions while playing ! Why don't you go act in the next Hollywood movie ? Why don't you go create another google.com and be worth billions ? Why can't you, like Mr. DeSantis, make 100 millions a year for your employer and get paid $700K back ?

Oh, I forgot. You were the lazy ass who dropped out high school and got stuck with $30k job and never had the talent and motivation to work your way up .

Don't tell me you are the tax payers. Do you have a clue that the bottom 50% of the population pay 1% of tax and bottom 40% pay zero ? My guess is that you, and most ignorant mobs posting here most likely belong to that bottom 50%. And people making over $250K feed you lazy pigs on everything. And now you are whining. How ironic!

Ford

March 25, 2009 2:07 PM

Does this guy giving the bonus money to charity somehow help him with his taxes?

While his offer is noble and welcome I prefer the first option, that is Uncle Same takes the bonus and does whatever is deemed fit with it.

john

March 25, 2009 2:08 PM

10,12,14 hours a day. It is normal for a lot of workers in IT world. What is he complaint about?

john

March 25, 2009 2:09 PM

10,12,14 hours a day. It is normal for a lot of workers in IT world. What is he complaint about? We dn't get bonus like what he used to get.

JK

March 25, 2009 2:10 PM

"
John
March 25, 2009 01:17 PM
Um, if it would appear there is a position open. I do not particulary like my job & it pays less than 50K a year. I would gladly take the office once occupied by Mr. DeSantis. Also, if we do not produce, I do not want a bonus
Thanks
"
Why don't you go play professional baseball . You can make millions while playing ! Why don't you go act in the next Hollywood movie ? Why don't you go create another google.com and be worth billions ? Why can't you, like Mr. DeSantis, make 100 millions a year for your employer and get paid $700K back ?

Oh, I forgot. You were the lazy ass who dropped out high school and got stuck with $30k job and never had the talent and motivation to work your way up .

Don't tell me you are the tax payers. Do you have a clue that the bottom 50% of the population pay 1% of tax and bottom 40% pay zero ? My guess is that you, and most ignorant mobs posting here most likely belong to that bottom 50%. And people making over $250K feed you guys on welfare and everything. And now you are whining that is your tax dollar. How ironic!

John Strong

March 25, 2009 2:10 PM

It is hard to imagine he did not know about the huge policies being written on CDOs, the credit default swaps, etc.

In my opinion, a few things are at work here: one is the "televangelist syndrome," whereby the apparent success of the enterprise (on the surface) justifies all manner of malfeasance, said malfeasance going through the phases of sin, necessary evil, to positive good. The next is a real disconnect with life as it is lived by most people (the "culture" as some contributors call it).

Given the immense amount of damage that this malfeasance has done to ordinary people all over the globe, I am not inclined to view this man's case generously, regardless of the letter of the contractual obligations he entered into, putatively in good faith. Real good faith would have been to blow the whistle on this immense bucket-shop scam before it ruined the financial system.

His failure to do so, in my view, forfeits his right to whine about how he's being treated. He needs to spend some time worrying about how he's going to scrape up a hundred bucks for a tooth extraction, or whether to pay car insurance or buy medicine for the kids.

Philip

March 25, 2009 2:10 PM

I can't believe the commenters here that believe hard work should be rewarded with guaranteed success. That the only way someone else is successful is they cheated. That the failure of one is an indictment of all. Sell your freedom for righteous indignation you fools. Scream from the hilltops "Where is my reward". Look to the government for your salvation, don't worry they'll tell you when and how to think, for a few welfare pennies. Talk about sheep, listen to your bleating.

Ivymike

March 25, 2009 2:12 PM

Explain to me how this is any different than unions (the average Joe) arranging deck chairs while the big ships like GM sink. Everybody wants theirs, executives and average Joe. Let's be France: impossible unemployment, no innovation. Executive pay should be whatever the market will bear relative to highly performing company culture (look it up). Blame the 'fat-cats' and those of you lucky enough to have a job will be working in rivet factories alongside your children.

Claremont Mom

March 25, 2009 2:12 PM

Mr. DeSantis' mindset is indicitive of the mindset of many (if not all) high powered corporate execs. There is nothing wrong with that if it works for the corporations and they continue to grow and be strong.

However, when a company allows the federal government to prop them up these brilliant execs must realize that they no longer work for the corporation alone and adjustments must and will be made.

Frankly, I don't care how any company decides to compensate their employees. But this company is no longer a private company, it is a government entity, propped up with my hard earned (10,12,14) tax dollars.

If you allow your company to become socialized you are beholden to everyone who supports you not only your shareholders.

david wayne osedach

March 25, 2009 2:14 PM

When it comes to free taxpayer money: they all want their share!

JulieB

March 25, 2009 2:16 PM

These events are exposing a mindset of "executive entitlement", from bonuses in the financial industry, to junkets at luxious spa's, to new cars given to GM executive to drive every 6 months--gas included. They seem no different than a welfare recipient whaling when the goodies end (bubble bursts) and they have to roll up their sleeves and produce honest, hard work for commensurate, fair market compensation levels. How many are the same ones who said GM workers make $75 an hour!! Go check their tax returns to validate that one. The country has a lot of folks nearest the pot of gold thinking they are entitled to it. Just because you are an accountant or finance person doesn't mean you get the money you are providing a support service for.

john

March 25, 2009 2:16 PM

These days, if we without these jerks on that spot. The company are still funtioning. How dare they take so much portion of profits into their from hard working team as a whole. They are clearly rubbing coporate money machine and dont feel any shame!

Ryan

March 25, 2009 2:18 PM

Well, after reading every comment on this article and finding not one dissenting opinion, I've decided I must play devil's advocate. And to be sure I don't lose credibility by anyone's assumption that I must be rich, I'll also mention my financial state: I make about $50K a year and my net worth is VERY negative. However, I still believe in the capitalist system, and I do believe hard work equates to success. Most of the opinions above seem to indicate that hard work does not payoff. That is simply absurd when I think of anyone I know who is successful and anyone I know who is not. Hard work pretty much goes hand in hand with success. Some people's definition of success is large amounts of money, and some folks think it is managing to find life balance. Regardless, I think anyone who truly applies themselves can make large amounts of money if that is their vision and they do not deviate.

I just notice more and more how everyone talks of the rich in the sense that they are all on one team, and that their collective goal is to hurt everyone else. That is pure jealousy talking.

As for Mr. DeSanti, we really do not know whether he is responsible for AIG's downfall. We don't know whether he was involved in every side of his business unit. At an organization as large as AIG, my guess would be probably not. My point is that in our outrage over corporate irresponsibility, we are willing to rake anyone over the coals who is remotely connected. I do agree that Mr. DeSanti seems to be a bit insensitive to why Americans are so mad, and that he probably should have kept his mouth shut, but his letter does not incriminate him at all.

The same thing happened to Arthur Andersen employees in the wake of Enron. Most of them were honest, hard working folks who did not make much money, yet the media and the public decided the whole company should be punished. I just think that we are a little too hasty to punish when we really don't know who is guilty. Until now, the only way wages could be revoked were by the court system who found someone guilty. What happened to due process?

ANON

March 25, 2009 2:19 PM

I just hate the way senators, congressman and americans keep reffering to AIG as "their own" or to the bailout as "tax payer's money." It is irrationally stupid to believe that a worker who makes 25K a years pays more taxes than a company that was once as profitable as AIG. One has to estimate that AIG in all its lifetime has paid perhaps twice as much of what they are getting right now in bailout money, and yet you hear most of the ignorant and brute citizens rationalize that it is a waste of tax payer's money.... For crying outloud!!!! This is a company that has paid much more in taxes than perhaps any other financial instituion in the US and ordinary citizens believe they have a claim or say on how the money of the bailout should be spent? They deserve the bailout they got as much as they deserve to make their own choices and take their own course of action within legal limits... the bonuses are part of their contract and thus part of the legal responsibility of the company itself. What else is there to liquidate besides legal obligations by AIG? what else do they need the bailout money for if not to pay for contractual debt, payroll and financial expenditures to keep the company afloat? I just hate to see how the "mob" is an irrational animal that does not think by itself, is just as if when you gathered a lot of people together the collective IQ goes down and down and thus when you have a mob, the IQ of the entire mob goes to 1, because they are not able to look at a problem from a rational perspective. The bonuses MUST be paid, they are part of the contractual obligations just as paying the credit default swaps is... again, the purpose of the bailout money is to pay off debt and that includes every bit of it. the government or the mob(under the pretenses that its their tax money) has the right to decide whether a contract is worthy or not of being honored.. how come the mob doesnt go against all the banks and instituions to which AIG owes money and tells them that they wont be paying them? When you owe money you owe money and you have to pay, it doesnt matter what the type of debt is (contractual bonuses, default swaps, payroll, etc...)
Please remember that all these executives and wall street economists are the ones with the power and knowledge to turn things around in AIG and get them out of this mess... and also remember that they DO have options, they dont need to stay at AIG and deal with this mess, they could all simply resign and let all the bailout money go to waste, do not be arrogant as to discredit these people only because they went to Harvard, or Yale or great business schools or educational institutions that the average person doesnt even intellectually qualify to go into. All I see here is pure arrogance by the mob only because of the bonuses, by I dont see any rational argument as to why they should not be paid... Please use your brains before talking, and this also goes to the stupid author of this article, pure ignorance speaking...

Butch

March 25, 2009 2:22 PM

The frenzy that democrat politicians and their support system that worked the country into over this are amazing. The notion that any politician (or most of the frenzied crowd for that matter) has enough business acumen to even engage in the conversation over these bonuses is absurd. Congress cannot even predict the cost of a typical program within $100 billion or more. In business, that would mean immediate termination, no bonus, and no hope to ever work there again. Businesses cannot run on a deficit or print their own money - or current administation is acting like their is no end to either one.

Whether or not any or all of those bonuses were appropriate or not is a question that can be answered by ANY outsider. If America didn't want business decisions being made with their money, they should never have given it to a business. If America wants the likes of Chris Dodd and company making all of America's business decisions, then we might as well turn it all over to government control and get it over with. After all, they are all so much smarter than anyone else - just ask them.

Jake

March 25, 2009 2:22 PM

Everyone!

Let's get over it and move on! If I was in that high position, I would probably want the fat bonus too~, wouldn't care what the taxpayers/unemployed goes through...as long as i can buy me ferraris, million dollar houses, luxury vacations, all things money can buy.....I would surely be blinded with greed. The rich cannot and will not sleep in an apartment hell no... we need to move on!!!

nikko

March 25, 2009 2:23 PM

In the last few years, on several occasions, workers had to break contracts because of company hardships. It didn’t matter whether or not the hardship was their cause. Even workers putting out more than their share must take the lumps. Even if the current execs were not the cause of the problem, why should they too not share in the hardship as common workers have time after time?

Their attitude exposes the fact that exec pay has become a complete fraud. Pay is not determined by “the market” If it did, they wouldn’t dare ask for ANY bonus until the company was turned around. Exec pay is a product of cronyism. Members from the club determine each other’s pay – and treat others as they want to be treated; Lavishly.

Here is a thought: Execs in other countries work for far less than they do here. They also tend to me more honest, because in most countries they would be jailed for what our exces just got a way with. If there is no execs willing to work for a mere $500 K a year, why not post adds in countries like Germany, Japan, India? If we can export labor, why not import CEO’s?

jim

March 25, 2009 2:23 PM

Go ahead vilify every executive. You only do so because you are not in that category. Yes, indeed so what if you earned it so what if you brought millions to your company that does not justify a bonus? The guy gets one dollar a year. Exactly what is his motivation to do anything good if not for money. Please how many of us would work for a company make it millions while only taking one dollar and then say oh because others have done bad I too will not only give up that bonus but continue to work for NOTHING!!

Please spare me your higher than thou attitude. All this is to get the attention of the 8 BILLION in port and the Trillions of ill spent money. Tax payers are never going to get that back. NEVER government does not know how to invest.

If there was so much money to be made off of this then the investors would have purchased these loans and loaned these companies the needed money. The problem is they are simply not worth the money given to them by our government and we will not get it back.

Stop your complaining over what the free market does and pay attention to what your government is doing. The government are the ones about to burn the country down... and your made at AIG executives working for $1 a year.

John Eason

March 25, 2009 2:27 PM

What's needed is accountability: reward success; do not reward failure. Short-term gain (the quarterly business cycle), plus the goal of year-bonuses, and a mountain of debt, have delivered this global Great Recession.

Sam

March 25, 2009 2:28 PM


Actually, if you research the AIG situation, you find that a small handful of people (around 25 people) at AIG-FP were working the credit derivatives. Also, as Obama said on Leno, "much of what was done was legal." Wall Street firms were told in 1999 and 2000 that they were unregulated now (after being regulated for over 100 years)--and we'd expect what to happen? Let's have Congress cut down all stop lights, erase all speed limits, take down all stop signs in this country and see what happens. If your car gets slammed into by another driver, you'd be surprised?
The government allowed reckless deregulation.
Also AIG is NOT AIG-FP; AIG is not a company like Merrill Lynch or Goldman Sachs. It is an entity of MANY companies most of which are totally and tightly regulated. Those companies could have been sold by now for good sums and the taxpayer repaid (and with interest) but that could not happen in a hostile environment (gov't, media, public) in which the good companies were devalued. Way to go taxpayers. Cut off your nose to spite your face. Didn't even bother to understand what exactly "AIG" really encompasses. And yes, AIG-FP is a tiny company within AIG and within that tiny company a handful of people were working the credit derivatives (that the gov't had legislated were OK to go unregulated.

jim

March 25, 2009 2:28 PM

Go ahead vilify every executive. You only do so because you are not in that category. Yes, indeed so what if you earned it so what if you brought millions to your company that does not justify a bonus? The guy gets one dollar a year. Exactly what is his motivation to do anything good if not for money. Please how many of us would work for a company make it millions while only taking one dollar and then say oh because others have done bad I too will not only give up that bonus but continue to work for NOTHING!!

Please spare me your higher than thou attitude. All this is to get the attention of the 8 BILLION in port and the Trillions of ill spent money. Tax payers are never going to get that back. NEVER government does not know how to invest.

If there was so much money to be made off of this then the investors would have purchased these loans and loaned these companies the needed money. The problem is they are simply not worth the money given to them by our government and we will not get it back.

Stop your complaining over what the free market does and pay attention to what your government is doing. The government are the ones about to burn the country down... and your made at AIG executives working for $1 a year.

Lon S. Cohen

March 25, 2009 2:31 PM

Very nice commentary on the letter to the New York Times. I agree with Ms. Brady's comments.

Seems the guy got what he wanted: A soap box to preach from. Yet, I think that this was neither the time nor the place to be telling everyone how lucky we are to have people like him running AIG now that American tax money is propping the company up. I'm sorry but I'm not sure too many people who read that letter care all that much for this guys plight.

We own a big piece of AIG now and to see people in the same division that cost Americans all that money then get hugely unbalanced compensation packages is bound to get the ire of the public up. Who could think otherwise. It's not a logical debate. We're INVESTED both monetarily and emotionally as Americans.

Do I EXPECT someone to do that job for $1 per year. No way. A reasonable salary can be negotiated. But millions of dollars in retention bonuses? That's simply ridiculous. Can't we get qualified candidates to help run this company for less than millions of dollars per year each? How about a reasonable salary and good solid benefits?

Bottom line is that people think that millions of dollars is way out of balance. Wall Street executives have to know they have a HUGE PR problem to deal with. This situation does nothing to endear AIG (or big financial institutions in general) to the public.

Especially mere weeks after a cash infusion of billions and billions of dollars. You need a little breathing room guys. Suck it up.

perspectives

March 25, 2009 2:32 PM

Oh, come on. Guys. Let's put some perspective into this, shall we...

Would you take $1 salary, work 10, 12, 14 hours a day with a promised bonus taking away?

I am willing to bet nobody would take a minimal salary, work 10, 12, 14 hours a day without overtime pay (bonus?).

Is $750,000 a lot money? Yes, it's. But let's take a look at the at from a different perspective: can you qualify for the job? Mr/Mrs/Miss angry tax payer? How about your, Ms Blady? Would you take a $1 job, work over 10 hours a day without bonus? Or would you qualify for Mr DeSantis job at AIG?

Let's be fair about the whole thing and stop blind sighted.

By the way, I am not working for AIG. And I don't know anybody at AIG.

Marco

March 25, 2009 2:32 PM

Everyone is missing the point this executive is making because of ignorance and understanding of managing a crisis... Here is the example... You live in a town and your lifestyle and standard of living depends on a city block of buildings... a few of those buildings catch on fire, now that's bad enough, but if they are left burning the whole block will burn down and then your lifestyle and standard of living go's from ok to destitute. So you depend on someone, anyone at this point to stop the fire… So your government agrees to an incentive, U get $1 salary and if you put out the fire, you will get a bonus… otherwise we are all doomed… The plan is a few will start putting out the fire over here and when it’s out u collect your bonus. Now they start getting the fires put out… and collect their bonuses… but now all the sudden, the government says… WHAT THE HECK, YOU CAN’T be getting BONUSES… BLAH BLAH BLAH… we still have a crisis here… So the rest of the folks fighting the fire look and say … WHAT the PH$UCK… ok we quit… And now the rest of the building on the whole block burn to the ground and EVERYONE in the town is now really SCREWED…..

Moral of the story… Don’t let idiots manage a crisis… That’s what’s happening right now with our current nut-job democrats in our government & the people don’t even see the folly of their emotional outrage…. Just you wait… let AIG & the rest of Wall Street implode and it won’t matter who’s to blame you will already be SCREWED!!!!

Conrad S.

March 25, 2009 2:35 PM

If AIG was allowed to go bankrupt to begin with, taxpayers would not be on the hook and a bankruptcy court could've decided on the validity of his contract. Instead, we have this mess...

Zebhead

March 25, 2009 2:36 PM

Boys and girls, if targeting your righteous indignation toward Mr. DeSantis, who may very well be a pompous ass, makes you feel better, then great. There are a few things I would ask you to consider however as the blame game for this mess gets played out.

First, our friends and neighbors such as Mr. Dodd and Mr. Frank (and many others) had their fingerprints all over this mess from Mr. Dodd putting the language in the legislation that permitted the bonuses to Mr. Frank that strongly supported reducing credit underwriting thresholds in the mortgage business under the name of "affordable housing" that created the flood of crap mortgages that provided the worthless paper. When November 2010 rolls around, I hope all of you outraged people will remember those of your elected officials that facilitate this mess either directly or indirectly by promoting legislation that made it possible or actually encouraged it. Washington is doing its best it can to deflect your focus elsewhere, like on Mr. DeSantis, but these guys were up to their eyeballs in creating these issues. There has been a long list of political maneuvers that have taken place over the past ten years that created the environment for this. Don't think this mess was something just cooked up by Wall Street.

Most of the posters here have no clue how this risk was created or why AIG was bailed out and who the real beneficiaries were to the bailout. I'd suggest you take a little time to understand these items. The money that everyone is focusing on, the bonuses, is chicken feed compared to the tens of billions that were channeled elsewhere and why. The current proposals for the newest acronym PPIP, while costing 100's of billions will only benefit a few, including the surviving Wall Street investment banks that will arbitrage the movement of these "toxic assets" from about four organizations; Bank of America, Citibank, AIG and Well (due to their acquisition of Wachovia)into "investor" hands. Folks there are 100's of billions of dollars being stolen out of the backdoor, and the magicians in Washington have all of you watching the other hand that has a measly $160 million in it. Classic illusionists trick, they have the American public all jacked up over a fraction of what they are stealing.

Making AIG the poster boy for this fiasco was brilliant, but now that we are all outraged over the Mr. DeSantis' of the world, watch the friggin magician's other hand because it's in your pocket. The One and the only great magician is getting ready to fleece you like you have never been fleeced before. There is a reason why he has planned all the face time with you recently, Leno, etc. He is doing the Pied Piper routine and all you little children are entranced and just blindly following him along.

Jason

March 25, 2009 2:38 PM

I truly believe that this mindset is endemic to the corporate executive. They deserve to be paid when things are going great and they deserve to be paid for failing the companies they work for. i.e. the golden parachutes when ceos are ousted. Stock options, payoffs. It's unbelievable when you compare this to the way we normal folk get treated when we're laid off or let go by the companies we work for.

Rick

March 25, 2009 2:39 PM

Rob's reply to Mr.Desantis is right on the mark.

Anon

March 25, 2009 2:44 PM

Is this Business Week, or Populist Week? How anyone could parse out points in this letter to try to justify the inane actions of Congress and AIG towards executives who legally received benefits is beyond me.

Jim Ford

March 25, 2009 2:44 PM

Mr. Desantis is correct in voicing his outrage over the public hurting his feelings. The people affected by AIG activities only lost their jobs, homes, dreams and self-esteem. Obviously, in his opinion, far less important than his version of fair play.

Raymond Meyers

March 25, 2009 2:45 PM

No snowflake ever feels responsible for the avalanche.

Chas

March 25, 2009 2:46 PM

Some questions that nobody I know of has answered:
1) Did these AIG employees receive ANY compensation or benefits? It sounds like they had a salary of $1. Did they get stock options, or ???
2) By not getting a 'bonus,' were they essentially working for free? For how long?
3) Why is the payment called a bonus? Bonus implies a reward for performance. It sounds like this is not a bonus, not a salary - more like a fee to a contract employee. How is the payment a bonus?
4) The resignation letter says something about a partial payment some months ago. How much of the 'bonuses' were already paid out, and when? What were the terms of the payments? E.g., $1 million every fiscal quarter?

I'd really like answers to these questions. Otherwise, we're generating only heat and no light.

Bush Cheney 2012

March 25, 2009 2:48 PM

Crazy article. Every serious economist knows that only by implementing a vigorous tax cuts for the wealthy strategy, can the little people benefit. Purchases of expensive items by the rich spurs our economy forward. No more debates about Wall Street bonuses. It is cruel to deny them the funds for their summer homes or ponies for their daughters. Yes many Americans may be unemployed, but in the words of CNBC personality Santelli - they are losers. American's are well aware that only when lead by our Japanese, Korean, and German masters do our autoworkers do a half way decent job. Otherwise they are lazy and shiftless. I support the GOP philosophy of not taxing the wealthy members of our society, and ending all inheritance taxes now. We have a ruling class, support them, don’t tax them.

SRVCTECH

March 25, 2009 2:49 PM

Wow, this guy is a joke. How does one become so brainwashed by money that they believe that they are not in the wrong. People who make that much income should have to donate a portion to several random charities, this decided by a computer to avoid kickbacks.

Congress should also be taking a pay cut considering that they make over 120,000 a year and get all food, hotel and travel paid for by OUR tax dollars. Not to mention 130 out of 435 have leased vehicles being paid by our tax dollars as well. Laura Richard son(d- long beach) has the most expensive leased vechile, Lincoln Town Car at $1300 a month. This is more than most people pay in rent, mortgages. This is also 2-3 times more than an average persons vehicle payments for a OWNED OR LEASED car. People with horrible credit get car payments for less. I guess this goes along with the $500 hammers and $1K toilet seats. Must be nice to be paid a lot and not even make a car payment. This country is no longer about what the people want, but rather what the wealthy want.

swl

March 25, 2009 2:49 PM

Government should never have intervened and given anybody money to begin. Now that they have intervened, the real story should focus on all the government officials who crafted this pile of crap and are overjoyed that the public is outraged at the AIG bonuses and attention is diverterted away from them. I don't give a rip about AIG, but I do give a rip that my government is proving to be inept, corrupt, and is seeking to meddle in areas that they have no business meddling in. I guess so long as Wall Street and firms like AIG are targeted as the villains, no one will even notice that Uncle Sam is slowly turning into Big Brother.

Jkca1

March 25, 2009 2:51 PM

Great article. Boo Hoo Mr.DeSantis. I find it hard to believe you are an innocent party to this mess but I'm looking forward to your book documenting the steps you took to prevent the mess AIG got into under your watch.

joe

March 25, 2009 2:54 PM

I'd like all the people who rely on public programs in the NYC area to quit whining when the programs go away due to budget shortfalls. NYC is coming up $1 billion short in tax revenues this year due to the loss of income tax from bonuses paid to wall street. So yes, while many didnt deserve any bonus, many did. When your sons little league is cancelled due to the budget shortfall, dont come crying to me, cuz if i had gotten a bonus I would have paid taxes to NYC to cover the cost of said little league...

Wes Boudville

March 25, 2009 2:54 PM

To Aurum79:

Great remark about "Jake". There is another meaning, from two centuries ago. The jakes were the public toilets. Sometimes used in singular.

Perhaps it's also appropriate for this bloke!

Wes Boudville

March 25, 2009 2:54 PM

To Aurum79:

Great remark about "Jake". There is another meaning, from two centuries ago. The jakes were the public toilets. Sometimes used in singular.

Perhaps it's also appropriate for this bloke!

JK

March 25, 2009 2:54 PM

To Conrad S.
quote WSJ:

"Had the company submitted to Chapter 11 rather than a government takeover, a bankruptcy judge might well have authorized identical incentives to minimize losses and maximize recovery for legitimate stakeholders."

Anonymous

March 25, 2009 2:55 PM

Great article, my thoughts exactly.

Tim, the contracts are irrelevant, they are now a gov't-owned institution, all that goes out the window. If they hadn't been bailed out, there would be no bonus, no job, or anything else (as Mark and others had pointed out). The only childish one here is the guy who is making personal attacks on the author for her thoughts.

And TestUser, "If we need these guys..." that's a BIG if, and the answer is no, there are plenty of others out there (especially these days) without the same sense of entitlement willing to work harder to get the job done.

As for saving 1% of the bail-out money, it's a good start. I hope more Jake-types leave AIG, maybe they'll stand a chance.

Bush Cheney 2012

March 25, 2009 2:55 PM

Every serious economist knows that only by implementing a vigorous tax cuts for the wealthy strategy, can the little people benefit. Purchases of expensive items by the rich spurs our economy forward. No more debates about Wall Street bonuses. They earned it the hard way through power lunches and golf outings. It is cruel to deny them the funds for their summer homes or ponies for their daughters. These fearless men are the pillars of our society, not blue collar bums. For example, Americans are well aware that only when lead by our Japanese, Korean, and German masters do our autoworkers do a half way decent job. Otherwise they are lazy and shiftless. I support the GOP philosophy of not taxing the wealthy members of our society, and ending all inheritance taxes. We have a ruling class, support them, don’t tax them.

doug

March 25, 2009 2:57 PM

Not involved with the offending division? Not nearly as far away from the epicenter as the taxpayers that are cleaning up this mess. Too Big To Fail should be restructured so it can implode without getting blowback on the rest of us. Let's make MegaCorp a thing of the past.

Churchell

March 25, 2009 2:58 PM

reminds me of a conversation between Himmler and Dr. Kersten ("the man with the miraculous hands") in which Himmler actually pitied himself as the Third Reich was collapsing around his ears!!!

Rick

March 25, 2009 2:59 PM

Obama approved the bonuses. Wake up to your new president everyone.

Renzo

March 25, 2009 2:59 PM

I am stunned by many of these ignorant, emotion filled statements above.

I moved to this country legally for the opportunity this country had -- be creative, innovative, work hard make smart decisions and you have the OPPORTUNITY to become rich in a country that had laws -- where do I live now the United Socialist States of America.

Lets look at FACTS not emotion here.
1. AIG was bailed out by CONGRESS last year and AGAIN this year-- they could have gone into bankruptcy, restructred the loans and other contracts under bankruptcy laws and the Goverment could have stood as Debtor in place to assist with this BUT no CONGRESS was going to run it and now wants even more NATIONALIZATION power -- they did no DUE DILIGENCE then or now -- Geithner was one of the main rocket scientists who came up with this plan -- and you people thinks its only managment that is the issue -- phew must be that government education you had.
2. AIG is a large conglomerate with many companies and a number that are PROFITABLE (evil word now in America) and some that were run into the ground by the corporate management of the PARENT company and FINANCIAL PRODUCTS. So if you go to work as AIG insurance as a sales rep sell a lot make money for the company bust your hump to get it PROFITABLE -- you people are saying -- NO BONUS in fact we don't want you -- don't return the money we have now spent. Maybe its him being so absorbed about his own situtation-- as none of you above are worried about your work or family or house -- no HE needs to worry about everybody else.
3. LAWS -- pesky little thing it makes societies run fairly well -- but we changed that -- if you have a contract and we don't like it we will either rip it up or threaten your life to cancel it. GREAT -- lets not stop with him -- remember you guys want this -- lets look at the tax code and make it retroactive -- that means for the time before and if we can do that to him I think we should tax everybody who is working -- 90% so we can all share and we will do it on the last ten years of your income not what you earn in the future.Oh and to lawyer who brought up disclosure laws it doesn't matter because laws and contracts don't matter so say the outraged.
4. Retention bonus -- do any of you know what this means it means we want you to stay on KNOWING we are kicking you out the door in a while help clean up this mess and then leave -- MAYBE he should have been so kind as to only expect $1.00 for working 12hours a day and if he only get $1.00 maybe that what we should pay everybody.

Yes feel outraged that regulators were not doing their jobs -- when was the last time an incompetent government employee got FIRED or feel outraged at the PREVIOUS management go onto the INTERNET and look it up. Feel outraged at CONGRESS who are packed with incompetent fools from both sides.

You want to get realistic force change participate in the election process -- get term limits so we can change the current CONGRESS -- get the fair tax so we get the tax code under control -- change company law so Shareholders of companies get more say especially over pay -- get the owners of the company to decide on that. Get rid of incompetent Regulators and government employees who aren't doing their job -- their job should be tied to performance as well.

Wise up and think -- then decide what you want a Capitalistic free society made of law or a Totalitarian Socialist society where laws do not exist.

larry

March 25, 2009 2:59 PM

DeSantis is bitter. He took the taxpayers' money, got caught, his hands were tainted, now he's coughing it all out. After reading his letter, I think DeSantis should apply for a plumber job. He will not be cheated.

sam

March 25, 2009 3:00 PM

Diane:
"The list of who to vilify grows ever smaller."

That's because your initial list of villains was constructed out of ignorance and guilt by association. You have to use a very broad brush to blame corporate culture.

"Just because you write enough transactions to rack up, say, $100 million in profits for your firm doesn’t mean you’re automatically entitled to millions in compensation."

AIG committed in advance to paying this guy a million dollars in exchange for working there the next year in order to generate a hundred million dollars in profits. Clearly, without the retention bonuses, he and others would have left the company. The guys in charge made the business decision that AIG was better off making the payments. No congressman, state attorney general, or journalist is in a position to understand how much worse off AIG would have been if they decided to allow the key employees to walk out the door.

The question is, if you have a contract that says a company will pay you a certain amount of money, are you entitled to receive that money? Or does Congress have the right to nullify contracts based on popular outrage?

"By that logic, producing millions in losses should send you reaching into your own pocket to repay your salary."

You're arguing for a different compensation structure. I agree that in an ideal world, most of the compensation of those involved in risk-based activities would be tied to long-term performance. But that's simply not possible with a company on the verge of collapse. Why would talented people stay with the company if they believed they wouldn't get paid?

"Would everyone have immediately fled if not for the guarantee of millions in compensation? (And to where? Despite the claim of abandoned job offers, I don’t know of a firm that’s expanding in the financial products arena at the moment.)"

AIG currently holds hundreds of billions of dollars in illiquid and complex securities contracts that it needs to unwind. There's a great deal of profit opportunity for people who have expertise in those same securities and who get on the other side of the deals. Job opportunities for those who get millions in bonuses would be limited to those companies that want to increase their own profits by tens or hundreds of millions.


Heidi:
"I too have worked many 10 - 14 hours days. And like many others in this country, I doubt my lifetime earnings, over these last 30 years, exceed the gross amount of the bonus Mr. DeSantis received."

And I doubt that the profits that you generated in your lifetime compare to the profits generated by DeSantis last year.

George Taylor

March 25, 2009 3:01 PM

A contract is a contract - the man is entitled to his money.

Period.

Rich Kline

March 25, 2009 3:02 PM

Marco has it right. The government went into the AIG mess with eyes wide open, and the bonus structure known and approved at several levels. Watching Geithner lie about it, and Obama fan the flames of outrage while claiming to have been misinformed or out of the loop, I am reminded of P.J. O'Rourke's famous quip: "Giving money to the government is like giving whiskey and the car keys to a 16-year-old boy."

If I were an AIG exec, I'd keep my bonus and dare the government to break its contract to try to get it back, just to remind people of the fools they've put in charge of things.

Ken

March 25, 2009 3:02 PM

Wall Street promised a quarter of a percent more return on investments. The money poured in.
We all, as Americans, enjoyed the fruits of the resultant investments.
We relied on a formula to control the risks....worked for a long time. We over invested, overproduced, overbuilt. The cat is out of the bag...it is possible for a home to devalue. So we stop our blame game, unite, smile, pay our bills respectfully and thankfully, and enjoy our U.S.

andy

March 25, 2009 3:03 PM

compensation is nothing to do with how hard you work. It's supply and demand.
When there is a demand for VP of
financial product..if he is the only handful in the world , then he would be pay a lot.
Just like NBA players or golf players..
there is only one tiger wood and one michael jordon. And we paid them a lot.
Fair? This is not Communist Russia.
So all you looser's comment on "he should be paid nothing becuase his company lose my money" just don't make sense.
our gov decided to save AIG or else all his counter parts (banks) will not get their money off their insurance.
then all the other bank will be lossing a lot more and all of them will close and all your "money in the bank" will be gone...I am not sure FDIC has that much money to cover it cause it's just another insurance.
Yes, they are greedy but so is you if you have a chance. Too bad your job don't make shxx but that's not his problem.
He already got paid 0 salary and now bonus is gone too...that is 0 income.
who will work for that? you loosers? no.
even the security guard will quit.
His company is to be blame for risky business but when the whole industry is trading like that and everywhere makes money...who knows it's risky?

Gobias

March 25, 2009 3:03 PM

Mr. DeSantis,

You sound so distraught, we are truly worried for your well being. We have all chipped in to purchase you a "Pick Me Up" package.

It comes complete with a rope and directions on tying knots.

Enjoy.

jm

March 25, 2009 3:04 PM

If bonuses are structured well they stimulate motivation through appropriate rewards so everyone in the organization focuses on those things that benefit the company. A strong bonus program should be at risk with both "upside' AND "downside" potential. Three components help ensure that the focus is appropriate at every level of the company. When overall company performance, work group performance and individual performance are all part of the bonus structure bonuses are better able to motivate the right actions. Finally, since top executives have more control over the total company performance, their bonuses should be weighted most heavily there. If that three-part structure had been in place, it would have been impossible for a failing company to pay executives huge bonuses. Bonus 101!

Mark

March 25, 2009 3:05 PM

University of Nairobi...heh heh

Transportguru

March 25, 2009 3:06 PM

Mr. DeSantis doesn't say how he will spend the huge tax credit he will undoubtably reap from donating THREE QUARTERS OF A MILLION DOLLARS to charity. It will probably be so big that he'll have to take the credit over a period of 5 or more years.

c

March 25, 2009 3:07 PM

He is very arrogant.

why not let AIG fail

March 25, 2009 3:09 PM

if AIG and its people are all bad, why not let it fail. Lehman executives aren't getting any bonuses nor are they writing resignation letters. why pump oxygen and blood for a patient that is already dead?

Poha Ren

March 25, 2009 3:11 PM

The government decides that AIG is too big to fail. So the government gives AIG a bunch of money and the government decides to hire certain experts to help re-organize the company. The government agrees to pay them certain amounts under certain conditions for their work. When the work is done, the government decides they don't want to pay them as they agreed. Since they can't void the contracts they signed, the government decides to pass a bill to take the money back.

I've got nothing to do with AIG but from my view our current problem lies with the clowns who are running the circus in Washington. No one in government wants to take responsibility for their screw-ups but instead wants to point the finger at anyone adn everyone else.

Jeff B

March 25, 2009 3:12 PM

As someone who worked for AIG in the past, I'd like to point out that there are some oversimplifications here. First, AIG is a HUGE company -- made up of over 150 separate companies under the AIG name. It is silly to assume that all employees in all AIG companies were somehow responsible for the VERY large failure of one of the companies. Second, some of our elected officials in Washington knew exactly what was going on at AIG in terms of bonuses, yet they did nothing to stop it until the public found out about it. In fact, Sen Chris Dodd actually worked in an amendment allowing these bonuses. Oh yes, and he is the largest recipient of campaign dollars (hundreds of thousands) from AIG. Barney Frank also takes in HUGE cmapaign $$ from banks and FI's. Why are we not asking for the heads of these elected officials? Why don't we ask them to give those contributions back?

jlg

March 25, 2009 3:12 PM

This is why the Government should stay out of private business. They shouldn't give money to sinking companies without stating the rules before it's given. Once they gave it to AIG it's there's to use as they see fit. Honoring a contract isn't an option, it must be upheld. I blame the Politicians for not clarifying what the money can be used for.

Walker, Texas Later

March 25, 2009 3:12 PM

You are all so full of it.

In the free enterprise system each person rises to their highest level of ability and just compensation.

Just because there are many many envious persons in the public sector does NOT justify taking compensation, especially compensation contracted for and executed upon performance of agreed to assignments.

If the public, beer drinking, couch-potato boob tube bubbas start to dictate what people are paid then everyone sell their homes so you can buy a nice "manufactured home" with a nice big "bump-out" living room and wait for tornadoes while watching King of the Hill.

When I think of the lazy, no-good bums who squeek out of middle and high school and then bitch and moan about how much a doctor, lawyer or professional makes - crikees! These people are just gaining ground after PAYING for six or eight years of additional education and then WORKING their way up the ladder with 14-18 hour days, six and sometimes seven days a week! You whiners make ME sick.

Half the workers in the world would be better off if they kept up with their industry, improved on their skills and were ready for changes when the world makes some progress.

You can bet the guys who used to make buggy whips and conestoga wagons piped up nice and loud when the horse-less carriage industry arrived.

Grow up - get a job - stop whining - pull your weight - oh and when you do get ahead - THEN make sure you give back to the poor.

Dan

March 25, 2009 3:13 PM

What a self-serving, whiner. Based upon the content and his act of posting the resignation letter in the NYT, DeSantis clearly considers himself a victim.

While DeSantis risks injury patting himself on the back for a herculanean (insert sarcasm) effort he has apparently forgetten or just failed to realize that millions of people are working 10-12 hour days, 2 -3 jobs to make ends meet. Oh yeah, and these people aren't making anywhere near what he was paid - with their tax dollars, I might add. I would venture that 90-95% (probably even 99%) of us would jump at the chance to make $1 million/year for 1-12, even 14 hours work per day.

If the government hadn't bailed out AIG, it would have collapsed and he wouldn't gotten a bonus anyway. Most companies operate on a principal that bonuses are a reflection of the overall health of the company. Some employees may get more than others but, generally, if the company has a bad year, everyone suffers. If the company is AIG and is the primary culprit in creating a global recession/near depression, then you don't get a $1 million bonus.

Apparently he doesn't need the money anyway (presumably because he benefitted from AIG's illusory success in the credit default swap dept.) so why doesn't he continue to work hard and turn this thing around? The answer is simple, he still doesn't get it! Like a spoiled child, if he doesn't get his $1 million bonus he's going to take his briefcase and go home.

Lynda

March 25, 2009 3:13 PM

The hubris of AIG executives no longer surprises me. But what does surprise me is that Mr. DeSantis, an executive vice president, claims to have neither met nor talked with the CEO.

The AIGs of the world need a Harry Truman at the helm!

Claremont Mom

March 25, 2009 3:13 PM

Fedup, you pose an excellent question.

Ralph Falkenburg

March 25, 2009 3:14 PM

Pompous arrogant elitist. How much was he paid during the past decade while AIG_FP buit their house of cards?

Generating profits while kicking the risk down the road..

My favorite line is: "You are as blameless for these credit default swap losses as I am."

Anon

March 25, 2009 3:14 PM

It would seem that the only growth industry in our economy, aside from government, is the manufacture of tumbrels.

David Platt

March 25, 2009 3:15 PM

Diane Brady cleary doesn't get it. As it seems many of you do not. You are in such a hurry to punish everyone and anyone that you make bad analogies and arguments. A plummer not being able to collect is not the same as saying the plummer doesn't deserve to be paid for their work.

The reality is myabe 1 or 2 of you have a clue what a derivative is or even how a bank functions. So you just make everyone the bad guy.

And yes if I am compensated by selling a product and I meet my targets I expect to be paid. As would any of you. Your argument suggest that the person selling cars on the GM lot should not be paid because GM is losing money and taking gov hand outs. How many of the companies you work for lost money last year. Does that mean you should not be paid? You are responsible?

I would be willing to bet all of you with these idiotic statements would be irate if your company decided not to pay you because they lost money so you didn't deserve it. But because it is someone else and not you it is fine. What if it were your mother, cousin, or best friend, still want them to not get paid? I bet not

Reading some of these comments I could not be any more

Jim

March 25, 2009 3:18 PM

Jake,I will call you anything you like.
I appreciate individual talent. You come to work for me and make $100 million and I will pay you $50 million.
I know you will not only work harder, that is a given, but most importantly you will work a hell of a lot smarter. These morons can not understand that. You had neither the power or control to have caused or prevented this mess. As you can see by reading these comments,
there are a lot of ignorant idiots out there, which means you do not have much competition.

Andy Hsieh

March 25, 2009 3:19 PM

There seems to be a misconception shared by the commenters on this page and by the public in general. The problem is with the words "executive" and "bonus," which immediately conjure up images of ski trips in Europe and expensive luxury cars. But I doubt that DeSantis is in the "number two position" at AIG-FP. After all, the CEO has never met him. Companies routinely reward their employees with important-sounding titles to reflect increased levels of responsibility. Your local Bank of America branch manager is likely a "vice president," and BofA probably has thousands of VPs. Such people are more like management staff than corporate executives. DeSantis happens to work in a field where management is paid a lot more than most of us. It isn't the only such field. Medical and legal managers are similarly well-compensated, very often at taxpayer expense, and yet we don't demand that they give up the bulk of their salaries in the name of "fairness" just because so many other people in society are poor and struggling.

Which brings up the second misconception. We call DeSantis's "bonus" an outrage because that word implies something extra, something beyond his normal salary. But bonuses in the financial services industry are like tips in the restaurant business and commissions in the sales world: they serve as the primary means of compensation (see www.livebreatheanddie.com/2009/03/17/dont-blame-aig-blame-the-spin-masters for more info). A waiter or salesperson may be paid minimum wage, but cannot depend on that to earn a living. If the government decided to tax tips and commissions at 90% because it deemed such income superfluous, then very few people would go into these careers. But even more insidious is retroactively imposing such a tax at the end of the year, after the worker has already put in 12 months of labor. Every man deserves to be paid for his work at the previously agreed-upon wage. And when you buy a company, you inherit all the obligations it previously held, including wage agreements. You can't just take the assets and ignore the liabilities. My father learned this the hard way when he purchased an existing small business without reviewing the books thoroughly enough. It took him several years of stressful work to pay off someone else's back taxes. Just because we the taxpayers "own" AIG now doesn't give us permission to renege on its contracts. We didn't have to buy the company, after all. We could have swallowed the bitter pill and gone back to a world without credit cards and mortgages, and when we depended on savings for retirement rather than investments that promise to double your money every five years but where "loss of principal" is not just a disclaimer but a cyclical reality.

If you're looking for someone to blame for the AIG collapse, I don't think DeSantis is your man. People who work in equities and commodities are the ones who have been responsible for making your retirement accounts grow over the years. Commodities transactions are supposed to be well-hedged, unlike credit default swaps which might have served a legitimate risk-management purpose for insurance companies in the beginning but seem to have morphed into something dangerously similar to betting on horses at the racetrack. If anything, DeSantis is probably helping to clean up the mess that we the eager-to-get-rich-quick public are ultimately responsible for fueling. It's not very helpful to claim to know someone else's "mindset." Such judgmentalism wastes countless hours in rhetoric and finger-pointing in Washington each year.

If your problem is that DeSantis makes or has too much money period, then I think Holly Garfield has ironically hit upon the right idea. "Someone is greedy if they make more than I do." That statement can apply to us as well, can't it? Where shall we draw the line? $700K? $150K? Anything more than the "average" wage? It's easy to nod our heads in fervent agreement when times are tough, but such sentiments point us toward the path of socialism and communism. Perhaps someday we as a society will rethink whether our system produces fundamentally unfair distribution of wealth. But until that day comes, there will always be people who are richer or more successful than I am, and I shouldn't label them as "greedy" when I myself am chasing after the same thing.

Squeezebox

March 25, 2009 3:19 PM

What the AIG executives need is a little perspective. The president of the United States of America, one Barack Obama, only earns $400,000/yr in salary (about 669,000 including the perqs). Why does Mr. DeSantis feel he is worth more than the most dangerous person in the world?

Moose

March 25, 2009 3:20 PM

Sorry Folks, I agree with Jim. I think the "American Way" is to work hard and get compensated for what you do. Regardless of how much you get paid, if you do a good job you get more money. COngress is tyring to set a dangerous president by attempting to tax bonus money. At a strech, they can then expand it to include ANY bonus money from everyone, not just executives. Hey honey I got a $100 bonus on my check for doing a good job this week, oops the government taxed it a 90% and I ended up with only $10, just think how bad you feel after that, think you will ever work your butt off again just to give it all away? Back to executives, they get paid to MAKE MONEY, or to prevent the company from loosing too much money, they get a salary, but it is insentive based, they make $500K, but they make the company $100M in a year, their compensation is based on a percentage of what the company made, what fool would push away a payday like that except a socialist, who like Obama wants to give what you or I work hard for and give it to some dumb slob who hangs out on the street corner smoking crack waiting for the government handout that he has promised, think again, it you're willing to give your hard earned pay check to those, you're welcome to, but not me, its "NOT THE AMERICAN WAY" I work to succeed and better MY FAMILY, not those woh don't care enough to give a crap to try.

Lynn

March 25, 2009 3:20 PM

After all that has happened this executive vice president of AIG’s financial products unit, still do not understand that when a company is not doing well nobody gets a bonus or increase in salary. This poor little rich boy still doesn't get it. No job title or college degree guarantees common sense. This is basic math if there is no profit (the company if operating in the red) there are no bonuses or pay increases for anyone. This is a good example why we should have let this company go under. It doesn’t even sound like this guy is even grateful for the bail out that saved his so called career! It sounds like people that share Mr. so called VP’s sentiments will never get a wake up call as long as we continue to give them a safety net. They need to be allowed to fail like the middle class and poor so they have a better understanding of what life is really about. No wonder this company went belly up I’m sure he is not the only one that felt regardless if the company is in the red or not we want bonuses for running the company into the ground. Doing well one quarter but having a terrible year do not count. When are we going to stop rewarding bad behavior and judgment regardless who the culprits are?

Rick

March 25, 2009 3:20 PM

Sounds like white collar slavery - working "10, 12, 14" hours a day for $1 annually. To everyone else claming they work that hard and dont get much compensation, i'm sure you get at least minimum wage, right? He's getting somewhere in the region of .0001 an hour, he might as well have been working at mcdonald's that time - though since he went to MIT, he might not even get the job for being 'overqualified'.

As much as I love being a slavedriver, i think the public needs to back out of this witch hunt and stick to what it knows: whining about the government's stupid decisions, not where it carelessly dumps money. Same for Cuomo, he needs to wipe the brown off his nose at some point so he can smell what's really cooking.

Joyce B

March 25, 2009 3:20 PM

Please keep us informed with regard to your job hunt. Many of those in your profession are now unemployed. But perhaps you squirreled away quite a lot from your years of being so underpayed...And the money is not yours, it's the taxpayers...So now I suppose you want to right it off on your taxes next year? Jerk. Think John Q public is that dumb. I'm glad you resigned, hope more follow.

dave

March 25, 2009 3:21 PM

Why do we constantly try and vilfy those who not only a) had nothing to do with creating this mess, but b) we need in order to help get us out of this mess; merely because they happen to work for a company they did not ask for to be taken over by a government intent on sticking its foot in places it does not belong.

I as a citizen never Ok'd for my government to take over A.I.G. We cannot just begin to overide contractual agreements because they are not popular, for whatever reason! No third party should have the right to interefere in private contracts to which they are not participants in. This country cannot afford to set such a precedent.

Why do we continue to compare "our" hard work to that of executives at financial companies? I make about $24/hr, was born in Long Beach, Ca to immigrant parents and because I "worked hard" in school managed to get a degree that allows me not to get paid $8.50 like my mom who because of her lack of education has to work at Wal-Mart. I help my parents out financially, always! But I cannot compare my duties with those of an executive of a company that is not only being vilified and terrorized by public anger, but at the same time is expected to partake in complex matters in order to not let that company tank and repay the tax-payers. If you ask me Mr. DeSantos' job carries much more responsibility than mine, and requires a very specific knowledge of the situation taht I doubt the majority of American's complaining about his pay posess. And even if they possessed it would balk at the chance to work under such horendous circumstances.

We need to get over our self-righteous attitudes and realize that our cynical views of others whom we are told have it better than we do, but we need desperately to help save us from this mess will undoubtadly bring about our own ruin. They get paid to perform a job that almost all of us CAN'T do (because we lack the required skillset and knowledge), nor would want to do because of the amazing pressures of public opinion.

Most importantly for the sake of sanity and the preservation of our republic we need to honor private contracts; regardless of wheather or not those contracts would be meaningless if the govt. hadn't stept in to rescue those contracts. The fact is the Govt. did rescue A.I.G., and it did rescue those contracts, and maybe it shouldn't have done the former so that the latter would never have been an issue.

Roger

March 25, 2009 3:21 PM

Mr. Desantis
If you are looking to donate some of your bonus to help those of us who have had to put off retirement because of the current climate in our country, send me a check. I'll be glad to cash it. I have seen my 401k shrink, my home values collapes and my long awaited dream of blissful retirement put off because of the greed exhibited by people like you. You have no concept of the term work and just compensation for it. Get out of town!!! Better yet, send me the whole amount of the bonus. I'll put it to very good use. Then, go jump off a cliff to end your suffering. I'm sure its unbearable.

Diane Brady, BusinessWeek

March 25, 2009 3:22 PM

Great debate here, everyone, and food for thought. Thanks for weighing in.

My argument isn't over whether Mr. DeSantis does or doesn't deserve his $750,000 bonus (though, in all honesty, I don't believe that amount should ever have been promised in the first place). I was intrigued by the language in his letter and what it reveals about a mindset on Wall Street that has helped to bring us into this crisis.

There has been this myth of irreplaceable expertise on Wall Street that has contributed to a remarkable sense of entitlement.

The mathematicians and market makers deserve tens of millions of dollars a year--even when their own money isn't at stake--because they understood complexities beyond the comprehension of the rest of us. That meant insurance contracts against bad loans (a.k.a. credit default swaps) that in fact didn't insure anything. It meant bets on an ever-rising housing market when logic would suggest every bubble must burst.

We have been in this place before. Remember Long Term Capital Management, the hedge fund created by Nobel Prize-winning economists that could never fail--but did? (And subsequently required its own bailout)

I think Mr. DeSantis is right to be angry at being promised one thing and then have it swiftly taken away. But his rhetoric about how he worked harder and deserved every penny based on the profits of his business--all the while having nothing to do with the anonymous folks a few desks down who we're now led to believe were the sole culprits behind the downfall of AIG--is telling.

Jason

March 25, 2009 3:23 PM

There is no such thing as a "poor federal tax payer." The poor not only dont pay taxes but get tax credits for having contributed nothing, if they have a job.

No, this is between weathy taxpayers and other wealthy taxpayers. This person was to receive a "bonus" in addition to a salary of zero. He deserves the bonus and the focus of the nation's anger should rightly be Dodd and Barney Frank!

Chas, you ask great questions. If we had a media which really wanted to get to the bottom of this, those questions would have been asked. Unfortunately, the MSM doesnt ask such questions because that kind of tenacity is repaid with the disclosures that the responsibility for the crisis lies in the hands of Democrats. Much better to just deal in winks an innuendos!

Srini

March 25, 2009 3:23 PM

The anger of the tax payers is misguided, partly due to the deft actions by congress and probably by the president too. Diane and a lot of readers miss the point that AIG made a contractual obligation, and that it should be met. This is what DeSantis is saying.

If congress poorly drafted/reviewed AIG's contract with its employees they have not represented the tax payer's interest. Why did congress let AIG promise any bonus while it is running in loss, let alone the fact that its kept afloat by tax payers. The contract is not DeSantis or any employee of AIG's doing. If companies and individuals do not honor contractual obligations, we will have lawlessness.

steve

March 25, 2009 3:25 PM

It's odd isn't it, how whenever something goes wrong that nobody is to blame. I guess John F. Kennedy said it best when he stated "victory has a thousand fathers but defeat is an orphan." Ironically, even in their disgrace, the proven nincompoops at AIG made more money than 99%+ of the human race at their various jobs and enterprises.

I Work for a Living

March 25, 2009 3:25 PM

This "services" economy is a fallacy. It's fallen flat on its face. What more proof do we need? Bring back to America the jobs that build something you can actually touch and feel.

Tristan

March 25, 2009 3:25 PM

"While the instincts are noble, the reality is that taxpayers now own most of AIG. Giving money back to the company is essentially tantamount to helping people suffering from the downturn."

There's an easier way to state this concept comrade: From each according to his ability, to each according to his need.

Curious

March 25, 2009 3:25 PM

Perhaps someone can clarify something for me: This gentleman accepted a position in the dismantling of the department responsible for the free fall of AIG, he accepted being paid $1 witha bonus at the end of the project, not unlike the retention bonuses that our government just paid out,and now is being vilified for doing the job he was hired to do and being paid what he was promised? If our government was to put strings on the bail-out money, which we most certainly should have done BEFORE giving the money, and then not changing language in the bill,(Dodd) that would have put a stop to said comepensation, why is this man and the others doing this job being crucified?

Tired of the Whining

March 25, 2009 3:26 PM

ANON, appreciate you allowing me to save most of my voice. This is why this entire mess shouldn't be resolved entirely within the public eye. 95+% of our country doesn't understand what happened at AIG. That's just a fact. I would never go on a tirade about a major screw-up at NASA because I don't have the appropriate background to do so. In order to make rational arguments and comments one should be educated on the topic or at least be willing to ask the right questions and learn.
If you're in an industry where you can never dream of making millions a year, well, you 'chose' to be in that industry. You can still retrain and try and make it on the 'new' Wall St. if you wish. If someone made my company $100mm (and that's "brought in", not "worked on a project that helped") I would certainly be willing to pay him or them millions for that. What do folks in retail/ sales make as a % on commissions?
I am actually at the point of laughing when I hear all of these comments surrounding Wall St pay and bonuses. This is what the industry has paid over the last X number of years. All those in favor of capping pay for executives working for firms that have received "taxpayer" money should really think who's going to be left at the these firms to help recoupe the "taxpayer" money... the intelligent exec's who can get the same Wall St $$ at another foreign or boutique shop??? ....or just the 3rd/4th/5th- tier employees that have nowhere else to go.....uh,...

Debra

March 25, 2009 3:26 PM

Dear Mr. DeSantis,

“I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G.”

As an executive vice president of the American International Group’s financial products unit; your job description may have read...

Partner with CEO to understand business goals.​

q Manage the sales process, from the sourcing leads to negotiating final deals.​​

q Work with ​management to identify process improvements and make recommendations for change.​​

Build relationships with outside lead sources.​ A good knowledge of trading and trading systems. A basic understanding of the company’s organizational structure.​​

Qualifications: Must possess strong track record of achieving sales goals.​​

The ideal candidate is someone who is intelligent, well educated, professional, polished, and articulate, with good interpersonal skills and knowledge of risk management.

Now that you have whined in the New York Times, where should we send your resignation gift of a wheel of swiss cheese.

Al

March 25, 2009 3:27 PM

I think that all members in our Congress should work for $1 for at least a year.
They are as much more responsible for the current crisis then AIG executives.

Dave

March 25, 2009 3:30 PM

Apparently, Mr.DeSantis, you are no stranger to failed financial institutions. There is lots of info on LinkedIn about you . . . Oh, that's not you, that's the other Jake DeSantis. Yea right. You claim you were "Director" of the Union Bank of Switzerland. That bank was traveling the same route as AIG. They were acquired by or "merged" with Swiss Bank Corporation, which has now gone the way of AIG, after taking money from the government of Singapore to prop it up while it pulled the same shenanigans that AIG has been pulling. It is now among the group of banks under investigation. Your degree (from M.I.T.) is in Science - not Finance. what's up with you anyway? There are many people (with college degrees in finance) FAR more qualified than you who are making only a fraction of the money you have swindl. . . ooops - made at AIG. You are a wealthy aristocrat with little or no moral or ethical standards in common with the average American citizen. Good riddance. You'll never work at my company!

Tell MeWhy

March 25, 2009 3:32 PM

So where is the outrage at the AIG Board of Directors that rubber-stamped all these stupid moves this company made? Is it possible that we read nothing about them in the press due to their extreme wealth and power in America?

Randall P

March 25, 2009 3:33 PM

all the big boys should pack there stuff and resighn, they can get collage grads fresh out of the top collages to work and perform better for half the wages and benifets. Everybody is replacable. Lets see what company will take this selfish loser? another loser? Wheather to take revenge and donate it to charity he should have gave it back to the people he stole it from. It was a form of revenge. SCUM

CLR

March 25, 2009 3:33 PM

This EVP, with a MIT education that has zero to do with business, has been at the helm of a financial instruments division of AIG for over 10 years. You know the game, and this time you lost it not only for yourself, but for people around the world.

Master-of-the-Universe no more little man. It’s too bad you more than likely have enough cash and assets (and friends with your same deranged attitude toward the chaos “you” have caused) that support you and will ensure you and your will be just fine; but it would be nice for you to feel the financial pinch like those who trusted you.

Har-de-har

March 25, 2009 3:34 PM

The poor sap should've negotiated heading the new "well-regarded commodity index business" at UBS. Karma's a female dog.

Indrid Cold

March 25, 2009 3:35 PM

I would personally enjoy gouging out Mr. DeSantis' eyes with a big rubber d**k.

Vas

March 25, 2009 3:36 PM

About Salary.
I am a programmer, I make 6 figure,I get bonus. What is the measue if I had work as hard as the guy work in McDonalds for 5$ an hour to justify my paid?
I finished my college degree and I can code something that is in demand that save companies millions while the Mcdonald guy just sell you a burger and make hundreds for the Mcdonald.
That's the reason I got pay more.
Same for this AIG exec. his line of work handle billions and makes millions for the company..so he is expected to make some money. That's how america works. You don't like it, go live in North Koera.
Congress try to get us angry on some exec so that they can be off our case to point out that they had not regulate the market that is causing bubble.
When housing price went up, does congress does anything to slow down the
"progress" to make us getting rich slower and "think"?
You all readers are to be blame for over spend on your credit card on money you don't have. For wanting the car you can't afford and for buying the house you can't afford. 300grand loan for a fresh grad that makes 40K a yr? The guy that took the bad loan is as guilty as the guy that sell the loan and as guilty as the guy that insure the load.
So everyone is to be blame.
Including you that had took out a re-finance loan to keep your bad habbit of spending on what you don't have.

Oh yea...you might not have overspend?
well, all people next to you had...and as a socity...you are paying for other's mistake or else you life will be in much worse shape when the ten guy are all broke.

Zak

March 25, 2009 3:36 PM

What an idiot!

Mark B

March 25, 2009 3:36 PM

It seems to me that all this outrage is misdirected. Very few appear to realize that our government is throwing money around without even determining what it's being used for. NOW you want to be outraged? NOW you want to be upset with the fools who took gifts from the devil? Before it was all just too big to fail and you bought that.

Take a closer look at the Polititians who are accepting donations from the Companies such as AIG and who are redirecting your outrage against them as the rest of the story comes out.

The criminals are our elected officials and the administration. They don't deserve to get off scott free.

Dave A.

March 25, 2009 3:36 PM

It amazes me how those high-salaried individuals in the finance industry beleive that they deserve compensation for their company's profits when A] their companies do not actually produce anything of value -- they only trade money until it appears to be worth more B] average workers in manufacturing do not get compensated based upon company profitabilty

Srini

March 25, 2009 3:38 PM

The anger of the tax payers is misguided, partly due to the deft actions by congress and probably by the president too. Diane and a lot of readers miss the point that AIG made a contract and that it should be met. This is what DeSantis is saying.

If congress poorly drafted/reviewed AIG's contract with its employees they have not represented tax payer's interest. Why did congress let AIG promise any bonus while it is running in loss? I am unaware of any company that pays bonus when it is raking up huge losses. The contract is not the making of DeSantis or any employee of AIG. If companies and individuals do not honor contracts, we will have lawlessness.

Working hard is a point made by DeSantis in the context of meeting the employee part of the contract. He did not claim that is the reason to deserve the bonus. It is reasonable for him feel frustrated when the employees made good on the contract, but not the employer. If people that are frustrated about not getting big bonuses, why not acquire skills/education that puts them in the line of businesses that pay big bonus?

JK

March 25, 2009 3:45 PM

TO: Diane Brady, BusinessWeek
"The mathematicians and market makers deserve tens of millions of dollars a year--even when their own money isn't at stake--because they understood complexities beyond the comprehension of the rest of us. That meant insurance contracts against bad loans (a.k.a. credit default swaps) that in fact didn't insure anything. It meant bets on an ever-rising housing market when logic would suggest every bubble must burst."

How can market makers in stocks, commodity, foreign exchange or even muni bond trading contribute anything to the financial meltdown ? Mr. DeSantis worked in a division that makes 100 million dollars for AIG. And those are closed positions which if you do not understand, means money in the bank. He deserved every penny of the 700K.

SS

March 25, 2009 3:45 PM

Great article and nice argument points!

DeSantis Never Worked a Day in His Life

March 25, 2009 3:46 PM

DeSantis:

Work creates or adds value. You sucked value out of society and now want more. Go drive a taxi for a while, and then talk to me about a 14 hour day. You're an infant.

Tariq

March 25, 2009 3:50 PM

He accepted a $1 salary for his "duty to country" and duty to the "taxpayer." Yet he is bitter because the country/taxpayer are upset over his $750,000 bonus. How could you call that duty to your country and the taxpayer?

Al Redlhammer

March 25, 2009 3:53 PM

"Take the money & Run" seems to be the philosophy.... he obviously doesn't have an investment in the company but direves a hard bargain to get as much as he can for his efforts. this is OK when the company is BUT, when the ship is going down is no time to work for "tips' in re-arranging the deck chairs............

Harold

March 25, 2009 3:53 PM

It's only fair DeSantis gives the money away...he sure as heck didn't earn it!!

Bob

March 25, 2009 3:54 PM

What's he gonna do if he donates the bonus money away as he wants (really an exertion of his ego /will / power) and then the govt decides to tax it as excessive income to boot? Is he setting himself up for a net loss here? Is this the clearheaded mindset of someone repairing a distressed company? They must be in an even deeper hole than I thought.

Claremont Mom

March 25, 2009 3:58 PM

Corporate executives beware, if you ask for government assistance for your company you cannot continue to run your company as a private enterprise.

Compensation should always be dictated by the company. It's none of my business what someone else is earning, period. If a company can compensate a valued employee at a very high level the company should make that determination.

It's very scary to see the government dictating compensation & implementing taxes at a 90% rate & pushing for more power to take over companies. Why aren't people in general concerned about this? It may impact even a small business like I own if we don't stand up for private industry.

The AIG mindset (or Jake's)is I work hard, I made you money and worked for a salary of $1 with the understanding that I would receive a bonus in the amount of XYZ dollars.

I don't earn that kind of money nor do my employees but if I work hard and my employees work hard maybe we will someday. If we do I do not feel that we should be scrutinized by the government or the people.

Beware the involvement of the government in private enterprise, the overpaid evil, greedy person could be you someday.

Hello

March 25, 2009 3:59 PM

@Marco

You should also mention that the buildings didn't just "catch" on fire.

It's like on Dexter, the T.V. show: the bodies don't just die by themselves.

Chuck

March 25, 2009 4:02 PM

So.... He does not "deserve" $750,000 bonus over a salary of $1.00 per year. The fact that it was an agreed upon contract, and the Govt knew Very good and well about that contract at the time they bought A.I.G does not matter?

It does not matter that our President and Congress simply fail to blame themselves for "overlooking" this? There is one simple reason this was not stopped, and why it came out as it did.

They want Mr/Mrs Voter to think that when they propose legislation to take over even more of the private sector, grow government, and take away our freedoms that it is "justified" to "protect" us from Wall Street greed.

Does Howard Stern "earn" $100+ million a year for his contract with Sirrus? Is it because he really helps society, and his genius cannot be replicated? Hardly.

Is it "fair" that Jay-Z made $82 Million?

How about The Police? 115 million there.

What about A-Rod? Just use some roids - and get $34 mil a year. Sure something we should all be happy about for sure.

Ohh. What about Oprah? She surely helps everyone sooo much that she deserves $275 million a year for sure!

It is absurd to complain about what this guy earned that our Federal Government is unfairly going to take away. If the Govt can "legally" do this, then pretty much anything is game. They are quite simply playing you, so that you WANT them to come sweeping in and "solve" everything.

When they are done, we will be just as good off as the socialists in Europe...

No freedoms, and no rights.

Bob M.

March 25, 2009 4:03 PM

Didn't someone once say that charity covers a mulitude of sins? Let the govt take it back and be happy that the powers that be don't strike you down further.

g

March 25, 2009 4:03 PM

“Too big to fail” is a monopoly, a monopoly on Wall Street is un-American.

FBEye

March 25, 2009 4:05 PM

What about the guy who wrote letters to the mainstream media back in the summer of 2007 regarding the- quote: "Collapse of the U.S. economy" that they didn't pay attention to???!!!!!! You can 'Google' this for proof- RIP OFF REPORT GM CREDIT CARD SERVICES, and go to the '1st Update' to that Ripoff Report from the summer of 2007. It's right there in plain English, isn't it? So much for the USA!!! WELCOME TO AMERICA- IN FRAUD WE TRUST! P.S. If you want the mainstream media's addresses, simply 'Google' this- RIP OFF REPORT RICHMOND TOYOTA THE BIGGEST JOKE, and the addresses appear in the 'Updates' section by that same person! It seems as though the "COLLAPSE" could have possibly been averted, wouldn't you now agree?

TheOne

March 25, 2009 4:06 PM

I keep reading this same theme "My family and friends who used to work at other companies that have gone under would love to have Mr. DeSantis problem"

I will help you out on this. I will employ 50 of your friends and family for the next year at his compensation of 1 dollar. I will expect all of you to put in the amount of hours a day he does. Please respond with a way to contact you to arrange for your employment.

ohmygod

March 25, 2009 4:07 PM

At last it's 'class warfare.' Sounds like a refreshing change from Republicans vs. Democrats. Rich liberals vs. poor conservatives. Rich conservatives vs. poor liberals. New pundits, alliances, blogs. Let the realignment fun begin!

NH

March 25, 2009 4:11 PM

How much of a bonus would he have received had AIG just been allowed to fail? If the taxpayer saved the company, then the tax payer should have been able to renegotiate the terms of any bonuses.

My disappointment comes in the fact that our government was too stupid to think that through and now looks even more moronic trying to "clawback" its own incompetence.

Harold

March 25, 2009 4:12 PM

A credit default swap is really just an insurance contract. AIG didn't call it "insurance" because it would have been illegal to sell insurance the way AIG did...with no reserves, no insurable interest, etc.

Insurance execs that do this go to jail. AIG just has to give their flipping bonuses to charity?

Harold

March 25, 2009 4:12 PM

A credit default swap is really just an insurance contract. AIG didn't call it "insurance" because it would have been illegal to sell insurance the way AIG did...with no reserves, no insurable interest, etc.

Insurance execs that do this go to jail. AIG just has to give their flipping bonuses to charity?

Terry

March 25, 2009 4:14 PM

Let's look DeSantis' actual situation.

No one has required that he return his bonus and no one has abrogated his "contract." Congress will never pass the law they've threatened and Obama won't sign it, having all now realized that it's over the top if not illegal.

And Cuomo et al just threaten to "name and shame," not actually go after his money. Why shouldn't we know who's getting our money? If DeSantis is as guiltless as he thinks he is, he just hides out for awhile and that all blows over. And he apparently isn't too concerned about publicity anyway, having put his resignation in the NY Times.

So he's got the money. He's just offended that some have suggested he give it back because it is now arguably being paid with public funds through a corporation that has arguably helped to greatly destabilize our economy, with the damage done by the unit for which Mr. DeSantis worked.

So he faced a dilemma: how to hold on to "his" money while saving face. Like most of these finance guys he's very clever when it comes to money. So he appears to take the high road, saying he'll donate his proceeds to unnamed charities. This allows him to take the pulpit and preach to us all about the unfairness of his situation. And it will also allow him to take a huge tax deduction after he and his accountants "structure" this deal properly as they always manage to do with their deals.

By choosing his charities carefully he'll become a hero in whatever circle he chooses. He also builds a lot of street cred with his fellow traders for having the cojones to speak up. So when he goes to look for a new position in the Wall Street club he'll probably find many doors opening for him, doors that might otherwise be shut if he was just a guy from AIGFP. And, like most in the world of finance, he really doesn't care what the rest of us think about him because he considers himself our better and lives in isolation from us.

And of what does he complain? Getting screwed at work. Well, welcome to the real world that most Americans inhabit. But most Americans don't have the stash he has to fall back on so it shouldn't be surprising if they're not too sympathetic. It's hard to be sympathetic with a guy who can afford to make a $750K gesture just to be able to spout off in the Times.

There are millions of Americans who have lost their jobs though no fault of their own or who have lost their meager savings or homes as a "derivative" of the shenanigans on Wall Street and who have little or nothing to fall back on. Yet Mr. DeSantis apparently expects them to rise up in righteous indignation over how he's being treated, even though he's actually lost nothing.

The truth is that Mr. DeSantis decided to make professional gambling his career, in a casino where he got to play with other people's money. A sweet deal that no doubt allowed him to put a lot of money in the bank over the years. It's a lucrative but far from noble calling that makes his current noble pitch ring a bit hallow.

I think Mr. DeSantis would have been better off simply saying, "My profession is all about the money, nothing else, and a contract is a contract, so I'm keeping my money." Simple, straight-forward, correct and honest. Instead he tries to convince us that a creature from the bottomless pit of greed is somehow now a wronged saint. A bit of a stretch in my opinion. I've always had a bit of trouble with people who go out of their way to tell me how good they are.

And as for those who think the AIG bonuses are a distraction from bigger issues, perhaps, but they also go to the heart of the mess we're in: a compensation system that rewards bad behavior and failure equally with good behavior and success. Mr. DeSantis supposedly stayed on to help clean up the mess his unit created, but only with the promise of great riches at the end. Where I grew up you cleaned up whatever mess you made because it was the right thing to do, with no compensation other than your intact honor.

CR

March 25, 2009 4:15 PM

I agree that people should not be rewarded for making bad financial decisions. Also, I think that perhaps Mr. DeSaints could have been a bit more humble in his letter. However, that being said, Mr. DeSaints did take a thankless job to help wind down AIG-FP and is now not being paid for his last 12 months of work; he deserves some compensation for continuing to help the Company with its problems.

Also, before people become too outraged at usage of tax payer’s money, I think it might be important to understand who paid those taxes in the first place. As a point of interest, the top 10 % of earners actually pay about 70% of all taxes collected in the US (see statistics from the US Congressional Joint Economic Committee below).

While our society has clearly made the decision that there should be a progressive tax system – i.e. those at the top of the earning spectrum pay the bulk of the taxes, this average tax payer has to ask if perhaps those top earners might be entitled to receive some benefit when things go south (they did pay in the majority of the money to begin with). The middle part of the tax bracket receives a great deal of benefit from these individuals when times are good, so perhaps when times are bad, we shouldn’t quite be so outraged when they ask for some of their money to iron this out.

As for the data (see http://www.house.gov/jec/news/2008/Oct/pr110-50.pdf) – according to 2006 tax returns (2007 data is not yet available):

The top 1% of earners (those making over ~$388k) paid approximately 40% of all taxes collected in 2006

The top 5% of earners (those making over ~150k per year) cumulatively paid over 60% of all taxes collected in 2006

And

The top 10% of earners (those making over ~109k per year) cumulatively paid over 70% of all taxes collected in 2006.

According to 2006 tax returns (2007 data is not yet available):

The top 1% of earners (those making over ~$388k) paid approximately 40% of all taxes collected in 2006

The top 5% of earners (those making over ~150k per year) cumulatively paid over 60% of all taxes collected in 2006

And

The top 10% of earners (those making over ~109k per year) cumulatively paid over 70% of all taxes collected in 2006.

Neo

March 25, 2009 4:16 PM

As an AIG shareholder, I would be happy to pay anyone $750,000 if he can increase my PNL by $100 millions.

If we can't pay people what they deserve for their positive contribution to the bottom line, then there is no reason for any competent employees to remain at AIG to work on decreasing the losses as they can find another workplace where they would be compensated at their right market value.

Dazed

March 25, 2009 4:20 PM

Sam
in reference to your staement "And I doubt that the profits that you generated in your lifetime compare to the profits generated by DeSantis last year."
you seem have your head in the sand...AIG didn't make any money last year...thats why we the US taxpayers, had to bail them out

C. Kayt

March 25, 2009 4:22 PM

I worked in the corporate world from 1989 - 2001 and have seen such self righteous, self entitlement, self promoting garbage many times among so called "management." I've had these jerks threaten and intimidate me and others with comments like "you are an outsider and not important to our company," "you don't deserve to be here," "you should consider yourself fortunate/lucky to get what little we are giving you," "you are living off my crumbs," "it is "OUR" money and "WE" are paying "you" , "employees usually are not capable of "SEEING" the "BIG PICTURE" and many employees have "MENTAL PROBLEMS" etc-etc-etc. I kid you not! My answer to DeSantis and his "TYPE" is that we are all mortal beings and will not take our ill gotten gains, procured at the expense of others, into our next existence. DeSantis must always remember that his entitlement to millions can involve the denial of basic necessities to many others. Insurance does not and cannot prevent catastophe or death, and the costs of insurance these days is calamitous. We the people are struggling to make our ends meet!

Ken

March 25, 2009 4:23 PM

Ok, now, people, once again, this is all vetted. We have had our say. We have to work together. It was the computer's fault actually....we honestly believed the formula was golden. Didn't test software enough. Also, 750k doesn't go far on East Coast.
Overbuilding is a smite-me, let's enjoy it.

John

March 25, 2009 4:24 PM


I have to agree with AnonObserver.
This issue that should concern everyone is not the amount of money he made (which was a lot), or the after-tax bonus, which the average person could live their lifetimes and not reach, but the idea of a contract. Throw away the idea of a bail out. If you work for ANY company or person and you are receiving a certain wage, the contract that you have is binding. It is like making minimum wage and then your boss saying, "sorry, we are only going to pay you half of that." Imagine taking a job and then they say, "sorry, we are not going to give you your health care benefits like the contract says." Is this fair? Is this "legal"? Think about the auto companies (not to beat a dead horse), but if the retirees "legal" contracts are just null and void and all of them lose their pensions and healthcare, etc. it is simply not "legal". Imagine the implications everywhere if contracts are just tossed aside. Not paying these bonuses (due to contracts) would send a big signal to every working and potentially working person that they should expect nothing in their contracts to be binding. Not honoring these contracts is what should be causing outrage! I think that people are jumping the gun with reaction to this just because of the amount of money. Rightfully so to be pissed off about the amount some of these people made, but to me, the issue of a contract is a dangerously slippery slope.

MoneyRQ

March 25, 2009 4:26 PM

AIG is a classic example in why you let companies fail. The tax payers should have taken 1% of what we gave AIG, but instead give it to the politicians, tell them to take that money and go to the bar. AIG would go bankrupt, the politicians would go drink until they forgot what dumb plan they had to start, and we would all be better off in the long run.

Bob M.

March 25, 2009 4:29 PM

Look at Jake Desantis's linked-in resume, and one will see he has worked his way up as one of those "creative" financial derivatives and commodity traders to the position he's in now. Looks like he's a tech / math / science wiz kid - probably used for his math analysis ability. I'm sure historically he's been part of the larger issue that these finacial products are based on faulty and assumptive math models.

Where's the duty, honor, country, to fix what he helped break?

Einstein

March 25, 2009 4:30 PM

I couldn't help but notice that it's only the hard core capitalists here that are calling other posters names. Why is that? Only when people truly realize that we are all interconnected and that the well being of the individual affects the well being of us all will things like crime, poverty and war (and class warfare) finally disappear.

PD

March 25, 2009 4:31 PM

This guy is such an immature, arrogant SOB.

Yet, he really captures the attitude of wall-street, banker and insurance types.

When things go badly, it can't be his fault. When things go well, then he wants to take all the credit.

Let's hope more of thess guys resign.

yetwave

March 25, 2009 4:31 PM

Jake:
Glad to hear that you have begun the healing process from your whine cellar.
Clever man that you are, you can probably turn your public 'resignation' rant into a book contract and maybe even a major motion picture. Ideally, your part would be portrayed by someone who is as overpaid and as out of touch with ordinary Americans as you are.

Rob-Great letter!

Chris in Port St. Lucie, FL

March 25, 2009 4:38 PM

Jake,
Tonight, I will go home and play my violin for you.
- Chris

Pliny

March 25, 2009 4:42 PM

Bravo to the employee leaving AIG. He is spot on correct. Of course, the government shouldn't be bailing out AIG in the first place, but the rage at AIG employees is grossly misplaced. The real villian here is the government; it is the government that has caused this mess and it is the government that is now spending us into oblivian.

Also, there is one other group of guilty that no one mentions. The American People. Americans voted for this worthless government; Americans behaved imprudently for decades spending recklessly in their personal lives. The American people writ large are getting what they deserve, but instead of learning from their mistakes they whine and demand that the people who behaved well, like this AIG employee, be punished unjustly. America is toddering on the brink of its own demise in its rush to tear up the rule of law and tear down any of their fellow citizens who have one dime more than they do.

NOBANKER

March 25, 2009 4:44 PM

blogging about: shhh I'm leaving let's make SOME NOISE!

jj

March 25, 2009 4:44 PM

Rebuttals by a Business Week writer to a Wall Street Trader are completely hollow.

Dan

March 25, 2009 4:46 PM

I think many are missing the point of his resignation letter. He is a Leader of his department, and I am sure there are many that report to him that are feeling betrayed that didn't get bonuses that were promised to them to stay, so AIG could keep running.

If they all would have left, we taxpayers would have owned nothing but a building with a lot of computers in it. You need people to do the work to make the business have value. All those who stuck around, probably could have gotten other jobs more secure than the one they have now, given the uncertainty.
So, I believe he was at least trying to stick up for his people, rather than how the CEO rolled over and let his people hang. There are a lot of regular folks that were entitled to a retention bonus that probably needed it to get by in this economy. I can respect the guy for making a stand, regardless of what the mob on here thinks, since as another pointed out, most of you don't pay the majority of the taxes anyway.

James H.

March 25, 2009 4:52 PM

At least he's putting his money where his mouth is by resigning...after all he didn’t have to, neither did he have to do anything thoughtful with the money. He certainly could have opted to go buy a Hummer and enjoyed a European vacation instead. Lake Tahoe, CA would have been glad to have him there with all of his money. I applaud him for donating the money to organizations that are helping people who are hurting from the recession. If he gave if back to the bank it would be back in the hands of the financially inept. These bailouts are the worst thing to happen to the US since The New Deal. We just took out a mortgage that we (us and generations to follow) are incapable of ever repaying. Our kids and grandkids will have every right to hate us for letting it happen. The capitalistic business model has done our nation very well in a relatively short period of time--why would we turn to socialism just because we are in a rough spot. The system always fixes itself and it's human arrogance that makes us think we can control it with any certainty.

Chester Arthur

March 25, 2009 4:53 PM

the people who find fault with Mr DeSantis essentially say this.

"Ok, maybe you weren't involved, but you made money at some point somehow so you are guilty of something so give me some money."

Absurd. Grow up. Those AIG people had a contract. Whether it was deserved or nor, whether they were part of the credit swaps or not, they had a contract. And the company is bound to comply. If you don't like that, too bad. That's the law.

And let's be clear about the chain of events. AIG didn't go begging to the government for money. Paulson, Bernanke and Geithner went to AIG and said, we're taking over. Kind of like Don Corleone and Luca Brasi with the bandleader.

The government confiscated AIG, then entered into contracts with employees and now wants to pretend they were duped saviors.

Grow up.

Gary

March 25, 2009 4:56 PM

Mr. DeSantis says “I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G.” Then he says “The profitability of the businesses with which I was associated clearly supported my compensation.”
So, would it be fair to say Mr. DeSantis that the 'profitability' from the credit default swap transactions clearly supported your compensation?!
In my eyes, you people at AIG didn't earn your money, you simply found ways to profit from corrupt business practices. Shame on you all.

Rob Schupbach

March 25, 2009 4:58 PM

AIG NEEDS EMPLOYEES WHO CAN HIT THE BALL!!
All the barking in the world can't change the facts.
THE AIG SITUATION IS FAR FROM OVER, UNDER ALL THE HIGH RISK UNDER RESERVED FINANCIAL PRODUCTS DIVISION IS A PROFITABLE COMPANY THAT IS OPERATION GLOBALLY WITH MILLIONS OF PREMIUM PAYING POLICY HOLDERS THAT ARE ENTITLED TO THE PROTECTION THAT THEIR POLICIES ARE PROVIDING. Aig needs eployees who can hit the ball more mow than ever before. There is a company with a tremendous cash flow and tremendous assets and tremendous policy holders.
STOP THE BARKING AND RUN THE COMPANY!
IT ANIT OVER TILL IT'S OVER!

Lynn

March 25, 2009 5:03 PM

The retention bonuses were negotiated by AIG and should have become void the minute the government stepped in and bailed out the company.
It's enfuriating to me that DeSantis and any other employee feels entitled to such a huge amount of money from tax payer's money. If he could work for a year with only a $1.00 salary, then he really doesn't need the bonus. There is no way that anyone I know could work for free; we have bills that need to be paid and not what must be thousands of dollars in assets or savings to draw from. Truth is, with out the bail out, the company would have failed and no one would have gotten bonuses. Jobs would have been lost like many other people; left with nothing.
The government did make a huge mistake by allowing the verbage to be included in the contract in the first place. I think that there should be some cut backs in government too; salaries, assistants, we are all having to cut back; government, senators and congress people should too!!
PS I do have my own business which is doing quite well and seems to be recession proof.

Wayne

March 25, 2009 5:08 PM

I think that it is really pathetic that everyone here is pretty much blaming Jake DeSantis for everything that has gone wrong in the economy.

He was a cog in a broken system. I hear you all claiming he should have changed the culture of the company, when is the last time you told you boss he is doing everything wrong and taking too many risk?

He is just like every other American in that his house price has declined and lost most of his savings for retirement. The only difference between him and all you is he studied hard in school and went to MIT so he could make the big bucks. Yeah I'm sure most of America would love to take his job and work for half his bonus, but they aren't qualified.

I hear all of you saying that Jake sould have no job if the government hadn't bailed AIG out, but he wouldn't have had to put in 100's of hours of work over the past 6 months either. You have to realize that the rich have bills to pay also, morgages, utilities, sending your kids to college so the fact that he has made no money for the last year has got to hurt.

Stop blaming this one guy for all that is wrong with wallstreet and the economy.

Clyde

March 25, 2009 5:09 PM

I in no way support AIG business unit that gave the farm away to make a quick profits (this was stupid and government regulators who allows AIG to sell this product, in the first place, should be called on the carpet and hung out to dry). The insurance industry is one of the most highly regulated industries in the country. However, AIG before all this started, was the Insurance Industry leader for many years under good management (much like G.E. before new managment came on board in the last few years).

I only wish we could get out Congress and Senators to work Just ONE YEAR for a dollar. That will be the day!

They are on the bottom of all my lists. They need a bail out and not in greenbacks.

joe

March 25, 2009 5:10 PM

To Jake DeSantis: You are part of the financial terrorist that destroyed our economy. Don't even try to pretend you are innocent. Terrorists in Guantanamo bay claim the are innocent too. All guys like you are lucky enough that you are still free. You guys, who are financial terrorists, should be put in Guantanamo bay as all other terrorists.

mike

March 25, 2009 5:14 PM

Diane, Good article.
It's amazing that after all that has transpired people like Jake don't get it. We the middle class are tired of the attitude that people like Jake have. It seems they feel they are entitled to 6 and 7 figure salaries and bonuses just because they work on Wall Street. Enough is Enough!!!!
I don't feel sorry for Jake....good luck finding a new job, maybe Jake should try working as a street cleaner or as a teacher and then maybe he would have a new appreciation for the people that paid his 700k bonus. I sure hope someone follows up and make sure he does donate the money like he said he is going to do.

JimWoods

March 25, 2009 5:18 PM

Jake DeSantis is fully justified.

The recent demagoguery from Washington demonstrates that our legislators have no respect for contracts and view employees of bailed out companies as slaves.

Employees at bailed out companies should give serious consideration to escaping to freedom.

Unfortunately, given the thuggish actions of our political leaders, New York will become to financial services what Detroit is to car manufacturing.

James H.

March 25, 2009 5:20 PM

@ Gary: Gary, what Mr DeSantis was saying is that AIG is a complex creature. It has numerous divisions which handle a plethora of products and not everyone has the same type of job. He worked in an area of the company that handled things OTHER THAN the credit default swap transactions. People are so outraged that they are blinded. This situation could be compared to a principal punishing an entire school because of one class in particular misbehaved. Slow down and try to imagine getting punished because some of your co-workers were corrupt and dishonest...how would you like it if their actions negated all of the hard work you personally contributed?

Kimo

March 25, 2009 5:29 PM

Jake, I refuse to address you as "Mr." as that would deem that I respect you. Respect is not a privilege, it is earned. You don't need to patronize us working stiffs of your intentions. I don't believe a single word that comes from your mouth as with many of your kind. Yes, you have a class all of your own now. I have been laid off 3 times in a little less than 2 years and now work two jobs just to get by. I have no sympathy for your worthless being.

John Strong

March 25, 2009 5:31 PM

Wayne:
"Stop blaming this one guy for all that is wrong with wallstreet and the economy."

The problem is that he has offered himself as a target, with his entitlementarian rhetoric.

If I opened a bucket-shop, and encouraged bettors to wager that various stocks would fail, fleecing everyone along the way, I would end up in prison. These pusillanimous ninnies get to squabble over hundreds of thousands of dollars and try to make a spectacle of their deprivation.

I don't buy into the current fad of imagining Wall Street functionaries as some sort of irreplaceable commodity to whom we must abjectly kowtow. They are every bit as fungible as they apparently regard the rest of us to be--particularly if they are running a barrel-house: criminals are a dime a dozen.

All Together

March 25, 2009 5:32 PM

Wow, Mr. Jake DeSantis takes the bonus, it's doesn't quite sit well with him keeping it. He says he's going to give it to charities, but we'll never really know how much and when. Is it years down the road after he's doubled his money with some hedge fund? And if he does really give it to charities, then he gets a huge tax right off from the American tax payer. But Mr. Jake DeSantis wouldn't do that to his fellow American citizens, now would he?

Dale

March 25, 2009 5:32 PM

Rob, I luv your acceptance letter of Jake DeSantis resignation.

DistendedPendulusFrenulum

March 25, 2009 5:39 PM

"academia's far-left and the secular elite opinionmakers."

Ugh, politico-religionist wharrgarbl.

Sam

March 25, 2009 5:47 PM

Dazed,
>>>
Sam
in reference to your staement "And I doubt that the profits that you generated in your lifetime compare to the profits generated by DeSantis last year."
you seem have your head in the sand...AIG didn't make any money last year...thats why we the US taxpayers, had to bail them out
>>
You don't seem to understand what it means for an individual to generate a profit.

ASELA

March 25, 2009 5:50 PM

How come no one has mentioned the guy who gave DeSantis his juicy contract? Instead of dividing his Salary into $1 and a retention bonus of millions why not say you will get X millions in straight salary. Working for a $1? Come on who is fooling who here? I smell a rat here as to why the millions were packaged as a bonus. Who can find out about the guy at AIG who signed off on such a juicy contract? Anyone? Anyone?

Brandon

March 25, 2009 5:50 PM

The issue is pure and simple greed. These people, like Jake DeSantis, have been spoiled rotten for years or decades. And they expect no less. They figure if the last guy received bonuses amounting to millions then they in turn should too. The problem turns into a vicious cycle where salaries, bonuses and Insurance packages become insanely high and unfounded for. The money blinds them to reality and prods them to insist that everything is fine economically until....boom, it all collapses.

I can assure you Mr. DeSantis, that if an electrician burned a house down he/she would be held liable, held legally responsible, be withheld any pay, and most certainly fired.

The submission of his resignation letter to the New York Times is evidence enough of the delusional benevolence with which these people live. Do us all a favour...step into the shoes of the little guy.

Sam

March 25, 2009 5:51 PM

Gary,
>>
Mr. DeSantis says “I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G.” Then he says “The profitability of the businesses with which I was associated clearly supported my compensation.”
So, would it be fair to say Mr. DeSantis that the 'profitability' from the credit default swap transactions clearly supported your compensation?!
>>
Based on DeSantis's first statement, the answer to your question is, No. His business made money and was not involved with the credit default swaps.

FC

March 25, 2009 6:06 PM

Translation of DeSantis' Letter "WAHH!! WAHH!!! WAHH!! MAD MAD MAD! Mine Mine Mine! I no bad boy"

Taxpayer's reaction - Call Nanny 911! Little Jake is upset!

kuei

March 25, 2009 6:12 PM

When I work 12, 14, 16 hours a day (frequently) I don't get a $4million bonus check from a company that lost money. I get time and a half (and double taxes) and my company makes money. If this fella is an executive and his company is failing, guess what. You are responsible. It's that easy. It's the leaders who lead a company down a toilet.

Frankly

March 25, 2009 6:19 PM

Dear Mr. Tired of Whining and his/her similar ilk:

You spew all this talk about capitalism and how Wall Street execs are so smart that they deserve the salaries they get. Fair enough. The point is with AIG, however, is that THE COMPANY FAILED and would have gone bankrupt without a government handout. Obviously, the wizards at AIG weren't nearly as smart as your portray them, else the company would not have been in a position to collapse.

If you really believe in capitalism (as I do--and yes, I work very, very hard and make a good income based on the sound business decisions I apply every day and the skills I have and that I have hired), if you really, truly believe in capitalism, then you should have no problem allowing AIG, as well as all the other lousy companies that overextended themselves due to simple greed, FAIL. LET AIG and all the rest FAIL.

With a great reckoning, we really would find out who are the best and the brightest, who the true "businessmen" are, and who, like Mr. DeSantis, fall into the pathetic realm of the Ponzi-Scheme-peddlers.

LET WALL STREET FAIL. Humanity and the economy will survive once the charade of "easy money" is destroyed. Only after that occurs will we once again understand that money must be based on actual wealth, not a fantasy of endless potential.

unemployed

March 25, 2009 7:02 PM

Folks,

Why so angry? The good news of those creative financial services products that brought AIG execs "the upside" and us minions the "downside" is that every unemployed taxpayer in the US can link to Jake on LinkedIn, seen that we have all done "business" with him. Maybe he can help us find a sweet gig like the one he gave up.

Dwight Nager

March 25, 2009 7:02 PM

Shareholder value?

The market is where it was 10 years ago. Ergo, collectively they've created no value.

But they've sure taken zillions in cash bonuses home over the years, based on their expectations-surpassing additions to shareholder value.

Reagan liquidated the air traffic controllers, and the new bunch kept the planes flying just fine. Liquidate Wall Street, and let in the new blood that thinks working huge hours for $150k is noble.

ATLcitizen

March 25, 2009 7:03 PM

A few points:

What value has Wall Street created for America? They have become value and market destroyers for a quick buck at the expense of hardworking Americans putting their hard-earned money into retirement accounts.

Wallstreet: what makes you think you are entitled to huge salaries and bonuses that are not tied to the performance of your companies? Because you took calculus in high school? Because you work hard, put in long hours? You pompous a-ses! You are so far removed from the reality of REAL hardworking Americans, you don't have a clue. If it was up to most Americans, we would have let your sorry companies fail and leave you jobless so you can lay in the bed that you made.

But I reserve my biggest contempt for our GOVERNMENT, both parties equally to blame. THEY sold us down the river. It was pre-meditated, no accident. They removed the supervision at Wallstreet's request, because Wallstreet owns them, and they do not feel responsible to the American People.
I say, get rid of every incumbent. Reform needs to start with the Government first. You cannot trust them. We need to separate the money from politics or we will never see the end of these scams, getting bigger each time. Campaign Finance reform for starters. More political parties for real competition. Get some real people in Congress, not just multimillionaires who made their money in the industries that want to pay them off. It's high time the American people figure this out.

Jimbo

March 25, 2009 7:04 PM

So when are the massive layoffs coming at AIG?

phew

March 25, 2009 7:25 PM

Lee... you state:
"Just because you write enough transactions to rack up, say, $100 million in profits for your firm doesn’t mean you’re automatically entitled to millions in compensation."... Who exactly are you to decide how a privately held company should compensate its employees?

that's exactly the point dumbass... AIG is NOT privately held.. its 80% owned by the government.

really?

March 25, 2009 7:34 PM

while i also don't actually like congress passing a special bill just toc claw back the bonuses (if they can do that for one company what else will they do? outlaw free speech, guns and right to privacy too?), one argument that does not hold water is that AIG is privately held and can do whatever it likes.

Yes these were contracts between the employees and AIG, but one mustn't forget, if the taxpayer did not prop up AIG and let if fail, those employment contracts would be worthless. If your employer goes bankrupt, you can sue them for all your unpaid leave, bonus and severance, but how much will you get out?

and this BS about $1 salary is just that, BS. The annual 'salary' may be $1, but what are the stock options, restricted stock grants, use of company jet, company car, health insurance, guaranteed pension etc worth? If his entire cost-to-company was $1, then i'd have sympathy, but alas it is not.

please prove me wrong

AL

March 25, 2009 7:38 PM

I guess this post and the comments hit a nerve with some rankled AIG folks (or maybe ex-Merrill Lynch or Bear Stearns or any of the other big firms who have gone belly-up) because there certainly seem to be a lot of people screaming about how "populist" it is to not sympathize with poor Mr. DeSantis, who is being "persecuted" for doing a terrible job, no differently than any employee would be in the same position.

I believe in hard work. I am not a high school dropout. I did not spend my entire high school career getting high/drunk and skipping class. I went to a good college, got a degree, am now a Master's student. My husband went to the same good school, got his BA and Master's. We have a nice house, nice cars, plenty money in the bank (not so much left in our investment accounts, though). All the result of hard work.

What I object to isn't that Mr. DeSantis made a lot of money but his general sense of entitlement, and belief that despite being Executive Vice President of the unit that tanked AIG, he should still be valued and honored for his "contributions." It's fine that people make money (although I have to say that there are executive compensation limits in other economies, and those economies seem to be doing better than the U.S.'s economy at the moment) but please, do not expect to make money when you have not done your job well. I understand the money Mr. DeSantis is talking about is a "retention bonus," my question is, why should any of these people be retained? Another commenter (here or elsewhere) quoted a great line from the movie Casino: "Either you were too stupid to realize what was happening, or you were in on it. Either way, you're out." That's exactly what needs to happen to these Wall Street execs - they need to be out. The crisis was not borne out of casual mistakes, but out of major errors, bad decision making, and general malfeasance. Why in the world should we pay Mr. DeSantis a "retention bonus" when he shouldn't still be in his job???

All in all, I agree that the biggest mistake here was bailing out these institutions in the first place. We should have let them fail, as bad as that would have been for the economy. After 9/11 people started taking security a lot more seriously; it took a serious crisis to wake people up and make change occur. The only way we would have gotten real change out of this crisis would have been to let all these banks go under, and start fresh. Unfortunately, now it's too late and probably in another 10 or 20 or 30 years we'll be looking at another "financial meltdown" brought about by unstinting corporate greed.

Lenka

March 25, 2009 7:42 PM

…those evil rich financial people! How dare they!
Have you lit your torches yet? No? What are you waiting for?!??!
…after all these people are rich, they don’t deserve what they get! They are stealing from you and me! They have our money, so they need to give it back… or at least that’s what the guy on TV says.
So, who’s fault is all this? Homes have been sold for many years and all of the sudden now all these problems. What I don’t understand is why none of you wonder what went wrong.
Anyone heard of the “Community Reinvestment Act”? It’s where the government said, “go ahead, banks, land money to people who can’t afford to pay it back, don’t ask them for proof of income” and we (Fenny May and Freddy Mac, government backed enterprises) will buy them from you, and we will offer really low interests too. Please get as creative as you can with “desktop underwriting and 0 down”. After all, everyone deserves an “affordable” home. …and we, Fenny May and Freddy Mac, will buy them from you, package them up with good loans and sell them to the evil Wallstreet investors.
In short, our fearless leaders at US Congress, lead by Barney Frank, are the ones who created this mess, and now they get to sit there and act all high and mighty.
It was Christopher Dodd, who added the line to the stimulus bill that exempts the AIG executives from any limits on their compensations (and later blamed the current administration for “making him do it”). Are any of these guys giving up their bonuses? Are executives at Fenny May and Freddy Mac giving up their bonuses, or being singled out? No they are not.
So now, to correct their own screw-up’s our government is going to tax it’s citizens earnings at 90%, but they whipped the general public up into such frenzy that nobody seems to realize who scary this is! All you know that it’s the evil rich guys that are going to be taxed, not you.
I work for a Financial Institution. I also get a bonus. Now I’m not part of the financial staff. I’m in IT (in case anyone wants to know). I too get an annual bonus, so when I asked a couple of my coworkers if they are at all concerned about this 90% tax , they said “no, this is only going to apply to companies that took the bailout money”. Really? Well now our glorious leaders are already floating the idea of taxing the bonuses of people who work at all financial institutions as long as the company is publicly traded.
Now, I noticed that most of you think that hard work has nothing to do with how much money you should make, but I do. I work my butt off here. Last weekend we had a big upgrade. I was at the office for 40 hours (OK, I did sleep for four of them on the floor, because I couldn’t see straight anymore, but I worked for the other 36). There are days that I work until midnight, and some times longer to make sure things are working properly, and I do expect to be compensated for my work. What’s wrong with that!?!? … and now the government is going to take 90% of it, because they managed to whip you up into a frenzy! This was a total “don’t look at the man behind the curtain” move!
Now, I come from a country where a long time ago the rich were vilified and the regular people were whipped up into a frenzy and in November (October) of 1917, an angry mob took over and the “regular people” prevailed. There were no mo rich. The government was going to take care of everyone… They are still trying to recover from that almost a 100 years later.
Pay attention to what your government is doing under the cover of this scandal that they themselves created!

Pro Exec Compensation

March 25, 2009 7:44 PM

Wow.. I've never seen so many clueless fiscally liberal citizens collected in one spot. Does this reflect on the average IQ of BusinessWeek's readers?

Sure kids.. step into the shoes of a fortune 100 executive for one week. Then you might happen to understand why the compensation is what it is.

No, instead you scream and yell at executives that exist in a culture you cannot even begin to understand.

Want to talk about AIG bonuses? Start with your buddy Chris Dodd. Start with your senators and congressmen that signed these outrageously complex bills in a matter of hours.

I wish you all good luck.

KL2

March 25, 2009 7:53 PM

I find these comments and the article very long on emotion and short on logic. The man had a contract. The company had an obligation to pay the contract if it could. It obviously could because it did. Does anybody think that we can treat with hundreds of years of contract law with such impunity? It would lead to chaos. You may find this all very distasteful but in the overall context of where we are now it's inconsequential. 2 trillion in deficits versus 165 million in bonus payments which were legally agreed to at a time when the company's future was clearly grave. So Mr Desantis decides to stick around and work to dissolve the unit. Do we have any idea of how good a job he did? Would he have ever agreed to do it if he knew that his payment for his services would be subject to public approval? Does anybody think that he could say these things in a letter to the NY Times and not think they would be subject to investigation?

Vinny

March 25, 2009 7:55 PM

I find it appalling that when these CEO's are signed up and a contract is drawn. They have pay grades and incentives that are out of a school boys dream. While the rest of the company is relegated to a pay grade comparable to your opposite at your competitors staff. Pay raises are far and few and they cry like little school girls when some one takes away their private jet as if it's a right and not a privilege. This culture of spoiling the very few at the top of these companies has to stop and bring their pay in line with the rest of the company. If the bulk of a company can manage with $50,000, Why can't they live with $500,000.

George

March 25, 2009 8:07 PM

Those who direct their energy at AIG bonus are wasting their energy and are stupid - dumb and dumber!!!

You want this country to become a banana republic - populism the rule of the land - 90% taxes and a corruprt, inept govt. - Didn't you guys elect this congress? shame on you...

and now AIG bailout was not for AIG - it is make sure that you the public will not go bankrupt by the systemic failure - and foiegners holding your debt pull the credit.

if You dont hold good the contracts, what kind country is USA?

so, all of you ranted against, ranted and raged on AIG bonuses are so stupid...you had a time bomb of 2.6 or so Trillion exposure ticking...now these guys who work at this unit has been systematically working to unwind that exposure...and has brought it down to 1.6 Trillion -

now there always will be greed - some measure is there in each of you - go look in the mirroe and say you dont...

That is why you need to channel the energy to have good regulations in place - this congress has proved last week that they are inept...fight for term limitation for congress - three terms at the most. Have you watched the AIG hearings? how stupid and childish did these committee members look...vote all of them out in 2010, doesn't matter which party they belong to...they dont deserve to represent the people.

Now stop the class war!!! doesn't have place in this gret country!!!This country is built by dreamers and risk takers!!!

now,am not rich, noting to do with Wall Street, am currently suffering like any other ordinary guy from his recession, but America needs to the country where I can trust a contract, expect my employer to pay what it has agreed to pay, and a government which is responsible and not making laws based on populism...

dont say grape is sour now...should have worked hard when you were in school and college and made it to the top..not make out at the back of car get drunk and drop off or get C's and then fight for Union thugs to bargain a decent pay for you, not on your merit - that is failed socialism from Europe...

sick and tired of this phony outrage on AIG bonuses...when your govt is putting on $1 Trillion deficit every year for the next 10 years...

Disillusioned

March 25, 2009 8:10 PM

It appears many people (myself included) are very upset about what is taking place in our country at this time. Thank goodness we have the internet to vent our emotions on this issue since in our grand "democracy" we seem to have no way of doing anything about it. I guess a little over three years from now we'll be able to vote again and "fix" the problem. It's kind of scary to see how little our elected officials knew about this since they had given AIG so many billions of dollars of our tax money (tax credit card) BEFORE these bonuses were given. I had hoped our officials would know something about the companies finances before loaning/giving them over $170,000,000,000 of taxpayer backed funding.
I also noticed today that Moodys downgraded BofA stock to junk status and the stock price ROSE about 6%. Our greed seems boundless. I wonder when that ever increasing $11 trillion dollar public debt (that's about $70,000 per the ever rarified US taxpayer) will start to be paid down. THANK GOODNESS WE HAVE SUCH WISE PEOPLE RUNNING OUR COUNTRY. See you in the bread lines in a year or so. Oddly enough I doubt we'll see any of our congresspeople there (hard to figure isn't it).

someone

March 25, 2009 8:19 PM

I have to take offense to many things in this article. The author mentions that if there is correlation between hardwork and pay then many people would be far richer than people in wall street. Well in the letter he mentions about his background he does mention about how he worked his ass off to get into MIT. You are discounting that part. He would have slogged his ass off to get the education which made him what he is now. Thats why he is making as such money in an hour that an ordinary person would make in a week.

ian

March 25, 2009 8:35 PM

People seem to have a problem with these 'bonuses' being paid when the company lost money. These were not performance bonuses, merely deferred compensation. If you want someone to blame in all of this, blame the boneheads who wrote the contracts, blame the treasury for agreeing to honor them, and blame congress for inserting clauses into legislation protecting them.
The money going into these bonuses are just a small fraction of the money wasted in the stimulus bill, the upcoming budget and in the new giveaway the treasury is proposing to finance buying toxic assets.
Seriously, there are much, much bigger things to get mad about.

James Mason

March 25, 2009 8:51 PM

In 'Casino Royale', M says to James Bond that arrogance and self-awareness are rarely found together. This guy just proves her point.

tom

March 25, 2009 9:08 PM

I have another question. Isn't the board of directors suppose to oversee the actions of the company?? Or was it a case of just going through the motions, collecting your 30 or 40 k per meeting, and pretend there is nothing wrong. Who oversees' the board of directors?? It is shame that no one seemed to care about the problems that were plaguing AIG, and speaking out about it.

Gary

March 25, 2009 9:33 PM

@ James H.: I understand that AIG is made of of different divisions and that he may have not had any personal involvement with the credit default swap transactions. Consider this, AIG paid him a salary and they were able to pay him because they were profitable. They were profitable because the division that handled these c.d.s. transactions hid their losses. If they would have been open and honest about their losses back in 2007, Mr. DeSantis would probably not have a job right now. He is now biting the hand that fed him. I guess division-to-division communication was prohibited at AIG during 2007 and 2008.

Maggie

March 25, 2009 9:45 PM

The victim mentality is so rampant! In any circumstances, people portrays themselves as victims. "Being let down" happens virtually every day, to any person, not just to well-educated, well-paid financial executives. Granted, contracts are legally binding -- but, at the same time, certain contracts can be distasteful by nature, as many business negotiations are.

Mr. DeSantis, just leave, and don't forget turn off the lights.

ableto

March 25, 2009 9:50 PM

With the new administration, this is the change you can believe in,

"Nobody gets rich, we all get equally poor".

Sherri

March 25, 2009 9:52 PM

Since so many of you are down on this guy, I want to know how many of you are willing to work for $1 a year, or have 90% of your earnings taxed away while your family is being threatened. If the government can do this to one group of people, it can do this to anybody. And thanks to the Obama economy, I've just been laid off for the second time in 3 months.

joe blow

March 25, 2009 9:54 PM

What is missing from the debate is whether the free market is truly "free" and capable of determining what is a "fair wage". In my opinion Wall Street is a club that only allows a select few to participate and they all scratch each others backs. Boards are next to useless in controlling exec pay because they are often overpaid themselves.
There needs to be serious reform in determining executive pay which should be similar to Walmart which shares profits with employees or provide share options which only reward good company performance.
I wonder what this guy actually did and if it was really as difficult as he claimed or whether he actually created any wealth for America. My experience with stock brokers and the like is they are basically greedy pigs who leach off the wealth of others.

The Truth

March 25, 2009 9:58 PM

Don't let the door hit you on the way out. Loser.

PS: You're right about one thing. The government has absolutely no right dictating your pay but they don't have any authority to bail you out either. In the real world traders that lose money don't eat. You're not a trader. You're a leech and a vampire.

Morality vs. Greed

March 25, 2009 10:33 PM

I am shocked. Speechless.

The people who have no morals are allowed to make wide ranging decisions and receive extraordinary (immoral) remuneration regardless of the outcome.

They know nothing about the purpose of 'money' in society. I suggest, as a first step, to look up Wikipedia, 'money'.

Cormac

March 25, 2009 10:50 PM

Four words - What a pompous a--hole.

John Seater

March 25, 2009 10:51 PM

There sure are a lot of very stupid comments on this article, written by people who clearly did not bother to read DeSantis's actual letter of resignation. Diane Brady's selected excerpts, together with her superior, snide comments, give a grossly warped picture of what Mr. DeSantis actually said. Get the facts before you jump to conclusions. Who do you think you are - Barney Frank?

Morality vs. Greed

March 25, 2009 10:54 PM

... One more.

The Bonus Gate is only a symptom of bigger, underlying problem. Should we fix the symptom or the problem?

Actually, I believe that the stock market is an immoral vehicle, which makes few people richer at the cost of the majority. After all, someone's gain is someone else's loss. Always.

I am a proponent of a 'no growth' system. Who knows, may be one day we will have such system. System, which is fair to all honest and hardworking people.

Peter B

March 25, 2009 11:15 PM

"Giving money back to the company is essentially tantamount to helping people suffering from the downturn."

No it's not. The government gives a tiny fraction of what it takes away, and with the present guard, that fraction is getting smaller and smaller.

If the federal morons would just get out of the way instead of spending our grandchildren into poverty, these companies would have failed and newer, more effective ones would take their place.

Mr. Simple

March 25, 2009 11:42 PM

There's a popular pub near the University that i attend. It's a great place to hangout with your friends, but just make sure you leave before 7 p.m. That's when the varsity teams arrive. The football team (the government) composed of rich and spoiled brats. Then there are the cheerleaders (Wallstreeters) who came to woo the football team. One day, my friend and I (the people) were bullied to give up our table when it became crowded. I stopped going there, and now the pub is going out of business. Isn't America grand!

Antonio

March 25, 2009 11:55 PM

$156 million? Is that REALLY what we are focusing on here? We are talking (or SHOULD be talking) about BILLIONS, with a 'B', of taxpayers money going into cleaning up this mess. This disproportionate focus on these bonuses is upsetting.

WHO is responsible? Look to your government, people. They are the ones who gave our hard earned (or otherwise) cash to AIG without making appropriate stipulations on payment caps for executives. And it is our government that will continue to spend our cash unless WE the people call them out on it. But right now they seem to have convinced us that we should pay no attention to the man behind the curtain. Instead, we talk about $156 million in bonuses. Seriously.

The Elite

March 26, 2009 12:52 AM

Executives deserve their bonus simply because they work harder than "normal" blue collar folks who are simply paying for their younger indolent years. The "public" made up of mass hordes of ignorant, incompetent workers oft prone to envy are taking this opportunity to assign blame for THEIR own reckless spending behavior.

The rich are rich because they are generally better people--smarter, harder working, more morale. There are always exceptions but generally hold true.

So perhaps instead of assigning years of pent up anger on people better than you, try to do something in educating your own children, and use your own failure as their lessons. Maybe one day, with a lot of luck, they might fare just a little better than your miserable self.


Always Better,

The Elite

Steven Hsu

March 26, 2009 1:36 AM

Reply to aurum79--

First of all, it is "Jake brake" not "Jake break," as in device used to slow a vehicle, not a moment of nonwork during which coffee is consumed. I've never heard of any danger associated with engine compression brakes. The ban of Jake brakes by some towns is certainly based on a concern regarding noise. Even this concern can be obviate with special muffling or valving.

I am not assosciated with the Jacobs company in anyway. Just try to dispell some misinformatin.

Kate M.

March 26, 2009 2:04 AM

In a large company with many silos that are actually distinct businesses, employees in those silos are expected to mind their own, ahem, businesses. Jake DeSantis was an A.I.G. employee. His title and compensation may put most of us in an unfavorable perspective toward him. In the banking/finance industry, the VP title means relatively little and implies a well-defined operational scope. Just don't expect "executives" like him to be responsible for the rest of the company. As to his compensation, the term "bonus" is quite misleading, as it implies something extra, something non-essential. Well, just like commissions in the world of sales, such compensations are negotiated in advance and based on performance goals. Again, we should remember that Mr. DeSantis was an employee working within a corporate silo, and his final compensation was contractual.

Are we Americans moving to a government-regulated, socialist society now? Will all salaries be specified and monitored by government agencies in the interest of social "fairness"? Are all "rich" people guilty? What should be the definition of "too much compensation", over $75K, over $100K, over $250K? Does it make sense to talk this way out of context?

ja

March 26, 2009 2:20 AM

JAKE DE SANTIS? THERE'S AN ANTHONY DE SANTIS THAT IS IN CHARGE OF AN AIG CAR INSURANCE COMPANY! LOL!

MS

March 26, 2009 4:41 AM

What has been missing in the dissection of the financial crisis has been any scrutiny of the role corporate boards have played in allowing, promoting and rewarding its management teams for their unbridled rush for profits and increased share value. No CEO acts without the Board’s oversight and approval. Senior management compensation plans are designed and authorized solely by corporate Boards. Stock incentive plans/rewards are created by those same Boards with the intention of driving the company to achieve annual corporate goals. And all these plans are intended to assure reaching the shareholder value promised to analysts who in turn qualify and promote the company’s stock to the public. It’s one of the things successful companies have in common; their ability to align incentives so everyone on the company is working for a common financial purpose. That same alignment unfortunately, if unchecked, can cause the type of disaster we see today in the financial markets. But make no mistake; if the buck stops somewhere, it is not only with the CEO but also with Board’s Chairman and Directors.

But corporate Directors have remained quiet and have been allowed to remain hidden during the current crisis. No media commentator has had the journalistic strength to probe the Board's role in this debacle. CNN, Bloomberg and CNBC nor any other media has put a spotlight on their actions and it probably has to do with fear of losing advertising revenue. If true, it proves the restrictive power corporate interests have over the public’s right to know and is itself a crisis, albeit a silent one.

That said, to put a spotlight on CEOs and a relative handful of senior managers fails to expose the real culprit, their corporate Boards. To pick on a relatively few individuals, who were paid and directed to run roughshod over the financial markets, without also recognizing the corporate Directors who incentivized their machinations is to get angry at the symptom and miss the cause. Make no mistake; I do not condone the actions of those who created these risky investments and I don’t feel bonus’ are due anyone whose operating unit lost money or contributed to the company’s failure. But if we are to learn from our mistakes, we need to address corporate Board failures to meet ethical standards and their losing sight of their fiduciary responsibility to protect and safeguard shareholder and investor value.

James H.

March 26, 2009 9:22 AM

@ John Seater: Why should we read the actual letter? The journalist wouldn't have said it if it weren't true. If context mattered they would have published the entire letter right? Part of the "change" that Americans DESERVE is to be spoon-fed everything, you should know this. Asking us to think for ourselves...what were YOU thinking? :)

@ Gary: You still didn't explain why you blame Mr. DeSantis personally. You did however agree "that he may have not had any personal involvement with the credit default swap transactions". Division-to-division communication...really? Maybe at a rudimentary level. While you may have plenty of time to handle your job as well as the jobs of others, it sounds to me like he was too busy with his OWN responsibilities to micromanage what his brethren were doing in their departments. You're using Dr. DeSantis as a scapegoat.

@ The Angry Mob with Pitchforks: It's scary how much this feels like a witch hunt. Why don't we just tie him to a stake and set him on fire? It's obvious that he was guilty via association. We can’t not stop there though, why don't we lock everyone who works for AIG in the building and set it on fire...that way we're absolutely sure to get the ones who were responsible for ruining everyone's 401K. Better to burn everyone involved, wouldn't want anyone to get away with it. This might make some people happy--but not this mob. After that we start going door to door in wealthy neighborhoods punishing anyone who even looks greedy. Of course that will only serve to fuel our bloodlust...then we need to head to the homes and offices of our public servants...after all they weren't voted in or anything, they just took power didn't they? The bottom line is that instead of whining and moaning on a website you should actually DO something...something that actually matters.

James H.

March 26, 2009 10:01 AM

@ Diane Brady: I have to amend my earlier statement where I stated that "If context mattered they would have published the entire letter..." There is a link to the the letter on the New York Times that I didn't notice. My apologies for not paying full attention.

Diane Brady

March 26, 2009 10:13 AM

Thanks, James. I completely agree with you that it's important to give readers the full text, so they can judge for themselves. Appreciate the feedback.

Waiting for Godot

March 26, 2009 10:41 AM

Frankly,

Frankly, you need to check your emotions at the door. They have done a disservice to your logic and articulation, rendering your response to "Mr. Tired and his ilk" replete with contradictions, puffery and histrionics (is it really necessary to use ALL CAPS?). The current economic situation has affected all of us in some way or another, be it financially, emotionally, physically, socially, etc., but in order to have an intelligent discussion about what has transpired and what can be done to remedy our collective plight you cannot automatically paint Wall Street and its brethren as "the enemy" or any "businessman" who asserts his innocence or right to a "bonus" as a "pathetic...Ponzi-Scheme peddler." So, take a breath, re-read Mr. Tired's response and come back with a reply that is well-reasoned, articulate and worth this forum's time.

Tired Of The Whining

March 26, 2009 10:45 AM

Dear Frankly, my comments were entirely based on taxpayer money having already 'left the building'. If a company like AIG has a very small department that costs them to go bust, well then, shame on them and their supposed credit regime. I can live with letting them fail, however, I don't think any of us have a true sense of the magnitude of the CDS that this group underwrote or the effect that allowing them to fail would have. We're slowly seeing how many billions they owed certain other counterparties (HFs, GS, etc.). But in the spirit of capitalism, I'm all for letting them fail like Lehman and as Bear should have. But I think the domino effect is something that none of us from Main Street to Wall Street would be ready for. The unregulated CDS market is a HUGE driver for the Wal St bailouts.
However, re AIG, since taxpayer money is already supporting them. Why force out the individuals that are willing to stick around and have the ability to try and wind down the situation as best as possible? JDS doesn't run AIG. JDS didn't write the deadly CDS. JDS agreed to work for $1. JDS is speaking for himself and his team that agreed to stick around and try to best serve taxpayers. JDS can and will easily get a job at another shop based on his skills and the fact that he did ADD VALUE to AIG by bringing in a lot of $$ during his tenure there. Those that find "adding value" on Wall St to be something other than bringing in $$ (assuming based on solid credit decisions)....what is your measuring stick?
And for all of the IT folks out there (who keep posting) who are working 12, 14 hour days and are admittedly a very important cog at every firm (if not a dime a dozen)...when was the last time you knew of a Sr IT professional banking millions? Seriously? Top Wall St earners are: John Paulson and....the Head IT Mgr at XYZ Firm???? Was that your goal upon entering the field? Sure there are ways to get there, but they likely require switching departments, I would think. Next I'm just waiting to hear from that Elementary School Teacher (who is absolutely underpaid) who is also putting in 12 hour days for his/er kids, and can't understand why JDS is working for a $750k after-tax bonus, when s/he is getting nothing but $35k, summers off and an occassional apple. If the complaint is that Wall St exec's get paid too much, OK, agreed in many cases, but as long as 'too much' is their current going rate on the St, do we really think it's a good idea to change that rate now at firms that have accepted taxpayer $$ if all of they other shops still see their value as "too much"......come on, lets think.

Anyone who wants to see AIG brought back to life after receiving billions of taxpayer dollars by a bunch of first- and second-year analysts fresh out of undergrad, say "I".............(silence?)

Frankly

March 26, 2009 11:57 AM

Dear Tired of the Whining,

Thanks for your explanation. I appreciate it.

I guess what set me off was the assertion by some of the (presumably) Wall Street minions here (and certainly by Mr. DeSantis) that they are the only ones who work long hours or contribute enormous sums via taxes.

As a guy who started, nurtured and maintains a relatively successful business that employs many people and produces a quality product, I am grotesquely familiar with long hours and high tax payments. I make a good salary and don't begrudge anyone who does.

However, if I made some ham-handed blunder or serious business miscalculation that caused my business to go into a downward spiral, I would not run to the government for a bailout, nor would I accept one if it were offered. As one of the components in the Engine of Capitalism, I have taken many risks, dodged many bullets, taken many lumps, and have learned many valuable lessons at the school of hard knocks.

For a short period of time, my family and I paid for a blunder I made by setting up living quarters in the back of my fledgling business. But we survived and that is what Capitalism is all about.

We are either a capitalist society or we aren't. If we are, we should live and act like one, which primarily means the notion of "too big to fail" is pernicious nonsense that actually harms our capitalist system, not enhances it.

While I fully understand the dire repercussions that might occur should our financial system tank, I am confident enough in the resiliency of the American Spirit that I believe our nation will continue to prosper and be blessed--although I realize full well the interim correction period would not be kind or pretty to anyone.

Should this occur, I am fairly certain my family and I will make it through. I've been at zero several times in my life, but dreams and tenacity have allowed me to overcome, and I believe most Americans have the same talent and ability if motivated enough.

Thanks for taking the time to consider my position and explicating yours.

doodahman

March 26, 2009 12:51 PM

It's a good thing this sap didn't follow his parents into the honorable and useful field of education. Imagine what damage he might have done to the kids!

Noah

March 26, 2009 12:58 PM

Jake The Snake DeSantis,
You are a sanctimonious, self-aggrandizing bozo (polite term). You took taxpayer money, OUR money, not yours and gave it to charity. For this cheap, sleazoid publicity image makeover ploy, both you and the right wing media who published your letter or report on it expect us to regard you as some kind of hero?? When I give to charity, I use my own money and I don't shout it from the rooftops. You are no different than a carny hustler or a patent medicine sales man.

Tim Connor

March 26, 2009 3:48 PM

You have got to loove these "sanctity of contracts" posts, as well as the one calling him a patriot and decrying class warfare. Also, the one accusing his critics of not being entrepreneurs.

1. Can we assume the sanctity of contracts crowds were appalled --I mean SHOCKED --when the contract of UAL employees was abrogated and their retirement fund used to pay creditors? OBVIOUSLY, they were willing to pay a tax surcharge to oprevent that contract from being abrogated, right? And I am sure they are OUTRAGED by the forced renegotiation of UAW contracts?

2. By class warfare, it has to be assumed that what they REALLY mean, is excrement should roll downhill. It's OK to vastly increase the portion of GDP taken by the upper 1/10th of 1% of incomes when times are good --but when things go bad, the reductions should all be borne by the unwashed peasantry?

In other words, they believe in asymentric upside and downside risk, despite the fact that they are supposedly leaders? Well, it's hard to blame them. Nice work if you can get it.

3. The idea that the letter writer can be compared to an entrepreneur is absurd. If he was an entrpreneur and things hadn't worked out, he would have gone bankrupt, not receiced government welfare.

Richard Watts

March 26, 2009 3:57 PM

Mr. DeSantis made some very good points in his letter. However, he was mistaken to believe that he had any "civic duty" to willingly cooperate with government extortion, and he is wrong to voluntarily relinquish one dime of the money he has earned.

zeeshan

March 26, 2009 4:02 PM

For sharing your layoff stories visit my blog:

http://project-you-are-not-alone.blogspot.com

Dr G Ledgerwood in England

March 26, 2009 5:47 PM


I, too, was lucky to attend MIT and had support to do so. Unlike Mr de Santis, I spent my career since (40 years) in a range of not for profit, charitable and educational agencies in 3 countries working to achieve social improvement and economic development. Often I was successful in substantial ways, but only occasionally earned sums that reflected my financial contribution to employers and clients. Can Mr de Santis say that his MIT education was as well invested? He has many years now to give back some of what he has taken. He’s clearly talented and let’s suppose that we have yet to see his greatest contributions to society. I, for one, look forward to hearing more from him, not as a financial manipulator but as a builder of the next generation of social enterprises.

Realist

March 26, 2009 5:59 PM

"And thanks to the Obama economy, I've just been laid off for the second time in 3 months."

Obama hasn't been in office 3 months. Listen to Rush much?

Cyre

March 26, 2009 8:04 PM

Dude F him. He's just a cheap cover and obfuscation tactic. He's like "Hey Look at me! I'm important and speshul!" while the people that really caused this mess are working hard to pretend everything's back to normal so they can continue to bleed us dry.

F-ing Unbelievable.

skeptic

March 26, 2009 9:53 PM

My first instinct on retention pay was the same as the one in this article - i.e. there's an oversupply of unemployed workers and very few available jobs for them, so it's not like workers have a lot of options to warrant large sums for retention pay. But I came across this article in the NY Times; poaching of talent apparently still happens even in this environment of rising unemployment:

http://dealbook.blogs.nytimes.com/2009/03/26/bank-of-america-loses-yet-another-banker/

trh

March 27, 2009 12:59 AM

"in the short term" does that mean untill things get straightened out?i thinks he better just leave now because i don't thinks anybody needs him nomore.i would be thinking like him too if i just got beat out of my bonus,but a public letter just shows the stupidity that got the company where it is today.

Realist

March 27, 2009 3:22 AM

Two things - first off, Jake got his money. What he does with it is up to him. So all these crocodile tears over poor Jake not getting his bonus are pretty phony, since he did, in fact, get exactly what he was promised.

Second, I'm willing to bet most of the people sobbing over poor Jake - who lost nothing - had absolutely no problem with blue-collar workers being forced to make concessions and give-backs to keep their jobs even in cases where no taxpayer bailouts were involved.

There's little in life more disgusting than people who seem to consider it their mission to afflict the afflicted and comfort the comfortable instead of the other way around. I'd say shame on you, but that would be a waste of time. Most of you aren't capable of shame.

Morality vs. Greed

March 27, 2009 5:54 AM

... one more

Mr. DeSantis, your actions have caused millions of people around the world loose their retirement, become unemployed, go hungry, and die.

Bravo!

How about a piano wire? Consider that!

Prem

March 27, 2009 8:32 AM

You say "I was asked to work for an annual salary of $1, and I agreed"... Whats so great about agreeing to work for $1 if all along you thought there was a nice hefty bonus coming your way ? Obviously you didnt take up the job out of any sense of duty towards AIG or the nation - you did it only because of the bonus - and now its gone, which is why you are so bitter.. Stop pretending about it.
And there are lots of other folks who worked as hard or even harder than you, didnt make as much money as you did during the last few years and today are looking out for a job, more out of your fault than theirs. Why should you be treated differently ?

Squeezebox

March 27, 2009 9:45 AM

I think what's really making us mad is that this guy thinks he's better than us when the evidence seems to say otherwise. So what if he graduated from a name brand college and made all the right friends in all the right places? He was still in charge of the finance department, he should have foreseen the risk of the investments and stopped them before the company ran into trouble. The company is not performing as it should because of the bad investments. Mediocre performance deserves mediocre pay. Let him take a more reasonable paycheck for his year of efforts, not 750K.

Not McCarthy

March 27, 2009 10:06 AM

I disagree with the idea that a "mindset created this mess" and that we should vilify individuals who we think had that mindset. Of course there were villains, but we need to identify them accurately, otherwise it's a McCarthy style witch hunt. The list should include the countless homeowners who flipped houses every year or two in order to live well beyond their means. That provided the motive power for this crisis. The banks created unsafe products using that motive power. The ratings agencies plastered the label "safe" on the unsafe products. The elected Republican government dismantled regulatory agencies as quickly as possible to make sure this "disastrous trinity" went unchecked. There are plenty of people to blame.

Furthermore, some of those Wall St executives were doing important jobs that did not contribute to this crisis. Those people were highly paid like all executives in a free market economy. Lou Gerstner and Steve Jobs made billions building our economy and nobody is complaining about them. It's funny how during good times everyone is a free market supporter (I got mine, I want to keep it), and during bad times everyone complains it's unfair (I lost my job, it's your fault).

In a healthy free market economy AIG should have been left to file for bankruptcy. But obviously it's not healthy because it turned out the entire US economy depends on AIG. Taxpayers now own 80% of AIG. Why not just nationalize it? Then we could dictate salaries just like we do for any federal employee, and this whole bonus debate might have been avoided. Of course AIG would then lose much, much more money and we would all be even worse off - but at least it would be fair, right?

A lot of people are having a horrible time right now, and it's popular and easy to blame all the problems on Wall Street executives. But not it's not fair or smart. If you want to understand the financial system, read "The Ascent of Money" by Niall Ferguson. Life is plenty worse in countries without proper banking systems.

Rocky

March 27, 2009 10:08 AM

I recall that Congress placed limits on executive salaries that could be paid out on a tax deductible basis some years ago. An exception was made for bonuses that were based on performance. I guess Congress got it wrong. Why don't the windbags admit they made a mistake in exempting derivatives from regulation a decade ago? Who are all the experts that pushed Congress and President Clinton down the de-regulation path and why aren't they being punished? Lawrence Summers, one of the experts, was Secretary Treasurer at the time. Not only is he not being punished, but he is now a senior economic adviser to President. So much for change.

rastaman

March 27, 2009 10:27 AM

This guy seems to be marketing himself for his next gig. Clever but risky. How can he get much sympathy for loosing a $700,000+ personal bonus when the average household income in America is around $50,000/year?

SM

March 27, 2009 11:28 AM

One point I have not heard discussed.

The bonus was for "retention" and was supposed to be for people who knew about the business and were thus, theoretically at least, best positioned to unwind the positions.

If DeSantis was not involved in any of the toxic assets as he claims, then why was he "retained" to unwind them?

Would it not be possible for another person in the financial industry (I hear a lot are looking for work) be hired at cosiderably less than $1.5MM (assuming DeSantis was taxed 50% and based on the $750K he got after taxes)?

So the question is: if he was not involved in the first place, why did he need to be "retained"?

The Mad Hedge Fund Trader, San Francisco, CA

March 27, 2009 12:12 PM

I’m glad that I’m not counting on an AIG bonus check to clear the bank. CNBC has turned into the AIG channel. I can only imagine how that annual review conversation went down. “The good news is that your bonus is $5 million. The bad news is that you will have to spend $25 million in legal fees defending it”. Thank goodness for small favors. What hath Obama wrought?www.madhedgefundtrader.com.

Nathaniel

March 27, 2009 12:14 PM

I am an AIG employee within the Personal Auto Group line, in November 2008 we were advised by management that all lower level employees (Supervisor and below) would lose part or all of our shift differential beginning January 1, 2009 which for some amounts to a loss of 5-20% in income, depending upon what schedule we work. The attitude of management at the time of the announcement was "be thankful we still have our jobs", AIG executives are the biggest bunch of hypocrites ever.

Our company newsletter is called "Seize the Future" for a reason, to give select individuals bonuses for playing golf on a work day and brown nosing is appalling. The average employee who actually performs the lion's share of work within our ranks is lucky to receive a 3-4% merit increase in any given year. Remember the good ol' days when we got $1.83 after taxes for $5 referral and an ice cream sandwich on Friday?

I challenge every non-exempt AIG employee to exercise your rights by submitting a complaint to your states Attorney General’s Office or Department of Labor, do not sit by and allow Ed "Dollar Bill" Liddy and his Band of Brothers to deceive you any further. Remember this, while you are slaving away on the phones, lying to the customers that "we used to be AIG, but now we're not" your income is less and executives still get bonuses. While you are lying to the customers about why their premiums have been raised yet again, executives are out on retreats. And yet they come to you and ask "your tone sounded really somber and flat on the phone today, anything wrong?" Well it's kind of hard to be energetic when 52 former executives receive retention bonuses of more than $1,000,000 and we are left to answer calls from angry customers as to why AIG is stealing taxpayer dollars.

When they spent $200,000 for rooms, $150,000 for meals and $23,000 for spa treatments, you and I were herded into a room for a Subway sandwich, AIG logo chap sticks and an empty green bag. When they were ready to give Martin Sullivan $19,000,000 and $600,000,000 to other executives, they came to you and me to take our money, for myself a loss of $2,400 or 3 mortgage payments.

Our old company values of People, Customer Focus, Performance, Integrity, Respect, and Entrepreneurship have been replaced by GREED. So since we are continually told "you are the voice of the customer" SPEAK UP! What is the worst case scenario? CEO forces the sale of the company under the guise of "Expansion, Restructuring and Re-branding" only to walk out the door with $40,000,000 a la Bruce Marlow or bankruptcy? For Mr. Liddy that would be about $165,000,000 plus his $1 annual salary, for us the lumpen........... nothing.

I would say call your congressman, but unfortunately many of them have already taken campaign money from, guess who? That’s right AIG, see everybody gets paid for doing nothing, except for you and me.

Sincerely,

At The Bottom

Realist

March 27, 2009 2:54 PM

"The list should include the countless homeowners who flipped houses every year or two in order to live well beyond their means."

Why? If they defaulted on their mortgages, that's one thing. But it's my understanding that "flipped houses" means they bought them for a short term, then sold them. If there's something illegal about that, we're going to need a whole bunch more prisons right away.

Nah, if you ask me, what happened was the financial industry saw the flippers making money and tried to figure a way to cut themselves in. Which they did. It just turned out to have implications they hadn't fully considered in their lust for the big bucks.

One last point: money, like energy, is never destroyed; only conserved. Which means it's never really "lost" - only transferred from one person or entity to another. The question people need to be asking is where all this "lost" money went. Find the money and you'll find the people responsible for this mess.

gg

March 27, 2009 4:14 PM

The De Santis resignation reflects the oft used quote about the fact that while "success has many fathers, failure is an orphan." What he fails to comprehend is that when a ship sinks NOT just the person at the helm goes down so does everyone else. does he seriously believe that all the people who lost their life savings working for Enron deserved what they got? They weren't the ones cooking the books. In good times everyone shares in a company's success [or should] & n bad times, everyone pays a price. De Santis still can't seem to grasp the fact that he is not being paid by a successful, money-making privately owned company called AIG anymore but rather by the US taxpayer & we do not reward failure. Give this guy a banker's box for his possessions & have security show him the door!

Rick

March 27, 2009 4:41 PM

I love how some of the people here who obviously work in the financial sector are defending the amounts of money these guys make. I have no problem with entrepreneurs and executives making large amounts of money, but only if it is for a legitimate industry... you need to face the facts, Wall Street is a fraud, it shouldn't exist, at least not in the way it has for the last few decades. We don't need these arrogant a*holes that think they know everything when all they are really doing is manipulating the markets to make short term profits usually at the longterm expense of someone else. These people are truly morally bankrupt. Also, there is not a direct correlation between intelligence and earnings.. after all, the mob makes a lot of money, do you think they are geniuses? I think we, the people, need to push our elected representatives to regulate the hell out of the financial industry.. lets see how talented this people are when they have to go into a real industry and actually produce something rather than just manipulate the markets to make short term profits.

LOL@USA

March 27, 2009 7:30 PM

Nat, you’re a dork. Who owns AIG now? We do. You and me.
Bashing AIG just keeps the fire going on and will make AIG a worthless company. In fact, it already may be after all this. The re-branding (going back to the old names) is happening for a reason. Those companies are doing well, all the garbage is going to stay with AIG and then they will bankrupt what is left of AIG. Very little new business is being done with the name AIG due to the mob mentally. The bashing and "Outrage" will make our tax dollars go into the toilet.

Enough AIG bashing, lets make it work so we can get our tax dollars back. After that, AIG can go back under a rock.

So how did you like the town hall meeting today?

Greg

March 27, 2009 10:33 PM

Most Americans have been duped by Obama and Democrats in Congress. Obama feigns disgust at the AIG bonuses, when he has known for his entire adult life that Wall Street executives do get bonuses. The bailout offered by Democrats specifically allows for bonuses. Obama simply misjudged how angry we can get, so he is using AIG executives as scapegoats. If Obama and the Democrats truly wanted to stop AIG bonuses, they should have said so months ago, so that the remaining AIG-FG execs would have a chance to find other jobs and allow AIG to fail spectacularly, bringing down other large financial institutions with it. But Obama lacked the courage then, and lacks the courage now, to admit his complicity in allowing bonuses to AIG. He used a bait-and-switch tactic to keep AIG execs working to unwind the financial mess, and then uses the media to shame those execs into giving up their promised rewards, never once admitting that he knew all along those bonuses were valid compensation promised by Democrats in Congress.

C.S. YANG

March 28, 2009 1:42 AM

He is a commodity and currency derivatives specialist who monitors markets 24/7 and will likely be hired by a Chinese Bank or Global hedge fund who will pay him 5-10 million/yr. That is, unfortunately to some, the going rate, still. That is the actual reason for his resignation.
His point, which a lot of the public has missed, is the fact that AIG need him more than he needs them, and even in bankruptcy court his contract will be honoured.
The government may be the de facto 80 % owner but they are technically only a creditor secured by the AIG franchise and business (which include life, casulty, property, etc., all profitable ) The taxpayers are only hurting themselves if the collateral for the loans to AIG diminish because of a mass exodus of personnel.
Everybody at their job believes they are doing hard work, but the world doesn't work that way. Compensation are determined by the labor market's supply and demand. However outrageous the contract term seems to be in hindsight, that was the price to keep your business growing to placate the shareholders. AIG cannot predict a financial disaster as much as anyone can predict Katrina. The CDS staff made mistakes, the debate should be whether other people in the company who did their jobs should paid ?

Disbelieving

March 28, 2009 11:49 AM

I have no love for AIG executives but can't you people see you are just being whipped up into a frenzy by the press and unbfortunately, the administration of Obama, and are now just a lynch mob looking for victim? while you focus you rabid hatred on these AIG executives the same thing is going on all around, and always will. you are political pawns.

Sam

March 28, 2009 12:22 PM

While he makes a great argument, I'm afraid it'll fall on deaf ears. Main St is not happy about hearing jobs being cut every day yet AIG execs receiving millions in bonuses. It's kind of sad how AIG execs are being vilified when they're not even the inventors of CDSs yet are receiving the blame due to the collective greed of investors who had no business purchasing risky CDS'.

Mr. DeSantis is a good man, and I hope people see his actions for what they are: he was betrayed the company he loyally served by being portrayed as a greedy, evil person so he wanted to salvage what little good he could by donating the rest of his bonus after having Congress essentially stealing 90% of it.

Sam

March 28, 2009 12:56 PM

Of course Main St is not happy about jobs being cut every day yet AIG execs receiving millions in bonuses (which ties into a deeper resentment of executive compensation in general). It's kind of sad how AIG execs are being vilified when they're not even the inventors of CDSs yet are receiving an unfair portion of the blame.

The decision to pay bonuses even after receiving taxpayer money wasn't a very smart one, however rather than having their contractually obligated bonuses stolen via taxation, they should've been strongly asked to return the bonuses or suffer the political fallout. Instead, all parties involved took the most extreme actions possible and further exacerbated public anger.

Mr. DeSantis is a good man, and people should see his actions for what they are: a man wanting to salvage what little good he could from this political nightmare by donating the remains of his bonus after having the majority of it stolen.

op

March 28, 2009 4:52 PM

Oh, puhleeze. I am sick and tired of hearing about the top 10 percent income earners paid 70 percent blah blah blah. First, there are payroll taxes which pay for medicare and ss. And payroll taxes do not go into some separate account. They go into the general fund and if you take that into account believe me, they pay for an awful lot of general government expenses. Second, the top 1 percent owns 80 plus percent of assets. There is an argument to be made that actually use more government resources to make their money. While the very poor may use more resources the total dollar value of resources used are less than the total dollar resources used by the wealthy. The ones who get squeezed the most are of course the middle and upper middle class who don't use as many resources but pay a ton in taxes and payroll taxes. Additionally there are sales and property taxes. Additionally the wealthy use more tax deductions than either the middle class and the poor. I am willing to bet the average upper middle class family with 2 regular jobs pulling in 200K do not have tax shelters in the Caymans set up by Goldman Sachs and Citibank and of course how could I forget UBS telling them to buy diamonds and art to escape taxes. And oh yeah, one more thing - if you have a problem with taxes in this country please feel free to move to some other country in this world where you can get away with paying as little taxes as you do here and still do business. I know it will cause such a huge brain drain in this country if you would leave. After all, there are just so many countries in this world with a stable government which can be legally bribed to keep your taxes lower.

williambanzai7

March 28, 2009 11:34 PM

I JUST WROTE AIG AN OP-ED LETTER
(the Letter, Joe Cocker)
WilliamBanzai7

Sing along: http://www.youtube.com/watch?v=HoW81x4j7ow

Gimme a minute to write a $750,000 complaint
Its just a matter of time before I'll find a new game
Fast and easy days are gone, I'm a-goin' home
Hey baby, I just wrote AIG an OP-ED letter

I don't care how much money I get to keep in the end
Got to go back to my savings once again
Fast and easy days are gone, I'm a-goin' home
Hey baby, I just-a wrote AIG an OP-ED letter

Well, I wrote them a letter
Said I couldn't live without my bonus no more
Listen mister, can't you see I can't just give it back
To charity maybe, don't cha wanna hear more?
Anyway, yeah!

Gimme a minute to write a $750,000 complaint
Its just a matter of time before I'll find a new game
Fast and easy days are gone, I'm a-goin' home
Hey baby, I just wrote AIG an OP-ED letter

Well, I wrote them a letter
Said they would have to live without me, ohhhh no!
Listen mister, can't you see I can't just give it back
To charity maybe, don't cha wanna hear more?
Anyway, yeah!

Gimme a minute to write a self servng complaint
Its just a matter of time before I'll find a new game
Fast and easy days are gone, I'm a-goin' home
Hey baby, I just wrote AIG an OP-ED letter

John

March 29, 2009 12:08 AM

All projects have instigators or champions. Why hasn't someone started naming those who did directly cause this mess?

coffeetoffee

March 29, 2009 1:56 AM

Google Jake DeSantis. I found a linkedn profile which says that he is a chemical engineer from MIT working as executive VP with AIG for last 10 years. Wonder how a chemical engineer becomes a financial expert.. but anyway..

I assume that he was part of the division that invented/promoted all these fancy products - CDS. Also assume that he made a lot of money in 10 years when times were good. What is he complaining about? Resigning is probably a smart thing for hime to do. Why work hard to fix the problem that was created under his supervision? Just retire happily now with all the money in the bank... And some people here who are feverishly defending him must be hoping to mint their retirement nest the same way... leeches and bloodsuckers of the society..

Health Career Agents

March 29, 2009 2:24 AM

Are we really mad at what AIG execs did or are we mad that our stocks are down, our houses are worth less and we don't have a job? If it's possible that it's the latter, the solution might be taking control over your life and most won’t ever do it working for someone else. A US News report identified that 13 of the top 30 careers are associated with health care. In addition to jobs being available in health care, there are opportunities too. People are taking charge of their careers and starting businesses of their own. It’s inevitable coming out of the down cycle and they are the leaders that will lead to eventual job growth for the masses. Our company, Health Career Agents teaches people how to start their own health care recruiting business. Health Career Agents recently announced three ways business people from various industries could get involved in health care recruiting:
- Buy a Health Career Agents business
- Start a Health Career Agents solo practice
- Work for a Health Career Agents office
The fact that we have Health Career Agents offices doing hundreds of thousands of dollars in revenue should serve as further evidence of the potential in health care recruiting with Health Career Agents.
http://www.healthcareer-agents.com/

Robert Adelbert

March 29, 2009 4:16 AM

For those who like to cite the trickle down idea, what trickles down from the Wall Street wise guys is urine.

ErinSiobhan

March 29, 2009 11:46 AM

Someone needs to tell him to stop whining. His company was bankrupt. Bankrupt companies don't pay their employees. Period.

If he was too stupid to take one of those (I suspect fictitious) job offers because he was promised a future bonus by an insolvent company, I'm not sure he's bright enough to help clean up the mess.

Shortsighted

March 29, 2009 1:06 PM

The Downside of the AIG Exodus
Fri Mar 27, 2009 11:09am EDT

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rob.cox - The Big Money

We the people got what we wanted. Most of the top executives at AIG's financial-products arm have agreed to pay back their bonuses. So, too, have many of the derivative business's rank-and-file employees. So, that's settled then, right? Not so fast. There may still be a consequence of the great AIG claw-back of 2009.

Staffers at the AIG black-box operation whose massive wagers in the credit-default swaps market necessitated a $170 billion U.S. government lifeline are leaving in droves. Many are quitting at the group's Wilton, Conn., office, including one whose letter of resignation to CEO Edward Liddy made the New York Times op-ed page Wednesday.

In Europe, where the bulk of the CDS bets were put on the books, at least two top dogs running Banque AIG announced this week that they would leave. And insiders at AIG are bracing for resignations en masse—some even speculate the entire division's employees in London will walk.

Who cares, you ask? Aren't these the villains who nearly put the global financial system in the junkyard and then had the gall to proceed with paying themselves millions of dollars in bonuses? Even erstwhile compatriots on Wall Street and in London share sympathies with the torch-and-pitchfork brigade. After all, if it hadn't been for the $165 million that AIG was contractually obligated to pay the derivatives folks two weeks ago, the House of Representatives wouldn't have passed a bill taxing bonuses at big recipients of government bailout money by 90 percent.

So news that the AIG bankers are handing back a chunk of money takes the pressure off everyone.

But the story is not over. While some of the $165 million may boomerang back to the taxpayer, what about the $170 billion the government has pumped into AIG? Retrieving this will depend on how well AIG can unwind the remaining $1.6 trillion in trades to which the financial products division committed.

These aren't simple IOUs. Some have durations of up to 90 years. They encompass many geographies, jurisdictions, and asset classes. Many have models attached that were engineered in computer programming languages that are no longer even taught in universities.

This is going to be a big, complicated task. Just do the arithmetic: A 2 percent loss in the value of the portfolio—which could easily transpire if trades are not hedged properly or negotiations to pick them apart falter—would see another $32 billion of taxpayers' money evaporated.

True, there must be lots of unemployed and talented bankers and traders willing to replace the fleeing bonus-takers of AIG. Perhaps—but the perquisites aren't compelling: a low base salary and no bonus. Meanwhile, incredible public scrutiny has unfairly cast the image of AIG employees somewhere between that of child molesters and journalists.

And the career path for those who agree to take a chisel to the derivatives book? Well, spend a few years winding down the portfolio, and, if you're lucky, you get to be the last guy to turn out the lights. There is, in short, no career upside and no money in this trade.

Outrage has clawed back a few million dollars in less than two weeks. But taxpayers better hope it has not come at a far greater expense in the long run.

DLaw

March 29, 2009 3:23 PM

Boo hoo hoo.... sniff.. sniff.

Relax Jack

March 29, 2009 3:34 PM

Mr DeSantis

Risk vs. Facts 101
You cannot take your bonus money with you when you die even if you or AIG are a saint.

And the owners of toxic assests
will and can walk away from government approved unmanagable debts

Selling 101
Its not for me to throw the first stone but if your going to stand behind AIG put the names of those who are responsible for the woes out front otherwise your delivery of justice is useless. What do you know? When did you know? Who's name you going to drop for your next job?

Get a Life
Thank your job while you were away working one of your family or you AIG collegue did not bankrupt your family household with their brilliant math skills. You are a gifted man your business skills do not require rehabilitation.

Bottom Line
We the taxpayers and descendats are there to represent the 10 trillion dollar deficit in pepertuity. If there was no national debt the credit markets and wall street would be out of business and congress would be a lovefest.

Mark-Anthony

March 29, 2009 7:17 PM

Screw most of you people. I would assume he is in the top 1% of earners in this country so I am pretty sure he pay a larger share of the tax burden then most of you do. I am glad he did that, because you all are hypocrites. When those soilders in Iraq killed those people, you didnt villify the entire US Army nor the millitary as a whole, so dont scapegoat someone who did their job and someone else took the company down.

Lisa

April 1, 2009 3:10 PM

For as long as I have worked, the is approximately 31 years now, pay and bonuses have been based on experience and production. The horribly uninformed and barely photogenic Catie Couric on CBS makes, correct me if I am wrong, 13 million in salary (goodness knows what in bonuses) -- not because she is intelligent (that's plain to see), but because CBS believed she could produce the ratings
they wanted. So, yes, if this man generated 100million in profit (as espoused by your 2nd statement) he deserves his bonus. That is how things work in the real world. The rest of you can state that you would never accept that kind of money when people are starving, Hah! If you had the opportunity you would in a hot minute and you know it. Oh, and I am so sure that you would use every cent of it for charity too! If you want to complain about over-paid useless human beings take a good look at Hollywood. Now that is a Soddom or Gomorrah if I ever saw one. Or try pro athletes, with their multimillion contracts and spousal abuse, animal abuse, drug abuse -- what are they doing for society?

Brian

December 23, 2009 6:25 AM

Tell it to the people working for Circuit City. This is hard-hitting capitalism, Friend.
Retarder l ejaculation Comment retarder ejaculation

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