Job Security AIG Style

Posted by: Nanette Byrnes on April 29, 2009

Now here’s an interesting twist on the AIG bonus scandal. The Wall Street Journal reports that James Shephard had decided to remain at Banque AIG, a part of AIGFP involved in many of the dangerous derivatives that have shackled the insurance giant. These are the contracts European banks bought to hedge other assets they owned, and limiting the capital they would need to hold.

Shephard’s staying is good because if he left, the company could have defaulted on $234 billion of derivatives. (Oh and he’s getting a promotion. Because the very top guy Mauro Gabriele, really is quitting and apparently won’t be talked out of it.)

What?

The tortuous reason: if the top managers of Banque AIG were to leave, the company would have to find replacements that passed muster with French banking authorities. Otherwise the regulators could put their own guy in, and defaults would ensue.

There must be an incredibly small pool of derivative experts for AIG to be that worried about finding another one.

Sadly this does not seem to be a model of job security easily exportable to other fields. Unless we can all manage to figure out how to structure things so if we get the boot, government regulators step in.

I’m racking my brain for other examples. Any ideas?

Reader Comments

FP worker

April 30, 2009 2:13 PM

Dont stress your little brain. You and many others like you are just jealous that some of us are doing better than you guys are despite the economic downturn. The bad thing about the net is thant it has enpowered people like you who have no idea what they are talking about and are too stupid to not be quiet.

We are thankful to people like Jim Shepard who have decided to stay on so an orderly unwind of the book at FP can take place. Mauro was definitely the brains in our Paris office but after all the humiliation he has received, I am not surprised that he decided to let go of several million dollars of his money so he wont be subjected to insults from idiots like you.

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