Thread: Dear A.I.G., I Quit!

Dear A.I.G., I Quit!


New York Times
Published: March 24, 2009


The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. 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.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitmentâ€

Fact:

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

One thing I did not know about Wall St. and alot of companies like AIG is that many of the top workers get paid like a minimum wage and then "earn" their true salaries thru bonus's based on results of sales or work provided. Sort of like a waitress who gets paid minimum wage and then "earns" her true salary thru tips. As someone who has worked in "sales" at a higher level, I know that it is not as easy as it is seen to be and the long, hard hours of 14 hour days plus is the rule not the exception, not to mention the continual jet lag from travel. I read the guys letter and what stood out to me was someone who for most of his life worked at the top peak of his ability, thru school, thru beginning jobs, thru getting to where he was, and that is something I could relate to. He did not seem like say a Brad Pitt who gets 20 million a film for 3 to 6 months on the long end of work. Hell, some TV stars get 750K per weekly episode, for 26 weeks or one full season, and they haven't gone to college (so no student loans). It is easy to demonize someone, but as someone who has worked very hard for a very long time to get where I am, I don't take pleasure in seeing men like this "taken down". If what they did was so easy, then why isn't everyman in America doing it? Why isn't everyman putting in the time in school, time in jobs? Taking the risks with their careers to keep getting ahead? Perfect example is a friend of mine in high school and myself. We started out basically at the same place, high school grads. I pushed myself thru college and a masters degree, in 5 years, working thru the summers and during school to subsidize my student loans. She worked thru college but would drop out and then start again and never finished. I then worked in various jobs with various companies continually looking for a better opportunity to learn and grow and take on more responsibility, thru company to company. (I paid off all student loans). She stuck with the same company and is still there after all these years. I work hard and travel and she has a set schedule - 9 to 5. We chose different lives, and so we chose different salaries and responsibilities. Equal opportunity to choose different paths. Yes, there are Enron's and World Com people out there in business, just as there are Chris Dodd's and Barney Franks and Maxine Walters who stand up for a guy runing and taking down Fannie Mae and Freddie Mack who walked away with 90 million, while those 3 testified on the hill that there were no issues at Fannie and Freddie and he was doing a great job.