Bonus Rounds

It is with deep regret I submit my notice of resignation from A.I.G Financial Products.

- Resignation letter from Jake DeSantis, EVP in AIG Financial Products Group published in the New York Times on March 25, 2009

Yesterday Jake DeSantis, an EVP at AIG resigned his position in a letter to Edward M. Liddy, AIG’s CEO that was published on the New York Time’s Op Ed page. (http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=1&ref=opinion)

Judging from the response his letters drew, it is clear Mr. DeSantis struck a nerve. (http://www.nytimes.com/2009/03/26/opinion/l26aig.html).

He reminded us that in all the uproar over retention bonuses, Congress and the public lost sight of the fact that AIG employees are people - not numbers , or symbols or initials. These are men and women, who by in large are honest and hard working. To “blame, name and shame” as some politicians want to do, make real people and their families real targets.

Here is a man who felt he had been let down by his company and thrown to the wolves. There is some truth to that. AIG’s meltdown cost him a significant portion of his savings. When his company asked him, he stepped up and he is doing the complex job of winding down his Division on a $1 a year salary.

Mr. DeSantis’ letter is emotional. He feels betrayed by a CEO that did not stand up to the public vilification of the people in AIG’s Financial Products Group. He feels angry that he will have his retention bonus taxed. He feels a deep sadness in taking apart a company to which he has given 11 years of his life.

I sympathize with him.

Years ago I worked for a company that was sold, and I was part of the team that closed it down. I literally handed over the keys to the buyer. It is a hard, sad, frightening experience, to watch your coworkers leave, take apart something you have built together, while worried about your future. I will never forget sitting around the main conference room table on that last day. After the CEO thanked us, we got up, walked out, turned off the lights and our company was gone.

Any yet…

The more I read his letter, the more his letter bothered me. Clearly Mr. DeSantis wants the reader to feel his personal and financial pain. Except by his own account Mr. DeSantis can work for $1 a year and keep his house, and his car. His wife and children will not go wanting. Furthermore, he is able to give up a bonus worth nearly $750,000.

He wants us to understand how hard he works - 10-14 hours a day. But that is a normal day for me and my co-workers. And we are paid a fraction of his salary. He wants us to understand what a good fellow he really is. He pledges to give the 10% of his bonus that is left over after taxes to charities that support the people hurt by the Great Recession.

But Mr. DeSantis, makes no mention what he will do with his $750,000 if the Senate does not pass its 90% tax or if President Obama vetoes the measure. Would he have made the same gift if no one knew or cared about AIG? I don’t think so. Character is what you do when nobody is looking. True charity is motivated by compassion, not anger and disgust.

Finally, I was struck by his perfunctory sympathy for the people who are suffering in the Great Recession. It was after all, triggered in large measure by his Division. He was paid for doing something for which we all took the risk, but only a small chosen few reaped the rewards. There was no attempt to explain to the person losing his house, job, farm, savings and future, what went on and what went wrong. Instead of taking the opportunity to provide some constructive insight that will help guide us, the main motivation of his letter was to complain about his boss.

His lack of understanding of how his actions connect to the world around him was the most illuminating aspect of his letter. It is exactly this lack of understanding by a handful of Wall Street titans that has helped land us in this mess.