Wednesday, March 25, 2009

Only 700K? Phffft! I'm Outta Here!

Frequent readers of this blog know the scent of futility hangs heavy in the mean know we haven't had much to say about the AIG bailout and subsequent bonuses paid to the employees so they wouldn't leave the company they ruined. We make no pretense about understanding any of this except to have the sneaking suspicion that rich people are getting richer by taking money from the government--which we thought was welfare. Apparently we were mistaken in that belief too, maybe because a lot of these people already own Cadillacs.

So today we ran across a letter written by a fellow name of Jake DeSantis who says he worked at AIG and he explains the whole thing is just one big misunderstanding and now that everyone hates AIG and all the people who work there--even though they are in no way responsible for all that crazy stuff they did--he is going to quit and open a clinic in Rwanda. Or something. Anyway, let's let him tell it:

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. which everyone knows were the fault of minorities.

After 12 months of hard work dismantling the — during which A.I.G. reassured us many times we would be rewarded--because nothing succeeds like failure — 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 leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn, namely me, because I'm now unemployed.

I take this action after 11 years of dedicated, honorable service to A.I.G during which I was able to find my office on my own most days. I can no longer effectively perform my duties in this dysfunctional environment where people are actually being asked to accept responsibility for their actions, 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 the fact that I kept my expense account, living allowance, company car and all the company sponsored club memberships. Now that the weather is getting nice, I can no longer justify spending 10, 12, 14 hours a day away from the golf course for the benefit of those who have let me down.

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. Of course, as we're finding out now those were all imaginary profits made up of imaginary money, but that's beside my point.

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 because, as we both knew and now the rest of the country is finding out, there was no money there anyway. No real money, just good wishes and ponies.

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 because we are both in supervisory positions and that means we have permission to delegate blame to the minions. Ain't management great? I'll miss it.

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 because, let's face it, who in their right mind would want to work in a department as screwed up as that one, and that the contracts, being both ethical and useful, should be left to stand. That and because we threatened to sue your silk suited behind from here to Wangdangistan and back again if you didn't.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust. No, not the breach of trust between AIG and the American people, the breach of trust that you wouldn't keep dumping boat loads of cash on us even though we make the occupants of a clown car look like a MENSA meeting.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. Besides, in order to feel guilt you need a conscience and I don't see anything about needing a conscience in my job description. Greed and stunning myopia, sure, but guilt? Nada, zip, zilch.

Many of the employees have, in the past six months, turned down job offers from more stable employers such as Home Depot, Walmart and Bed Bath and Beyond, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you. Neener, neener, neener.

Some might argue that members of my profession have been overpaid, and I wouldn’t disagree, and the fact that we were paid with real money while earning imaginary money for our companies is, well, inconvenient for those investors who didn't see the difference, but hey, am I my stockholders keeper?

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less —say $1.50. OK, $2.00. Come on, have you seen the price on golf ball markers? What? You think I'm going to mark my ball with a quarter or something? Come on, what am I? Middle management or something?

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear that they might have to work at a job where their performance is actually measured and evaluated.

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 because frankly, there aren't many balls left to be dropped. Now, if you'd just send someone over to show me how to work this elevator thingy. My personal assistant was laid off a couple of weeks ago.


Anonymous said...

So good!

Anonymous said...

What’s lost in the public outrage toward the AIG bonuses is that not every division of AIG was involved in these risky and complicated credit default swaps. In fact, there were many other profitable sections that were lead by extremely talented executives. If the public has any interest in getting back some of the TARP loans and stock options, their goal should be to do everything they can to keep these gifted executives from going elsewhere. Besides being a Bill of attainder and thus unconstitutional, the AIG bonus tax would drive away any hope the company had at making any kind of profit in the future