AIG Bonuses: Jake DeSantis Quits

AIG continues to steal the limelight with its latest drama. Jake DeSantis, an executive vice president of the company, offered his resignation in protest against government pressure and public outcry against stupendous sums of bonuses.

AIG offered the money to several of its executives after the company posted a $62 billion loss in the fourth quarter of 2008 and took $180 of taxpayer-backed TARP bailout funds to keep its business alive.

Recently, AIG paid out $165 million in bonuses even after the debacle. The New York Times reports that 15 recipients of the bonuses agreed to return the money even as the House voted with thumping majority to tax the bonuses at a 90% rate. Public scrutiny has put the AIG executives in an uncomfortable spot.

In his resignation, DeSantis points that he and several others are not responsible for the reckless risks that brought down the company. He claims that he put in very hard work over the past several months to clean up the company and is now shocked at the company retracting its contract to pay him his dues. He expresses disappointment and regret that he had worked for a $1 salary and had lost value in his deferred compensation invested in AIG.

While the first reaction is to feel sorry that DeSantis got cheated at AIG, we must remember that these are extraordinary times; unemployment is heading towards double-digits and many counties and even states in the country are at the verge of bankruptcy. People in the Main Street are struggling to keep a roof over their heads and place a meal on the table. Businesses across all sectors are shrinking. Despite this the common man is paying out of his pocket to bail out companies like AIG. After all with an education from MIT and work experience on Wall Street, DeSantis should still find multiple well-paying opportunities. So he has little moral authority in complaining about the breach of the bonus contracts.

Besides, in any company, bonuses are based on overall company performance. There is no common sense in justifying a million dollar bonus when the company has lost billions.

He also states in his resignation letter that Mr. Liddy, the CEO reassured them at least three times during the last several months that they would pay out the bonuses. This raises the question as to how aware treasury Secretary, Geithner and Fed Chairman, Bernanke were about the bonuses and why they did not act until public outcry tied their hands.

DeSantis complains that executives like him are being shamed by New York Attorney General Cuomo and his likes. I think it is only right and fair to the common people of America. It leaves us to wonder - What sort of morals do such Wall Street executives have? How do they sleep peacefully at night?