Jake DeSantis Resigns from AIG

Jake DeSantis of AIG, American International Group, Inc., was an executive who received a bonus of $742,000.40 after taxes was taken out of the sum of his bonus. On Wednesday, March 25, 2009, a letter was published in the New York Times that DeSantis had written to Edward Liddy of DeSantis resignation and donating his bonus to charities given the economic turmoil of the United States of America. In the letter to Mr. Liddy DeSantis criticized Liddy for first agreeing to to the bonus for retention payments of the AIG employees. Liddy later stated to congress that he found the bonuses distasteful. In total AIG has awarded $165 million in bonuses for employees after getting a bailout of $182.5 billion from the Federal government of the United States.

Jake DeSantis's letter states that he is regretfully resigning and hopes that Liddy would read the letter in its entirety. DeSantis begins by explaining to Liddy that he is proud of his own accomplishments that he has done for the company of AIG and explains that himself and other employees were promised to be rewarded for their hard work by March. Especially since these employees were working up to fourteen hours a day for a $1 salary for the year. DeSantis continued in criticizing the environment of the workplace stating that many of the employees had turned down more stable job offers.

"I agreed out of a sense of duty to the company and the public officials who have come to its aid. I can no longer justify 10, 12, 14 hour days from my family for the benefit of those who have let me down." DeSantis, Letter Published in the New York Times.

DeSantis addressed Libby and how they had never met and allows Liddy to know about his upbringing, college, and how he had started in the company of AIG in 1998 as an equity trader. Then DeSantis also explains after the meltdown of September he was named the Head of Business Development for Commodities. During the time of dismantling AIG, he explained in his letter that it depleted his savings greatly. Farther statement from DeSantis letter addressed how he was quite hurt of Liddy not supporting the employees against the press about the retention payments.

DeSantis explained that the action of the contracts to begin with where Liddy had decided to accelerate by three months more than a quarter amount of money due and that the action alone showed significant support for the employees in the start of the contract signing. The contracts were not seen as distasteful from the start, and they had still not seemed distasteful over the six month period until only hours before Liddy was to go before congress. DeSantis farther explained to Liddy that the employees had been guilted out of their pay after working a year under the contracts. Many of the employees had remained faithful and turned down paying jobs.

The threat of Mr. Cuomo that he would name and shame those who did not return their money has instilled a lot of fear into the AIG employees. Of course, DeSantis agreed that he had been overpaid in the amount of a contract payment of making close to $750,000 a year and has decided to donate the money at 100% to a charity. Though he is unsure how much the charity will receive of the money since there is now a 90% tax upon the retention payments.

In the closing of DeSantis letter he wishes Liddy luck in getting the money returned that was extended by the American government and that quitting his employment at AIG was far better than being pushed out the door.

Personally, when I first saw the amount of money of $740,000 I felt that was a little high of a salary. I calculate that it would take me at least 30 years and sixteen jobs to make that amount of money ever in my life. I however, would never have agreed to work for $1 salary with a promise of farther money. Especially now when that promised money is demanded to be returned. I find it quite unprofessional and unethical for Liddy to wait only hours before going before congress to call the bonuses distasteful. That to me is like promising someone money to build me a house and then telling them thanks for volunteering their time. From the start, Liddy should have discussed with employees that due to the Federal government bailout there would be a change of compensation and gave the employees time to find new jobs or some form of compensation discussed.

I do not think that these employees should be expected to get nothing for working fourteen hour shifts for a company and never be paid more than a $1 salary. I though slavery was outlawed and I thought that there was a minimum wage law as well. In the least Liddy should be expected to compensate these employees with no less than their worth of hard work or at least minimum wage with the adjusted overtime payment. Not expect these individuals to work for free because he made a distasteful mistake and wants to cover his tracks.

Source: http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=1