More departures at AIG after bonus outrage
posted at 10:14 am on March 26, 2009 by Ed Morrissey
Jake DeSantis may have been the most publicly vocal departure at AIG after Congress and the media attacked his compensation, but he’s not alone. Reuters reports that several high-ranking executives at AIG have given notice. The insurance giant, 80% owned by the US at the moment, says it can get by for now, but more departures could cripple their ability to pay back taxpayers for the massive bailout:
Several more employees are leaving the controversial financial products unit that brought American International Group Inc to its knees last year, according to a person with knowledge of developments there.
The resignations are in addition to the “handful” of senior AIG Financial Products executives who have already given notice, said the person, who could not quantify the total number of departures.
To date, AIG said the situation at the financial products unit remains “manageable,” despite the departures. But if too many employees quit, Chief Executive Edward Liddy has warned it could be disastrous for AIG and, ultimately, for U.S. taxpayers who are the insurer’s majority owners.
Reuters manages to report correctly on the bonuses, a breath of fresh air after two weeks of media screeching and hyperbole about the supposed villains getting rich off the taxpayer teat:
Employees there were promised retention payments more than a year ago, on condition they stayed long enough to wind down their areas of business, effectively working themselves out of a job.
But now some have changed their minds, fed up after 10 days of ridicule and scorn from lawmakers who broadly derided the bonuses, demonstrators picketing outside AIG offices and a threat by New York Attorney General Andrew Cuomo to publicly name anyone who did not return the bonuses.
The employees still working are not the ones who caused the large losses and “are being unfairly persecuted by elected officials,” wrote Jake DeSantis, an executive vice-president for the Wilton, Connecticut-based financial products unit, in a resignation letter printed by the New York Times on Wednesday.
Employers pay retention bonuses to keep employees in time-limited or unprofitable jobs. Otherwise, as soon as a unit at a company hears that they will be shut down, the talent flies out the door, and the only people remaining are those who can’t get jobs anywhere else — not exactly the best and brightest. Most if not all of these employees agreed to work in the Financial Products division after the collapse, not before, and had nothing to do with the abuses that created it. They went there to rescue their own retirement portfolios, heavily damaged by AIG, and for the retention bonuses that AIG offered them as compensation as part of an employment contract. Some, like DeSantis, only had a $1 salary, getting paid only if he stuck around long enough.
If the public threatens the safety of their families, the Attorney General threatens to prosecute them, and Congress threatens to take the money away they got paid for not seeking employment elsewhere, why should they stay? And here’s an even better question: why should anyone take their place? Would you work for $1 a year just so you could put your children in the gunsights of lunatics doing bus tours past your house and have the state’s top prosecutor pledging to come after you with all the tools at his disposal? The people leaving AIG are literally irreplaceable under these conditions, and we need the FP unit staffed with knowledgable people if we want to see even a fraction of our investment returned to us.
This is what mob hysteria produces, and we can thank Congress and our “shaking with outrage” President for fomenting it. They’ve put people in danger who had little to do with the actual wrongdoing, and deliberately encouraged the drooling, mindless reaction around the nation. They’ve probably kneecapped any possibility of getting our money back out of AIG. I hope people enjoyed their outrage parties, because we just paid $150 billion for them.