In an open letter to AIG CEO Edward Liddy, a vice president of financial products division of AIG,Jake DeSantis, announced his resignation and said he would donate his bonus worth ove $742,000 after taxes to charity.
Expressing his frustration at being 'betrayed' by those he tried to help, DeSantis in his op-ed piece in Tuesday's New York Times, said he was leaving the company because the staff in the financial products unit are being unfairly persecuted by elected officials.
''After 12 months of hard work dismantling the company - during which A.I.G. reassured us many times we would be rewarded in March 2009 - 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 now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself,'' he said.
The executives of the financial products division, the part of the company widely blamed for AIG's near collapse, received $165 million in bonus few weeks back. Those payments, and their recipients, have been blasted by lawmakers and, notably, the attorneys general of New York and Connecticut. (See: Failed AIG's bonuses to employees draw flak)
DeSantis insists he was not involved in the credit default swaps that are at the root of AIG's problems, noting that most of those responsible "have left the company and have conspicuously escaped the public outrage."
"I take this action after 11 years of dedicated, honourable service to AIG. I can no longer effectively perform my duties in this dysfunctional environment, 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 to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down," he said in his letter.
DeSantis criticised Liddy for not defending workers in the "face of untrue and unfair accusations" from lawmakers and "baseless and reckless comments" from the attorneys general of New York and Connecticut, Andrew Cuomo and Richard Blumenthal, respectively.
He said the decision to ask for the bonus payments back was a "breach of trust" and only came because Liddy faced political pressure. DeSantis said the promise of the bonuses was the only reason for some workers to stay on at AIG and try to manage its crisis.
"We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house," he wrote.
DeSantis said he received a $742,006.40 bonus in March and would not return it. Rather, he plans to donate the after-tax sum to various charities, saying he did not "want to see them disappear back into the obscurity of AIG's or the federal government's budget."
"Some might argue that members of my profession have been overpaid, and I wouldn't disagree,' he admitted.
DeSntis started his career in AIG as an equity trader, became the head of equity and commodity trading and, a couple of years before AIG'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.
The financial products division incurred heavy mark-to- market losses on credit default swaps, a type of derivative that guarantees underlying debt against default, after the downturn in the US housing market. As of last month, the financial products unit employed about 370 people at offices in Connecticut, London, Paris, Hong Kong, Tokyo and in India.
Since September 2008, AIG has collected $182.5 billion federal bailout money. (See: US government injects additional $30 billion in AIG)