AIG executive resigns over bonus issue

26 March 2009

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.