Jake DeSantis’ AIG Resignation Letter

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AIG Financial Products VP Jake DeSantis sent his open resignation letter to the New York Times, which published it last night. Here’s the first part:

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

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.

I take this action after 11 years of dedicated, honorable service to A.I.G. 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.

(more)

DeSantis goes on to say explain his thoughts about the sudden disappearance of his and other employees’ retention bonuses, the bad blood at AIG, and why he is leaving. He also plans to donate his the after-tax proceeds of his $742,000 retention payment to nonprofits helping people during the downturn.

I appreciate DeSantis’ gesture to give voice to his own situation. But it’s not exactly moving. DeSantis’ hopes were dashed, his expectations ground into the mud–but he’s still doing alright. His annual pay last year was still $1 + $742,000. He has worked hard, neglected his family, and gotten his version of beans for it. But these claims are cliched by now.

At the end of the day, DeSantis is another suffering American. He just happens to be suffering more comfortably than many others.

  • WIll Barrow

    It’s a good letter. But let’s see the figures he is talking about, and the previous say 3 years salary figures AND bonuses to get this into perspective. You don’t agree to $1 out of company loyalty – you have to be able to afford it. It may tug less at the heart strings in context and its no different in any case than hundreds of thousands of others who were not in finance and are jobless – not by choice.

  • Lynda Wilson

    Your columnist seems to have missed the point of Mr. DeSantis’ letter entirely. It is all about trust and the necessity for it in a business environment. It is not about surviving the current downturn, comfortably or not. Those who contract to do a certain job, and then do it, should be able to trust that neither the government nor the business they contracted with should be able to renege on the contract according to the way the political winds are blowing. Since Mr. DeSantis had nothing to do with the credit default swaps side of AIG, there isn’t a question of moral culpability here. If the American people decide bankers make too much money, can they overturn the rule of law by pitchfork (that would be their ever ready congressmen)? You blew this one.

  • Johnny the Accountant

    DeSantis, go to work. You bum. You’re increasing the unemployment statistics. Haven’t you done enough damage to AIG already? Now you’re playing with our unemployment statistics.

  • Howard Rork

    Buh-bye, Jakie. And take all your arrested-development adolescent shruggers with you. Go set up a utopia where you all sit around in a cirle jerk selling CDFs and Patek-Phillipe watches to each other. No, we won’t be buying anything from you, and if your Blackwater Danneskjold terrorists show up in our AO, they will be shot. If they survive, they will be water-boarded, then shot again.

    So have fun in South Carolina, or Costa Rica, or Nigeria, or wherever the hell other 3rd world cesspool you think is no-government paradise. The sooner you parasites GTFO, the sooner the REAL producers can get on with the business of creating useful things.

    Maybe all you Rand cultists didn’t notice, but the crony capitalists in Atlas Shrugged were villains. The heroes actually made useful durable goods. Now go, raise your own kobe beef, build your own mansions, mow your own golf courses, roll your own cohibas, whatever. Just go. Go now. Before we get the guillotines out.

  • Grover Alford

    As submitted to the New York Times @ 6:00pm 3/25/2009

    I found Mr. DeSantis’ resignation letter quite eloquent. He presented a stirring, emotional treatise without using extremely vitriolic language. My problem with Mr. DeSantis’ letter is his use of the plumber analogy.

    It may seem logical for Mr. DeSantis to assert that a plumber who does excellent work should not be penalized for the shoddy work done by an electrician, but this comparison is not truly an accurate one. If a plumber works for a construction company that is responsible for completing an entire building project, the company’s overall proficiency is the major determinant of success. So shoddy electrical work would result in problems for the company overall, including the company’s excellent plumbers.

    AIG officials (whoever they were)chose to leverage their future success on fundamentally faulty products. Mr. DeSantis claims not to have been one of the major decision makers in this leveraging process. Still, this bad decision was so significant that it resulted in losses that overshadowed AIG’s financial successes. This being the case, the employees (and tax payers) are now having to pay.

    The idea of employees having to pay for bad corporate decisions is not a novel concept. For years innocent Americans have lost bonuses and jobs due to poor decisions made by corporate executives. Innocent though they were, these hard-working Americans still suffered indignity and betrayal at the hands of politically weak or personally greedy executives. Unfortunately for Mr. DeSantis, the consequences of bad corporate decision-making finally ascended to levels high enough to touch people like him.

    Grover Alford
    Duncanville, TX

  • Jwy01

    Jake you should run for president! Finally someone who speaks the
    Truth, unlike the big 0. May capitalism rise up to squelch the liberal
    Socialists before it is too late. Is it 1013 yet? Because my vote is for jake.

  • Big q

    My vote is for Jake also! Let Nancy Pelosi work for $1 and see how long she lasts…
    God forbid they take her charter jet privledges away from her, she may have to resort
    To using a broom!

  • Greg Riccardi

    I was unmoved by the resignation letter and I do not attach any degree of honor to his commentary. AIG would have filed Chapter 11 bankruptcy without the bailout and then we would not been having any of these discussions about bonuses.

    Mr. Desantis interned at Los Alamos Labs while at MIT and I believe its a sorry testimony on our society that such a bright person with a strong background in science chose to become a commodity trader.

    AIG lost $99.0 billion dollars in 2008. How could anyone connected to that organization defend a bonus entitlement regardless of promises or contracts? Thats not what I deem to be honorable.

  • WillyJohnson

    I have cringed many times in reading the anti-business comments of this site. I’ve read the snarky belittlement of people who work hard to make a business. I’ve come to a conclusion.

    You must write this crap because you don’t/can’t get a real job. It never ceases to amaze me how many people, including many of the comments on this site, take shots at those who try.

    We are in the midst of destroying the dollar, placing unpayable debt on our children and grand children, and turning into a country that our founding fathers wouldn’t recognize. And you write something that takes a shot at a guy who is clearly highly skilled, hard working, and moral. His only failing, believing what he was told by our government and his employer. Then again, many of us believed what we were told in the campaign as well.

    The double standard of this site appalls me.

  • Ray

    Very nice letter that nobody cares about. Yes this is a issue of company loyalty but if part fails they all failed.
    So he gave his bonus to charity but I’m sure he’s not worried since he has stashed millions away ( maybe even in one of the hidden Swiss Bank Accounts the government is trying to check for tax evasion). I note he doesn’t seem worried or upset about being unemployed. No Sympathy

  • ER

    The columnist, as well as several of those commenting, have missed the point. Mr. Desantis actions and those of his colleagues within this particular division of AIG had absolutely NOTHING to do with the actions and choices that have led to this situation.

    I am glad this is not 1692 and that I am not in Salem, MA. The wild-eyed crazies are on the hunt and won’t be satisfied until there is the blood of innocent, but admittedly wealthy, business people on their hands. Comments about guillotines – really!?! Since when is it a crime to make money in this country? If you don’t like it, there are plenty of other places with a more socialist bent … thing is, despite the painful economy, the U.S.A. is still head/shoulders above ALL of the rest of the world.

    For those who do not like it, please consider moving to your “utopia”.

    ER
    Boston, MA

  • Ben

    I don’t feel bad for Mr. DeSantis. When a company fails, every employee of that company feels some level of pain regardless of how well each of them performed their job. This is a fact of life. My wife previously worked for Arthur Anderson in Washington DC, and while she had nothing to do with the Enron fiasco, she felt the consequences. The company was essentially broken up and sold for parts. My point is that when you decide to work for a company, you are accepting the risk that bad decisions made by other employees (typically company leaders) could impact your job/career. Sometimes, it doesn’t even require a bad decision, just a bad economy. While this is unfortunate, no one is immune. It’s reality.

    With that said, Mr. DeSantis needs to gain some perspective. Companies make unpopular decisions in order to survive tough times. He has no more right to complain than any of the millions of people who have been laid off as a result of the bad economy. While I’m as offended as everyone else by the actions of AIG, they are doing what they feel they need to do in order to survive.

    Personally, I think AIG should be broken up and sold for parts. No company should ever be too big to fail.

  • David

    Join the club pal

    OK, I see on linked-in this individual has same educational background as me (I’m an electrical engineer in VLSI design, computer chips for the lay person). So, I really have an affinity for him personally. But, as an electrical engineer where over the last two decades I have consistently worked 10 hour days. Where I see my teams members and management go from all American faces (in the 80’s) to now faces of foreigners w/green cards. Where over the last decade I’ve had to seriously worry about loosing my job to overseas engineers (off shoring). Where my 401K has been decimated, where I can not remember when I last got a bonus. Where this last couple of quarters I’ve seen my company lay off over 6% of other engineers and we’ve had to take mandatory pay reductions. Where I’ve seen more fellow engineers out of a job then in the total of my combined experience of 22+ years doing microprocessor design. Where my home value has dropped, where in my little neighborhood of half a dozen homes, two sit vacant and for sale for over a year. Where my bank refused to refinance my 30 year fixed rate mortgage (thanks BOA) to today’s current low rates.

    Well, sorry pal, my heart goes out to you, but join the club of life’s hard knocks! At least you have the luxury of being able to quit you stinking job and not have to immediately go beg for money. As I lost all of my savings several years ago over the loss of my dear wife of 22 years I have no such ability. It’s just me and my three wonderful kids pulling up our suspenders and trucking on…

  • Robin L

    Boo Hoo Mr. Desantis.
    I am so sorry you worked 10-12-14 hour days. Like the rest of us haven’t? When I did my medical residency – I worked between 80-110 hours per week. I barely slept and was asked to make important decisions affecting the health and possibly lives of sick patients. You know how much money I made? About $36,000 per year. So I am just SO sorry that you feel like you deserved your $750,000 BONUS for working 12 hour days. Sorry you couldn’t hit the golf course whenever you wanted. Your profession is SO overpaid for what you do – and has been for years – and now you are just realizing that? I’m not even sure you have realized that much. You just feel victimized. Since you are feeling so high and mighty -that you actually got yourself educated and are entitled to all that money – why don’t you put all your brains and work ethic toward a slightly more honorable cause and help society – instead of just thinking about your own personal wealth and what society owes you.

  • You don’t need to feel bad for DeSantis to know that refusing to fill a contractual obligation is wrong, whether it’s an obligation of $100 or several hundred thousand.

  • kiwigg

    I am underwhelmed with sympathy for Mr. DeSantis. When a ship sinks because someone tried to benefit from buying cheap rivets, all hands go down with it. As the kids used to say when I was in junior high, “My nose bleeds for him.”

    He appears to be in no financial distress, and I cannot afford to subsidize his extras via the bonus he appears to think he is entitled to. Who doesn’t work long hours? Who gets to bet on getting a windfall bonus instead of a salary? He has enough money to pay living expenses, etc. without a salary? How fantastically well off he is to work for $1 a year. (Others I know of who have done that have worked for government or charities.) Other people just as intelligent and well-educated devote themselves to their careers – if they still have them – in less greed-driven professions.

    He evidently was a scientist but left for Wall Street for its fabled riches. We need scientists. We don’t need more money “managers.” Time to pay the piper, Mr. D.

  • Matt

    Folks, Jake and I have done business in the past and he is upstanding American. I trade at the CBOT in Chicago. He did the right thing. Unlike the snakes in Washington governing our country, he put the greater good of the country first. I gave up my career for several years to serve in Afghanistan with the Army Reserve – I guess you can say I work for about $1 a year, because what I make as a soldier is FAR less than what I make as a trader. Like Jake, I didn’t do it for the money – I did it for America. Jake’s a patriot. So, before you rip a man to shreds, walk a mile in his shoes. Jake, I commend you for your actions. Now, if the weasels in Washington D.C. would only follow your lead.

  • Matt

    Wow! I just read ALL of the comments and most of you are nutz. What has the ‘great one’ done to all of you? This is America, not Cuba. If you don’t like the fact that there are rich people in America, get out! Obama and the rest of the left-wing crazies are demonizing the execs in corporate America. These are the same fools that forced the banks to lend to unqualified borrowers – this created a synthetic market for credit swaps and ultimately led to the crisis we are in. Mr. Dodd, Ms. Pelosi, Mr. Reed, Mr. Franke – these are just a few of our leaders that FORCED banks to lend money to everyone. AIG and crew are not the only ones to blame. What about Fannie and Freddie – the bone-heads in DC had their hands in that deal too. Chris Dodd and Barney Franke need to man-up and move on. Pelosi and Reed – time to retire. Once again, Jake did the right thing and should be commended for it. Run Jake, you have my vote!

  • GB

    Grover Alford, excellent comment. The appeal to fairness and trust other commentors have referenced I think lies at the heart of this issue. Jake is just learning now what working class Americans have known for decades: their bosses will sell them out. For Jake, it was due to political expediency. For everyone else, it’s to squeeze another buck out of the middle class.

    My personal take, I shed no tears for this man. Not to compare the actors in this drama in any way with the horrors of the past, but the argument is reminiscent of ordinary German’s claims at the end of WW II: we had nothing to do with it, we didn’t know. I’m not buying the Pollyanna. It was a small business and they all knew what was going on. When public money rescues a corporation from collapse, all internal contracts are up for re-negotiation. They should be working for minimum wage.

  • Bill Henderson

    Boo hoo? The man worked under the premis of getting a one time settlement. It is not an uncommon payment scheme in dying and closing companies.

    You all jealous becuase of how much he made? Are you’ll that insecure with your own lives that you have to bash a guy who did what was asked of him, worked hard and then got cheated in the end?

    If any of you had your paychecks yanked on the Monday after payday you’d be screaming murder…here you say tough luck? Why? becuase he is smarter, more intelligent and more aggressive than you and get compensated as such?

    Get a life….this guy got screwed and if it was you you would be ballistic…..

    What happened to being successful? It is almost as if it is a sin now. Go back and watch you game shows instead of commenting on stuff you do not understand.

  • Doug

    This guy did not agree to work for a dollar. He agreed to work for over one million. The work he has done for the last 11 years has had zero value. He has contributed nothing to his country or company. He has earned nothing and taken too much. May he one day live in poverty.

  • m

    DeSantis complexifies a complicated issue few Americans, even smart ones, are willing to view in shades of grey. The letter isn’t about sympathy, empathy, or even fairness, really. It’s about making nuanced judgments and claims that account for the complexity of the AIG mess, which few politicians (and fewer posters on this website) are willing to make. Good for him.

  • Cindy

    If you do not have to PAY TAXES, then you don’t have a clue. What about Earned Income Credit, Foodstamps, Welfare, Free Insurance and I could go on???? This is also taxPAYER money. I would rather someone receive it who WORKED for it instead of some dead beat spending my money on beer, cigarettes and drugs while receiving everything for free. If you don’t pay taxes, (by pay I mean when you file your taxes you DO NOT GET IT ALL BACK AND THEN SOME) then keep your opinions to yourself! It’s not your money that they are using! In fact, this man has been working to support YOU for years. So just say Thank You and be on your way!
    Cindy of TN

  • The man

    Plenty of childish comments from burger flippers here. The bottom line is Jake and coworkers were given assurances, they relied on those assurances and now they have been hurt when the company would not make good on what they said and the promises made. A contract is a contract.
    Does not matter how much money was involved, or what he does for a living, he and others were screwed over. Expressly by a weak boss, but virtually by sanctimonious politicians. I was embarrased listening to how some of the congress dealt with Mr. Liddy in the hearing last week, their lack of understanding of the situation was obvious. If they were from your state then vote them out for crying out loud.
    Keep the money Jake, you earned it, you kept up your end of the contract.

  • Barbara

    No sympathy here. As far as I am concerned, if you worked for a buck, then you were high enough in that company to see the incredibly stupid moves made in another department. AIG is costing taxpayers our hard earned money. The American people are upset with the excess on Wall Street that has been revealed lately.
    Congress went a bit overboard, but so did Wall Street.
    Please feel free to donate more than just your bonus to a charity. Do what I do and donate your time as well as your $.

  • Percolator

    What a whiner! For a great take down on Jake DeSantis everyone’s got to read this:

    http://www.smirkingchimp.com/thread/20988

  • dboy

    I think we all share the same feelings about the staggering losses at AIG. How couldn’t we? I did not go to collage and ended up on the floor of the Chicago Board of Trade. I started as a runner making $90.00s a week. After the runner job I ended up in the bond pit and after that I ended up at the CME in the S&P 500. I have been lucky and you know why? Because I was able to meet a lot of very good, hard working people on Wall St that believed in me. During my career there have been many ups and downs just like the markets. I was in the S&P for the 87 CRASH, I was around when Long Term Capital pulled what they did and I lost everything I had to a small customer position in the currencies, I personally has to come up with 990k. It has taken 15 years to get my life back in order. When the credit crisis started in May of 07 no one knew that the “GOVERNMENT” would let Bear Sterns go out of business and no one knew they were going to let Lehman fall. Like I said I didn’t go to collage so I always stand to be corrected by smarter people. But you know what? I didn’t need to go to collage to know that when the government made those mistakes they set off a domino effect that was going to last for years. After all I stand at ground 0, the S&P 500. You can say what ever you like and you are more than welcome to voice your opinion but I know Jake DeSantis. He had no more to do with what happened at AIG than the mail room people at Lehman did with TER3. If you scoff at someone that makes more than you then you miss the point. He like me worked his A S S off and was smart enough to get to where he got by hard work .I have done Jakes trades in the S&P for the last 13 years. He has been and is today one of the most honorable people that I have ever meet in my life. Like the guy said below, it does not matter how much money was involved, or what he does for a living, he and others were screwed over. Expressly by a weak boss, but virtually by sanctimonious politicians. I was embarrassed listening to how some of the congress dealt with Mr. Liddy in the hearing last week, their lack of understanding of the situation was obvious. If they were from your state then vote them out for crying out loud. I didn’t write the last 4 lines but that exactly what this is about. As for Jake keeping the money? He won’t do that and knowing him it will be given to people that really need it.

    Thank you Jake…

  • Donald Stevens

    Mr.DeSantis – Thank you. I knew there had to be more to the AIG bonus story than we were hearing from Barney Frank, et. al. Everyone else – What all of you nay-sayers are COMPLETELY missing is the fact that our elected officials, when they had the chance to, FAILED to renegotiate these contracts. That’s what they’re trying to draw your attention away from. They had the opportunity to get these contracts renegotiated. Personally, I believe they failed to do so on purpose, to manufacture this controversy to assist their precedent setting, unconstitutional salary caps and taxing of specific individuals at 90%. Even if it was an “oversight” due to NONE of them reading the stimulus bull, ah, bill; and little Timmy the Treasury Czar, ah, Secretary just happened to FORGET that he wrote the original TARP bill allowing the bonuses, they’re ALL still to blame. Not Jake DeSantis. He had NOTHING to do with the contractS (plural emphasized on purpose), except signing his OWN. Meanwhile, the ones RESPONSIBLE falsely accused EVERY executive at AIG recieving a bonus of being responsible for the collapse of said company, and try to use that as justification to break contracts they approved. They minimize DEATH THREATS that have been made against these people?!?! They encourage these private citizens names and personal information to be thrown into the public arena after death threats have been made against them when these executives have done NOTHING WRONG, have in fact been EARNING money for this failing company?!?! As for this gentleman’s CHOICE of occupation, versus yours, whatever it may be, you could’ve made the same choice. You didn’t. Get over it. You wanta demonize someone for getting rich by fleecing people, you’re looking in the wrong place. Try our government, where politicians fleece us every day, then point their fingers at law-abibing citizens. You all need to remember, in many cases, these people making this kind of money earn it for a reason: they’re producing SOMETHING, even if it’s not something most of us really understand (I wouldn’t even PRETEND to understand what this guy did), and that production enables the rest of us to have JOBS. Their example also shows all of us what’s possible, if we work hard enough, get an education and make the right choices. This guy’s letter had NOTHING to do with the money; it had EVERYTHING to do with being demonized for something he had NOTHING to do with and having his family and those of his coworkers put in jeopardy, by the people who approved him recieving what they’re now demonizing him for taking. While you displayed your ridiculous outrage for his earnings, I saw NONE for those who TRULY do nothing for much more ridiculous earnings, such as professional athletes, actors and musicians. I personally don’t fault them for taking what they get either- it’s legal, but I don’t pay the exorbitant prices they want because I don’t feel it’s justified. At least this guy was contributing SOMETHING. They contribute little to nothing (really nothing more than entertainment), and recieve SO much more. Unfortunately, you all idolize them, and demonize him. We should all feel VERY lucky that everyone with the means to do so doesn’t just quit and go sit on the sidelines somewhere until this little socialist power grab is over. If I were one of them I probably would, at this point. If they all did that, guess what, we’d ALL be out of jobs. Is this Salem or the United States?

  • kiwigg

    Good lord, all you people praising him and the sanctity of The Contract, etc. This is only MONEY we’re talking about here, not the End of the Civilized World As We Know It.

    Congress made mistakes, AIG made BIG mistakes, and so did other financial “brains” on Wall Street and around the world. DeSantis didn’t contribute directly, but he bet on huge payoffs and this time it didn’t come through. Aren’t bonuses supposed to be based on superior results? Guess not when it’s built into a contract. That’s not a bonus, then, it’s a payoff in lieu of salary in this case.

  • Donald Stevens

    The correct term for what he was supposed to recieve was a “retention bonus”. That’s when your company or organization gives you a bonus for sticking around. It’s QUITE common. I got one when I was in the Army. Not all bonuses are paid as a reward for performance. Know whereof you speak before you open your mouth. It’s all about the contract. Contracts are written because without them people won’t always follow through. Now, with the precedents of the past couple weeks, people won’t have to follow through even WITH a contract. That means that none of us can now count on a contract – we have to just HOPE the other party follows through. That can and will severely impact our economy.

  • kc

    Jake is still feeding you a line of B.S!

    Read this:

    http://tinyurl.com/crf8vy

  • K

    As if all of you burger flippers really know how hard people like DeSantis work. It takes a lot more than long hours for these men and women to work on Wall Street- it is HARD work that not everyone can do. So why don’t you all leave Wall Street alone, and point your finger to Congress and to the people in public office for once.

  • Imran

    I believe that Mr. Desantis deserves the “fruits of his labor”. Why should he be penalized for the mistakes of the corp. Going to MIT isnt a walk in the park . Obviously he put in his labor and worked for everything he has.In reality how many of us would really return a bonus that was promised to us?