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Dear AIG - I Quit

1K views 37 replies 11 participants last post by  mac11 
#1 ·
This letter was posted in the NY Times this week. It is a resignation letter by an employee of AIG. Long but an interesting read..

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.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’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. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

Readers' Comments
"Hint: If your company accepts tens of billions of dollars from taxpayers, consider your bonus renegotiated."
Rolf, New York
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That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. 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.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

Sincerely,

Jake DeSantis
 
#4 ·
:rolleyes :bs

Rahm Emmanual had a background in dance, speech and politics (nothing financial) and went on to make 16 million in 2 years as an investment banker.

That Kos website will rot your brain. :laughing


Fortunately, that 90% tax bill is now dead. It was just grandstanding.
The Senate has moved on to more important things, like the BCS system.
 
#6 ·
Even better -Fannie Mae, after he made his fortune anyway. Got a couple hundred thousand out of them during their own accounting scandals.

But the point was, the Kos kid (and you) thinks that DeSantis background is proof positive he was in the CDS division with Cassano. I say that is a stupid and weak argument, as illustrated by Rahm's background having absolutely nothing to do with where he ended up in the investment banking sector.
 
#16 ·
He's pissed because his employer told him what he wanted to hear to keep him around and he fell for it? Makes me wonder how he got into MIT if he's that gullible.


"The company I worked for failed, but fuck them I typed all my memo's correctly I deserve a bonus and if it has to be supported by tax dollars so be it."?

What a fucking jerk off.
 
#17 ·
If my employer writes me a legal binding contract, and doesn't hold up its end of the deal, im just supposed to take the shaft??

i dont seem to understand why people think that its these guys fault. the company offered them this plan before any govt money came in, and Im quite sure that the govt knew about alot of things before giving the company the cash.

and im glad to hear that the 95% tax on these bonuses has died. once that happens to these people, who is to say that govt doesnt decide one day to tax someone else because they dont like decisions made somewhere along the line.
 
#18 ·
I recall reading an article in the Trib last year about a family which was having a hard time living on the husband's base salary of 200k. The whole story was about how they had to rent because they couldn't afford the right house, in the right town, blah, blah, bullshit. Now, I know that 200k isn't (or wasn't) all that much, but it's more than Nan and I make combined, and we work our asses off. We're also, somehow, quite comfortable, although I need to take her on a very nice vacation. She has the patience of a saint.

I was so pissed when I read that. I still don't know exactly what the point was; at the very least, they (the Trib) were waaay out of touch with the common reality that most people experience.

Boo-Fucking-Hoo, indeed.
 
#20 ·
When I try and wrap my arms around this mess of an economy that we are now ALL part of, I get depressed and sad - I understand what got us here but still wrestle with anything that has been done to get us (our US Economy) back on it's feet again - I am by no means intelligent in the ways of understanding politics or Gov't and Finance and tend to fall into the category of a "Typical Dumb American" but just shudder to think of what is still in store for us - Yes, I have been impacted by the downturn in a sense that what I do for a living has slowed a bit - Sales are still there as networks will always need to be secure but this has turned typical sales that were one day never even thought to be scrutinized in a way that a purchase under a $100K was nothing - Now, I am seeing companies battle to save an extra $1000.00 on a $150K sale - I know I am fortunate to have a job, (2) motorcycles, a car and a pad in DT with a view and even type this on a computer with many components but it just SICKENS me when I see stuff like the above letter - So you went from making a HIGH 6 digi income to a lower 6 digi income - STFU and come see what real americans have to struggle with - My savings in now the worth i have in my condo and a wee bit in the bank

Fuck you to the upper echelon of this country who sit in their 10K sf home and drive $100K autos and squabble over the fact that they have had to sacrifice - The whole world has had to do the same - What makes you soooo special?

Maybe I am hopped up on pan pills due to my back again but this kind of thing just pisses me off
 
#21 ·
" I understand what got us here but still wrestle with anything that has been done to get us (our US Economy) back on it's feet again..." -- by Bug

A couple of weeks ago I bought a new pair of front loaders for the laundry room and I'm about to go out in a wee bit and get a new dishwasher.. then, onto a new fridge.. If anyone has any hopes for the economy, it's to keep things moving (goods, services, and money) and changing hands. That's really the only things we can do as consumers.
 
#22 ·
A couple of weeks ago I bought a new pair of front loaders for the laundry room and I'm about to go out in a wee bit and get a new dishwasher.. then, onto a new fridge.. If anyone has any hopes for the economy, it's to keep things moving (goods, services, and money) and changing hands. That's really the only things we can do as consumers.
I agree but for me personally, it is tough to continue to spend the way I normally due in "hopes" that people will continue to buy what I sell - My business works off "Margin" - The list price of a Software or Appliance is X - I buy from the Mfg or Distributer at Y - I have a certain percentage I must keep in order to not lose money on a deal - Say I make $10K profit for my company on a deal and the customer takes 90 days to pay, that $10K with the cost of money these days shrinks dramatically - We have actually lost profit margin and if the company loses, so do I - I cannot justify spending with the hopes this will not happen - Sure I have my daily spends that will always be there but for me to buy what I want when I want is not the most sensible thing to do right now
 
#26 ·
That whole contract thing escapes some people.
Now you know who will try to screw you over and break promises and agreements because they're envious and petty. (key character traits of a "jerk-off" if you ask me)

I don't care how much money you make or how little you make. If your employer screws you over, and doesn't hold up his end of the bargain because its politically expedient to do so, thats fucked up.

What it all comes down to is envy.
Say the letter was exactly the same except take 3 decimal places off the bonus. $742. He busted his ass with the expectation he would get this bonus, because it was in the contract. I don't think anyone here would say what happened to the dude was fair, just or right. Everyone would recognize he got screwed.

The only thing different is that this guy is rich. Wealth envy and class hatred. It took decades to overcome this widespread mentality when it comes to race, when whites would respond with "boo-hoo" because it was a black getting screwed, or vice-versa. but when it comes to money, its still alive and well. Hate someone because they have a different skin color, religion or sexual preference, or hate them because they have more than you. Either way, its wrong.
 
#31 ·
I don't agree with the idea of a retention bonus. The retention bonus should be their pay. If the pay isn't good enough for them they should leave. Performance bonuses are good. I can guarantee you will find hard working hungry people just as good as this guy to fix AIG at a reasonable salary. So if he doesn't like it, he can get to stepping, and not let the door hit him in his ass. I agree, companies should honor their contracts, doesn't mean we have to stop raking greedy folks over the coals :lmao:. He didn't get an extra 750k and many other Americans are living in tents and eating cat food, oh the injustice :lmao:. They are still giving him his money, if he didn't feel guilty about taking it he wouldn't resign and would tell all the folks bad mouthing AIG to STFU. If I were in his position, not a chance I would take the money given the current climate. He has to look at the situation from an outsider's eyes. If he did, he would clearly see why it would not be cool to take the money.
 
#35 · (Edited)
anyone else read his wifes post?
http://flyyak.livejournal.com/6770.html

Sounds like they weren't excellent financial planners..
I imagine they did get screwed... but.. so did just about everyone else..
Sucks that he was on call all the time.. IT guy... Go figure.. Cry me a river :) heh

but still if he was averaging 7 figures... You'd think she'd be able to do more with the money... No?

Initially I thought this was supposed to be from the wife of the guy who wrote the iquit memo..
Looks like it's not..
 
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