AIG exec gives back bonus, resigns

CHARLOTTE, N.C. — An American International Group (AIG) executive who received a retention bonus worth more than $742,000 after taxes has resigned publicly — in an Op-Ed column in The New York Times.

Jake DeSantis, an executive vice president at AIG's financial-products division, said Wednesday he's leaving the company and will donate his entire bonus to charity. The letter, addressed to AIG's CEO, Edward Liddy, criticized Liddy for, among other things, agreeing to the payments but then calling the bonuses "distasteful" as he testified before disapproving members of Congress.

"We in the financial-products unit have been betrayed by AIG and are being unfairly persecuted by elected officials," wrote DeSantis, who was head of business development for commodities. "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 added: "I take this action after 11 years of dedicated, honorable service to AIG. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so."

By Wednesday afternoon, there were nearly 1,000 comments from readers posted on the Times Web site after the letter. Most were unconvinced by DeSantis' arguments, scoffed at his claims about working for $1 a year when a $700,000 bonus was promised, and even doubted DeSantis' assertion that he was not involved in AIG's downfall.

AIG has been heavily criticized by government officials and the public after it awarded $165 million in bonuses earlier this month. The retention bonuses, payments designed to keep valued employees from quitting, were paid out whether the employee had a great year or a terrible one.

The bonuses were given to employees of the financial-products division, a global unit that issued derivatives called credit-default swaps that helped sink AIG as a whole last year.

"Ed deeply appreciates the frustration expressed in this letter and believes that the recent vilification and harassment of AIG employees is grossly unfair and unwarranted," wrote AIG spokesman Mark Herr in a statement e-mailed to The Associated Press.

Attempts to reach DeSantis were unsuccessful.

AIG has expressed concern that the company may not be able to attract and retain talented employees if they believe their compensation is subject to adjustment by the government.

An AIG spokesman said Monday that a "handful" of senior-level executives have resigned from the financial-products division, and that there will likely be more resignations to come.

AIG came close to collapsing last September because it had gotten heavily into the business of insuring mortgage-backed securities, the risky investments that are at the root of the hundreds of billions of dollars in losses suffered by banks and other financial institutions around the world.

Since September, the government has given AIG $182.5 billion, maintaining that without help, AIG would fail, further disrupting already stricken markets and cause more damage to the economy. In return for the aid, the government took a nearly 80 percent stake in AIG.