Wednesday, March 25, 2009

HERE. Thoughts?

Favorite comment so far:

Anonymous said...
So he scored a few touchdowns, but his team lost the game. No trips to Disneyland for any of you.

70 comments:

K.Line said...

Wow. Need to think for a few minutes... He's bold, I'll give him that.

Tamstyles said...

BYE...see ya! thats my take.

Mrs. Limestone said...

I think its a shame this gets buried in the opinions section. Most people only want to hear one side of the discussion when in fact its a lot more complex than most people want to admit.

SGM said...

$700K AFTER the 90% tax? Did I read that right? No boo-hooing from me.

Anonymous said...

SGM, I think you are reading that wrong - it sounds to me like 700K after the "normal" tax rate. He seems to be questioning what will be left if the 90% tax is allowed to go through.

I guess I'm the only one that sees the irony in members of Congress (arguably one of the most inept collection of human beings in our country) grilling a company over "undeserved" benefits/bonuses - which they approved (even if only because they couldn't be bothered to actually READ a bill they passed).

Yep, these are the people we want deciding that you make too much money and I make too little, might as well hand me your wallet right now. Most people who make that kind of money work their butts off for it...me being envious isn't a reason that the government should be able to take it away.

Anonymous said...

It is not $700,000 after the 90%, but rather 90% off of the $700,000...I am so sick of the general community persecuting people who make a good living. Why should these people be strung up because a) they worked ethically and were responsible with THEIR money and b) they entered into a contract which promised them a bonus (did you note that he was only paid $1.00/year people?) and fulfilled their end of the deal by putting in LONG hours away from their families?

People who claim that they would never take that sort of salary are either lying or crazy. Why wouldn't you? I bet you this guy already donates to his community in a larger way than most of the "lower" waged people who do all of the complaining do.

He had NOTHING to do with the fall of AIG. It is a HUGE company...why throw the baby out with the bath water.

The House of Beauty and Culture said...

A noble gesture, but he should keep the money. He earned it fair and square.

Anonymous said...

On the one hand, he has a point in saying that he was not directly responsible for the credit default swaps and that the majority of those people left. No doubt, innocent bystanders are being hurt in this situation. And not just the American taxpayer. And to work for $1 to help dismantle those products could not have been easy.

On the other hand, he was an Executive Vice President of the Financial Products Unit. Could he really have been an innocent bystander even if he did not directly set up the swaps? How much as a supervisor is he responsible for those that work under him or for him in his division? Did he have no idea what was going on? Was he completely in the dark? I don't know the answer to these questions, but if he knew what was going on, as an executive manager of that Unit he is ultimately responsible for what goes on under his watch.

Susan

royalapothic said...

WOW. Thanks for posting that. It goes to show that there are many things going on within companies that the general public doesnt know about.

Anonymous said...

This by far the scariest time I have ever lived in. Congress is close to inciting class warfare. Scares the sh*t out of me. We don't need their version of the French Revolution to get on a better course in the US. Jake DeSantis wrote a great letter - it's part of the story that must be heard. I feel for the people who have worked hard, lived ethically yet are being unfairly blamed for the distrastrous decisions of a a relatively small number of individuals. And I completely applaud his decision to give his after-tax bonus to charities of his choice rather than voluntarily return any of it to AIG. What a mess.

ita darling. said...

i kept thinking about simon cowell in his british accent saying "self indulgent rubbish" furthermore... the editor's picks of the 126 pages of comments on the NYT site really sum up both sides of the reactions.

my brain is a little fried trying to determine what i feel about this...

every american deserves to make as much money as they can- but his vision is definitely skewed- his department was successful but the company tanked?- that's a tough break man!

he has no right to feel so self righteous, just bummed that all his hard work is for naught.

mr desantis will definitely land on his feet and hopefully decide to work for someone with a little more transparency and less turpitude.

what i don't like at all is that the news and the politicians have really portrayed this story in a very off balanced and misrepresenting light .. ugh. this is why i dont watch the news.

Lolo said...

I do respect many of his points and good on him for making something successful out of himself. I also have zero problem with him keeping his retention pay, especially in light of taking a 1 dollar salary however this paragraph leaves me with more questions ~
"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."

If someone who has the expertise that he does, still allowed his deferred compensation to be tied to and tied up in credit default swaps, then why are they complaining that their loss in salary be made up for by the government? I mean, if you, a financial wizard, are content to let your parent company use your deferred salaries as part of a precarious but potentially huuuuuuuuugely profitable series of transaactions and then said instruments go bust ~ isn't that risk part of what you signed up for? For you to then complain that your company, which was largely tied to said division, upon going bust and having to ask for bailout/loans/government capital is being held to onerous terms which are not profitable to the company as a whole .... oy, my head.

If they can claim that this one toxic portion of their company should not be allowed to taint the whole, then why not just cut that particular cancer out? What's that? It's all tied together? Well then, 'nuff said, IMO.

Lolo said...

Oh yeah, and I am sick to shit of the NYT's version of class warfare masked as journalism. Their faux populism does nothing but a disservice to our society.

Carla said...

If it's in between the kitchen and the dining/entertaining area, wouldn't it make a nice bar? Wine racks, attractive glassware display, linens, gorgeous bottles....

Carla said...

Wow. Just commented on the wrong post... (new to commenting. I'll get there...)

tritesprite said...

Wow. You guys are pretty rough.

1. This guy and others like him worked 70-80 hour weeks for a whole year for $1. Would you work that many hours for $1 and then take heat for being greedy over your bonus?

2. AIG is a HUGE company. What happens in one division is completely separate from what happens in the other divisions. This guy, and others like him, had no say over anything that happened outside his division.

3. The US government is bailing out AIG because it thinks the company is too big to fail. Not adequately compensating the workers in the divisions that *make money for the company you are trying to save* weakens the good parts of the company. Which completely defeats the purpose of the bailout.

Wow.

If you want to be angry with someone, get angry at the SEC.

Decorina said...

The fact remains that while all the regulations they could remove were tossed aside, and the financial instruments such as CDS were designed and implemented in order to lavish ridiculous levels of compensation on DiSantis and his friends, the middle class (read labor) was stripped of almost everything.

Cry me a river, dude, and crawl back to your mansion to live off the years of overcompensation that you have endured to date.

And, yes, it is time for some real class warfare instead of just trying to pretend that you are one of the rich by mortgaging your home for the 14th time to buy a Hummer and display that you are in debt when you are nothing but a sad, overextended peon.

sara said...

I think this just shows that there is more than one side to the story. Everyone who works there is not a bad person. Many of the people who made a lot of money worked long, hard hours for their pay. This is a very complex issue.

Anonymous said...

I am afraid that many good, honest, and honorable people are paying the price for the sins of a few. Life is never black and white, it is many shades of gray. However our polarized political climate in this country doesn't allow for that fact. Congress itself gave this companies the power to conduct credit default swaps in December 2009, so the blame should start there.

Lolo said...

He's a graduate of MIT. He worked there for 11 years (at what I think we can all safely assume was far more than 1 per year) and was head of Equities. Which means that he had a more than basic handle on things such as complex financials, P/E on stocks and knew enough about things to gamble his "deferred salary" to a structuring that would presumably have much bigger payout than if he had taken his cash in hand at the time. He also made enough to be able to not only work for the past year for a dollar but to gift almost a quarter million dollars as a way of dodging the crapbullets that the NY AG is firing at each and every executive they can name.

I don't for a minute support the AG's blackmail of the executives and in fact see it for what it is. A way of making political hay out of backlash. No thanks.

However, if even someone like me, with no degree from MIT or heading up a financial division of a HUGE corporation, can see enough to know that an economy that is largely driven by banks circle jerking each other over credit markets and rates made off of consumers who are often in no position to afford that McMansion that they were determined to rent to own then yes, I do think that someone like DeSantis can cry himself to sleep in his comfy home, with his healthy savings.

Krysta said...

It isn't just that his department did well and the company tanked. The greater point was that the company set up contracts to retain top individuals at the company in an effort to help pull them out of the mess (that these retained top individuals were not responsible for). And now, because of public outrage, they want to default on those contracts or I guess have the people return their compensation.

I think, in general, the public has no idea how these companies are run, how these people were retained, etc. Yes it is maddening to read about bonuses being paid to top execs at a company that needed taxpayer dollars, but in reality these people are the people who are going to help restore this company, this economy.

It isn't like this guy needs this job. I'm sure he can very easily go for work for a hedge fund making millions more. So we can say good riddance, see ya later, but really in order for things to get better we need (and therefore need to properly compensate) top people who will do the right things to help clean up this mess.

Also, in regards to the deferred compensation, he doesn't get to pick and choose where it goes like a 401K. It is funneled back into the general stock of the company. It isn't like he chose to put his money into a high risk (potentially high yielding) portfolio and is upset because it didn't pan out.

Cristina said...

NOBODY works a job for $1 a year without expecting some serious bank by the end of it.

Most people would balk at that very idea of getting paid only in bonuses. This is why I feel that I understand very little of this situation.

However, i do think that he has to have some responsibility. The "we never did anything to make this happen" speech is probably true.

BUT WHAT DID HE KNOW ABOUT THAT HE DIDN'T TRY TO STOP? What is the saying? "when good men do nothing..."

This guy has a degree from MIT. All he has to do is make a phone call and he's got another job. He'll land on his feet. I'm glad he wrote the letter. There are a lot of factors at work here. And we all knew that people were throwing eachother under the bus.

Anonymous said...

AIG excels at screwing people.

And, now we discover their own people.

When you've imploded as a company you don't make promises of big bonuses.

But AIG does. Incredible. They have no shame.

Anonymous said...

The writer says "I have done nothing wrong, so I should get my money."

Hello!

Tell that to the 600,000 workers laid-off each month recently. They have done nothing wrong, and they have lost more.

Tell that to the auto workers whose contracts, health care, retirement plan contracts have all been breached.

I'm sorry that you were innocent, but guess what?

Join the crowd. The vast majority of us who are being shafted by this crisis are also all innocent.

Anonymous said...

Yet another example of AIG's mismanagement.

Why are these people still running AIG?

Anonymous said...

I know it is customary in "business," but the constant lying and deceit is disturbing.

All lies.

Lies, lies, lies.

I have no trust in the so-called "captains of industry." The robber barons, the thieves.

They lie, cheat and steal. From everyone. And they don't care.

Reminds me of F. Scott Fitzgerald's _The Great Gatsby_ "The rich are not like you and me"

And, here I'm paraphrasing "they make messes, hurt people, they don't care or even seem to realize the damage they cause."

Anonymous said...

I'm not an American, but unfortunately, like most others, suffer as a result of American actions. The thing that strikes me is that though the American public's outrage is valid, important and understandable, it's misdirected and a little too late. Like this man's letter says, he fulfilled his American dream. The American dream is inseparable from American capitalism. It's not a dream about helping others, bettering society or giving something of yourself, it's about personal success which means economic success. How can you fault these guys for being successful in a problematic system which is based on a rich minority and working majority. I'm not advocating "communism" whatever that may mean to you, but whenever I hear people scream "socialism" at Obama when he talks about health care reform, I cringe. Take your anger out at your former President and try to allow for some positive change in your system. BTW, I'm Canadian, enjoy great health care, pay a ton in taxes and wouldn't have it any other way. Our banks are quite regulated, but we are still being hit by your failure to do the same. Don't turn this into a witch hunt, try to affect some positive change this time.

Anonymous said...

Not sure where this writer gets his moral high-ground stance of "innocence."

If he was such a key, powerful executive, why didn't he do something earlier to end all this?

He writes: "my wages were in no way connected to the credit default swaps." That is not true. The entire company is interconnected.

The CDS were money makers for all of AIG. He is not innocent.

I'm sorry about how things turned out, but I've lost my life savings in the stock market because of this crisis caused by CDS. I am more innocent! So, where's my money?

Anonymous said...

He writes "Some say those in this business are overpaid. I don't disagree."

Yikes!

Then why have you been collecting huge sums?

I suggest he continue to work at AIG if he can do some good "unwinding" (what a euphemism!) the "bad assets."

He could volunteer his services as charity work.

Anonymous said...

What's wrong with "class-warfare"? God knows, we, the people have been getting screwed for some time. No health care, no job security, no real pensions that are guaranteed (not the 401k pretend kind), no realistic maternity-leave, etc.

I'd say it is about time we come to our true class-consciousness and ask for whom does the current system benefit?

Why are we bailing out the banks and not the auto workers who actually make something of use?

Anonymous said...

The AIG executives blackmail tactic:

"Pay me more than I deserve or I won't fix the CDS Frankensten that I created out of sheer greed and corruption." Maybe technically it was "legal" but clearly outside the spirit of responsible banking practices.

"Pay me more than I deserve or the world can continue to sink into depression. And I don't care."

That makes me sick. Grow up.

jen said...

Anyone else get the feeling that he was giving himself a giant pat on the back? Unless you're looking for praise at being so "charitable", why send your resignation letter to the NY Times?

Anonymous said...

I don't think so Jen. He was probably trying to stop the witch hunt that wants to burn his house down.

Anonymous said...

Those of you bitching about losing money in the stock mark need to take a lesson in what "risk" is all about. Just because your house appreciated or your stocks had been doing well, doesn't mean that these are fool-proof "safe" investments. The stock market is a risky investment.....duh? If your "life savings" is in the stock market, well you are an idiot. Don't gamble with any money you are not afraid of losing.

Furthermore it's ignorant (at best) to assume that the executives at AIG caused all of this. Greed is the culprit here and it comes in many faces and in every area down the food chain.

Tell me that you wouldn't accept a huge compensation for doing your job if it was offered?

The vultures at AIG are just on the front burner now, but you "aint seen nothing yet".

Where is all this entitlement coming from?

Anonymous said...

I will never understand working class schmucks who defend the wealthy. The top 20 percent own 82 percent of all the wealth in this country. The bottom 80 percent own all of 18 percent. They have sucked up all the gains from our productivity over the last 30 years. Hard work, my ass.

Anonymous said...

Um, my bonus is based on net operating income of the entire company, which is common practice. So this guy didn't participate in the shenanigans. It doesn't really matter. The company lost money. He shouldn't get shit.

Simple.

tracey said...

Anonymous 9.00, I would also accept a $1 salary, if I was promised a bonus worth probably $1.2 million dollars!! A tax bill of $700 000, means that was what he was probably earning! I agree with SGM, boo hoo! Your company is up the creek, why on earth do you deserve a bonus they can't afford!

Anonymous said...

For those who say "don't invest in the stock market if you're not prepared to lose all the money":

Are you kidding?

401ks are in stocks, bonds, mutual funds, etc. All investments are tied to the markets.

There is no alternative--other than the mattress.

Anonymous said...

I don't have a problem with a person receiving huge compensation. If you can cure cancer and create world peace, you are entitled to millions, heck, billions.

But, if you're just going to play with numbers in a way that skirts the law with other people's money, then not so much. Where is the value-added in that?

Yes, AIG is not along. But, in this discussion, they represent the greed and cheating that occurred.

Anonymous said...

To think much of this could have been easily avoided with a little bank regulation.

Anonymous said...

I want to be Canadian!

Anonymous said...

I'm trying to look for the silver lining in this fiasco:

1. We can now understand how health care must be addressed and solved. Doesn't make sense to tie health care to jobs in today's world.

2. We can now understand that shifting the burden of pensions to individual's investments don't work, so we need real pensions that are guaranteed--like what our father's or grandfather's had.

3. We need bank regulation.

Anonymous said...

The only safe "investment" is the mattress.

But you will actually lose money long-term because of inflation.

The markets (or real estate which also, obviously, can be volatile) are the only alternatives.

LIMOM said...

Since Wall Street effectively purchased deregulation years ago, why does anyone - employee, farmer, or Congressman, think that those running the industry will feel any sense of shame or God forbid accountability, whatsoever.

AIG house of cards fell, the big wigs skipped off to their golf games, and many of the innocent are now cleaning up the mess. Make no mistake Mr. DeSantis knew full well that what was going on in AIG stunk to high heaven. Where was he three years ago?

Your sense of moral outrage is a day late and dollar short Mr. DeSantis.

Cristina said...

I also think he's thumbing his nose at the government as well.

He was going to get 700k and now that it's being taxed 90%, he's too good for the money. So to shove the taxes in their faces, he's going to donate the money to charity.

He's not doing it out of the goodness of his heart. He's doing it to make a point. "I'm too good for your small change."

Reggie said...

He was promised the bonus, he earned it, and he deserves to be paid it. Poor judgement all around on the part of senior management at AIG shouldn't be reason to hit the employees who are sticking it out to clean up the mess. Senior mgt shouldn't have promised such high payments to begin with; they've mishandled the PR hailstorm that ensued and are quashing worker morale in the meantime. Am very disheartened at the scape-goating taking place now, and the "off with their heads" mentality infecting our leaders, the media, and the mob. I'm an MD in an Investment Bank, and my bonus this year was $20k, with a base salary equivalent to what I could make working in a non-profit. Much of what is referred to as a bonus in my business is actually deferred compensation, and in years past when bonuses were larger, a lot of it was paid in stock that vests over 3 years. Last I checked my firm's stock price is down 80% so much of my previous bonuses were actually phantom ones. And as far as being one of the ones that made the mess, patently untrue -- those of us who remain (after 5 brutal headcount reductions) are here because we are the ones that are critical to maintaining what's left of the firm's franchise. The culprits have already fled the henhouse.

Iheartfashion said...

I'd respect him more if he donated his bonus without crowing about it on the op-ed page of the NY Times.

Anonymous said...

Reggie, I feel for you and you make a good point, but hey, you have a job.

What about all the innocents who were not even working in finance who lost their jobs because of this economic crisis?

It really is rough all over, man.

The point is the old rules don't apply.

The game has changed.

If you have a job now. You're very lucky.

I don't know anyone who is still getting bonuses. So don't consider your situation unusual.

I got a 1% raise. I'm just grateful to be employed. Of course my health premiums have gone up.

Everyone I know who has gotten compensation in the form of stock and stock options, etc. has effectively gotten nothing because their stocks are down so much.

All I'm saying is your situation is not unique.

I've stopped participating in my employee stock purchase b/c the stock is so worthless. Putting good money toward bad.

My "award" for exceeding my goals this year was stock options. But they are worth almost nothing. I don't have a whole lot of faith that they will go up either.

But, I'm not surprised. Yes, I'm disappointed, but not surprised.

I don't get how some people are surprised by this, or feel that they are being unfairly treated.

Again, if you have a job, you're very lucky.

Anonymous said...

I'm a liberal, so don't get me wrong, and I detest conservatives' overuse/politicizing of responsibility, but this is one case where, for god's sake where is the accountability? Take some responsibility, AIG.

Anonymous said...

So he scored a few touchdowns, but his team lost the game. No trips to Disneyland for any of you.

Anonymous said...

I am one of those who lost their job at the end of '08. There were no jobs in my field to be had in the area I live in....many others were losing theirs as well. So I started my own business. BTW....when you do that you are disqualified from unemployment, because you are "self-employed" even if you are losing $ getting the biz started for a couple of months.
You are also disqualified from refinancing your home....because, even if you make more from your new business....it does not count as income for at least two years in the eyes of the bank. No help there.
Sorry.....can't feel too sorry for the MIT grad who couldn't be bothered to know what others were doing in his company. I have a feeling he will not be losing his standard of living like so many others out there.

I can't blame him for quiting, but I can't feel sorry either.

Anonymous said...

Witch hunt. Anyone who has bought and sold or refinanced all contributed to this. I know tons of people who took home equities because they could. Barney Frank is the one who made it just too easy to get a mortagage.

Anonymous said...

To the person who writes:
"I know people who took home equities just because they could."

But there is a big difference:

These people are paying the price. Maybe they are going into foreclosure, maybe they're having to sell their house, declare bankruptcy etc.

The outrage is because AIG, Goldman-Saks, hedge funds, Wall Street, etc. seem to have *relatively* little negative consequences to their irresponsible actions.

Anonymous said...

Anonymous March 26, 2009 10:42 AM said...

"Witch hunt. Anyone who has bought and sold or refinanced all contributed to this. I know tons of people who took home equities because they could. Barney Frank is the one who made it just too easy to get a mortagage.?

This is a huge oversimplification. Worldwide, bad bets total over a quadrillion dollars, 22 times more money than exists in the world. Homeowners who took on too much debt didn't make those bets. Traders did.

Anonymous said...

"BTW, I'm Canadian, enjoy great health care, pay a ton in taxes and wouldn't have it any other way."

By the way, I too am Canadian, suffer from sh$tty health care, pay a ton in taxes and dreamed my whole life of picking up and moving to the US. I did so once for a wonderful decade but had to return to Canada to care for ailing family; heavens knows that our socialist system did precious little for them.

Ever wonder why almost all immigration between Canada and the US is entirely one-way... especially amongst skilled, educated individuals? Because socialism might sound lovely but it's depressing to live under and especially doesn't work for those people who have the luck, talent or drive to make something of themselves.

You don't have to take my word for it. Check the stats about how many individuals moved from Canada to the US and then how many moved in the other direction. Under Bush, under Carter, under Reagan, under Clinton, it doesn't matter: it's all pretty much uni-directional.

Class warfare is merely an excuse for people who aren't wealthy to express their rage about the fact. Socialism will just make the US like every other country in the world: filled with citizens who want to get the hell out.

Anonymous said...

if he can afford to resign, great! leaves another job for someone who wants it.

Anonymous said...

Boo fucking hoo...

Decorina said...

Yes, so you donate your bonus - paid for by the taxpayers. How stupid do you think we are?

Anonymous said...

To Canadian Anon
Props to you. Very good point. I have many, many Canadian friends. Four live in my neighborhood since we are close to nyc. I've NEVER met one I didn't like...kind, well-rounded, etc. They all have said the same thing. They miss home but that the system there sucks. I really hope that we don't continue into socialism. After all of this, from 1776...our forefathers would roll over in their grave to see democracy fall apart in the hands of one ego-heavy socialist. And to think that the Boston Tea party was done by angry citizens who thought something like 3 % taxation was too much.

Anonymous said...

"Class warfare is merely an excuse for people who aren't wealthy to express their rage about the fact."

Well, that would be about 99% of us then!

Anonymous said...

Anon 3:31 AM:

"our forefathers would roll over in their grave to see democracy fall apart in the hands of one ego-heavy socialist."

Democracy has already fallen apart. The banksters are running things now. The wealthy "own" the government. We've had socialism for the wealthy for decades now. Privatize the profits, socialize the risks.

Anonymous said...

I think the fears of the U.S. somehow becoming a socialist state are waaaaayyyy overblown.

Remember, democracy and socialism can easily co-exist as in social security, medicare, pell grants, student loans, etc.

Anonymous said...

Anon 3:31 AM:

"our forefathers would roll over in their grave to see democracy fall apart in the hands of one ego-heavy socialist."

You've got to turn off Fox "news" right now.

Rachel said...

Okay - I totally agree with Anon 8:54 and Krysta.
Especially about the part that Congress is outraged, yet voted for it to pass.... I hate when people complain about "Well, I didn't see this, it was in the fine print..." Read the fine print.

Oh, and as somebody who was supposed to receive their commission check (not a bonus, but what I EARNED) about 3 weeks ago, but has yet to see it?? Working for free sucks.

Anonymous said...

"You've got to turn off Fox "news" right now."

Because it's worse than our other "journalistic" options?

The press sucks all around at this point, do we have to pick sides on who is worse?

Maison Luxe said...

the BEST article written in response to the letter ever is right here:

http://www.alternet.org/mediaculture/133627

hello gorgeous said...

I think it was written by AIG PR - my guess is there is no Jack de Santis.

Anonymous said...

I'm not articulate enough express my opinion about this, but Matt Taibi came to the rescue: http://www.smirkingchimp.com/thread/20988. So that's exactly what I think of "the other side of the story".

Rebekah said...

I think he has every right to be pissed off. I would to if a contract wasn't honored. I also think it's completely ridiculous that people aren't more pissed off at the administration (from local to national) for presenting only one side of the issue and not being smart enough to read the bill they were passing. I also think it's awesome that charities will get over 700K in donations because of this fiasco.

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