{"id":328,"date":"2009-03-25T15:30:28","date_gmt":"2009-03-25T19:30:28","guid":{"rendered":"http:\/\/000af36.netsolhost.com\/wordpress1\/2009\/03\/25\/aig-bonuses-the-other-side-of-the-story\/"},"modified":"2009-03-25T15:30:28","modified_gmt":"2009-03-25T19:30:28","slug":"aig-bonuses-the-other-side-of-the-story","status":"publish","type":"post","link":"http:\/\/griendling.com\/wordpress1\/2009\/03\/25\/aig-bonuses-the-other-side-of-the-story\/","title":{"rendered":"AIG Bonuses: The Other Side of the Story"},"content":{"rendered":"

I\u2019m not one to defend AIG executives generally, but this letter<\/a> from a resigning EVP in today\u2019s New York Times gives us a little peak into the other side of this story and brings up some issues that need to be explored.  Some of those issues I outlined in an email<\/a> to several Washington Post reporters the other day.<\/p>\n

His salary is $1 a year.  His bonus is nearly $750,000.  <\/p>\n

\n

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.\u2019s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable \u2014 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.\u2019s effort to repay the American taxpayer. <\/p>\n<\/blockquote>\n

\n

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 \u2014 directly as well as indirectly with the rest of the taxpayers. <\/p>\n

\u2026We 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. <\/p>\n

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.\u2019s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.\u2019s promises and are not inclined to return the money as a favor to you.<\/p>\n<\/blockquote>\n

Working for a $1 annual salary clearly requires some kind of bonus.  Even if he was not worth $750,000 \u2013 and he admits that may be too much \u2013 you can\u2019t simply say he should get no bonus.<\/p>\n

He is quitting and taking the bonus.  But even then, you can\u2019t beat up the guy if he follows through on his promise.<\/p>\n

\n

So what am I to do? There\u2019s 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\u2019t disagree. <\/p>\n

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.\u2019s or the federal government\u2019s 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.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

I\u2019m not one to defend AIG executives generally, but this letter from a resigning EVP in today\u2019s New York Times gives us a little peak into the other side of this story and brings up some issues that need to be explored.  Some of those issues I outlined in an email to several Washington Post… Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/posts\/328"}],"collection":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/comments?post=328"}],"version-history":[{"count":0,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/posts\/328\/revisions"}],"wp:attachment":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/media?parent=328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/categories?post=328"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/tags?post=328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}