An A.I.G. Executive Fights Back

In today's Times, an A.I.G. executive sends Edward M. Liddy, the chief executive of A.I.G., a resignation letter and basically tells him where he can shove his bonus money.

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.

He said that he had nothing to do with the portion of AIG that was responsible for the huge losses. He has been working long hours with no base salary, because Liddy had assured them of their bonus money.

He received a bonus of around $742,000 after taxes (probably $1.5m before taxes) and he plans on giving it to charities.

So, what do you think? Do you have sympathy for this man?

On the one hand, nobody should be forced to work 14 hour days for free. If Steve was asked to work those hours for free, I would make him quit immediately. Gotta feed those babies. This guy, in particular, seems to have been a victim of some double talk.

On the other hand, I was irritated by the guy's cluelessness and disdain for politics. A basic mistake that these executives made was to agree to work for $1 in exchange for a bonus at the end of the year. Most people consider a bonus to be extra money that one gets for extraordinary success. Most people never get a bonus. And when the public owns your company, executives have to be conscious of political considerations. They are now public employees. The only reason that this man had a job all year was because of the government and the public's (reluctant) willingness to send them their tax money. He can't complain about politics and at the same time receive its benefits.

There was also some dishonesty about those $1 salaries.  Make the people think that you are the good guys while taking secret bonuses on the side? That's not cool.

There are several basic questions on the table. If we own the financial industry, should finance people make average government salaries? Instead of making $400,000 a year, should they make $60,000 a year? Are we going to see huge attrition rates? Those guys work really long hours with a lot of stress at jobs that aren't all that interesting only because of those fat salaries. If we chase them away are we going to be left with the types of people who run DMV?

UPDATE: Read Tim Burke's fun, snarky response. Megan McArdle defends the bonuses. Must read the comments at the NYT.