Joe Cassano, Most Selfless Individual In All The Land, Begged His Bosses At AIG To Let Him Not Take A Bonus

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But they said no, Joe, no. You, our adorable little Jon Lovitz lookalike, deserve this. We won't have it any other way. You have done so much for this company! Letting you walk away without $315 million would be practically criminal. Would you like that in unmarked, non-consecutive twenties? Singles? Briefcase or g-string?

Joe Cassano’s Testimony
In November 2007, it became apparent that AIG-FP’s accounting losses would be substantial and would require a change to our compensation structure to ensure that employees stayed with the company to help it address the issues surrounding the AIG-FP portfolio, but also would not be immune to AIG-FP’s losses if they were actually realized. I had several discussions with my superiors at AIG about this change, emphasizing the need to recognize the accounting losses while also noting the importance of keeping our employees together during this critical time. For that reason, I suggested that AIG-FP adopt a special-incentive plan (”SIP”), which would place any compensation in excess of a set amount in a special deferred-compensation account. The funds in that account would remain subject to AIG-FP’s business performance and the risk of realization of the accounting losses.

Unlike the standard deferred compensation, one-third of the SIP funds would vest at the end of 2008 and the remaining two-thirds would vest at the end of 2009, and the funds would have been paid in 2012. My goal in proposing the SIP was to recognize the unrealized accounting losses and to put highly compensated employees’ pay at risk to those losses becoming realized, while also providing an incentive for them to remain with the company through the end of 2009.

Although I was pleased with the SIP and believed it was a fair and appropriate plan given the magnitude of the accounting losses, I went one step further and volunteered to take no bonus whatsoever for 2007. Instead, I proposed to AIG that we simply have a handshake agreement that AIG would compensate me in the future if AIG-FP’s accounting losses reversed, as I was confident they would. I did not make this offer because anyone asked me to — I did it because it was the right thing to do, even though AIG management ultimately rejected my proposal.

Joe Cassano’s Testimony: AIG CDS Worked Just Fine [WSJ]

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