The Journal buries the lede in its piece today on life at AIG Financial Products, post-bonus flap:
Overall, Mr. Pasciucco [the unit's current head] said, about a third of the resignations were from the financial-products office in London. He said that Jake DeSantis, an executive who announced his resignation in a New York Times op-ed piece amid the controversy, is still on the job short term as the commodity business he works on is resolved. AIG didn't make him available for comment.
Hmmm... In related news, Pasciucco said about 20 of AIG-FP's 370 employees have quit thanks to the scandal--some after their children were harassed.
I don't want to re-litigate the whole episode, but it sounds like some of those 20 people had knowledge that was relevant to unwinding the unit's trades, a process Pasciucco says has been delayed by several weeks (though he's optimistic it'll get done this year). This graf gets at the issue:
Many of the trades are currently hedged, which is intended to limit losses, but Mr. Pasciucco said maintaining the hedges "is a task," which is one reason to pay bonuses to keep employees who are familiar with the portfolio.
Pasciucco may be exaggerating for dramatic effect, or to excuse a delay that was going to happen anyway--who can prove him wrong? And I certainly don't think we should pay any AIG-FPer extortion money--if, say, they're threatening to leave to trade against the company's book of business. (We should arrest those people, if possible.) But part of the objection to the bonuses seems like a case of the unemployed banker fallacy, in which critics assume that employees of big financial institutions are largely interchangeable, and we can pretty costlessly replace them. I just don't think that's the case for some of these guys.