AIG CEO: Outrage Over Bonuses Was 'Just As Bad' As Lynchings In The Deep South
REUTERS
AIG CEO Robert Benmosche may have an inflated sense of his own problems.
In an interview with the Wall Street Journal, Benmosche appeared to say that public anger over the company's decision to dole out $450 million in bonuses after it r eceived $173.3 billion in government aid was "just as bad" as actual historical lynchings in the Deep South.
The quote — which was not included in the Journal's print article but only in a subsequent MoneyBeat blog post — was picked up by the Columbia Journalism Review's Ryan Chittum .
Here's the quote in context from MoneyBeat :
Mr. Benmosche on the government’s campaign against partial “bonuses” to be paid to hundreds of employees in the AIG financial-products unit as they unwound massive, ill-fated bets on mortgage bonds. He said “less than 10” employees were behind the bad trades.
“That was ignorance … of the public at large, the government and other constituencies. I’ll tell you why. [Critics referred] to bonuses as above and beyond [basic compensation]. In financial markets that’s not the case. … It is core compensation.
“Now you have these bright young people [in the financial-products unit] who had nothing to do with [the bad bets that hurt the company.] … They understand the derivatives very well; they understand the complexity. … They’re all scared. They [had made] good livings. They probably lived beyond their means. …They aren’t going to stay there for nothing.
The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that–sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong."
In the interview, Benmosche also controversially claimed that "too big to fail" had been solved.
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