Wednesday, September 25, 2013

AIG CEO: Anger About Bonuses "As Bad" As Racist Lynchings

The American International Group (AIG) took billions in taxpayer bailout money following the 2008 financial crisis and then rewarded its employees with bonuses. In an interview with the Wall Street Journal, Robert Benmosche, CEO of AIG, compared public anger about the bonuses to a racist lynch mob in the Deep South in the middle of the last century:

“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.

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