AIG CEO Says People Angry Over Wall Street Bonuses Are Like a Lynch Mob

<a href="http://www.google.com/imgres?imgurl=&imgrefurl=http%3A%2F%2Fwww.reuters.com%2Farticle%2F2011%2F04%2F05%2Fus-aig-benmosche-idUSTRE73474920110405&h=0&w=0&sz=1&tbnid=yuujc7CXpk5-QM&tbnh=188&tbnw=268&zoom=1&docid=rtC7rNpZxZILtM&hl=en&ei=KIVBUsWwAvDh4APIioHwDQ&ved=0CAEQsCU">Reuters</a>

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Is a public upset about big bonuses at bailed-out Wall Street firms akin to a lynch mob? The CEO of the insurance giant AIG thinks so. In an interview with the Wall Street Journal, Benmosche talks about the outrage that erupted in March 2009, when AIG—which had just received a $170 billion bailout—announced it would pay up to $450 million to employees in the financial products unit that brought the company to the brink of collapse.

Here’s what Benmosche said:

“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 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 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 pitchforks and their hangman nooses, and all that–sort of like what we did in the Deep South. And I think it was just as bad and just as wrong.

“We wouldn’t be here today had they not stayed and accepted…dramatically reduced pay…They really contributed an enormous amount [to AIG’s survival] and proved to the world they are good people. It is a shame we put them through that.”

Interestingly, the main interview with Benmosche ran in the Journal Friday, but as the Columbia Journalism Review notes, this particular clip only showed up on the website’s MoneyBeat blog two days later.

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate