When the global economy collapsed in 2008, American International Group (AIG) was hit extraordinarily hard. The company turned to Washington, D.C., for a $182 billion government bailout, eventually repaying that amount in 2013.
But rather than humbling CEO Bob Benmosche, who was not CEO during the crisis, it appears the bailout has emboldened him.
For instance, remember when he said last year that the U.S. government should send AIG a thank-you note for getting its affairs in order?
Now, Benmosche, in a recent interview with the Wall Street Journal, recalls the backlash the company experienced after it decided to award post-bailout bonuses to its top executives.
The public outcry, he explains, “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 Benmosche’s defense, some post-bailout anti-Wall Street rhetoric has been pretty brutal. Perhaps it’s worth recalling some of the anti-capitalist, anti-banker rhetoric from, say, the Occupy Wall Street movement:
Logan Fazio/Primary Flight.
Steven Lassiter at the Occupy Wall Street protest in lower Manhattan, held an effigy of Lloyd Blankfein, the CEO of Goldman Sachs who he claims is “the most corrupt corporate leader in the world who bet against his own clients and made rocket profits." (https://aleim.com)
Still, from a PR standpoint, the AIG exec should probably stay away from comparing his post-bailout experiences to racist lynch mobs. And from a standpoint of terrible things you don't say, the AIG exec should never, ever compare people criticizing bonuses to the awful horror of racist lynch mobs.
Here’s the full Wall Street Journal quote for reference:
“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.
“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.”
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(H/T: New York). Featured image Getty Images.
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