Billionaire investor George Soros said US taxpayers were entitled to resent bankers’ bonuses because their profits were funded by government bailouts, according to an interview published in the Financial Times.
“Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts, from the government, so I don’t think that those monies should be used to pay bonuses,” the paper quoted him as saying in yesterday’s edition. “There’s a resentment which I think is justified.”
The US government committed hundreds of billions of dollars to bailing out financial firms, some of which have since reported surging profits.
Soros said there was a need to regulate payments to employees, even if that meant banks found it difficult to retain talented risk-takers.
“That would push the risk-takers who are good at taking risks out of Goldman Sachs into hedge funds, where they actually belong, because hedge funds take risks with their own capital, not with deposits and not with government guarantees,” he said.
Meanwhile, American International Group Inc (AIG), the insurer bailed out by the US government, approved the payment of US$2.6 million in previously disclosed retention bonuses to two top executives.
Chief financial officer David Herzog will receive US$1 million and Kristian Moor, the chief executive officer of AIG’s Chartis property casualty division, will get US$1.6 million, the New York-based company said in a regulatory filing on Friday.
AIG authorized the payments after Kenneth Feinberg, the pay master in US President Barack Obama’s administration, released his review of the insurer’s proposals on executive pay. Feinberg has the power to limit some pay for top managers at AIG after the company took a US rescue valued at US$182.3 billion.
Feinberg said he determined the pay to Herzog, Moor and another unnamed executive wouldn’t be cut because of “the need to retain the services of these three employees who are deemed to be particularly critical to AIG’s long-term financial success,” though he “considered” the awards in determining cuts to their salaries this year.
The delayed payments, authorized by AIG’s board yesterday, total US$12.1 million for all managers classified in the filing as executive officers.
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