The WSJ scores a nice scoop this morning with word that the relatively new head of AIG wants to quit over government compensation restrictions.
The news falls into the medium-sized category since CEO Robert Benmosche hasn’t actually done anything yet, and the leak may be tactical. But still, director-level exclusives are hard to get, and it’s worth noting that the Journal produces them with regularity in this hotly competitive category.
WSJ competitors duly acknowledge the get, with Bloomberg gamely advancing it a bit by digging up a speech Benmosche gave last August when he talked about the importance of pay:
“I am very easy when it comes to doing business, but I’m just not cheap,” Benmosche said during an Aug. 11 meeting in Houston for life insurance workers, according to a record obtained by Bloomberg. “So if you want me, you can have me, but you’ve got to pay. The money is about what I am worth, and what my job is worth to be your leader.”
We’ve remarked that the Journal often outperforms on board-level-leak-gathering, memorably so during the mad back-and-forth between Ken Lewis and John Thain last winter during the BofA-Merrill Lynch merger.
Without downplaying the value of this information to investors, most especially including U.S. taxpayers who own the controlling stake in the fallen insurance giant, it’s also worth pointing out that scoops are the product of journalists’ age-old and delicate balancing act of cultivating high-level sources and managing long-term relationships, while at the same time remaining at arms-length, ready to burn bridges, if necessary, should the facts require it. There’s not a thing wrong with this tension, but readers should be reminded that it exists, and in financial journalism it exists in spades. When things get out of whack, as they did during the runup to the mortgage crisis, the public is left in the dark about bad behavior of major financial institutions.
The Journal has placed an emphasis on scoops, and it is paying off to readers’ benefit. We’ll advocate for our preference, accountability, as a counterbalance, such as it is.
In the meantime, chalk another good one up for the Journal.
Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.