June 5 (Bloomberg) -- Peter G. Peterson, co-founder of Blackstone Group LP and former chief executive officer of Lehman Brothers Holdings Inc., said in a new autobiography that Wall Street bonuses created “spoiled and ungrateful schmucks.”

Peterson, who turns 83 today, recalled in “The Education of an American Dreamer” his disgust at the “gamesmanship and petty jealousies” that emerged after he distributed bonuses to Lehman employees at the end of 1974 after steering the bank back to profitability.

“I was quietly furious,” Peterson wrote in the book, scheduled for publication on June 8. “To myself I was thinking, ‘What a bunch of spoiled and ungrateful schmucks!’”

Peterson joined the Forbes magazine list of the world’s wealthiest people after Blackstone Group’s initial public offering in 2007 made him a billionaire. Lehman Brothers, which Peterson left in 1984, was the fourth-largest U.S. securities firm when it failed in September in the biggest bankruptcy in U.S. history. He wasn’t available for comment today, a spokesman said.

The Yiddish word schmuck, originally a vulgar term for penis, has come to be used in English as a synonym for “jerk,” said Paul Glasser, associate dean of the YIVO Institute for Jewish Research’s Max Weinreich Center for Advanced Jewish Studies in New York. “It seems like words that move from Yiddish to English often do lose some of their force,” he said.

In Peterson’s book, he described receiving a $450,000 bonus at Lehman Brothers in 1974 and said other executive committee members garnered $350,000 to $425,000 each. The payouts followed a year in which partners hadn’t received any bonuses because the firm lost $8 million.

‘Unfathomable, Unfair’

“Men with $300,000 bonus checks in their pockets made it clear, in the form of serious complaints, that they were miffed,” Peterson writes. “The bonus distributions were unfathomable, unfair, unconscionable! This came from people who had gotten nothing one year earlier, when the firm was on the brink.”

Peterson wrote that the late Lewis Glucksman, whose feud with Peterson at Lehman led to the firm’s sale to American Express Co. in 1984, “would have exploded.” Peterson, by contrast, wasn’t able to “verbalize” his anger.

“It might have been healthier for me and the organization had I, too, been more vocal,” he wrote.

Financial News reported Peterson’s account of the Lehman bonuses on June 2.

“The Education of an American Dreamer: How a Son of Greek Immigrants Learned His Way from a Nebraska Diner to Washington, Wall Street, and Beyond” is being published by Twelve, an imprint of the Hachette Book Group.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

Last Updated: June 5, 2009 11:59 EDT