AIG Head Threatens to Quit Over Executive Pay Limits

November 11, 2009

(ChattahBox)–Robert Benmosche, chief executive of AIG, the giant insurer considered “too big to fail,” which received billions in federal bailout funds, is angered over government imposed compensation limits. After just three months as CEO, Benmosche told AIG directors last week that he was “done,” according to the Wall Street Journal.

Benmosche, a former CEO of MetLife Inc., is known for his blustering and already threatened to quit once before in August, when his own compensation package wasn’t as yet, formally approved by the Treasury Department. His $10.5 million pay package, which includes a cash salary of $3 million, was later finalized, making it the largest compensation package approved by Kenneth Feinberg, the special master for compensation.

In recent days, the so called pay czar, Kenneth Feinberg has imposed curbs on compensation and bonuses for firms accepting federal bailout funds, including AIG, which is 80 percent owned by the federal government. The compensation review of AIG cuts executive compensation for dozens of executives, by 91 percent from compensation levels in 2008.

An unnamed source says Benmosche’s frustrations with the curbs on compensation “hit a crescendo.” Feinberg modified the original proposed pay packages submitted by AIG for approval, because they were “inconsistent” with the public interest.

President Obama endorsed the curbs on excessive Wall Street compensation and bonuses of firms receiving federal taxpayer funds to stay afloat saying, “it does offend our values.”

AIG and other financial firms that reached the brink of failure, and nearly took down the entire US economy with their risky investments and excessive compensation based on short term gains, are now under the authority of Kenneth Feinberg and the Treasury Department, to ensure the economy is not put in peril again from risky compensation practices.

If Benmosche does indeed take his millions and go home, Douglas Steenland, a former Northwest Airlines Corp. chief executive and AIG board member has been mentioned, as a replacement.

According to the Wall Street Journal piece, Benmosche has expressed disdain for the Treasury Department and the government, which bailed out AIG to avert an economic collapse:

“Soon after taking the job at AIG, Mr. Benmosche made a number of fiery comments that startled observers, including a reference to “crazies down in Washington.”

See the Wall Street Journal for more.


Comments

2 Responses to “AIG Head Threatens to Quit Over Executive Pay Limits”

  1. Old Man Dotes on November 11th, 2009 1:44 pm

    Good idea. In fact, I recommend that the Special Master make the resignation of Benmosche a *requirement* along with total forfeiture of all stock, non-cash compensation, and restitution of all salray and other compensation sicne the date that the Feds bailed out AIG.

    And then we airdrop the fat bastard in Havana. Hey, if he’s really good at groveling, we could rent him a parachute.

  2. Five AIG Execs Start a Revolt, Threaten to Quit Over Pay Cuts | ChattahBox News Blog on December 7th, 2009 12:24 pm

    […] month Robert Benmosche, chief executive of insurance giant AIG, threatened to take his millions and go home, because he was angered over the government imposed compensation limits and curbs on bonus […]

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