Wednesday, November 11, 2009

AIG chief threatens to walk

insurance company

NEW YORK ( -- Robert Benmosche has threatened to step down as chief executive of American International Group, just three months after taking the helm of the insurance company that's received billions in government aid, according to a report published Wednesday.

The Wall Street Journal said Wednesday that Benmosche told AIG's board that he was "done" during a meeting last week. But the "strong-willed" executive agreed to reconsider after fellow directors were shocked, the newspaper said, citing unnamed sources.

Benmosche has reportedly expressed frustration with the constraints placed on AIG by the government after the global insurance company was bailed out last year.

The Journal said he complained to AIG's board about limitations on compensation imposed on the company following a recent review by the Obama administration's pay czar, Kenneth Feinberg.

Last month, Feinberg demanded companies that had received government aid reduce total compensation for their top 25 highest-paid employee by 50%, on average.
America's most tone deaf CEO

Benmosche, 65, reportedly told AIG's board that the pay constraints would drive away talented employees.

A spokesman for AIG said the company had no comment.

AIG (AIG, Fortune 500) received a $182 billion lifeline from the government last year as the credit crisis forced the company to the brink of collapse. In exchange, the government took an 80% ownership stake in AIG.

Benmosche, formerly chief executive of MetLife, replaced Edward Liddy as AIG's chief executive in August. He has been criticized for his brash behavior and aggressive attitude toward Congress.

However, it isn't clear whether Benmosche would actually resign. According to the report, the executive was said to be prepared to step down at least once before, in August, before his own pay package had been formally approved.

Despite ongoing criticism of the company's compensation practices, Benmosche negotiated a $10.5 million pay package, including cash salary of $3 million. It was the largest award approved under the Treasury Department's recent curbs on executive pay.

Meanwhile, AIG has benefited recently from stabilization in the insurance business and improvements in the credit and mortgage market.

Last week, the New York-based company said it earned $455 million in the third quarter,an improvement over the $24.5 billion loss from a year earlier. It was AIG's second profitable quarter in a row.