AIG's CEO threatens to leave, at last
Filed under: People, American International Group, INC., Bank of America, Avis Budget Group
In an exclusive report in The Wall Street Journal, word emerged that AIG (AIG) CEO Robert Benmosche has said he may leave, largely because of what he sees as heavy-handed government regulation. He believes that the "pay czar" is hurting the insurance company's chances of bringing in new talent.
Benmosche has fought the government, his board and the public's perception of him at nearly every turn. He complained when government officials did not immediately approve his $10.3 million pay package -- perhaps forgetting that his predecessor Ed Liddy worked for $1.
More Coverage: AIG May Be Able to Repay U.S. After All
When the public criticized a vacation he took just after joining AIG, he gave an interview to Reuters explaining how hard he worked while at his holiday villa. Benmosche has made a number of public comments about the pace at which AIG has been allowed to sell units and bring in talented people.
AIG may be better off without Benmosche. The Obama administration should view the appointment of a controversial figure into a high profile job, in which diplomacy is part of the role, as a mistake. Unlike other companies that the government has given money to, AIG has quarreled with the administration on a regular basis. AIG's management needs to spend more time restructuring the firm and less time battling the government.
Who could take Benmosche's job? Ken Lewis, the CEO of Bank of America, (BAC) who has announced his retirement, has a lot of experience running a big financial firm and dealing with government regulators.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 4)
11-11-2009 @ 6:49AM
fred said...
If the government wants to get their money paid back ASAP let the man run the company that the board appointed. They had a profit last quarter. The so called pay czar never ran anything larger than a newspaper route as a kid, if that.. AIG already hinted at repaying the government money within a short period of time. Maybe Benmosche is a disagreeable person but if he can pull the company back together and repay the government, then the pay czar should sit silently with his hand crossed and his mouth clossed.
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11-11-2009 @ 9:48AM
will said...
first.....if you put your hand out don't run your f@cking mouth.
second.....if you take what was put in your hand, don't run your f@cking mouth!!
11-11-2009 @ 12:08PM
John said...
AIG has shown that they are a "loose cannon on deck." They went crazy making lots of money and crashed miserably. They want to retain and attrack talent? How can they assure that their so called talent isn't another bunch of thieves with lots of schemes and deviations. I'm glad to see the government growing some balls and saying "no" to people like these.
Academic credentials do not automatically chronical talent. Talent comes when a profit is made in a responsible way that doesn't blow up in their face when their processes are questioned. If they weren't so artificially large, they would have gone out of business last year.
11-11-2009 @ 7:02AM
ront said...
when one goes begging hand in hand for money, one has little choice in the terms. if and when aig can repay government loans; then the company can do as they like.
the profits earned so far this year are from monies loaned from the taxpayer.
if benmosche thinks his services are worth so much more, look for another job. if another company is willing to pay what he asks, then go for it.
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11-11-2009 @ 7:02AM
gary said...
The man appears to be having some success already at turning the company around. The government, on the other hand, has made it very clear that this country's best and brightest should not be going into the financial sector. Barney Frank seems to know everything about running a financial company, so why not let him run AIG.
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11-11-2009 @ 7:11AM
Mark said...
Let that idiot leave!!! He will pay back what he mooched off the taxpayers by gouging the living s__t out of anybody doing business with AIG. They used taxpayer money to somehow acquire 21st Century insurance, and when I recieved my first notice to renew ,I was informed my premium (which was $160.) was now $596. Needless to say I no longer carry insurance with AIG. This was with no claims, no accidents, and no tickets on my record, and a safe driver notification on my license since it was issued in 1976. He is what is wrong with big insurance.
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11-11-2009 @ 10:34AM
anais_morr said...
Hate to break this to you Mark but Benmosche is not responsible for AIG's meltdown. Benmosche is the fifth or fourth CEO in AIG's history. Meltdown can be attributed to Maurice Greenburgh's actions when he was CEO and Martin Sullivan's poor leadership when Hank Greenburgh was shown the door at AIG back in 2005. Benmosche was literally given only a mop and bucket to lead AIG. I used to work for AIG and although I hate that company, AIG was at least in the position to hire and keep the best and the brightest. People are leaving AIG left and right now and some even have to drop off that company from their resumes. Only some employees and executives were responsible for AIG's complete downfall. You have no idea.
And Benmosche is right: this administration is screwing around. Case in point: the auto industry. Have any idea Mark how many people lost their jobs once the Obama administration stepped in and reneged on its promise to help GM and Chrysler? Have any idea how many jobs are not going to be restored? Tax payer outrage you say? Dude...you have no idea what you are writing about. Step away from your keyboard and Google before you post the next time.
11-11-2009 @ 1:47PM
Barry said...
You were paying $160.00 a year for auto insurance?, You surely do not live in NJ. We pay apx 1500.00 for an individual policy, 2500.00 if there is a couple, and in the $5,000.00 range if you have a family with "young" drivers
11-11-2009 @ 1:48PM
Barry said...
When Hank Greenberg had built and was running AIG, they did not issue credit default swaps, they started that after Spitzer forced him to resign (over the phone) with pressure on the board. His final words in that conversation went something like "between you all in the room, can you even spell insurance", Guess he was right, as he is building CV Star into what AIG used to be before the problems, an extremely profitable machine
11-11-2009 @ 7:28AM
David said...
If you think Lewis wants another opportunity to be pushed around by folks who have no profit making record or responsibility, you are nuts!
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11-11-2009 @ 7:29AM
mark said...
P.S. If that bonehead thinks the government is heavy handed, what exctly was meant by AIG's letter to me, when I changed insurance companies without telling them first, that they were going to inform the Dept of Public Saftey, that I in fact, no longer had insurance,and I would then have to prove that I was in fact insured to keep my license. THAT IS BLACKMAIL no matter how you cut it
I have become convinced that the government should never be permitted to require any citizen to do business with any for profit, private company for any reason.
Let insurance companies work for their money like everyone else. They have a product to sell, let them convince me that the product they offer is worth the price they are asking, and I will buy it. If they cannot do that, I won't. That would make for some real market competition, instead of having every citizen of driving age legally bound to be a customer of theirs.
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11-11-2009 @ 9:49AM
will said...
those a$$holes tried to do that to me also. i threatened to sue them. i would have (had they persisted) because it is nothing more than blackmail. they are scum.
11-11-2009 @ 10:40AM
anais_morr said...
Best advice I can give to you is to file a formal complaint with your State's Department of Insurance and request the State to look into AIG's handling of your policy. People also tend to forget that the insurance industry is already regulated by the State. The DOI can step in on your behalf and order the carrier to reacess your coverage and/or reinstate your coverage. By law an insurance carrier cannot drop an insured unless the insured renegs on paying premium.
11-11-2009 @ 10:58AM
MIKE said...
That letter to your Public Safety Dept. or Motor Vehicles Dept. informing them of your potential lack of coverage is required by law in most states. It is not the insurance companies trying to blackmail you.
11-11-2009 @ 8:03AM
Tom said...
I agree, Barney Frank with all his government experience and financial knowledge should quit government, take a pay cut and run AIG.
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11-11-2009 @ 10:46AM
anais_morr said...
Let Barney Frank run AIG? LOL But I guess if we all really wanted to get rid of AIG, Frank will be the right man to really run that company to the ground!
11-11-2009 @ 8:00AM
bored2tears said...
Replacing Crazy Pants Benmosche with Brain-Dead Ken Lewis makes about as much sense as anything else in the whole sordid AIG saga.
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11-11-2009 @ 2:39PM
Dennis said...
I traded my AIG Life insurance for another company. American General (AIG) gave me the worst service I have ever had from an insurance company. Now I have no more payments the rest of my life, Covered to age 120 instead of 75, increased the death benifit by at least 40%. Thank you AIG for the poor service.
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11-11-2009 @ 9:04AM
Donovan said...
Someone sure as hell needs to regulate these overpaid corporate CEO's. As long as these corporations are being financially sustained by Government funding, the Government has every right to place what ever restrictions they feel necessary in order to guarantee the funds loaned are being used for the purpose they were intended and allocated for. Until such time as (ALL) the corporations, banks, and business's have paid back ALL TARP monies, and are once again able to financially sustain their business's with their (OWN) generated revenue. Mandatory Government restrictions, and regulations need to remain in place. These CEO's can not, and should not expect to be paid an excessive salary, plus bonus's. When receiving and being financially sustained by Government/tax payer funding.
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11-11-2009 @ 10:59AM
TC said...
So when you took a mortgage out on your home,the bank came to your house and told you what colors to paint each room and the cost limit of the furniture you could buy ? UNTIL YOU PAID YOUR MORTGAGE IN FULL!!!! RIGHT?WAKE UP!!! THE GOVERNMENT IS PLAYING EVERYONE !! but goldman sachs is ok? they did'nt need a DIME! but they took it!! gov'mt made them a BANK HOLDING co. why??? AIG MADE BIG MISTAKES..but they didn't take us into recession! BIG MAN Barney Frank and his crew DID!!!