Wednesday, November 11, 2009

AIG CEO Benmosche Threatens To Quit Over Pay Constraints

. Wednesday, November 11, 2009

By stockOzone team

American International Group Inc. (NYSE: AIG) Chief Executive Officer Robert Benmosche is considering stepping down from his position, the Wall Street Journal reported late Tuesday, citing people familiar with the situation.

The Journal said Benmosche told AIG's board he was "done" with the job, although he reportedly is reconsidering his stance in the face of the board's dismay. According to the sources, the former MetLife CEO is upset with the constraints of leading a company majority-owned by the government. The Journal said Benmosche has complained to AIG's board about the outcome of the Treasury Department's recent compensation review which slashed pay for a number of AIG executives by 91 percent from 2008.

Benmosche took the helm of AIG in September, making him insurer's third CEO in less than a year. Under a package approved by Feinberg over the summer, the AIG CEO will get compensation of about $10.5 million.

The insurance giant has been bailed out thrice by the government, with a loan package worth up to $182.5 billion in exchange for an 80 percent stake in the insurer. It is one of seven big companies the Treasury Department ordered to cut top executives' salary and bonuses in half, starting this month. Under the plan, cash salaries for the top 25 highest-paid executives will be limited in most cases to $500,000 and, in most cases, perks will be capped at $25,000.

Last week, Benmosche and other AIG board members met with Kenneth Feinberg Feinberg in New York, President Barack Obama administration’s special master, the Journal said.

The insurer posted its second consecutive quarterly profit last week, helped by a recovery in the value of its investments.

Disclosure: Author does not own any of the stocks discussed here.

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