Term Life Insurance Articles
AIG CEO Ready To Quit After 3 Months At Life Insurance Giant
2009-11-16
The revolving door at insurance giant, AIG could be poised to spin out another CEO, according to a November 10th Wall Street Journal report. The report quotes "people familiar with the matter" saying that the CEO of three months, Robert Benmosche, threatened to leave during a board of directors meeting last week. According to Wall Street Journal sources, Benmosche feels that the company's executive staffing situation is "impossible".
The beleaguered life insurance company has suffered a choppy existence since the government bailout last year. Benmosche is attempting to emphasize the need to establish and maintain a brain trust to navigate AIG through uncharted territory. He suggests that AIG needs expert executive strategists to oversee the company as it struggles to return to a consistent profitable status and repay the more than $180 billion in loans from the government. Top salaries could be the only incentive for such experts. Benmosche is publicly concerned that the compensation restrictions imposed by the Obama administration's Kenneth Feinberg will limit AIG's ability to acquire said executives.
This is not the first face-off between Benmosche and Feinberg. In August of 2009, Benmosche threatened to quit when Feinberg delayed formal approval of his $10.5-million pay package. The threat worked that time. Benmosche's compensation package is now the largest approved under the Treasury Department's recent restrictions on executive pay. Perhaps Mr. Benmosche is hoping for a similar outcome for the additional executives he wishes to hire.
Many recipients of bailout money sell financial services products similar to those of AIG. However, many also sell additional products. AIG is more of a pure insurance concern. They sell traditional insurance products similar to what other life insurance companies offer, such as term life insurance, commercial lines and annuities. As such, AIG is the only insurance company beneficiary of a staggering amount of bailout funds. Unlike some of the other recipients of bailout money, AIG has no board members appointed by the government. However since the time that the Bush administration appointed an auditor to sit in on all AIG board deliberations, it has been no secret that the company's CEO would not have a free hand. Indeed, the Treasury Department's pay review lead to 91 percent pay cut from 2008 levels for a number of AIG executives. Benmosche apparently struggles with such oversight, but after all, the U.S. Government now owns 80 percent of AIG.
Robert Benmosche has a reputation as a shrewd and fiercely autonomous chief officer and executive. It remains to be seen if he will actually follow through on this threat to leave AIG. He did not respond to a request from the Wall Street Journal for comment.
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The revolving door at insurance giant, AIG could be poised to spin out another CEO, according to a November 10th Wall Street Journal report. The report quotes "people familiar with the matter" saying that the CEO of three months, Robert Benmosche, threatened to leave during a board of directors meeting last week. According to Wall Street Journal sources, Benmosche feels that the company's executive staffing situation is "impossible".
The beleaguered life insurance company has suffered a choppy existence since the government bailout last year. Benmosche is attempting to emphasize the need to establish and maintain a brain trust to navigate AIG through uncharted territory. He suggests that AIG needs expert executive strategists to oversee the company as it struggles to return to a consistent profitable status and repay the more than $180 billion in loans from the government. Top salaries could be the only incentive for such experts. Benmosche is publicly concerned that the compensation restrictions imposed by the Obama administration's Kenneth Feinberg will limit AIG's ability to acquire said executives.
This is not the first face-off between Benmosche and Feinberg. In August of 2009, Benmosche threatened to quit when Feinberg delayed formal approval of his $10.5-million pay package. The threat worked that time. Benmosche's compensation package is now the largest approved under the Treasury Department's recent restrictions on executive pay. Perhaps Mr. Benmosche is hoping for a similar outcome for the additional executives he wishes to hire.
Many recipients of bailout money sell financial services products similar to those of AIG. However, many also sell additional products. AIG is more of a pure insurance concern. They sell traditional insurance products similar to what other life insurance companies offer, such as term life insurance, commercial lines and annuities. As such, AIG is the only insurance company beneficiary of a staggering amount of bailout funds. Unlike some of the other recipients of bailout money, AIG has no board members appointed by the government. However since the time that the Bush administration appointed an auditor to sit in on all AIG board deliberations, it has been no secret that the company's CEO would not have a free hand. Indeed, the Treasury Department's pay review lead to 91 percent pay cut from 2008 levels for a number of AIG executives. Benmosche apparently struggles with such oversight, but after all, the U.S. Government now owns 80 percent of AIG.
Robert Benmosche has a reputation as a shrewd and fiercely autonomous chief officer and executive. It remains to be seen if he will actually follow through on this threat to leave AIG. He did not respond to a request from the Wall Street Journal for comment.
