The News: Benmosche Shrugged
AIG Chief Executive Robert Benmosche says he's had enough of government bureaucrats expecting him to revive the troubled insurance conglomerate with both hands tied behind his back. So, he "shocked" board members last week by threatening to resign three months into the job, The Wall Street Journal reports.
He's said to feel that pay restrictions imposed by White House paymaster Kenneth Feinberg make it all but impossible to retain talent needed to keep AIG's varied businesses on track toward repaying some $90 billion of taxpayer aid.
The issue isn't Benmosche's own $10.5 million package, which Feinberg previously approved. Rather, it's the broad reductions ordered for the 24 highest-paid executives and producers beneath the CEO - and presumably, apprehension about the reductions Feinberg might order in the next stage of his review, which concludes later this month.
Benmosche is already the fourth CEO to lead AIG in the last year and a half and its second since being bailed out by taxpayers in September 2008. To put it mildly: A resignation now would disrupt efforts to right the company.
Observes the WSJ: "The tensions over compensation and the prospect of another change atop AIG highlight a problem central to this era of government bailouts: the difficulty of finding experienced executives who are often accustomed to exercising broad authority, and then putting restrictions on their decisions."
That neatly encapsulates what's wrong with the way the bailouts are being handled. It's in line with the views we've been expressing at eFinancialCareers News for more than a year.
AIG's Benmosche Threatens to Jump Ship [WSJ]
Banking: Not Everyone Gets a Bonus [BusinessWeek]
Chase to Hire 1,200 Mortgage Officers to Help Families Buy, Refinance Homes [JPMorganChase]
Lloyds Bank to Cut 5,000 Jobs Following Merger [Dow Jones Newswires, vis SmartMoney]
New Survey Finds Disparities by Race and Other Issues of Fairness in State Insurance Licensing Exams [Coalition for Financial Security, via PRN]
2010 Hedge Fund Compensation on the Rise [Glocap Search, via PRN]
Pala Investments Expands Team [Pala Investments]
Financial Accounting Foundation Names Grace L. Hinchman Vice President, External Relations & Communications [Financial Accounting Foundation, via BW]
Corporate Leaders Preemptively Leaning into the Recovery: Deloitte Study [Deloitte]