The News: Soldering On at AIG
Citigroup and Wells Fargo may be getting in line to repay federal bailout money, but AIG is a long way from joining them. And the insurance giant's chief executive, Robert Benmosche, says key employees are struggling along with the company to recover from financial losses they suffered during 2008.
Speaking with The Wall Street Journal, Benmosche says shrinking the company and offering competitive employee compensation are keys to repaying the $90 billion it owes the U.S. government. Ten executives who report to him have lost a combined $168 million in pay, he notes, while five employees in the financial products division have lost $88 million.
"(If) you look at where they've been this year, they've been pretty much wiped out. And we have to recognize that we're not 100% sure about what the value of AIG will be in the future," Benmosche said.
Benmosche's retention problems are made all the keener as other financial firms repay the government. By doing so, they get out from under federal pay curbs. "We have to be empathetic to taxpayers' concerns," he said, "but at the end of the day, if I lose a lot of key executives, it weakens the company which in turn makes it more difficult to repay taxpayers."
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