AIG chief says he's 'committed' to staying despite battle with U.S. over pay
American International Group Inc. Chief Exeuctive Robert Benmosche today sought to play down published reports that’s he’s ready to jump ship because of frustration with his federal masters over executive pay issues.
After a Wall Street Journal story said that Benmosche was threatening to leave AIG -- just three months after taking the helm -- the CEO sent a letter to employees insisting that he was "totally committed to leading AIG through its challenges."
AIG shares, which fell as low as $36.02 today, rebounded to $37.99 after the letter was reported but have since drifted lower again.
Benmosche, who was named to the CEO job in August, hasn’t been afraid to take on the government despite its 80% ownership of the company since last year’s federal bailout.
From Benmosche’s letter, which the Journal posted on its website:
I’m sure many of you were concerned to see this morning’s news accounts speculating about my frustration with the time and effort it is taking to ensure that our top 100 executives are compensated fairly. To be certain, I and the Board are indeed frustrated and we are in ongoing discussions with Treasury and the Special Master to resolve the uncertainty surrounding this issue. However, as I have said before, the vast majority of AIG employees are unaffected by this issue.
Let me be clear: I and the Board remain totally committed to leading AIG through its challenges and to continuing to fight on your behalf. We are all working aggressively to overcome this compensation barrier that stands in the way of restoring AIG’s value and allowing us to live up to our obligations to all stakeholders: our customers, who have remained loyal; our nearly 100,000 employees, including 46,000 here in the U.S.; our shareholders and creditors.
The U.S. took a majority stake in AIG in return for keeping the company afloat amid the financial system meltdown. The government’s stake means the administration’s pay czar, Kenneth Feinberg, has the right to reject executive-compensation arrangements that he believes are unwarranted.
The Journal story said Benmosche believed he was in an "impossible situation" trying to balance government pay restrictions against the need to retain top AIG staff.
-- Tom Petruno