Robert Benmosche, frustrated civil servant

By Felix Salmon
November 11, 2009
became obvious very quickly that Robert Benmosche was something of a prima donna. That's far from unusual in people earning 8-figure salaries: indeed, being the recipient of such a massive emolument tends to exacerbate such tendencies in anybody.

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I’m not at all convinced that any CEO is ever worth a $10 million pay package, but if it wasn’t clear when that deal was signed, it became obvious very quickly that Robert Benmosche was something of a prima donna. That’s far from unusual in people earning 8-figure salaries: indeed, being the recipient of such a massive emolument tends to exacerbate such tendencies in anybody.

The real culprit in this story, however, isn’t Benmosche, who has been something of a known quantity from day one at AIG. Rather, it’s the people at Treasury, who are now zero for two in picking AIG CEOs. Maybe it’s not as easy as they thought.

The problem is that the CEO of AIG isn’t like the CEO of a public company: he’s fundamentally a civil servant, and is much more constrained in his actions, including his ability to hire people at high salaries, than 99% of other CEOs. The leader of AIG is always going to be second-guessed and micromanaged, which will make any CEO type unhappy.

It’s become clear that the Obama administration is incapable of hiring a largely-independent CEO for AIG and then leaving him to his own devices. So if and when Benmosche leaves, they should probably reconsider the whole job, and how much it’s really worth to them. My guess is that the answer is going to be much less than $10 million.

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