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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Comments
7 comments so far

The links to the stories don’t seem to be working…

Posted by Lgg | Report as abusive

There you go being rational again. I’ll bet the other side of that guess and say they will decide they need to pay *more*. This is the Obama administration after all. The lesson they learn from the failure of preemptive concessions in their negotiations with republicans specifically, and the rich and powerful in general, is that they haven’t conceded enough or fast enough.

Posted by tc | Report as abusive

Board of Directors
American International Group

Dear Sir or Madam:

It is with reluctance that I’m submitting this letter.

Although my three months with (AIG) has been, on the whole, satisfying and productive for me, for quite a while now I have become less and less satisfied with the work situation.

As you know, the question of the amount of my vacation or should I say Croation, time has never been fully resolved to my satisfaction. As you know, I work much more efficiently in my Croatian Villa which is equipped with enough toilets to service me every time the sh!t hits the AIG fan.

I was also deeply disappointed that the Board would not agree to allow me to use the company jet to fly to Croatia every weekend.

Moreover, my $10,000,000 compensation package is hardly adequate for the stress associated with this job.

Last week, I learned from Mr. Feinberg that AIG is actually 80% owned by the US government. If I had known this previously I would never have signed up for the job.

As you know, like Lloyd Blankfart I am also committed to doing God’s work. The Lord works in mysterious ways and I believe I can serve him more lucratively at another firm.

Therefore, it is with regret that I ask you to accept this as my resignation from (AIG) effective immediately.

In the Name of the Father, the Son and the Holy Ghost,

Robert Beanmush

cc:

Barack Obama
Ben Bernanke
Timmy Geithner
Lloyd Blankfart

I say let him quit. The financial world will be a better place without him. He made his millions on the backs of hard working employees. That was his story since he was at PaineWebber back in the 80s and 90s.

Posted by Tony | Report as abusive

With all the salary caps, it sounds like the AIG executives might have to try Walmart.

The answer: Put them ALL on civil servant salaries and benefits. If they don’t like it, they can find another job.

Posted by Lilguy | Report as abusive

Middle class U.S. Workers have not had a cost of living raise, let alone a decent merit raise, in over 2 decades. The average merit raise has been 2.5-3.5%. Their salaries have shrunk, slowly and regularly. Workers are forced into foreclosure and moving down, not able to have children, and holding at least one job per adult, usually another part-time, hourly job to survive. The workers are not taking more than 2 weeks vacation, and cannot afford to travel across the U.S., let alone to Croatia.
Wall Street executives and financial gamblers are thieves. They are supported by politicians and lawyers who contrive the U.S. legal system to allow their thievery unregulated and unmonitored.
The time has come for that to stop. The public and workers have to speak up loudly now.
This man’s audacity and greed is alarming. How long ago had AIG milked the U.S. taxpayer for billions in bailouts. there should be no raises, no hidden offshore compensation, no merit increase, only taxable salary on the books for these crooks.
It sounds harsh, but the middle class is living an economic war with finance, banking, oil, pharmacy, insurance executives…the big corporate players. No one should be able to take from the U.S. citizen, and then cry about their millions of dollar salaries.
I am disgusted to read this article, and hope the citizens revolt through their elected officials, and buying power, against the crimes of economics being waged in our country.

Posted by Tom Boston | Report as abusive
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