Will he stay or will he go? That was the question raised by the Wall Street Journal on Tuesday morning, when it trumpeted that Robert Benmosche, AIG’s gaffe-prone chief executive had threatened to “jump ship”.
Those all-knowing “people familiar with the matter” were duly wheeled out:
Robert Benmosche has told the board of American International Group Inc. that he is considering stepping down as chief executive of the government-controlled insurer, just three months after taking the job, according to people familiar with the matter.
At a board meeting last week, the strong-willed industry executive told fellow AIG directors that he was “done” but agreed to think it over after other board members reacted with shock, according to the people.
The executive is chafing under constraints imposed by AIG’s government overseers, particularly a recent compensation review by the Obama administration’s pay czar, Kenneth Feinberg, according to the people. AIG, 80% government owned since a rescue last year, is one of the companies under Mr. Feinberg’s purview.
Last week, Mr. Benmosche and other AIG board members met with Mr. Feinberg in New York. During the three-hour meeting, board members discussed difficulties of complying with pay policies and retaining talent at the company. Mr. Benmosche’s frustrations “hit a crescendo,” said a person familiar with the matter. “Bob feels he is in an impossible situation,” the person added. Mr. Benmosche didn’t respond to a request for comment.
The WSJ’s Deal Journal blog even contemplated the method to Benmosche’s madness.
But wait - what’s this? Some hours later, the following flashed up on the front page of the WSJ’s website:
That’s right - AIG’s Benmosche is not in fact jumping ship; the man is “totally committed” to AIG. Want proof? Here’s an extract from the memo to employees obtained by the WSJ (from, we presume, another set of familiar people). Emphasis FT Alphaville’s:
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.…
Once again I ask you not to be distracted by speculative media stories and to maintain your focus on the important work you are doing. People - you - make AIG strong and successful. I am impressed every day at all that you are accomplishing and I thank you all. I’m proud to have this opportunity to work with you to restore our company.
Or, as the WSJ suggested in its later story on the memo, it’s simply that he’s changed his mind:
Mr. Benmosche last week expressed frustrations to AIG’s board of directors about pay constraints recently imposed on some employees by the Obama administration’s pay czar, and was considering quitting.
Such are the hazards of the 24-hour news cycle.
Related links:
AIG’s new chief executive worth 7 million times the old one - FT Alphaville
AIG ‘Revolving Door’ May Hinder Search If Benmosche Departs - Bloomberg
