AIG has already taken in $180 billion of taxpayer money and there is absolutely no reason to believe that most of it will be returned. The insurance company is still losing money and its efforts to sell off units to raise capital have been pathetic.
Ed Liddy, former CEO of Allstate (ALL), was the firm’s CEO for the last year. He was brought in by the government to help work out the mess. He was repaid by regular beating from Congress over AIG management compensation set before he arrived. He worked for $1 a year.
AIG’s (AIG) new CEO will not be so generous. After making tens of millions of dollars at MetLife (MET) where he was the chief executive, he will now make at least $7 million over the next year running the ruined financial firm. Robert Benmosche clearly does not have a community-minded bone in his body.
It is stunning that the government, which owns 85% of AIG, and its board would give the new chief such a rich package. The Administration and its pay czar are fighting extravagant pay packages on Wall St. Now, they turn around and overpay a man with the job of dismantling a large company.
The government would like to press its image as populist by beating down bankers on the pay issue. It has, in one act, undermined its moral authority on the issue. Surely it could have found one rich former insurance executive to run AIG as a contribution to the turnaround of the financial system.
Douglas A. McIntyre