The Wall Street Journal reported that Benmosche told his board that he was ready to quit because pay czar Kenneth Feinberg would not go along with requests from AIG to allow key employees to have base salaries above those Feinberg was prepared to approve. AIG claimed that it could not retain its best talent with the prospect of only modest compensation. There is nothing unusual about that. The chairman of GM made a similar statement about the difficulty of hiring and retaining talent at the car company when the federal government is unbending in its plan to keep pay scales low at firms with TARP investments.
Benmosche may have walked out of a frustrating meeting with Feinberg and the AIG board believing that Feinberg would not give him the latitude to pay AIG executives what Benmosche believes is necessary to keep them. Benmosche may have told his board that he was done and ready to retire to his villa and make wine. It was actually, likely, a dramatic gesture that he did not intend to have go any further than that.
Benmosche sent a letter to his employees after the Journal piece ran. In the note he said “I and the board remain totally committed to leading AIG through its challenges and to continuing to fight on your behalf.” He is not leaving. He did not say whether he threatened to do so or not.
It may never be known outside a small group of people whether Benmosche was a few moments from quitting AIG or was just a man who was frustrated because he is frustrated easily. The Wall Street Journal article may have been no news at all or it may have been the news that painted Benmosche into a corner which made him recant his resignation threat.
Benmosche has a huge ego. It does not take a psychiatrist to know that. And, he never really intended to leave. He just wanted attention, something that he does not seem to be able to do without. AIG is his prestige now. The Wall Street Journal had a good headline and a tip from a board member or two. But, it was not much of a story.
Douglas A. McIntyre
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