Troubled insurance and financial giant American International Group Inc. (NYSE: AIG) may have found a new CEO to run the company. Or dare we say… a new victim! Based upon what the company has told us today, we would consider this is a rumor until an announcement is formally made by the company. The WSJ, Bloomberg, and Reuters have all reported that Robert Benmosche has been selected to take the CEO role now that Ed Liddy has stepped down. If Benmosche’s name sounds familiar, that is because he was Chairman and CEO of MetLife Inc. (NYSE: MET). We have heard several names thrown around in recent weeks over who might take this job, and there may be a winner.
Our own call into AIG has so far been unable to confirm or refute if Benmosche is accepting the position. The statement we just received from a spokesperson was “We are not commenting on this issue.”
Benmosche’s pre-MetLife experience was at Arthur D. Little, Chase Manhattan, and Paine Webber. He is also the one noted for demutualizing MetLife to allow it to be more aggressive and more competitive. He retired from MetLife in 2006.
Benmosche was one of several outsiders we have heard as possible replacements for Liddy. Liddy had a solid career before he was appointed to run AIG. The government backed him, yet ultimately the government’s treatment of Liddy probably contributed most to his decision to step down. Liddy had regulatory backing over which bonuses were to be paid out and he was working for the great sum of a mere $1.00. No million, no billion. $1.00. Whether he ends up getting more is something else.
Our own biggest issue was (and is) whether AIG would be able to find anyone who was both qualified AND who would accept the role. What is the worst call you could get from a head hunter? Probably something to the tune of “Hey, Dave, I got you a job if you can stomach it. How would you feel about going to work at AIG?”…. Honestly, how many people on Wall Street or Main Street today would accept even a fairly large pay raise to go work at AIG? The notion that your pay and your work, regardless of even if newcomers have zero involvement and zero responsibilities to AIG’s past, would become a matter for public debate and scrutiny is too much for many to handle. The notion that every member of Congress may be hounding new workers is also a real threat. Look at the case of Liddy.
There was one person which some were hoping could regain control of. Top holder Hank Greenberg was hoped for by some we spoke with. But based upon the trouble the company is in and how troubled the regulatory environment is now, very few believed that Greenberg had anything more than a snowball’s chance in hell of getting his company back.
JON C. OGG
AUGUST 3, 2009
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