Robert Bermosche has made plenty of waves in his three months at the helm of troubled insurer AIG, starting with his early bluster about not being pushed into selling assets too soon. On Nov. 11 Bermosche got into hot water again after the Wall Street Journal reported that he’d threatened in front of board members to quit his post over the pay limitations being imposed by the Federal Government. Following an emergency bailout in September 2008, the government now owns 80% of AIG. In a letter to employees sent out after the story surfaced, Benmosche didn’t deny the reports, though he termed them “speculative.” He admitted his frustration with the pay caps, but tried to assure employees that “I and the Board remain totally committed to leading AIG through its challenges and to continuing to fight on your behalf.”
Bemosche’s earlier controversies had been read positively for the most part, signals that he was rallying the troops and would go to bat for them. During his tenure the stock had risen over 170% prior to this news. But Bemosche lost sympathy in some quarters in October when he secured a rather healthy pay package. On top of a $3 million salary, he’ll get $4 million worth of stock options, and be eligible for $3.5 million in bonus. And AIG's stock took a hit on this most recent round of corner-office theatrics; it closed today at $36.75, down 84 cents, or 2.2%.
Board members, some of whom were described as “shocked” by his threat, may be feeling some strain. AIG’s performance has improved over the past six months, but it remains challenged as business and talent continue to drain away and competitors grow stronger. That’s more than enough to worry a board now stocked with veteran corporate leaders such as Dennis Dammerman, former head of GE Capital, former American Express CEO Harvey Golub (who is non-executive chair of AIG’s board), former Sears CEO Arthur C. Martinez, and turnaround specialist Robert Miller. They don't need self-inflicted bad news added to the mix.
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