AIG Selects Former MetLife CEO Benmosche as New CEO After Liddy

August 3, 2009

Troubled insurer American International Group Inc. has chosen former MetLife chief Robert Benmosche as its new CEO, The Wall Street Journal reported, citing people familiar with the matter.

The AIG board approved the choice Monday morning, the newspaper said on its website.

An AIG spokesman was not immediately available to comment.

Benmosche would succeed Edward Liddy as AIG chief executive. Liddy joined the company as chairman and CEO last September, within hours of the company getting billions of dollars in support from the U.S. government after nearly collapsing under losses on repackaged mortgages it had guaranteed.

In May, Liddysaid he planned to step down once replacements were found to fill the CEO and chairman roles.

Benmosche retire as CEO and chairman of MetLife in 2006 after eight years at the helm. He led MetLife’s demutualization in 2000, transforming the company from an insurer owned by its policyholders to one that is publicly traded on the New York Stock Exchange.

His success in restructuring MetLife’s ownership could bode well for AIG, which is having to reshape itself in the wake of its federal bailout. Once the world’s largest insurer, AIG is in the process of selling off assets to try to repay more than $80 billion in loans from the U.S. Treasury and Federal Reserve.

In total, AIG has been given a taxpayer lifeline of up to $180 billion over the course of three successive bailouts. The company is expected to report second-quarter results this week. It has reported billions of dollars in losses in each of the previous five quarters.

SALARY QUESTION

Liddy, who led AIG for $1 a year, told Reuters in May he expected his successor to earn a much bigger salary, consistent with what is paid to other chief executives in the industry.

AIG’s board has agreed Benmosche would be paid compensation worth between $7 million and $10 million, consistent with industry standards, according to the Wall Street Journal. But the final say on his pay package may be made by federal officials, since the company is now 80 percent owned by U.S. taxpayers.

The Journal said it was unclear if Benmosche would accept the job if the compensation agreement had to be altered.

AIG stirred nationwide anger in March when it agreed to pay millions of dollars in bonuses to employees of the financial products unit that was the source of nearly half of its $99 billion loss last year.

More recently it entered into discussions with Kenneth Feinberg, Washington’s newly-appointed compensation czar, to address several outstanding compensation and bonus issues. It has delayed some bonus payments, pending the outcome of those talks.

(Reporting by Lilla Zuill; editing by John Wallace)

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