AIG CEO Benmosche Threatens to Leave

November 11, 2009 8:18 AM EST

AIG (NYSE: AIG) Chief Executive Robert Benmosche is unhappy over the restrictions that the company is operating under since the U.S. government become an 80 per cent owner, and is threatening to step down only three months after taking the job, according to a report in the Wall Street Journal.

Benmosche told AIG directors last not week that he was "done" but has agreed to not make an immediate decision after the board reacted with surprise.

The executive is unhappy with the recent compensation review by the Obama administration’s pay czar, Kenneth Feinberg. The government constraints have required that companies that received government funding must reduce total compensation for their top 25 highest-paid employees by 50 percent on average.

Benmosche believes that the government restrictions will cause the company to lose its most talented employees.

After nearly stepping down in August when he had yet to finalize what would become the third highest pay package for an executive to be approved under the government’s restrictions at a total of $10.2 million ($3 million cash), Benmosche has not made it clear as to whether he will actually resign.

An executive change for AIG could be highly disruptive for a company that is starting to show signs of life as it attempts to pay back the $90 billion borrowed from the U.S. taxpayers.

Shares of AIG are currently priced at $36.80 before the market opens today, down 2.4%.

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