Former MetLife Inc. CEO Robert Benmosche will replace Edward Liddy as American International Group’s CEO, reports the Wall Street Journal (WSJ). Liddy replaced Robert Willumstad, former Chairman and CEO of AIG. Benmosche will be the insurer’s fifth leader since 2005.
INN reported in May that Liddy announced he would step down as soon as a successor at AIG was found. Liddy, who previously held the chairman, president and CEO position at Allstate, agreed to take $1 per year in salary when he was appointed AIG's CEO last September. WSJ sources report that the package being offered Benmosche will likely fall between $7 and $10 million annually, noting the deal must be approved by the federal government.
The feds may well determine that Benmosche will earn his keep. The new CEO faces the task of finding a way to turn around a company that lost almost $100 billion last year after bad bets on subprime mortgages and needs to repay the loan portion of the Troubled Asset Relief Program (TARP) that swelled to $182.5 billion, reports Bloomberg.
The post is “the most intellectually stimulating job in America,” Liddy, 63, said in May when he recommended the company split the responsibilities of CEO and chairman. He holds both positions and said he also plans to leave the board.
Benmosche served as MetLife’s chairman and CEO for eight years, overseeing the company’s 2000 initial public offering, and orchestrating an expansion outside North America, according to Bloomberg. MetLife previously was owned by its policyholders.
Unlike AIG, MetLife, which purchased a bank-holding company in 2001, making it eligible for TARP funds, turned down the government’s offer in April 2009. In a statement, MetLife CEO Robert Henrikson said the company was "well positioned, with approximately $5 billion in excess capital." In today’s news, MetLife posted a $1.4 billion second-quarter net loss on derivatives.
AIG has said it may hold public offerings for two non-U.S. life insurance businesses and a property/casualty operation to help repay the bailout.
On the WSJ Web site, Michael Corkery, Journal online blogs editor, offered the following dossier on AIG’s new chief:
Hometown: Monticello, N.Y. (Catskills)
Childhood: Benmosche’s father died when he was 10, leaving the family $250,000 in debt and hotel a restaurant that the family continued to run. Benmousche also had three younger siblings.
College: A math major at Alfred University in New York, he paid his tuition by delivering Coca-Cola to various retail and wholesale customers.
Army: Benmosche served for 13 months in Korea in the U.S. Signal Corp. during the Vietnam War.
Early work years: Working as computer consultant from 1966 to 1975, Benmosche ultimately joined Chase Manhattan Bank to work on its systems group. Paine Webber hired him in 1982, where he managed 1,500 brokers and headed systems for the company. MetLife hired Benmosche in 1995, and in 1998 was named CEO.
Biggest accomplishment: Benmosche was at the helm during MetLife’s $2.51 billion initial public offering in 2000, changing the company to a shareholder-owned company from a mutual insurance company owned by 11 million policy holders. By the end of 2000, MetLife’s share price had more than doubled from its initial price of $13 a share.
Pushing out Snoopy: As MetLife prepared to go public, Benmosche decided to downplay the Peanut’s character in MetLife’s advertisements, reports Corkery. “I felt it was too much Snoopy,” Benmosche said in 1999. ”When you talk about Met Life, you say, ‘That’s Snoopy’s company,’ and that’s important. But we also want the ads to begin to remind people why to do business with MetLife.”
Notable Quote: “You love him or you don’t like him at all because of his sometimes confrontational style,” Corkery quotes Martin Stein, a vice-chairman at BankAmerica Corp, who had known Benmosche for more than 25 years.
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