The Execs Are Starting to Bail

I said back when Obama decided to control the pay of executives that the talent that's running those now government owned companies would start bailing out as soon as they could. It's starting:

American International Group Inc. Chief Executive Officer Robert Benmosche told the company’s board that he is considering resigning from the job he’s held for three months, the Wall Street Journal reported, citing people familiar with the situation.

Benmosche told directors at a meeting last week that he was “done,” though he agreed to think it over after board members reacted with shock, the Journal reported.

The CEO is chafing under constraints imposed by AIG’s government overseers, in particular a recent compensation review by Kenneth Feinberg, the special master on pay in U.S. President Barack Obama’s administration, according to the people.

Benmosche, who started in August after his predecessor Edward Liddy quit in May, is seeking to halt the departure of customers and employees so he can build up units to sell in order to repay loans included in AIG’s $182.3 billion bailout. New York-based AIG is among firms Feinberg ordered to slash pay.

“If it’s true, it’s not a pretty story,” said Mitsushige Akino, who oversees about $645 million as chief investment officer at Tokyo-based Ichiyoshi Investment Management Co. “Either he’s leaving because the first round of problems have been settled to some extent, or there are too many problems to be dealt with. The U.S. government is still taking a very conservative stance on tackling the financial system problems.”

Last week, Benmosche and other AIG board members met with Feinberg in New York, the Journal said. During the three-hour meeting, board members discussed difficulties of complying with pay policies and retaining talent, the report said.

There's going to be a lot more of this and replacing these guys with comparable talent will be very difficult.