NEW YORK (
) -- The federal government is running some of America's largest and formerly most influential companies, including
(AIG - Get Report)
Bank of America
The track record of government managing -- let alone turning companies around -- businesses is poor. Still, it's calling the tune at the moment, sitting in on internal meetings, pushing out CEOs (like GM's Rick Wagoner), CFOs (like Citigroup's Ned Kelly) and directors (see the reconstitution of the Bank of America board since its April shareholders meeting), and determining whether prearranged pay packages should still be treated as valid contracts.
Yet, the government, with all the best intentions, will never turn around these companies. It's the companies themselves and their employees who must turn things around. AIG and its new CEO Robert Benmosche get that, while Citigroup and its CEO Vikram Pandit don't. Both companies are extreme corporate basket-cases now controlled by the government on behalf of taxpayers. Yet, the styles of Benmosche and Pandit couldn't be more different.
Pandit's been the quintessential invisible CEO: quiet, passive, and immediately forgettable when he does speak. Benmosche is on the other end of the spectrum: straight-talking, aggressive, asking challenging questions, and lots of slaps on the back. Benmosche doesn't suffer fools gladly; Pandit appears to suffer fools for years without saying boo.
As horrible as AIG has been as an investment since last fall, Citigroup has been worse. AIG's stock price is 15% higher than Citigroup's since the government took over the company. When the market learned of Benmosche's hiring and digested some of his positive comments on the company, it responded positively, sending up AIG's stock by 35% last week (and still higher this week).