AIG's Benmosche Stands His Ground: Today's Outrage

NEW YORK (TheStreet) -- AIG (AIG Quote) CEO Robert Benmosche has had it with government interference.

Word on the street is that after just three months on the job, Benmosche is threatening to walk away from AIG because of the shackles placed on him by the Obama administration, in particular the compensation constraints. Confidants say Benmosche feels he is in an "impossible situation" according to the Wall Street Journal.

Sounds to me like Benmosche and outgoing Bank of America (BAC Quote) CEO Ken Lewis have a lot in common. Note to Benmosche: Lewis lost his battle with Obama.

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Benmosche's level of frustration and threat to leave should come as no surprise. He demanded more independence and took a stand on pay issues from the very beginning. In his first month on the job, he reportedly got a stern warning from the AIG board to tone down his tough talk about keeping compensation competitive.

In the end, Benmosche was granted approval for his own $10.5 million pay package, split between $3 million in cash, $4 million in stock and as much as $3.5 million a year as part of a stock incentive plan. Under the terms of the government's approval, he doesn't get any kind of severance.

This whole compensation debate is fraught with peril because banking salaries and bonuses seem so out of whack with the incomes of ordinary Americans, creating wonderful opportunities for political grandstanding.

While we are a nation founded on the ideal of endless opportunity for those with the gumption to pursue it, that only applies when you succeed on your own.

When trillions of dollars in taxpayer money is used to prop up the financial sector because of a massive self-inflicted crisis, then it's easy to argue that the bankers and insurers haven't earned the money they've grown accustomed to being paid. So on behalf of the people, the government is now challenging the compensation structure.