AIG's Benmosche Says He's Staying

NEW YORK (TheStreet) -- American International Group (AIG) CEO Robert Benmosche sought Wednesday to diffuse speculation about him potentially leaving the bailed-out insurance giant after just three months on the job, but did not deny reports that he had threatened to quit .

"Let me be clear: I and the board remain totally committed to leading AIG through its challenges and to continuing to fight on your behalf," Benmosche said in a memo to employees.

He added that AIG's leadership is "indeed frustrated" with the Obama administration's heavy-handed tactics, after pay czar Kenneth Feinberg mandated huge cuts to planned 2009 bonuses. Benmosche said he and the board are "working aggressively to overcome this compensation barrier."

AIG spokeswoman Christina Pretto declined comment on a report in Wednesday's Wall Street Journal, which cited anonymous sources, saying Benmosche had told board members he was "done" because of regulators' interference with managing the firm.

There is considerable uncertainty about who might have the desire and capacity to succeed the bold, if tart-tongued, leader, if he were to ultimately leave. Benmosche is the fifth CEO in a chaotic succession spree over the past 18 months. Although he appears to constantly butt heads with regulators, and perhaps even the board, he has also had apparent success in turning AIG's fortunes around.

AIG reported its second successive profitable quarter last week, and a bullish Moody's note on Tuesday further bolstered Benmosche's claims of improvement. Though AIG still owes the government about $90 billion, the ratings agency predicts the insurer will probably be able repay its taxpayer debt.