Five Dumbest Things on Wall Street: Dec. 11

1. Pay Czar Blinks

A group of AIG (AIG) execs called U.S. pay czar Ken Feinberg's bluff this week. Guess who won the showdown?

Yep, Feinberg folded.

AIG's government overseer will exempt up to 75 executives at the bailed-out insurer from a $500,000 salary cap after at least five employees threatened to quit because of the limits, according to Bloomberg. Two have since retracted the threat now that Ken has reportedly caved.

The government, in case you've forgotten, rescued the company with a package valued at more than $180 billion. Having a controlling stake in AIG, however, clearly doesn't guarantee government control.

The $500,000 compensation ceiling has thus far applied to everyone at AIG except CEO Robert Benmosche, who rakes in a cool $7 million a year. Of course, even that mammoth amount did not stop him from pitching his own little fit not too long ago. Last month, Benmosche set a stellar example for his troops by threatening his own walkout over the government's pay constraints.

In the end, Benmosche came back, but his charges certainly got the hint that the squeaky wheel gets the green.

Dumb-o-meter score: 95 -- Winners never quit. But quitters at AIG get raises.

-- Written by Gregg Greenberg in New York.

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