No Jet for You, Mr. Benmosche
NEW YORK (
) --
American International Group
(AIG) - Get Report
CEO Robert Benmosche, accustomed to the perks and compensation of headier times, may have to tamp down his expectations as leader of a struggling and largely government-owned company.
AIG's board told the
that he won't be allowed personal use of the company's aircraft, according to a
Bloomberg
report that cited anonymous sources. Although AIG spokeswoman Christina Pretto told the news agency there is "no conflict between Bob and the board on this matter," there must have been at least a difference of opinions, or there wouldn't have been much to report.
It's not clear what effect the semi-public rebuke will have on Benmosche's attitude, but it is clear that board members would like to make a show of their
with him.
Bailed out companies like AIG, which has received $180 billion in support from the government, need special permission for the Treasury Department to extend a perk like company-financed jetsetting anyway. Since that was unlikely to happen, board members were either frustrated enough with Benmosche's attitude to leak the dispute to the press, or both parties wanted to show that discipline is being enacted.
Either way, Benmosche will have to get used to waiting in line with ordinary folks at JFK, or pony up for his own private flights.
Why Benmosche would take up such a battle with the board, given public outcry over similar instances recently, is a head-scratcher. When the heads of the former Big Three automakers used corporate jets to get to Washington and plead for public funds, they were condemned and ridiculed. They drove hybrid cars there the next time around.
Big bailed out banks were required to provide the Treasury Department with written documentation of their travel and entertainment policies as a result. CEOs have taken note, with recently deposed
Morgan Stanley
(MS) - Get Report
CEO John Mack agreeing to reimburse the company for personal trips,
Citigroup
(C) - Get Report
CEO Vikram Pandit going a step further to stop using corporate jets entirely, and
Wells Fargo
(WFC) - Get Report
requiring prior written consent from CEO John Stumpf before any executives are allowed to make personal trips on Wells' planes.
Bank of America
(BAC) - Get Report
has said its existing policies were sufficient.
Benmosche's alma mater,
MetLife
(MET) - Get Report
, which didn't accept bailout funds, recently began allowing executives to use aircraft for personal matters again. But Benmosche's more demure predecessor at AIG, Edward Liddy, used commercial jets to shuttle between his Chicago home and AIG's Lower Manhattan headquarters.
Liddy, who received $1 a year in compensation and $47,578 in reimbursements for those flights, looked at the job as a public service. Benmosche, who will receive at least $7 million this year, seems to see it as a challenge: to succeed in the mammoth task of turning AIG's troubled business around while getting as many personal benefits as he can.
No word on whether Benmosche will be granted the privilege of flying first class.
-- Written by Lauren Tara LaCapra in New York
.
