Updated from 12:10 a.m. EST

NEW YORK ( TheStreet) -- American International Group's ( AIG) Robert Benmosche is considering stepping down as CEO of the insurer, the Wall Street Journal reports, citing people familiar with the matter.

The Journal says Benmosche, named CEO three months ago, told directors at a board meeting last week that he was "done" but agreed to think it over after other board members expressed shock at his announcement.

Benmosche is upset over constraints being placed on the insurance company by the U.S. government, which owns 80% of AIG since it was rescued last year. The CEO is particularly perturbed over a compensation review by the Obama administration's pay czar, Kenneth Feinberg, the Journal reports, citing the people.

"Bob feels he is in an impossible situation," a person close to the matter told the newspaper. Benmosche didn't respond to a Journal request for comment.

It isn't clear if Benmosche actually would resign, the Journal says. He had threatened to do so before in August when his $10.5 million pay package had yet to be formally approved by Feinberg. It has since been finalized and is the largest compensation package approved under the Treasury Department's recent curbs on executive pay, the Journal notes.

A new CEO would be AIG's third since it received government funding in September 2008 and the fifth in less than 18 months.

Shares of AIG in premarket trading were down by 17 cents to $37.42.

-- Reported by Joseph Woelfel in New York .

Follow TheStreet.com on Twitter and become a fan on Facebook.