Wow! I can't wait for the headlines tomorrow. Following-up from a poor showing on the trading floor, and a ridiculous number of dire predictions by so-called "experts" on tv, we get to end the night with a glass of red wine and news about AIG approving a $7 million salary--plus a $3.5 incentive bonus--for its new CEO, Robert Benmosche. Good thing I'm not drinking Riunite or I would be highly upset. :)
But, here's the thing, his salary is well worth it. And, I'm not saying that because the new pay czar, Kenny Feinberg, has approved the salary. I'm saying it because there's a price for assuming risk. And, in the case of being the CEO of AIG, there's a tremendous amount of risk.
Benmosche is 65 years old, but here's the kicker on the new pay package: There's no severance if he's terminated. That's right--if he goes down, there's no golden parachute. Just a 'thanks for stopping by' and a trip to the unemployment line. And, at the age of 65, Benmosche can probably expect to live--soundly--for another 20-25 years. He'll need the cash and this job is his way to compensate for assuming the risk of the position.
So, before Matt Lauer gets middle-America all crazed-up tomorrow morning on the Today Show, let's remember what Benmosche is walking into and what is expected of him. Sure, tax dollars bailed out the company, but it wouldn't make a lot of sense if you put some joker in that office. After all, as a taxpayer, I want to see a return on my investment.
Todd M. Schoenberger, Managing Director
LandColt Trading, Inc.