Wednesday, November 11, 2009

Tin Ear of the Year Nominee: AIG's CEO

Man, this guy is -- how to put this gently? -- aw, the hell with it -- the very embodiment of chutzpah. Early in this financial crisis, I noted the curious lack of contrition on the part of Wall Street bankers. There was nothing in the way of an apology, just a lot of hustling out the back door with the bags of TARP money. There wasn't even that mumbled, eyes downcast, insincere "I'm sorry" that you get from your four-year-old who was caught smearing peanut butter on his sister's ponytail. At the time I wondered about the deafening silence of Wall Street's public relations machines.

Lately, Wall Street's head honchos have opened up a bit more, even going on "charm" offensives. And now, you understand why they were silent before. Because these guys radiate arrogance, even when they think they're striking a humble pose. You have Lord Blankfein over at Goldman Sachs, telling us the firm is doing God's work (shades of noblesse oblige) and that a certain amount of income inequality just has to be tolerated.

And then you have AIG's Robert Benmosche, who's threatening to walk off the job after only three months. I love the brutal Huffington Post headline and subhead:
AIG Chief Threatening to Jump Yacht
New CEO Benmosche Spent First Two Weeks on Job Vacationing on the Adriatic ... Now Claims He's Done, Angry About Pay Restrictions

(Note: the pictured yacht is not his, I suspect -- it appears far too small.)

Okay, Benmosche -- who I have yet to see a photograph of, but I imagine most images portray him with foot lodged firmly in mouth, as that's where it appears to have been since his hiring -- is fuming about pay restrictions on AIG executives. Remember, AIG was on the brink of self-immolation last fall when the U.S. government discovered that the company was actually a hedge fund grafted atop a sedate-looking insurer, and was about to go up in flames in a very messy way. And so the government (using our taxpayer dollars) interceded.

So now the U.S. government has the audacity to make rules about how the top executives are compensated, which has a funny sort of logic about it because we own the damn company. AIG is a ward of the state: we purchased four-fifths of this wrong-way bet colossus. Of course we have a say. Don't sell me a hair-covered lollipop then tell me I can't clean it up.

And the top 25 executives at AIG are being forced to work at starvation wages. Anyone want to guess what their annual salary is capped at? $100,000 a year? Well, no -- not that starvation. Any self-respecting AIG top executive is still going to have golf club dues and such. We can't airbrush all that away. Okay, then $200,000 a year? Nah, not that bad. $300,000 a year? Oops, not that low. Not even what the U.S. president makes: $400,000 a year.

Here's the answer: Benmosche is bitching because he can't pay them more than $500,000. By the way, how rich are you if you make a cool half a million? Check this out: you happen to be the richest 107,565th person on the planet. No, actually, you're even richer than that, because the Global Rich List calculator tops out at 107,565 at $201,000 of income. So let's just say you're pretty stinkin' well off.

Benmosche, by throwing a hissy fit about the inability to lavishly compensate his key executives, is displaying a level of Tin Ear-edness that may just win him top honors this year. Since he has no clue about how to run a company without a fat-salaried caste of big bosses, I hereby offer up a few bits of advice (free, because I know he's on a, ahem, budget these days).

1. Grow your own executives, dammit. Surely there are people -- strivers; check the backs of their co-workers for claw marks -- within the relevant divisions, at lower levels, who dream of running the world someday. They're probably not happy with their pittance salaries of $250,000 to $300,000. $500,000 would be a big salary bump. Find them. Mentor them. Put them in place.

2. Split job responsibilities. Okay, if you can't find one guy to run your fire insurance or whatever division for $500,000, find two guys. Better yet, find two women. And a couple of minorities to boot. Use this as an opportunity to introduce a few new faces and spread duties a bit more widely. Checks and balances, right? Maybe, next time, Betty will say to Financial Products co-head Flo Bassano, "Hey, do you really think we ought to be loaded up with so many of these darn CDS things? They look sort of volatile."

In short, be creative. And for God's sake, talk to your PR department. They may, in so many words, tell you what the rest of the world wants to: Stop yer bitchin'.