Benmosche c. 2012
|Born||Robert Herman Benmosche
May 29, 1944
Brooklyn, New York, U.S.
|Died||February 27, 2015
New York, New York, U.S.
|Cause of death||Lung cancer|
|Residence||Suffern, New York and Boca Raton, Florida|
|Alma mater||Alfred University|
|Salary||US$13.9 million|
|Title||President/CEO of American International Group|
|Term||August 2009 – August 2014|
|Predecessor||Edward M. Liddy|
Robert Herman "Bob" Benmosche (ben-moe-SHAY, May 29, 1944 – February 27, 2015) was the president and chief executive officer of American International Group (NYSE: AIG). He was appointed President & Chief Executive Officer by the US Department of Treasury and AIG Board of Directors to succeed Edward M. Liddy. Benmosche is best known for his leadership at AIG, where he led a turnaround, improved profits 60% year over year, and paid down government aid pledged by the Bush and Obama Administrations.
Benmosche was born in Brooklyn, New York. Benmosche traced his Jewish lineage back to Lithuania, where his great-grandfather, Moshe Kreiskol, was one of the first Jews to serve in the tsar’s army in the 1830s. Benmosche's grandfather, Rabbi Herman Benmosche moved the family to the US in 1894.
Benmosche's father died when Benmosche was 10 years old. His estate included a newly constructed motel in the Borscht Belt—the small towns in the Catskills where New York City Jews summered; and $250,000 debt. The family kept the motel. Benmosche himself took a series of jobs, working there, caddying, and later, driving a delivery truck. He graduated from New York Military Academy in 1962, and from Alfred University in 1966 with a Bachelor of Arts degree in Mathematics. From 1966 to 1968, Benmosche served as a Lieutenant in the U.S. Army, serving a tour of duty in Korea in the U.S. Signal Corps where he led the setup of field communications.
Benmosche began his career when he joined Arthur D. Little and Information Science as a consultant. In 1975, Benmosche joined the Chase Manhattan systems group. In 1982, Benmosche joined Paine Webber to lead the development of Paine Webber's Central Asset Brokerage Account. During his 14-year tenure at Paine Webber, Benmosche gained experience in marketing and operations in different business units, using the knowledge he gained to become Chief Financial Officer of the company's retail business. As his career progressed at Paine Webber, Benmosche continued to gain new responsibilities, eventually earning a promotion to the position of Executive Vice President and Director of Operations, Administration and Technology. In that role, he oversaw the merger of Kidder Peabody’s operations and systems with those of Paine Webber.
Benmosche left Paine Webber to join the Metropolitan Life Insurance Company in 1995. He was later promoted to president and Chief Operating Officer, and in November 1997 in his role as COO, oversaw individual and institutional as well as international insurance operations. In 1998 he was named Chairman of the Board and CEO. He retired in 2006. During his tenure, he oversaw MetLife's successful transition from mutual company to publicly traded firm.
Innkeeper and vintner
Benmosche owned Villa Splendid in Dubrovnik, Croatia. In 2001, Benmosche bought the one-time discothèque and spent the next six years renovating it. In 2006, Benmosche purchased land and imported 1500 Zinfandel plants from Napa Valley, California. In 2011, Benmosche’s vineyard produced 3,000 bottles of wine under The Benmosche Family Dingac label.
In mid-2009, Benmosche was appointed CEO of American International Group. He assumed that role on August 10 of that year. He was recruited by Jim Millstein who was Chief Restructuring Officer at the US Department of Treasury.
During his first meeting with employees, Benmosche stated that Congress was composed of "crazies," that he would not cooperate if asked to testify before Congress, and that New York Attorney General Andrew Cuomo, who had investigated AIG, "doesn't deserve to be in government." He later asked for a personal private jet and said that he might quit over government-imposed pay restrictions.
In 2010, Benmosche testified to the Congressional Troubled Asset Relief Program (TARP) Oversight Panel, on May 26 , that AIG would repay the U.S. Government and American taxpayers’ investment in AIG in full, with a profit. “AIG is now on a clear path to repaying taxpayers ... At the end of the day, the U.S. government will make an appropriate profit,” he testified.
Benmosche oversaw the sale of non-core assets in AIG’s portfolio to pay down the $182 billion in government aid. Business units such as American Life Insurance Company (Alico), American General Finance, 21st Century Insurance, Nan Shan and AIA were sold.
On December 14, 2012, Benmosche announced that the U.S. government and American taxpayers received their full investment in AIG, plus a $22 billion positive return. Benmosche's management has been credited with leading the company to back to profitability, the full repayment to the Federal Reserve Bank of New York, reducing the Treasury Department’s stake in AIG to below 20% and the repayment of the 2008 $85 billion federal loan.
In an interview with Charlie Rose in December 2012, Benmosche said that he would stay at his current position for two more years. In August 2014, he accelerated the timetable of his retirement from AIG due to the progression of his cancer. Peter Hancock took over the role of CEO on September 1, 2014. Benmosche died on February 27, 2015, in Manhattan, aged 70.
Controversy over bonuses
In September 2013, Benmosche gave an interview to The Wall Street Journal in which he compared public outrage over AIG bonuses to the lynching of African-Americans in the Deep South, saying "the uproar was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that – sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong."
This was seen as a reference to the $165 million in bonuses paid out in March 2009 to employees of AIG's "financial products" division, which sold the credit derivatives that put AIG deeply in debt after the Lehman Brothers collapse and compelled the Federal Reserve to bail out AIG with an $85 billion loan six months earlier, that eventually ballooned to $182.7 billion. His comments were labeled insensitive, offensive and tasteless by a number of commentators, with Congressman Elijah Cummings calling for him to resign.
Following the public outrage over the comments and Cummings' call, Benmosche apologized for the remarks two weeks later.
- Insurance and Technology magazine identified Benmosche as one of the insurance industry's "Tech-Savvy CEOs" in 2010.
- Benmosche ranked 42nd in Fortune magazine’s Top 50 Business Leaders of 2010.
- The New York Times DealBook Andrew Ross Sorkin named Benmosche “2010 Executive of the Year”.
- Benmosche ranked #59 of Top 100 CEOs by Harvard Business Review, January 2010.
- Insurance and Technology magazine named Benmosche 2011 “Mover and Shaker”.
- The New York Police & Fire Widows’ & Children’s Benefit Fund named Benmosche as an honoree in 2012.
- 2013 winner Insurance Hall of Fame
Benmosche's career included:
- AIG, CEO, 2009–2014
- Metropolitan Life, CEO, 1998–2006
- Metropolitan Life, President, 1997–2004
- Metropolitan Life, EVP Individual Business, 1995–1997
- Paine Webber, EVP Southern Division Sales Group, 1994–1995
- Paine Webber EVP and Director of Operations, Administration and Technology, 1987–1994
- Paine Webber, CFO Retail Business, 1986–1987
- Paine Webber, Senior VP Marketing, 1982–1985
- Chase Manhattan Bank, VP Technology, 1975–1982
- Arthur D. Little, Staff Consultant, 1969–1975
- Benmosche, Bob (2016). Good for the Money: My Fight to Pay Back America. with Peter Marks and Valerie Hendy. Macmillan: St. Martin's Press. ISBN 978-1250072184. Retrieved April 12, 2016.
- "Robert Benmosche: Executive Profile & Biography". investing.businessweek.com. Retrieved June 26, 2012.
- Block, Melissa. "Pay Czar Outlines Compensation Limits". All Things Considered. National Public Radio. Retrieved November 6, 2012.
- "Man Who Saved AIG". barrons.com. Retrieved November 5, 2012.
- Koppenheffer, Matt. "1 Thing to Focus on From AIG's Earnings". Motley Fool. Motley Fool. Retrieved November 6, 2012.
- Berkowitz, Ben. "Treasury says to raise $5 billion from AIG stock sale". MSNBC. MSNBC. Retrieved November 6, 2012.
- "AIG CEO defends holiday, slams "lynch mob" attacks". Reuters. August 27, 2009.
- Leon, Masha (November 25, 2005). "Recalling a Screen Legend's Legacy". The Forward. Retrieved August 4, 2015.
- "Robert H. Benmosche '62". New York Military Academy. Retrieved August 4, 2015.
- Scism, Leslie; Lublin, Joann S.; Pleven, Liam (August 10, 2009). "AIG Chief: Loud Voice And a Listener's Ear". The Wall Street Journal. p. C1.
- Son, Hugh (August 18, 2009). "AIG's Benmosche Scuttles Auction of Advisory Unit". Reuters.
- "Silent Films? With This Theater's Organ, Hardly". The New York Times. April 21, 2002. Retrieved April 12, 2016.
- "AIG CEO Robert Benmosche The Insurance Executive Makes Wine in Croatia". winespectator.com. Retrieved May 18, 2013.
- Son, Hugh (August 14, 2009). "AIG Changes Bylaw to Ensure Chairman's Independence". Bloomberg LP. Retrieved February 28, 2015.
- "AIG: The country's most tone-deaf CEO". Fortune. December 31, 2009. Retrieved February 28, 2015.
- "AIG Under Troubled Asset Relief Program, Panels 4 & 5". C-SPAN. Retrieved February 28, 2015.
- Davies, Paul. "AIG sells $6bn AIA stake to pay down debt". Financial Times. Financial Times. Retrieved November 6, 2012.
- "Overall Positive Return on $182 Billion AIG Commitment during Financial Crisis Reaches $15.1 Billion after Treasury Announces $2.7 Billion in Additional Expected Proceeds from AIG Common Stock Sale". US Department of Treasury. US Department of Treasury. Retrieved November 6, 2012.
- Dennis, Brady (March 9, 2010). "AIG sells Alico unit to MetLife for $15.5 billion". washingtonpost.com. Retrieved November 5, 2012.
- "AIG sells American General unit to Fortress at loss". ibj.com. Retrieved November 5, 2012.
- Lifsher, Marc; Zimmerman, Martin (April 17, 2009). "AIG selling 21st Century Insurance to Farmers Insurance". latimes.com. Retrieved November 5, 2012.
- "AIG Said to Agree to Sell NYC Headquarters Buildings (Update2)". bloomberg.com. June 2, 2009. Retrieved November 5, 2012.
- "AIG sells Atlantic Station pieces". bizjournals.com. Retrieved November 5, 2012.
- "Treasury sells big chunk of AIG stock at a profit". reuters.com. Retrieved November 5, 2012.
- Son, Hugh. "AIG Changes Bylaw to Ensure Chairman's Independence". Bloomberg LP. Retrieved February 28, 2015.
- "AIG Chief Is Being Treated for Cancer". Wall Street Journal. October 26, 2010. Retrieved November 6, 2012.
- Jessica, Pressler (October 21, 2012). "The Randian and the Bailout". New York Magazine. Retrieved November 6, 2012.
- Berkowitz, Ben (January 24, 2011). "Benmosche beats back cancer to stay at AIG". Reuters. Retrieved November 6, 2012.
- "Charlie Rose Talks to AIG Chief Robert Benmosche". Bloomberg. Retrieved April 10, 2013.
- Wallace, Gregory (August 28, 2014). "Outgoing AIG CEO given terminal cancer diagnosis". Retrieved September 3, 2014.
- Obituary, nytimes.com; accessed February 28, 2015.
- Scism, Leslie. "AIG's Benmosche and Miller on Villains, Turnarounds and Those Bonuses". Wall Street Journal. Retrieved September 26, 2013.
- Gongloff, Mark (September 24, 2013). "AIG CEO: Bonus Uproar 'Just As Bad' As Racist Lynch Mob". The Huffington Post. Retrieved September 26, 2013.
- Chittum, Ryan. "WSJ buries the lead deep on AIG's CEO". Columbia Journalism Review. Retrieved September 24, 2013.
- Pareene, Alex. "Hey, white guys: No, you're not the victim of a "lynch mob"". Salon. Retrieved September 24, 2013.
- AIG CEO causes outrage with comments comparing bonus criticism to lynching of blacks
- AIG CEO Bob Benmosche apologizes for remarks that equated bonus criticism with lynchings of blacks
- Burger, Kathy (January 6, 2011). "AIG's Bob Benmosche Reflects on His Career". Insurance & Technology. Retrieved November 6, 2012.
- Newcomb, Peter (November 19, 2010). "2010's top people in business". CNN Money. Retrieved November 6, 2012.
- Sorkin, Andrew Ross (January 3, 2011). "Roasting and Toasting The Dealmakers". New York Times. Retrieved November 6, 2012.
- Hansen, Morten T. "100 Best-Performing CEOs in the World". Harvard Business Review. Retrieved November 6, 2012.
- Gordon, Amanda (October 12, 2012). "Scene Last Night: Swizz Beatz, Michael Moore, Estelle". BusinessWeek. Retrieved November 6, 2012.
- "2013 Winner Insurance Hall of Fame". Property Casualty 360. Retrieved February 28, 2012.
Edward M. Liddy
|CEO of AIG