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Since the market crashed in September 2008 and the economy went with it, we’ve heard a lot of stories about the financial industry’s claim to les droits de la noblesse and the abuse of taxpayers’ money once TARP funds were dispensed to salvage floundering firms. Like that of former Merrill Lynch CEO John Thain’s $87000 carpet and his $1400 waste can for his newly redecorated office, we’ve seen it all.
Until now.
According to The New York Times, AIG’s CEO Robert Benmosche is so upset about pay restraints the U.S. government has implemented on his firm that he’s ready to quit after only three months on the job.
Of course he said this from the confines of his villa on the Croatian coast while on vacation.
VACATION.
During the first three months of his new job.
While overseeing his new vineyards.
And this guy can’t understand why there’d be lynch mobs looking for him?
Out here in fly-over country, where earning the roof over one’s head requires getting one’s hands dirty or slogging it out over a hot keyboard in a stuffy cubicle, many folks have forfeited vacations and taken pay cuts so they can continue to feed their families and keep their shelter.
A single mother of a teenager, whose education is one class shy of a master’s degree in education, is happy to snag a full-time office assistant’s position paying $11 an hour without benefits. It’s an improvement over $11 an hour as a substitute teacher. Working as a substitute, she can’t count on a regular check to pay the rent. Her underemployment has been emotionally draining on the heels of a personal bankruptcy. She’s happy even though this wage is only two times her rent; she’ll making do with consignment shop clothes for her son and herself, and her 12-year-old car because this is the best she can do when the rate of unemployment in her state is more than 15%.
Another fairly typical example: a Midwestern manufacturing manager travels three days out of every five, including trips overseas, doing the work of sales and management and administration, overseeing work on customer sites and begging for more work or for payments on work and goods already delivered. The same manager has taken three pay cuts along with the rest of his staff in order to keep as many staffers as possible employed and on their much-needed health benefits. The business has been dodging a complete shut-down of his facility all year, although not without losing a few staffers here and there through several cuts.
And in the background, there’s chronic pressure to make payments on time to the bank because this manufacturing business is seen as "high risk" due to the volume of work they do for the automotive industry. They’ve been expecting the boot from their bank for six months because of their risk index and are probably going to have to move to a cash-only operation, in spite of the fact that the kind of capital equipment manufacturing they do requires purchasing millions of dollars of materials and months of labor before they can ship, install, test the equipment and get paid.
But most of us who aren’t financial industry executives are quite familiar with these stories. We know the people who make real goods and perform services we use every day, because we are those people. We live out stories like those the single mother and the manufacturing manager every grinding, crunching day of this Unnamed-Great-Depression-Two, somehow lighter in the pocket as the sun goes down than when we started working at sunrise.
So what the hell is the financial industry doing any more? They aren’t lending money; they are preventing any hiring because of the need for small firms to retain more cash (when they have any) as credit is impossible. It’s absolutely unclear what the insurance industry is doing to create value for businesses, because the money goes in, keeps going in, and nothing comes out except for management salaries. Rather like banks.
And yet this leach-like asshole Benmosche — who makes in in 78 minutes what the single mother mentioned above will make in a month — thinks he’s worth more money?
The entire mess looks like nothing but massive extortion, one enormous shakedown. Locusts have come, eaten everything including the seed corn, and now have the unmitigated, arrogant gall to ask for more?
Stay in Croatia, Mr. Benmosche, take to heart your own words when asked why you chose a villa in Croatia.
It’s safe there.
Oh, and you might consider re-entering retirement. Especially if you can’t get buy on $3 million a year in salary and an estimated $4 million in other compensation.
21 Comments
True dat
300 bigguns* is a lot of arrogance.
Cannot believe this guy thinks that what he does is worth that kind of money.
What the hell does he do anyway? Just boggles my mind.
* ED. NOTE: Original hed contained erroneous number of $300M instead of accurate number $3M — you’ll see comments following which address this.
Benmosche also receives an additional amount of compensation in excess of $4M as AIG’s CEO.
Seriously. And don’t let the door hit cha where the good doG split cha.
digg it
Rayne, although I agree with the thrust of this post, according to the reports you yourself linked to, Benmosche has been back from Croatia since Labor Day, and his annual compensation amounts to about $10 million. Where do you get $300 million?
What he thinks he’s worth since he’s such a MOTU that he’s running AIG. I think it’s called sarcasm.
Rayne seemed pretty unsarcastic about the figure in comment 2 above.
You’re looking at total compensation.
Technically, he’s only drawing 300 mil for his daily work, the rest is likely tied to the performance of AIG as a whole, although we don’t actually get to see the fine print in his contract.
He said this shit while he was on vacation. And since he says he can work just as well from Croatia as NYC, are you absolutely sure he’s clocking in at AIG offices here on the North American continent?
Sorry, but you wrote unequivocally that this week’s threat to quit was made while he was in Croatia. You have no basis for saying that, at least according to the HuffPo article you link to. All I see is that his first few weeks on the job, last August, were spent at his Croatian villa.
And I still don’t see any reference to $300 million in the links you provided.
Also just checked the latest NYT articles on him from the last couple of days and found nothing indicating that he’s currently telecommuting from Croatia or that he’s getting $300 million in compensation.
I’m with you about the arrogance and gall, but as a precision junkie I have to point out that I don’t see where these two specific assertions come from.
My bad, you’re right, 3Mil, head changed. See last graf in story.
[edit: and the calculation that Benmosche's 78 min = single mom's one-month salary was based on salary of 3Mil.]
No sweatski, and congrats on the front-paging.
Your words mean nothing to pricks like Benmosche who see their earnings as proof that they are better than the hard working people you describe. To Benmosche and his ilk, if you aren’t at his level it’s because you’re either a lazy shit or too stupid to rise above the cubicle.
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Mod note: *****No violent suggestions.
Someone needs to remind him that his annual base salary of $3 million is more than most Americans will earn in their lifetime, even assuming they work until they’re 70.
Thanks for all you’ve done for us, Mr Benmosche, and may you not enjoy that estate in Croatia.
I’ve been thinking about income inequality, poverty and hunger, for quite some time now. And lately it’s crystallized in my head that there really should be a “Day Of Action” that has never been done before.
There was an FDL/Mike Stark post a while back about how lobbyists would pay homeless/unemployed people to keep their place in line at the Capitol for hearings etc. This is what I think now:
-That there would be a netroots effort to buy all those places in line in DC on a specific and crucial hearing or vote day, to ensure NO LOBBYIST had a seat in hearings/votes that day.
-That would be the only DC action. The rest of the action would be…
-At the targeted CEOs.
Just a thought experiment, but imagine:
If on the day DC lobbyists were denied, and the CEOs homes and Offices were targeted by protesters, very well coordinated, you wouldn’t necessarily need media, even though I think you’d prick TradMed’s attention.
What you would get is the attention of the CEOs.
1- We cut your access to Power
2- We know where you live
3- We’re organized, and YOU are accountable
I think behaviors would change, and really quite quickly.
It is a great idea to bring attention – but really wouldn’t change anything.
Real Change in the Corrupt Wall Street shenanigans “could” have happened – until Obama hired Geithner and Summers – and wants Bernanke to stick around. Hugely disappointing.
Obama could have stomped on the CEOs to accept No Pay – they renegotiated UAW contracts – but he didn’t which showed whose side he is one – and it is clearly Wall Street. I definitely didn’t think this would be the actions of Obama – but now we are stuck with the Wall Street Owned Govt.
Will the Obama DOJ ever indict a Wall Street CEO? Pretty sad if not – even Bush had a few prosecutions of Enron pals.
Well, I guess what I am saying is attack the puppeteers, not the puppet.
When You own a Government like they do, why not be arrogant. WE! Could be arrogant if we owned a Government.
Remember that none of what they have done, could have been done had not the Congress passed the laws that allowed it.
People still want to blame those greedy bastards, but give the Congress a pass. Your Government ripped You off more than they did, why not start placing the blame where it lies.
Remember You voted for the people in the Congress, and have let them have a free hand to do as they see fit, so who is really to blame. LOOK in the mirror if You have supported either of our political parties and politicians.
It’s been a year and all they had to do was reinstate the regs they took away, and they have done nothing but talk. What will it take to give the people a hint of where the problem is.
Further, I think a certain populist rage is completely in order, and directed at the Finance Masters.
I’m pretty sure teabaggers would be on board to shout at “Pay us back, you’re sucking us dry!”
They would probably freak out that there were dirty patchouli smelling hippies around, yelling the same thing, but, whatever!
This piece matches up well with masaccio’s below, on the column asserting that US workers are “overpaid.” By 20%.
The authors don’t mention whether wall street brokers and fincom ceo’s are included in their definition of “workers.”
Of course, as Rayne says, the top guys think they are paid this well because they’re “worth it.” And they’re worth it because? Because that’s what they get paid: i.e., if company boards are willing to pay them this much money, then that’s the definition of how much they’re worth.
But a cubicle or factory worker, or a sales person, as in Rayne’s example, well, the fact that the market/employer is willing to pay them all of, oh, lets say, $11.00 an hour, that doesn’t mean that they’re really worth that much. No, apparently the mom in Rayne’s example is really only worth $8.80.
Our society is so fucked up I don’t see how we will every get out of this. Rich people don’t give up their money or power; only the “little people” can be forced to do that.
It was always a big question mark why Benmosche was chosen. Yes, he had run MetLife but what was needed for AIG was someone to get to the bottom of the frauds there, look out for the taxpayers’ money, and generally wind operations down. In this regard, Benmosche was totally unqualified. Instead he wants to run it like MetLife before the crash. Add in quirks like his megalomania and this is a recipe for disaster.
I would go over his contract with a fine tooth comb, find something that I could call a material breach, and fire his ass. Even if I couldn’t I still would fire his ass and then do the same to the board. This just goes to how corrupt and incompetent corporate management has become in this country. And as pointed out over at Naked Capitalism there are only about a zillion laid off financial managers who could do this job with their eyes closed, and for a lot less.
Oh, hey, wait a minute… He had to buy a place in CROATIA, dammit, because you just can’t get ANYTHING on the Costa Del Sol on his meager salary. Besides, the Russians have bought up everything from Gibraltar all the way up to Valencia.