WH: $7M AIG Exec Salary Not a Problem
The White House is raising no objections to the $7-million-a-year pay package being given to the new CEO of American International Group – the insurance giant that received a U.S. government bailout package worth $182.5 billion.
"We're not micromanaging these companies," says White House Press Secretary Robert Gibbs. He says the government "is not making these decisions."
Federal pay czar Kenneth Feinberg is said by the company to have approved in principle of the compensation plan for CEO Robert Benmosche.
Asked why taxpayers "shouldn't feel like suckers if they see the CEO of a government-owned company getting $7 million a year," Gibbs acknowledged that AIG is "a royal mess." But he said the company's board wants "good, competent leadership that can lead the company back toward profitability."
The government now owns about 80 percent of AIG, and Gibbs said it hoped new management can help taxpayers recoup some of the investment they put in to prevent an economic calamity.
At $7 million a year, CEO Benmosche will be earning 17.5 times as much as President Obama, whose salary is set by Congress at $400,000 per annum.
Back in January, reacting to big money bonuses some Wall Street bankers were giving themselves, Mr. Obama called it "shameful" and the "height of irresponsibility."
He said they needed to show some "restraint," "discipline" and "sense of responsibility."
Gibbs conveyed no presidential outrage or backlash about the AIG salary.
A White House official sought to justify the $7 million paycheck, saying "compared to the salary of other CEOs in similar companies and industries, the (pay) package provided an appropriate amount of compensation."
The official also pointed out that $4 million of the salary is in the form of stock – "which more closely aligns the CEO's compensation with the performance of the company."
Benmosche is also eligible to receive a bonus of up to $3.5 million in stock, which the White House official points out is "entirely dependent on AIG repaying US taxpayers."
Mark Knoller is a CBS News White House correspondent. You can read more of his posts in Hotsheet here. You can also follow him on Twitter here: http://twitter.com/markknoller.
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