Insurance CEOs Immune to Leaner Paychecks

(MoneyWatch)  U.S. unemployment is hovering around 10 percent, and those with jobs are working longer and harder to keep them. But there's no shortage of cash for those at the top of the heap, particularly at insurance companies.

Was it only January when the grumbling and hoopla surrounding bonuses for unworthy American International Group employees became a Congressional sideshow? Then AIG CEO Ed Liddy, who was paid only $1 a year, took the brunt of that abuse.

Now times have changed. U.S. pay "czar" Kenneth Feinberg quietly approved new AIG CEO Robert Benmosche's annual pay package of $10.5 million, a third higher than the $7 million previously reported in the media. Feinberg oversees pay packages for executive compensation of companies that took TARP transfusions. AIG was one of them, with access to $182 billion. Feinberg says Benmosche's pay is consistent with federal guidelines.

True, $7.5 million of that is in stock, which should motivate him to bring the ailing insurer back to life. But he is also well provided for, thanks to his previous incarnation as MetLife CEO. And, with a villa in Croatia, he will never be homeless.

In a letter to AIG's compensation committee Feinberg said he would also review the compensation packages for other unspecified AIG employees. Hopefully his open checkbook will cover staff rather than just executives.

Also in the category of "doing well on the taxpayers" is the new Hartford Financial CEO Liam McGee, who arrived just this month and is looking at an $8.2 million payday, according to National Underwriter.

McGee has a work history devoid of insurance background, but he was a success, at least initially, as a Bank of America executive. He left the building just as the walls came tumbling down around Ken Lewis, who resigned as BofA CEO and is now being investigated by New York Attorney General Andrew Cuomo. Hartford is the happy recipient of $3.4 billion of TARP money.

To be fair, insurance executives' salaries have always registered in the stratosphere. In a good year AIG CEO Martin Sullivan got $25 million. Unfortunately when the good years ended, no one bothered to tell the insurers, or Mr. Feinberg.