AIG's New Boss: Robert Benmosche

American International Group's (AIG) newly named CEO, Robert H. Benmosche, has lots of experience making deals and overseeing complex organizations. He's going to need it. Benmosche's selection lands him in one of the hottest seats in business, as AIG struggles to gain its footing after its near-bankruptcy and government rescue last fall.

Industry observers give Benmosche (pronounced ben-mo-SHAY) high marks for his tenure as CEO at MetLife (MET) from 1998 to 2006. "There are very few financial-services executives with insurance background…that have his experience and track record," says M. Evan Lindsay, vice-chairman of recruiter Heidrick & Struggles (HSII). He did "an extremely good job at Metropolitan" and "changed it into a performance-based culture," Lindsay says. (Heidrick was not involved in the AIG search.)

Benmosche, 65, will succeed Edward Liddy, the former head of Allstate (ALL) who came out of retirement to run AIG in September for a salary of $1 a year. In a statement, AIG said Benmosche will take over from Liddy on Aug. 10. Despite this act of public service, Liddy became a lightning rod for congressional critics and others over AIG's pay practices. The federal government has a nearly 80% stake in AIG. Benmosche won't come so cheap. According to The Wall Street Journal, his compensation package will total $7 million to $10 million—a salary that must be approved by Kenneth Feinberg, the government's new pay czar, and could trigger more political fireworks. AIG consulted with government officials about Benmosche's selection, the Journal reported, citing a person familiar with the situation. It's not clear if federal officials have agreed to the compensation. But, Lindsay notes, "that is market [rate] for anyone in this position."

Financial Discipline While at MetLife, Benmosche oversaw the insurer's conversion from a mutual company to a public corporation. He also orchestrated several major deals, including the $11.5 billion acquisition of Travelers Life & Annuity from Citigroup (C) in 2005. He "instilled a lot of financial discipline" at MetLife and led a "seamless integration" of acquired businesses, says Andrew Edelsberg, an insurance industry analyst at A.M. Best. Before MetLife, Benmosche was an executive at Paine Webber—now part of UBS (UBS)—and when that firm acquired Kidder Peabody in 1994, Benmosche oversaw the combining of the brokerage firms' operations. This experience makes him "a good choice" to lead AIG, Edelsberg says.

Whether Benmosche will be building AIG's business or dismantling it remains to be seen. The onetime industry goliath remains deeply wounded. On Aug. 3, Moody's Investors Service (MCO) downgraded two AIG lending units to near junk status. Saddled by its massive IOU to U.S. taxpayers and battered in its operations by competitors taking advantage of its weakness, AIG had appeared headed for effective liquidation. But, says Marc Steinberg, another A.M. Best analyst, that's not a foregone conclusion. "There are a lot of different strategies they could take," he says. In the statement issued by AIG, Benmosche says: "With my AIG colleagues, we will focus on this mission: maximizing the value of the company's assets and meeting all of our stakeholder obligations."

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