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TheStreet.com
November 11, 2009 Wednesday 13:05 PM EST
SECTION: NEWS & ANALYSIS; Financial Services
LENGTH: 483 words
HEADLINE: AIG Vice Chairman Frenkel Retires
BYLINE: Lauren LaCapra, TheStreet.com Staff Reporter
NEW YORK (TheStreet) -- Robert Benmosche's drive to retain top talent at the bailed-out insurer American International Group (AIG:NYSE) took an ironic turn for the worse on Wednesday, with a high-profile vice chairman's departure getting a lot of attention, as reports continued to circulate that the CEO himself is threatening to leave. In a note to employees on Tuesday, Benmosche announced the departure of Jacob Frenkel, AIG's vice chairman of global economic strategies for over five years. Frenkel had planned to retire for some time, but delayed his departure to assist AIG through its crisis."Although he had been contemplating this change for some time, Jacob had agreed to stay on to help AIG through its challenges," Benmosche wrote. "Now that AIG has stabilized, Jacob has decided to move ahead with his retirement."AIG spokeswoman Christina Pretto declined comment on reports that Benmosche had told board members he wants to quit because of regulators' interference with managing the firm. The tart-tongued executive has been advocating for his employees since taking the top job in August. He recently butted heads with the Obama administration, and its pay czar Kenneth Feinberg, over mandated pay constraints though he did win approval for his own pay package of up to $10.5 million.Benmosche has the credentials to help restore AIG, after spending several decades competing insurance powerhouse MetLife (MET:NYSE), eventually retiring as CEO in 2006. A relatively bullish Moody's note on Tuesday bolstered his claims of improvement, with the ratings agency predicting that AIG will probably repay its $90 billion in government support.Whether Frenkel was one of the talented employees that Benmosche was striving to retain to achieve that goal is unclear, though he did cite Frenkel's "remarkable and distinguished service" and "wise counsel" as a "highly respected economist" in his letter. Before joining AIG in May 2004, Frenkel had been a top gun at another ill-fated financial institution, serving as chairman of Merrill Lynch's international division, now part of Bank of America (BAC:NYSE). He is also a former governor of the Bank of Israel, and has been an economist at the University of Chicago and written for the Council on Foreign Relations.Frenkel's pedigree as an international monetary policy wonk was sufficient for him to represent AIG at a global economic conference early this year where he made some controversial remarks.Taking a similar stance as former AIG CEO Robert Willumstad, Frenkel said at the Davos World Economic Forum in January that he bore no personal culpability for the insurer's near-failure, according to Time magazine. He also noted that, despite his title, he doesn't serve on the board or make executive decisions.AIG shares were off 3.7% to $36.20 in afternoon action on volume of 10.8 million.-- Written by Lauren Tara LaCapra in New York.
LOAD-DATE: November 12, 2009
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