American International Group Inc
Benmosche, 65, succeeds Edward Liddy, who is retiring as CEO and chairman effective August 10 after 11 months on the job.
AIG has not named a new chairman, but it is likely to do so soon, and it is expected to tap one of its newest directors for the role, a person familiar with developments said on Monday.
Six directors joined AIG's board in June, including Harvey Golub, a former American Express CEO; Christopher Lynch, a retired KPMG partner; Arthur Martinez, former head of Sears, Roebuck & Co; Robert Steve Miller, Delphi Corp's executive chairman; Douglas Steenland, former CEO of Northwest Airlines Corp, and Laurette Koellner, a former Boeing executive.
Benmosche has signed up for one of the most unenviable positions in corporate America. Liddy, who took the job for $1 a year, has been repeatedly upbraided by lawmakers angered by bonuses the insurer paid and concerns that it would not repay bailout money it received from the U.S. government.
Liddy joined AIG after its first bailout last September, handpicked for the job by then U.S. Treasury Secretary Henry Paulson, and was not responsible for the bonus agreements.
AIG received three successive bailouts totaling about $180 billion, including more than $80 billion in federal loans.
HARD WORK AHEAD
Benmosche left MetLife in 2006 after eight years as CEO. He led MetLife's demutualization in 2000, transforming it into a publicly traded company from one owned by policyholders.
His success in restructuring MetLife's ownership could bode well for AIG as it reshapes itself. Once the world's largest insurer, AIG is selling assets to pay back the loans from the U.S. Treasury and Federal Reserve.
Benmosche will not have the assistance of Paula Rosput Reynolds, who as chief restructuring officer had helped Liddy in preparing asset sales. AIG said in a statement that Reynolds would leave the company in the third quarter.
AIG did not say what it would pay Benmosche as CEO.
The Wall Street Journal reported on Monday that the board had agreed to pay him between $7 million and $10 million. But the final say on his pay package may be made by federal officials, since AIG is 80 percent owned by U.S. taxpayers.
AIG drew nationwide anger in March when it agreed to pay millions of dollars in bonuses to employees of the financial products unit that was the source of nearly half of its $99 billion loss last year.
It is in talks with Kenneth Feinberg, Washington's compensation czar, regarding outstanding compensation and bonus issues. AIG has delayed some bonuses, pending the outcome of those talks.
AIG is expected to report second-quarter results on Friday. It has reported billions of dollars in losses in each of the previous five quarters.
AIG shares rose to $13.64 after hours after closing at $13.60 on the New York Stock Exchange.
(Reporting by Lilla Zuill; editing by John Wallace)