Tension Growing Between CEOs and Pay 'Czar'

This is a rush transcript from "Your World With Neil Cavuto," November 11, 2009. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: "I can't get AIG out of this fix if you don't get out of my face." That is CEO Robert Benmosche's not-too-subtle message to Washington — Benmosche knocking down reports that he's stepping down, but still saying he's frustrated with the pay czar, or the government, and all of that.

My next guest doesn't blame him one bit, Patrick Byrne, the CEO of

Patrick, what essentially Benmosche was saying is, "I can't do anything if you are handcuffing me."

What do you make of that?

PATRICK BYRNE, CHAIRMAN & CEO, OVERSTOCK.COM: Well, I think that's probably right.

There's really two questions. One is, does the government have the right to be doing — sort of micromanaging his decisions at AIG? And the second question is, is it smart to?

Do they have the right to? Yes, they have the right to. They're the 80 percent owner. If I owned 80 percent of a company, I would expect to be able to go in and dictate executive compensation and all kinds of things.

So, they have the right to. But this is a little bit like, you know, supposed somebody were looking at Joe Namath on the '69 Jets, saying, ah, is he really worth that? I don't think so. Let's get rid of him.

Well, it is someone who has never actually played football, he probably — maybe should keep his opinions to himself and leave more to the discretion of Joe Namath.

Similarly — so, the government has the right to do this, but they really are — have to be careful. And it is not such an easy question to say if this is a good idea or bad, but it's certainly leading in a bad direction.

CAVUTO: But you stated right at the outset there, Pat, when you talked about all bets are off when you take government money, and, in this case, we taxpayers are 80 percent owners, after giving this company over $250 billion, that, yes, that might be a little discomforting for you, Mr. Benmosche, but then there's the breaks. We would not be dictating squat to you if that weren't the case.

What do you make of that?

BYRNE: Well, Benmosche came in after the collapse...

CAVUTO: You're right. You're right.

BYRNE: ... after everything bad.

We, the people, hired him to go do this job. And, having hired him, I think, you know, we should have made sure we hired the right guy to begin with. But it can't be — we can't be micromanaging him once he's in the job.

We always have the right — I am sure the feds can pull the rip cord on this fellow any time they want. But they are pushing the line very hard. On the other hand, there's actually a very similar parallel to this, if you go back 20 years, when your friend and — your friend and mine, Mr. Buffett, took over, had to step in and basically run Solomon Brothers.

And, at Solomon Brothers, there were all these people saying, if you don't give us these enormous pay packages, we are going to walk out of the door. And Buffett, who had been this longtime critic of Wall Street, was more or less saying, don't let the door hit you on the way out. But the truth is, he ended up compromising. And I have heard him say many years later that, if he had one regret, he wished he had been — he hadn't been as compromising as he ended up being. And I think that's just analogous...


CAVUTO: Well, I think one of the things he regretted, too, was just setting a dollar amount. And I think that is what they are doing here, right?

Hard to say what is fair compensation in the financial community, but the government dictating it could — could chase people away. Is that not what Benmosche is saying?

BYRNE: Yes. That's Benmosche's point...


BYRNE: ... that you have $200 billion, $180 billion, $250 billion invested in this, and you want to get the very best possible people running the different corners of the company.

CAVUTO: Right.

BYRNE: And if we don't pay them $2 million, $3 million, $4 million, we are going to lose them.

Well, I would be more inclined to...

CAVUTO: You're not so sure.

BYRNE: I am not so sure.


BYRNE: And I'm not sure — so sure how bad that would be.

CAVUTO: Well, good stuff, Patrick, as always.

Talk about a pretty wealthy guy in his own right.

Pat Byrne, always good seeing you.

BYRNE: Nice to see you, sir.

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