>> tonight on "titans at the table," i will be chatting with robert benmosche. former executive of aig. i traveled to croatia to spend time with the wall street titan. >> there are not many views like this in the world. >> when you come here, do you relax? he recounts how he turned a company left for dead. >> you thought you had a company of zero value. today, the market value is almost $80 billion.

>> all while dealing with a personal struggle. >> i had nine months to a year to live. they put me on aggressive chemotherapy. i said, i have an obligation to resign if i can't handle the chemotherapy. >> robert benmosche was born in brooklyn in 1944. his father moved his family to the catskill mountains. he left the family was left a quarter million dollars in debt. from there, having enough money became a driving force in benmosche's life. he rose up the ranks in some of the biggest firms in wall street. he became ceo at metlife. in 2009, he took on his biggest job.

turning around the ship at aig. it was in croatia that he took the job. at times, one of the most hated characters in the financial world. during a boat ride along the adriatic coast, benmosche explained how he fell in love with the country years ago. >> we came here in 1987 with about 250 people. >> so this was like their reward. >> they all thought it was a joke. and then they came here and said, this is unbelievable. i decided, in 2000 after the war with serbia, i would see if i could buy vineyards. >> in 2006, he did just that. bought two plots of land.

it was harvest season and he invited me to take a long as he checked the grapes. >> it looks like we will salvage something from this. >> it was here that he started getting calls from people like jim milstein at treasury to come back and take over aig. while life in croatia was serene, the u.s. financial markets were in crisis. walk me through what happened. >> i thought if aig failed, first and foremost the insurance industry would never be the same. i'm a big shareholder in metlife. the first thought i had was -- >> metlife. >> it could be in big trouble if aig fails.

the second thought was, i think it is bad for the country. if america can show they can fix business problems the right way. it would be bad for meritocracy and capitalism. >> aig had just received one of the biggest government bailouts in history. $182 billion in exchange for a 92% stake in the company. few thought the company would survive. he started making headlines, floating conventions including going on vacation. >> grandpa is on big trouble because he left his job to go on vacation after two weeks. >> you did a lot of things of that time. can i name some of them? you said you had bigger balls than the government. >> that was in a private meeting.

what i said was, i know they can come after us. the fact is, i'm not worried about the size of mine. the government is not going to tell me how to run this company. i am going to tell you how to run this company. that is what they hired me for. >> when you except that the job as ceo, you said, you are not going to work for ed liddy. when you came back, you didn't need the money. but you insisted on the pay. >> absolutely. >> that set the precedent. people should be paid what they are worth. >> that is beyond a doubt. the messages, we are going to pay competitively for positions. i need to make sure the people have hope and opportunity. they are going to be paid competitively.

if we deliver a free and independent aig. i did not want my pay to be a cause that pay is too high. pay should be relative to your performance, the performance of your company, and the value you create. >> coming up, going to war over bonuses. >> they spent $100 million watching people who earned $165 million for the work they earned. ♪

>> benmosche's fight over his own pay turned out to be a small fight compared to the fight over pay for employees at aig. he found himself in a fight over bonuses. the same unit that almost sank aig.

i want to read a quote. he said, we are in effect at war. over $165 million in bonuses. >> why weren't they at war over the $100 million watching people work? you tell me. maybe i am nuts. >> crazy enough to threaten to quit the job he just started if the bonuses were not awarded. >> you threatened to quit. >> what i said was, i'm going to announce my retirement in april, 2010. i will say we have stabilized

and is this time to move on. if i cannot commit to a compensation program that made sense -- people were asking me to pay in aig stock. people in the administration and government did not think we could pay back the government. how much is the stock worth? nothing. why would you stay -- >> and get paid in stock? >> he did not step down and the bonuses were handed out. afterwards, most of the highest-paid executives agreed to give the money back. but the outrage over the bonuses and his compensation lingered. >> can you understand the public frustration? not only at the time but even now. the frustration with pay. can you understand that? >> i understand part of it.

you have to understand, they gave me $10.5 million a year. they thought they had a company of zero value. actually negative. today, that market cap, not the equity, the market value is almost $80 billion. if i said to the american public, i can create an $80 billion company and i will give it back to you with a profit, but i want 1% or 2%, they would give it to me. >> they don't see it that way. >> they don't understand what was created. >> they think the rich are getting richer. all the rich are enriching their

friends. >> they see that. in 2009, march, i took every penny i had and bet on the market. >> what are we talking about? >> we are not going to discuss them numbers. nice try, but no thank you. several americans did it. guess what. it paid off. if you look at what happened in the five-year time, there has been huge growth. >> are you saying a rising tide rises all boats? >> i'm saying you have to take a risk. if you take a risk and win, you should not be blamed for winning. the people who lose did not do so well. >> what he found when he first opened aig's books. >> i didn't figure it was that bad. the world thought they were worse than they were.

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>> compared to other wall street titans, robert benmosche is less recognizable but you couldn't tell on the streets of dubrovnik. he recalled the first time he took on the job with aig. >> i did not look in the books. i had a good idea of what was represented i what was in the books. i spend a lot of time with jim milstein. he was the restructuring executive who was handling this for the u.s. treasury. i spent a lot of time with the

person handling it for the new york fed. i question them about the financials. my something was, they did the dude diligence. >> when they briefed you on what was going on, with a better or worse than you thought? >> the world thought they were worse than they were. >> you did not? >> i didn't think it was that bad. if the outside world thinks it is that bad, i have to get you to stop talking about how bad it is. >> in energy was expected to be broken up and the best parts sold off. tim geithner said he wanted aig successful enough so the taxpayer can get out.

benmosche had different plans. he was going to revive the company and pay the taxpayer back. >> did you ever think you would not? >> i did not think i could not get it done. what i said was, in september of 2009, i think what you are going to be left with is a $70 billion company. if you have $70 billion as your margin of error, there is no doubt. >> that was your back of the envelope. >> that was my back of the

envelope calculation. i was wrong. it is $100 billion. our market cap is $80 billion. >> when they finally pay back the american text areas with a $23 billion profit, the committee took out ads taking the american people. but benmosche felt the officials to him fell short. >> was that the first time you had lunch with him? >> they met with me when they signed the deal that gave them 92% ownership of aig. the question was, how are we going to sell all the shares? when they saw me at the end of 2012, that would have been more meaningful. >> why? >> they should have said, what we put the people of aig through was horrific. i want to say that it is incredible what they have accomplished. to not only pay us back, give us the $23 billion profit, but you have kept all the americans

employed. you have kept them as effective citizens of our country. we thank you for that. >> they never said that. >> they never said that. >> it almost sounds like you are looking for it an apology. >> people should recognize they did a great job under the worst of conditions. >> does it still pose a threat to the financial system? >> i don't the can other aig will happen. >> we are not going to see another aig crisis. >> no. we have been in this position for over two years. i don't think we will see a bank failure that we have seen. a security industries failure like bear or lehman. >> you give a thumbs up to the regulators. >> i give them a thumbs up for getting the job done but a thumbs down for failing to tell the public. i have criticized people in washington.

why don't you talk about how much progress you have made? their answer is, we are not sure something cannot go wrong. i say, shame on you. you should be sure. i am sure. >> when we come back, robert benmosche's villa splendid lives up to its name. and he gets personal about his fight with cancer. ♪

>> how are you? >> hi, betty. >> show me around your beautiful villa. >> in 2001, he began looking for a place to retire and settled on an abandoned the villa.

>> this whole place is a wreck. cracked tiles. but i looked at the view and said, wow. there aren't very many views like this in the world. >> they bought the property for about $1 million and spent millions more fixing it up. >> all i preserved was the outside walls. every thing built from inside. >> on a cliff above the sea, it has 12 bedrooms, eight bedrooms, and three kitchens. it is aptly named villa splendid. he imagined himself relaxing and hosting parties. what he did not expect was the terrible news that came in 2010. cancer.

>> it is a terrible diagnosis. one thing i learned in the life insurance business is everybody dies. we are just not told a timeframe. you have the luxury of imagining years beyond where today is. >> did the doctors say you have x number of years? in general for this illness, cancer? >> in general, i have nine months to a year to live is what i was told. then they put me on aggressive chemotherapy. normally, you are supposed to get it over three days. they said, ok we can but we do not like to do it. than we did a scan and it had no effect. >> they put him on an experimental treatment which did work. his 12 month prognosis stretched to three years. you never disclosed which cancer you had. >> if i were comfortable disclosing it, and it would help

people, i would. i don't want to give people the concern that he will not be here long. and secondly, i don't want to be able to tell people, i want to do what he did. there is no miracle drugs here. it is the pipeline that counts. i think it is premature to get into a conversation about it. >> but the treatment stopped working. >> they reset the clock nine months to a year. >> when? >> back in may. the board and i met in april. we said, i think you need to do some major changes in the organization. they were concerned about me changing the organization dramatically. announced a new ceo. i said, that is great. we were thinking about the first quarter of next year. i said, i'm not going to play

the odds and changes have to be made now. i said, let's accelerate my retirement. the board was happy to do that. >> on september 1, he turned over the ceo role to his chosen successor, peter hancock. the transition was smooth and quiet. a vast difference from the days when he took over. >> if there's some sort of secret that you can dispel for somebody with a diagnosis like that -- but still able to turn around a multibillion dollar company -- how do you do that? >> you have to focus on living. there are times in my life that had the diagnosis, and the consequence of death came, it would have been devastating. had it happened in the middle of getting aig to the point that we completed the restructuring.

completed the 92% ownership of common shares to the government. that would have been devastating. it would have been devastating in 2005, when i was still getting this house finished and ready for my retirement. when you thick about your death, thick about what you have accomplished. if there are things that are worrying you about legacy, my father left behind a wife with four children. no will. $250,000 in debt. >> were there moments where you sat down and thought about that? went to a dark place? >> i was never in a dark place. i felt the hardest thing is telling denise. then telling my son and daughter. and then close friends.

say to them, unfortunately, there's going to be a timeframe here. let's think about all the things we can celebrate of what we have already done. >> and done with the corporate world. now it is time to enjoy everything he has. >> my mother said, enjoy life when you are healthy. >> could you have enjoyed this 20 years ago? >> no, i did not have as much money. >> it comes back to money with you. ♪

>> how does it feel to be taking steps right now? >> we check out a house that will take your bill to zero. >> this comes this comes with zero electricity in zero gas bills. >> "bloomberg brink."