AIG board meets Tues, no plan on CEO - source

By Paritosh Bansal and Lilla Zuill

NEW YORK (Reuters) - An American International Group Inc's board meeting is expected next week against the backdrop of Chief Executive Robert Benmosche's frustration with the U.S. government's involvement in the insurer's affairs, a source familiar with the matter said on Thursday.

But the board does not plan to take any action with respect to Benmosche when it meets next Tuesday, the source said.

The Wall Street Journal has reported that the recently installed CEO had threatened to quit earlier in November, partly because he does not have discretion over pay packages for top executives.

But Benmosche said in a letter to employees last week that he was "totally committed" to seeing the company through its difficulties.

Benmosche has been frustrated with the extent of governmental oversight of the bailed out insurer, and would rather focus on improving its operations, the source said.

AIG, which has received up to $180 billion of federal aid, including more than $80 billion in loans, is around 80 percent-owned by U.S. taxpayers.

AIG declined to comment. The source did not want to be identified because the upcoming meeting is not public.

Benmosche, a former CEO of MetLife Inc, said in the letter he was particularly concerned with the pay of the company's top 100 executives, which is under the purview of Kenneth Feinberg, the U.S. government's pay czar.