Coverage: New AIG CEO says company will grow
American International Group Inc. held its consumer insurance investor conference on Monday, bringing out new Chief Executive Officer Brian Duperreault to talk.
Chad Bray of The New York Times had the news:
“Let me be clear, I am here to grow A.I.G.,” the executive, Brian Duperreault, said at the company’s consumer insurance investor day on Monday.
“I recognize the value of the company’s multiline structure,” he said. “I didn’t come here to break the company up. I came here to grow it.”
His appointment is a homecoming. Mr. Duperreault, 70, worked 21 years at A.I.G. before leaving in 1994. He was a lieutenant to Maurice R. Greenberg, who built the New York-based company into a global colossus before resigning as chief executive amid accounting investigations in 2005.
Mr. Duperreault replaces Peter D. Hancock, who abruptly announced plans to resign as A.I.G.’s chief executive in March after shareholders lost faith in a two-and-a-half-year turnaround effort.
Sonali Basak and Anders Melin of Bloomberg News reported that the new CEO’s annual pay package will be $16 million:
American International Group Inc. will give Brian Duperreault $12 million in cash, 1.5 million stock options and an annual pay package valued at $16 million to turn around the company as its seventh chief executive officer since 2005.
AIG will also pay Duperreault’s previous employer, Hamilton Insurance Group, as much as $40 million over two years to waive their former CEO’s non-compete agreement, according to a regulatory filing Monday.
Duperreault, 70, spent time at AIG earlier in his career as a deputy to Maurice “Hank” Greenberg, who built the company into the world’s largest insurer before departing in 2005. Duperreault will begin immediately, AIG said in a statement. He succeeds Peter Hancock, who said in March he would leave because of insufficient support from investors such as activist Carl Icahn. The new CEO told investors on a conference call he doesn’t plan to break up the company, as Icahn has previously advocated.
“It’s a good choice, he’s a good man,” Greenberg said Monday by phone. “Breaking up the firm is a stupid strategy.”
Leslie Scism and Joann Lublin of The Wall Street Journal focused on Duperreault’s challenges:
In returning to AIG, Mr. Duperreault will face the challenge of improving its financial results amid fierce industry competition. The insurance conglomerate has paid off a nearly $185 billion U.S. government bailout extended during the global markets meltdown of 2008, but it had to sell many businesses to repay taxpayers. AIG’s profit margins have notably lagged behind many of the insurer’s rivals since its near collapse.
Separately, AIG said Monday that it had agreed to acquire Hamilton’s U.S. platform for an estimated price of $110 million, a move seen as deepening AIG’s push into big data and analytics. AIG and Hamilton also announced a reinsurance partnership, and AIG agreed to pay Hamilton as much as $40 million for the firm releasing Mr. Duperreault from restrictive covenants that could have restricted his hiring.
The past six months have been particularly tumultuous for AIG. Just a few weeks after the firm posted disappointing fourth-quarter results, CEO Peter Hancock in March said he would resign from the insurance giant after less than three years at the helm. Many board members were unhappy about setbacks in the company’s plan for boosting profitability, while several also feared a potential fight with AIG shareholder and activist investor Carl Icahn.
Mr. Hancock agreed to stay until a successor was found.
AIG executives are carrying out a two-year strategic plan unveiled in January 2016 — in response to pressure from Mr. Icahn. Many goals are on track to be achieved, such as cutting costs and returning $25 billion to investors through dividends and share buybacks, analysts have said.