Former American International Group Inc. CEO Maurice “Hank” Greenberg says AIG’s board raised questions in early 2005 about a retirement bonus plan now being wrangled over in court.
About two months before he was ousted as CEO, tensions were growing between him and the company, he said in federal court in Manhattan on Thursday.
The insurance giant AIG ( AIG – news – people ) has sued Greenberg’s private firm, Starr International, accusing it of plundering an AIG retirement program holding $4.3 billion in stock.
“It began to get more heated,” Greenberg said, and it appeared the board would not want to continue the plan unless they controlled Starr International. That was “intolerable” to Greenberg and other voting shareholders at Starr, he said.
Forbes article from 6/4/9
Maurice “Hank” Greenberg, at age 84, is anything but a retiring sort of guy. Joining AIG in 1960, he built it into the world’s largest insurance company with operations around the globe. His tenure came to an abrupt end in 2005, however, when Eliot Spitzer, New York’s attorney general at the time, accused him of accounting misdeeds. Under pressure, the company’s board unceremoniously forced Greenberg out.
Since then, Greenberg has been involved in a litany of lawsuits pitting him against government officials, the company he built and former shareholders. The veteran of the Omaha Beach landing during World War II has also been a lightning rod for criticism amid the collapse of AIG ( AIG – news – people ) at the hands of a Financial Products division that wrote a half-trillion dollars in credit default swaps. The debacle has led to a U.S. government bailout in excess of $170 billion and personally cost Greenberg over $3 billion in lost wealth.
As he battles to move beyond these events, Greenberg is trying to build CV Starr & Co. into a major international insurer and investor. Following is an interview in which Greenberg discusses AIG and what he sees as the government’s needless, and needlessly expensive, disassembling of it. For his views on the financial crisis and how he is investing, see the second part of this interview.
Forbes: Your former company AIG has been heaped with scorn for its financial collapse. What do you think of the government’s response?
Greenberg: I think what the government did with AIG is bewildering. To begin with, there was one unit that caused the problem. All the rest was, by and large, doing quite well. All the Fed [Federal Reserve] had to do was put a guarantee behind AIG FP [Financial Products]. It would have regained its triple-A rating.