Brian Duperreault, a protégé of deposed American International Group CEO Maurice R. (Hank) Greenberg for 21 years before he embarked on a career of turning around and starting up his own businesses in 1994, is returning to the troubled insurer as president, CEO and a director.
It took a hefty financial package for New York-based AIG to free up and lure Duperreault, who is 70, from Bermuda-based Hamilton Insurance Group, a global holding company for insurance and reinsurance operations he launched in 2013. He will be the sixth CEO at AIG — the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of the company — since Greenberg was forced to quit after 40 years at the helm in 2005.
“AIG said it will pay as much as $40 million to free Duperreault from a noncompete agreement with Hamilton … in addition to a $16 million annual pay package,” reports Reuters’ Suzanne Barlyn. “AIG also agreed to buy Hamilton's U.S. business, a technology-driven group of insurance companies, for $110 million, and create a partnership with an affiliate of quantitative investment firm Two Sigma to expand its data mining and analytics.”
AIG has been putting out fires since the financial crisis nearly a decade ago.
“Since its 2008 bailout, American International Group Inc. has delivered paydays for investment bankers, Warren Buffett and even departing executives. Shareholders? Not so much,” write Sonali Basak and Anders Melin for Bloomberg.
“AIG shares have lost 1.6% since the day of the U.S. government rescue, compared with a 98% gain in the S&P 500 Index. In the same period, Wall Street banks led by Morgan Stanley have collected an estimated $740 million in fees for helping the insurer sell assets, according to consulting firm Freeman & Co. AIG doled out about $10 billion to the conglomerate owned by Buffett to offset insurance risks, and the insurer’s executive merry-go-round has cost tens of millions of dollars in exit packages for departing top employees.”
The latest CEO to go, Peter Hancock, had announced that he would depart in March following a quarterly loss of $3.04 billion. In a statement at the time, he indicated that he felt a lack of “wholehearted shareholder support for my continued leadership.”
One of those shareholders happens to be Carl Icahn, who owns 4% of the company and has been exerting his muscle in an effort to break up the company. But Hancock was, he felt, the wrong man for the job.
“[Icahn] said to people recently that Hancock was ‘someone who was trying to do brain surgery but was really a knee surgeon,’” Brian Schwartz reported for Fox Business on Friday, while revealing that Icahn has had his eyes on Duperreault as a replacement for some time.
“1/2 - Very pleased the AIG board is finally making some of the much-needed changes we've been advocating the last 18 months,” Icahn crowed in a tweet yesterday. “2/2 - It is extremely gratifying that the activist strategy continues to create value for ALL shareholders.”
But speaking at AIG’s consumer insurance investor day yesterday, Duperreault seemed to be wielding carpenter’s glue, not a chainsaw.
“I recognize the value of the company’s multiline structure,” Duperreault said. “I didn’t come here to break the company up. I came here to grow it,” Mark Hollmer reports for Carrier Management.
“This company has met its tremendous commitment to return capital to shareholders,” he continued. “Going forward, capital will also be deployed to expand and grow our businesses with the goal of building long-term shareholder value.”
“Mr. Duperreault started at AIG in 1973 and rose through its executive ranks, leaving the company in 1994 for the top job at ACE. He served as chief executive of ACE until 2004, when he was replaced by Evan G. Greenberg, Mr. Greenberg’s son and now the chief executive of Chubb. Mr. Duperreault served another two years as ACE’s non-executive chairman until he retired in 2006,” Chad Bray reports for the New York Times.
“Mr. Duperreault returned to the insurance business two years later as president and chief executive of the professional services firm Marsh & McLennan Companies. He retired again in 2012, only to be drawn back to the industry again in 2013 when he began running Hamilton, which he helped found,” Bray continues.
And now he gets to rub shoulders professionally with Icahn, President Donald Trump’s special adviser on regulatory matters whose Twitter profile proclaims: “Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity.”