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AIG's Hancock expects more asset sales
[NEW YORK] American International Group Inc Chief Executive Officer Peter Hancock, who took over the top job in September, said he plans to sell more businesses that don't align with the insurer's biggest moneymakers.
"Floating or selling businesses that lack current or realizable potential synergy with our core operations" remains a key initiative, Hancock, 56, said Monday in his first letter to investors as head of the company. He became CEO in September after his predecessor, Robert Benmosche, sold assets and cut jobs to help repay a US$182.3 billion government bailout.
Mr Hancock's letter was published on the same day as reports that AIG Chairman Steve Miller plans to step down from the post this year. Miller, 73, plans to relinquish his position, according to a person familiar with the matter. He's still a candidate to remain a director.
After joining the board in 2009, Mr Miller became chairman in July 2010. Company policy limits the chairman to a five-year term, which is unlikely to be extended in this case, said one of the people, who asked not to be identified speaking about board personnel matters.
As chairman, Mr Miller helped oversee AIG's repayment of more than US$182 billion to the US government and the hand-off from former CEO Robert Benmosche to Hancock.
A spokesman for AIG declined to comment on Miller. The Wall Street Journal reported on his plans earlier Monday.
Also Monday, AIG said that Mr Hancock was paid US$12.06 million for 2014, with a base salary of US$1.43 million. In its proxy filing, the insurer said that Jay Wintrob, who left the firm in 2014 after he was passed over for the CEO job, received compensation valued at US$15.2 million in his last year.
More than 40 per cent of Wintrob's pay came in a US$6.52 million lump-sum severance. Wintrob, 58, was hired by Oaktree Capital Group LLC, the world's biggest distressed-debt investor, as CEO in October with annual compensation of at least $5 million.
Mr Hancock said in Monday's letter that he's focused on AIG's "intrinsic value," not its market cap, and is working to avoid excessive risk. That's a shift from the era of ex-CEO Maurice "Hank" Greenberg, who built AIG into the world's largest insurer by acquiring businesses in his 38-year tenure through 2005. The firm's market value has shrunk by about half since the financial crisis.
"Managing our business to maximize intrinsic value in a sustainable way means resisting the urge to blindly pursue market share and sales volume," Mr Hancock said.