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Ex-AIG Boss Greenberg Says He Would Not Have Paid Bonuses

March 23, 2009
Related Topics: Miscellaneous Legal Issues, Compensation Design and Communication, Ethics, Latest News
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Former American International Group Inc. chairman and CEO Maurice R. Greenberg said he never would have paid out the retention bonuses awarded to employees of AIG Financial Products Corp. if he still were at AIG's helm.

During an interview on CBS' “Early Show,” Greenberg said such contracts didn’t exist when he headed AIG.

"When I was there, nobody had a contract in the company, including me," said Greenberg, according to a transcript posted on the "Early Show" Web site. "I didn't believe in them. If you didn't do the job, you didn't deserve to be there. There were no contracts."

When asked whether he would have paid the bonuses if he were CEO today, Greenberg replied "absolutely not." He added that "we had bonuses based on performance. If you didn't perform, you didn’t get a bonus."

Greenberg also criticized AIG's current CEO, Edward M. Liddy, and declined to take any responsibility for AIG's woes. "Early Show" co-anchor Maggie Rodriguez noted that Liddy "seemed to imply that a lot of the mistakes at AIG were made when you were CEO," and asked Greenberg if he accepted "any responsibility."

"Absolutely not," said Greenberg. "It was the greatest company in history. In the insurance industry, there wasn't anything like it. How does a man who ran a small automobile insurance company, a one-line type of insurance company, ever be on anybody's list to run AIG?"

Liddy is a former CEO of Allstate Corp.

"Are you saying Edward Liddy should be fired?" asked Rodriguez.

"I think he should be replaced," said Greenberg. "You can call it what you want."

Rodriguez also asked Greenberg if the people who have managed AIG since he left in 2005 "are guilty of something criminal." "I don't know if it's criminal," he said. "I think it's stupidity."

AIG disputed Greenberg's account of how AIG handled guaranteed compensation.

"Greenberg is again trying to rewrite history in order to distance himself from the Financial Products group he personally created and oversaw," said an AIG spokesman in an e-mailed statement. "The fact is that, under his watch, guaranteed compensation arrangements for FP employees were put in place.”

Filed by Mark A. Hofmann of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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