Short List of Executives for AIG's Next CEO
It is a role once compared to a monarchy.
Maurice R. "Hank" Greenberg served as chief executive of American International Group for 40 years, building and managing what became a global insurance empire.
Tapped by the firm's founder C.V. Starr to run the former Dow component in the 1960s, Greenberg failed to name and develop an heir apparent even as he entered his eighties. It is a decision that hurt the firm when Greenberg was forced to resign in 2005 under the cloud of an accounting scandal.
Six years and four CEOs later, AIG faces the question once again — who will run the firm? This time around, it appears the transition will be more orderly.
Despite a rocky start marked by threats he would quit, the firm's current CEO, Bob Benmosche, has now been at the helm since August 2009.
In a recent meeting with analysts, he hinted at who might succeed him when he steps down at the end of 2012.
A person present at the meeting, who declined to be identified, said Benmosche noted the appointment of Peter Hancock as CEO of AIG's core property and casualty business, Chartis, will give Hancock the experience needed in P&C to run AIG.
AIG declined comment, noting Benmosche also said Hancock was part of a deep bench from which AIG can draw for its next CEO.
It is a bench occupied by another executive, Jay Wintrob, who runs AIG's other core business, the SunAmerica Life unit. Sources, though, believe Hancock is the early favorite to replace Benmosche. Hancock joined AIG as Vice President of Risk in February 2008. He formerly served as vice chairman of Cleveland-based KeyCorp.
Prior to that he co-founded the financial advisory firm Financial Limited after a 20-year career at J.P. Morgan where he served as CFO and developed the bank's derivatives business.
A person familiar with Hancock, who asked not to be named, described him as being more social than Benmosche who, though gregarious, is less interested in listening to others than Hancock.
Last fall, it looked like AIG's succession plan would have to be implemented sooner than expected — Benmosche disclosed he had an unspecified form of cancer. Since then, his doctors have told the board his prognosis is good and Benmosche himself has said, his health allowing, he expects to serve out his term through the end of 2012.
By then, Benmosche would fulfill the promise he made when he was named CEO to see AIG through a restructuring and recapitalization plan that concludes once the government sells the 92 percent stake it acquired in AIG as part of a 2008 bailout.
This means AIG still has a 19-month window to settle on a successor. To that end, director Arthur Martinez is heading up the effort to vet internal and external candidates. Headhunters and people in the industry were at a loss to name a possible outside successor, noting there is a relatively small group of people with the skill set needed to run AIG.
With the financial crisis necessitating a government bailout, AIG's undergone a massive restructuring over the past two years, selling off over 40 businesses including its overseas life insurance business. It is now more focused on its two main businesses, global property and casualty and the domestic life and retirement business of SunAmerica.
Still, given AIG has operations in over 130 countries, headhunters believe candidates either from the US or abroad should have experience running a global operation. Questions about succession at AIG are expected to come front and center when the firm launches its road show for its re-IPO, or the sale of the government's stake.
Shareholders are concerned the C-suite has had a revolving door since Greenberg left.
Martin Sullivan, who replaced Greenberg in 2005, was dumped after the company reported its first loss in more than 40 years. He was briefly replaced by former director Bob Willumstad, who was fired by the federal government three months later when it took over the firm.
Willumstad's replacement, Ed Liddy, served for a year. His $1 salary seemed a meager reward for the public flogging he received from members of Congress about the firm's near-failure; he had come out of retirement to run the firm.
Benmosche also came out of retirement to run AIG, in part after being taunted by a friend that American companies were losing their edge on the global playing field.
As the road show gets underway next month, investors who buy the government's stake are going to want to know this time around that AIG has a better grasp on its future, from both a personnel and profit perspective.
Watch CNBC all day Friday, April 29, for special "Heir To The Throne" reports about CEO succession plans at five companies. Mary Thompson reports more details about AIG on "Closing Bell," 3 pm ET.