American International Group Inc's new Chief Executive Brian Duperreault has pledged to revive the insurer's glory days of top talent, underwriting discipline and fat profit margins.
One thing he has already brought back: big pay packages.
As he rejoined AIG in May, the 70-year-old insurance industry veteran received bigger awards than any of his predecessors since Maurice "Hank" Greenberg, the man who built the company into a behemoth and left under a cloud in 2005.
Duperreault quickly hired as his deputy Peter Zaffino, a former colleague at broker Marsh & McLennan Cos Inc, with a lucrative sign-on bonus, as well as a senior executive to head technology initiatives.
Shareholders are banking that these costly personnel moves will pay off, after watching AIG stock underperform rivals and the broader market for nearly a decade.
"He (Duperreault) comes with a visible long-term track record in terms of inspiring the operations and leading the personnel," said Mac Sykes, an analyst at investment firm Gabelli & Co, which owned about $58 million worth of AIG shares as of June 30. "It's what AIG needs at this point."
Sykes and others said they have no issue with Duperreault's handsome pay package, as long as he performs.
"We didn't react in a negative way, especially because they're going to make a lot more money if they execute," said a portfolio manager whose fund owns a large AIG stake, but was not authorized to speak about it publicly.