Greenberg "Stunned" Same AIG Employees Still In Place, Blasts Bonuses

Forced to retire from AIG in 2005 and still reportedly angry about his removal, Hank Greenberg offered what was, at times, a blistering testimony about the troubled path his former company pursued since his departure.

Appearing before the House Oversight and Government Reform Committee, the 83-year-old lashed into his former colleagues for essentially shedding the skin that had made the company successful. "When AIG lost their AAA rating, they wrote as much business in nine months as we wrote in seven years," Greenberg told lawmakers. "That became a different book of business."

As for the much-maligned Financial Products unit that brought the company to its current doldrums, Greenberg said that executives had shifted "the way the unit did business," accelerating the sales of credit default swaps.

His indictments of his old company did not end there. Greenberg, who left under charges of fraudulent business practice, said that he was "stunned" that AIG continued to employ some of the same officials who had failed to initially recognize the danger of those swaps.

"It stuns me that they are still there," he said.

And when asked about the issue of compensation, Greenberg made the case (somewhat grudgingly) that the AIG executives didn't deserve their bonuses.

"I haven't read the bill, but my own sense is that over any period of time, it would have been best to not have the government setting compensation rules for business. Now I recognize that when you take a great deal of money from the government, the government has to have a say in the compensation of a company. But if the compensation is not competitive with the marketplace generally, it doesn't help to have people who will not perform at the level that you want them to perform because they are not being compensated adequately. Having said that, I would agree with anyone that compensation in the financial sector got out of hand in our country."

Asked to clarify how this applies to AIG, he said: "If they have not protected the assets, obviously, they should not be compensated. They probably should be fired...They should not get bonuses."

And yet, the harshest of Greenberg's words may have been directed at the government program for propping up the insurance giant. Calling the approach, "failed," he said that AIG should pay back the taxpayer money and search for private capital investments. "AIG is not too big to be managed," he said, "it is too big to be managed poorly."

Comments

[ptarantino]

09:39 AM on 04/03/2009

Hank Greenberg is a crook & was forced out of AIG because he was involved in another fradualent part of their business. They literally made up millions of profits, with a re-insurance company, that happened to be owned by Warren Buffet's company.

It's criminal to me that the media doesn't report his shady past, every time they mention his name.

[Sizzzla]

01:39 AM on 04/03/2009

HMMMM....GREENBERG,......IS THAT AN IRISH NAME?

[vgirl1]

11:54 PM on 04/02/2009

Not a word would I believe from this sleeze bag who is under investigation by the SEC.

[Renee27]

11:18 PM on 04/02/2009

This guy is not a whistleblower. He is weasel.

AIG's Greenberg: Why Should Taxpayers Get My Money?

http://www.youtube.com/watch?v=R9Oka9V9Mmk

[Montreaux1991]

10:24 AM on 04/03/2009

I was watching the live feed of his grilling on CNN yesterday,... my jaw dropped clear to the ground floor of my building when he uttered those words.

The gall of these weasels is nauseating.

[AurigaRa]

11:03 PM on 04/02/2009

at first glance I thought the headline was "Greenspan Shunned"

We can only hope.

[munki]

10:28 PM on 04/02/2009

performance basis for bonus...

no one will complain, but... NOT when you are so close to chapter 11

[caterpol]

09:38 PM on 04/02/2009

And yet another injured party speaks up, a day late and a dollar short. His good reputation is in jeopardy!

His wealth, however, is still in tact.

How comparable is that to what happened to Main Street?

Cry me a river.

[ScenicKing]

07:31 AM on 04/03/2009

From what I understand Greenberg was HEAVILY invested in AIG...he's not in the poor house but he took a huge hit too.

[dashboard]

07:13 PM on 04/02/2009

Greenberg you let AIG FP run untethered because they were profitable. Apparently never questioning the risk Cassano et al were taking. You sir, are responsible for letting these gamblers take AIG down. You and your board looked the other way as cashed your checks.

You should be ashamed of yourself. Your deeds are worse than Bernie Madoff.

[plaidsportcoat]

07:08 PM on 04/02/2009

"it doesn't help to have people who will not perform at the level that you want them to perform because they are not being compensated adequately."

PEOPLE! This is the biggest load of crap we've been fed over and over. Because it they really believed that why, they'd be BEGGING TO RAISE THE MINIMUM WAGE

[JumpyJack]

08:17 PM on 04/02/2009

I believe there's a "line" between recieving a minimum wage and millions in bonuses.
I would completely agree to pay those AIG managers at least a minimum wage (even if they didn't even deserve that), but not millions in bonuses.

[virgomlb08]

07:06 PM on 04/02/2009

what a joke

[Hawkeye17]

06:57 PM on 04/02/2009

Is it just me or does it seem that there is a whole generation of older Americans who have serious issues with taking any responsibility for their actions?? To these people, all good results were their doing but all bad results were someone else's fault. The Me Generation indeed. It should be called The Locust Generation.

[Rapid Ray]

07:33 PM on 04/02/2009

The "It Wasn't Me" Generation.

Continuously placing blame elsewhere, hiring the best lawyers to find a technicality that exonerates them from the truth of their actions, placing responsible people and underlings in the position of scapegoat for a rainy day....

Just say no to a "Yuppie".

[anothervoice2]

11:49 PM on 04/02/2009

This disease is called Narcissism. Most CEOs - especially in the financial sector - seem to have it.

[BobaFett]

06:44 PM on 04/02/2009

Hank was (and is) AIG and all that they stand for. It was a one-man show and all roads led to Hank. Hank was personally responsible for starting the greed culture at AIG that was, in turn, pevasive across The Street. He should be, therefore, personally responsible for their downfall. My industry colleague worked for him as VP of HR and counts his time at AIG as the worst ever company that they worked for. A big "f**k off", to you Hank! May you NOT rest in peace..

[anothervoice2]

11:55 PM on 04/02/2009

When one Narcissistic CEO (like Hank) is allowed to flourish for 38 years at the same place, everyone there is working for him. In the "my way or the highway" culture, only talking bobble heads would have succeeded there. And now he blames the folks still working there?! Wasn't Cassano (protege of Milkin) hired under Hank's watch? What did Hank think Cassano brought to the table? Narcissists have a way of appearing convincing, charming and authoritative but wrecking devastation within the company - and only folks working closely with such personalities will know the perils of such a boss. Congress shouldn't let Hank walk away free.