AIG convinced — with $20 million — Hamilton Insurance Group to let its CEO Brian Duperreault go. Two other firms were involved in a complex contractural unwinding that includes AIG’s purchase of Hamilton.
The Insurance Journal link at the end of this story outlines the details of how Duperreault was acquired by AIG.
In accepting the position, Duperreault said he has not been hired to break up the company. “I recognize the value of the company’s multiline structure. I didn’t come here to break the company up. I came here to grow it,” he told shareholders.
His predecessor Peter Hancock faced tremendous pressure to turn AIG into three separate entities and to return more money to shareholders. Hancock balked at the three entities but did return equity to shareholders.
“This company has met its tremendous commitment to return capital to shareholders. Going forward, capital will also be deployed to expand and grow our businesses with the goal of building long-term shareholder value. While technology is an essential component of long-term strategy, let me be clear: I am here to grow AIG. This company has the substance in its businesses and people to pursue organic growth and inorganic growth opportunities,” he said.
“Through the right combination of underwriting discipline, diversification and growth, we will build a more balanced commercial business that can deliver consistent underwriting profits. The improvement in our commercial property/casualty business will be judged by the growth in our bottom line. Growth in profitability and book value are the measures of success in our business,” Duperreault said.
He added that financial targets — while important — need to be put into perspective, “Loss ratios are important, but so is a mix of business and the level of expenses.”
Once he completes his second year as CEO Hamilton will get another $20 million. With other restrictions and compensation, the total cost for AIG to get Duperreault will be something like $110 million.
And that’s even if the 70-year old Duperreault no longer heads AIG due to death or disability.
As for his salary. Duperreault will have a salary of $1.6 million per year with a short-term incentive target that could net him another $3.2 million. Long term he could pick up $11.2 million more.
Source links: Insurance Journal, Carrier Management — link 1, link 2