My first interview for a post-college, full-time job took place many moons ago high in the sky inside the then-headquarters of insurance giant American International Group, better known as AIG. In what was only my second visit to New York City, I remember getting out of the subway at the Wall Street station, not far from where the illustrious, 66-story building on 70 Pine is located and, in Hollywood movie fashion, staring skyward, terrified, both of my imminent interview and of the building itself.
In the end, the interview went well. Or so I thought. I wasn’t offered the job. In any case, ever since, whenever I read about AIG in the press, I think back to that day, to my first full-time-job interview, and to that giant imposing structure in the sky.
Speaking of AIG press, four years ago I (and many other financial industry observers) wrote about what was perhaps the lowest moment in AIG’s 93-year history. In the fall of 2008, in the wake of Lehman Brothers’ epic failure, the U.S. government lent the battered AIG (the firm had insured billions of dollars of mortgage-backed securities, which had become utterly worthless nearly overnight) more than $180 billion in the largest U.S. federal bailout in history. And if you recall, AIG had more problems than it being seconds away from bankruptcy. After the bailout, it was revealed that the firm honored a promise to pay bonuses to employees of the same division that nearly brought the firm down (the financial products division). And the then-AIG’s new CEO (Ed Liddy, a former Allstate chief who was hired by the Bush administration to run AIG) did an about-face, quitting not long after arriving. The firm was desperate. The U.S. government (the firm’s majority shareholder) was desperate. And that’s when Bob Benmosche came on the scene.
The six-foot-four, self-made millionaire Benmosche (pronounced Ben-mo-shay) was, back in the fall of 2008 and early 2009, lying low in Dubrovnik, enjoying the winnings he made while CEO of MetLife (as well as some of the fine Zinfandel made at his Croatian vineyard). It’d been about three years since he killed it as chief of MetLife, making some tough decisions at the firm before taking it public in a wildly successful IPO. Enticed to come out of retirement by Hank Greenberg (the man who built AIG and who was pushed out of the firm in 2005 due to an accounting scandal but a man who still cared deeply for the firm he raised), Benmosche left his vineyards and villa and headed back to New York.
There, once hired as CEO of the out-of-favor AIG, he locked horns with the feds (Benmosche is not one to pull punches, or his words: on record, he’s called Congress “the crazies”; has claimed to have larger stones, to paraphrase, than the U.S. government; has referred to Warren Buffett’s claim that his secretary pays a lower tax rate than he does “bull$hit,” and, just after taking the AIG CEO job, called up Kenneth Feinberg, the so-called "pay czar," and told him, "You have to promise me not to f*&^ this up."). Eschewing the advice of many, both at AIG and within the federal government, Benmosche did it his way, all the way, leaving many heads in his wake, including the chairman of the board of AIG.
In the end, Benmosche orchestrated what Barron’s has called “one of the great management stories of the new century: A tale of rallying the troops, intelligently downsizing, and managing often rocky relations with Washington.” What Benmosche actually did is sell off several AIG units (the 70 Pine building was also sold), streamlining the insurance giant; string together four straight profitable quarters in the past year; raise AIG’s share price by 47 percent in 2012 (while the S&P rose only 13 percent); pay back the entire bailout loan given to the firm by the U.S.; give the U.S. a $22.7 billion profit on its investment; and do all this while battling cancer.
Which is why he gets my vote for 2012 CEO of the Year.
Of course, there were many others, both inside and outside AIG, who also had a hand in turning around the firm. One such outsider is Jim Millstein, who served as the U.S. Treasury's chief reconstructing officer from 2009 to 2011 and was largely responsible for hiring Benmosche. Millstein, who's worked for Lazard and now heads an eponymous investment banking firm, has said that Benmosche has the “right combination of bull in the china shop and crazy like a fox,” that Benmosche’s “emotional intelligence is unrivaled,” and that “he is by no means short on analytical strengths, but he's a very shrewd evaluator of people.”
As for those inside AIG who are responsible, there are thousands of employees that played a role. And, recently, their CEO thanked them for their work. In a memo circulated company-wide, dated December 11, 2012, Benmosche wrote, “America invested in 62,000 AIG employees, and we kept our promise to rebuild this great company and deliver a profit to those who put their trust in us. You did this. Every single man and woman at AIG did this remarkable thing. There is a saying that in American life, there are no second acts. Well, take a bow, because today marks our second act.”
U.S. Profit on AIG Climbs to $22.7 Billion on Share Sale (Bloomberg)
The Randian and the Bailout (NYMag)
The Man Who Saved AIG (Barron’s)
‘You Did It,’ A.I.G. Chief Tells Workers (DealBook)
No Bonus? Low Salary? Blame it on AIG (CNBC)