The Biggest Loser: Hank Greenberg
In a matter of days, the former AIG CEO lost his fortune and his legacy.
September 17, 2008— -- Everyone who owned shares in AIG took a hit Wednesday, following the announcement that the iconic insurance company was the latest casualty of the financial crisis -- but no one lost nearly as much as the firm's former CEO, Maurice "Hank" Greenberg.
In his 27 years as CEO of AIG, Greenberg was credited with vastly expanding the company, turning it into the world's largest insurance firm. Forced to relinquish the reins in 2005 amid a fraud investigation by then-New York Attorney General Eliot Spitzer, Greenberg went on to run two companies that remained highly invested in the American International Group (AIG).
In the matter of a weekend, however, Greenberg watched the company he built over a lifetime collapse and, with it, his personal fortune and greatest legacy.
His genius, said Ron Shelp, a former AIG executive and the author of "Fallen Giant," a book about Greenberg, was in putting the company into sectors other than insurance. In addition to being the world's largest insurer, it is also the world's largest lessor of airplanes.
But that diversity would ultimately bring about the company's downfall. Though AIG's traditional insurance departments remain profitable, it was its London-based financial services group that threatened to destroy the firm. The group sold credit-default swaps, instruments that allowed investors to insure securities backed by the same bad mortgages responsible for the ongoing financial crisis.
Greenberg on Wednesday -- just hours after the federal government announced it would provide AIG an $85 billion loan secured by an 80 percent stake in the company in an effort to prevent its collapse -- appeared on ABC's "Good Morning America" to decry the actions of the current board and to admit that he had lost much of what he had built over the course of four decades.
"I've lost my entire net worth, literally my entire net worth," Greenberg said. "I worked 40 years building the greatest insurance company in history, one that everyone in the world envied – who was in this industry."
Greenberg, who privately or through the companies he runs still owns a private jet, an office on Park Avenue and homes in New York City and Brewster, N.Y., likely lost 95 percent of his total assets, or somewhere in the neighborhood of $3 billion, analysts say.
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