AIG's Steve Miller on Benmosche's Departure and New CEO Peter Hancock
Steve Miller, non-executive chairman at AIG, spoke with Bloomberg Television's Betty Liu today about the outlook for new CEO Peter Hancock and the process by which Bob Benmosche resigned his position. In an interview last week, Benmosche revealed to Liu that he sped up his departure from AIG when he learned he had nine months to a year to live.
Miller explained what AIG to keep updated on Benmosche's health: "I had frequent conversations with Bob that pretty much always started with, Bob, how are you feeling? We were also connected to his medical team because as a board, you have to ask the question, is there something about this person's medical condition that could interfere with either their physical or mental or emotional capability to lead the company? We always got that assurance."
AIG also had short-term succession planning in place. Miller said "If something happened to Bob before we were ready with the successor, I would step in as the interim CEO so that we could tell the investors that we will have continuity no matter how this turns out."
BETTY LIU: Right now I want to bring in a member of that board the AIG nonexecutive chairman, Steve Miller. Steve, great to have you this morning.
STEVE MILLER: Thank you, Betty Liu.
LIU: From listening to what Benmosche said, is that how it all went down earlier this year?
MILLER: Yes. That is reasonably accurate. The way that I remember it. We did meet in Beijing in April and we talked about accelerating the succession planning. There were a lot of questions hanging that really needed to be answered in part by the new CEO, whoever that might be.
LIU: You mean questions about strategy?
MILLER: About -- well, about strategy, about the organizational --
LIU: -- members?
MILLER: -- and so on. So it was clearly becoming time to get on with the succession planning. So that's what we talked about in April.
In May I talked to Bob and he had just come from the doctors with the diagnosis that the old therapy that had worked so wonderfully well for 3-4 years was no longer effective, needed to try something else and that has been the path we've been on since.
LIU: So in April, when the board met in Beijing, they did not know specifically the shape of his health at the time. They knew that things were perhaps deteriorating or that he was coughing more and that they could see right visible signs that his health was deteriorating?
MILLER: There were some signs. But remember, Bob was diagnosed with cancer back in 2010, toward the end of 2010. We have had a succession plan for what happens if he suddenly were to suddenly stepped down. We've also been working since that time on the longer-term succession plan which we implemented by announcing Peter Hancock in June and which became effective yesterday.
LIU: As you mentioned, Steve, the board knew this since 2010. So tell me exactly how did it work. How did you keep updated or how did Bob keep you updated on his health? How did it work for the board? What was the process?
MILLER: Two things. One, I had frequent conversations with Bob that pretty much always started with, Bob, how are you feeling?
LIU: Which he said, by the way, he found that irritating after a while -- not you personally.
MILLER: I know. Everybody was asking the question because being the leader of one of the world's greatest companies, your health is a matter of public concern. And so you're always going to get asked that question.
LIU: You were talking to him a lot.
MILLER: We talked to him a lot. We were also connected to his medical team because as a board, you have to ask the question, is there something about this person's medical condition that could interfere with either their physical or mental or emotional capability to lead the company? We always got that assurance. So we were doing our due diligence as a board on that matter.
Secondly, we got on with succession planning, including the short-term succession plan. If something happened to Bob before we were ready with the successor, I would step in as the interim CEO so that we could tell the investors that we will have continuity no matter how this turns out.
LIU: Did you feel sometimes more comfortable asking his medical team questions versus asking Bob directly?
MILLER: Well, it's just -- the due diligence by the board requires that you not only ask the person directly, but you make sure it's verified by what the medical staff would say.
LIU: What have you learned from Bob in the years that you've worked with them?
MILLER: I have learned, one more time, the power of great leadership, even in the most disastrous of circumstances. Remember nobody gave AIG a chance back in 2009. You have both had a very troubled company hated by many people for what had happened in the crash.
LIU: Still hated by some.
MILLER: And secondly this of $182 billion of government loans. How are they ever going to work their way out and get past that? And Bob was able to effect that leadership.
LIU: Right, and turn that around in five years. So tell me how is the transition going with Peter Hancock? And what's the handoff going to be like? Describe to me the process.
MILLER: Well, sometimes, I've analogized this to we are changing generals as we move from wartime to peacetime. All of the restructuring of AIG, paying off the government, all that has been accomplished. What's left ahead of us now is I would say tweaking -- not major changes to the strategy. We have gotten our company down to where we are in the property-casualty business, the life and retirement businesses. We're a world leader on both sides. And now we have to say how can we grow from here?
Everybody who bought shares back at beginning of Benmosche's administration of course are delighted. The stock went from maybe $10 to $55. We have people buying stock today at $55. We have to make sure they are equally delighted with the progress of the company from here. We can't rest on our laurels.
And Peter, he's not only a brilliant leader, he was born in Asia, educated in the United Kingdom and had his business experience in America. So he is the perfect global --
LIU: Global, yes.
MILLER: He is very focused on using data analytics to make sure we do our job better and earn a better return on our equity.
LIU: Steve, thank you so much for stopping by this morning. Really appreciate it -- AIG nonexecutive chairman, Steve Miller.