Word: greenberg
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...Last week, AIG for the first time said that if it wins it plans to use the money to pay back taxpayers (AIG has received more than $170 billion in government assistance). Previously, the company had suggested that the missing shares should be used to compensate employees. Greenberg's Starr, for its part, has recently been beefing up its credentials as a charity. In the past few weeks, Starr has given out $1.5 million to antihunger and homeless causes in the New York City area. Starr is owned by a nonprofit (thus, it thinks of itself as a charity...
...complicated case stems from the departure of Greenberg in 2005, when he was ousted from AIG, a company he ran for 37 years, amid an accounting scandal. While the case gets at the wacky bonuses and compensation structure present at AIG for years, the facts of it predates the mortgage mess and the company's current troubles...
...Here, in a nutshell, is the source of the current disagreement. Back in 2005, Greenberg was the head of both AIG and Starr International, a private insurance company whose main asset was nearly 300 million shares of AIG. For years, Starr had used that stock to dole out retention bonuses to AIG executives. When AIG booted Greenberg, he seized control of Starr and its AIG shares. Greenberg says Starr is a separate company that was set up to use its shares to benefit a charitable trust, and insists it can do what it wants with the shares. AIG says Starr...
...spokesperson for AIG says the idea that Starr is a charity is a sham, noting that Greenberg's company in all the years of its existence has donated less than 0.01% of its worth. "Only after AIG brought this action did SICO [Starr International] suddenly and cynically show charitable tendencies," says the spokesman. "Mr. Greenberg is dressing up SICO in a veneer of philanthropy just like a defendant who buys a new suit for the courtroom...
...Greenberg and Starr say that AIG should not be believed when it says it is pursuing the lawsuit on behalf of shareholders or taxpayers. In a recent e-mail to a blogger, a Starr spokesperson wrote, "By its own admission, AIG is prosecuting these claims for only one purpose: To add hundreds of millions of dollars to a bonus pool available to AIG's top 700 executives...