Former AIG boss shown his speeches and letters from 1990s
Former AIG chief executive Maurice "Hank" Greenberg, said in court that he did not have a fiduciary duty to fund an AIG compensation plan and the AIG shares held by Starr International (Sico) were not intended only for AIG executives, sources report.
"I did not view myself as a fiduciary," Greenberg, 84, said in a firm voice as he smiled at the nine jurors assembled in U.S. District Judge Jed Rakoff's Manhattan courtroom, Reuters reports.
Greenberg appeared at times evasive and often testy under questioning by the lawyer for his former company, said Reuters.
AIG is suing Starr International for $4.3 billion in damages representing the sale of millions of AIG shares since Greenberg left the insurer and the return of more than 185 million AIG shares that Starr International controls.
Sico lost confidence in AIG
Greenberg told a court that the voting shareholders Sico - once the largest shareholder in AIG - had lost confidence in AIG after he was forced to leave, the FT reports.
"They felt they lost control,'' he said. "I think the voting shareholders had confidence in me. The record of AIG speaks for itself . . . I was just one of 11 voting shareholders.''
Shares held for many purposes
Ted Wells, AIG's attorney, showed videotapes and transcripts of speeches in which Mr Greenberg told employees about the Starr plan. One described it as a plan that "would provide for incentives to future generations of managers in the AIG companies".
Greenberg told the court that the shares were put aside in a trust "for many purposes'', and not just for the benefit of AIG employees. He said the compensation plan, was "not cast in concrete'', and could be terminated at any time. "There was nothing that said the obligation would be continued indefinitely.''
"As you know, things do change . . . if you have a management that doesn't adhere to good business principles . . . you have to take action,'' Greenberg said.
"If AIG was not performing the way it should perform, the voting shareholders [of Starr] have the right and responsibility and duty to make a change,'' adding that Starr was a separate company that was independent from AIG. Greenberg rejected suggestions that his forced departure was the reason why Starr cut off the compensation programme for AIG employees. In his opening statements, Wells had portrayed Greenberg as having been "angry" and "vindictive'' over losing his job.
Video of speech from 1996
Dow Jones reported that AIG introduced videos of speeches Greenberg gave in 1996 and in 2000 to AIG employees and talked about the deferred compensation program.
Greenberg said the purpose of the program was to "provide an incentive for future generations" of AIG managers and employees.
Greenberg said he and the other voting shareholders in 1970 were entitled to take the shares as their own, but instead set aside the stock to fund the compensation program.
"It was the most unselfish act in corporate history that I know of in this country," Greenberg said in the speech.
