AIG's Former Bosses: Who Says There's No Free Lunch?

When former American International Group Chairman and Chief Executive Maurice “Hank” Greenberg was booted out of AIG in March 2005 for allegedly cooking the books (a charge he denies), he didn’t go far. He moved from AIG’s comfortable headquarters in lower Manhattan to the equally comfortable headquarters of C.V. Starr in midtown where he now enjoys the luxury of the Chinese art and other perks he took with him.

C.V. Starr is a company Greenberg carved out of AIG to pay huge bonuses to the executives who worked for him there, according to lawsuits filed against Greenberg and the company. Along with his role as head of both C.V. Starr and Starr International, a companion firm, Greenberg took about 12 percent of AIG’s then valuable shares, and AIG has sued to get most of them back.

Good luck. Greenberg is countersuing AIG because his shares have fallen in value. This makes Wall Street lawyers on both sides of the case rich. And, of course, AIG’s lawyers are now on the taxpayer’s clock.

While at AIG, Greenberg made millions each year, in addition to smaller perks such as taking his dog Snowball on a ride to China, according to syndicated columnist Liz Smith. What he makes now is unclear, since Starr is a private company. But don’t feel sorry for his underlings. AIG executives even had a private masseur when Greenberg wasn’t using him, according to Fallen Giant, an unauthorized biography.

Greenberg’s successor Martin Sullivan didn’t do badly either. He made about $25 million a year in salary and bonus until his hurried departure a year ago, just after the Financial Products unit, which had been taking huge risks in toxic credit default swaps, exploded.

And Joseph Cassano, the chief of the Financial Products unit, felt no pain when he left the insurer. According to Talking Points Memo he may have been able to keep his division’s book off-limits to AIG’s in-house and outside accountants and auditors for years. Even after he was forcibly retired in March of 2008, he was kept on a $1 million per month retainer and allowed to live in the AIG-paid-for apartment in London until September, when Rep. Henry Waxman found out, TPM claims.

So when congressmen do everything but throw their shoes at current CEO Edward Liddy (who earns nothing), and the latest round of AIG’s bonus babies are told that they better give back the $165 million or go into witness protection, it’s wise, if not comforting, to remember this: Controlling greed has long been a behavioral challenge for AIG executives.