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The Chairman
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(address
is not clickable)7/30/2005
Dept. of Hubris, by Victor Niederhoffer
Fortune's article on ousted AIG CEO Hank Greenberg "Inside Hanks's Big Fall" outlines the guideposts of many an executive's path to doom:
- "All I want in life is an unfair advantage." (I note that Hank apparently likes tennis and often describes his situation in terms of foot faults.)
- A Morgan Stanley analyst summarizing her glowing report " What investors really want is for Hank to become immortal".
- "The problem of AIG was that G had built a company accountable to no one but himself. Spitzer's suit says that AIG's official books were altered on nothing more than handwritten sheets, with hundred of millions of dollars shifting from account to account."
- In response to a refusal by a trader to buy some AIG in the last 10 minutes of market trading because it was illegal, he told her he didn't care what the H the reason was. Like his counterpart at GE, G "was a bully of epic proportions."
- When the reckoning comes, excessive and unleavened love always leads to total warfare. For example: " G blasted his former company for refusing to let him collect his personal office possessions, including the medical records for his dog Snowball"
The observer from the grandstand like myself who doesn't know much about the insurance industry must agree with what many of G's defenders say: He never did anything for himself, but for the good of the company. "He was dedicated to the company," said E. Stempel, a former director. As Henry the K said " I can imagine an excess of perfectionism. I can imagine him going to the edge. But I cannot imagine that he would deliberately go over it."
It is ironic that "an improbable source" -- the company of his good friend the Sage of Nebraska -- seems to have gratuitously turned over documents that led to the end of Greenberg's career. Yet the problem at both the Sage's company and Greenberg's AIG seems clear. It's one I've seen a google of times in my career. An old lion or Cape buffalo, if you will, is no longer able to adapt to the flexible demands of leading a dynamic pack. He digs in deeper and deeper, sullenly lashing out at any who all who would thwart him in his single-minded ideas about what's good for the pack and the company. Eventually, the former young lions that he protected and nurtured turn on him with a vengeance for the good of the futurity.