AIG Annual Meeting A Short, Relatively Calm Affair

NEW YORK_American International Group Inc.'s annual shareholder meeting ended without drama Tuesday after a handful of shareholders voiced disappointment over the embattled insurer's near-collapse last fall.

The meeting at the company's headquarters was relatively calm, and there was little outrage over the insurance giant's recent problems, in contrast to shareholder meetings this year for other financial firms that have relied on government support, such as Bank of America Corp. The meeting was also short, lasting less than an hour, well under Citigroup's six-hour gathering and four hours at Bank of America.

"I was expecting more of a crowd," said Kenneth Steiner of Great Neck, N.Y., who was one of about 80 shareholders other than employees in attendance. "With the stock as low as it is, I expected more from shareholders."

AIG shareholders have nearly been wiped out since the government provided the company with a lifeline last September at the height of the financial crisis. AIG was done in by underwriting risky financial derivative contracts, not its traditional insurance operations.

The government, which ultimately gave AIG a $182.5 billion bailout, now has an 79.9 percent stake in the insurer.

CEO Edward Liddy said the government may never relinquish its stake in the insurer.

"I can give you no assurances that it will ever change," Liddy said responding to a shareholder's question. He went on to say that a lower percentage of government ownership should increase the company's value.

AIG's share price has declined 89 percent since the government first bailed out the New York-based company in September. So far this year it has slid 15 percent.

Russell Ryan, a 76-year-old retiree from Brooklyn, N.Y., purchased about 2,500 shares of AIG two years ago when the price was about $80. Ryan's investment is part of his personal retirement account, and he estimates he and his wife have lost $160,000 as the company's stock plummeted.

"I bought it," Ryan said, "and down the drain it went."

AIG stock was down 16 cents, or 12 percent, at $1.17 in afternoon trading Tuesday.

Ryan's wife, Kathy, stepped up to the microphone during the meeting to ask Liddy if he expected AIG's share price to appreciate. She said she purchased AIG stock after doing careful research, and now wondered whether to sell the stock or hold it.


"What should I do?" she asked.

Liddy apologized for the couple's losses, but declined to offer more specific directions.

"I'm such a bad stock picker," he said. "I'm hesitant to give you advice."

As the dialogue continued, he said that AIG stock could recover, but that it's "not a black and white answer" about how the couple should handle the stock.

"But I wish you luck," Liddy said, drawing audible groans from the audience.

In an interview with The Associated Press , Kathy Ryan said that she was not satisfied with Liddy's response, and remained convinced that research analysts were given false information in the years leading up to the company's decline.

"We did our homework, we read what was covered and the opinions were good," she said. "We're going to hold on to the stock and hope for the best."

During the meeting, Liddy reviewed AIG's plans to repay the loans it received from the government to help it remain in business.

Despite its near-collapse last September, Liddy said the insurer is "more stable than before."

"Repaying the government will happen," he said.

AIG is in the process of restructuring its business, shedding assets and cutting costs as part of a plan to repay the government.

On Tuesday it said it is selling the assets of a Taiwan-based subsidiary, AIG Credit Card Company (Taiwan) Ltd., to Far Eastern International Bank. Terms of the deal were not disclosed.

Last week, AIG said it was moving forward with plans to spin off two international life insurance subsidiaries, American International Assurance Co. and American Life Insurance Co.

All the company's proposals were approved during the meeting, except for one relating to the number of authorized shares; all shareholder proposals were rejected.

AIG had delayed its annual meeting, usually held in May, to give it more time to shuffle its board, which has been almost entirely reconstituted over the last year.

"They were all kicked out or resigned voluntarily ... good riddance," Steiner said after the meeting. "Shareholders now need to now stay on top of the directors."

He added: "If the stock goes up to $5 under (these directors') watch, at this point things will be a success."

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Business Writer Stephen Bernard contributed to this story.