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Posts Tagged ‘AIG’

AIG CEO Compares Bad Publicity Over Bonuses to Lynching

"You're gonna sound like an a**hole. I guarantee it."

“You’re gonna sound like an a**hole. I guarantee it.”

Scoring an interview with The Wall Street Journal‘s Money Beat blog is obviously a little different than going on the Today show, but some rules still apply:

  • Don’t try to turn billionaires into victims, because that doesn’t work
  • Never compare suffering bad publicity to being kidnapped and murdered

Robert Benmosche, CEO of real estate insurance giant/big time bad guy AIG, discarded both of these rules last week when he sat down with WSJ. In case you don’t recall, AIG was one of the prime movers blamed for the mortgage crisis because it trafficked in worthless credit default swaps before collapsing and receiving the largest government bailout of a private company in history. And the terrible PR Benmosche describes concerned the fact that employees continued to get eye-opening bonuses after they ruined their own company and, by extension, the entire American economy. Here’s the quote that’s pissing everybody off:

“Now you have these bright young people [in the financial-products unit] who had nothing to do with [the bad bets that hurt the company.] … They understand the derivatives very well; they understand the complexity. … They’re all scared. They [had made] good livings. They probably lived beyond their means. …They aren’t going to stay there for nothing.

The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that–sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.

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AIG Backs Down from Lawsuit. Is the PR Damage Already Done?

American International Group InsuranceWe recently discussed what appeared to be the glaring hypocrisy of financial/insurance giant AIG. We grew interested after the release of what was supposed to have been a rousing ad campaign thanking American taxpayers for their (non-optional) support during the financial crisis even as the company was simultaneously considering suing the government.

The suit would have claimed that the abnormally high interest rate charged by the fed during the bailout violated the Constitution’s Fifth Amendment, which protects “private property” against “public use, without just compensation”. While AIG ultimately decided not to back the lawsuit (ya think?), the story has already subverted the brand’s we’ve-cleaned-up-our-act message. The damage, as they say, is done.

“The hiccup with the lawsuit issue stole a great deal of the thunder from the ad”, said Bruce Haynes, managing partner of Purple Strategies, a corporate communications and branding management company. “For a moment, it seems they were awash in hypocrisy. Although they made a good decision not to back the lawsuit, it was a communication failure”. That’s putting it mildly — this was one hell of a hiccup. In fact, if we take the hiccup metaphor literally, we think it would look something like this (It’s a cat GIF. You’re welcome).

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PR Fail: AIG May Sue the Government That Saved Its Ass

Today in You Have Got to Be Kidding News, insurance giant American International Group–seen by many as the most obvious bad guy in the economic collapse that nearly wrecked the world’s biggest economy in 2008–has apparently considered joining a suit against the very entity that saved its ass from oblivion: the U.S. government.

AIG has repaid the billions in federal loans that allowed it to stay afloat, but the suit (filed by the company’s former chief executive, who is still an investor) claims that the abnormally high interest rate charged by the government violates the Constitution’s Fifth Amendment, which protects “private property” against “public use, without just compensation” (of course, the company agreed to this rate when accepting the bailout).

To state the obvious: this is a bit of a contradiction from a corporate entity that just released an ad “thanking” the American taxpayer for providing the funds that allowed it to live another day. Here’s that predictably ridiculous spot, complete with models straight out of a stock photo portfolio.

OK, so AIG thanks Americans for helping it survive when they had no choice in the matter but sues the government for supposedly screwing its shareholders by making a profit off an extremely risky investment? We won’t call ourselves business experts, but we can’t think of a better way for a massive company to fail its investors than falling into bankruptcy thanks to its own dubious practices.

Now we have a headache. And while we understand that AIG was and is “too big to fail”, at this moment we really wish the government had just let it burn.

Weber Shandwick Partners With Liberty Mutual For Crisis Insurance

Weber Shandwick has teamed up with Liberty Mutual Insurance to become the go-to firm for crisis comms for that company’s customers, part of the insurer’s “commercial lead umbrella policy.”

With this new relationship in place, policyholders will have 72 hours to file a claim for $50,000 worth of crisis management services from the firm. Policyholders also have the option of purchasing additional coverage that would get them $250,000 worth of crisis management. That’s a mighty big crisis! We’ve asked the firm what exactly in included at the $50,000 level of service and we’ll come back with those details once we have them.

This isn’t the first time we’ve heard of this sort of partnership. Back in October, an AIG subsidiary, Chartis, announced a partnership with Burson-Marsteller and Porter Novelli to provide a “ReputationGuard” service. In that case, an annual premium of $10,000 would guarantee policyholders some crisis management service.

Get Your Reputation Insured With AIG

Well now. AIG subsidiary Chartis has launched a product this week called “ReputationGuard” that will offer services from Burson-Marsteller and Porter Novelli to account holders in case of a crisis situation. Policy prices vary, but a small company could shell out $10,000 in annual premiums.

Yes, we’re talking about the AIG that got all that bailout cash and became the object of intense scorn when the economy collapsed in ’08. AIG’s own crisis situation was so bad, this subsidiary changed its name from AIU Holdings to Chartis so it wouldn’t be associated with its parent company. And, according to a Harris Interactive study from earlier this year, its reputation is still pretty much in the toilet.

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