Analysts Speculate On Greenberg Successor

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By Michael Ha

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NU Online News Service, Dec. 5, 1:20 p.m.EST?Donald Kanak, elevated to vice chairman and co-chiefoperating officer post at AIG, has now joined Martin Sullivan, theother vice chairman and co-chief operating officer, as one of thetwo most likely candidates to succeed chairman and chief executiveofficer Maurice Greenberg, according to Morgan Stanley.[@@]

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The New York-based financial firm Morgan Stanley said it hasbeen guessing that Mr. Sullivan, 49, was the most likely manager tobecome AIG's new CEO if Mr. Greenberg chooses to retire or split upthe CEO-chairman roles.

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But now, with Mr. Kanak entering the picture, the eventualoutcome is becoming a little harder to predict. Analysts at MorganStanley said in its research note that they still believe Mr.Sullivan has the inside track, but "this latest move does add moreuncertainty to that potential outcome."

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Mr. Kanak, 50, who replaces Edmund Tse in the co-chief operatingofficer role, has been serving as president and CEO of AIGCompanies in Japan and Korea.

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Morgan Stanley observed that Mr. Kanak, educated both in theUnited States and England, is well regarded within the company forhaving led strong growth in the company's Japanese and Korean lifeoperations.

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The fact that Mr. Kanak has been leading AIG's Asian life unitscould turn the succession decision in his favor, since Asian lifeinsurance is becoming AIG's strongest long-term growth potentialbusiness. "Mr. Kanak's past experience carries significant weight,"said Morgan Stanley analysts.

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The timing of Mr. Greenberg's retirement or management changecould also swing the succession decision to either candidate. Ifthe change were to occur soon, Mr. Sullivan is still the strongercandidate, Morgan Stanley hypothesized. But if Mr. Greenberg wereto stay around longer, Mr. Kanak could gain the edge, as thecompany's growth plan in Asia takes hold.

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