Could Kanak Succeed AIG's Greenberg?

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By Michael Ha

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NU Online News Service, Dec. 5, 12:05 p.m.EST?American International Group Inc. said it has namedDonald Kanak as new vice chairman and co-chief operating officer,boosting Mr. Kanak's chance of eventually succeeding longtimechairman Maurice Greenberg.[@@]

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Mr. Kanak replaces Edmund Tse, 65, in the co-chief operatingofficer role. Mr. Tse will now focus on the company's lifebusinesses in Asia and around the world.

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Mr. Kanak, 50, first joined New York-based AIG in January 1992and has recently been serving as president and chief executiveofficer of AIG Companies in Japan and Korea.

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For his new role, which takes effect beginning next month, hewill move to New York to work alongside Martin Sullivan, 49, who isthe other vice chairman and co-chief operating officer. The two menwill then be the top two executives right behind Mr. Greenberg.

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"I think, right now, you have to look at Don Kanak and MartinSullivan?either of them or even together?as a likely successor toMr. Greenberg," Mark Lane, research analyst at Chicago-basedfinancial firm William Blair & Co., told NationalUnderwriter. "Donald Kanak has been seen as someone who hasbeen rising within the organization. But this clearly symbolizesthat sort of recognition."

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Stephanie Eakins, financial analyst at Jupiter, Fla.-based WeissRatings Inc., also agreed with that assessment and said, "Mr. Kanakis one of the top candidates for succeeding Mr. Greenberg, sinceMr. Greenberg's sons are no longer working at AIG. They have leftin the last few years?they have gone to other insurancecompanies."

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Mr. Lane noted that the important thing about AIG and successionis that "it's got to be someone within the company, and those twoguys are now the second group in command. It's a natural place tolook for a successor."

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Still, Mr. Lane acknowledged that it remains difficult topredict who will eventually replace Mr. Greenberg, and even whenMr. Greenberg will decide to retire.

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"Trying to predict when Hank Greenberg will want to step asidehas been very challenging," he said. "He is still very involved inday-to-day operations, so it's very difficult to predict. There isa succession plan right now, but it just hasn't been made public.If something were to happen to Mr. Greenberg, there is a plan inplace."

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