NEW YORK–Other than a couple of pointed questions, stockholders attending the annual meeting of American International Group had a mild reaction to the company's announcement last week of a $7.8 billion first-quarter loss.

The meeting, which was circled with security personnel, came in the wake of Sunday's written attack made on the company's corporate management by Maurice R. Greenberg AIG's former chairman and chief executive officer.

Mr. Greenberg called for a postponement of AIG's meeting to give shareholders time to digest the company's recent actions and losses. He wrote that the company “is in crisis” and that shareholders need time to “give careful thought to how best to move AIG forward.” He said the company had seen a “deterioration” and was endlessly losing value, and questioned AIG's move to raise money in the capital markets.

A spokesperson for the company said the heavy security, which included a bomb-sniffing dog, metal detectors and body frisking, was normal, but persons who had attended previous AIG annual meetings said security appeared to have been ramped up.

While there were only five stockholder remarks, one of which was a statement of praise for the company, some of them did take up points that Mr. Greenberg had raised.

One noted the past assurances by management that had indicated the firm was on firm ground followed by large write-downs and the company announcement it would raise $11.5 million in capital.

Martin Sullivan, AIG's CEO, said in response that the capital raising was a proactive move to reassure the marketplace that the company balance sheet was fortified. He said the capital-raising effort was “going better than expected.”

John Youngman, a portfolio manager at Griffin Asset Management, said there had been a sharp deterioration in the company's fortunes while both board compensation and hiring increased. He said the company was “headed precipitously in the wrong direction,” and he wondered what management was doing to restore investor confidence.

Mr. Sullivan said that while AIG's holding company had suffered a one-notch rating downgrade, top ratings for its insurance companies remained in place.

He said the firm is maintaining a disciplined approach to expenses, and that some spending had been necessary to operations and systems and the company's personnel had expanded by “a tad over 5 percent.”

Some of the added staff was needed to work on regulatory compliance, he said.

Mr. Sullivan said frequently during his remarks that no one in management was pleased with the latest results, but the management team expected to see them improve. He said the fundamental business performance of the company remained sound and its strength was intact.

One stockholder, Philip Berman, said the company in a poor economic environment is still “a super colossus and outranks its peer group,” and he looks forward to the upside when the current down cycle ends.

There were two stockholder propositions that were defeated by a vote at the meeting. One would have the company examine risks involved with human rights to water and another would require disclosure of political contributions of corporate funds.

Management said the company was already addressing risks related to water resources and that political contribution information was already available through public sources.

Special Reports /

Little Fire At AIG Annual Meeting Despite Loss

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