Brian Duperreault, Marsh & McLennan Companies new chiefexecutive, outlined for stockholders today a plan to return thecompany to profitability that includes cost controls and cuts,divesting some businesses and acquiring others.

Speaking at the annual shareholder meeting, Mr. Duperreault,president and chief executive officer of MMC, called the NewYork-based services company, the parent of insurance broker Marshand reinsurance broker Guy Carpenter, "a great company withtremendous potential," but acknowledged that its financial positionhas not performed "adequately."

For the first quarter of this year, MMC reported that net incomedropped $478 million to a loss of $210 million compared to the sameperiod last year. This translated into a loss of 40 cents a share,down 87 cents from the comparative period. Revenues improved 8percent in the quarter by $235 million to more than $3 billion.

While he has only been on the job about 100 days, he said he hastaken several initiatives aimed at regaining profitability,especially at Marsh and Kroll, the company's risk consultingfirm.

"Management's role is to repair what is wrong and get us back onthe path of success," he said.

He laid out seven objectives for MMC's five companies, whichalso include the consulting firm's Mercer and Oliver WymanGroup.

Marsh, he said, must return to profitability, calling thatpriority number one. He credited Daniel S. Glaser, chairman and CEOof Marsh, with simplifying the organizational structure of the firmand improving its financial performance with expense managementcontrol.

For the first quarter Marsh reported revenue growth of 7percent, or $85 million, to $1.23 billion. Organic growth grew by 1percent.

"We are pleased by this tangible evidence of cost containmentbut will continue to implement vigorous expense discipline at Marshin order to achieve even greater long-term margin improvement,"said Mr. Duperreault.

"We know there is a lot of work ahead of us at Marsh, but theactions we have taken today have generated positive results."

He said integration plans for Kroll with Marsh nevermaterialized, and after a review of the business he said there areseveral lines within Kroll that do not fit. MMC will look to divestitself of these businesses, he said, but did not identify thespecific businesses.

Guy Carpenter will go through a restructuring, he said, whichhas already begun with cost reductions under new management. Morethan 300 positions will be eliminated--about 10 percent of theworkforce--translating into annual savings of $40 million.

He said the broker is the "preeminent reinsurance advisor in theUnited States" and the aim in the future is to make it thepreeminent reinsurance advisor in the world.

Attention needs to be paid to its consulting services, Mercerand Oliver Wyman, which will undergo some stress during the U.S.economic slowdown, said Mr. Duperreault.

They account for half of MMC's revenues, and the company mustseek a balance between being prepared to take advantage of theeconomy when it improves and at the same time growing in ways thatare prudent, he informed.

Mr. Duperreault said MMC has underinvested in its people andimprovements will be needed to attract new talent and retaintalented employees.

The company will look at costs at its "corporate center" todetermine if greater efficiency is necessary, he noted.

Finally, he is putting MMC on a path of organic growth andgrowth through acquisition. He signaled that no acquisition shouldbe considered too small, but at the same time the company should bewilling to get rid of anything that doesn't work.

"We still have a lot of work ahead of us, but I'm optimisticabout the future," Mr. Duperreault concluded.

MMC today announced that it would pay a quarterly dividend of 20cents per share on Aug. 15 to shareholders of record as of July8.