Flipping his usual procedure for an annual corporate meeting, American International Group Inc.’s (AIG) chief executive began AIG’s annual meeting Tuesday with a look back at the events of the last year, which put AIG into the hands of the government in an unprecedented taxpayer bailout.
Edward M. Liddy, AIG chairman and chief executive officer, said that “in light of the extraordinary events of last year,” he would put the management report at the beginning of the meeting, rather than after other procedural tasks.
The meeting was held at the company’s New York headquarters and was broadcast on the Internet.
Liddy said AIG had made progress at reducing risk in its derivatives business, and he said the outstanding value of its derivatives has been cut almost in half, to $1.4 trillion from $2.7 trillion last year.
He also said progress had been made in selling off assets in order to repay its government debt.
“We have determined the destinies of nine of our major businesses,” Liddy said. “AIG is far more stable than it was a few months ago.”
Shares of AIG sank Tuesday after the company reported that it could face unrealized losses in its portfolio of credit default swaps contracts written to provide regulatory capital relief to E.U. banks, if credit markets continue to deteriorate. Shares of AIG recently traded down 15.8%, to $1.12.
AIG has had mixed results in selling off assets to pay off its loans to the U.S. government. Its biggest deal to date is its agreement to trade a portion of its foreign life insurance operations to the New York Fed in return for reducing its $40 billion government debt by $25 billion.
By Lavonne Kuykendall, Dow Jones Newswires; (312) 750 4141; lavonne.kuykendall@dowjones.com
