AIG Jumps into Fray with Its Side of the Story

Watching the volcanic outrage over the AIG bonus money playing out in the media I wondered how the company would respond.

Many companies make the mistake of ducking for cover thinking they can wait out the storm.

While AIG is hardly the poster child for business communications, it made the right move with an op-ed from the CEO Edward Liddy in today’s Washington Post.

He frames the op-ed with classic storytelling; i.e., the disaster, hero to the rescue, corrective actions and finally the promise that everyone in Gotham City will eventually live happily after.

Let’s take a closer look.

The power of empathy championed by Oprah and her ilk is not lost on Mr. Liddy. His piece kicks off:

The government rescue of American International Group (AIG) and other financial firms has produced a palpable wave of anger on the part of Americans and a rising public demand for accountability from corporate and government leaders. The anger is understandable, and I share it.

Is he saying that he shares our anger or he shares an understanding that we’re angry? I’m not sure. Still, right move to jump on the anger bandwagon.

Next comes the mea cupa:

Mistakes were made at AIG, and on a scale that few could have imagined possible. The most egregious of those began in 1987, when the company strayed from its core insurance competencies …

Good word “egregious.” 

With the stage setting in place, our hero arrives on the scene. Here, Liddy makes it very clear that those “egregious” acts did not happen on his watch since “I answered the call for help and joined AIG in September 2008 …”

How has Liddy changed the behavior at AIG?

He makes a case with hard numbers that prudent fiscal management has been established highlighting that the top 47 execs made 56 percent less in 2008 than 2007. The sparseness in his language — “My annual salary is $1. My only stake is my reputation” — closes this section with a bit of drama.

In other words, other execs might have pigged out at the trough, but that’s not me. In fact, my financial stake is a single buck, and again, that bad stuff happened before I took the reins.

Finally, we get to the core issue.

Liddy refuses to use the B word, acknowledging that AIG made a “set of retention payments to employees based on a compensation system that prior management put in place.”

This is the one segment where I take issue with word choice. Everyone knows about the bonuses. Call them bonuses.

As we come down the home stretch, good conversational language follows that unfortunately derails at the critical junction:

Make no mistake, had I been chief executive at the time, I would never have approved the retention contracts that were put in place more than a year ago. It was distasteful to have to make these payments. But we concluded that the risks to the company and therefore the financial system and the economy, were unacceptable.

What does that last sentence mean? He was doing so well up to this point.

The piece closes with the happily-ever-after message.

I give AIG credit for recognizing the value of making its voice heard even in a hostile environment.

The op-ed is well crafted with elements of storytelling.

But the question on everyone’s mind still isn’t answered.

What are you going to do about all that bonus dough paid out?

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2 comments

2 Comments so far

  1. Dan Holden March 19th, 2009 9:55 am

    The kicker is that AIG took its cue not from the business world, but from the rap music world. As you recall last week Chris Brown bowed out of Nickelodeon’s award show after his alleged felonious assault on Rihanna. That saved Nickelodeon and its advertisers from having to force Chris to stand down. Same thing here. AIG didn’t demand a return of the bonuses, it merely took credit for the fact that some execs took the initiative to return (part of) them. From a public relations standpoint, AIG is in poor company and this letter does nothing to improve it.

  2. Lou Hoffman March 19th, 2009 11:19 am

    Good stuff.

    Your five words say it best:

    “AIG is in poor company”

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