Greenberg, Jeffrey W. 1951–
Jeffrey W. Greenberg
Chairman and chief executive officer, Marsh & McLennan Companies
Education: Brown University, AB, 1973; Georgetown University Law School, JD, 1976.
Family: Son of Maurice "Hank" Greenberg (business executive); married second wife Kimberly (maiden name unknown).
Career: Marsh & McLennan Companies, 1976–1978, broker, manager of the commercial aviation and aerospace insurance group; American International Group, 1978–1995, several management positions, including executive vice president of domestic brokerage insurance group; Marsh & McLennan Companies, 1996–2002, chairman of MMC Capital; 1999–, CEO; 2000–, chairman.
Awards: Named by Forbes as one of America's Most Powerful People, 2000 and 2001.
■ Jeffrey Greenberg spent most of his early career under the wing of his father, Maurice "Hank" Greenberg, head of American International Group (AIG). After nearly two decades he surprisingly left AIG and joined Marsh & McLennan Companies (MMC), a global insurance, investment, and consulting company. Within a few years he was named the company's chairman and chief executive officer (CEO). Greenberg led AIG through several tumultuous events, including the loss of hundreds of employees in the September 11, 2001, attacks on the World Trade Center. He also steered AIG through an investment scandal at Putnam Investments, one of MMC's subsidiary companies. Greenberg was described as a smart and competent executive who tended to avoid the spotlight.
FOLLOWING IN HIS FATHER'S FOOTSTEPS
Jeffrey Greenberg grew up in a privileged environment, but he did not want to be a stereotypical rich kid. As a teenager he took jobs pumping gas and bagging groceries at a local supermarket (although he reportedly used the proceeds to buy an Alfa Romeo sports car). His former wife, Nikki Finke, described Greenberg as a "dutiful son." After graduating from Brown University and Georgetown University Law School, he took a job as a broker at MMC, where he quickly became known for his intelligence and hard work. "I think he could have succeeded in any business," Michael P. Esposito, a longtime business associate, told BusinessWeek.
Greenberg left MMC after two years to join his father's company. In 1988 he was made head of AIG's property-casualty division, the National Union Fire Insurance Company. Three years later he was named executive vice president of domestic brokerage operations. The insurance products he helped develop enabled AIG's customers to protect themselves against a wide variety of potential problems, from severe weather to currency fluctuations. While at AIG, Greenberg adopted his father's tough business style. When Hurricane Andrew hit Florida in 1992, Jeffrey Greenberg is said to have sent out a memo (supported by his father) telling AIG senior managers, "This is an opportunity to get price increases now" (Washington Post ).
Greenberg spent 17 years at AIG and was expected to succeed his father as head of the company. But in 1995 he abruptly left his position as executive vice president, just weeks after his brother, Evan, was awarded the same title. Although Jeffrey said he made the move because "it would be fun to do something independent of AIG" (Wall Street Journal ), there was some speculation that Evan's rapid rise within the family business threatened Jeffrey's position as heir apparent. Other analysts suggested that Jeffrey was tired of waiting for his father's job; though Maurice was well past the age of retirement, he showed no signs that he was ready to relinquish the top spot at AIG.
Still other people in the industry suggested that Jeffrey felt strangled by his father's tight rope. At one point his father reportedly responded to a personnel problem in one of Jeffrey's divisions by saying, "You either fix your management problem or I'll fix mine" (Washington Post ). But Jeffrey denied that there was any strain in his relationship with his father. Some AIG executives were saddened when Jeffrey Greenberg left the company and were concerned that his brother would not be able to fill his shoes. "He was a real creative force," one high-level manager said of Jeffrey (BusinessWeek ).
RETURN TO MARSH & MCLENNAN
Soon, Greenberg returned to MMC. The move raised eyebrows, because AIG was one of MMC's primary sources of insurance coverage for its clients. Skeptics were concerned that Greenberg would give preferential treatment to his father's company, choosing its policies over those of rival insurers.
Greenberg was chairman of MMC Capital from 1996 until 2002. In 1999, at the age of 47, he became the youngest CEO in the company's 129-year history. At the helm he was charged with overseeing the three divisions of the multibillion-dollar financial-services conglomerate: Marsh, one of the world's largest corporate risk and insurance brokers; Putnam Investments; and Mercer Consulting Group. Within two years MMC's stock prices were up 60 percent, and Greenberg had lured top talent from companies such as PepsiCo and the Union Bank of Switzerland to fill his management team.
Associates described Greenberg as an intellectual and analytical leader with a deliberate management style. "He's not a person who makes snap decisions," Michael A. Lewis, an analyst at UBS Investment Research, told the New York Times. As CEO, Greenberg always kept a low profile, making few public appearances, and rarely hosting conference calls to announce quarterly earnings, as was the practice of many of his rivals' CEOs.
DIFFICULT TIMES FOR MMC
The rosy period that Greenberg enjoyed during his first few years at MMC did not last for long. The economic downturn at the beginning of the 21st century hit MMC's stock price hard. The company was also devastated by the events of September 11, 2001. MMC had 1,700 employees working in the upper floors of the World Trade Center, and nearly 300 of them were killed. When he heard news of the terrorist attack, Greenberg quickly established a command center at the company's headquarters in midtown Manhattan. He later arranged for grief counselors and other support for the families of those employees who had perished. September 11 changed the business world significantly, but for the insurance industry the repercussions were not all negative. MMC took advantage of higher insurance rates and the increased demand for insurance that resulted from the attacks.
In 2003 Putnam Investments, one of MMC's divisions, found itself embroiled in scandal. Civil charges were filed against the company for alleged trading abuses. According to the Securities and Exchange Commission, Putnam's executives used insider information to profit from the international funds they managed, at the expense of their clients. Within a few months after the story became public, angry investors withdrew more than $71 billion from the company. Greenberg replaced Putnam CEO Lawrence Lasser soon after the scandal broke, in a move many thought reminiscent of his father. ""I see this as an aggressive move that hopefully will address whatever problems they have and get them firmly back on track," Chris Winans, an insurance analyst at Lehman Brothers, told the New York Times. "This is very much like his father's approach to problems, to address them quickly and forcefully."
Although Greenberg vowed to stick with Putnam, he was firm that the company would not stand for any sort of shady business practices. "We are taking measures to see that this does not happen again. The kind of conduct that has occurred has no place at Putnam," he said in a statement (CFO.com ). He directed Putnam Investments' mutual-fund unit to pay millions of dollars in restitution to jilted investors. Greenberg also added independent directors and limited employee trading, all in an effort to restore investor confidence.
While his company was struggling to regain its foothold in the investment industry, Greenberg's own finances were solid. In 2003 he pocketed approximately $14 million, a hefty in crease from the previous year. By the end of the year MMC was on better footing as well. The company had a double-digit revenue increase over the previous year, fueled primarily by a strong performance by its risk and insurance businesses. In 2004, following the controversy over former chairman Richard Grasso's $188 million compensation package, Greenberg was appointed to the New York Stock Exchange oversight board to help reform the organization's business practices.
Greenberg was a trustee of the Brookings Institution, Brown University, the Spence School in New York City, and New York Presbyterian Hospital. He was a member of the board of overseers of the Joan and Sanford I. Weill Graduate School of Medical Sciences of Cornell University, the board of directors of ACE Limited, the Council on Foreign Relations, and the Trilateral Commission.
See also entries on American International Group, Inc. and Marsh & McLennan Companies, Inc. in International Directory of Company Histories.
sources for further information
Brady, Diane, "People: Dynasties: Like Father, Like Sons," BusinessWeek, March 1, 1999, p. 112.
Crenshaw, Albert B., "Another Son of CEO Leaves AIG; Evan Greenberg Quits 9 Months After Being Called Next Chief," Washington Post,, September 20, 2000.
Lohse, Deborah, "At AIG, Son is (Nearly) Spitting Image of CEO Father," Wall Street Journal, June 15, 2000.
Taub, Stephen, "That's No Virus, That's Our Restatement," CFO.com, http://www.cfo.com/article/1,5309,11079–0–A–93–100,00.html.
Treaster, Joseph B., "Attention-Getting Decision from a Low-Profile Chief," New York Times, November 4, 2003.