Remember the $165 million in bonuses that American International Group (AIG) awarded to its executives after accepting more than $170 billion in federal bailout money? Those bonuses, which have become a symbol of corporate greed and self-indulgence in the eyes of many Americans, were approved by former Unum CEO James F. Orr. Orr is now an AIG director and serves as chairman of its “executive compensation committee.”
Now several owners of AIG stock, including the leaders of big union and pension funds, are requesting the removal of Orr from AIG’s directorship. The stock owners made their appeal to the three AIG trustees appointed by the federal government. The decadent bonuses, they claim, were awarded to the same AIG executives who were responsible for AIG’s catastrophic losses.
It seems as though Orr’s special form of business ethics become a central part of the corporations he leads. He served as Unum’s CEO for many years in the 80s and 90s when the company called Portland, Maine, home, and many credit him for turning Unum into a multi-billion dollar disability insurance provider. Orr was in charge of Unum when it merged with the Tennessee-based Provident Companies, becoming UnumProvident. The company recently renamed itself Unum.
Unum’s success, however, was ill rooted in a discovery that the company could make more money on disability claims by denying as many of them as possible. The company routinely challenges legitimate disability claims, devises cost cutting schemes that frustrate and confuse its claimants, and generally works very hard to avoid helping the people it’s supposed to serve. At one time, Unum even gave out “Vulture” awards to employees who denied the most claims.
The American Association for Justice (AAJ) recently ranked Unum number two in its published list of Ten Worst Insurance Companies in America.
The request to remove Orr from AIG came from the American Federation of State County and Municipal Employees Pension Plan, the Connecticut Retirement Plans and Trust Funds, and the American Federation and Congress of Industrial Organizations Reserve Fund. The stock holders did not request any other AIG Directors be removed.