American International Group stunned the insurance sector last week when it abruptly ended its agreement with incoming president John Neal before he could start. The decision followed an internal investigation at Lloyd’s of London, where Neal previously served as CEO. Lloyd’s launched the probe after market rumours surfaced about a relationship Neal allegedly had with an employee.
This was not the first such issue. Neal had earlier lost part of his 2016 bonus at QBE after failing to disclose a relationship with a subordinate. Reports also suggested the woman later replaced Neal’s former assistant, whom he married.
His collapse at AIG highlighted how corporate tolerance for workplace relationships has tightened. High-profile exits at several major companies have shown leaders face growing scrutiny over personal conduct. Industry experts say workplace culture now represents a major organisational risk.
Neal would have earned $17.2 million in his first year at AIG, including salary, bonuses, and stock awards. Instead, AIG and Neal reached a mutual decision that he would not join the company.
Some advisers now question whether AIG carried out sufficient due diligence, especially given previous conduct issues and recent legal challenges involving another senior executive. Industry observers say they are surprised this situation developed unnoticed for so long.
