Morning. I am Rosemarie Glaser, Senior Vice President, Corporate Secretary and Deputy General Counsel of AIG, and I welcome you to the Annual Meeting of Shareholders for twenty twenty. Joining me is Doug Steenland, Chairman of the AIG Board of Directors and Brian Dupro, AIG's Chief Executive Officer. Our thoughts go out to everyone joining us today who has been affected by COVID-nineteen. We hope that you all remain safe and healthy as we navigate this unprecedented global event together.
For the safety and well-being of our shareholders and employees, we determined not to hold a physical in person meeting this year, but we are pleased to be able to host our meeting virtually, which allows us to be more inclusive and reach a greater number of our shareholders. Our team is working remotely, so we are each joining you this morning from different locations. Before we begin the meeting, I'd like to cover a couple of housekeeping items. A link to the rules of conduct for the meeting are available in the meeting materials portion of the virtual meeting web portal. I ask everyone to review these rules of conduct and adhere to them.
Please note that this meeting is being recorded. However, no one attending via webcast is permitted to use any recording or transcribing device. An agenda for the meeting should be visible on the virtual meeting web portal. As is our custom, Doug will conduct the official business of the meeting and address the list of proposals under consideration today as presented in the proxy materials. After the formal meeting has been adjourned, Doug will introduce Brian to remark on the progress the company made in 2019 and areas of focus to position AIG as a leading insurance franchise and a top performing company.
We will then provide time for general questions and answers. Only validated shareholders who have entered their control numbers into the web portal will be able to submit questions during today's meeting. Please adhere to our rules of conduct to allow us to answer questions from as many shareholders as possible. The rules provide that each shareholder may submit a maximum of two questions. A certified list of shareholders entitled to vote at this meeting is now available for inspection on the web portal.
Links to the AIG Annual Report, which includes the Form 10 ks for the year 2019, the proxy statement, and the Form 10 Q for the first quarter twenty twenty are also available in the meeting materials portion of the web portal. I now submit the affidavit of Broadridge Financial Solutions, Inc certifying that each shareholder of record at the close of business as of 03/18/2020 was sent a notice of availability of proxy materials transmitted on or around 03/31/2020, or a package containing AIG's 2019 annual report, notice of this meeting, a proxy statement, a proxy card, and a return envelope mailed commencing on 03/31/2020. In addition, I would like to remind you that the remarks made today may contain forward looking statements, which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Any forward looking statements are not guarantees of future performance or events. Actual performance and events may differ, possibly materially, from those anticipated in any such forward looking statements.
Factors that could cause such differences include the factors described under management's discussion and analysis and under risk factors in our twenty twenty first quarter ten Q and our twenty nineteen ten ks. AIG is not under any obligation and expressly disclaims any obligation to update any forward looking statements, whether as a result of new information, future events, or otherwise. The information provided today may also include non GAAP financial measures. The definitions of such measures and the reconciliation of such measures to the comparable GAAP figures are included in AIG's 2019 Annual Report to Shareholders and our twenty nineteen and first quarter twenty twenty financial supplement, which are available on AIG's website. Christopher Woods joins us today and has been sworn in as our independent inspector of election.
He advises that a quorum is present. Additionally, we are joined by Tom Perolo from PricewaterhouseCoopers, our independent auditor. Tom will be available during the question and answer session after the formal meeting to respond to questions. With that, I will turn the meeting over to our Chairman, Doug Steenland.
Thank you, Rosemarie. I hereby call to order the twenty twenty Annual Meeting of Shareholders of American International Group, Inc. Joining us for the meeting today are the 12 nominees, including Brian and me for the AIG Board of Directors. The other nominees are W. Don Cornwell, John H.
Fitzpatrick, William G. Jurgensen, Christopher S. Lynch, Henry S. Miller, Linda A. Mills, Thomas F.
Ottomad, Peter r Perino, Amy l Shoaldeger, and Theresa m Vaughan. All of the nominees are currently members of AIG's board of directors. I would like to recognize Suzanne Nora Johnson, who has decided not to stand for reelection. Thank you, Suzanne, for your many years of service and your valuable contributions to AIG. Finally, I also wanna thank all of the nominees for agreeing to stand for reelection and being willing to serve on the AIG board.
Proceeding to the official business of today's meeting, I will list the proposals under consideration today as they appear in the proxy statement. After the list has been presented, if any shareholder wants to comment on or ask a question about any of these proposals, you may do so by submitting your comment or question through the web portal. The first proposal is the election to the AIG Board of the 12 nominees I introduced to serve as directors until the next annual election or until their successors are elected and qualified. The second proposal is a nonbinding resolution to approve executive compensation. The third proposal is to amend and restate AIG's restated certificate of incorporation to restrict certain transfers of AIG's common stock in order to protect AIG's tax attributes.
The fourth proposal is to ratify the amendment to extend the expiration of the American International Group, Inc. Tax Asset Protection Plan. The fifth proposal is the ratification of the selection of PricewaterhouseCoopers, LLP, as AIG's independent registered public accounting firm for 2020. The sixth and final item of business is to consider a shareholder proposal that the Board take steps to lower the ownership threshold required for shareholders to call a special meeting. The Board has unanimously recommended that the shareholders vote against this proposal for the reasons set forth in the proxy statement.
Mr. John Shiveden representing Kenneth Steiner will present the proposal. Mr. Shiveden, your proposal and supporting argument is contained in the proxy statement and is deemed submitted. If you wish to make a statement in support of the proposal in accordance with the rules of conduct for this meeting, you will have five minutes to present your statement.
Operator, would you please unmute Mr. Chiveden's line?
Hello, this is John Steaden. Can you hear me okay?
Barely. There. That's better.
Okay. So this is proposal six. Make shareholder right to call special meeting more accessible. Joe has asked our board to take the steps necessary to amend our bylaws and appropriate governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. Adoption of this proposal topic could include a provision that a 20% stock ownership threshold would apply if a single shareholder calling for a special meeting owning 10% or more of AIG stock.
This proposal topic won more than 70% support. This proposal topic also won 78 support at the Sprint annual meeting with 1,700,000,000 yes votes. Nuance Communications shareholders gave 94% support in 2018 to a shareholder proposal calling for 10% of shareholders to call. Our higher 25% threshold for shareholders to call a special meeting may be out of reach due to time constraints and the detailed technical requirements. The 2019 version of this proposal won 47% support, which represents at least 51% support from the shareholders who have access to independent proxy voting advice at AIG.
The Board of Directors should respect the vote of shareholders who have access to independent proxy voting advice. And this proposal does not face a level field today. After a 47% shareholder vote in 2019, management is intent on overkilling this proposal. This proposal is limited to 500 words. Management, on the other hand, is rude in giving this proposal a negative introduction with a negative image next to it and has 1,300 words in opposition including two sidebars and five oversized headings.
Management overkill is a guiding principle after a 47% shareholder vote in 2019. Any claim that a shareholder right to call a special meeting can be costly may be largely moot. When shareholders have a good reason to call a special meeting, our board should be able to take positive responding action to make a special meeting unnecessary. Special shareholder meetings allow shareholders to vote on important matters such as electing new directors that can arise between annual meetings. Adoption of this proposal could create more of an incentive for the chairman of the executive pay committee, Don Cornwell, to avoid rejection by more than 10 times as many shareholders' votes as a number of other AIG directors as was the case in 2019.
44% of shares rejected AIG executive pay in 2019. 37% of shares rejected AIG executive pay in 2018. If AIG executive pay had better incentives, then perhaps our stock would perform better than being down more than 50% in the last five years. Under these circumstances, it is important that preliminary percentage votes in regard to executive pay be announced at this meeting. Please vote yes.
Make sure the right to call a special meeting more accessible proposal six.
Thank you, Mr. Shiveden. For the reasons stated in the proxy statement, the Board of Directors has carefully considered this proposal and unanimously recommends a vote against the proposal. Are there any questions or comments on the proposals? If so, please submit your question or comment through the web portal now.
As a reminder, there will be time later for general questions. Questions or comments at this point are limited to the six proposals presented.
So we have, Mr. Chairman, one question with regard to the proposals. The question is, what percent vote did the topic of proposal six get in 2019 at AIG? And the answer is 47.23%. There are no other questions in the queue related to the proposals.
Okay. Thank you. We will now proceed to vote on the proposals that have been properly presented to the meeting. The polls are now open. Any shareholder who hasn't yet voted or wishes to change their vote, they do so by clicking on the voting button on the web portal and following the instructions there.
Shareholders who have sent in proxies or voted by telephone or Internet and do not wish to change their vote do not need to take any further action. We will now pause in case anyone wishes to vote or change their vote. Alright. Now that everyone has had the opportunity to vote, I now declare the polls closed. I have the preliminary report of the inspector of election as of the start of this meeting.
Report shows that each of the director nominees standing for election has been elected by a majority of the votes cast and that all of the board's sponsors proposed sponsored proposals have been adopted, and that the shareholder proposal was not adopted. We will be reporting the detailed final results in an eight ks to be filed with the SEC within four business days. The official meeting the official business of the meeting is now concluded, and the twenty twenty Annual Meeting of Shareholders is now adjourned. We will now turn to Brian for a brief overview of how AIG performed in 2019, and importantly, how the company has responded to COVID-nineteen thus far in 2020. Brian?
Thank you, Doug, and thanks to all of you for joining us virtually this year. I hope you remain safe and healthy in this unprecedented time. As Doug mentioned, I'll provide a brief overview of how we've continued to execute against our strategy for long term sustainable profitable growth. Then I'll turn to AIG's response to COVID-nineteen. Looking back on 2019, I'm proud of the many accomplishments.
The foundational work we have undertaken at AIG since mid-twenty seventeen was evident in our 2019 financial performance, with broad based improvements in all segments. Most notably, General Insurance achieved full year underwriting profitability, and we expect to see continued improvement in the combined ratio, excluding catastrophe losses for 2020. We remain diligently focused on instilling a culture of underwriting excellence and enhancing underwriting profitability while continuing to reposition our portfolio. Life and Retirement continues to deliver solid results, and we do not believe the impact of COVID nineteen will result in material reduction of our long term return profile. With life and retirement diversified portfolio and distribution network, we continue to be able to tailor our offerings to meet the needs of customers and distributors in the evolving market environment.
Additionally, we focused in 2019 on further strengthening AIG's balance sheet by deleveraging and more efficiently managing AIG's legacy liabilities. One example of the latter is the agreement reached last year to sell a majority interest in Fortitude Group Holdings LLC. We continue on a course towards a mid year closing, subject to regulatory approvals. Last year, we also made significant progress on AIG 200, our global multi year transformational effort that's being led by AIG's president, Peter Zaffino, which is designed to strategically position AIG for long term sustainable and profitable growth. We remain committed to this critical effort.
Turning to 2020, AIG's core business delivered strong first quarter results despite the impact of COVID-nineteen and its associated market decline, building on AIG's momentum coming into the year. Having said that, COVID-nineteen has brought circumstances around the world unlike anything I've seen in more than forty years in the insurance business. We've been fortunate to have a relatively small number of colleagues who tested positive for COVID nineteen. Our hearts go out to them, and particularly to the families of a few who sadly passed away. Throughout this time, AIG has remained focused on helping our colleagues and the communities where we live and work.
As one example, in mid March, we issued a $500 grant to each colleague globally to help with unanticipated costs. We also recently reinstated the AIG Foundation and will be making an inaugural $5,000,000 contribution. The foundation's primary focus for the foreseeable future will be on COVID nineteen relief efforts across the globe. With regard to our operations, AIG moved quickly to put protections in place to safeguard our colleagues while implementing business continuity plans designed to ensure that we can continue to serve our clients, policyholders, distribution partners, and other stakeholders without material interruption. As a result, over 90% of our workforce is working remotely, and we have taken substantial precautions for our teams whose jobs require them to work on-site, including stringent measures to keep them safe and healthy.
To and thanks to these colleagues a thanks to these efforts, AIG's colleagues remain available to help meet the needs of clients and other business partners with both in force and new business. We took a very prudent yet robust approach to analyzing COVID nineteen's impacts across AIG in the first quarter, and we will continue to be thoughtful and thorough as we move through each quarter while this ongoing crisis evolves. COVID has resulted in increased uncertainty, extreme equity volatility, equity market volatility, and dramatic interest rate actions. However, the foundational work we have undertaken over the past two years and on which we continue to build has strengthened our ability to lead through this complexity. As disclosed with AIG's first quarter results, the company has ample liquidity, its balance sheet strong, and our insurance subsidiaries have strong capital ratios.
Following our following our earnings call last week, we tapped the debt markets with a sizable $4,100,000,000 senior notes offering. Our transaction was very well received and its success is validation that the investment community believes in the strength of AIG, both in our ability to weather the current economic uncertainties and to be well positioned to capitalize on opportunities that will emerge as business activity begins to normalize. As I conclude, I would like to thank everyone across AIG for their resilience and dedication to continue serving our many stakeholders throughout this period, as well as their contribution over the past year to help move our company forward. Despite the many macro headwinds that now exist, we continue to make meaningful progress on our goal of becoming a leading insurance franchise. I remain confident we are on the right path, and I look forward to what we will accomplish together.
I would also like to thank you, our shareholders, for your continued support on our journey. I'll now turn the floor back to Doug to begin the general Q and A session. Doug?
Thank you, Brian. I would like to remind you of the procedures that we are going to follow for our Q and A and ask that you work with us to adhere to them. Please submit your questions through the web portal. As a reminder, only validated shareholders may ask questions in the designated field on the web portal. Please note that we will attempt to answer as many questions as time allows.
Rosemarie, will you please read aloud any questions that have been submitted on the Web Portal?
Thank you, Doug. The first question, what is the greatest impact of COVID nineteen on the company?
Well, thanks, Rosemary. Thanks for the question. Last of March 31, when we issued our first quarter results, financially, the the largest impact was the effect on the financial markets and the asset values that we have. You know, we have a very good, strong invested asset and strong balance sheet. And, you know, that was the greatest impact.
Now, you know, this is an ongoing crisis, and it's very, very difficult to predict what the future might bring. But I but I will say that through April 30, a large portion of that financial hit to the asset levels rebounded. I think we mentioned that in our first quarter earnings call. I think it was about a return of about $6,000,000,000 in value to the balance sheet. So that was the largest impact.
I think, you know, from a personal point of view, from an operational point of view, it's getting our employees working remotely. So, you know, a massive change in how we go to work every day. And I must say that I'm so proud of all of the people who work at AIG, all of my colleagues who have responded so well to this crisis. We are working remotely. 90% of our workforce is remote is working remotely.
That happened within, you know, a week of the of the of the shutdown. So those are the those are the impacts.
Thank you, Brian. The next question, are there any employee furloughs so far in 2020?
Well, I'm pleased to announce that no, we have not furloughed any employee. We have no plans of anything like that due to the COVID. You know, we continue to look at our our normal review of of our expenses and and more importantly, our efficiency levels. But, no, we have not furloughed anyone.
Next question. Why did the stock price drop so dramatically, and what steps are being taken to help the stock move back up to its pre COVID nineteen level?
Well, you know, there's many, I'm sure there are many reasons for a decline. As I mentioned earlier, the big impact was the, the asset levels. I think, we spent a good good deal of time on the first quarter call explaining what the impacts were to the company, you know, the kind of reserve levels that we needed to put up for the for the COVID and general insurance, its effect in life and insurance. I look, we I mentioned earlier on the on the remarks, we continue to be on a on a pace to execute our plans to improve this company, and and we're well on the on the way. And and that is the way that we will create shareholder value.
I will point out that our tangible book value levels increased 11% between 2019 and 2020. And so that's an that's a a clear indication of the continued improvement in the in the in the level of the company's performance. Thank you.
The next question is, are stock buybacks authorized for 2020? And if so, how much?
We've bought back 500,000,000 of AIG stock in the first quarter. That leaves us with 1,500,000,000.0 remaining in authorization. We mentioned in our first quarter earnings call that due to the uncertainties in the of COVID nineteen and it's continuing evolving, you know, as a as a global pandemic, we have suspended plans to buy back stock, and we will continue to evaluate that as as as COVID continues to evolve itself.
Thank you. Next question. Why is Blackboard being run off and why is the charge being taken so large?
Well, black we made a decision, with respect to Blackboard that, was strategic in nature, a decision to whether or not to continue the investment in it. It's a and and therefore, that strategic decision taken in the first quarter caused us to put the company into runoff. The the write offs are, based on the level of of assets that we felt that would be, loan no longer valid. That's my answer. Thank you.
Then we have one that's what's the projected second quarter twenty twenty profit?
Well, we suspended any
guidance
for the year because it's been very difficult to predict the effect that COVID will have on on the company's performance. And so because of that, I I won't comment on what we project the quarter's profits to be.
Thank you, Brian. And our final question was how many questions did we get at this meeting? And I'll take that one. There were seven questions in the general q and a session that were not already addressed in your remarks, and one that we had already answered as part of the proposals for a total of eight. So with that, our Q and A session is now over, and the meeting is concluded.
If you didn't get your question addressed or if you have additional questions, please contact AIG Investor Relations. The contact information and links are available on our website. Thank you for attending, and we hope all of you remain safe and healthy.