Peter Hancock, widely credited with being the architect of the derivatives business, has just been tapped by AIG to oversee finance and risk.
He’s taking over the job at AIG Financial Products that was led by Joseph Cassano and later Gerry Pasciucco. About 230 employees remain at Financial Products, down from about 430 in 2008. Last week it was reported that AIG had paid out $100 million in bonuses to these folks. Hancock will get a $3.9 million starting salary, $1.5 million in cash and $2.4 in stock. He’s eligible for a $1.8 million cash bonus next in 2011. Next year his slary rises to $1.8 million in cash and $4.4 million stock.
Hancock spent 20 years at a predecessor to JPMorgan Chase & Co., where he established the derivatives group and served as chief financial officer, New York-based AIG said in a statement today. Hancock, who most recently was vice chairman at KeyCorp responsible for national banking, will report to AIG Chief Executive Officer Robert Benmosche.
Hancock “is one of the people that basically developed the credit-default swaps market at JPMorgan in the mid-1990s,” said Ed Grebeck, CEO of Stamford, Connecticut-based debt-consulting firm Tempus Advisors and an instructor at New York University on derivatives. “Given that he was one of the pioneers, it’s probably the first good appointment that any one of these bailed-out firms has made.”
JP Morgan derivatives queen Blyth Masters describes Hancock as “a great leader and mentor, and…one of the best risk managers I know.”
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