June 9 (Bloomberg) -- Hartford Financial Services Group Inc. promoted Christopher Swift to chief executive officer to replace Liam McGee, who is stepping down after a medical procedure related to a brain tumor.
Swift, the 53-year-old chief financial officer who joined from American International Group Inc. in 2010, will become CEO on July 1, according to a statement today. McGee, 59, will remain executive chairman until the next annual shareholders meeting.
McGee, a former executive at Bank of America Corp., took over Hartford in 2009 and repaid a $3.4 billion U.S. rescue the next year. He sold a life insurer, a Japan annuity business and a retirement-plans operation as he narrowed the company’s focus. Hartford said in January 2013 that McGee was having chemotherapy after the removal of a brain tumor.
Stepping down as CEO will allow McGee to devote “additional time to continued recovery from a recent procedure related to my previously disclosed health issue,” he said in the statement. “With our strategic transformation largely complete, it is the right time for the company and me personally to make this transition.”
Beth Bombara, 46, who is overseeing the businesses that Hartford is winding down, will replace Swift as CFO. Doug Elliot, 53, president of commercial markets, will take the title of president, a duty that is currently held by McGee.
The insurer has gained 37 percent from the last trading day before McGee became CEO on Oct. 1, 2009, through June 6. Hartford, based in the Connecticut city of the same name, slipped 2 cents to $36.21 at 12:45 p.m. in New York, and is little changed this year after rallying 61 percent in 2013.
John Paulson, the billionaire hedge-fund manager, pressed McGee to split Hartford in 2012 after a share slump the previous year. McGee resisted, instead divesting units, helping the shares recover as he focused on property-and-casualty coverage. Paulson’s firm later praised Hartford.
“Liam McGee has led a generational transformation of Hartford, positioning it to prosper by focusing on operations with industry-leading positions,” Paulson & Co. said in an e-mailed statement today. “We thank him for his efforts on behalf of shareholders and wish him a healthy recovery.”
Warren Buffett’s Berkshire Hathaway Inc. and Prudential Financial Inc. were among the firms to benefit from McGee’s push to shrink Hartford. Berkshire agreed last year to buy Hartford’s U.K. variable-annuity unit, and Prudential acquired the individual life business.
“A lot of the turnaround points have been achieved,” Nina Gupta, an analyst at Portales Partners LLC, said by phone. “They’ve made great strides since the financial crisis in reducing the risk on the runoff side and improving their P&C business.”
Swift will join the board on July 1, Hartford said in a regulatory filing. His annual compensation target was set at $8.25 million, including a $1 million salary.
Elliot’s pay target is $6.5 million, Hartford said in the filing. Bombara is slated to receive $2.88 million. McGee earned $17.7 million last year, including option awards.
Swift was CFO of American Life Insurance Co., the AIG unit that was sold to MetLife Inc., before joining Hartford. He started his career as an auditor in the Chicago office of KPMG and later became executive vice president of Conning Asset Management.
“I want to thank Liam for his leadership,” Swift said in the statement. The company plans to expand property and casualty, group benefits and mutual funds businesses while “reducing the size and risk of our legacy annuity block.”
Swift is among former AIG executives who left the insurer after its $182.3 billion U.S. bailout, and later took top posts at rivals. Mark Wilson, who led AIA Group Ltd. when it was owned by AIG, is now CEO at Aviva Plc. Rodney Martin, who oversaw international life units at AIG, runs Voya Financial Inc.
Matthew Winter now runs Allstate Corp. personal lines, after overseeing a U.S. life unit at AIG. Peter Eastwood is president of Berkshire Hathaway Specialty Insurance; he left AIG as CEO of the company’s Americas property-casualty operation.
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