Hank Greenberg, who was ousted as AIG’s chief executive in 2005, defended the decision to terminate a long-term compensation plan involving a block of the insurer’s shares now at the centre of a $4.3bn lawsuit.

Mr Greenberg, 84, told a court that the voting shareholders of his private investment firm, Starr International Company (Sico) – once the largest shareholder in AIG – had lost confidence in the company after he was forced to leave.