#1 Next Generation Lindners
25-Year Lease Says It Plain "” Here to Stay for Cincinnati

If Cincinnati were traded on the New York Stock Exchange, among the biggest investors would be American Financial Group's co-presidents and CEOs, Carl III and Craig Lindner.

"Obviously, we're buying because of the commitment we have here," says Carl, seated in a conference room on the 41st floor of the new Great American Insurance Group Tower at Queen City Square, overlooking the Ohio River and home plate in the Great American Ball Park.

Craig adds, "If the community is looking for a signal of our commitment to Cincinnati, I think looking at the decision we made to be involved with this building and sign a 25-year lease should be a pretty obvious sign that our family is very much committed to the city of Cincinnati."

Exclamation point

That's more than a good point. It's a 665-foot high exclamation point that punctuates the city skyline. The newest and highest skyscraper in Cincinnati, topped by a tiara of jeweled lights, stands even taller against a gloomy economic landscape that's as flat as Nebraska. It has given Cincinnati a lift that other cities envy: more than 5,000 construction jobs and new life for the east end of Fourth Street.

When Western & Southern CEO John Barrett approached the Lindners about building a new office tower, it was Carl's and Craig's decision to stay downtown. They had plenty of offers to move away. Competing cities and regions would move mountains to land a prize like AFG, with total assets of $35 billion and 6,700 employees, including 2,500 in downtown Cincinnati. An economic impact study by the University of Cincinnati Economics Center for Education and Research says the new tower has an economic benefit of $1.66 billion in Greater Cincinnati each year, including $7.7 million in annual earnings taxes for the city and schools.

Into next generation

"We basically said that for the rest of our working lives and almost the next generation, Great American is going to be an anchor in Cincinnati and we're going to want to continue to make this a great city," says Carl.

Such public comments by the Lindners may seem as rare as new skyscrapers. But it's a new era for the family. Their father, Carl H. Lindner Jr., one of the greatest Cincinnatians ever, passed away last Oct. 17 at age 92. Like him, the sons are modest and soft-spoken. They have been quietly running AFG together for nearly two decades now, but they let their actions speak louder than words, through philanthropy, political donations and steady, solid business success.

"We are low-profile and, speaking for myself, I like it that way," says Craig. "There may be occasions when we grant interviews on something that's very important to us, but I don't see it being a regular thing."

"We will probably take a more balanced approach," Carl agrees. "We won't seek to be out there all the time, but when there are times that we need to speak up, that's what we'll do."

"We've been blessed"

That comes from something else that runs deep in the Lindner family: strong Christian faith and genuine humility. Not entirely comfortable with Power 100 rankings, Carl says, "God puts people in a position of power and he can take it away. The real question is what you do with it. Do you honor God and help your employees and your community and others? That's the daunting task. Some days you do well, and others you don't."

Craig nods. "The last thing I want to do is come off as an egotistical person who wants to get as much attention as he can. We've been incredibly blessed. It's all a gift and we need to use it wisely."

They've done that and more.

As the sons took over and turned their focus to the core insurance business, they reduced risk and debt that enabled their father to build one of the biggest financial empires in America. "He ran a conglomerate with theme parks, broadcasting "” maybe 50 or 60 different industries at various times," says Craig. "Dad created loads of value, but it was more volatile, more risky. He enjoyed all of that. Carl and I are more risk-averse. We de-risked the company. We de-leveraged the company."

Carl says, "We simplified. Maybe it's the best of both worlds. We still have the entrepreneurial spirit in our DNA."

For example, they scored big with an investment in residential mortgage-backed securities when the market was running the other way. They also scored big with a major ownership position in Verisk Analytics, which was the largest IPO in the United States in 2010.

"We like to become large buyers when everyone else is selling," says Craig.

Meanwhile, their property and casualty insurance business has risen to the top of the industry. Great American Insurance ranked number one from 2006 to 2010. Their investment performance put them in the top 5 percent of property and casualty companies, and they rank in the top 10 percent for life and annuity companies.

AFG property and casualty returns, at 31 percent (2006-2010), outperformed big names such as The Hartford, Chubb and Travelers. Guests at the annual AFG Music Hall Christmas party were told that, "by any measure, AFG's financial position is the strongest in our company's history."

If the takeover '80s were a roller-coaster, the 2012 growth chart is a steady, comfortable ski lift. It rises over rocky years of low interest rates, poor stock performance and costly hurricanes, floods, earthquakes and tornadoes that can blow away property and casualty profits. AFG's record year was 2009, at the bottom of the recession trough.

And the Lindners are happy to share the credit. "We have the ultimate responsibility to make decisions, but the success of this company is the result of the good decisions by many very talented, loyal, hard-working people," Craig says.

Carl compliments his younger brother's investment skills: "Craig is bright and perceptive, very objective. I'm really proud of the leader he has grown into.

"He has been all important in helping to shape American Money Management into what it is and has applied the same skills and talents to Great American Financial Resources."

Craig says, "Carl is a great communicator and has spent his entire career in the property and casualty business. He has an incredible wealth of knowledge and experience. He surrounds himself with very strong people and is an excellent motivator."

Politics and philanthropy will also remain part of the Lindner family tradition.

At Christmas, they got together and decided they would back Mitt Romney in the 2012 presidential race and Ohio's important March 6 primary.

Still "the boys"

The enthusiastic participation of their mother, Edyth, was a delightful surprise, says Carl. "That was really neat. She made it clear to the boys "” we will always be "¢the boys' "” that she's ready to step up in philanthropy and politics and has her own opinions."

Also involved was their youngest brother, Keith, who worked in business with his brothers and father very closely for 30 years.

In 2003 he moved to Jacksonville, Fla., to devote half of his time to ministry and half to business ventures. He says the family's approach to giving comes naturally:

"We are three brothers who love each other, who do things together as close friends, and one of those things is the way we work together in charities and in ministry. We don't have any family boards to meet and vote on what we're going to do. We each do it as individuals, as God calls us.

"And the remarkable thing is the way God calls us together. Craig was the Center of Hope. Carl was Cincinnati Hills Christian Academy. I was Horizon Community Church. But we all came along and supported each other. So did our Mom and Dad. They would say "¢What are you up to, what is God doing in your life?' Then it would be a family effort of time, talent and treasure. It just happens naturally because we love each other," says Keith.

Their giving has transformed Cincinnati. The Lindner Center for Hope is unmatched in treatment of disorders, addictions and mental illness, partnering with another family favorite, the University of Cincinnati. Cincinnati Hills Christian Academy (CHCA) is one of the nation's premier private K-12 Christian schools. Horizon Community Church has seen remarkable growth to three Sunday services since it opened in Newtown a year ago.

Sharing their gifts

And that hardly scratches the surface. At Christmas, Carl and his wife, Martha, announced their latest gift to the University of Cincinnati from their Psalms Foundation, to create the Carl H. Lindner III Center for Insurance and Risk Management at the UC business school. The couple donated $4 million. Another $1 million was donated by Great American Insurance, part of AFG.

Hospitals, performing arts, inner city churches and recreation centers, schools and numerous other charities have received remarkably generous Lindner family donations over the years. Carl says, "A lot of people wonder if we're going to step into our father's shoes. But he was so unique. Nobody is going to fill our father's shoes in this community. We don't want to raise expectations that we're going to be our father."

But his presence is there in spirit. "Our emphasis on integrity in the way we do business comes from our father. So does our emphasis on respect for others. We took a lot of his core values and Craig and I added some additional ones."One of those is allowing a bit more workplace flexibility for family time that is especially important to people today, he says. Nobody could keep up with their father's famously long hours and almost 24/7 work schedule. "He never missed one of our sports events, but he might have been conducting a meeting on the sidelines," Craig laughs.

Their father was also one of the founding members of the Cincinnati Business Committee and was known as "Uncle Carl" in local politics. "We're still sorting that out," Carl says.

"Craig and I are really focused as much as anything today on the next two generations of leadership in the company, so we know that the performance of our company is going to be strong for the next 50 or 100 years." They take seriously the daunting responsibility to do what's right for the company, its investors, their extended family of employees and the rest of the community. And as insurance executives, they are well aware of risk when they take stock in Cincinnati.

If Cincinnati had an annual meeting to hear from stockholders, it would get some pointed but positive advice from two of its biggest investors, Carl and Craig Lindner:

 

 

Signing a 25-year lease in Cincinnati's newest skyscraper is a clear signal of the Lindner brothers' commitment to the city. Like their father, the late legendary businessman Carl H. Lindner Jr., they are known by their deeds in philanthropy, political donations and business.

Carl III and Craig Lindner, at the helm of American Financial Group, lead the list of Cincy's leaders in politics, business, media and community involvement.

Cincy's eighth annual Power 100 list recognizes those people who hold and use the most clout to benefit the region.

"” THE EDITORS


2 John Boehner
Speaker, U.S. House of Representatives

Battling the President on the budget, the payroll tax and more, Boehner is doing an amazing job of managing an often-divided GOP House. Ohio's 8th District congressman since 1990, Boehner has become point man of the opposition without changing his blunt style. He's not going anywhere soon "” he's raised more than $46 million in 2011. That's nearly twice what he raised in the entire 2009-10 election cycle.

 
 
 
3 Bob McDonald
President and CEO, PROCTER & GAMBLE

With his leadership, 24 of P&G's brands reached more than a billion dollars in annual sales in 2011. Numbers aren't the only thing. He has helped P&G "touch and improve lives" worldwide through programs such as P&G's Children's Safe Drinking Water Program, which recently provided its 4 billionth liter of clean water when it helped a family in Thailand.


 
 
 
 
 
4 Robert Castellini
Chairman, Castellini Co.; CEO Cincinnati Reds

The Reds took a slight step back in 2011 (79-83) after making the playoffs in 2010, but owner Bob Castellini is running a steady, steaming ship. The team made big trades in the winter in a message that it is "all in" for 2012, a year after drawing 2.2 million fans, the most in Castellini's six years at the helm. Castellini also makes waves off the field as the region's top political donor.

 
 
 
 
 
 
 
 5 John Barrett
Chairman, President, CEO Western & Southern

Since 2000, Barrett has helped the company transform from a Midwestern life insurance group into a national financial services enterprise. The gleaming tiara atop the $400 million Great American Tower is a fitting symbol of job creation, vision and getting things done in the Queen City.

 
 
 
6 Rob Portman
U.S. Senator
 
Portman enjoys a sterling reputation even among Democrats. A rising star in the GOP, he was named to the 12-person deficit supercommittee. After 12 years in the House and two cabinet-level stops, many pundits predict bigger things. In mid-January, he said he had no interest in being VP, but the buzz continues.
 
 
 
 
 
 
 
 
7 Michael Fisher
President, CEO Cincinnati Children's Hospital Medical Center

U.S. News & World Report once again ranks Children's in the nation's top 10 best children's hospitals. It's No. 3 for 2011-12, with many of its specialties, including digestive disorders, respiratory disorders and neonatal care, ranking in the top three. Fisher says the honor reflects strengths in clinical care, research and education. Still, improvements remain his top priority.

 
 
 
8 James Kingsbury
President, CEO UC Health
 
From University Hospital to building and developing a teaching and research hospital in Dubai and back again, Kingsbury brings his experience in running complex health systems back home. UC Health now encompasses the top-rated flagship University Hospital, West Chester Hospital, Drake Center, Lindner Center of Hope, UC Physicians, UC Surgical Hospital and several medical institutes.
 
 
 
 9 Julie S. Janson
President of Duke Energy Ohio and Duke Energy Kentucky; Chair, Cincinnati USA Regional Chamber Board of Directors

Incoming Chairman of Cincinnati USA Regional Chamber board, the president of the electric giant brings her leadership to promoting the Tristate. Duke, a Fortune 500 company, is one of the country's largest electric power companies, delivering electricity to nearly 4 million U.S. customers.

 
10 Candace S. McGraw
CEO, Cincinnati/Northern Kentucky International Airport

Promoted to CEO in mid-2011, McGraw is working to reverse CVG's six-year decline in air service and passenger traffic. That has meant adding flights to Atlanta and Detroit and reinstating service to Portland through Salt Lake City. Expect more gates this spring "to position CVG for future growth" once the $31 million renovation of Concourse A is complete.

 
 
 
 
 11 Susan Croushore
CEO, The Christ Hospital

Croushore has helped position the healthcare giant for more growth with January's announcement of a $20 million expansion. Recognized as one of the top hospitals in the country by U.S. News and World Report, it's also nationally ranked for cardiology and pulmonology. Christ steps into Northern Kentucky with an outpatient center in Fort Wright opening this spring.

 
12 Mike Brown
Owner, Cincinnati Bengals
 
In his 21st season in charge, the Bengals owner found the Midas touch in 2011. He drafted immediate standouts QB Andy Dalton and WR A.J. Green. He won the stalemate with disgruntled QB Carson Palmer and he brought back coach Marvin Lewis, who led the team to the playoffs for the third time in his nine seasons in what was supposed to be a rebuilding campaign. Off the field, he directed acquisition of shares in the team, bolstering local ownership.
 
 
 
 13 Gregory H. Williams
President, University of Cincinnati

With a record surge in enrollment, a newly dedicated business school to Carl H. Lindner and alumni donations up 12.5 percent this year, Williams has proven how much he can accomplish in a short time. Last year was UC's best fundraising year since 2000, with a total of $110 million raised, despite struggles with massive state budget cuts and rising costs.

 
14 Mark Mallory
Mayor, City of Cincinnati
 
 This year promises to be big for the second-term mayor after Democrats swept into power on City Council in November to reverse the conservative majority. They immediately gave him more power to set the agenda with a change in Council rules. The streetcar is just one of many hot-button issues for Cincinnati.
 
 
 
 
 
 
15 Kevin Kabat
CHAIRMAN, President, CEO Fifth Third Bank

Kabat has led Fifth Third to $111 billion in assets, 15 operating affiliates and more than 1,300 full-service banking centers. Kabat has more than 30 years of experience in financial services and the banking industry. Third-quarter income was up over the previous quarter and over the year before.

 
 
 
16 Bill Cunningham
RADIO/TV TALK SHOW HOST

He may have toned down his rhetoric and his wardrobe "” just a tad "” for his new, syndicated TV daytime eponymous talk show that premiered in September, but Cincinnati's fast-talking, ever-opinionated lawyer and long-time talk radio host is still driving debate all over the region. Love him or hate him, he has earned a couple of Marconi awards for Big Market Radio personality of the year and shows no signs of fading from the local scene.

 
 
 
 
17 Jack Cassidy
CEO, Cincinnati Bell

"I think our purpose in life is to leave every situation better than we found it," says Cassidy. With a commitment of volunteers, money and equipment, he led the effort to turn around the school now known as Taft Information Technology School. It was recognized this year with a second consecutive "excellent" rating by the Ohio Department of Education.

18 Steve Stevens
President, Northern Kentucky Chamber of Commerce

With more than 2,000 member businesses, the Chamber is at the heart of Northern Kentucky development. Expansions, new jobs and a legislative agenda declaring that, "Kentucky should not miss the opportunity to show that it is open for business," are all part of the message of Northern Kentucky.

 
19 Fr. Michael J. Graham, S. J.
President, Xavier University

Recognized as one of the top four universities in the Midwest by U.S. News & World Report, XU continues to build its reputation even as its campus continues its transformation. Students settle into a $58 million housing and dining complex, MBA students pair with start-up firms, and a campus cop ends up in a Clooney movie.

 
 
 
20 Gary Heiman
President, CEO Standard Textile

Standard Textile supplies hospitals and hotels around the world with products manufactured in the U.S., Mexico, Europe, Israel, Jordan, Cambodia and China. Heiman's community involvement includes being chairman of the board at Jewish Hospital. He is also a member of the University of Cincinnati Board of Trustees.

 
 
21 Kevin Kline
Senior Vice President, General Manager, Horseshoe Casino Cincinnati

Kline is at the helm of the $400 million Horseshoe Casino Cincinnati being built downtown. Kline brings 17 years of experience to the high-stakes table from work with world-renowned Caesars Entertainment. The casino is expected to open in spring 2013.

 
 
22 James Votruba
President, Northern Kentucky University

After engineering NKU's graduation from regional college to a university with Division I sports, a cutting-edge Law and Informatics Institute and an MBA program "re-imagined" to shoo XU back over the Ohio, Votruba is retiring. Sort of. He'll return to the classroom; he has joined the St. Elizabeth Healthcare board; and we expect to see plenty of him, still.

 
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