Chief executive of AIG expected to step down

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Chief executive of AIG expected to step down

15/06/2008 20:30

NEW YORK (Reuters) - The board of American International Group Inc was meeting on Sunday to accept the possible resignation of Chief Executive Martin Sullivan, The Wall Street Journal reported on its website, citing a person familiar with the matter.

The Wall Street Journal story said the resignation was not a "done deal" but was considered "highly likely."

AIG spokesman Michael Arcaro declined to comment on the report.

In recent weeks, several large shareholders have been pushing for Sullivan’s ouster after the giant insurer posted back-to-back quarters of record losses, stemming from about $20 billion (10 billion pounds) in write-downs in the market value of assets linked to subprime mortgages.

To date, the board has voiced its support for Sullivan, who was named CEO about three years ago.

Former director Eli Broad and fund managers Shelby Davis of Davis Selected Advisers LP and Bill Miller of Legg Mason Inc wrote in a letter obtained by Reuters last week that "significant and immediate changes at both the management and board level are clearly called for."

The same group sent another letter to the board last month, also expressing concern over Sullivan’s management.

Separately, former Chief Executive Maurice "Hank" Greenberg, who remains a large shareholder, has also been critical of management and AIG’s board.

Sullivan, 53, replaced Greenberg as chief executive in 2005, after then-New York Attorney General Eliot Spitzer and the U.S. Securities and Exchange Commission accused Greenberg and the company of financial misconduct.

Greenberg is still fighting civil charges. Sullivan ushered AIG through the difficult process of reaching a settlement with regulators, paying more than $1 billion to put the matter behind it.

The Wall Street Journal report also said that the AIG board would discuss replacements for Sullivan. The article said one possibility is for AIG Chairman Robert Willumstad, a former top Citigroup Inc executive, to take over from Sullivan on either a temporary or permanent basis.

(Reporting by Nicole Maestri, additional reporting by Lilla Zuill, editing by Maureen Bavdek)

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