NY Times: With Shares Battered, A.I.G. Ousts Leader

[marmar]

With Shares Battered, A.I.G. Ousts Leader
By JONATHAN D. GLATER
Published: June 16, 2008


For the second time in three years, the board at American International Group, the giant insurance company, responded Sunday to its falling stock price and to regulatory concerns about its accounting by replacing its chief executive.

Robert B. Willumstad, chairman of the company’s board and a former top executive at Citigroup, was named as Mr. Sullivan’s successor, A.I.G. said in a statement.

The board also named Stephen F. Bollenbach, a member of the A.I.G. board and a former chief executive of Hilton Hotels, as its lead director.

The change at the top comes as pressure has mounted on the company to respond to a steady stream of bad news, including record losses, that has pounded down the stock price more than 40 percent since December. A.I.G.’s shares closed at $34.18 on Friday, down from $57.05 in December.

In 2005, Mr. Sullivan’s predecessor, Maurice R. Greenberg, was asked to resign by board members unnerved by news that regulators had sent the company subpoenas. Mr. Sullivan’s departure comes just weeks after A.I.G. confirmed that it was the subject of new investigations by regulators and the Justice Department.

Investors had every reason to hope that Mr. Sullivan’s tenure would be free of such turmoil. Months after he took office, A.I.G. restated financial results covering a five-year period and went on to negotiate settlements with regulators. There were supposed to be no more surprises. .....(more)

The complete piece is at: http://www.nytimes.com/2008/06/16/business/16insure.html?_r=1&hp&oref=slogin