Posted on 20 May 2009
American International Group Inc. (AIG), moving to strengthen its corporate governance in the wake of the U.S. government's rescue last year, unveiled a slate of six new board nominees.
Scheduled to be voted on at the annual meeting on June 30, the nominees are Harvey Golub, 70 years old and a former head of American Express Corp.; Laurette T. Koellner, a 54-year-old former Boeing Co. executive; Christopher S. Lynch, 51 and a retired KPMG LLP partner; 69-year-old Arthur C. Martinez, who ran Sears Roebuck; Robert S. "Steve" Miller, 67, executive chairman of Delphi Corp.; and Douglas M. Steenland, 57, former Northwest Airlines chief executive.
The new board will be composed mostly of independent directors. All but Mr. Koellner had been rumored as likely nominees.
Steven Bollenbach, the lead independent director at AIG, will not stand for re-election to the board, according to people familiar with the matter. Three other directors -- top Asia executive Edmund Tse and outside directors Virginia Rometty and Michael Sutton -- had previously decided to leave the board. Mr. Sutton and Mr. Rometty were both on the heavily criticized board compensation committee, with Mr. Sutton the chairman.
Last week, trustees overseeing the government's nearly 80% stake in the embattled insurer promised swift changes to the board and pleaded for lawmakers' cooperation as the company aimed to formulate "a fair and effective compensation system." The furor has died down, but earlier this year AIG was subject of sharp criticism when it paid out big bonuses after receiving billions in government aid. However, the trustees have warned Congress' chilly relations with AIG put the government's huge investment at risk.
On May 1, the company staged a speed-dating session to see how prospective nominees felt about stepping into to a difficult situation. Because of its troubles, AIG has reportedly faced concerns from potential nominees over litigation risk.
Mr. Bollenbach's position as lead independent director is unlikely to be filled, according to people familiar with the matter, as the company considers splitting the chairman and CEO roles whenever Edward Liddy, who currently holds both posts, leaves the company.
Mr. Bollenbach, a former chief executive of Hilton Hotels Corp. and a former finance chief at Walt Disney Co., is a relative newcomer to the AIG board. He joined in January, 2008, eight months before the government rescued AIG from potential bankruptcy. Taxpayers got a nearly 80% stake in the company in return.
Mr. Bollenbach was named lead director last June, serving as the main board representative for outside shareholders. Such roles are common when a company chairman also maintains an active executive role.
Mr. Bollenbach had been supported by billionaire investor Eli Broad and some other key dissident AIG shareholders.
Three trustees who oversee the taxpayer stake in AIG are also laying the ground work for a new CEO search.
Mr. Liddy, who was installed by the government in September, has said he wants to leave the company within a year. He's come under repeated fire from Congress, especially during the flap over bonuses paid to AIG employees.
AIG's new chairman could come from the ranks of its new board of directors.