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Golub Resigns as AIG's Chairman

Source: NY Times

Posted on 15 Jul 2010

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American International Group (AIG) said Wednesday evening that its chairman, Harvey Golub, had resigned amid continued bickering with the chief executive, Robert H. Benmosche.

Mr. Golub will be replaced by Robert S. Miller,  the former chairman of Delphi and a fellow AIG director. Mr. Miller, known as Steve, made his reputation as a turnaround expert.

In a letter released by the company, Mr. Golub wrote that his constant disagreements with Mr. Benmosche were so severe that Mr. Benmosche described their relationship as “ineffective and unsustainable.”

Mr. Golub added, “At this point, I view asking the board to choose between us would be an abdication of my responsibility to lead.” He continued: “Consequently, I’m resigning for the simple reason I believe it is easier to replace a chairman than a CEO.”

The two, both known for their forceful personalities, had often disagreed over various ways for AIG as it tries to right itself after nearly collapsing two years ago, according to people briefed on the matter.

Also on Wednesday, AIG’s directors voted to proceed with an initial public offering of its Asian life insurance subsidiary, American International Assurance, one of the people briefed on the matter said. The decision followed an aborted attempt to sell the unit to Prudential of Britain, and was AIG's initial course of action.

The future of the unit, known as A.I.A., had become one of the flash points between Mr. Benmosche and his board, the people briefed on the matter said. Mr. Benmosche had argued for selling the unit to Prudential rather than staging an initial offering in Hong Kong, saying that a sale would bring in more certain funds than an I.P.O. that would take a long time to complete. Several directors argued that the sale involved too much risk.

AIG intends to divest itself of noncore assets to help pay back its enormous government bailout.

The government still remains AIG’s largest shareholder.