The U.S. Treasury Department Thursday named two former executives of E-Trade Financial and Electronic Data Systems to serve on the the board of directors of American International Group, the insurer bailed out by the federal government.
The appointments are Donald Layton, former chief executive of E-Trade Financial, and Ronald Rittenmeyer, former chief executive of Electronic Data Systems.
Treasury said it exercised its right to appoint directors because AIG failed to pay dividends for four quarters on the AIG preferred stock acquired by Treasury in its massive bailout of the insurer.
“We are confident that these appointees will make significant contributions to AIG’s strategy to de-lever, de-risk, pay back taxpayers,” said Herb Allison, Treasury’s assistant secretary for financial institutions.
The government owns 79.9 percent of AIG after having committed more than $180 billion of taxpayer funds into the company since rescuing the company at the height of the financial crisis in September 2008.
Layton was E-Trade’s chairman and chief executive from March 2008 until December 2009 after he retired in 2004 as a top executive at JP Morgan Chase. He is currently a director of Assured Guaranty Ltd.
Rittenmeyer held a host of senior positions at Electronic Data Systems from July 2005 to December 2008.
The government is likely to follow an exit strategy similar to what it has used so far with Citigroup to untangle itself from AIG, a source familiar with the matter told Reuters last month.
AIG has struck separate deals to sell its Asian unit, American International Assurance (AIA) to Britain’s Prudential Plc its foreign life insurance unit American Life Insurance Co (Alico) to MetLife Inc, the largest publicly traded U.S. life insurer.
(Additional reporting by Paritosh Bansal and David Lawder; Editing by Leslie Adler)
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