American International Group named director Robert “Steve” Miller as its new chairman, replacing Harvey Golub, who resigned after clashing with Chief Executive Robert Benmosche over the botched sale of the insurer’s Asian life unit.
“Bob Benmosche has informed the board that he believes our working relationship as Chairman and CEO to be ineffective and unsustainable,” Golub wrote in a letter to AIG director George Miles.
“At this point, I view asking the board to choose between us would be an abdication of my responsibility to lead,” Golub said. “Consequently, I’m resigning for the simple reason I believe it is easier to replace a chairman than a CEO.”
AIG’s board decided to proceed with an IPO for the Asian unit, American International Assurance, the Wall Street Journal reported.
Golub, a former American Express CEO, and Miller were nominated to AIG’s board last year by the government, which owns nearly 80 percent of the insurer.
Miller, 68, retired as executive chairman of Delphi Corp in 2009 and is chairman of MidOcean Partners. He is also a director of Symantec Corp and UAL Corp.
Golub was named AIG’s nonexecutive chairman in August 2009 to replace Edward Liddy.
At the time Benmosche said Golub would help AIG “realize the true value” of its businesses “for the benefit of all of our stakeholders, including clients, employees and the U.S. government.” But tensions between Benmosche and Golub built up over the future of AIA.
AIG was well on its way to doing an IPO of the unit when Britain’s Prudential Plc stepped in with an offer to buy it for $35.5 billion, but the deal soon ran into trouble.
Benmosche was in the favor of selling the business to Prudential on revised terms, which included a cut in the price, but was overruled by the board, which lost confidence in the British insurer’s ability to close the deal.
Golub said in the letter that it was easier for the company to find a new chairman at a time when it was in the midst of a major corporate restructuring and developing an exit plan from government control, “both of which involve executing a long list of difficult tasks.”
“I appreciate the support I’ve received from my fellow Directors and their desire to have me remain as chairman,” Golub said.
AIG’s board was scheduled to meet Wednesday and a public float for AIA was seen as the most likely outcome, sources told Reuters previously.
AIA, seen as AIG’s Asian crown jewel, is a key cog in the bailed-out insurer’s plans to repay U.S. taxpayers, who now own nearly 80 percent of the company and have pledged $182.3 billion in rescue funds.
Chances of an AIA IPO were bolstered after strong institutional demand for Agricultural Bank of China’s roughly $20 billion IPO.
Banking sources have previously told Reuters AIG could sell up to a 50 percent stake in AIA to raise up to $15 billion through a Hong Kong listing.
(Reporting by Paritosh Bansal, editing by Bernard Orr, Leslie Gevirtz)
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