AIG Shakes Up Board with 6 New Nominees
Wednesday, May 20, 2009
The trustees representing the U.S. public's majority stake in American International Group flexed their collective muscle yesterday, making good on a promise to seek a shakeup of the company's board of directors.
The troubled insurance giant announced six new nominees to its board, at least five of whom were selected by the federally appointed trustees. The group's members, who for months have operated largely outside the public eye, told a congressional committee last week that they intended to overhaul AIG's board.
"We've spent considerable effort focused on AIG's board of directors -- how it functions, what skills the board members have and how those skills fit with the needs of a company in AIG's extraordinary circumstances," Douglas Foshee, a trustee and chief executive of El Paso Corp., told lawmakers. "We've come to the conclusion that if AIG is to succeed, it needs a fresh start -- a reset, if you will -- a reset in the eyes of Congress, the American public and other important constituencies."
The current AIG board has nine directors, several of whom have indicated that they do not intend to seek reelection. Several others, including chairman Edward M. Liddy, have served for only a matter of months. Because the trustees are free to vote the taxpayers' 77.9 percent equity share, they essentially can dictate the composition of the board.
The six nominees will stand for election at AIG's annual meeting, scheduled for June 30. They are:
Harvey Golub, 70, former chairman and chief executive of American Express; Laurette Koellner, 54, a retired senior executive of Boeing; Christopher Lynch, 51, an independent consultant formerly of KPMG, one of the world's largest professional services firms; Arthur Martinez, 69, former chairman and chief executive of Sears, Roebuck and Co. and a former chairman of the Federal Reserve Bank of Chicago; Robert S. Miller, 67, executive chairman of Delphi; and Douglas Steenland, 57, former president and chief executive of Northwest Airlines.
The three AIG trustees were appointed in January by the New York Fed, in consultation with the Treasury Department, and formally began work in early March. They serve under an arrangement established by the New York Fed for the purpose of acquiring, holding and ultimately disposing of the government's massive stake in AIG. Each is paid $100,000 annually. A spokesman for the group could not be reached for comment yesterday.
The group's members have asked Liddy and other senior managers to review the company's compensation programs and to develop a comprehensive payment plan by year's end that would reward performance and discourage excessive risk taking.
But their key focus has been reshaping the board of directors. Pressure for significant change has intensified as AIG has continued to post massive losses in recent quarters, and as the government's total commitment in the company has grown to more than $180 billion.