American Express Co. President Sanford I. Weill will resign Aug. 1 "to pursue other business interests," the financial services company said yesterday.
American Express simultaneously announced plans to restructure its Fireman's Fund Insurance Co., the nation's 10th-largest property and liability insurer. According to the plan, the life insurance operations of Fireman's Fund will be merged into American Express, while the property and casualty business will be sold through a public stock offering.
Weill, a Wall Street entrepreneur, had considered the possibility of a leveraged buyout of the troubled insurance subsidiary, but he dropped the idea and is "not discussing" taking it over, said Walter G. Montgomery, a spokesman for American Express.
Weill's departure had been rumored since he began selling his American Express stock last year. Calls to Weill's office were referred to the company spokesman.
Weill, 52, has been considered a driving force behind American Express' ambitious diversification efforts, particularly its expansion of personal financial services. The company said he will serve as a consultant to American Express Chairman and Chief Executive Officer James D. Robinson III and will assist in the restructuring of Fireman's Fund.
Weill will be succeeded as president by Louis V. Gerstner Jr., 43, chairman of the company's executive committee.
Weill was described as "imaginative" and "dynamic" by analysts, who guessed that his departure may be a result of restlessness or the presence of "too many cooks" at the top of American Express management.
With three partners, Weill founded the securities firm of Carter, Berlind, Ptoma & Weill in 1960; through mergers, he built it into Shearson Loeb Rhoades Inc. Weill was chief executive of Shearson when it was acquired by American Express in 1981. He became president of American Express in 1983.
Analysts also praised Weill's efforts to turn around Fireman's Fund, particularly his willingness to shake up the management there.
American Express, however, has decided that Fireman's property and casualty business, which is primarily commercial, is not "a close strategic fit" with its other financial services, Montgomery said.
Fireman's reported 1984 net income of $43 million on revenue of $4 billion, while its parent company earned $9.8 billion on revenue of $13 billion.
American Express plans to arrange for a public offering of Fireman's stock but has not decided when that will occur or how much stock may be sold, Montgomery said. American Express may keep an equity stake in the insurance company but plans to spin it off as an independent company with its own board of directors and management.
The plan will allow Fireman's "to tap outside sources of funds, while reducing our exposure to a volatile industry," the American Express spokesman said.
Weill has not said whether he may buy some portion of the shares offered, Montgomery said.
Weill said in a statement: "My departure opens a variety of options for me. I am looking forward to doing my own thing again as well as to a continuing relationship with Jim Robinson and my other friends at American Express."