Four of AIG's Highest-Ranking Executives to Depart
Four of AIG's Highest-Ranking Executives to Depart
American International Group said four of its 15 most-senior executives
are departing, continuing an effort by Chief Executive Peter Hancock to
realign duties and cut costs as the insurer faces pressure from big
investors to improve profitability.
The departures will shrink an advisory committee of high-ranking executives that Mr. Hancock formed shortly after taking over as CEO in September 2014. It will become a 10-member team, down from 15.
The shake-up is part of a broader plan, unveiled last month, to cut up to 23% of AIG's senior management, or as many as 320 positions. Duties of the four departing executives will largely be distributed to executives who are remaining. A fifth departing member will stay at the company.
The revamping is aimed at making AIG less complex, more efficient and able to make decisions faster, AIG said in a news release.
Since late October, billionaire investors Carl Icahn and John Paulson made public separate proposals to break up the insurer into three parts.
The investors say such a breakup would reduce the company's regulatory burden and allow it to return more capital to stockholders through share buybacks. They are also pushing for stepped-up cost-cutting to bring the company's financial results more in line with better-performing peers.
Mr. Hancock has responded publicly that management and the board have reviewed the idea of breaking up the insurer and concluded that such a move doesn't make financial sense. He has said he wants the company to continue with strategic priorities he has had in place for months, which include further narrowing of AIG's operations with some divestitures.
In the news release Thursday, Mr. Hancock said that AIG is "moving forward with a continued sense of urgency" on top priorities, including the existing goals of narrowing its focus on the most-profitable areas, "growing through innovation," and returning excess capital to shareholders.
Two of the four departing executives have key roles running AIG's core property-casualty insurance operations, where the company has struggled to match the strong financial performance of peers such as Travelers and ACE.
Write to Leslie Scism at leslie.scism@wsj.com
The departures will shrink an advisory committee of high-ranking executives that Mr. Hancock formed shortly after taking over as CEO in September 2014. It will become a 10-member team, down from 15.
The shake-up is part of a broader plan, unveiled last month, to cut up to 23% of AIG's senior management, or as many as 320 positions. Duties of the four departing executives will largely be distributed to executives who are remaining. A fifth departing member will stay at the company.
The revamping is aimed at making AIG less complex, more efficient and able to make decisions faster, AIG said in a news release.
Since late October, billionaire investors Carl Icahn and John Paulson made public separate proposals to break up the insurer into three parts.
The investors say such a breakup would reduce the company's regulatory burden and allow it to return more capital to stockholders through share buybacks. They are also pushing for stepped-up cost-cutting to bring the company's financial results more in line with better-performing peers.
Mr. Hancock has responded publicly that management and the board have reviewed the idea of breaking up the insurer and concluded that such a move doesn't make financial sense. He has said he wants the company to continue with strategic priorities he has had in place for months, which include further narrowing of AIG's operations with some divestitures.
In the news release Thursday, Mr. Hancock said that AIG is "moving forward with a continued sense of urgency" on top priorities, including the existing goals of narrowing its focus on the most-profitable areas, "growing through innovation," and returning excess capital to shareholders.
Two of the four departing executives have key roles running AIG's core property-casualty insurance operations, where the company has struggled to match the strong financial performance of peers such as Travelers and ACE.
Write to Leslie Scism at leslie.scism@wsj.com
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