AIG Names Six for Board as Trustees Assert Control (Update3)
By Hugh Son
May 19, 2009
May 19 (Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S., named six new director candidates in the first nominations since the trustees managing the government stake vowed to overhaul the board.
The candidates are Harvey Golub, Laurette Koellner, Christopher Lynch, Arthur Martinez, Steve Miller and Douglas Steenland, New York-based AIG said today in a statement.
The trustees, named in January, are under pressure to turn around the money-losing insurer after the bailout was expanded to as much as $182.5 billion. The trustees told Congress last week that they'd selected five executives to join the board and that AIG will nominate one new member.
"They're people with strong resumes -- the question is do they have the experience to do the job?" said Richard Ferlauto, a director of corporate governance at the American Federation of State, County and Municipal Employees. The union asked the trustees in a March 31 letter to block the re-election of James Orr from the board.
The insurer's current board worked with the trustees in picking the candidates, Chief Executive Officer and Chairman Edward Liddy said today in the statement. AIG's annual meeting will be held on June 30, the insurer said today. It was previously scheduled for May 13.
The names of all the candidates excluding Koellner, 54, a former president at Boeing Co., were reported last week.
Miller, 67, is chairman of Delphi Corp. and a former chief financial officer of Chrysler Corp. Steenland, 57, is the ex- Northwest Airlines CEO. Lynch, 51, is a retired partner at consulting firm KPMG International.
Golub, 70, was CEO of American Express Co. from 1993 to 2001. Martinez, 69, was CEO of Sears Roebuck & Co. from 1995 until 2000.
"The new candidates have extensive experience with large complex organizations and in the areas of financial services, accounting and restructuring," Liddy said in the statement.
The trustees, appointed by the Federal Reserve Bank of New York, are Jill Considine, former chairman of the Depository Trust & Clearing Corp.; Chester Feldberg, former chairman of Barclays Americas, and Douglas Foshee, chief executive officer of natural gas producer El Paso Corp.
The director candidates will be listed in an AIG proxy to be issued this month, Foshee told lawmakers last week in prepared testimony. The board will have nine new directors including Liddy, Suzanne Nora Johnson and Dennis Dammerman, each appointed in the past year, he said.
"If AIG is to succeed, it needs a fresh start -- a reset, if you will," Foshee said at the May 13 hearing.
The trustees wield the government's 77.9 percent stake in AIG and control votes on board members, asset sales, mergers and selection of top executives, according to a regulatory filing.
The overseers will vote in a way that "maximizes shareholder value" said Peter Bakstansky, a spokesman for the panel, in an April 6 interview.
AIG directors Virginia Rometty, Michael Sutton and Edmund Tse have said they are stepping down from the board. Stephen Bollenbach, appointed last year as lead independent director, and Harvard University Professor Martin Feldstein won't stand for re-election at the annual meeting, said a person familiar with the situation. The person asked not to be identified because AIG hadn't announced the directors' plans.
A voicemail left for Bollenbach wasn't immediately returned. An assistant for Feldstein at Harvard University said he was traveling, and Feldstein didn't immediately respond to e- mails seeking comment.
AIG was first rescued in September with an $85 billion credit line after a liquidity squeeze caused by credit-default swaps the insurer sold to banks. The company agreed in September to hand over a controlling stake to the U.S. and to replace Robert Willumstad as chairman and CEO. Liddy was picked by then- Treasury Secretary Henry Paulson.
The insurer's bailout expanded to $122.8 billion, $152.5 billion and then $182.5 billion as the government sought to prevent losses at banks that did business with AIG. The company said it owes about $46 billion of a $60 billion Federal Reserve credit line as of last week.
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