AIG's Sullivan Stepping Down, Reports Say

Posted by: Jena McGregor on June 15, 2008

American International Group CEO Martin Sullivan is stepping down, the Wall Street Journal is reporting, following a Sunday meeting of the insurer’s board. Following weeks of outspoken shareholder dissent calling for management changes, a war of words with ousted CEO and major shareholder Maurice “Hank” Greenberg, and record quarterly losses, Sullivan has reportedly resigned under pressure, to be replaced by current Chairman Robert Willumstad. Until recently, Willumstad and the board were defending Sullivan, who as late as May was calling the firm’s credit rating downgrade “very manageable.”

As a result, Willumstad is finally getting his wish. The former Citigroup president and operating chief, Willumstad, who joined AIG’s board in early 2006 and became chairman in September of that year, left Citi following Chuck Prince’s ascent to the throne, stating his desire to run a public company. It won’t be an easy job. The Journal’s story makes the smart point that running a highly complex company such as AIG (or, for that matter, General Electric or Citigroup) in the aftermath of a strong-willed, long-tenured CEO is an extraordinary task—one that may not be done well by anyone, especially in a rough economic environment.

What may help—or hinder—Willumstad is his greater distance from Greenberg. Sullivan’s departure ends a troubled reign; he was sharply different in both management style and public presence from Greenberg, despite being his handpicked successor (making his on-air declaration that AIG is “falling apart” all the more notable). Plus, Sullivan apparently left many of Greenberg’s executives in place. Whether that’s an opportunity to clean house—or a risk that managers with knowledge of the complex firm will leave—remains to be seen.

Reader Comments

williambanzai7

June 15, 2008 11:35 PM

It takes more than one good old boy to run a company like AIG into the ground. This just goes to show what happens when a headstrong leader like Hank leaves. No independent intellectual muscle behind the iron fist. Time for some new blood.

Dave

June 16, 2008 7:53 AM

Thank God!!!! Anyone else in the company would have been let go long ago. But I will be watching the board very carefully, after all they were supporting Sullivan during this downturn. If this should happen again it will be the boards turn to be gotten rid of. 50% decrease in the stock price and they supported him, makes you wonder.

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