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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.
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