American International Group on Sunday replaced Martin Sullivan, its embattled chief executive, with Bob Willumstad, the veteran banker who is the insurer’s chairman, in an effort to end one of the worst crises in the company’s 89-year history.
An emergency board meeting had decided to end Mr Sullivan’s three-year tenure at the helm of AIG, which has been rocked by credit-related losses and regulatory probes.
Willumstad, who missed out on the top job at Citigroup in 2003, would take over the chief executive job on a permanent basis. Stephen Bollenbach, a former chief executive of Hilton Hotels, will become lead director.
Willumstad, who will retain the title of chairman, told the Financial Times on Sunday night: “The current challenge for the company is to get through this credit crisis and to make sure that the balance sheet is strong.”
Sullivan, 53, who joined AIG as an insurance clerk aged 17, is likely to leave with a severance package of more than $35 million, according to his contract.
Sullivan becomes the latest high-profile casualty of the credit crisis, which has already claimed the jobs of Chuck Prince, Citigroup’s chairman and chief executive, and Stan O’Neal, his opposite number at Merrill Lynch.
In a statement, George L. Miles, Jr., chairman of the nominating and corporate governance committee of the AIG board, says: “Martin successfully led AIG through the crisis it faced when he became CEO in 2005, and he has made significant contributions over the past three years in executing AIG’s strategy and building on its global franchise. The Board has determined that Bob’s broad managerial and financial services experience makes him the right person to lead AIG through today’s turbulent markets, drive further organizational change and rebuild shareholder value in the years ahead.”