American International Group Inc (NYSE:AIG) removed Peter Hancock as its CEO to avoid a proxy battle with billionaire activist investor Carl Icahn, The Wall Street Journal (via Business Insider) reported.
Last Thursday, AIG announced that Peter Hancock is resigning as president and CEO of the insurance company.
Hancock was appointed as CEO in September 2014. He previously worked as CEO of AIG Property Casualty. Hancock joined AIG in 2010 as executive vice president, finance, risk, and investments.
Hancock made a decision to step down as he was unable to improve the financial situation of the insurer. The AIG’s poor financial performance made the company’s shareholders and board members frustrated.
Citing sources, the Journal reported that Hancock agreed to leave the company after meeting with several directors. They expressed their concerns about his ability to improve AIG’s performance, while several board members feared a potential fight with Icahn, according to the report.
Icahn is AIG’s fourth-largest investor. He owns more than 45 million shares of the company. At the end of 2016, the value of the investor’s holdings was around $3 billion.
Capital Research Global Investors is the largest shareholder of AIG, owning around 77.93 million worth about $5.09 billion as of December 31, 2016.
Last month, AIG reached a deal with Icahn to add one of his analysts to its board of directors at the upcoming annual meeting in May.
“We believe that AIG stockholders will benefit from our agreement, which permits our representative to share information with our principals and consultants, subject to customary confidentiality restrictions. I hope and believe that we will work with AIG’s board to enhance value as we have done with so many other boards and companies in the past,” Icahn said in a statement last month.
Icahn and John Paulson, which leads Paulson & Co. Inc., want AIG to split into three pieces.
AIG also agreed to add Paulson to its board.
Last month, Icahn said he continues “to believe that smaller and simpler is better. The billionaire investor added that he looks forward to “working collaboratively with the board and management to help catalyze a turnaround in core P&C operations, a more transparent operating structure, and the ultimate shedding of the SIFI designation.”
American International Group Q4 Results and Stock Update
For its fourth quarter of 2016, the insurance company posted a loss of $3.04 billion, or $2.96 a share, versus a loss of $1.84 billion, or $1.50, in the same quarter of 2015.
Shares of AIG are down 3.72% this year. During the last three months, the stock has fallen 4.74%. However, the shares have gained 18.89% during the last 12 months.