American International Group Inc (NYSE:AIG) has yet to name a replacement for Peter Hancock who announced his resignation in March. Hancock’s decision to step down came after he lost the support from directors and investors including legendary Carl Icahn.
Hancock resigned his position of president on March 9 and is waiting for the company’s board to find his successor so he can leave the CEO position.
AIG is set to report its first-quarter earnings on Wednesday. Wall Street is hoping that the insurance giant will announce the succession plans on Wednesday.
What Analysts are Saying
Talking to Reuters, Sandler O’Neill analyst Paul Newsome said “we need to know” about who will be the next CEO.
“The lack of a CEO puts the strategy for the company completely in play. There’s a very large chance that with a different CEO, you are going to have a change in the strategy, despite what the board says,” Newsome added.
In a note to investors (obtained by Bloomberg), Barclays Plc analyst Jay Gelb wrote: “I doubt you would be able to attract AIG’s next CEO from an already-top-performing property-and-casualty insurer or insurance broker. Why would they give up their current role and deal with a turnaround situation?”
Icahn, Hancock and AIG
American International Group Inc (NYSE:AIG) was a main player in the financial crisis of 2008. It was bailed out by the federal government for $180 billion.
Hancock joined AIG in 2014. His troubles started in 2015 when Icahn and John Paulson acquired stakes in the company.
Icahn, the company’s fourth-largest investor, wanted AIG to split into three parts. However, Hancock thought that breaking up the insurer does not “make financial sense.” He outlined a two-year turnaround plan involving cutting costs and selling parts of the insurer, with the target of giving $25 billion back to shareholders.
Who Will Replace Hancock?
Reports from the Wall Street Journal and Bloomberg have suggested that AIG is planning to name Brian Duperreault as its next CEO.
Duperreault is a former deputy to AIG leader Maurice Greenberg. He later became CEO of the biggest insurance broker Marsh & McLennan Cos. and then Hamilton Insurance Group, which is backed by principals of hedge fund Two Sigma Investments, Bloomberg reported.
Duperreault is “among the best possible candidates to become AIG’s next CEO,” Barclays Plc analysts said in a note to investors. “Duperreault would be able to form a workable strategy for AIG and also attract top industry talent.”
The new CEO will face many challenges. He or she will have to restore the confidence of investors and analysts who have been frustrated by four losses in six quarters.
Shares of American International Group Inc (NYSE:AIG) are down over 5% so far this year. The stock is trading up 0.58% on Tuesday.
