Management Turnover as Change Agent

Monday, June 9, 2008

CEO Watch List - Martin Sullivan, AIG, Update 1

Just a month ago I put AIG's CEO Martin Sullivan on my CEO watch list.  So far, Sullivan has managed to keep his job.  According to Felix Salmon of the Wall Street Journal has run another story today placing new pressures on Sullivan.  According to the WSJ article by Liam Pleven and Randall Smith,
American International Group Inc.'s embattled chief executive, Martin Sullivan, is now facing mounting dissent from some of his largest shareholders.

Two days before AIG's May 14 annual meeting, three major shareholders who effectively controlled more than 100 million shares -- about 4% of the company's stock at the time -- sent a blistering letter to the company's board....

... people familiar with the board say Mr. Sullivan needs to turn things around fast. Amid widespread turmoil in the credit markets, AIG has reported two consecutive record quarterly losses totaling $13 billion -- almost as much as the firm made all of 2006 -- and last month raised $20 billion to bolster its finances, a remarkable reversal for an insurer long prized by investors for its business savvy.
The added pressure of the WSJ article definitely turned the screw a bit more on Sullivan's chances to survive as CEO.  Keep a close eye on AIG and any new business decisions Sullivan and/or the company makes.

No comments: