American International Group Inc said on Thursday Chief Executive Peter Hancock plans to step down, a move that comes more than a year after billionaire investor Carl Icahn called for a breakup of the company.
Hancock, who has been at the helm for more than two years, will remain CEO until a successor has been named, the company said.
Tensions between Hancock and Icahn began to mount after the CEO rebuffed the activist investor’s proposals, which also included extensive cost cutting. Icahn had also threatened a proxy fight, reports Reuters.
“We fully support the actions taken today by the board of AIG,” Icahn tweeted on Thursday.
The Wall Street Journal reported last month that the company’s board was discussing whether to penalize or oust Hancock over a major setback to the insurer’s turnaround plan.
The two-year restructuring plan, unveiled early last year, included returning $25 billion to shareholders and trimming its property and casualty business.
Investors have been concerned over AIG’s cost burden and weak underwriting amid falling rates for commercial property and casualty insurance. The company’s net loss widened to $3.04 billion in the fourth quarter from $1.84 billion a year earlier.
Icahn has argued that a split would help AIG rid itself of the regulatory burden of being a systemically important financial institution, which requires higher capital cushions.
Icahn Associates owned about 45 million shares of AIG at the end of the fourth quarter, making it the fourth-largest shareholder in the insurer.
“Without wholehearted shareholder support for my continued leadership, a protracted period of uncertainty could undermine the progress we have made and damage the interests of our policyholders, employees, regulators, debtholders, and shareholders,” Hancock said in a statement on Thursday.
