Harvey Golub resigned as chairman of American International Group (AIG) today, the insurer confirmed. Golub’s resignation follows public speculation that he and CEO Robert Benmosche sparred over the troubled sale of AIA Group, AIG’s Asian life business unit.
Golub, who previously served as CEO of American Express, came to AIG as its nonexecutive chairman in August 2009 to replace Edward Liddy during the company’s tumultuous economic woes.
AIG Director Robert "Steve" Miller will replace Golub. Miller, 68, retired as executive chairman of Delphi Corp in 2009 and is currently serving as chairman of MidOcean Partners. He is also a director of Symantec Corp. and UAL Corp. Both Miller and Golub were nominated to AIG’s board by the federal government, which gave the feds an 80% stake in AIG as part of the Troubled Asset Recovery Program.
Friction between Golub and Benmosche grew after AIG shareholders did not approve a $35.5B offer for AIA Group from Prudential PLC (London) and AIG’s board recommended rejecting it. This lead to rumors that Prudential’s CEO, Tidjane Thiam, would apologize to his own shareholders. And according to Bloomberg, in the wake of the board’s decision, Benmosche threatened to resign unless he was given more freedom to run the company.
In a letter to AIG director George Miles Golub said, "Bob Benmosche has informed the board that he believes our working relationship as Chairman and CEO to be ineffective and unsustainable," Golub said. "At this point, I view asking the board to choose between us would be an abdication of my responsibility to lead. Consequently, I'm resigning for the simple reason I believe it is easier to replace a chairman than a CEO."
With the goal of raising capital to pay back some of the $182.3 billion in rescue funds it received, AIG says it plans to go forward with an IPO to sell half of the Asian business unit, known as AIG’s “crown jewel.” The IPO could fetch $15 billion to $20 billion, depending on the market valuation of the business, a MarketWatch report said. For an IPO to launch before year-end, AIA's listing prospectus would have to be completed by the end of September, according to Wall Street Journal reports.