AIG could hold emergency meeting over CEO: report

Fri Jun 13, 2008 5:13pm EDT

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NEW YORK (Reuters) - American International Group Inc (AIG.N) could hold an emergency meeting as soon as this weekend to discuss the fate of Chief Executive Martin Sullivan, according to a report on business news channel CNBC on Friday.

In recent weeks, several large shareholders have been pushing for Sullivan's ouster after the giant insurer posted back-to-back quarters of record losses, stemming from about $20 billion in write-downs in the market value of assets linked to subprime mortgages.

An AIG spokesman declined to comment on whether a special meeting was being considered. To date, the board has voiced its support for Sullivan, who was named CEO about three years ago.

Former director Eli Broad and fund managers Shelby Davis of Davis Selected Advisers LP and Bill Miller of Legg Mason Inc (LM.N) wrote in a letter obtained by Reuters earlier this week that "significant and immediate changes at both the management and board level are clearly called for." The same group sent another letter to the board last month, also expressing concern over Sullivan's management.

Separately, former chief executive Maurice "Hank" Greenberg, who remains a large shareholder, has also been critical of management and AIG's board.

Sullivan, 53, replaced Greenberg as chief executive in 2005, after then New York Attorney General Eliot Spitzer and the U.S. Securities and Exchange Commission accused Greenberg and the company of financial misconduct.

Greenberg is still fighting civil charges. Sullivan ushered AIG through the difficult process of reaching a settlement with regulators, paying more than $1 billion to put the matter behind it.

Joseph Cassano, the head of AIG financial products unit, the division that took the risky mortgage bets, quit his post earlier this year. More recently, the insurer said Steven Bensinger, AIG's chief financial officer, would move to a newly created vice-chairman, financial services role. The company has not named a successor for the CFO position.

(Reporting by Lilla Zuill, editing by Phil Berlowitz, Gary Hill)