AIG Directors to Discuss Whether to Penalize or Oust CEO Over Fourth-Quarter Results

By Joann S. Lublin, Leslie Scism and David Benoit 

Directors of American International Group Inc. are trying to determine whether to blame -- and possibly replace -- Chief Executive Peter Hancock following a major setback in the insurance giant's turnaround plan, people familiar with the matter said.

Mr. Hancock's 15 fellow directors are expected to debate at an early March board meeting various potential actions, including cutting his bonus or removing him, some people said. Some cautioned it is premature to predict any particular outcome at this point, and that the board will look broadly at management's role.

The discussion marks a sign of lessened board support for the 58-year-old Mr. Hancock, who has run the giant insurer for more than two years. It is fallout from a $3.04 billion fourth-quarter loss, one of AIG's worst results since the U.S. government bailed it out during the financial crisis.

The stock fell 9% on the Feb. 14 earnings announcement and additional bad news the next day: lowered targets for improving two closely watched profit measures.

Directors want to know "how did this happen, and who, if anyone, should be held accountable for this?" one person said.

In response to a request for comment from Mr. Hancock and the board's chairman, Douglas Steenland, AIG said that "AIG's Board of Directors and management team" are focused on their "clearly defined transformation plan for the company to deliver high quality, sustainable earnings."

The statement added, "At this point every year, we actively review our past and future expected performance against our plan, and this year is no exception."

Write to Joann S. Lublin at [e-mail], Leslie Scism at [e-mail] and David Benoit at [e-mail]

(END) Dow Jones Newswires

February 27, 2017 13:35 ET (18:35 GMT)

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