Report: Greenberg Out as AIG Chief Executive

The board reportedly is working to set terms for his retirement.
By TSC Staff ,

Maurice Greenberg is set to retire this week as chief executive of

American International Group

(AIG) - Get Report

, under pressure from the board over the company's regulatory posture, the

Wall Street Journal

reported.

AIG, an insurance and banking conglomerate whose $90 billion in revenue made it the 10th-biggest company in the U.S. last year, is preparing to name Co-Chief Operating Officer Martin Sullivan to succeed the 79-year-old Greenberg as CEO, the newspaper said. Greenberg might remain as chairman.

AIG's shares took a hit last fall when it was among the companies targeted by New York Attorney General Eliot Spitzer in a probe of insurance industry price-fixing. Two of its executives pleaded guilty last month to fraud charges arising from the probe. The company was also forced to shell out $126 million in fines and restitution for its roll in arranging structured-finance transactions that helped two firms smooth earnings.

The insurer's name came up again late last month when the

Financial Times

said Spitzer had reopened a probe into AIG's business dealings with a Bahamas-based affiliate whose accounting has raised regulatory interest in the past. The company has denied knowledge of the investigation.

Greenberg has spent close to 40 years at the helm of AIG and overseen its transformation into an industry behemoth. Throughout the recent rounds of regulatory scrutiny, he has been a vocal defender of his company, denying that they were taking any toll on its business.

"It's the feeding frenzy that the press takes," Greenberg said on an Oct. 21 conference call. "We can't control the press. They can say and do what they want."

The stock was down $1.11, or 1.7%, to $63.60 on Instinet.

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