NEW YORK ( TheStreet) -- It seems Bob
Benmosche has won the latest battle with American International Group's ( AIG) board. On Wednesday afternoon, AIG announced that Harvey Golub was stepping down as chairman, "effective immediately," to be replaced by Steve Miller, who joined the board just over a year ago. Golub and Benmosche, AIG's CEO, have been in a protracted fight over plans to divest a subsidiary. Benmosche recently gave the board an ultimatum -- Golub goes or I go -- and after the board's meeting on Wednesday, it seems Golub made the decision to step down. "Bob Benmosche has informed the Board that he believes our working relationship as Chairman and CEO to be ineffective and unsustainable," Golub said in a letter to Miller, who heads the insurer's governance committee. "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 -- particularly a company in the midst of two major activities: (1) a major corporate restructuring, and (2) development of an exit plan from government control, both of which involve executing a long list of difficult tasks." The board had reportedly been meeting to discuss the future of AIA, an Asian insurance subsidiary of AIG that the firm plans to sell in order to repay part of its government debt. Management of the U.K.-based insurer Prudential plc had offered to buy AIA for $35.5 billion, but shareholders balked at the price and threatened to vote down the deal. When they came back with a $30 billion offer, Benmosche wanted to accept, but Golub and other board members refused. Benmosche, a strong,but outspoken leader who once described himself as a "bull in a china shop," said the disagreement threatened his ability to lead the firm effectively. The two had agreed to resolve their differences and move on, and were reportedly planning an IPO for AIA, but apparently their differences couldn't be resolved. It wasn't the first time the two had butted heads.
AIG shares shot up on Tuesday on word that plans for an IPO were moving forward. The announcement of Golub's departure, rather than news on the AIA front, was slightly unexpected. Golub joined AIG as nonexecutive chairman last August, two months after Miller, and eight years after a long tenure as CEO of American Express ( AXP). Miller, the new king of AIG's boardroom has a reputation as a corporate restructuring guru, having spent years fixing finding solutions for once-troubled firms like Delphi Corp., Bethlehem Steel and Waste Management ( WM). He also serves as chairman of the private-equity firm MidOcean Partners. Miller thanked Golub for his "tremendous service to AIG." -- Written by Lauren Tara LaCapra in New York.