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Fri, Jul 16, 2010 - Page 10 News List

AIG chairman resigns, loses against chief executive officer Benmosche

NEW YORK TIMES NEWS SERVICE , NEW YORK

The conflict between the American International Group’s (AIG) chairman and its chief executive had been quietly building for months and in recent days it became so palpable that many at the company were wondering which of the two men would survive the coming showdown.

On Wednesday, the victor emerged when Harvey Golub resigned as chairman, leaving Robert Benmosche, the chief executive, at the helm.

Golub will be succeeded by Robert Miller, a fellow AIG director who previously led Delphi, the auto parts maker, through an unusually long and difficult restructuring in Chapter 11.

Golub was brought in as chairman at a low point for AIG last year, after huge losses and scandals over executive bonuses convinced AIG’s federal stewards that the jobs of chairman and chief executive — previously held by one person — needed to be separated. Golub was intended to be AIG’s Washington face, working the halls of US Congress to ensure that no one could claim again that AIG’s taxpayer-owners were being kept in the dark.

Benmosche, who made his mark on the insurance industry by converting the giant MetLife from a mutual to a publicly traded company, was supposed to be the hard-charging insurance executive who would sell AIG’s prized subsidiaries at what he deemed fair prices and rebuild the company for the taxpayers instead of dismantling it.

The two not only had different mandates, but different management styles, which ended up boiling over.

In a letter released by the ­company on Wednesday, Golub, who is 71, wrote that his constant disagreements with Benmosche were so severe that the chief executive had described their relationship as “ineffective and unsustainable.”

“At this point, I view asking the board to choose between us would be an abdication of my responsibility to lead,” Golub wrote. “Consequently, I’m resigning for the simple reason I believe it is easier to replace a chairman than a CEO.”

Miller, known as Steve, has a reputation as a turnaround expert in troubled situations, especially those in the automotive and steel industries where the federal government was a major party.

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