Report: AIG's Greenberg to Step Down

March 14, 2005 ( - Amid multiple investigations into corporate wrongdoing, the board of AIG is reportedly urging long-time chief executive Maurice "Hank" Greenberg to resign his post.

According to the Wall Street Journal, the 79-year old may step down by the end of the week. The directors of the company he has headed for decades met on Sunday, according to the Journal, and a formal vote on the matter may come Monday evening. Multiple scenarios are being discussed by the board; one includes his resignation as CEO, but retention of his chairman title.

Greenberg’s reported successor might be Martin Sullivan, a co-chief operation officer and vice chairman with the insurance giant, according to the Journal.

The regulatory focus on multiple insurance companies has shed light on AIG business practices, according to the Journal. AIG settled a potential crisis for $126 million in November, ending a criminal investigation into the company’s role in helping a cell phone distributor disguise losses (See AIG Proposes Settlements in SEC, DOJ Probes ). However, it has received further subpoenas into the issues (See AIG: We Have SEC, Spitzer Subpoenas ).

At the heart of the matter, however, is a transaction involving AIG and Berkshire Hathaway’s General Reinsurance unit, according to the Journal. Greenberg personally initiated the deal, according to the Journal. The SEC and New York Attorney General Eliot Spitzer are currently probing the transaction.

However, the Journal is reporting that neither Spitzer nor the SEC have asked that Greenberg step down.