Reply #7: Hope Springs Eternal: Former Amex chief tipped for AIG chair [View All]

http://www.ft.com/cms/s/0/6ee0b1e2-81e7-11de-9c5e-00144feabdc0.html

By Francesco Guerrera in New York

Published: August 5 2009 22:06 | Last updated: August 7 2009 02:00

Harvey Golub, a respected former head of American Express, has emerged as the frontrunner to become chairman of AIG, in a move that would provide the stricken insurer with a robust defender against congressional critics.

Mr Golub, who joined AIG’s board in June, has the edge over other candidates, including ­Dennis Dammerman, the former General Electric executive who is also a director of the government-controlled insurer, people close to the situation said.

They added that no decision had yet been made and the situation remained fluid.

AIG’s board is expected to decide on the new chairman in the next few days, following this week’s decision to appoint ­Robert Benmosche, former head of the insurer MetLife, as chief executive.
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The management reshuffle has been driven by the decision by Edward Liddy, chairman and chief executive, to step down next week after a torrid 11 months marked by several government bail-outs and a political furore over employee bonuses.

Mr Liddy agreed to receive just $1 for his services, but the new chairman and chief executive are expected to be paid in line with industry standards, with Mr Benmosche believed to have agreed a package of $7m-$10m a year.

Officials at the US Treasury and the New York Federal Reserve, which have propped up AIG with $80bn in loans and capital, have been monitoring the selection process for the chairman and chief executive.

Mr Golub, 70, and Mr Dammerman, 63, were among several new directors picked by government officials over the past few months as the authorities revamped a board that had been criticised for failing to spot AIG’s huge problems.

The insurer’s new chairman will have to manage the company’s strained relationship with lawmakers and ensure its government paymasters are happy with the pace of disposals of most of its global operations.

Mr Golub, who is also non-executive chairman of the private equity group Ripplewood, the food group Campbell Soup and The Readers’ Digest Association, has been an outspoken critic of government involvement in financial matters.

In an editorial in the Wall Street Journal after Barack Obama’s presidential victory in November, Mr Golub said he was “pessimistic about whether our next president and the savants in Congress can deal with the massive economic issues we face”.

“Members of Congress...will continue to meddle in matters beyond their knowledge. In doing so they will exacerbate our current economic downturn,” wrote Mr Golub, who used to be on the board of Dow Jones, the owner of the WSJ.

As chairman and chief executive of Amex between 1993 and 2001, Mr Golub was credited with turning round the fading US corporate star. During his tenure, Amex’s shares rose more than sixfold.