Shares of American International Group Inc. (NYSE: AIG) saw a slight gain on Thursday after the company announced that its president and CEO, Peter Hancock, will be stepping down. There may be mixed views on the departure, but we know that activist investor Carl Icahn is definitely happy with this result.
Although Hancock is stepping down, he will remain as chief executive officer until a successor has been named. Hancock became president and CEO of AIG in September, 2014, when he was also elected to the AIG board of directors.
The Wall Street Journal reported back in February that the board of directors was discussing whether to drop Hancock over a complication in the firm’s turnaround plan. On Thursday, Hancock commented on his departure:
I believe this is the right decision to make for the company and all its stakeholders. Without wholehearted shareholder support for my continued leadership, a protracted period of uncertainty could undermine the progress we have made and damage the interests of our policyholders, employees, regulators, debtholders, and shareholders.
“Wholehearted shareholder support” could mean a number of things. But this company has been under pressure from Icahn over the past year. Icahn first called for the company to be broken up over a year ago.
Needless to say, nobody likes a backseat driver. Hancock and Icahn have butted heads in this time over Icahn’s proposals for cost cutting. Icahn has even gone as far to threaten a proxy fight. After hearing AIG’s announcement on Thursday, it seems that Icahn feels he has won:
Will this be the turning point for AIG? Will the board give more credence to Icahn’s plans? These are some of the questions that investors will have to ask themselves in the coming months.
Icahn Associates reported that it owned roughly 45 million shares of AIG at the end of the fourth quarter, making it the fourth largest shareholder.
Shares of AIG were last seen at $63.30, with a consensus analyst price target of $68.73 and a 52-week trading range of $48.41 to $67.47.