Not yet, but it seems like just a matter of time for the AIG (AIG) CEO..
Here is the thing. Sullivan can talk all day about “system upgrades” and M&A troubles integrating Greenberg’s mergers. He can also complain all day that many of the write-down’s currently being suffered are the results of what Greenberg did. None of it matters…
Why? Sullivan said earlier in the year that he did not expect any write-downs. He said it and he cannot put that aside. You also cannot say you have a “fortress balance sheet”, take over $11 billion in write-downs in a quarter then go out and raise $12 billion in an environment that will cause that equity raising to be very expensive. Let’s not forget the current results come just after of the announcement earlier this month that an auditor found “material weakness” in AIG’s accounting. Then AIG said it had to write down the value of the portfolio of derivatives by $4.88 billion for October and November. That indicates that in December, the value of that portfolio declined by an additional $6.24 billion.
That just does not jive with a “fortress balance sheet”.
Sullivan now has a job because no one wants it. As soon as folks view the worst is over for AIG candidates will begin to emerge. The Board will then take action to find a successor to Sullivan.
Disclosure (“none” means no position):None
