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Billionaire Carl Icahn just ripped into AIG's CEO for not being willing to take what Icahn called "the bold steps" required to move the company forward.
Icahn, who owns more than 42 million shares of the insurance giant's stock, had sent a public letter to the company's CEO, Peter Hancock, in late October saying the company continued "to severely underperform" and was "too big to succeed."
AIG nearly failed during the financial crisis and had to be bailed out by the US government. Icahn said the company had not done enough to make itself smaller since then.
In the October letter, Icahn said it was a "no brainer" that splitting up the company would unlock shareholder value.
Icahn said in a new letter published Monday that he had since conversations with Hancock that hadn't gone anywhere.
"We have also met and had a number of conversations with AIG CEO Peter Hancock, and he has invited us to continue having conversations," Icahn wrote. "However, despite that invitation, in all of our discussions with Mr. Hancock it was abundantly clear to us that he is not willing to take the bold steps that we, and so many other shareholders, believe are long overdue.
"In addition, in those conversations he failed to lay out any alternative strategic plan with the potential to unlock value for shareholders or to provide compelling reasons as to why these businesses belong together."
Icahn said he planned to continue his dialogue with Hancock but didn't think the AIG CEO would seriously consider his recommendations.
"Therefore, while we plan to accept Mr. Hancock's offer to continue having discussions and meetings with AIG, we do not believe that he will ever sincerely consider what we, and so many others, have proposed," Icahn wrote. "Nor do we believe that the AIG board of directors will respond to the demands of AIG shareholders absent a clear mandate."
Now Icahn plans to take it to the shareholders to decide. He suggested one outcome could be the appointing of a new CEO.
"As a result, we intend to commence shortly a consent solicitation that will enable shareholders to express their views directly to the board, which may include a proposal to add a new director who would agree in advance to succeed Mr. Hancock as CEO if asked by the board to do so."
AIG's share price was most recently trading around $62.23 per share.
Business Insider has reached out to AIG for comment.
Here's the full letter:
On October 28, 2015, as one of AIG’s largest shareholders (we currently own over 42 million shares), we wrote a public letter to the CEO of AIG suggesting that the company is “Too Big To Succeed” and should accelerate cost cutting and separate into three public companies to shrink below the threshold for systemically important financial institutions. Since we released that letter, many large institutional shareholders and analysts have contacted us and expressed their support for our views. We have also met and had a number of conversations with AIG CEO Peter Hancock, and he has invited us to continue having conversations. However, despite that invitation, in all of our discussions with Mr. Hancock it was abundantly clear to us that he is not willing to take the bold steps that we, and so many other shareholders, believe are long overdue. In addition, in those conversations he failed to lay out any alternative strategic plan with the potential to unlock value for shareholders or to provide compelling reasons as to why these businesses belong together.
We have created hundreds of billions of dollars of shareholder value over the last 30 years by convincing boards and CEOs to take the steps necessary to greatly increase the value of their companies. Several well-known examples include Texaco, RJR Nabisco, Kerr-McGee, Time Warner, Motorola, ImClone, eBay and Forest Labs, as well as many others. Unfortunately, it often took years for management and the boards of those companies to agree that we were correct. However, AIG is too important, and the current situation is too time-sensitive, to wait years. In fact, we believe the current situation is too time-sensitive to even wait until the company’s annual meeting next spring, especially when all of the stakeholders who have reached out to us believe management’s current plan (or lack thereof) is insufficient.
Therefore, while we plan to accept Mr. Hancock’s offer to continue having discussions and meetings with AIG, we do not believe that he will ever sincerely consider what we, and so many others, have proposed. Nor do we believe that the AIG board of directors will respond to the demands of AIG shareholders absent a clear mandate. As a result, we intend to commence shortly a consent solicitation that will enable shareholders to express their views directly to the board, which may include a proposal to add a new director who would agree in advance to succeed Mr. Hancock as CEO if asked by the board to do so.
We thank our fellow shareholders for their continued support and look forward to sharing the details of our consent solicitation over the next few weeks.
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