AIG Names John Paulson, Carl Icahn’s Representative to Board


American International Group Inc (NYSE:AIG) decided to expand the number of its Board of Directors and added John Paulson, president of Paulson &Co., and Samuel Merksamer, a managing director of Icahn Capital.

The size of the AIG Board increased from 14 to 16 with the appointment of Mr. Paulson and Mr. Merksamer, who represents billionaire investor Carl Icahn.

In a statement, AIG Chairman Douglas M. Steenland, said: “AIG has a strong Board, with a track record of creating significant shareholder value and delivering superior returns. John and Samuel will bring financial and business expertise to the Board, and we look forward to benefiting from their insights as we move forward with our strategy to create a leaner, more profitable and focused AIG.”

Mr. Paulson and Mr. Merksamer will be included in the insurance company’s proxy statement for election at the 2016 AIG Annual Meeting of Shareholders.

Icahn declined to be on the AIG Board

In a separate statement, Mr. Icahn said he declined to be on the AIG Board, but they reached an agreement that of his analysts will be joining instead of him.

“I myself declined to go on the board because of my involvement in so many other companies at this time,” said Mr. Icahn. He added that the insurance company also entered into a separate agreement with Mr. Paulson’s firm. The activist investor believed that Mr. Paulson’s involvement is beneficial because they shared the same goals for AIG.

Enhancing value for shareholders

Mr. Icahn said, “We commend the board for adopting a number of our recommendations over the last few months. We continue to believe that smaller and simpler is better and look forward to working collaboratively with the board and management to help catalyze a turnaround in core P&C operations, a more transparent operating structure, and the ultimate shedding of the SIFI designation.”

Furthermore, the activist investor expressed confidence that the shareholders of the insurance company will benefit from their agreement, and he is hoping to work with the AIG Board to enhance value.

Mr. Icahn believes that the shares of the insurance company are worth $100 each if it would divide itself into three publicly-traded companies— a property-casualty, a life insurance and a mortgage focused company.

AIG shares closed $50.58 per share, up 3.55% on Thursday. The stock regained 1.8% to $51.49 per share during the extended trading hours.