Investors Press for AIG Board Overhaul

''There are a number of board members whose roles should change and who should leave,'' says one. ''We intend to work through the nominating committee and with [special board adviser] Arthur Levitt to make this happen.''

Shareholders attending the annual meeting of American International Group Inc. on Thursday seemed to be in an agreeable mood. With former chief executive officer Maurice Greenberg out of the picture, they OK’ed the insurance giant’s entire slate of 15 directors and renewed the contract of auditor PricewaterhouseCoopers LLP.

However, a few major institutional investors are apparently till unhappy with these developments.

In a statement, California State Treasurer Phil Angelides said that the California State Teachers’ Retirement System (CalSTRS), which has a position in AIG, opposed PwC’s renewal as well as the election of those board members on audit and executive-compensation committees “who served at the time of the scandal.”

Angelides, a trustee in the fund, also stated that he was urging CalSTRS and the California Public Employees’ Retirement System (CalPERS) “to take all possible action to recover losses the funds and taxpayers suffered as a result of AIG’s alleged mismanagement and to push for reforms to protect shareholders from further harm.”

Richard Ferlauto, director of pension and benefit policy for the American Federation of State, County and Municipal Employees (AFSCME), called on the company to allow shareholders to participate in nominating future board members, according to the Associated Press. Ferlauto also said AFSCME withheld votes from several nominees to send a message that the board needs to bring in new, independent directors, reported MarketWatch, though he did not name the directors who were targeted by the withhold votes.

MarketWatch also noted that proxy advisory firm Glass Lewis & Co. had recommended that investors withhold their votes from 10 of the company’s 15 board members because they failed to properly oversee AIG’s accounting, executive compensation, and corporate governance.

“There are a number of board members whose roles should change and who should leave,” Ferlauto reportedly added. “We intend to work through the nominating committee and with [special board adviser] Arthur Levitt to make this happen.”

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