AIG adding Icahn-linked director to board; loses $1.10 a share, missing estimates
American International Group reported after the bell on Thursday that it had a fourth-quarter loss of $1.10 per share and that it is adding a Carl Icahn-linked member to its board.
Analysts expected AIG to post a shortfall of 93 cents per share on $13.54 billion in revenue, according to a consensus estimate from Thomson Reuters. The company had a profit of 97 cents a share a year earlier.
Icahn announced in a tweet that he has reached an agreement with the insurance giant.
As part of that accord, AIG will add Samuel Merksamer, managing director of Icahn Capital, to its board of directors in May. John Paulson, president of Paulson & Co., will also be joining AIG's board in May.
"We welcome John Paulson's addition to the board and believe his involvement will be additive, especially in that we both have stated the same goals for AIG," Icahn said in his statement.
The company's board also authorized a $5 billion buyback of AIG common shares and increased its quarterly dividend by 14 percent to 32 cents a share on Thursday.
"Together, these capital actions are a strong start towards our goal of returning at least $25 billion to shareholders by 2017," Peter Hancock, AIG's president and CEO, said in a statement.
The insurer said in a statement that its fourth quarter net loss of $1.50 per share was a result of realized capital losses as well as restructuring costs.
"During the fourth quarter, we streamlined our management structure to accelerate decision-making and strengthen accountability. Our recent strategy update detailed the next chapter of our transformation into a leaner, more profitable and focused insurer," said Hancock.
The global insurance company, known for its life insurance and retirement services, has been under pressure from activist investor Icahn to split into three companies to reduce its regulatory burden.
AIG's current restructuring plans include an IPO of up to 19.9 percent of United Guaranty, its mortgage insurance unit. In January, the company also announced the sale of AIG Advisor Group, which it plans to close in the second quarter of this year. AIG also intends to sell its operations in four Central American countries.
Shares of AIG are down about 3 percent over the past year, compared to competitor MetLife, which has dropped roughly 30 percent as it, too, plans to restructure by separating its life insurance unit. AIG shares were up slightly in after-hours trading Thursday.