The removal of American International Group Inc (NYSE:AIG) CEO Peter Hancock is broadly negative for the company according to a flash research note on the topic from RBC Capital Markets.
Hancock will remain CEO until a successor has been named, the company said.
The company's share price was up about 1.2 percent on the news at $64.22 in early trading on March 9.
Hancock's plan previous year came as billionaire activist investor Carl Icahn called for AIG to be split. Hancock was named president and CEO of AIG in September 2014, when he was also elected to the AIG board of directors.
In a release on Thursday, Douglas Steenland, AIG's chairman of the board, said, "Peter's accomplishments at AIG, including his role in the company's turnaround and in driving shareholder value, are immeasurable".
"We fully support the actions taken today by the board of AIG", Icahn tweeted on Thursday. The CEO's two-year turnaround plan appears to be faltering after AIG reported a unexpectedly large quarterly loss for the fourth quarter of last year, mainly due to a $5.6 billion reserve charge to cover possible future claims.
The board met in NY on Wednesday and had been discussing whether to penalize or oust Hancock over the setback in the turnaround plan, according to the Wall Street Journal. "He tackled the company's most complex issues, including the repayment of AIG's obligations to the U.S. Treasury in full and with a profit, and is leaving AIG as a strong, focused and profitable insurance company".
AIG was brought to its knees during the financial crisis and rescued by a $182 billion bailout from the government.
The New York-based insurer posted four losses in six quarters under Hancock's leadership.