American International Group Inc. has elected a former chief accountant of the Securities and Exchange Commission to a key board committee and announced several corporate-governance changes.
Michael H. Sutton, who served as chief accountant of the commission from 1995 until his retirement in 1998, will serve on the company’s audit committee. In 1998 and 1999, Sutton also served as a special full-time consultant to the Financial Accounting Standards Board. Since 2004, he has served as a director of Allegheny Energy Inc. and Krispy Kreme Doughnuts Inc.
The insurance giant also announced improvements to its corporate-governance policies. For instance, AIG became the latest in a long line of companies to adopt a majority voting policy. The new policy requires that director nominees who run in uncontested elections and receive a greater number of “withheld” votes than “for” votes should tender their resignation.
Under this new guideline, the nominating and corporate-governance committee of the board will recommend whether or not to accept the resignation. The board can still retain the director regardless of the recommendation, so the rule is not as onerous as it sounds on paper.
Also adopted was a mandatory retirement age of 73 for board members. The age limitation can be waived for any director for one year if doing so is deemed “to be in the best interests of AIG.” However, company officials promised to use the waiver provision “sparingly.”
The most common retirement ages for directors at large companies are 70 and 72.
Under the new AIG guidelines, M. Bernard Aidinoff, chairman of the nominating and corporate-governance committee, will not stand for election at the next annual meeting. He is 76 and has served as an AIG director since 1984.
In August, institutional investors urged the board to bring in new independent directors, and proxy advisory firm Glass Lewis & Co. 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.