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American International Group, the insurer bailed out by the US government in 2008, has named an executive chairman to oversee one of its businesses after the chief executive admitted to an affair with a subordinate.
Laurette Koellner, a retired Boeing executive, has been appointed executive chairman of International Lease Finance Corporation, AIG’s aircraft leasing unit, after Henri Courpron, chief executive, admitted to having an affair with an employee under his supervision.
Mr Courpron will remain as chief executive as AIG looks to sell ILFC and reduce its dependence on the US government. But his total pay package will be cut by $1m to $4.4m and he will report to Ms Koellner, rather than AIG’s chief executive, Robert Benmosche.
Ms Koellner will receive a $1.9m pay package from ILFC, but will step down from the AIG board to take up the position.
The affair came to light after an anonymous complaint. Both Mr Courpron, and the other party, who is female, “acknowledged that they had engaged in a voluntary relationship that had ended”, a company statement said.
“I apologise for my mistake and the time-consuming distractions it created,” Mr. Courpron said. “I am committed to keep moving forward with the ILFC team and Laurette.”
It is understood that the other party will remain with ILFC, but will be redeployed to another position, where she does not report directly to Mr Courpron.
The complaint had also alleged that the relationship resulted in improper use of company assets and inappropriate personnel decisions, but AIG said an investigation involving external lawyers had not found evidence for that.
AIG would not comment on how long the affair lasted.
AIG’s share price has increased by a third this year to $31.04, as the company has bought about $5bn of shares back from the Treasury, although the US government still owns 61 per cent of the company.
In September ILFC notified the Securities and Exchange Commission that it planned to list on a US exchange. AIG has not said what valuation it would seek for ILFC, and AIG does not break out the company’s earnings in its results.
Earlier this year Brian Dunn resigned as chief executive of Best Buy over an “inappropriate relationship” with a female subordinate.
Richard Schulze, the electronics group’s founder and chairman, also stepped down from the board after failing to tell other board members about the allegations.