American International Group Inc., (AIG) on Thursday posted a loss for the fourth quarter, while the insurer added investor John Paulson and Samuel Merksamer to its board in order to avoid a proxy fight. The company also lifted its quarterly dividend and announced a $5 billion share buyback.
New York-based AIG reported fourth-quarter net loss of $1.84 billion or $1.50 per share, compared with a profit of $655 million or $0.47 per share a year ago.
Excluding items, operating loss for the quarter was $1.35 billion or $1.10 per share, compared with operating profit of $1.37 billion or $0.97 per share in the prior year. On average, 18 analysts polled by Thomson Reuters estimated loss of $0.91 per share for the quarter. Analysts' estimates typically exclude special items.
The company's commercial property and casualty insurance business reported a pre-tax operating loss of $2.34 billion. Net Investment income at the unit dropped to $730 million from $1.11 billion last year.
CEO Peter Hancock said, "Over the past year, we have been implementing our strategy and made significant progress towards our objectives. 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."
AIG also approved a share buyback authorization of $5.0 billion and boosted its quarterly dividend to $0.32 per share from $0.28 per share. Chairman Douglas Steenland said, "These actions are part of our commitment to return $25 billion of capital to shareholders over the next two years."
Meanwhile, AIG agreed to expand the size of its Board from 14 seats to 16 seats. The company will nominate John Paulson, President of Paulson & Co., and Samuel Merksamer, a Managing Director of Icahn Capital, for election at the 2016 AIG Annual Meeting.
Recently, Icahn and Paulson have criticized AIG's structure and had urged the company to split itself.
AIG closed Thursday's trading at $50.52, down $1.93 or 3.68%, on the NYSE. The stock further rose $0.18 or 0.36% in the after-hours trade.
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