AIG 2005 Annual Report Download - page 11

AIG ■2005 Annual Report 9
is nearing completion and we shortly
expect to have available publicly a
detailed description of all such activities
on AIG’s website, www.aig.com. In addi-
tion, a written summary report on
AIG’s corporate social responsibility will
be published soon.
AIG Stock Price and Dividends
AIG’s common stock price closed
the year at $68.23, compared to
$65.67 at year-end 2004, an
increase of 3.9 percent. This compares to a
3.0 percent gain for the S&P 500 Stock
Index. During the year, the price of AIG
stock ranged between a high of $73.46 on
February 11 and a low of $49.91 on April
25. In the period from the April low to
year end, the price rose 36.7 percent.
Over the past 10 years, AIG’s common
stock, including reinvested dividends,
increased 222.2 percent, compared to a
gain of 138.4 percent for the S&P 500. It
is my firm belief that our stock price in the
future will reflect our successful execution
of the growth strategies I have discussed
in this letter, as well as the competitive
strength of AIG’s unparalleled global
network, extensive product offerings, and
deep bench of talented employees, agents
and business partners. In addition, we
intend to manage AIG’s capital to levels
appropriate to support the risks inherent
in our businesses.
The Board of Directors increased AIG’s
quarterly common stock dividend twice
in 2005. In January, the dividend was
increased by 66.7 percent from $0.075 per
share to $0.125 per share, and in August,
the dividend was increased by an
additional 20.0 percent to a new quarterly
dividend rate of $0.15 per share. Together,
these increases, which total 100 percent,
reflect AIG’s strong financial position
and the growth we have achieved in our
business. 2005 represents the twentieth
consecutive year in which AIG has raised
its dividend.
Board of Directors and Management Changes
Six new members joined our Board
of Directors during 2005 and in
early 2006. The Board now has a
clear majority of independent Directors
with a wide array of business, financial,
regulatory, international and public policy
backgrounds. In March, 2005, the Board
elected Stephen L. Hammerman a
Director. Mr. Hammerman was a senior
executive with Merrill Lynch & Co., Inc.
from 1978 to 2002, serving as General
Counsel, Chief Financial Officer and most
recently as Vice Chairman of the Board.
He was also Deputy Commissioner of
Legal Matters for the New York City
Police Department, a Director of the
New York Stock Exchange and Chairman
of the National Association of Securities
Dealers.
In April, 2005, the Board announced
the election of two additional indepen-
dent Directors, George L. Miles, Jr. and
Morris W. Offit. Mr. Miles is President and
CEO of WQED Multimedia and a certified
public accountant. Mr. Offit is Co-CEO of
Offit Hall Capital Management LLC,
and was the founder and CEO of OFFIT-
BANK. He served as the first Chairman of
the Professional Ethics Committee for the
Financial Analysts Federation. In October,
2005, the Board elected Michael H.
Sutton a Director. Mr. Sutton was Chief
Accountant of the Securities and
Exchange Commission and later served as
a consultant to the Financial Accounting
Standards Board.
In January, 2006, the Board elected
Fred H. Langhammer and Robert B.
Willumstad as Directors. Mr. Langhammer
served as CEO of The Estée Lauder
Companies Inc. from 1999 to 2004, and
prior to that was President and Chief
Operating Officer. He is currently
Chairman, Global Affairs, of Estée Lauder.
Mr. Willumstad was formerly President
and Chief Operating Officer of Citigroup
Inc. He was a member of the Citigroup
Management and Business Heads
Committee and of the Citigroup Board of
Directors. Mr. Willumstad has spent
his entire career in banking and financial
services. These new Directors bring
outstanding skills and experience to
AIG’s Board.
Three of AIG’s Directors will not stand
for re-election at the company’s forthcom-
ing Annual Meeting of Shareholders:
M. Bernard Aidinoff, William S. Cohen
and Carla A. Hills. Mr. Aidinoff has
provided valued counsel on many matters
over more than two decades on our Board.