Aon Founder Pat Ryan Resigning

Aon Founder Pat Ryan Resigning

By Steve Tuckey

NU Online News Service, Sept. 30, 2:49 p.m. EDT?Aon chief executive and founder Patrick Ryan said today he is resigning his post effective upon the appointment of a successor.[@@]

In the surprise announcement, the 67-year-old executive said he would remain as chairman of the board of the Chicago-area-based insurance broker.

Since 1990, Mr. Ryan has led the company to the No. 2 position in the insurance brokerage field just behind New York City-based Marsh McLennan Companies.

Andrew McKenna, head of the board's governance committee, will head the recruitment effort for the CEO post.

At the same time, Michael D. O'Halleran, 54, president and chief operating officer, has removed himself from consideration for the top post. He will give up his current posts to serve as senior vice president of the company.

Morgan Stanley analyst Vinay Saqi said Mr. O'Halleran's move indicates the company will look for an outsider for the top job.

"The moves are not likely to come as a huge surprise to investors, although they could cause some volatility in the stock," Mr. Saqi said in a note to investors.

He also asserted that the company's credibility has suffered of late due to the fact that its operating performance has lagged its peers by a wide margin.

"After announcing that the company would look to achieve 20 percent pretax margins in that business in 2005, management recently noted that the goal would be difficult to reach, given slowing revenue growth," Mr. Saqi wrote. "We guess that trends likely remained difficult in the third quarter."

Mr. Ryan became chief executive of the firm in 1982 after merging his Ryan Group into the entity that eventually became Aon. He became chairman in 1990.