NEW YORK (Bloomberg) — Carl Icahn, the activist investor calling for a break-up of American International Group, said the alternative plan presented last week by the insurer’s chief executive officer was inadequate and that he’s assembling a slate of directors to shake up the company.

Icahn plans to propose a list of possible board members by the end of next week, he said in a phone interview yesterday, without identifying candidates.

Chief executive officer Peter Hancock has rebuffed Icahn’s call to split AIG into separate insurers focusing on life, property-casualty and mortgage coverage. The CEO outlined plans last week for a more patient approach of simplifying the company, saying he’d have an initial public offering of a partial stake in the mortgage guaranty business, sell a broker- dealer operation and consider divestitures of other assets. Still Hancock said last week that “there are important tax and diversification reasons that would preclude major divestitures in the short term.”

AIG’s Sid Sankaran, who has been designated to be the insurer’s next chief financial officer, said in a video posted online on Monday prior to Icahn’s comments that breaking up the company would punish investors by jeopardising tax assets.

AIG accumulated deferred tax assets when the insurer was unprofitable, and the holdings can limit future obligations to the government.

The insurer pared losses after Icahn’s comments, trading at $56.16 at 1.38pm in New York, down 0.6 per cent from Friday’s close. The stock had dropped as low as $55.38 earlier yesterday.