AIG's Chairman: Board Stands Behind CEO Sullivan

American International Group Chairman Robert Willumstad said Wednesday the global insurance giant's directors stand behind Chief Executive Martin Sullivan, fending off concerns raised by investors frustrated by two quarters of record losses.

Willumstad, speaking at AIG's annual shareholder meeting, also denied that comments expressing concerns about management included in a Wall Street Journal story Wednesday came from directors.

Still, Willumstad acknowledged the disappointing losses, which prompted former CEO Maurice "Hank" Greenberg to call on management to explain why it raised $11.9 billion of equity and convertibles -- deals that dilute existing shareholdings -- rather than shed assets. (For the full inside scoop on AIG, see the CNBC video at left.)

"No one is pleased with the financial results and we would certainly expect them to improve," Willumstad said.

Sullivan told the meeting that AIG's efforts to raise new capital and bolster the balance sheet were going "better than expected."

Earlier in the week, Greenberg said the insurer is in "crisis" and urged a delay in its annual meeting. But AIG said its board saw no need to postpone the meeting.