American International Group Inc Chief Executive Robert Benmosche and Chairman Harvey Golub, at odds since a botched sale of the company's Asian life unit, will try to work out their differences, the Wall Street Journal reported on Thursday.

Benmosche told the board last week he wanted Golub to leave the company and would himself resign if that did not happen, according to media reports.

But Golub and Benmosche have agreed to work on the disagreements and a plan for American International Assurance, the Journal reported, citing unnamed sources. They are also planning to remain in their positions, the paper said.

The two now agree the insurer should attempt an initial public offering for AIA by the end of this year, the paper said.

The two are trying to defuse tensions within the board room after a deal to sell AIA to Britain's Prudential Plc for $35.5 billion fell apart.

Prudential wanted to cut the price and Benmosche backed the proposal, but the AIG board overruled the hard-charging CEO, sources have told Reuters.

AIG was counting on the AIA sale as a big step forward in its efforts to repay taxpayers.

Benmosche favored the new terms because, even at a lower price, it offered more liquidity and sooner. But some AIG directors were unhappy with Benmosche's handling of the transaction, a source told Reuters earlier this month.

However, Benmosche's position -- he the fourth CEO since June 2008 -- was seen as safe, with the board wanting him to remain, the source said at the time.

An important concern for the board was the difficulty of finding another person to take on the job, according to the source at the time.

AIG was not immediately available for comment.

(Reporting by Paritosh Bansal; editing by Andre Grenon)

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