Brought In to Lead AIG in Upheaval, Liddy to Resign
Friday, May 22, 2009
American International Group yesterday announced that Edward M. Liddy is stepping down as chairman and chief executive of the troubled insurance giant, but he plans to remain until the company's board of directors names his replacement.
Liddy, 63, agreed to take the reins of the troubled insurance giant after the federal government bailed it out in September. He previously had retired as a chairman of Allstate and has served on the board of Goldman Sachs.
His departure will mark continued upheaval at the top ranks of AIG. Liddy is the company's fourth chief executive since 2005, and each of his three predecessors -- Maurice R. "Hank" Greenberg, Martin Sullivan and Robert Willumstad -- was forced out of the company.
"This is going to be nice, organized transition," Liddy said in an interview yesterday. "We're going to do it well. We're going to do it right."
He has recommended that the company separate the position of chairman and chief executive into two jobs, saying that it makes sense from a corporate governance standpoint and as AIG spins off units into separate companies.
Liddy's tenure at AIG has been anything but tranquil. Since September, the government's total commitment to the company has more than doubled, to an estimated $180 billion. Liddy has struggled in his plan to pay back AIG's debt by selling off the company's worldwide operating units, as the sinking economy has battered asset prices and kept potential buyers at bay.
In early March, AIG posted a $62 billion loss for the fourth quarter of 2008 -- the largest such loss of any company in U.S. history. Weeks later, Liddy became a magnet for public criticism over millions of dollars in retention bonuses paid to workers at AIG Financial Products, the unit whose faulty derivative contracts had wrecked the company. On Capitol Hill, he absorbed the anger of lawmakers who grilled him about company bonuses, AIG's lack of transparency, its payments to trading partners and its plans for survival.
Last week, Liddy told a congressional committee that he thinks AIG could pay back taxpayers in three to five years, assuming the economy halts its decline. He said that the company would continue to sell assets while he remains at the helm, and that it planned to make public offerings for certain businesses in 2010.
Asked who would be willing to replace him in what appears to be one of the most unenviable jobs in corporate America, Liddy expressed confidence that someone would step forward. "I think there are some people who would find this to be a real challenge, who would think it's fun," he said. "Intellectually, it's very, very stimulating."
But Liddy, who once said the pressure of restructuring AIG could be "suffocating," vowed yesterday that when he retires this time, it will be for good.
"If I have a conversation with my wife about doing something else, I'd fear for my own safety," he said. "I don't know if I'd make it out of the house."