American International Group Inc (AIG) said on Thursday that chief executive Edward Liddy plans to step down, signaling the end to a short and tumultuous tenure running the government-rescued insurer.
Liddy, 63, named chairman and chief executive of AIG within hours of the government bailout last September via a massive capital injection, had always planned for his stay at the company to be temporary.
The former Allstate executive’s reign at AIG may end up being best remembered for the multiple public scoldings he received from lawmakers over bonuses paid to executives of the insurer’s troubled financial product unit. Liddy said that while being a personal target of public anger had not been easy, he knew the assignment would be a tough one when he accepted it.
“I absolutely would do it again. I think I’ve done the job well,” he said. “I think we are in a much better position than we were and I’m comfortable turning the reins over to the next person.”
Liddy, who was being paid an annual salary of US$1, will not receive a severance package.
“One reason I did this for US$1 a year was because it was not a permanent position,” he said.
He expects his successor to be paid a much higher salary than he has taken. Even so, some say the job will be a tough one to fill.
“It all depends on how much you enjoy testifying in front of angry public officials,” said Donald Light, an analyst with Celent in San Francisco. “It would easily be one of the most challenging jobs in the world of insurance, but add in the public scrutiny and it becomes difficult by a different order of magnitude.”
The US government rescued AIG after money-losing bets on derivatives threatened to drive the company into bankruptcy.
AIG, which now owes taxpayers more than US$85 billion, could take several more years to repay its obligations, Liddy said.
In total, taxpayers have put up to US$180 billion at AIG’s disposal, including billions of dollars to buy toxic assets that led to the company’s losses and US$30 billion in a credit facility that is as yet untapped.
AIG also disclosed paying out more than US$400,000 in costs related to travel, tax, legal and other payments for Liddy last year.
Liddy has recommended to AIG’s board that they find a separate chairman for the company, splitting the two roles.
He said AIG’s next chairman should be “knowledgeable in the ways of Washington,” while the next chief executive should have a time horizon of at least three to five years.
Liddy does not expect the recruitment process to take more than a few months. He said the candidate to succeed him as chief executive could come from inside. The individuals leading the search for AIG’s new leadership will be announced next week, he added.
Before the end of the year, Liddy expects to be back at home in Chicago, rejoining his wife and closer to his three grown children and expanding brood of grandchildren.
“My wife in her very gentle but probing way has from time to time said: ‘Where was this in our retirement plan?” Liddy said.
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