AIG's Liddy to step down

CEO and chairman Edward Liddy, who came under fire for the hundreds of millions of bonuses the company paid out, will leave when a replacement is found.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Goldman, CNNMoney.com staff writer

For Money's upcoming Best Places to Live list, we'd like to know: What's most important to you when choosing where to live?
  • Good jobs
  • Affordable homes
  • Top schools
  • Low crime
  • Things to do

NEW YORK (CNNMoney.com) -- AIG Chief Executive Edward Liddy announced Thursday that he plans to step down from the company once the insurer's board of directors finds a replacement.

"Much work remains to be done at AIG, but much has already been accomplished," Liddy said in a statement. He noted that the company's recovery "is likely to take several years [and] AIG should have a leadership team committed to a similar time horizon and prepared to carry the plan to completion."

Liddy had previously indicated that he would stay at the company for a limited amount to time, but he did not give an exact time frame. "[He] said he would know when the time was right," said AIG spokesman Mark Herr. "He stabilized the company, reduced its risk issues, and institued a plan to pay back the taxpayers. He decided now the time is right for someone else to oversee the next phase for the company."

Liddy, who serves as both chairman and CEO, was appointed by the Federal Reserve to head the company in September, after the troubled insurer received billions of dollars in federal aid.

Liddy also recommended that the CEO and chairman roles be split -- a move the current board has indicated it will do.

AIG will elect six new board members at its annual meeting on June 30. The slate of six includes former executives from American Express, Boeing, KPMG, Delphi, Sears and Northwest Airlines. On Thursday, the company also announced it will vote on a 20-1 reverse stock split at the meeting.

Liddy had come under intense scrutiny from lawmakers and the public in March after it was revealed that AIG (AIG, Fortune 500), recipient of $182 billion of taxpayer funds, had paid out $165 million to executives in the company's financial products division, the unit that dragged the company to its knees.

Liddy had argued that all of the bonuses were needed to retain top talent, to prevent an "uncontrolled collapse" of the financial products unit and to maximize return on taxpayers' near-80% stake in the company.

But after much prodding by Congress and the Obama administration, Liddy asked employees who took home more than $100,000 in bonuses to return at least half. So far, AIG said about a third of the bonuses were returned.

AIG's board and trustees have said all along that they support Liddy and his plan to spin off some of the insurer's most valuable assets to pay back the government. Earlier this week, the company said it would speed up plans to list its Asian subsidiary through an IPO that could raise more than $4 billion

Liddy "answered the call of his country and the needs of AIG without reservation amid one of the darkest periods of the current financial crisis," said Stephen Bollenbach, AIG's lead director, in a statement. "We wish him well in his return to retirement. He deserves it." To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
8 must-have travel apps Whether you've got wanderlust or an airline grievance, here are some apps to pack onto your phone. More
Hot stocks: 10 record breaking companies The S&P 500 is trading at all-time highs, and many well-known businesses are leading the charge. Time to buy or sell? More
My biggest retirement mistake Five CNNMoney readers share stories about saving that you can learn from. What they would do differently if they had another chance. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.