AIG chief Edward Liddy to step down – without being paid
Friday 22 May 2009
Edward Liddy, the finance industry executive brought out of retirement by the US government to run the nationalised insurer AIG, is to quit as soon as a replacement can be found, foregoing the chance of being paid for his work.
After eight months at the centre of political rows and public opprobrium over the spiralling cost of the AIG bail-out, Mr Liddy said last night he wanted to go back into retirement.
His departure leaves the Obama administration with the headache of filling one of the toughest jobs in the government-controlled sector of the finance industry, or more accurately, two of the toughest jobs, since Mr Liddy recommended that AIG split the roles of chairman and chief executive.
The company's shares are still trading among outside investors who hold 20 per cent of AIG, but the government's rescue bid during the financial panic of last September has left it with the remaining 80 per cent. AIG was brought down by trillions of dollars of disastrous bets on credit derivatives, which it did not have the money to cover. Because it was a trading partner with almost all of Wall Street's biggest firms, it was deemed to important to let collapse.
"Ed 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," AIG's lead director, Stephen Bollenbach, said. "He has led AIG effectively and courageously – and without compensation. We wish him well in his return to retirement. He deserves it."
AIG has needed repeated infusions of around $150bn (£95bn) of public money to stay afloat. It is trying to sell some of its more traditional insurance businesses to pay back these debts. Employees are working under close scrutiny by Congress, the media and the Obama administration and earlier this year there was outrage at the payment of $165m in bonuses to executives of the division responsible for the catastrophe at the firm. Mr Liddy was hauled before a Congressional panel to defend the bonuses, which he said were vital to retain staff working on the restructuring.
Last night, Mr Liddy said: "Our pace of success will depend on global economic conditions and financial markets. It is likely to take several years. AIG should have a leadership team committed to a similar time horizon."
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