Edward Liddy, chairman and chief executive of AIG, the embattled insurance company that is now largely government-owned, will step down as soon as he can be replaced, the company said today.
There will be two replacements for Liddy because AIG's board accepted his recommendation to separate the role of chairman and CEO.
Liddy took on his role at AIG in September at the height of the financial crisis, when he was picked for the position by the federal government, which is now the largest shareholder in AIG. The company has received more than $180 billion in bailout funds, more than any other bailout beneficiary.
"In accepting the stewardship of AIG at the request of the U.S. government, Mr. Liddy took on one of the most challenging jobs in the American financial system today," Treasury Secretary Timothy Geithner said in a statement today. "He shouldered this burden out of a strong sense of duty and patriotism, and I am grateful for his hard work and service. The Treasury Department looks forward to continuing to work with Mr. Liddy as the new Board looks for his successor."
At the time of his selection, Liddy was serving on the board of Goldman Sachs and is believed to have been personally asked by then-Treasury Secretary Hank Paulson, a former Goldman Sachs CEO, to take the job.
Some wondered why Liddy, who had a successful career behind him, would take on such a monumental task.
Rob Haines, an analyst with CreditSights, says Liddy took the position to be "a good corporate citizen."
While the job of fixing AIG is incomplete, the company, under Liddy, is in much better shape, Haines said
Liddy is being paid a $1 a year and, according to AIG, will receive no severance package.
Others, such as Rep. Elijah Cummings, D.Md., were less enthused by Liddy's performance. "It became clear early on that Mr. Liddy was not the right fit for this position, and as time has progressed, he has continued to lose the confidence of the U.S. Congress and of the American people," Cummings said in a statement today. "This was the right move."
AIG became the object of public vitriol earlier this year when it was revealed that many employees at the company received millions in bonuses, after the company was bailed out with taxpayer funds.
AIG spokesperson Mark Herr would not comment on how long the search for a new chairman and CEO will take, saying only that the process will be "diligent and thorough" and "will take as much time as needed."
Herr would also not comment on what role the federal government will have in this search process.
In a company release announcing his decision to depart, Liddy said, "Much work remains to be done at AIG, but much has already been accomplished.
"With the financial assistance of the Federal Reserve Bank of New York and the U.S. Department of the Treasury, we have made substantial progress in stabilizing AIG, reducing the systemic risk that led the government to rescue the company, protecting our policyholders and our businesses, and developing a plan to repay American taxpayers."
The company has been selling prized company assets in recent months as part of its efforts to return taxpayer funds.
With reports from ABC News' Matthew Jaffe and Lauren Pearle.