NEW YORK -- Edward Liddy, CEO of embattled global insurer, American International Group AIG, said Thursday he is stepping down.
Liddy's short but tumultuous reign started eight months ago, in mid-September, when the U.S. government took control of AIG, which was near failure. Then-Treasury-secretary Henry Paulson turned to Liddy to help steer the company, which was deeply embroiled in the financial turmoil.
"When you think of the brink that we were in last fall, and the country calls on you for help, you don't think about it twice," says Liddy, a retired former CEO of auto insurer Allstate. "I'm proud to have done it, and will do it again."
Liddy's decision came after an announcement earlier this week that AIG has nominated six new directors for election on June 30 at the company's annual shareholder meeting. Given that the board has nine directors including Liddy, the company will likely have a new board in a few weeks.
The jobs that Liddy is vacating will not be easy to fill. Liddy said he would stay until the board of directors found a successor for each of his roles, and recommended that AIG split the jobs of chairman and CEO.
"Liddy made an enormous sacrifice for the country and then was shot in the back," says Alan Johnson, managing director at compensation consultant Johnson & Associates.
Johnson was referring to the intense heat that Liddy, who was paid $1 in salary, took in recent months from lawmakers and the public on how he's handled the payout of $165 million in retention bonuses to AIG employees.
But Liddy, the third person to take the CEO position at the company last year, had his work cut out. AIG, a complex giant, was hobbled by losses totaling billions of dollars at its financial products unit. The unit had written quasi-insurance contracts on various debt and securities that were held by global financial giants. To avert disaster across the system, the government had to bail out AIG four times for a total of roughly $180 billion since September.
AIG still faces challenges. However, Liddy says he has brought the company to a "much better position," from where it was. He says because AIG is more stable today, the company needs someone who can shepherd it over at least three more years so that taxpayers can be repaid.
"I would have to commit to be here another three years more and I'll be 67 then, but I'm ready to head back to retirement," Liddy says.