So long Liddy, we hardly knew ye

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Edward Liddy, Chairman and CEO of embattled insurance company AIG (AIG), has announced his intention to step down as soon as the board of directors can find his replacement. This follows the nomination of six new directors who will run for election at the company's June 30 board meeting.

Liddy has stated that, as AIG's board is being reconfigured, the company needs to bring in a more permanent leadership team. He has also suggested that the roles of Chairman and CEO be separated, presumably to diffuse power at the head of the company.

Liddy began his tenure as Chairman and CEO of AIG in September 2008, when Treasury Secretary Henry Paulson asked him to run the company. In the ensuing months, Liddy ended up at the center of a series of controversies, as he has had to defend many of the profligate policies of the company's former leadership. In October 2008, for example, he was called to task by then Democratic Presidential candidate Barack Obama for funding a lavish retreat for AIG employees mere days after the company received an emergency $85 billion bailout. While the retreat had been planned since long before his arrival, he ended up having to defend it as standard business.

Similarly, earlier this year, Liddy was in the uncomfortable position of having to oversee the dispersal of massive, controversial bonuses throughout AIG. Although many of these payments were contracted and he was legally obliged to make them, Liddy was widely criticized for the policy. Later, when he asked AIG's staff to return the money, he found himself facing criticism from employees who felt that he had caved in to public pressure. By the end, he was being excoriated by congressmen, economic pundits, and former employee Jake DeSantis, whose indignant resignation letter was published as an Op-Ed in the pages of The New York Times.

While Liddy's support of AIG's unpopular policies suggests that he is the product of a business environment that has increasingly proven itself untenable, it is clear that he has spent the last eight months making the best out of a bad situation. While shepherding AIG through a rapidly changing economic landscape, he has managed to keep it intact and presented a thoughtful, if occasionally indecisive figure. Perhaps most impressively, he has done all this for an annual salary of $1.

So long, Liddy. Take a nice vacation.
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