Now that Ed Liddy has decided to quit his thankless jobs as chair and CEO at American International Group, the big question is, who in their right minds would want to sit in the hot seats he is vacating?
Yes, I use the plural here, because Mr. Liddy suggested (and the AIG board wisely agreed) to split his two posts–a move I have urged ever since Maurice Greenberg resigned both positions in the wake of an accounting scandal involving bogus financial reinsurance deals.
AIG–and every U.S. company–should have a board chair separate from the CEO who runs day-to-day operations to assure internal oversight and accountability. It's about time AIG got the message.
That said, in spite of recent criticism of Mr. Liddy's bloated personal living expenses, I have to hand it to the guy for coming out of retirement to take over AIG during such an overwhelming crisis. It was like being named captain of the Titanic right after it hit the iceberg–that being the reckless credit default swaps that threatened to sink AIG until Washington stepped in with a $180 billion life preserver.
Even though Washington maneuvered to put the former Allstate executive in charge, that didn't stop government officials–particularly in Congress–from beating him like he was a pi?ata.
The media did its share of bashing as well–yours truly included–about the luxurious retreats where AIG officials wined and dined top producers, the massive bonuses paid to those in the Financial Products unit that nearly destroyed the company, and most recently about Mr. Liddy's more than generous personal expense account.
Still, Mr. Liddy did his job, stabilizing the crippled company, providing credibility at the top, and beginning the long, arduous process of liquidating assets so taxpayers might actually be repaid someday. And while not exactly riding the bus to work, he did all this for an annual salary of $1.
The next chair and CEO will likely get paid more reasonable sums, but they will have to work their butts off to earn every penny. Indeed, whoever fills these hot seats will face incredible challenges–not the least of which will be trying to run the company with Uncle Sam looking over their shoulders. Plus, there are always press pundits like me ready to pounce at the first sign of trouble.
Treasury Secretary Timothy Geithner has made it clear the federal government will be intimately involved with AIG for the foreseeable future–for better or worse. That is an enormous complication for AIG's new leaders to cope with.
It's hard enough running a public company, with all the demands made by shareholders, regulators, analysts and the press. Having Congress, the Treasury and the White House poking their noses into AIG's business as well is certainly not a positive recruiting point.
Still, this is AIG we're talking about. Any top insurance executive worth their salt would relish the opportunity to be the leader who restored AIG to its former glory.
Besides, a lot of the heavy lifting has already been done by Mr. Liddy, as insurance subsidiaries are rebranding while preparing for a spinoff and public offering to raise capital. As the economy improves and the capital markets loosen up, growth prospects should brighten considerably.
So, who will take over for Mr. Liddy? Your guess is as good as mine. The company needs leaders with guts, gumption, vision, salesmanship and very thick skin.
Got any suggestions?
To respond to Sam Friedman's column, e-mail sfriedman@nuco.com, or go to his blog at www.NUSamSoapbox.com.
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