Edward Liddy: AIG's $1 Man

As American International Group Inc. is raked over the coals for paying $165 million in bonuses, one fact has helped insulate AIG chief executive officer Edward M. Liddy: He is personally blameless for AIG's stunning collapse.

Liddy was appointed Sept. 16, after the main damage was done. He came at the request of former Treasury Secretary Henry M. Paulson Jr. in the same emergency deal that gave the insurance giant its first $85 billion loan from the Federal Reserve.

The government's goal was to save AIG from bankruptcy and spare the world economy from the consequences of the firm's failure. Liddy told Congress this week that he "came out of retirement to help my country." A former CEO of Allstate Corp., he agreed to limit his AIG pay to $1 per year.

"My only stake is my reputation," Liddy said in a letter Saturday to Paulson's successor, Timothy Geithner.

If he turns around what is left of AIG, however, Liddy apparently could benefit financially. In a Nov. 25 news release, AIG said that beyond his $1 salary in 2008 and 2009, Liddy's "initial compensation will consist entirely of equity grants." AIG said: "He will not receive an annual bonus in those years, although he may be eligible for a special bonus for extraordinary performance payable in 2010."

Some facts about Edward Liddy:

Age: 63.

Previous salary: $1.2 million in 2006, his last year in charge at Allstate, plus $16 million in nonsalary compensation and $16.5 million from exercising option awards during the year.

Education: B.A. (1968), Catholic University. M.B.A. (1972), George Washington University.

Other jobs: Joined private-equity firm Clayton, Dubilier & Rice Inc. last year after retiring as Allstate chairman; left to join AIG. Allstate chief operating officer from 1994 to 1998. Executive at Sears Roebuck & Co., Allstate's former parent, from 1988 to 1994. Former national chairman, Boys & Girls Clubs of America. Director, Goldman Sachs Group Inc., 2003 to 2008. Director, 3M Co., Boeing Co., Kroger Co.

- Jeff GellesEndText