Edward Liddy, the chairman and CEO of the insurance and financial service firm American International Group (AIG), announced on May 21, 2009, that he would step down as soon as the company's board of directors finds a replacement. He recommended the roles of CEO and chairman should be separated.

The Federal Reserve appointed Liddy as the chairman and CEO of AIG in September 2008. Liddy was criticized for allowing the company to receive $182 billion as part of a government bailout and then paying out $165 million in bonuses to AIG financial products division executives.CNN Money: AIG's Liddy to Step Down (May 21, 2009)

On March 13, 2009, AIG paid out $165 million in corporate bonuses that they claimed they were "contractually obligated" to pay out. The majority of the bonuses were paid out to employees or former employees of AIG Financial Products, the division which has been blamed for the company's financial crisis in 2008. Seventy three employees from that division received over $1 million each in bonuses.CNN Money: 73 At AIG Received Bonuses Of $1 Million Or More (March 17, 2009) The decision to pay out the bonuses was met with criticism because the company has received over $170 billion in federal loans. Liddy maintained that the company was required by contracts to pay the bonuses.

Liddy was questioned about the bonuses in a testimony in front of the House Financial Services Committee on March 18, 2009. Liddy, who took over after the contracts were written, said he the company was required by contracts to pay the bonuses and called them "distasteful".Marketwatch: AIG's Liddy: Bonus payments distasteful but necessary (March 18, 2009) He also said he had asked for the recipients of the bonuses to return half of the money or more.Marketwatch: AIG CEO, some staff get death threats over bonuses (March 18, 2009)

On March 24, 2009, Jake DeSantis, an executive vice president in the financial products unit of AIG, resigned. His resignation letter addressed to Liddy was published in the New York Times the next day. In the letter, DeSantis said it was unfair to ask employees to return the bonuses and that AIG employees felt "betrayed" by Liddy for not defending them and for asking them to return the bonuses.The New York Times: Dear A.I.G., I quit! (March 24, 2009)