Shares Of AIG Dip As Embattled CEO Steps Down

Shares of American International Group Inc. (AIG) sank Friday after Chairman and CEO Edward Liddy announced that he would step down from the troubled insurer as soon as the company can replace him.

AIG recently traded down 6.1% to $1.70. AIG said Thursday after the market close that Liddy would step down.

The company also announced that it will ask shareholders to vote on a reverse 1-for-20 stock split at its annual meeting in June, and also to authorize an increase in shares, as it reorganizes to reflect its nearly 80% government ownership.

Andrew Barile, an insurance consultant in Rancho Santa Fe, Calif., said that newly named board member Harvey Golub is the most suitable board member to take the chairman role, given his extensive financial services background. Golub is the former chairman and chief executive of American Express Co. (AXP).

Barile said the position of chief executive will be difficult to fill, and could potentially go to a team of executives in an office of the CEO arrangement, with life and property/casualty insurance and international experience. "You need the expertise in both disciplines and global experience" to run the company. But he said it would be difficult to fill the jobs as long as the company is in "chaos."

-By Lavonne Kuykendall, Dow Jones Newswires; [phone]; [e-mail]