We (the taxpayers) own AIG. We should fire the top 20 managers immediately as an example to the rest. They should be replaced with people who have never been employed by AIG; it would be bad to promote the next tier of AIG employees up to the top because that would effectively be a reward for their demonstrated incompetence in 2008.
Is it risky to replace the top management of a company? We voters do it every 4-8 years for the U.S. government, a vastly more complex operation than AIG.
I would add this: How could all-new management possibly do worse? AIG, today, is perhaps the single worst-run corporation in the history of the world.