AIG cuts salaries to 3 top executives
Insurer American International Group Inc said it has cut the salaries of three top executives to comply with pay restrictions for companies that took federal bailout money, according to a regulatory filing yesterday.business Updated: Nov 26, 2009 09:33 IST
Insurer American International Group Inc said it has cut the salaries of three top executives to comply with pay restrictions for companies that took federal bailout money, according to a regulatory filing on Wednesday.
The government has provided AIG with a bailout package worth up to $182.5 billion in exchange for an 80 per cent stake in the company. The package includes restrictions on compensation for the insurer's 100 highest-paid employees.
AIG said it would now pay Chief Financial Officer David Herzog a $350,000 annual salary, pro-rated for the period from Nov. 1 to December 31. That's down from the $675,000 annual salary he earned in 2008. He will also get $3.1 million in stock and is also eligible to receive $833,333 in restricted stock if he meets certain performance goals.
None of the three executives were given stock grants in 2008, according to a June filing with the Securities and Exchange Commission.
Kristian P Moor - who was named CEO of the company's spun-off property casualty and general insurance business Chartis in July - will be paid $450,000 in annual salary pro-rated for Nov. 1 to Dec. 31. That is down from the $959,615 in salary he earned in 2008. Moor will also get $4.7 million in stock and potentially another $2 million in performance-based restricted stock. Win J Neuger, chief executive of AIG Investments, will receive $425,000 in annual salary pro-rated for the period. In 2008, as AIG's chief investment officer - a position he relinquished in January of this year - he was paid a $1 million salary. Neuger is ineligible for stock awards because he will leave AIG after the sale of its asset-management business.
AIG also said it had suspended accruals to a supplemental retirement plan and other nonqualified deferred compensation plans for the three executives.
On Tuesday, AIG said it would go ahead with a previously announced pay package for its new CEO Robert Benmosche of $7 million in cash and stock. Benmosche, who took over as CEO of the embattled insurer three months ago, will receive an annual salary of $3 million in cash and $4 million in AIG common stock under the pay agreement.
AIG shares rose 16 cents to $34.84 in after-hours trading Wednesday after closing at $34.68, down 32 cents from a day earlier.