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November 26, 2009

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AIG gets approval for CEO pay plan

AMERICAN International Group Inc, the insurer that received billions of dollars in a United States bailout, has been authorized by its board to pay Chief Executive Officer Robert Benmosche's US$7 million compensation, after it laid to rest concerns that he may quit the post.

The approval, which the company announced on Tuesday, means that AIG can pay Benmosche an already agreed annual salary of US$3 million in cash and US$4 million in fully vested AIG stock. He is restricted from selling the vested AIG stock for five years from his August start date.

As part of the deal, Benmosche has also signed an agreement that would bar him from working for AIG's competitors when he eventually leaves the company, said a source familiar with the developments.

The agreement comes after Benmosche, a former chief executive of large US life insurer MetLife Inc, told the board in recent weeks that he was tempted to quit because of frustration over the extent of governmental oversight at the company. However, Benmosche told employees in a later letter that he was "totally committed" to seeing the company through its difficulties.

He has also now given the board an assurance that he will stay, said the source, who asked not to be identified because he was not authorized to speak about these developments.

Benmosche could also be eligible for a performance bonus that would raise his total compensation as high as US$10.5 million.


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