Business Context and Reporting Period
This Form 8-K Current Report was filed by American International Group, Inc. (AIG) on November 21, 2009. The report addresses corporate governance and management changes, specifically regarding executive compensation adjustments mandated by the Office of the Special Master for TARP Executive Compensation.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements and contractual agreements.
Material Changes
Effective November 1, 2009, AIG implemented the following compensation changes for specific executives:
- David L. Herzog (CFO): Annual cash salary set at $350,000; annual stock salary of $3,104,167 (vests at grant); eligible for up to $833,333 in 2009 long-term incentive awards (restricted stock) contingent on performance goals.
- Kristian P. Moor: Annual cash salary set at $450,000; annual stock salary of $4,691,667 (vests at grant); eligible for up to $2,000,000 in 2009 long-term incentive awards (restricted stock) contingent on performance goals.
- Win J. Neuger: Annual cash salary set at $425,000. He is not eligible for stock salaries or long-term incentive awards as he is departing AIG following the sale of the asset management business.
- Plan Suspensions: Accruals under supplemental retirement and non-qualified deferred compensation plans were suspended for Herzog, Moor, and Neuger.
Additionally, on November 24, 2009, AIG entered into a Stock Salary Award Agreement and a Restrictive Covenant Agreement with President and CEO Robert H. Benmosche, consistent with his comprehensive compensation package previously disclosed in August 2009.
Guidance, Outlook, and Risks
Management Commentary and Risks:
- The compensation changes were required by a Determination Memorandum from the Office of the Special Master for TARP Executive Compensation.
- Executive rights under other plans, including the Executive Severance Plan, may be affected by these actions.
- All compensation and rights remain subject to the limits of the Emergency Economic Stabilization Act of 2008 and AIG's agreements with the U.S. Department of the Treasury.
Unusual Items: The filing notes that Mr. Neuger's departure is linked to the previously announced sale of AIG's asset management business.
Investor Verification Checklist
- Verify the specific performance goals required for Herzog and Moor to receive their long-term incentive awards.
- Confirm the impact of the suspended accruals on the executives' total deferred compensation balances.
- Review the attached Exhibits 10.1 and 10.2 for the full terms of Robert H. Benmosche's Stock Salary Award and Restrictive Covenant Agreements.
- Monitor future filings for updates on the sale of AIG's asset management business and the final departure of Win J. Neuger.