Business Context and Reporting Period
This Form 8-K Current Report was filed by American International Group, Inc. (AIG) on April 1, 2011. The report addresses corporate governance matters, specifically the determination of executive compensation for the top twenty-five most highly compensated employees (Covered Employees) by the Office of the Special Master for TARP Executive Compensation.
Key Financial Metrics
The filing does not provide general financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation structures.
| Executive Officer | Annual Cash Salary | Annual Stock Salary | Max Long-Term Incentive (2011) |
|---|---|---|---|
| Robert H. Benmosche | $3,000,000 | $7,500,000 | None (Substituted with stock salary) |
| Peter D. Hancock | $1,800,000 | $4,400,000 | $800,000 |
| David L. Herzog | $495,000 | $4,734,000 | $1,071,000 |
| Kris P. Moor | $700,000 | $5,300,000 | $2,000,000 |
| Jay S. Wintrob | $495,000 | $5,315,000 | $1,190,000 |
Material Changes
The primary material change reported is the formalization of compensation levels effective January 1, 2011, as determined by the Special Master. Notably, the compensation structure for CEO Robert H. Benmosche was revised to substitute his long-term restricted stock award opportunity with additional stock salary, maintaining his total annual direct compensation opportunity while accommodating his stated intent to retire before the end of the minimum two-year vesting period required for long-term awards.
Guidance, Outlook, and Risks
- Compensation Structure: Stock salaries are granted as immediately vested AIG restricted common stock or restricted stock units but are subject to transfer or payment restrictions over a multi-year period.
- Vesting Schedules: For Mr. Benmosche, restrictions lapse on the fifth anniversary of the date of hire. For Messrs. Hancock, Herzog, Moor, and Wintrob, restrictions lapse one-third each year, beginning on the first anniversary of the date of grant.
- Performance Conditions: Eligible executives (excluding Mr. Benmosche) may receive 2011 annual long-term incentive awards payable in long-term restricted stock if they achieve performance goals and grants are deemed appropriate based on AIG's overall circumstances.
- Risks/Contingencies: The filing highlights the regulatory oversight of executive compensation under TARP provisions, requiring adherence to the Special Master's determinations.
Investor Verification Checklist
- Verify the specific vesting schedules and transfer restrictions for the stock salary grants detailed in Exhibit 10.1.
- Confirm the performance goals required for the 2011 long-term incentive awards for Messrs. Hancock, Herzog, Moor, and Wintrob.
- Review the full Determination Memorandum (Exhibit 10.1) for details on the remaining 20 Covered Employees not explicitly named in the summary.
- Monitor future filings for actual grant dates and any adjustments to the compensation structure based on retirement timelines or performance outcomes.