Business Context and Reporting Period
This Form 8-K Current Report was filed by American International Group, Inc. (AIG) on April 10, 2012, covering events occurring on April 6, 2012. The filing addresses corporate governance matters regarding executive compensation determinations made 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 structures.
Material Changes and Compensation Details
On April 6, 2012, the Special Master issued a Determination Memorandum setting annual cash and stock salary levels for AIG's top 25 Covered Employees, effective January 1, 2012. Key compensation figures for named executive officers include:
- Robert H. Benmosche: $3,000,000 cash salary; $7,500,000 stock salary. Stock restrictions lapse on the fifth anniversary of hire. Long-term incentive awards were substituted with stock salary due to potential retirement timing.
- Peter D. Hancock: $1,800,000 cash salary; $5,200,000 stock salary. Stock restrictions lapse one-third annually starting the first anniversary of grant. Eligible for up to $1,000,000 in long-term incentive awards.
- David L. Herzog: $495,000 cash salary; $4,734,000 stock salary. Stock restrictions lapse one-third annually. Eligible for up to $1,071,000 in long-term incentive awards.
- William N. Dooley: $450,000 cash salary; $5,550,000 stock salary. Stock restrictions lapse one-third annually. Long-term incentive awards were substituted with stock salary.
- Jay S. Wintrob: $495,000 cash salary; $5,315,000 stock salary. Stock restrictions lapse one-third annually. Eligible for up to $1,190,000 in long-term incentive awards.
Stock salaries are granted as immediately vested restricted common stock or restricted stock units subject to multi-year transfer or payment restrictions.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, financial outlook, or general risk factors. The primary contingency noted is that long-term incentive awards for Messrs. Hancock, Herzog, and Wintrob are contingent upon achieving 2012 performance goals and being deemed appropriate by the Special Master based on AIG's overall circumstances.
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 Messrs. Hancock, Herzog, and Wintrob to receive their potential long-term incentive awards.
- Review the full Determination Memorandum (Exhibit 10.1) for details on the remaining 20 Covered Employees not named in the summary.
- Assess the impact of the substitution of long-term incentive awards with stock salary for Messrs. Benmosche and Dooley on total compensation liability.