American International Group Inc. and Hartford Financial Services Group Inc. have been setting up payment arrangements for new chief executive officers.
Robert Benmosche, the new president and CEO of AIG, New York, will receive an annual salary that could reach up to $10.5 million, according to a proposal submitted by AIG and approved by Kenneth Feinberg, the special master for Troubled Asset Relief Program executive compensation.
Benmosche is a former chairman of MetLife Inc., New York.
Feinberg, who was appointed by President Barack Obama to be the so-called “pay czar,” has written in a letter to AIG’s compensation committee that the total compensation package was determined to be appropriate “when compared to the total compensation packages of other applicable presidents and chief executive officers of similarly situated companies.”
Benmosche’s salary consists of a $3 million cash salary per year, stock salary of $4 million per year and long-term incentive awards of up to $3.5 million.
In his letter, Feinberg writes that the stock salary “is determined to be performance-based because the value of such stock salary will be determined by the value of the company’s stock over the long term and cannot be sold until [Aug. 10, 2014].”
The long-term incentive award is also performance-based, and it “will not vest unless Benmosche continues to provide services to the company for two years following the grant date of the award, and will be subject to an annual performance” by AIG’s compensation committee, Feinberg writes.
“Any and all incentive compensation paid to Benmosche will be subject to recovery or ‘clawback’ if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metrics,” Feinberg writes.
- Phil Gusman
Liam McGee, the new chairman and CEO of Hartford Financial, Hartford, could get as much as $8.2 million in compensation.
That is slightly less than the former CEO, Ramani Ayer, was earning. Ayer resigned from Hartford’s chairman and CEO posts last week.
McGee, 55, will receive an annual cash base salary of $1.1 million and deferred stock units at an annual rate of $4.4 million, according to a document filed with the U.S. Securities and Exchange Commission. In 2010, he will receive $2.7 million in the form of restricted stock as part of the company’s long-term incentive award program.
After 2010, the long-term incentive award will be made at the discretion of the board of director’s nonmanagement members and in consultation with the special master for TARP executive compensation.
Hartford says McGee’s agreement also contains noncompetition, nonsolicitation and confidentiality provisions.
McGee previously was president of the consumer and small business bank unit at Bank of America Corp., Charlotte, N.C.
Ayer received a base salary of $1.15 million and was eligible to earn up to $9 million in incentive compensation, according to a report Hartford filed in April.
Because Hartford did poorly in 2008, Ayer’s actual 2008 compensation was just $4.47 million, down from about $16 million in 2007.
- Mark E. Ruquet