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