Posted on 05 Apr 2010
American International Group Inc. (AIG) boosted cash salaries for its chief financial officer and a senior insurance executive by 41% and 56% respectively in 2010 from 2009, even as many of the insurer's top earners saw salaries drop.
In a regulatory filing on Friday, the government-controlled insurance giant detailed 2010 pay packages for CFO David Herzog and Kristian Moor, who heads AIG's global property-and-casualty-insurance business. Their compensation packages were among a batch approved in March by U.S. pay czar Kenneth Feinberg.
Mr. Herzog will receive an annual cash salary of $495,000 and an annual stock salary of $4.49 million in 2010, according to the filing. He also is eligible for a long-term incentive award of as much as $1.02 million this year. In an October 2009 regulatory filing, the company listed Mr. Herzog's annual cash salary as $350,000 and stock salary at $3.1 million.
Mr. Moor will get a cash salary of $700,000 this year and $5 million in stock salary. In 2009, his annual cash salary was $450,000 and he had a stock salary of about $4.69 million. He is eligible for a long-term incentive award of as much as $1.9 million this year.
The pair's pay packages stand in contrast to most other highly paid AIG executives, who have seen their 2010 cash compensation cut or frozen as Mr. Feinberg monitors salaries at the insurer, which is nearly 80% owned by U.S. taxpayers. Last month, Mr. Feinberg said overall 2010 cash compensation for a group of AIG's top earners would decrease 63%, or $22.2 million, from the prior year, though a handful of executives saw increases in cash salary from 2009. Mr. Feinberg allowed just five individuals out of the group to receive more than $500,000 in cash salary for the year, even though AIG had proposed that 10 people get more than that amount.
Last fall, Messrs. Herzog and Moor received cash retention awards of $1 million and $1.6 million, respectively. The U.S. pay czar had cut both individuals' 2009 cash salaries by about half from their previous levels, and their new 2010 cash salaries are still less than their old pay, according to a person familiar with the matter.
AIG has decided to move away from doling out retention awards to employees who stay at the company and recently implemented a new system under which it will pay bonuses and other incentive compensation based on employee performance.