Posted on 18 Aug 2009
Robert Benmosche, the new president and CEO of American International Group, Inc., will receive an annual salary of $7 million, plus long-term incentives amounting to as much as $3.5 million a year in a package announced yesterday.
The compensation package has received "approval in principle" from Kenneth Feinberg, the Treasury Department's special master for executive compensation for institutions that received bailouts. Benmosche was appointed to the position a week ago.
Citing a person close to Benmosche, The Wall Street Journal last week reported that the lack of a formal pay package as Benmosche took the helm of AIG left him "ready to walk if this doesn't get resolved, and resolved quickly."
Benmosche's predecessor, Edward Liddy, wasn't able to negotiate a salary beyond the $1 annual paycheck he got when he took the role at the request of the Treasury Department in September. Mr. Liddy, the former chairman and CEO of Allstate Corp., stepped down on Aug. 7. He called his short tenure at AIG one of the most difficult experiences of his life.
Benmosche, 65 years old, was chairman and CEO of MetLife Inc. from 1998 until 2006 and has extensive holdings of MetLife stock and stock options.
AIG said it couldn't replace the value of Benmosche's MetLife holdings because, under the Troubled Asset Relief Program, such payments aren't permitted. In a Securities and Exchange Commission filing on Monday, AIG said paying Benmosche for those holdings wouldn't be in the interests of AIG shareholders.
Mr. Benmosche's salary will consist of $3 million in cash, and $4 million in fully vested AIG stock will give him a significant equity stake, which will "align his interests with those of AIG," the filing said.