Posted on 25 Nov 2009
AIG CEO Robert Benmosche signed a non-compete agreement, indicating his commitment to remaining with the insurer.
Mr. Benmosche "is committed to leading this company as CEO until the job is done," AIG Chairman Harvey Golub said in an interview following a board meeting on Tuesday. "The board is very satisfied that the commitment is real and heartfelt."
In early November, Mr. Benmosche told board members he might quit after expressing frustrations about government-imposed pay curbs on AIG's top executives. He later told employees in a memo that he was committed to staying and leading the company, which is 80% owned by U.S. taxpayers.
U.S. pay czar Kenneth Feinberg in October slashed 2009 pay packages for 13 top AIG employees. Federal officials are now pressing him to go easier on compensation packages for next year.
Mr. Benmosche's Aug. 16 employment letter stated that he had to negotiate and enter into non-compete arrangements before he could receive AIG common stock worth $4 million a year, part of his $10.5 million pay package. The non-compete agreement covers other insurers.
AIG said Tuesday that Mr. Benmosche would receive his stock salary in "biweekly awards" that would vest immediately. He is restricted from selling the shares until five years after his start date, Aug. 10, 2009. His pay package also includes $3 million in annual cash salary and up to $3.5 million in long-term incentive awards.
Mr. Golub said AIG and the U.S. Treasury will cooperate on identifying several new board members with the help of executive-search firm Korn/Ferry International. The government gained a right to elect two or three new directors to AIG's board after the insurer in early November missed a fourth quarterly dividend payment on preferred shares issued to Treasury.
Mr. Golub said new directors appointed by Treasury "will not replace existing directors" on AIG's current 11-member board. Mr. Golub added that he and fellow AIG director George Miles have also "felt we needed a couple more directors because of the workload we have."
Mr. Golub said he and Mr. Miles, head of the board's nominating and governance committee, met Monday with James Millstein, a Treasury official, plus Korn/Ferry recruiters to discuss the search for two or three board newcomers.