Kristian Moor, head of Chartis insurance group, will not be receiving a full bonus due to "underachievement," according to a regulatory filing by American International Group Inc. (AIG).
Moor was awarded incentive pay equal to 90 percent of the $1.9 million target set for 2010, or $1.71 million, the New York-based insurer reported in its filing. AIG cited “underachievement of certain financial metrics.” Moor received a salary of $5 million in stock and $700,000 in cash.
“Increasing Chartis’ reserves back in February was something of a surprise,” said Clark Troy, a senior insurance analyst based in Chapel Hill, North Carolina, for Aite Group. “The reserve adjustment would suggest that things aren’t going as perfectly as they had hoped.”
AIG, which got a $182.3 billion U.S. bailout, said in February it set aside about $4.2 billion to boost reserves at the Chartis property-casualty unit after claims costs were higher than projected. The insurer has slipped 26 percent this year, the second-worst performance in the Standard & Poor’s 500 Index after Monster Worldwide Inc.
Executive Officer Robert Benmosche was awarded 100 percent of his incentive, or $3.5 million, and also earned $7 million in cash and stock for 2010, AIG said in the filing. Peter Hancock, head of finance and risk, received 120 percent of his incentive pay, or $4.3 million, for less than 11 months of work. He was paid $2.4 million in stock and $1.5 million in cash. AIG’s compensation is still overseen by the Treasury Department’s Office of the Special Master.
Moor, 51, fell short of the financial metrics set for him by the company, including maintaining grades from the four ratings companies, according to the filing. Moor met the strategic and operational metrics set for him, AIG said.
Standard & Poor’s lowered Chartis’s rating to A from A+ in February because of “deterioration in the group’s operating performance,” according to a Feb. 28 statement. The property- casualty units were downgraded Feb. 10 by Fitch Ratings, which said the company was a “significant outlier” in the industry for reserve additions.