American International Group, the world’s largest insurer, cut Chief Executive Martin Sullivan’s 2007 pay by about 48 percent from 2006, to $13.93 million, according to a regulatory filing late Friday.
Sullivan, who is entering his third year as AIG chief, was paid $26.7 million in 2006.
The earnings figure was calculated based on salary, bonus, other compensation, non-equity incentive compensation and the grant date fair value of stock and option awards, as disclosed in a filing with the U.S. Securities and Exchange Commission.
AIG’s net income for the year fell about 56 percent to $6.2 billion from $14.05 billion in 2006.
Last year’s earnings were hurt by nearly $11.5 billion in net unrealized market valuation losses related to an AIG Financial Products credit default swap portfolio that had to be written down to reflect deterioration in the mark-to-market valuation of underlying assets.
AIG in February said it recorded a $5.3 billion loss in the fourth-quarter, its largest ever. The insurer’s shares fell sharply after AIG first disclosed it would have to take a large write-down on the credit default swap portfolio. The shares are down about 16 percent from the start of the year, based on Friday’s $47.30 a share close.
Sullivan took AIG’s helm after former Chief Executive Maurice “Hank” Greenberg left the insurer, amid an accounting scandal in 2005.
Greenberg remains one of AIG’s largest shareholders through a personal stake and control of several entities that were once closely affiliated with the company.
(Reporting by Lilla Zuill; editing by Carol Bish.)
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