American International Group Inc., the insurer that received billions of dollars in a U.S. bailout, said on Monday that it will pay newly-appointed Chief Executive Robert Benmosche an annual salary of $7 million.
In a filing with the U.S. Securities and Exchange Commission, AIG said the salary would consist of $3 million in cash and $4 million in fully-vested common stock. He will also be eligible for a performance bonus of up to $3.5 million.
The pay has been approved in principle by Washington’s new pay czar Kenneth Feinberg, said AIG.
AIG, as one of the largest recipients of U.S. aid, has to comply with new pay regulations imposed on companies that have received the largest loans under the U.S. Treasury’s Troubled Asset Relief Program.
Benmosche, 65, who officially started his new job on Aug. 10, will be eligible to receive a prorated bonus for 2009, the company said.
He will not receive any severance pay if his employment is terminated, in contrast to the healthy exit packages awarded to CEOs of the insurer in the days before AIG’s financial troubles.
Once the world’s largest insurer, AIG was saved last September by a taxpayer bailout that has grown to as much as $180 billion. The company had teetered on the brink of collapse from losses on credit default swaps, a type of derivative that sank in value as the credit crisis grew worse.
AIG shares were down 3.5 percent to $23.52 in Monday afternoon trade on the New York Stock Exchange.
(Reporting by Lilla Zuill; Editing by Tim Dobbyn)
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