Benmosche Agrees to Stay As AIG Board Approves His $7 Million Pay

November 25, 2009

American International Group Inc., the insurer that received billions of dollars in a U.S. bailout, has been authorized by its board to pay Chief Executive Robert Benmosche’s $7 million compensation, after it laid to rest concerns that he may quit the post.

The approval, which the company announced Tuesday, means that AIG can pay Benmosche an already agreed annual salary of $3 million in cash and $4 million in fully-vested AIG stock.

He is restricted from selling the vested AIG stock for five years from his August start date.

As part of the deal, Benmosche has also signed an agreement that would bar him from working for AIG’s competitors when he eventually leaves the company, said a source familiar with developments.

The agreement comes after Benmosche, a former chief executive of large U.S. life insurer MetLife Inc., told the board in recent weeks that he was tempted to quit because of frustration over the extent of governmental oversight at the company, including how much it can pay top executives.

However, Benmosche told employees in a later letter that he was “totally committed” to seeing the company through its difficulties. He has also now given the board an assurance that he will stay, said the source, who asked not to be identified because he was not authorized to speak about these developments.

Benmosche could also be eligible for a performance bonus that would raise his total compensation as high as $10.5 million.

As one of the largest recipients of U.S. aid, AIG has to comply with pay regulations imposed on the top 100 executives at companies that have received the largest loans under the U.S. Treasury’s Troubled Asset Relief Program. Benmosche’s pay package had already been approved by Washington pay czar Kenneth Feinberg.

Once the world’s largest insurer, AIG was saved last September by a taxpayer bailout that has grown to as much as $180 billion, including more than $80 billion in loans. The company is around 80 percent-owned by U.S. taxpayers.

AIG’s shares closed down 28 cents at $35 on the New York Stock Exchange on Tuesday.

(Reporting by Lilla Zuill; Editing by Phil Berlowitz)

Topics USA AIG

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Latest Comments

  • December 1, 2009 at 12:36 pm
    Fla Home Boy says:
    Lest we all forget the free 7 billion doled out to the banks and investment houses in Nov. 08. The Fat Cats don't give a s*&t about anyone but themselves. Like I said before... read more
  • December 1, 2009 at 10:59 am
    John Q. Public says:
    Help me remember. Was it Bush or Obama who ponied up the bailout cash? See, it really doesn't matter until it concerns your partisan perspective. Can't help but think there is... read more
  • December 1, 2009 at 10:21 am
    Fla Home Boy says:
    No we don't make 7 million a year, do you? Didn't think so......I just think all of these wall street fat boys are all overpaid. Especially the ones at AIG that caused all t... read more

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