AIG chief gets OK for $10.5 million pay package

Kenneth Feinberg gives formal OK for Benmosche's salary, making AIG the first company to receive the pay czar's compensation approval.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Goldman, CNNMoney.com staff writer

ken_feinberg_090610.03.jpg
Kenneth Feinberg approved AIG CEO Robert Benmosche's $10.5 million salary.
Do you expect to be better off financially in 2010?
  • Yes, a lot
  • Yes, a little
  • About the same
  • No, worse off

NEW YORK (CNNMoney.com) -- AIG Chief Executive Robert Benmosche's $10.5 million annual pay package has been formally approved by Obama administration pay czar Kenneth Feinberg.

According to a letter to Treasury's compensation committee dated Oct. 2, Feinberg said Benmosche's package, $4 million of which is in stock options, is comparable to that of other CEOs.

Benmosche, who took over the bailed out insurer's reins in August, will take home $3 million in cash. His "stock salary" will come in equally divisible, bimonthly payments of common shares. Under the terms of his pay deal, he can't sell those shares until August 2014.

The new AIG CEO will also be eligible for $3.5 million in annual performance bonuses. The bonus will be prorated for 2009. AIG can recover his bonus if he deceives shareholders.

The approval was widely expected, because Feinberg gave a preliminary thumbs-up to the package when it was announced on Aug. 18. For formal approval, AIG had to submit a review of Benmosche's compensation package from his last job, when he was the CEO of MetLife (MET, Fortune 500). AIG also was asked to compare Benmosche's pay plan to those of other CEOs at similar companies.

In his letter to Treasury, Feinberg said he maintains the right to reduce (but not to increase) Benmosche's bonus based on the CEO's or the company's performance.

Feinberg oversees the executive compensation packages of seven bailed-out companies, including AIG, Chrysler, Chrysler Financial, Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), General Motors and GMAC. The companies submitted proposed employment contracts for their 25 highest-paid employees on Aug 14, and compensation proposals for the next 75 most compensated employees are due by Oct. 13.

AIG was the first of the seven companies to receive any kind of formal approval. The pay czar is expected to rule on all of the pay plans by the end of the month. That information is due to be made public by Treasury sometime after, although any announcement may not include details of pay packages for individual employees.

Shares of AIG (AIG, Fortune 500) rose 6% by midday Tuesday. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
These 20 antique guns could fetch big bucks Morphy Auctions in Pennsylvania is putting nearly 1,000 old guns on the block. Here are just a few. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.