New Chief at A.I.G. to Be Paid at Least $7 Million a Year

How much will it cost the American International Group to keep its chief executive to help stabilize the troubled insurer? At least $7 million a year.
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Hiroko Masuike for The New York Times

Robert Benmosche will earn far more than his predecessor.
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A.I.G. disclosed Monday in a regulatory filing that it would pay Robert H. Benmosche, 65, the former head of MetLife, $3 million a year in cash and $4 million in stock.

Mr. Benmosche will also be eligible for up to $3.5 million in stock as part of an incentive plan, A.I.G. said in a regulatory filing.

The pay package has received preliminary approval by Kenneth R. Feinberg, the administration official in charge of overseeing compensation for top executives at seven large firms bailed out by the federal government, according to the regulatory filing.

Mr. Benmosche will receive significantly more than the dollar a year earned by his predecessor, Edward M. Liddy, a former head of Allstate who came out of retirement to try to turn A.I.G. around after it received $182 billion in government aid. The government now owns nearly 80 percent of the company. (Mr. Liddy, however, received about $460,000 to compensate for air travel, housing and other expenses.)

Mr. Liddy, who unlike Mr. Benmosche also held the title of chairman, described his job at A.I.G. as public service, one where he was charged with reshaping the company after its near-collapse last fall. Under him, the company began exploring deals to sell assets in hopes of repaying some of the hundreds of billions of dollars it received from the government.

This month, A.I.G. reported its first quarterly profit since 2007, though Mr. Liddy warned that the insurance businesses “remain challenged.”

But Mr. Liddy was criticized by Congress for paying retention bonuses to people in its financial products unit, the division that sold the credit-default swaps that nearly brought A.I.G. to financial ruin. He was not in charge when those contracts were struck. He has said that A.I.G. would need to pay his successor significantly more in order to retain a well-qualified individual.

The last A.I.G. chief executive to work a full year, Martin J. Sullivan, was paid $14.3 million in 2007. (Robert B. Willumstad, who succeeded Mr. Sullivan in 2008, worked for only three months before he was ousted as part of the first government bailout.)

A.I.G. said in its letter formally offering Mr. Benmosche the job that his compensation would be subject to “clawbacks” by Mr. Feinberg’s office, meaning that at least some of the money could be recovered if the bonuses were paid based on financially misleading data. Mr. Benmosche will also not receive a severance package if he is dismissed from the company, according to the regulatory filing.

Because Mr. Benmosche still retains some holdings in MetLife — about 500,000 shares and 2.1 million options — he will be excluded from any deals between his old employer and A.I.G., the company said in its filing. Instead, a special committee of directors will oversee the handling of any such sale. Any transaction involving MetLife would not be factored into consideration for bonuses to Mr. Benmosche.