AIG Sets Bonus Plan to Reward Executives After Repaying BailoutNoah Buhayar
American International Group Inc. adopted incentive plans for employees to reward top performers after the insurer exited a U.S. bailout last year.
The 2013 long-term incentive plan provides for performance share units based on achievements in a three-year period ending Dec. 31, 2015, the New York-based company said late yesterday in a regulatory filing. Participants, including “officers and key employees,” can earn a maximum 150 percent of their target award based on an evaluation.
AIG Chairman Steve Miller has pledged to reward managers who helped the insurer repay its $182.3 billion rescue. The U.S. Treasury Department imposed compensation restrictions on top executives at firms that received bailouts amid the 2008 financial crisis. AIG was freed from those limits in December when the U.S. sold its last shares in the insurer.
“You need to put a carrot out in front of people to get them to perform at their very best,” Miller said in an interview on Bloomberg Television in January. “They’ve performed miracles without it, but we think they can do even better if we can put in the right tailored comp program.”
The insurer didn’t identify which employees will participate in the long-term incentive plan. Jon Diat, a spokesman for the company, declined to comment on the filing.
AIG was faulted in 2009 for paying retention bonuses to employees including members of the Financial Products unit that oversaw derivative bets that nearly shuttered the firm. Staff at the derivatives unit got more than $400 million in incentive payments after the rescue.
Government restrictions on pay practices harmed AIG’s ability to attract, retain and motivate employees, the company said in a regulatory filing last year. Chief Executive Officer Robert Benmosche, 68, who took over at the firm in 2009, has said AIG employees who performed their jobs capably suffered when the stock price plunged in 2008.
Kenneth Feinberg, who oversaw pay at seven bailout recipients for Treasury, said in September that the limits didn’t put AIG at a competitive disadvantage.
AIG also established a policy to claw back incentive pay from executives who harm the company’s finances or reputation, according to the filing. A separate short-term incentive policy was established to reward most employees, the filing shows.
AIG rose 8.4 percent this year through yesterday, trailing the 9.6 percent gain on the Standard & Poor’s 500 Index.