AIG's new boss will earn $3 million

Posted By Grant Dade - bio | email

NEW YORK ( -- AIG's new boss will make an annual salary of $3 million and receive bonuses and stock options worth millions more, according to a company filing on Monday.

         Chief Executive Robert Benmosche, who took over the bailed out insurer's reins on Aug. 10, will take home $3 million in cash and $4 million in stock options.

         According to an AIG spokeswoman, Benmosche will receive his "stock salary" 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 annual performance bonuses. The bonus will be prorated for 2009. He is not eligible for any kind of severance package.

         In the Securities and Exchange Commission filing, AIG also said that Kenneth Feinberg, the Obama administration's pay czar, "expressed approval in principle" for Benmosche's compensation package. Feinberg still must formally approve the new CEO's compensation.

         Feinberg was not available for immediate comment.

         AIG was one of seven TARP bailout recipients required to submit proposed employment contracts for their 25 highest-paid employees. The others were Chrysler, Citigroup, Chrysler Financial, Bank of America, General Motors and GMAC.

         AIG has received a larger federal bailout -- $182 billion -- than any other company. Executive pay has caused a series of political firestorms.

         The insurer is required to get its 2009 compensation plan approved by Feinberg. In addition, it still has nearly $240 million in 2008 bonuses to pay out. A $2.4 million payment scheduled for July was held up by Feinberg's office, pending further review.

         Controversy over the bonuses erupted in March after it was revealed that employees of the company's crippled Financial Products division received $165 million in retention bonuses. That unit wrote the complex derivatives that nearly brought the whole company down.

         Former AIG CEO Edward Liddy, who retired on Aug. 7, opted to receive a nominal $1 a year salary and gave up a bonus after the controversy.

©2009 KLTV. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.