8-KLeadership Changes

AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Executive Changes (Apr 4, 2013)

Filed April 4, 2013For Securities:AIG

Summary

This 8-K filing from AMERICAN INTERNATIONAL GROUP, INC. (AIG) on April 4, 2013, details the company's 2013 executive compensation program. The program emphasizes a balanced structure with market-competitive base salaries, short-term incentives tied to performance, and significant long-term incentives primarily in performance share units. This approach is designed to align executive interests with long-term shareholder value creation and to encourage prudent risk management. The filing also clarifies specific adjustments to the 2012 Executive Severance Plan, ensuring consistency in severance calculations for certain highly compensated employees. Notably, the CEO, Robert H. Benmosche, is not eligible for severance under his employment agreement. Investors should note the established target compensation figures for named executive officers, which reflect the company's strategy for attracting and retaining key talent while driving performance.

Key Highlights

  • 1AIG established its 2013 executive compensation program effective April 1, 2013.
  • 2The 2013 program structure targets: 25-35% base salary, 25-35% short-term incentive, and at least 40% long-term incentive.
  • 3Short-term incentives are cash-based, tied to enterprise, business unit, and individual performance, with 50% deferred for one year.
  • 4Long-term incentives are primarily performance share units, earned over three years based on Total Shareholder Return (TSR) and tangible book value per share growth relative to peers.
  • 5All deferred and long-term awards are subject to clawback provisions for risk management failures or reputational harm.
  • 6The filing provides specific target compensation details for named executive officers, including CEO Robert H. Benmosche.
  • 7The 2012 Executive Severance Plan was amended for calculation consistency, particularly for top-compensated employees.

Frequently Asked Questions

This 8-K filing primarily focuses on the establishment and details of American International Group's (AIG) 2013 executive compensation program and amendments to its Executive Severance Plan.

The 2013 structure includes market-competitive base salaries, short-term cash incentives linked to performance (with 50% deferred), and substantial long-term incentives primarily in performance share units tied to a three-year performance period. This aims to balance fixed and variable pay, drive strategic achievement, and align executives with shareholder interests.

Long-term incentives are primarily earned through performance share units, which are contingent on AIG's performance over a three-year period. The metrics include Total Shareholder Return (TSR) and growth in tangible book value per share, measured relative to AIG's peer group.

Yes, all deferred and long-term executive awards are subject to rigorous clawback provisions. These provisions can be triggered by failures in risk management or if executives cause material reputational harm to AIG.