8-KLeadership ChangesRegulation FDExhibits & Filings

AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Executive Changes (Jul 6, 2017)

Filed July 6, 2017For Securities:AIG

Summary

This 8-K filing announces a significant executive appointment at American International Group (AIG). The company has appointed Peter Zaffino as Executive Vice President and Global Chief Operating Officer, effective August 1, 2017. Mr. Zaffino brings extensive experience, having previously served as CEO of Marsh LLC and holding senior roles within Marsh & McLennan Companies (MMC) and Guy Carpenter. The filing also details Mr. Zaffino's compensation package, which includes a substantial base salary, short-term and long-term incentives, and a significant sign-on award. This award includes stock options with performance-based vesting conditions tied to AIG's stock price, incentivizing management to drive shareholder value. The appointment is a strategic move, aiming to leverage Mr. Zaffino's expertise in the insurance and reinsurance sectors.

Key Highlights

  • 1Appointment of Peter Zaffino as Executive Vice President and Global Chief Operating Officer, effective August 1, 2017.
  • 2Mr. Zaffino has over 25 years of experience in the insurance and reinsurance industry, including CEO roles at Marsh LLC and Guy Carpenter.
  • 3Zaffino's compensation includes an annual base salary of $1.25 million.
  • 4Annual short-term and long-term incentive targets are $3 million and $4.25 million, respectively.
  • 5A one-time, sign-on award valued at $15 million is granted, including stock options and cash components.
  • 6A significant portion of the stock options have performance-based vesting contingent on AIG's stock price reaching specific thresholds ($10 and $20 above a reference price).
  • 7Zaffino is required to liquidate his ownership in MMC and its affiliates within 10 business days after MMC's Q2 2017 earnings blackout period.

Frequently Asked Questions

Peter Zaffino has been appointed as Executive Vice President and Global Chief Operating Officer of AIG, effective August 1, 2017. He has a strong background in the insurance and reinsurance industry, with previous leadership positions including CEO of Marsh LLC.

Mr. Zaffino's compensation includes an annual base salary of $1.25 million, an annual short-term incentive target of $3 million, and an annual long-term incentive award of $4.25 million. Additionally, he receives a one-time sign-on award with a target value of $15 million, composed of stock options and cash.

The stock options have a tiered vesting structure. Some vest over three years based on continued employment. Others vest only if AIG's stock price meets specific performance hurdles: 200,000 options vest if the stock price is at least $10 above a reference price for 20 consecutive trading days, and another 200,000 vest if it's at least $20 above the reference price for the same period. The remaining 267,000 options vest if the stock price is at least $30 above the reference price.

Yes, Mr. Zaffino is required to fully liquidate any ownership position he holds in Marsh & McLennan Companies (MMC) and its affiliates as soon as practicable, but no later than 10 business days after the expiration of MMC's blackout period for the second quarter of 2017.