The Compensation and Management
Resources Committee determines and approves the compensation awarded to AIGs Chief Executive Officer (subject to ratification or approval by the Board) and approves the compensation awarded to the other senior executives under its purview,
oversees AIGs compensation and benefits programs for other employees and makes recommendations to the Board with respect to these programs where appropriate. The Compensation and Management Resources Committee also oversees AIGs
management development and succession planning programs and produces this Report on annual compensation. In carrying out these responsibilities, our objective is to maintain responsible compensation practices that attract, develop and retain
high-performing senior executives and other key employees while avoiding incentives that encourage employees to take unnecessary or excessive risks that could threaten the value of AIG.
AIG remains
committed to continually evaluating and enhancing our risk management control environment, risk management processes and enterprise risk management functions, including through enhancements to its risk governance framework. AIGs compensation
practices are essential parts of the companys approach to risk management, and the Committee regularly monitors AIGs compensation programs to ensure they align with sound risk management principles. Since 2009, the Committees
charter has expressly included the Committees duty to meet periodically to discuss and review, in consultation with the Chief Risk Officer, the relationship between AIGs risk management policies and practices and the incentive
compensation arrangements applicable to senior executives.
In July 2016, the Committee conducted its annual review with AIGs
Chief Risk Officer of AIGs compensation plans to ensure that they appropriately balance risk and reward. As recommended by AIGs Chief Risk Officer, the Committee continued to focus its review on incentive-based compensation plans, which
totaled 102 active plans with approximately 76,350 participants as of June 2016. (Some employees are eligible to participate in more than one plan.)
AIGs Enterprise Risk Management (ERM) conducted its annual risk assessment to
evaluate AIGs active incentive plans. Since 2014, AIG risk officers have assigned a risk rating of low, medium or high to each active incentive plan. In assigning the risk rating, AIG risk officers considered, among other things, whether the
plan features include capped payouts or deferrals and/or clawbacks, whether the plan design or administration leads to outsized risk taking, and whether payments are based on
pre-established
performance goals
including risk-adjusted metrics. For the 2016 annual risk review, ERM reviewed a sample of plans previously rated low risk and medium risk plans (there were no high risk plans). Also as part of its 2016 risk review, ERM reviewed 2015 incentive
payouts to identify any significant variability in payouts that may be indicative of plan features that encourage excessive risk-taking or fraudulent behavior. As of July 2016, no plans were categorized as high risk. As part of this risk review, and
as discussed with the Committee, ERM concluded that AIGs compensation policies and practices do not encourage excessive risk-taking and are not reasonably likely to have a material adverse effect on AIG.
The
Compensation Discussion and Analysis that follows discusses the principles the Committee has been using to guide its compensation decisions for senior executives. The Committee has reviewed and discussed the Compensation Discussion and Analysis with
management. Frederic W. Cook & Co. (FW Cook) has also reviewed and discussed the Compensation Discussion and Analysis on behalf of the Committee with management and outside counsel. Based on such review and discussions, the Committee
recommended to the Board that the Compensation Discussion and Analysis be included in AIGs 2017 Proxy Statement and in AIGs 2016 Annual Report on Form
10-K.
Our compensation philosophy centers on creating a culture of performance management and pay for performance to motivate all AIG employees
to achieve sustainable value through a strategic focus on our core businesses and achieving the right balance between growth, profitability and risk.
We structure our compensation program and make enterprise-wide compensation decisions consistent with our compensation philosophy. Our
compensation philosophy centers around the following objectives:
Consistent with this philosophy, our
short-term and long-term incentive programs are designed to provide appropriate upside opportunity and downside risk and reinforce alignment with shareholder interests. The Compensation and Management Resources Committee evaluates and adjusts the
programs annually based on strategic priorities, stakeholder feedback and market considerations.
The 2016 compensation structure for our current named executives continues to consist of market-competitive base salary, approximately 25
to 35 percent target short-term incentive opportunity and at least 40 percent target long-term incentive opportunity. An executives total direct compensation target is determined based on his or her position, skills and experience
and demonstrated performance, as well as market practice, and is then allocated in accordance with the compensation structure. Consistent with our compensation philosophy, we believe this structure provides an appropriate balance of fixed and
variable pay, drives achievement of AIGs short- and long-term business objectives and strategies and aligns the economic interests of our executives with the long-term interests of AIG and our shareholders.
In the first quarter of 2016, the Committee established annual base salaries (effective as of January 1, 2016), short-term
incentive opportunities and long-term incentive opportunities, including the grant of PSUs, for our named executives.
Our short-term incentive, which represents approximately 30 percent of an executives target total direct compensation
opportunity, is designed to reward annual performance and drive near-term business objectives and strategies. It consists of an annual cash award with individual target amounts that reflect business unit or corporate function responsibilities and
experience and that is earned based on
pre-established
goals for Company performance that produce an objective Company score. As applied to our named executives, earned 2016 awards could range from 0 to
175 percent of target and are subject to clawback. The Committee has discretion to determine the final award amount.
To maintain continuity with our general program, which uses both a
Company score and individual score that are multiplied together and are calibrated accordingly, a multiple of three times the Company score is used in order to determine the earned short-term incentive for Executive Leadership Team members. For
example, if performance is 10 percent above target, awards for these individuals would be 130 percent of target; conversely, if performance is 10 percent below target, awards for these individuals would be 70 percent of target.
Based on the Company score of 40 percent, the multiplier resulted in a 0 percent payout for Executive Leadership Team
members. The Committee does not believe that this result reflected the accomplishments achieved by AIG with respect to 2016, including, but not limited to, expense reductions and capital returns to shareholders that exceeded strategic targets, the
completion or announcement of over ten transactions that will generate over $10 billion in liquidity and the growth and improved profitability of Consumer Insurance. After discussions with Mr. Hancock, the Committee determined not to apply
the multiplier to the members of the Executive Leadership Team other than him.
ITEM 11 |
Executive
Compensation
|
AIG
In accordance with this approach, the Committee determined (and, for Mr. Hancock,
the Board ratified) the following earned short-term incentive amounts for our named executives:
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Named Executive Officer
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Individual Target
Amount*
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Calculated Performance
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Earned Award
Amount
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Peter D. Hancock
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$3,200,000
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0%
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$
0
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Siddhartha Sankaran
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$1,700,000
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40%
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$ 680,000
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Douglas A. Dachille
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$2,000,000
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40%
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$ 800,000
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Kevin T. Hogan
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$1,900,000
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40%
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$ 760,000
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Robert S. Schimek
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$1,750,000
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40%
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$ 700,000
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Former Executive Officer
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David L. Herzog
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$ 500,000
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40%
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$ 200,000
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Seraina Macia (
formerly
Maag)
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$ 425,000
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40%
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$ 170,000
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Brian T. Schreiber
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$ 437,500
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40%
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$ 175,000
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* Prorated for former executive officers based on the number of full months employed during 2016.
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The Committee determined that, beginning with 2016 short-term incentives, the short-term incentive would
be paid in full in the first quarter following the performance year. The Committee concluded that our prior practice of deferring a vested portion of short-term incentives was not consistent with prevailing market practice and did not meaningfully
contribute to risk-balancing, especially since the full short-term incentive amount remains subject to our clawback policy.
Long-Term Incentive.
Our long-term incentive comprises the largest percentage of an executives target compensation
opportunity, representing at least 40 percent of his or her target total direct compensation opportunity. We believe that providing a significant portion of executives compensation in equity, based on performance metrics over a three-year
period, will drive long-term value creation for our shareholders and appropriately account for the time horizon of risks. Since 2013, our long-term incentive program has consisted entirely of PSU awards that are earned between 0 and 150 percent
based on achievement of performance metrics over a three-year period. Earned PSUs vest in three equal, annual installments, resulting in a five-year time horizon to vest in the full award. The following table illustrates our outstanding long-term
PSU awards.
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2013
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2014
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2015
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2016
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2017
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2018
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2019
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2020
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2021
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2013
Long-Term
Incentive Awards
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Performance Period: 20132015
Metrics comprise relative TSR (weighted 50%) and relative growth in tangible book value per share (excluding average accumulated other comprehensive
income) (weighted 50%)
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1/3 of
Earned PSUs Vest
in January
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1/3 of
Earned PSUs
Vest
in January
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1/3 of
Earned PSUs
Vest
in January
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2014
Long-Term
Incentive Awards
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Performance
Period: 20142016
Metrics comprise relative TSR (weighted 75%) and relative change in CDS spread (weighted 25%)
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1/3 of
Earned PSUs
Vest
in January
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1/3 of
Earned PSUs
Vest
in January
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1/3 of
Earned PSUs
Vest
in January
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2015
Long-Term
Incentive
Awards
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Performance
Period: 20152017
Metrics comprise relative TSR (weighted 75%) and relative final CDS spread (weighted 25%)
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1/3 of
Earned PSUs
Vest
in January
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1/3 of
Earned PSUs
Vest
in January
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1/3 of
Earned PSUs Vest
in January
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2016
Long-Term
Incentive
Awards
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Performance Period: 20162018
Metrics comprise relative TSR (100%). If relative OAS
percentile is below 20
th
percentile of peers, payout reduced by half.
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1/3 of
Earned PSUs
Vest
in January
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1/3 of
Earned PSUs
Vest
in January
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1/3 of
Earned PSUs Vest
in January
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Grant of 2016 Long-Term Incentive Awards
To determine PSU grants, the Committee approves (and, for Mr. Hancock, the Board ratifies) the target dollar amount of an
executives long-term incentive award, which is then converted to a number of PSUs based on the average closing price of AIG Common Stock over the calendar month preceding the reference date rounded down to the nearest whole unit. In general,
the reference date refers to the grant date in the case of annual awards, the date of the offer of employment to a new hire or the effective date of a recipients promotion. For 2016, earned PSUs range from 0 to 150 percent of the target
grant based on achieving relative TSR, in order to align with our business strategy and evaluate long-term performance relative to peers. To protect against excessive risk-taking, the TSR metric is balanced by using relative OAS as a gating metric.
OAS is a measurement of the spread of a fixed income securitys return and the risk-free rate of return, which is adjusted to take into account embedded options. Relative OAS acts as a measure of
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AIG | 2016 Form 10-K/A
16
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ITEM 11 |
Executive
Compensation
|
AIG
our relative creditworthiness and serves only as a gating metric such that, if our relative OAS percentile is below the 20
th
percentile of our
peer group, the payout level resulting from the relative TSR score is reduced by half. The Committee determined that relative OAS is now a more reliable and effective risk-adjustment metric than relative credit default swap spread (CDS), which is
the risk-adjusted metric used for our long-term incentive awards granted in 2014 and 2015, given the decreased liquidity in the CDS market. Earned PSUs vest
one-third
in January of each of 2019, 2020 and 2021
and are settled in AIG Common Stock.
The table below summarizes the performance metrics used for the 2016 to 2018 performance
period. Earned awards are based 100 percent on relative TSR, which is targeted at median. Actual performance below threshold will result in a 0 percent payout. Relative OAS acts as a gating metric to protect against excessive risk-taking,
and will reduce the payout level (if any) resulting from the relative TSR score in half if our relative OAS percentile is below the 20
th
percentile of the peer group.
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Metric
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Weighting
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Threshold
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Target
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Maximum
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Relative TSR
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100%
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25
th
percentile
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50
th
percentile
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75
th
percentile
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Relative OAS
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Acts as a gating metric:
If OAS percentile is less than 20
th
percentile of peer
group, the payout level is reduced by half.
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Payout:
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50%
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100%
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150%
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For the 2016 to 2018 performance period, TSR is measured relative to the following 18 peers. Relative
OAS is also measured against these peers, excluding Allianz Group, AXA Group, Prudential plc, Tokio Marine Holdings, Inc. and Zurich Financial Services AG because these companies do not have
USD-denominated
senior unsecured debt outstanding.
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Peers
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AEGON, N.V.
Allianz Group
AXA Group
Chubb Limited
CNA Financial Corporation
Hartford Financial Services Group Inc.
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Lincoln National Corporation
Manulife Financial Corporation
MetLife, Inc.
Principal Financial Group, Inc.
Prudential Financial, Inc.
Prudential plc
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Swiss Re Group
The Travelers Companies, Inc.
Tokio Marine Holdings, Inc.
Voya Financial, Inc.
XL Group Ltd.
Zurich Financial Services AG
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The peer group above includes public companies against which AIG benchmarks financial performance and
competes for market share and talent. For each company in the peer group, TSR will be measured by (1) the sum of (a) the companys adjusted share price at the end of the performance period minus the companys adjusted share price
at the beginning of the performance period (in each case, as reported by Bloomberg, adjusted for stock dividend distributions and stock splits and using a
30-day
period prior to quarter close for the beginning
and end of the performance period) plus
(b) non-stock
dividends declared during the performance period and reinvested in the companys shares on the
ex-dividend
date, divided by (2) the companys adjusted share price at the beginning of the performance period (as reported by Bloomberg, adjusted for stock dividend distributions and stock splits
and using a
30-day
period prior to quarter close for the beginning of the performance period).
For AIG and each company in the peer group that have
USD-denominated
senior unsecured debt
outstanding, OAS will be measured based on the OAS for each company as reported by Bloomberg, and AIGs relative OAS percentile will be determined by the average monthly AIG OAS percentile, as compared to the peer group, over the three-year
performance period.
Results will be certified by the Committee in the first quarter of 2019, and
one-third
of any earned PSUs will vest in each of January 2019, 2020 and 2021. Once earned, vested PSUs are settled in AIG Common Stock.
For 2016 long-term incentive awards, dividend equivalent rights in the form of additional PSUs accrue commencing with the first dividend
record date of AIG Common Stock following the PSU grant date, are subject to the same vesting and performance conditions as the related PSUs and are paid when such related earned shares (if any) are delivered. The number of additional PSUs earned at
any such time will be equal to (i) the cash dividend amount per share of AIG Common Stock times (ii) the number of PSUs covered by the award (and, unless otherwise determined by AIG, any dividend equivalent units previously credited under
the award) that have not been previously settled through the delivery of shares (or cash) prior to such date, divided by the fair market value of a share of AIG Common Stock on the applicable dividend record date.
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AIG | 2016 Form 10-K/A
17
|
ITEM 11 |
Executive
Compensation
|
AIG
Adjudication of 2014 Long-Term Incentive Awards
The three-year performance period for our 2014 long-term incentive awards ended on December 31, 2016, and the Committee assessed
performance in the first quarter 2017. The metrics for 2014 long-term incentive awards comprised relative TSR (weighted 75 percent) and relative change in CDS spread (weighted 25 percent), in each case measured relative to a peer group. The
following table shows the results from the 2014 to 2016 performance period as certified by the Committee:
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Performance Metric
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Threshold
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Target
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Maximum
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Actual
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%
Achieved
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Weighting
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%
Achieved
(Weighted)
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Relative TSR
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25
th
percentile
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55
th
percentile
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75
th
percentile
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56
th
percentile
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103%
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75%
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77%
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Relative Change in
CDS Spread
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5
th
percentile
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20
th
to 80
th
percentile
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95
th
percentile
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30
th
percentile
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100%
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25%
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25%
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Payout:
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50%
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100%
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150%
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102%
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One-third
of the earned PSUs settled in shares of AIG Common
Stock in the first quarter of 2017. The remaining
two-thirds
of earned PSUs will vest
one-third
each in January 2018 and 2019 and be settled in AIG Common Stock.
Earned 2013 Long-Term Incentive Awards
Our 2013 long-term incentive awards, for which the three-year performance period ended on December 31, 2015, were earned at
147 percent of target, as determined by the Committee in the first quarter of 2016.
One-third
of the earned PSUs vested in January 2016, another
one-third
vested in
January 2017 and the remaining
one-third
will vest in January 2018. All earned PSUs are settled in AIG Common Stock.
2017 Short-Term and Long-Term Incentive Structure
The Committee determined in the first quarter of 2017 to adjust both our short-term and long-term incentive programs for 2017 in order to
continue our commitment to sustaining and rewarding a high performance culture with competitive compensation opportunities that are compatible with effective risk management and do not incentivize excessive risk taking, as well as enhance our
ability to attract and retain key talent:
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Short-term incentive awards
: For 2017, individual awards for members of our Executive Leadership Team will be
based on a combination of an enterprise-wide Company score and an assessment of individual performance, resulting in a potential range from 0 to 200 percent of target for each member of the Executive Leadership Team. In addition, for the
Company score, in order to simplify the program and increase the weighting of return on equity (ROE), we are replacing the Normalized Insurance Company PTOI, Normalized AIG ROE and Normalized AIG GOE metrics with a Core Normalized ROE metric that is
targeted based on an improvement in Core Normalized ROE relative to 2016. The Normalized Production RAP and Normalized VoNB metrics remain, and their weightings are increased.
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Long-term incentive awards
: Our 2017 long-term incentive program will consist of grants of PSUs, earned based on
achievement of performance criteria during a three-year performance period, and grants of restricted stock units, earned based on continued employment through the three-year period, each of which vests after the three-year period. PSUs will continue
to be based on relative TSR and may range from 0 to 200 percent of target. The Committee determined that 2017 long-term incentive awards for members of our Executive Leadership Team (except AIGs Chief Executive Officer) will consist of
70 percent PSUs and 30 percent restricted stock units. For other participants, 2017 long-term incentive awards will consist of 50 percent PSUs and 50 percent restricted stock units.
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Continuity awards
: In the first quarter of 2017, the Committee also made
one-time
grants of restricted stock units to each member of our Executive Leadership Team, other than Mr. Hancock, designed to provide for continuity during the search for and transition to a new Chief
Executive Officer in 2017. These continuity awards will vest on the second anniversary of the grant date, subject to the participants continued employment through such date (or the participants earlier termination without cause), and are
not eligible for qualifying resignation or retirement treatment.
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AIG | 2016 Form 10-K/A
18
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ITEM 11 |
Executive
Compensation
|
AIG
Compensation StructureIndirect Compensation Components
Welfare and Other Indirect Benefits
.
AIGs senior executives generally participate in the same broad-based
health, life and disability benefit programs as AIGs other employees.
Retirement Benefits
.
AIG provides a
number of retirement benefits to eligible employees, including both defined contribution plans (such as 401(k) plans) and traditional pension plans (called defined benefit plans). These plans can be either
tax-qualified
or
non-qualified.
AIGs only
active defined contribution plan for the named executives is a 401(k) plan, which is
tax-qualified.
The plan was amended effective January 1, 2012 to provide all participants with a match of
100 percent of the first 6 percent of their eligible compensation contributed up to the Internal Revenue Service (IRS) compensation limit ($265,000 for 2016). Accordingly, for the named executives in 2016, AIG matched a percentage of their
contributions to the 401(k) plan up to $15,900. Effective January 1, 2016, AIG also provides a contribution of 3 percent of eligible compensation to all employees eligible to participate in the 401(k) plan, in addition to the
6 percent matching contribution, subject to IRS limits. In addition, Mr. Herzog participated in certain legacy nonqualified defined contribution plans. These plans are described in greater detail in 2016
CompensationPost-Employment CompensationNonqualified Deferred Compensation.
AIGs defined benefit plans
include the AIG Retirement Plan (the Qualified Retirement Plan), the AIG
Non-Qualified
Retirement Income Plan (the
Non-Qualified
Retirement Plan) and the Supplemental
Executive Retirement Plan (the SERP). Each of these plans provides for a benefit based on years of service and average final salary and, for the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan,
also based on pay credits and interest credits. Effective January 1, 2016, benefit accruals under the Qualified Retirement Plan, the
Non-Qualified
Retirement Plan and the SERP were frozen. As a result,
the Qualified Retirement Plan, the
Non-Qualified
Retirement Plan and the SERP were closed to new participants, and current participants no longer earn additional benefits (however, interest credits will
continue to be earned by participants under the Qualified Retirement Plan and
Non-Qualified
Retirement Plan). These plans and their benefits are described in greater detail in 2016
CompensationPost-Employment CompensationPension Benefits.
Perquisites and Other Compensation
.
To facilitate the performance of their management responsibilities, AIG provides some employees, including the named executives, with aircraft usage (including by an executives spouse when traveling with the executive on business travel),
automobile allowances, use of company pool cars and drivers or parking, legal services, financial, estate and tax planning and other benefits categorized as perquisites or other compensation under the SEC rules.
Termination Benefits and Policies
.
AIG provides severance benefits to its executives in order to offer competitive
total compensation packages, ensure executives ongoing retention when considering potential transactions that may create uncertainty as to their future employment with AIG and enable AIG to obtain a release of employment-related claims.
In 2012, the Committee established the 2012 ESP, which replaced AIGs prior Executive Severance Plan established in March 2008. The
2012 ESP extends to AIG executives in grade level 27 or above, including the named executives, and other executives who participated in the prior plan. For purposes of the 2012 ESP, a participants grade level is the highest level at which he
or she was employed at any time in the 12 months immediately prior to the qualifying termination.
The 2012 ESP provides for
severance payments and benefits upon a termination by AIG without Cause or if a qualifying executive terminates for Good Reason, including, for qualifying executives, after a Change in Control. In the event of a
qualifying termination, a participant is generally eligible to receive severance in an amount equal to the product of a multiplier times the sum of salary and three-year-average annual incentives. The multiplier is either 1 or 1.5 depending on the
executives grade level and increases to 1.5 or 2 for qualifying terminations within two years following a Change in Control. In July
2016, the 2012 ESP was amended to provide that if a qualifying termination occurs within twelve months
after a participant experiences a reduction in his or her base salary or annual short-term incentive opportunity, the severance payment will be calculated as if the qualifying termination occurred immediately prior to the reduction. In any event,
executives in grade level 27 or above who participated in the prior plan, which includes Messrs. Hancock, Herzog, Sankaran, Schimek and Schreiber, may not receive less than the severance they would have received under the prior plan.
Transition Arrangements for Named Executives
Pursuant to his August 14, 2013 offer letter and in consideration of compensation foregone upon rejoining AIG, Mr. Hogan was
granted a
one-time
bonus payable in three installments, subject to Mr. Hogans continued employment through the payment date. The third and final installment, in the amount of $800,000, was paid in
April 2016. This
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AIG | 2016 Form 10-K/A
19
|
ITEM 11 |
Executive
Compensation
|
AIG
installment is subject to recoupment if Mr. Hogan resigns without Good Reason or is terminated by AIG for Cause in the 12 months following payment. In connection with
the offer letter, Mr. Hogan entered into a
non-solicitation
and
non-disclosure
agreement, pursuant to which he agreed to perpetual
non-disparagement
and confidentiality covenants and to a
non-solicitation
covenant that applies during his employment and for a period of one year following his
termination.
Pursuant to her October 21, 2013 offer letter and in consideration of compensation foregone from her former
employer, Ms. Macia was granted a
one-time
bonus payable in in three installments, subject to Ms. Macias continued employment through the payment date. The third and final installment, in the
amount of $950,000, was paid in March 2016 before Ms. Macias separation from service from AIG. In connection with the offer letter, Ms. Macia entered into a
non-solicitation
and
non-disclosure
agreement, pursuant to which she agreed to perpetual
non-disparagement
and confidentiality covenants and to a
non-solicitation
covenant that applied during her employment and for a period of one year following her termination.
Former Named Executive Officers
Mr.
Herzog
.
Mr. Herzog separated from AIG on April 8, 2016 and entered
into a Release and Restrictive Covenant Agreement (Release Agreement) with AIG. Under the Release Agreement and pursuant to the 2012 ESP, Mr. Herzog was entitled to termination without cause benefits as a participant in the prior plan.
Accordingly, Mr. Herzog received a lump sum severance payment of $6,173,333 and was entitled to continued health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), a $40,000 payment that may be applied toward
continued health coverage and life insurance, outplacement services and one year of additional age and service for purposes of determining eligibility to participate in any AIG retiree medical plan. In addition, Mr. Herzog was entitled to one
year of additional service credit and credit for additional age solely for purposes of determining vesting and eligibility for retirement, including early retirement, under the
Non-Qualified
Retirement Plan.
Mr. Herzog was eligible for early retirement benefits under the
Non-Qualified
Retirement Plan as of his separation, with commencement of his benefits delayed six months as required under Section 409A of
the Internal Revenue Code of 1986 (the Code). Mr. Herzog also elected to commence his early retirement benefits under the Qualified Retirement Plan pursuant to the terms of the Qualified Retirement Plan and the American General Corporation
Supplemental Executive Retirement Plan, with payment of his benefits under this plan delayed six months as required under Section 409A of the Code, which Mr. Herzog participated in as a result of his employment by American General Corporation
prior to its acquisition by AIG. AIG agreed to consider Mr. Herzog an eligible employee for purposes of the Assurance Agreement with respect to certain obligations of Starr International Company, Inc. (SICO) (SICO awards are described in
greater detail in 2016 CompensationHoldings of and Vesting of Previously Awarded Equity). Upon his separation, Mr. Herzog became entitled to a lump sum distribution of his balance under the Executive Deferred
Compensation Plan, with payment of his benefits delayed six months as required under Section 409A of the Code, and a lump sum distribution of his balance under the American General Supplemental Thrift Plan, pursuant to the terms of each respective
plan. Mr. Herzogs separation benefits, including the treatment of outstanding long-term incentive awards, are discussed further in 2016 CompensationPotential Payments on TerminationQuantification of Termination
Payments and Benefits.
In the Release Agreement, Mr. Herzog agreed to
one-year
non-solicitation,
six-month
non-competition,
perpetual
non-disparagement
and confidentiality
covenants and a release of claims in favor of AIG.
Ms.
Macia
. Ms. Macia
separated from AIG on March 31, 2016 and entered into a Release Agreement with AIG. Under the Release Agreement and pursuant to the 2012 ESP, Ms. Macia was entitled to termination without cause benefits. Accordingly, Ms. Macia
received a lump sum severance payment of $3,000,000 and was entitled to continued health coverage under COBRA, a $40,000 payment that may be applied toward continued health coverage and life insurance, outplacement services and one year of
additional age and service for purposes of determining eligibility to participate in any AIG retiree medical plan. In addition, AIG will make any tax equalization payments related to Ms. Macias prior international assignment during 2016
and 2017, pursuant to AIGs practice generally applicable to employees on overseas assignments, and Ms. Macia will receive tax services for 2016 and 2017 tax returns. Ms. Macias separation benefits, including the treatment of
outstanding long-term incentive awards, are discussed further in 2016 CompensationPotential Payments on TerminationQuantification of Termination Payments and Benefits.
In the Release Agreement, Ms. Macia agreed to
one-year
non-solicitation,
six-month
non-competition,
perpetual
non-disparagement
and
confidentiality covenants and a release of claims in favor of AIG.
Mr.
Schreiber
.
Mr. Schreiber separated from AIG on March 31, 2016 and entered into a Release Agreement with AIG. Under the Release Agreement and pursuant to the 2012 ESP, Mr. Schreiber was entitled to termination without cause benefits as a
participant in the prior plan. Accordingly, Mr. Schreiber received a lump sum severance payment of $5,999,250 and was entitled to continued health coverage under COBRA, a $40,000 payment that may be applied toward continued health coverage and
life insurance, outplacement services and one year of additional age and service for purposes of determining eligibility to participate in any AIG retiree medical plan. Mr. Schreiber elected to receive his
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AIG | 2016 Form 10-K/A
20
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ITEM 11 |
Executive
Compensation
|
AIG
Qualified Retirement Plan benefit effective November 1, 2016 in the form of a lump sum payment. Mr. Schreibers separation benefits, including the treatment of outstanding
long-term incentive awards, are discussed further in 2016 CompensationPotential Payments on TerminationQuantification of Termination Payments and Benefits.
In the Release Agreement, Mr. Schreiber agreed to
one-year
non-solicitation,
six-month
non-competition,
perpetual
non-disparagement
and
confidentiality covenants and a release of claims in favor of AIG.
Process for Compensation Decisions
Role of the Committee
.
The Committee determines and approves the compensation of AIGs Chief Executive Officer,
and the Board approves or ratifies the amounts to be awarded to him. After considering the recommendation of AIGs Chief Executive Officer, the Committee also approves the compensation of other key employees under its purview, which includes
all of the other named executives. The Committee also makes recommendations to the Board with respect to AIGs compensation programs for other key employees and oversees AIGs management development and succession planning programs.
Attendance at Committee meetings generally includes members of the executive team as appropriate, including representatives from internal legal and human resources, outside counsel, and the Committees independent consultant.
Consultants
.
To provide independent advice, the Committee has used the services of FW Cook since 2005. A senior
consultant of FW Cook regularly attends the Committees meetings and is instructed to provide independent, analytical and evaluative advice about AIGs compensation programs for senior executives, including views of how the program and
proposals compare to market practices in financial services and general industry and to best practices. FW Cook responds on a regular basis to questions from the Committee and the Committees other advisors, providing its opinions
with respect to the design and implementation of current or proposed compensation programs, including the 2016 executive compensation structure. FW Cook also participated in the Committee meeting in which the compensation risk assessment discussed
under Report of the Compensation and Management Resources CommitteeRisk and Compensation Plans was conducted and previously advised that the process was thorough and well designed. In compliance with SEC and NYSE rules, in
February 2016 and February 2017, the Committee reviewed various items related to FW Cooks relationship to AIG, the members of the Committee and AIGs executive officers. The Committee confirmed that neither FW Cook nor any of its
affiliates provides any other services to AIG or its management except with respect to director compensation, and that FW Cook had no business or personal relationship with any member of the Committee or executive officer that raised a conflict of
interest with respect to FW Cooks work for the AIG Board. The Committee also received information on the fees paid to FW Cook by AIG as a percentage of FW Cooks total revenue and FW Cooks ownership of any AIG Common Stock.
Considering this information, the Committee determined that FW Cook is independent and that its work has not raised any conflict of interest.
In 2016, the Committee also considered materials prepared by Johnson Associates related to market compensation levels. Johnson Associates
was engaged by AIG to assist with this work. In particular, Johnson Associates prepared reports presenting market comparisons of total compensation levels for existing employees, new hires and promotions with respect to positions within the
Committees purview. The Committee performed a review of Johnson Associates services similar to the review of FW Cook described above. The Committee noted that FW Cook reviewed the reports prepared by Johnson Associates prior to
consideration by the Committee and determined that this appropriately addressed any conflict of interest raised by Johnson Associates work or business relationship with AIG.
Consideration of Shareholder Feedback
.
The Committee values feedback from AIGs shareholders, including the
feedback received through our
say-on-pay
advisory vote. Since 2010, AIG has held an annual
say-on-pay
advisory vote. In the most recent advisory vote, approximately 97 percent of the votes cast by shareholders were in favor of the 2015 compensation of our
named executives as disclosed in our 2016 Proxy Statement. The Committee believes this level of approval indicates our shareholders strong support of our compensation philosophy and goals and the structure of our executive compensation
program.
Consideration of Competitive Compensation Levels
.
In 2016, the Committee considered information from
data disclosed in surveys, market practices and levels disclosed in proxy statements and employment contracts from a number of peer companies (Broad Data), as well as Johnson Associates benchmarks, which reflect proprietary data, third-party
references and market impressions and judgment. The companies used in the Broad Data set were: Aetna, Inc., AFLAC, The Allstate Corporation, American Express Company, Ameriprise Financial, Inc., Bank of America Corporation, Bank of New York Mellon,
BlackRock, Inc., Capital One Financial Corp., Chubb Group, CIGNA Corporation, Citigroup Inc., Hartford Financial Services, Invesco Ltd., JP Morgan Chase & Co., Lincoln National Corporation, Marsh & McLennan Companies, Inc., MetLife
Inc., Principal Financial Group, Inc., Prudential Financial Inc., T. Rowe Price Group, Inc., The Travelers Companies Inc., U.S. Bancorp and Wells Fargo & Company.
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AIG | 2016 Form 10-K/A
21
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ITEM 11 |
Executive
Compensation
|
AIG
Other Considerations
Clawback Policy
.
In 2013, the Committee adopted and implemented a comprehensive Clawback Policy to encourage sound
risk management and individual accountability. The Clawback Policy covers all executive officers and any other employee as determined by the Committee and applies to covered compensation for such executive officers and employees. Covered
compensation generally includes any bonus, equity or equity-based award or other incentive compensation granted to an executive officer or employee while he or she is subject to the Policy, which includes our 2013, 2014, 2015 and 2016 incentive
awards. In the event that the Committee determines that a triggering event under the Clawback Policy has occurred, the Committee may require an executive officer or other covered employee to forfeit and/or repay all or any portion of any unpaid
covered compensation or covered compensation paid in the 12 months (or such longer period of time as required by any applicable statute or government regulation) preceding the event. Triggering events generally include a material financial
restatement; the award or receipt of covered compensation based on materially inaccurate financial statements or performance metrics that are materially inaccurately determined; a failure of risk management, including in a supervisory role, or
material violation of AIGs risk policies; and an action or omission that results in material financial or reputational harm to AIG.
Share Ownership Guidelines and Holding Requirements
.
AIGs share ownership guidelines establish levels of
ownership of AIG Common Stock at five times salary for the Chief Executive Officer and three times salary for other executive officers, which included the other named executives during 2016. Until the guidelines are met, such employees are required
to retain 50 percent of the shares of AIG Common Stock received upon the exercise, vesting or payment of certain equity-based awards granted by AIG. Shares held for purposes of the guidelines may include stock owned outright by the officer or
his or her spouse and earned but unvested share-based awards. Executive officers are required to comply with the guidelines until six months after they cease to be executive officers.
No-Hedging
Policy
.
AIGs Code of Conduct and Insider Trading Policy
prohibit employees from engaging in hedging transactions with respect to any of AIGs securities, including by trading in any derivative security relating to AIGs securities.
Deductibility of Executive Compensation
.
Section 162(m) of the Code generally limits the tax deductibility of
compensation in excess of $1 million per year paid by a public company to its chief executive officer and three other most highly compensated executive officers (other than the chief financial officer), subject to certain exceptions, with an
exception for qualifying performance-based compensation (as defined under applicable tax regulations). At AIGs 2013 Annual Meeting, our shareholders approved the AIG 2013 Omnibus Incentive Plan (2013 Omnibus Incentive Plan), which
is designed to allow for the issuance of awards that satisfy the performance-based compensation exception under Section 162(m), and the Committee intends that short-term and long-term incentives awarded to covered employees for 2016
qualify for this exception.
Accordingly, separate from determining 2016 short- and long-term incentive opportunities, in the first
quarter of 2016, the Committee established performance criteria and set one percent of Normalized Insurance Company PTOI, as defined in
Non-GAAP
Financial Measures, as the Section 162(m)
compliant maximum for 2016 short- and long-term incentives awarded to each individual covered employee, including the named executives. This limit does not serve as a basis for the Committees compensation decisions for our named executives,
but rather provides for the maximum amount of tax deductible 2016 short- and long-term incentive compensation that the Committee can award to the covered employee, with the Committee retaining the discretion to pay less than the maximum. Once the
maximum amount is established, the qualifying performance-based compensation for each covered employee is delivered through the 2016 short-term incentive and long-term incentive programs. If the total amount earned under these programs is less than
the maximum deductible amount, the Committee will pay only the amount earned.
The Committee retains the ability to pay compensation
that exceeds $1 million and does not constitute qualifying performance-based compensation when it determines that such payments are in the best interests of AIG and our shareholders. The Committee believes that retaining the flexibility to
attract, retain and motivate our employees with a compensation program that supports long-term value creation, even though some compensation awards may not be deductible, is in the best interests of our shareholders.
Non-GAAP
Financial Measures
Certain of the operating performance measurements used by AIG management are
non-GAAP
financial measures under SEC rules and regulations. See
Non-GAAP
Financial Measures for an explanation of how these measures are calculated from our audited financial statements.
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AIG | 2016 Form 10-K/A
22
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ITEM 11 |
Executive
Compensation
|
AIG
Conclusion
Our 2016 compensation program reflects our continued commitment to comprehensive
pay-for-performance
standards throughout AIG. We believe our compensation program properly motivates our employees and appropriately rewards them for their efforts to balance profit, growth and risk, and
create value for our shareholders.
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AIG | 2016 Form 10-K/A
23
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ITEM 11 |
Executive
Compensation
|
AIG
2016 COMPENSATION
Summary Compensation Table
The following
tables contain information with respect to AIGs named executives. As required by SEC rules, AIGs named executives include the Chief Executive Officer, Chief Financial Officer and the three other most highly paid executive officers, who
each served through the end of 2016, as well as a former Chief Financial Officer who served during part of 2016 and two additional individuals who served as executive officers during part of 2016.
2016 Summary Compensation Table
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Name and
Principal Position
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Year
|
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Salary(1)
|
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|
Bonus
|
|
|
Stock
Awards(2)
|
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Non-Equity
Incentive Plan
Compensation(3)
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Change in
Pension
Value(4)
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All Other
Compensation(5)
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Total
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Peter D. Hancock
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2016
|
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$
|
1,600,000
|
|
|
$
|
0
|
|
|
$
|
7,851,287
|
|
|
$
|
0
|
|
|
$
|
8,991
|
|
|
$
|
116,257
|
|
|
$
|
9,576,535
|
|
Chief Executive Officer
|
|
|
2015
|
|
|
$
|
1,661,538
|
|
|
$
|
0
|
|
|
$
|
8,231,460
|
|
|
$
|
2,496,000
|
|
|
$
|
59,759
|
|
|
$
|
49,218
|
|
|
$
|
12,497,975
|
|
|
|
|
2014
|
|
|
$
|
1,426,923
|
|
|
$
|
0
|
|
|
$
|
7,011,108
|
|
|
$
|
3,497,334
|
|
|
$
|
73,751
|
|
|
$
|
55,312
|
|
|
$
|
12,064,428
|
|
Siddhartha Sankaran
|
|
|
2016
|
|
|
$
|
1,000,000
|
|
|
$
|
0
|
|
|
$
|
3,159,665
|
|
|
$
|
680,000
|
|
|
$
|
705
|
|
|
$
|
39,598
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|
|
$
|
4,879,968
|
|
Executive Vice President
and Chief Financial Officer
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Douglas A. Dachille
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|
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2016
|
|
|
$
|
1,000,000
|
|
|
$
|
0
|
|
|
$
|
3,829,868
|
|
|
$
|
800,000
|
|
|
$
|
213
|
|
|
$
|
65,706
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|
|
$
|
5,695,787
|
|
Executive Vice President
and Chief Investment Officer
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|
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Kevin T. Hogan
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|
2016
|
|
|
$
|
1,000,000
|
|
|
$
|
800,000
(6)
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|
|
$
|
3,446,866
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|
|
$
|
760,000
|
|
|
$
|
98,417
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|
|
$
|
51,430
|
|
|
$
|
6,156,713
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Executive Vice President
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2015
|
|
|
$
|
1,038,462
|
|
|
$
|
1,150,000
(6)
|
|
|
$
|
3,613,812
|
|
|
$
|
1,482,000
|
|
|
$
|
12,995
|
|
|
$
|
620,888
|
|
|
$
|
7,918,157
|
|
Consumer
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|
|
2014
|
|
|
$
|
903,846
|
|
|
$
|
1,300,000
(6)
|
|
|
$
|
3,517,171
|
|
|
$
|
2,058,750
|
|
|
$
|
338,113
|
|
|
$
|
895,534
|
|
|
$
|
9,013,414
|
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Robert S. Schimek
|
|
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2016
|
|
|
$
|
1,000,000
|
|
|
$
|
0
|
|
|
$
|
3,351,116
|
|
|
$
|
700,000
|
|
|
$
|
27,564
|
|
|
$
|
44,457
|
|
|
$
|
5,123,137
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Executive Vice President
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Commercial
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Separated during 2016
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David L. Herzog
|
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2016
|
|
|
$
|
269,231
|
|
|
$
|
0
|
|
|
$
|
3,829,868
|
|
|
$
|
200,000
|
|
|
$
|
102,613
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|
|
$
|
6,336,748
|
|
|
$
|
10,738,460
|
|
Former Executive Vice President
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|
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2015
|
|
|
$
|
1,038,462
|
|
|
$
|
0
|
|
|
$
|
4,015,335
|
|
|
$
|
1,560,000
|
|
|
$
|
28,172
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|
|
$
|
41,405
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|
|
$
|
6,683,374
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and Chief Financial Officer
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|
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2014
|
|
|
$
|
1,000,000
|
|
|
$
|
0
|
|
|
$
|
3,935,432
|
|
|
$
|
2,440,000
|
|
|
$
|
271,673
|
|
|
$
|
48,000
|
|
|
$
|
7,695,105
|
|
Seraina Macia
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|
|
2016
|
|
|
$
|
250,000
|
|
|
$
|
950,000
(7)
|
|
|
|
|
|
|
$
|
170,000
|
|
|
$
|
0
|
|
|
$
|
5,581,224
|
|
|
$
|
6,951,224
|
|
Former Executive Vice President
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|
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|
|
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Brian T. Schreiber
|
|
|
2016
|
|
|
$
|
233,846
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
175,000
|
|
|
$
|
0
|
|
|
$
|
9,494,318
|
|
|
$
|
9,903,164
|
|
Former Executive Vice President
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Footnotes to 2016 Summary Compensation Table
(1)
|
Amounts for 2015 reflect an additional pay period for all U.S. salaried employees due to our
bi-weekly
payroll calendar.
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(2)
|
|
2016 Amounts. The amounts represent the grant date fair value of PSUs granted for the 2016-2018 performance
period under the 2016 AIG Long-Term Incentive (2016 LTI) award based on target performance determined in accordance with FASB ASC Topic 718. At the maximum level of performance, the grant date fair value would be:
Hancock$12,410,252; Sankaran$4,994,387; Dachille$6,053,751; Hogan$5,448,354; Schimek$5,296,979; and Herzog$6,053,751. All
amounts are subject to clawback under the AIG Clawback Policy.
|
2015 Amounts.
The amounts represent the grant date fair value of PSUs granted for the
20152017 performance period under the 2015 AIG Long-Term Incentive (2015 LTI) award based on target performance determined in accordance with FASB ASC Topic 718. At the maximum level of performance, the grant date fair value would be:
Hancock$12,993,187; Hogan$5,704,344; and Herzog$6,338,110. All amounts are subject to clawback under the AIG Clawback Policy.
2014 Amounts.
The amounts represent the grant date fair value of PSUs granted for the 20142016 performance period under the
2014 AIG Long-Term Incentive (2014 LTI) award based on target performance determined in accordance with FASB ASC Topic 718. At the maximum level of performance, the grant date fair value would be: Hancock$10,351,704; Hogan$5,288,877; and
Herzog$5,882,089. All amounts are subject to clawback under the AIG Clawback Policy. In the first quarter of 2017, the Committee certified the results for the 20142016 performance period and determined the actual earned 2014 LTI awards
for each named executive. See Compensation Discussion and AnalysisAdjudication of 2014 Long-Term Incentive Awards for further information.
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AIG | 2016 Form 10-K/A
24
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|
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|
|
ITEM 11 |
Executive
Compensation
|
AIG
Calculation.
The amount shown for the awards granted by AIG was calculated using
the assumptions described in Note 20 to the Consolidated Financial Statements included in AIGs 2016 Annual Report on
Form 10-K
(for awards granted in 2016), Note 19 to the Consolidated Financial
Statements included in AIGs 2015 Annual Report on
Form 10-K
(for awards granted in 2015) and Note 21 to the Consolidated Financial Statements included in AIGs 2014 Annual Report on Form
10-K
(for awards granted in 2014).
(3)
|
2016 Amounts.
The amounts represent the full amount of the awards earned under the AIG Annual Short-Term
Incentive Plan for 2016 performance as determined by the Committee in the first quarter of 2017. 100 percent of the award was vested and paid in March 2017. All amounts are subject to clawback under the AIG Clawback Policy. Amounts for Messrs.
Herzog and Schreiber and Ms. Macia represent the prorata portion of their 2016 short-term incentive earned awards based on the number of full months employed during 2016.
|
2015 Amounts.
The amounts represent the full amount of the awards earned under the AIG Annual Short-Term Incentive Plan for 2015
performance. 50 percent of the award was paid in March 2016 and the remaining 50 percent of the award was paid in March 2017. All amounts are vested and subject to clawback under the AIG Clawback Policy.
2014 Amounts.
The amounts represent the full amount of the awards earned under the AIG Annual Short-Term Incentive Plan for 2014
performance. 50 percent of the award was paid in March 2015 and the remaining 50 percent of the award was paid in March 2016. All amounts are vested and subject to clawback under the AIG Clawback Policy.
(4)
|
The amounts in this column do not represent amounts that were paid to the named executives. Rather, the amounts
represent the total change of the actuarial present value of the accumulated benefit under AIGs defined benefit (pension) plans, including the Qualified Retirement Plan, the
Non-Qualified
Retirement Plan
and the SERP and/or the American General Corporation Supplemental Executive Retirement Plan, as applicable. These plans are described in Post-Employment CompensationPension Benefits. Ms. Macia and Mr. Schreiber had
negative changes in pension value of $55,670 and $2,224,279, respectively, due to forfeitures under those plans upon their separation from AIG.
|
While AIG was subject to the Troubled Asset Relief Program (TARP) restrictions on executive compensation, there was a freeze on future
benefit accruals with regard to the benefits provided under the
Non-Qualified
Retirement Plan and the SERP. Benefit accruals in these plans ceased on October 22, 2009 for Mr. Herzog and on
December 11, 2009 for Messrs. Schimek and Schreiber. Because the TARP restrictions ceased to apply to AIG as of December 14, 2012, the freeze on benefit accruals in the
Non-Qualified
Retirement Plan and the SERP ended, and benefit accruals commenced again under these plans after this date. In addition, benefit accruals commenced after December 14, 2012 for Messrs. Hancock and Sankaran under the
Non-Qualified
Retirement Plan, as they had not accrued any benefits under this plan prior to the TARP restrictions. We are not permitted to restore service for benefit accruals for the length of time during which
these executives were subject to the freeze. Before joining AIG as Executive Vice President and Chief Investment Officer in September 2015, Mr. Dachille served as Chief Executive Officer of First Principles. Pursuant to the terms of AIGs
acquisition of First Principles, the AIG hire date of each First Principles employee was recognized for the purposes of determining vesting and eligibility to participate in the Qualified and
Non-Qualified
Retirement Plans. Accordingly, Mr. Dachille began to participate in the Qualified and
Non-Qualified
Retirement Plans on September 15, 2015, the date he joined AIG. Mr. Hogan had accrued pension
benefits under the Qualified and
Non-Qualified
Retirement Plans from his previous tenure at AIG and, in accordance with the terms of these plans, benefit accruals commenced under the Qualified and
Non-Qualified
Retirement Plans when he rejoined AIG on October 14, 2013. Ms. Macia was hired on November 11, 2013 and benefit accruals under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan commenced on December 1, 2014, after she completed one year of service with AIG.
|
|
|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
25
|
ITEM 11 |
Executive
Compensation
|
AIG
(5)
|
Perquisites.
This column includes the incremental costs of perquisites and benefits. The following table
details the incremental cost to AIG of perquisites received by each named executive in 2016.
|
Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Personal
Use of
Company Pool Cars/
Parking (a)
|
|
|
Personal Use of
Aircraft (b)
|
|
|
Financial,
Tax and Legal
Planning (c)
|
|
|
Non-U.S.
Assignment/
Relocation (d)
|
|
|
Other (e)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter D. Hancock
|
|
$
|
20,513
|
|
|
$
|
71,324
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
91,837
|
|
Siddhartha Sankaran
|
|
$
|
10,573
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
4,605
|
|
|
$
|
15,178
|
|
Douglas A. Dachille
|
|
$
|
34,786
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
6,500
|
|
|
$
|
41,286
|
|
Kevin T. Hogan
|
|
$
|
11,837
|
|
|
$
|
0
|
|
|
$
|
15,173
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
27,010
|
|
Robert S. Schimek
|
|
$
|
3,181
|
|
|
$
|
0
|
|
|
$
|
10,056
|
|
|
$
|
0
|
|
|
$
|
6,800
|
|
|
$
|
20,037
|
|
|
|
|
|
|
|
|
Separated during 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Herzog
|
|
$
|
3,642
|
|
|
$
|
0
|
|
|
$
|
15,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
18,642
|
|
Seraina Macia
|
|
$
|
932
|
|
|
$
|
0
|
|
|
$
|
28,754
|
|
|
$
|
153,292
|
|
|
$
|
0
|
|
|
$
|
182,978
|
|
Brian T. Schreiber
|
|
$
|
1,650
|
|
|
$
|
0
|
|
|
$
|
47,725
|
|
|
$
|
0
|
|
|
$
|
4,309
|
|
|
$
|
53,684
|
|
|
(a)
|
Includes the incremental costs of driver overtime compensation, fuel and maintenance attributable to personal use
of company pool cars. For Mr. Schreiber, also includes parking costs.
|
|
(b)
|
Includes personal use by Mr. Hancock and his spouse of
AIG-owned
corporate aircraft and corporate aircraft owned by a third-party vendor. Mr. Hancocks personal use of corporate aircraft is calculated based on the aggregate incremental cost of the flight to AIG. For use of
AIG-owned
corporate aircraft, aggregate incremental cost is calculated based on the direct operating cost of the aircraft, including fuel, additives and lubricants, maintenance, airport fees and assessments,
crew expenses and
in-flight
supplies and catering, as applicable. For use of corporate aircraft owned by a third-party vendor, aggregate incremental cost is calculated based on the
cost-per-flight-hour
charge by the vendor as well as costs of fuel and airport fees and assessments, as applicable.
|
|
(c)
|
Incremental costs related to financial, tax and legal planning represent AIGs direct expenditures. Includes
reimbursement of tax preparation services related to prior international assignments for Messrs. Hogan and Schimek and Ms. Macia. Also includes reimbursement of legal services in connection with review of severance agreements for
Mr. Schreiber ($30,000) and Ms. Macia.
|
|
(d)
|
Assignment-related expenses, including reimbursement of housing costs ($9,051) and relocation expenses ($134,191) and
payment of education allowance ($10,050). Certain expenses were paid in British pounds (GBP) and were converted to U.S. dollars using the GBP to U.S. dollar exchange rate at the time of payment.
|
|
(e)
|
Includes the cost of an annual medical examination for certain named executives paid for by the company and moving
expenses for Mr. Schreiber in connection with his separation.
|
Other Benefits
. This column also
includes life insurance premiums paid for the benefit of the named executives. All named executives are covered under the AIG Basic Group Life Insurance Plan. For group life insurance, the 2016 company-paid costs were: Hancock$570;
Sankaran$570; Dachille$570; Hogan$570; Schimek$570; Herzog$153; Macia$110; and Schreiber$132.
This column also includes matching contributions and
non-elective
company contributions made by
AIG under its 401(k) plan. These contributions include the following amounts in 2016: Hancock$23,850; Sankaran$23,850; Dachille$23,850; Hogan$23,850; Schimek$23,850; Herzog$23,850; Macia$21,427; and
Schreiber$21,565. See Post-Employment CompensationNonqualified Deferred Compensation for additional details.
For Mr. Herzog, this column includes $6,213,333 related to payments that he received following his separation on April 8, 2016
in accordance with his Release Agreement pursuant to the 2012 Executive Severance Plan and $80,770 related to accrued and unused paid
time-off
paid upon his separation. For Ms. Macia, this column includes
$4,840,000 related to payments that she received following her separation on March 31, 2016 in accordance with her Release Agreement pursuant to the 2012 Executive Severance Plan and $28,846 related to accrued and unused paid
time-off
paid upon her separation. For Mr. Schreiber, this column includes $9,339,250 related to payments that he received following his separation on March 31, 2016 in accordance with his Release
Agreement pursuant to the 2012 Executive Severance Plan and $66,682 related to accrued and unused paid
time-off
paid upon his separation. The separation benefits for Messrs. Herzog and Schreiber and
Ms. Macia are discussed further
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
26
|
|
|
|
|
ITEM 11 |
Executive
Compensation
|
AIG
above in Compensation Discussion and AnalysisFormer Named Executive Officers and below in Potential Payments on TerminationQuantification of Termination
Payments and Benefits. In addition, this column also includes $507,863 representing tax equalization payments related to Ms. Macias prior international assignment, $10,964 representing the reimbursement of taxes owed on
Mr. Schreibers financial and tax planning expenses and $2,041 representing the reimbursement of taxes owed on Mr. Schreibers moving expenses, each as described above.
AIG maintains a policy of directors and officers liability insurance for the directors and officers of AIG and its subsidiaries. The
premium for this policy for the year ended September 22, 2016 was approximately $15.7 million and for the year ending September 22, 2017 was approximately $12.7 million.
(6)
|
Represents the first, second and third installments of Mr. Hogans transition award paid in April 2014,
April 2015 and April 2016, respectively. Each payment was made pursuant to Mr. Hogans offer letter. See Compensation Discussion and AnalysisTransition Arrangements for Named Executives for further information.
|
(7)
|
Represents the third installment of Ms. Macias transition award paid in March 2016. Payment was made
pursuant to Ms. Macias offer letter.
See Compensation Discussion and AnalysisTransition Arrangements for Named Executives for further information.
|
|
|
|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
27
|
ITEM 11 |
Executive
Compensation
|
AIG
2016 Grants of Plan-Based Awards
Total 2016 Grants
.
The following table details all equity and
non-equity
plan-based awards granted to each of the named executives in 2016.
2016 Grants of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
|
Board
Action
Date
|
|
|
Estimated Possible
Payouts Under
Non-Equity
Plan Awards(1)
|
|
|
Estimated Possible
Payouts Under Equity
Incentive Plan
Awards
(Performance Share Units)(2)
|
|
|
All Other
Stock
Awards
(# of
AIG
Shares)
|
|
|
Grant Date
Fair Value
of Equity
Awards
(3)
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
|
Peter D. Hancock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
03/08/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
3,200,000
|
|
|
$
|
5,600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
03/16/16
|
|
|
|
03/08/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,185
|
|
|
|
156,369
|
|
|
|
234,554
|
|
|
|
|
|
|
$
|
7,851,287
|
|
Siddhartha Sankaran
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
02/18/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
1,700,000
|
|
|
$
|
2,975,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
03/16/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,465
|
|
|
|
62,929
|
|
|
|
94,394
|
|
|
|
|
|
|
$
|
3,159,665
|
|
Douglas A. Dachille
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
02/18/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
2,000,000
|
|
|
$
|
3,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
03/16/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,139
|
|
|
|
76,277
|
|
|
|
114,416
|
|
|
|
|
|
|
$
|
3,829,868
|
|
Kevin T. Hogan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
02/18/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
1,900,000
|
|
|
$
|
3,325,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
03/16/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,325
|
|
|
|
68,649
|
|
|
|
102,974
|
|
|
|
|
|
|
$
|
3,446,866
|
|
Robert S. Schimek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
02/18/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
1,750,000
|
|
|
$
|
3,062,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
03/16/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,371
|
|
|
|
66,742
|
|
|
|
100,113
|
|
|
|
|
|
|
$
|
3,351,116
|
|
|
|
|
|
|
|
|
|
|
|
|
Separated during 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Herzog
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
02/18/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
2,000,000
|
|
|
$
|
3,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
03/16/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,139
|
|
|
|
76,277
|
|
|
|
114,416
|
|
|
|
|
|
|
$
|
3,829,868
|
|
Seraina Macia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
02/18/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
1,700,000
|
|
|
$
|
2,975,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian T. Schreiber
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 STI
|
|
|
02/18/16
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
1,750,000
|
|
|
$
|
3,062,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts shown reflect the range of possible cash payouts under the AIG Annual Short-Term Incentive Plan for 2016
performance. Actual amounts earned, as determined by the Committee in the first quarter of 2017, are reflected in the 2016 Summary Compensation Table under
Non-Equity
Incentive Plan Compensation. For more
information on the 2016 short-term incentive awards, including the applicable performance metrics, please see Compensation Discussion and AnalysisCompensation StructureDirect Compensation ComponentsShort-Term
Incentive.
|
(2)
|
Amounts shown reflect the potential range of PSUs that may be earned under the 2016 LTI awards. Actual amounts
earned are based on achieving relative TSR over the 20162018 performance period. The TSR metric is balanced by using relative OAS as a gating metric to protect against excessive risk-taking. If AIGs relative OAS percentile is below the
20
th
percentile of the peer group, the payout level is reduced by half. Results will be certified by the Committee in the first quarter of 2019. For more information on the 2016 LTI awards,
including the applicable performance metrics, please see Compensation Discussion and AnalysisCompensation StructureDirect Compensation ComponentsLong-Term Incentive. Holders of PSUs earned under the 2016 LTI
awards are also entitled to dividend equivalent rights in the form of additional PSUs beginning with the first dividend record date following the PSU grant date, which are subject to the same vesting and performance conditions as the related PSUs
and are paid when such related earned shares (if any) are delivered.
|
(3)
|
Amounts shown represent the grant date fair value of the PSU awards for the 20162018 performance period
determined in accordance with FASB ASC Topic 718 using the assumptions presented in Note 20 to the Consolidated Financial Statements in AIGs 2016 Annual Report on Form
10-K.
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
28
|
|
|
|
|
ITEM 11 |
Executive
Compensation
|
AIG
HOLDINGS OF AND VESTING OF PREVIOUSLY AWARDED EQUITY
Outstanding Equity Awards at December 31, 2016
Equity-based awards held at the end of 2016 by each named executive were issued under the incentive plans and arrangements described
below. Shares of AIG Common Stock deliverable under AIGs time-vested equity and option awards will be delivered under the 2013 Omnibus Incentive Plan, 2010 Stock Incentive Plan or 2007 Stock Incentive Plan, as applicable. Also included in
outstanding equity-based awards are grants historically made by Starr International Company, Inc. (SICO) under a series of
two-year
Deferred Compensation Profit Participation Plans (the SICO Plans).
The following table sets forth outstanding equity-based awards held by each named executive as of December 31, 2016.
Outstanding Equity Awards at December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
Option Awards(1)
|
|
|
|
|
|
|
|
|
|
|
Unvested (No Longer
Subject to Performance
Conditions)
|
|
|
Equity Incentive Plan
Awards (Unearned
and Unvested)
|
|
Name
|
|
Year
Granted(1)
|
|
|
Number
Exercisable
|
|
|
Exercise
Price
|
|
|
Expiration
Date
|
|
|
|
|
|
|
|
|
Plan(2)(3)
|
|
Number
|
|
|
Market
Value(2)(3)
|
|
|
Number
|
|
|
Market
Value(2)
|
|
Peter D. Hancock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
158,916
|
|
|
$
|
10,378,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
238,131
|
|
|
$
|
15,552,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 LTI
|
|
|
141,991
|
|
|
$
|
9,273,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 LTI
|
|
|
126,890
|
|
|
$
|
8,287,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
268,881
|
|
|
$
|
17,560,618
|
|
|
|
397,047
|
|
|
$
|
25,931,140
|
|
Siddhartha Sankaran
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
63,954
|
|
|
$
|
4,176,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
52,269
|
|
|
$
|
3,413,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 LTI
|
|
|
36,850
|
|
|
$
|
2,406,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 LTI
|
|
|
36,913
|
|
|
$
|
2,410,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
73,763
|
|
|
$
|
4,817,462
|
|
|
|
116,223
|
|
|
$
|
7,590,524
|
|
Douglas A. Dachille
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
77,519
|
|
|
$
|
5,062,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
100,144
|
|
|
$
|
6,540,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
177,663
|
|
|
$
|
11,603,171
|
|
Kevin T. Hogan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
69,767
|
|
|
$
|
4,556,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
104,543
|
|
|
$
|
6,827,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 LTI
|
|
|
73,947
|
|
|
$
|
4,829,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 LTI
|
|
|
65,978
|
|
|
$
|
4,309,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
139,925
|
|
|
$
|
9,138,502
|
|
|
|
174,310
|
|
|
$
|
11,384,186
|
|
Robert S. Schimek
|
|
|
2007
|
|
|
|
499
|
|
|
$
|
1,140.99
|
|
|
|
12/13/2017
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
67,829
|
|
|
$
|
4,429,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
52,269
|
|
|
$
|
3,413,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 LTI
|
|
|
37,176
|
|
|
$
|
2,427,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 LTI
|
|
|
41,482
|
|
|
$
|
2,709,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
78,658
|
|
|
$
|
5,137,154
|
|
|
|
120,098
|
|
|
$
|
7,843,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separated during 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Herzog
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 LTI
|
|
|
|
|
|
|
|
|
|
|
77,519
|
|
|
$
|
5,062,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
116,160
|
|
|
$
|
7,586,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SICO Plans
|
|
|
729
|
|
|
$
|
47,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
193,679
|
|
|
$
|
12,649,175
|
|
Seraina Macia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
40,653
|
|
|
$
|
2,655,047
|
|
Brian T. Schreiber
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 LTI
|
|
|
|
|
|
|
|
|
|
|
95,832
|
|
|
$
|
6,258,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
None of the named executives has received options since 2008. All previously granted options had four-year
pro-rata
vesting schedules. All outstanding options were exercisable and have an exercise price equal to the closing sale price of AIG Common Stock on the NYSE on the date of grant.
|
(2)
|
All 2016 LTI awards are shown at target payout, all 2015 LTI awards are shown at maximum payout and all 2014 LTI
awards and 2013 LTI awards are shown at actual amounts earned, in each case using the closing sale price of AIG Common Stock on the NYSE on December 30, 2016 of $65.31 per share. Actual amounts earned for the 2014 LTI awards and the 2013 LTI
awards were determined by the Committee in the first quarter of 2017 and the first quarter of 2016, respectively. See Compensation Discussion and AnalysisEarned 2013 Long-Term Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
29
|
ITEM 11 |
Executive
Compensation
|
AIG
|
Awards and Compensation Discussion and AnalysisAdjudication of 2014 Long-Term Incentive Awards for further information. 2016 LTI and 2015 LTI award amounts also
include additional PSUs accrued in respect of dividend equivalent rights, which are subject to the same vesting and performance conditions as the related PSUs and are paid when such related earned shares (if any) are delivered. Whether the 2016 LTI
or 2015 LTI awards (and related dividend equivalents) will be earned at the level shown or a different level, or at all, depends on AIG performance against plan metrics over a three-year performance period.
|
Once earned, all 2016 LTI awards (including related dividend equivalents) to current named executives will vest
one-third
on the first day of January in each of 2019, 2020 and 2021, and all 2015 LTI awards (including related dividend equivalents) to current named executives will vest
one-third
on the first day of January in each of 2018, 2019 and 2020.
One-third
of the earned 2014 LTI awards to current named executives vested on January 1, 2017,
and the remaining
two-thirds
will vest
one-third
on the first day of January in each of 2018 and 2019.
Two-thirds
of the earned
2013 LTI awards to current named executives vested
one-third
on the first day of January in each of 2016 and 2017, and the remaining
one-third
will vest on
January 1, 2018. The
one-third
of 2013 LTI awards that vested January 2016 are reflected in the 2016 Vesting of Stock-Based Awards table below.
Messrs. Herzog and Schreiber and Ms. Macia became vested in their 2013 LTI, 2014 LTI, 2015 LTI and 2016 LTI awards, as applicable,
upon their respective separation dates. For 2013 LTI and 2014 LTI awards, the number of earned shares were based on actual performance as determined by the Committee in the first quarter of 2016 and the first quarter of 2017, respectively, and are
reflected in the 2016 Vesting of Stock-Based Awards table below. For 2015 LTI and 2016 LTI awards, the number of earned shares, if any, will be based on AIG performance over the applicable three-year performance period. These unearned awards are
reflected in the table above, at target payout for 2016 LTI awards and at maximum payout for 2015 LTI awards. For all awards, any earned amounts will be paid on the normal payment schedule.
(3)
|
Prior to 2005, key employees participated in the SICO Plans. The original SICO plan came into being in 1975.
Participation in the SICO Plans by any person, and the extent of such participation, was at the sole discretion of SICOs Board of Directors. SICO is responsible for issuing cash or AIG Common Stock under the SICO Plans when required; AIG has
made no payments under these plans, although AIG records the expense attributable to these plans in its financial statements. In 2005, AIG took steps to protect the interests of AIGs current employees with respect to these benefits. AIG
agreed, subject to certain conditions, to make any payment or delivery of AIG Common Stock that is not promptly made with respect to the benefits accrued by current employees of AIG and its subsidiaries under the SICO Plans.
|
Shares that have been contingently allocated to a participating named executive under the SICO Plans will not be paid until age 65 and
generally are subject to forfeiture on earlier termination of employment. AIG agreed to consider Mr. Herzog, upon his separation, an eligible employee for the purposes of the AIG agreement with SICO, and he remains entitled to his SICO plans
benefits subject to certain conditions. SICOs Board of Directors has the authority to reinstate a payout right and may permit early payout of shares. Before earning the right to payout, a participant is not entitled to any equity interest
with respect to the contingently allocated shares.
Under certain of the SICO Plans, since Mr. Herzog continued to be employed
by AIG at the end of the eighth year after units were granted and had not yet reached age 65, he was contingently allocated additional shares equal to 35 percent of the shares initially allocated. The contingent allocations are included in this
table.
Market value is based on the closing sale price of AIG Common Stock on the NYSE on December 30, 2016 of $65.31 per
share.
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
30
|
|
|
|
|
ITEM 11 |
Executive
Compensation
|
AIG
Vesting of Stock-Based Awards During 2016
The following table sets forth the amounts realized in accordance with SEC rules by each named executive as a result of the vesting of
stock-based awards in 2016. There were no options exercised in 2016 by any of the named executives.
2016 Vesting of Stock-Based Awards
|
|
|
|
|
|
|
|
|
|
|
Stock-Based
Awards
Vested in 2016
|
|
Name
|
|
Number of
Shares
Acquired on
Vesting
|
|
|
Value
Realized on
Vesting
|
|
Peter D. Hancock
(1)
|
|
|
63,444
|
|
|
$
|
3,833,921
|
|
Siddhartha Sankaran
(1)
|
|
|
18,456
|
|
|
$
|
1,115,296
|
|
Douglas A. Dachille
|
|
|
|
|
|
|
|
|
Kevin T. Hogan
(1)
|
|
|
32,988
|
|
|
$
|
1,993,465
|
|
Robert S. Schimek
(1)
|
|
|
20,740
|
|
|
$
|
1,253,318
|
|
|
|
|
Separated during 2016
|
|
|
|
|
|
|
David L. Herzog
(2)
|
|
|
237,324
|
|
|
$
|
12,988,862
|
|
Seraina Macia
(3)
|
|
|
28,763
|
|
|
$
|
1,554,640
|
|
Brian T. Schreiber
(4)
|
|
|
194,153
|
|
|
$
|
10,760,328
|
|
(1)
|
Represents one-third of the earned PSUs granted under the 2013 LTI awards that vested on January 1, 2016
(based on the value of the underlying shares of AIG Common Stock on the vesting date).
|
(2)
|
Represents 153,804 shares underlying earned PSUs granted under Mr. Herzogs 2013 LTI award,
one-third
of which vested on January 1, 2016 and the remaining
two-thirds
of which vested upon Mr. Herzogs separation on April 8, 2016 (based on the value
of underlying shares of AIG Common Stock on the respective vesting dates), and represents 83,520 shares underlying earned PSUs granted under Mr. Herzogs 2014 LTI award, which fully vested upon his separation on April 8, 2016 (based
on the value of underlying shares of AIG Common Stock on the vesting date).
Two-thirds
of Mr. Herzogs earned 2013 LTI award has been delivered, and the remaining
one-third
will be delivered in January 2018.
One-third
of Mr. Herzogs 2014 LTI award has been delivered, and the remaining
two-thirds
will be delivered in each of January 2018 and January 2019.
|
(3)
|
Represents 28,763 shares underlying earned PSUs granted under Ms. Macias 2014 LTI award, which fully
vested upon her separation on March 31, 2016 (based on the value of underlying shares of AIG Common Stock on the vesting date).
One-third
of Ms. Macias 2014 LTI award has been delivered, and
the remaining
two-thirds
will be delivered in each of January 2018 and January 2019.
|
(4)
|
Represents 125,249 shares underlying earned PSUs granted under Mr. Schreibers 2013 LTI award,
one-third
of which vested on January 1, 2016 and the remaining
two-thirds
of which vested upon Mr. Schreibers separation on March 31, 2016 (based on the
value of underlying shares of AIG Common Stock on the respective vesting dates), and represents 68,904 shares underlying earned PSUs granted under Mr. Schreibers 2014 LTI award, which fully vested upon his separation on March 31,
2016 (based on the value of underlying shares of AIG Common Stock on the vesting date).
Two-thirds
of Mr. Schreibers earned 2013 LTI award has been delivered, and the remaining
one-third
will be delivered in January 2018.
One-third
of Mr. Schreibers 2014 LTI award has been delivered, and the remaining
two-thirds
will be delivered in each of January 2018 and January 2019.
|
POST-EMPLOYMENT COMPENSATION
Pension Benefits
AIG maintains
tax-qualified
and nonqualified defined benefit (pension) plans providing retirement benefits for employees. Participants in the
tax-qualified
pension plan vest in and receive
their benefits based on length of service. Participants in the
non-qualified
pension plans vest in and receive these benefits based on their age and length of service. Employees of AIG and its subsidiaries who
are paid on a U.S. dollar payroll and are citizens of the United States, or
non-citizens
working in the United States, are covered under the Qualified Retirement Plan. Participants whose formula benefit is
restricted from being fully paid from the Qualified Retirement Plan due to IRS limits on compensation and benefits, including the named executives, are eligible to participate in the
Non-Qualified
Retirement
|
|
|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
31
|
ITEM 11 |
Executive
Compensation
|
AIG
Plan. Of the named executives, only Mr. Schreiber participated in and had a benefit under the SERP, and Mr. Herzog had a benefit under the American General Corporation Supplemental
Executive Retirement Plan (AGC Retirement Plan).
Effective January 1, 2016, benefit accruals under the Qualified Retirement
Plan, the
Non-Qualified
Retirement Plan and the SERP were frozen. As a result, the Qualified Retirement Plan, the
Non-Qualified
Retirement Plan and the SERP were closed
to new participants, and current participants can no longer accrue additional benefits after December 31, 2015. However, interest credits continue to accrue on existing cash balance accounts, and participants also continue to earn service
credits for purposes of vesting and early retirement eligibility subsidies as they continue to work for AIG. In addition, Mr. Herzogs benefit under the AGC Retirement Plan vested, and his age 65 accrued benefit was frozen, following the
acquisition of the American General Corporation on August 29, 2001. His benefit under the AGC Retirement Plan is for service accrued to December 31, 2002.
While AIG was subject to the TARP restrictions on executive compensation, benefit accruals in the
Non-Qualified
Retirement Plan ceased on October 22, 2009 for Mr. Herzog and on December 11, 2009 for Messrs. Schimek and Schreiber. Benefit accruals in the SERP ceased on
December 11, 2009 for Mr. Schreiber. Because the TARP restrictions ceased to apply as of December 14, 2012, the freeze on benefit accruals in the
Non-Qualified
Retirement Plan and SERP
ended and benefit accruals commenced again under these plans after this date. In addition, benefit accruals commenced for Messrs. Hancock and Sankaran under the
Non-Qualified
Retirement Plan, as they had
not accrued any benefits under this plan prior to the TARP restrictions. We are not permitted to restore service for benefit accruals for the length of time during which these executives were subject to the freeze. Mr. Hogan was employed by AIG
from September 4, 1984 to November 5, 2008 and accrued pension benefits under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan during this employment. Mr. Hogan did not
receive a distribution from the Qualified Retirement Plan or the
Non-Qualified
Retirement Plan at the time of his resignation in 2008. Pursuant to the terms of these plans, prior service is recognized for
vesting and eligibility to participate. Therefore, upon rejoining AIG in 2013, benefit accruals commenced immediately under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan for
Mr. Hogan. Mr. Dachille was hired on September 15, 2015 and benefit accruals under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan commenced on September 15, 2015.
Ms. Macia was hired on November 11, 2013, and benefit accruals under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan commenced on December 1, 2014, after she completed one
year of service with AIG.
The benefit formula under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan was converted effective April 1, 2012 from a final average pay formula to a cash balance formula comprised of pay credits, calculated based on 6 percent of a plan
participants annual pensionable compensation. Pay credits under these plans accrued through 2015 (subject to the IRS limitation on qualified plans of $265,000 in 2015) and ceased on December 31, 2015. However, annual interest credits of
2.89 percent continued in 2016 (based upon the
30-year
long-term Treasury rate). This rate is adjusted annually on January 1.
The definition of pensionable compensation under the cash balance formula is different from the definition used in the final average pay
formula. Prior to the January 1, 2016 freeze date, and effective April 1, 2012, pensionable compensation under the cash balance formula included base salary, commissions, overtime and annual short-term incentive awards. The Qualified
Retirement Plan was subject to IRS compensation limits and the
Non-Qualified
Retirement Plan was subject to an annual compensation limit of $1,050,000 in 2015.
The final average pay formula and definition of pensionable compensation did not change under the Qualified Retirement Plan or the
Non-Qualified
Retirement Plan for employees whose age plus credited service as of March 31, 2012 equaled 65 or greater and who had at least five years of credited service in the Qualified Retirement Plan
as of that date. None of the named executives met these requirements. For purposes of the Qualified Retirement Plan,
Non-Qualified
Retirement Plan and the SERP, each final average pay formula has been based on
the average pensionable compensation of a participant during those three consecutive years in the last ten years of credited service that afford the highest such average, not including amounts attributable to overtime pay, quarterly bonuses, annual
cash bonuses or long-term incentive awards. However, as a result of the freeze to benefit accruals effective January 1, 2016 to the Qualified Retirement Plan, the
Non-Qualified
Retirement Plan and the
SERP, each final average pay formula is based on the average pensionable compensation of a participant during those three consecutive years in the last ten years of credited service through December 31, 2015. These participants will receive a
benefit under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan calculated using either the final average pay formula or the cash balance formula, whichever produces the greater benefit. The
Non-Qualified
Retirement Plan provides a benefit equal to the portion of the benefit that is not permitted to be paid from the Qualified Retirement Plan due to IRS limits on compensation and benefits. The Qualified
Retirement Plan and
Non-Qualified
Retirement Plan final average pay formula ranges from 0.925 percent to 1.425 percent times average final salary for each year of credited service accrued since
April 1, 1985 up to 44 years through December 31, 2015 and 1.25 percent to 1.75 percent times average final pay for each year of credited service accrued prior to April 1, 1985 up to 40 years. For participants who
retire after the normal retirement age of 65, the retirement benefit is actuarially increased to reflect the later benefit commencement date.
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
32
|
|
|
|
|
ITEM 11 |
Executive
Compensation
|
AIG
Participants in the Qualified Retirement Plan are vested after three years of service
and participants in the
Non-Qualified
Retirement Plan are vested once they attain age 60 with five or more years of service or age 55 with ten or more years of service.
Participants in the Qualified Retirement Plan can elect to receive their benefit in the form of an annuity or as a lump sum distribution.
For
Non-Qualified
Retirement Plan participants, the benefit they accrued through March 31, 2012 can be paid only in the form of an annuity, and the benefit accrued on and after
April 1, 2012 through December 31, 2015 can be paid only in a lump sum.
The SERP continues to provide participants
annuity options under its final average pay formula. The SERPs final average pay formula provides a benefit equal to 2.4 percent times average final pay for each year of credited service up to 25 years through December 31, 2015,
reduced by the monthly benefits payable from the
Non-Qualified
Retirement Plan, the Qualified Retirement Plan, Social Security and any predecessor plan or foreign deferred compensation plan sponsored by AIG.
Early retirement benefits.
Each of the domestic pension plans provides for reduced early retirement benefits. These
benefits are available to all vested participants in the Qualified Retirement Plan. The
Non-Qualified
Retirement Plan provides reduced early retirement benefits to participants who have reached
age 55 with ten or more years of service or to participants who have reached age 60 with five or more years of service. The early retirement reduction factors in the
Non-Qualified
Retirement Plan are
based upon age as of the retirement date and years of credited service excluding the TARP-related freeze period. The SERP provides reduced early retirement benefits to participants beginning at age 60 with five or more years of service, or to
participants who have reached age 55 with ten or more years of credited service, except that the Committee must approve payment for eligible participants retiring before age 60.
In the case of early retirement, participants in the SERP will receive the SERP formula benefit reduced by 3, 4 or 5 percent
(depending on age and years of credited service at retirement excluding the TARP-related freeze period) for each year that retirement precedes age 65. Participants in the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan under the final average pay formula will receive the plan formula benefit projected to normal retirement at age 65 (using average final salary as of the date of early retirement),
but prorated based on years of actual service, then reduced by a further amount in the same manner described with respect to the SERP except that there is no exclusion of service for the TARP-related freeze period under the Qualified Retirement
Plan. Participants in the Qualified Retirement Plan,
Non-Qualified
Retirement Plan and the SERP will continue to receive service credit on and after the January 1, 2016 freeze date in determining age and
length of service for early retirement subsidies and vesting purposes. Participants in the Qualified Retirement Plan with at least three years of service to AIG have a vested reduced retirement benefit pursuant to which, in the case of termination
of employment prior to reaching age 65, such participants may elect to receive a reduced early retirement benefit commencing at any date between their date of termination and age 65. Participants in the Qualified Retirement Plan may choose to
receive a lump sum payment or an annuity option upon normal or early retirement. Participants in the
Non-Qualified
Retirement Plan must receive the benefit accrued through March 31, 2012 in the form
of an annuity and the benefit accrued on and after April 1, 2012 through December 31, 2015 in a lump sum. The SERP participants can elect an annuity option only and may not choose to receive the benefit in a lump sum.
Death and disability benefits.
Each of the domestic pension plans also provides for death and disability benefits. The
death benefit payable to a participants designated beneficiary under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan will generally equal the participants lump sum benefit or
cash balance account. In the case of death, the SERP provides a participant who has at least five years of service to AIG with a survivor annuity equal to 40 percent of the participants accumulated benefit, which may be reduced based on
the age of the surviving spouse.
Under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan, prior to the January 1, 2016 freeze date, participants who became disabled and received payments under AIGs long-term disability plan, and whose benefit was determined under the final average pay formula, continued to
accrue credited service, and participants whose benefit was determined under the cash balance formula continued to receive interest and pay credits to their cash balance account, for a maximum of three additional years. On and after the
January 1, 2016 freeze date, participants who receive payments under AIGs long-term disability plan continue to receive service credit in determining age and length of service for early retirement subsidies and vesting purposes, and
participants whose benefit is determined under the cash balance formula continue to receive interest credits to their cash balance account, for a maximum of three additional years. Under the SERP, participants do not accrue credited service during
that time.
As with other retirement benefits, in the case of death and disability benefits, the formula benefit under the
Non-Qualified
Retirement Plan and the SERP is reduced by amounts payable under the Qualified Retirement Plan, and
|
|
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|
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|
|
|
|
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|
AIG | 2016 Form 10-K/A
33
|
ITEM 11 |
Executive
Compensation
|
AIG
participants in both the
Non-Qualified
Retirement Plan and the SERP may receive the formula benefit from the SERP only to the extent that it exceeds the
benefit payable from the
Non-Qualified
Retirement Plan and the Qualified Retirement Plan.
2016 pension benefits.
The following table details the accumulated benefits under the pension plans in which each named
executive participates. In accordance with SEC rules, these accumulated benefits are presented as if they were payable upon the named executives normal retirement at age 65. However, it is important to note that the benefits shown for the
named executives are at least partially unvested and could be received at lower levels due to reduced benefits or forfeited entirely if the named executive does not continue to work at AIG for the next several years. As of
year-end
2016, none of our current named executives were eligible for early retirement benefits under the
Non-Qualified
Retirement Plan.
Mr. Herzog was eligible for early retirement benefits under the
Non-Qualified
Retirement
Plan and the AGC Retirement Plan upon his separation from employment on April 8, 2016, with commencement of his benefits delayed six months as required under Section 409A of the Code. Mr. Herzog elected to commence his early retirement
benefits under the Qualified Retirement Plan effective May 1, 2016.
Ms. Macia was not vested in or eligible for early
retirement benefits under the Qualified or
Non-Qualified
Retirement Plans upon her separation from employment on March 31, 2016. Ms. Macia forfeited these benefits upon her separation from AIG.
Mr. Schreiber was not vested in or eligible for early retirement benefits under the
Non-Qualified
Retirement Plan or the SERP upon his separation from employment on March 31, 2016. Mr. Schreiber
forfeited these benefits upon his separation from AIG. Mr. Schreiber elected to receive his Qualified Retirement Plan benefit effective November 1, 2016 in the form of a lump sum payment. AIG has not granted extra years of credited
service under the defined benefit plans described above to any named executive, other than credit for prior service by Mr. Herzog to American General Corporation (as required by Code regulations applicable to plans assumed in acquisitions) and,
pursuant to the terms of AIGs acquisition of First Principles, recognizing prior service by Mr. Dachille to First Principles for purposes of determining vesting and eligibility.
2016 Pension Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Years of
Credited
Service(1)
|
|
|
Present
Value of
Accumulated
Benefit(2)
|
|
|
Payments
During 2016
|
|
Peter D. Hancock
|
|
Qualified Retirement Plan
|
|
|
5.333
|
|
|
$
|
109,459
|
|
|
$
|
0
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
3.000
|
|
|
$
|
139,133
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
248,592
|
|
|
$
|
0
|
|
|
|
|
|
|
Siddhartha Sankaran
|
|
Qualified Retirement Plan
|
|
|
4.583
|
|
|
$
|
57,428
|
|
|
$
|
0
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
3.000
|
|
|
$
|
97,667
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
155,095
|
|
|
$
|
0
|
|
|
|
|
|
|
Douglas A. Dachille
|
|
Qualified Retirement Plan
|
|
|
0.333
|
|
|
$
|
14,181
|
|
|
$
|
0
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
0.333
|
|
|
$
|
1,998
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
16,179
|
|
|
$
|
0
|
|
|
|
|
|
|
Kevin T. Hogan
|
|
Qualified Retirement Plan
|
|
|
25.917
|
|
|
$
|
607,617
|
|
|
$
|
0
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
25.917
|
|
|
$
|
768,948
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
1,376,565
|
|
|
$
|
0
|
|
|
|
|
|
|
Robert S. Schimek
|
|
Qualified Retirement Plan
|
|
|
9.917
|
|
|
$
|
202,258
|
|
|
$
|
0
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
6.917
|
|
|
$
|
274,981
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
477,239
|
|
|
$
|
0
|
|
|
|
|
|
|
Separated during 2016
|
|
|
|
|
|
|
|
|
|
|
|
David L. Herzog
|
|
Qualified Retirement Plan
|
|
|
15.917
|
|
|
$
|
0
|
|
|
$
|
385,616
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
12.750
|
|
|
$
|
534,750
|
|
|
$
|
168,897
|
|
|
|
AGC Retirement Plan
|
|
|
2.917
|
|
|
$
|
0
|
|
|
$
|
231,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
534,750
|
|
|
$
|
785,782
|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
34
|
|
|
|
|
ITEM 11 |
Executive
Compensation
|
AIG
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Years of
Credited
Service(1)
|
|
|
Present
Value of
Accumulated
Benefit(2)
|
|
|
Payments
During 2016
|
|
Seraina Macia
|
|
Qualified Retirement Plan
|
|
|
1.083
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
1.083
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Brian T. Schreiber
|
|
Qualified Retirement Plan
|
|
|
18.083
|
|
|
$
|
0
|
|
|
$
|
328,651
|
|
|
|
Non-Qualified
Retirement Plan
|
|
|
15.083
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
SERP
|
|
|
15.583
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
0
|
|
|
$
|
328,651
|
|
(1)
|
The current named executives had the following years of service with AIG as of December 31, 2016:
Mr. Hancock6.917; Mr. Sankaran6.167; Mr. Dachille1.333; Mr. Hogan27.5; and Mr. Schimek11.5. As of their respective separation dates, the former named executive officers had the following years
of service with AIG: Mr. Herzog14.75, Ms. Macia2.417; and Mr. Schreiber18.917.
|
Mr.
Hancock.
Mr. Hancock had fewer years of credited service than actual service under the Qualified
Retirement Plan because, at the time he was hired, employees were required to wait a year after commencing employment with AIG before becoming participants in this plan and received credit for service retroactive to six months of employment.
Mr. Hancock became a participant in the Qualified Retirement Plan effective March 1, 2011 after he completed one year of service with AIG, with service credited retroactive to September 1, 2010. Mr. Hancock began
accruing credited service under the
Non-Qualified
Retirement Plan on January 1, 2013, the first of the month following December 14, 2012, the end of AIGs TARP restrictions period. He
participates in the Qualified Retirement and
Non-Qualified
Retirement Plans under the cash balance formula. He began to accrue pay credits under the
Non-Qualified
Retirement Plan cash balance formula following December 14, 2012, the end of AIGs TARP restrictions period. The Qualified and
Non-Qualified
Retirement Plans were frozen effective
January 1, 2016 and credited service accruals ceased under these plans as of December 31, 2015.
Mr.
Sankaran.
Mr. Sankaran had fewer years of credited service than actual service under the Qualified
Retirement Plan because, at the time he was hired, employees were required to wait a year after commencing employment with AIG before becoming participants in this plan and received credit for service retroactive to six months of employment.
Mr. Sankaran became a participant in the Qualified Retirement Plan effective December 1, 2011 after he completed one year of service with AIG, with service credited retroactive to June 1, 2011. Mr. Sankaran began accruing
credited service under the
Non-Qualified
Retirement Plan on January 1, 2013, the first of the month following December 14, 2012, the end of AIGs TARP restrictions period. He
participates in the Qualified Retirement and
Non-Qualified
Retirement Plans under the cash balance formula. He began to accrue pay credits under the
Non-Qualified
Retirement Plan cash balance formula following December 14, 2012, the end of AIGs TARP restrictions period. The Qualified and
Non-Qualified
Retirement Plans were frozen effective
January 1, 2016 and credited service accruals ceased under these plans as of December 31, 2015.
Mr.
Dachille.
Mr. Dachille had fewer years of credited service than actual service under the Qualified
Retirement Plan and the
Non-Qualified
Retirement Plan because the plans were frozen effective January 1, 2016 and credited service accruals ceased under these plans as of December 31, 2015.
Mr. Dachille became a participant in the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan effective September 15, 2015, the date he joined AIG. He participates in the Qualified
Retirement and
Non-Qualified
Retirement Plans under the cash balance formula.
Mr.
Hogan.
Mr. Hogan had fewer years of credited service than actual service under the Qualified
Retirement Plan and the
Non-Qualified
Retirement Plan because, at the time he was hired, employees were required to wait a year after commencing employment with AIG before becoming participants in these plans
and received credit for service retroactive to six months of employment. Mr. Hogan was employed by AIG from September 4, 1984 to November 5, 2008 and accrued pension benefits under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan during this employment. Mr. Hogan did not receive a distribution from the Qualified Retirement Plan or the
Non-Qualified
Retirement Plan at
the time of his initial resignation. Upon his rehire on October 14, 2013, benefit accruals commenced immediately under the Qualified and
Non-Qualified
Retirement Plans calculated under the cash
balance formula, and prior service, pursuant to the terms of these Plans, was recognized for vesting and eligibility purposes. Mr. Hogans credited service under the
Non-Qualified
Retirement Plan is
equal to his credited service under the Qualified Retirement Plan because he was not an employee during the time period in which the freeze on service accrual in the
Non-Qualified
Retirement Plan was
applicable. The Qualified and
Non-Qualified
Retirement Plans were frozen effective January 1, 2016 and credited service accruals ceased under these plans as of December 31, 2015.
|
|
|
|
|
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AIG | 2016 Form 10-K/A
35
|
ITEM 11 |
Executive
Compensation
|
AIG
Mr.
Schimek.
Mr. Schimek had fewer years of credited
service than actual service under the Qualified Retirement Plan and
Non-Qualified
Retirement Plan because, at the time he was hired, employees were required to wait a year after commencing employment with AIG
before becoming participants in these plans and received credit for service retroactive to six months of employment. Mr. Schimek became a participant in the Qualified Retirement Plan and
Non-Qualified
Retirement Plan effective August 1, 2006 after he completed one year of service with AIG, with service credited retroactive to February 1, 2006. Mr. Schimeks credited service under the
Non-Qualified
Retirement Plan is less than his credited service under the Qualified Retirement Plan due to the freeze on service accruals in the
Non-Qualified
Retirement
Plan. He participates in the Qualified Retirement Plan and
Non-Qualified
Retirement Plan under the cash balance formula. Mr. Schimek resumed accrual of pay credits under the
Non-Qualified
Retirement Plan cash balance formula following December 14, 2012, the end of AIGs TARP restrictions period and resumed accruing credited service under the
Non-Qualified
Retirement Plan on January 1, 2013. The Qualified and
Non-Qualified
Retirement Plans were frozen effective January 1, 2016 and credited service
accruals ceased under these plans as of December 31, 2015.
Mr.
Herzog.
Under the Qualified Retirement
and
Non-Qualified
Retirement Plans, Mr. Herzog received credit for his service retroactive to his date of hire at American General Corporation, which was acquired by AIG in August 2001. Under the
Qualified Retirement Plan, Mr. Herzog had more years of credited service than actual service because that plan provided credit for years of employment with American General Corporation before its acquisition by AIG. Under the
Non-Qualified
Retirement Plan, Mr. Herzogs credited service is less than his credited service under the Qualified Retirement Plan due to the freeze on service accruals in the
Non-Qualified
Retirement Plan. He participated in the Qualified Retirement and
Non-Qualified
Retirement Plans under the cash balance formula. Mr. Herzog began to accrue
pay credits under the
Non-Qualified
Retirement Plan cash balance formula following December 14, 2012, the end of AIGs TARP restrictions period, and resumed accruing credited service under the
Non-Qualified
Retirement Plan on January 1, 2013. Mr. Herzogs benefit under the AGC Retirement Plan was frozen at December 31, 2002. The Qualified and
Non-Qualified
Retirement Plans were frozen effective January 1, 2016 and credited service accruals ceased under these plans as of December 31, 2015. For Mr. Herzog, years of credited service and
pension values reflect the values as of his separation date of April 8, 2016.
Ms.
Macia.
Ms. Macia had fewer years of credited service than actual service under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan because, at the time she was hired, employees were required to
wait a year after commencing employment with AIG before becoming participants in these plans. Ms. Macia became a participant in the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan
effective December 1, 2014 after she completed one year of service with AIG. She participated in the Qualified Retirement and
Non-Qualified
Retirement Plans under the cash balance formula. The Qualified
and
Non-Qualified
Retirement Plans were frozen effective January 1, 2016 and credited service accruals ceased under these plans as of December 31, 2015. For Ms. Macia, years of credited service
and pension values reflect the values as of her separation date of March 31, 2016.
Mr.
Schreiber.
Mr. Schreiber had fewer years of credited service than actual service under the Qualified Retirement Plan and
Non-Qualified
Retirement Plan because, at the time he was hired, employees were required to
wait a year after commencing employment with AIG before becoming participants in these plans and received credit for service retroactive to six months of employment. Mr. Schreiber became a participant in the Qualified Retirement Plan and
Non-Qualifed
Retirement Plan effective June 1, 1998 after he completed one year of service with AIG, with service credited retroactive to December 1, 1997. Mr. Schreibers credited service under
the
Non-Qualified
Retirement Plan is less than his credited service under the Qualified Retirement Plan due to the freeze on service accrual in the
Non-Qualified
Retirement Plan. He participated in the Qualified Retirement Plan and
Non-Qualified
Retirement Plan under the cash balance formula. Mr. Schreiber resumed accrual of pay credits under the
Non-Qualified
Retirement Plan cash balance formula following December 14, 2012, the end of AIGs TARP restrictions period. The Qualified and
Non-Qualified
Retirement
Plans were frozen effective January 1, 2016 and credited service accruals ceased under these plans as of December 31, 2015. For Mr. Schreiber, years of credited service and pension values reflect the values as of his separation date
of March 31, 2016.
(2)
|
The actuarial present values of the accumulated benefits are based on service and earnings as of
December 31, 2016 (the pension plan measurement date for purposes of AIGs financial statement reporting), with the exception of Messrs. Herzog and Schreiber and Ms. Macia, whose values reflect their separation dates. The
actuarial present values of the accumulated benefits under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan are calculated based on payment of a life annuity beginning at age 65, or current
age if older, consistent with the assumptions described in Note 21 to the Consolidated Financial Statements included in AIGs 2016 Annual Report on Form
10-K.
As described in that Note, the discount rate
assumption is 4.15 percent for the Qualified Retirement Plan. The discount rate assumption is 4.03 percent for the
Non-Qualified
Retirement Plan and 3.87 percent for the AGC Retirement Plan. The
mortality assumptions are based on the
RP-2014
annuitant white collar mortality table projected using the AIG improvement scale.
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AIG | 2016 Form 10-K/A
36
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|
ITEM 11 |
Executive
Compensation
|
AIG
As a result of the TARP restrictions on executive compensation, benefit accruals in the
Non-Qualified
Retirement Plan ceased on October 22, 2009 for Mr. Herzog and on December 11, 2009 for Messrs. Schimek and Schreiber. Benefit accruals in the SERP also ceased on
December 11, 2009 for Mr. Schreiber. None of our other named executives participate in the SERP. The TARP-related freeze on benefit accruals in the
Non-Qualified
Retirement Plan and SERP ended
on December 14, 2012. Messrs. Dachille and Hogan and Ms. Macia were not employed by AIG during the TARP-related freeze period, and Messrs. Hancock and Sankaran did not begin accruing pay credits under the
Non-Qualified
Retirement Plan until December 14, 2012. We are not permitted to restore service for benefit accruals for the length of time during which these executives were subject to the TARP-related
freeze.
The
Non-Qualified
Retirement Plan and SERP benefits for these participants, if
eligible, are equal to the lesser of the frozen
Non-Qualified
Retirement Plan and SERP benefit (excluding service and earnings during the period in which benefit accruals were frozen due to the TARP
restrictions) or the
Non-Qualified
Retirement Plan and SERP benefit without taking into account the TARP-related freeze on service accruals. Vesting is determined in the
Non-Qualified
Retirement Plan and the SERP based on age and years of service as of the executives actual retirement date. Early retirement reduction factors are based on age at the executives
actual retirement date and years of credited service excluding credited service during the period in which benefit accruals were frozen due to the TARP restrictions. Participants will continue to receive service credit on and after the
January 1, 2016 freeze date in determining age and length of service for both vesting and early retirement subsidies.
Mr.
Herzog
. Mr. Herzogs AGC Retirement Plan benefit was frozen as of December 31, 2002
following AIGs acquisition of American General Corporation.
Nonqualified Deferred Compensation
In 2008, AIG paid out the entire account balances of most participants and terminated future participation in a number of its
nonqualified deferred compensation plans, including the Executive Deferred Compensation Plan (EDCP), in which designated key employees were eligible to participate. However, for certain current and former employees on December 31, 2008,
including Mr. Herzog, payments of account balances were not accelerated. Mr. Herzog participated in the EDCP. In addition, Mr. Herzog participated in the American General Supplemental Thrift Plan (AG Supplemental Thrift Plan) as a
result of his employment by American General Corporation prior to its acquisition by AIG.
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AIG | 2016 Form 10-K/A
37
|
ITEM 11 |
Executive
Compensation
|
AIG
Executive Deferred Compensation Plan.
Participants in the EDCP were able
to defer cash compensation up to a maximum of $300,000 per year. Amounts deferred under the EDCP were credited with earnings based on the returns of a small number of mutual funds. In 2016, based on the performance of these funds, Mr. Herzog
experienced a return of approximately 7.85 percent. Amounts deferred during each year, and earnings thereon, will be distributed in accordance with a participants prior decision to receive installments over a period of five or ten years
or in a lump sum payment following termination of employment after reaching age 60. A participant whose employment terminates before reaching age 60 must receive his or her account balance in a lump sum payment. Mr. Herzogs separation
from AIG occurred prior to his reaching age 60, and accordingly, he received his account balance in a lump sum payment, credited with earnings or losses based on the returns of the mutual funds, after a
six-month
delay required under Section 409A of the Code. Balances under the plans in which the named executives participated are detailed in the following table.
2016 Nonqualified Deferred Compensation
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Name
|
|
Executive
Contributions
|
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AIG
Contributions
|
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Aggregate
Earnings
|
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Distributions
|
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Aggregate
Balance at
Year-End
2016
|
Peter D. Hancock
|
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$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
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|
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|
|
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|
Siddhartha Sankaran
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Douglas A. Dachille
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin T. Hogan
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert S. Schimek
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
Separated during 2016
|
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|
|
|
|
|
|
|
|
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|
|
|
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|
|
David L. Herzog
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EDCP
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
46,607
|
|
|
$
|
640,430
|
|
|
|
|
|
|
$
|
0
|
|
AG Supplemental Thrift Plan
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
505
|
|
|
$
|
22,933
|
|
|
|
|
|
|
$
|
0
|
(1)
|
Total
|
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|
|
|
|
|
|
|
|
$
|
47,112
|
|
|
$
|
663,363
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seraina Macia
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian T. Schreiber
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
(1)
|
Represents Mr. Herzogs balances under the AG Supplemental Thrift Plan and contributions made to this
plan prior to AIGs acquisition of American General Corporation. Mr. Herzog received a lump sum distribution from this plan after his separation from AIG and election to receive a lump sum distribution from AIGs 401(k) plan. This
plan provides a return based on Prime plus 1 percent, which resulted in a rate of return of approximately 2.25 percent in 2016.
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|
AIG | 2016 Form 10-K/A
38
|
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|
|
ITEM 11 |
Executive
Compensation
|
AIG
POTENTIAL PAYMENTS ON TERMINATION
Executive Severance Plan
.
As previously discussed, AIG maintains the 2012 Executive Severance Plan (the 2012 ESP)
for AIG executives in grade level 27 or above, including the current named executives, and executives who participated in AIGs prior executive severance plan (Prior Participants).
Severance benefits
. The 2012 ESP provides for severance payments and benefits upon a termination by AIG without Cause
or by a qualifying executive (including Messrs. Hancock, Sankaran, Dachille, Hogan and Schimek) for Good Reason, including, for qualifying executives, after a Change in Control. In the event of a qualifying termination,
subject to the participants execution of a release of claims and agreement to abide by certain restrictive covenants, a participant is generally eligible to receive:
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For terminations on and after April 1 of the termination year, a prorata annual short-term incentive for the year
of termination based on the participants target amount and actual company (and/or, if applicable, business unit or function) performance, paid at the same time as such short-term incentives are regularly paid to similarly situated active
employees; and
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Severance in an amount equal to the product of a multiplier times the sum of base salary and the average amount of
short-term incentive paid for the preceding three completed calendar years. The multiplier is either 1 or 1.5 depending on the executives grade level and increases to 1.5 or 2 for qualifying terminations within two years following a
Change in Control. Each of Messrs. Hancock, Sankaran, Dachille, Hogan and Schimek is eligible for the higher multipliers.
|
If the qualifying termination occurs within twelve months after experiencing a reduction in base salary or annual short-term incentive,
the payments described above are calculated as if the qualifying termination occurred immediately prior to the reduction.
However,
in any event, Prior Participants in grade level 27 or above, which includes Messrs. Hancock, Sankaran and Schimek, may not receive less than the severance they would have received under the prior plan. Severance generally will be paid in a
lump sum. Participants are entitled to continued health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), a $40,000 payment that may be applied towards continued health coverage and life insurance and one year of
additional age and service under AIGs
non-qualified
pension plans and AIG Medical Plan solely for purposes of determining vesting and eligibility, not benefit accruals. The one year of additional age and
service is also used for the purpose of determining eligibility to enroll in retiree medical coverage.
Restrictive covenants
.
Pursuant to the release of claims that each participant must execute to receive benefits under the 2012 ESP, each participant is generally prohibited from:
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Engaging in, being employed by, rendering services to or acquiring financial interests in certain businesses that are
competitive with AIG for a period of six months after termination;
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Interfering with AIGs business relationships with customers, suppliers or consultants for a period of six months
after termination;
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Soliciting or hiring AIG employees for a period of one year after termination; and
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Disclosing AIGs confidential information at any time following termination.
|
Definitions
. Under the 2012 ESP:
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Cause generally means
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the participants conviction, whether following trial or by plea of guilty or
nolo contendere
(or similar
plea), in a criminal proceeding (A) on a misdemeanor charge involving fraud, false statements or misleading omissions, wrongful taking, embezzlement, bribery, forgery, counterfeiting or extortion, (B) on a felony charge or (C) on an
equivalent charge to those in clauses (A) and (B) in jurisdictions which do not use those designations;
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the participants engagement in any conduct which constitutes an employment disqualification under applicable law
(including statutory disqualification as defined under the Exchange Act);
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the participants violation of any securities or commodities laws, any rules or regulations issued pursuant to such
laws, or the rules and regulations of any securities or commodities exchange or association of which AIG or any of its subsidiaries or affiliates is a member; or
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the participants material violation of AIGs codes of conduct or any other AIG policy as in effect from time
to time.
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AIG | 2016 Form 10-K/A
39
|
ITEM 11 |
Executive
Compensation
|
AIG
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Change in Control generally means
|
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individuals who, on the effective date of the 2012 ESP, constitute the Board of Directors of AIG (or subsequent
directors whose election or nomination was approved by a vote of at least
two-thirds
of such directors, including by approval of the proxy statement in which such person is named as a nominee for director)
cease for any reason to constitute at least a majority of the Board;
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any person is or becomes a beneficial owner of 50 percent or more of AIGs voting securities (for this
purpose, person is as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act);
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consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving AIG
that results in any person becoming the beneficial owner of 50 percent or more of the total voting power of the outstanding voting securities eligible to elect directors of the entity resulting from such transaction;
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a sale of all or substantially all of AIGs assets; or
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AIGs stockholders approve a plan of complete liquidation or dissolution of AIG.
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Good Reason generally means a reduction of more than 20 percent in the participants annual target
direct compensation.
|
Treatment of LTI Awards.
Since 2013, LTI awards have been issued under the 2013
Long Term Incentive Plan, which provides for accelerated vesting of outstanding PSUs in certain termination scenarios. In the case of a participants involuntary termination without Cause (defined in the same manner as in the 2012 ESP as set
forth above), retirement or disability, or if the participant experiences a qualifying resignation after the first year of a performance period (e.g., on or after January 1, 2017 for the 20162018 performance period), the
participants award will vest and earned PSUs (if any) will be determined based on actual performance for the whole performance period, and be delivered on the normal settlement schedule. Retirement requires attainment of age 60 with five years
of service or attainment of age 55 with ten years of service, and a qualifying resignation requires attainment of both (1) age 50 with at least five years of service and (2) age plus years of service equal to at least 60. In the case of a
participants death during or prior to adjudication for a performance period or involuntary termination without Cause within 24 months following a Change in Control (defined in the same manner as in the 2012 ESP as set forth above) during
a performance period, an amount equal to the participants target amount of PSUs (unless the Committee determines to use actual performance through the date of the Change in Control) will vest and be delivered to the participant by the later of
the end of the calendar year or two and a half months following death or termination.
Quantification of Termination Payments
and Benefits
.
Our former named executive officers are not included in the Termination Payments and Benefits table below because they were not employed by us on December 31, 2016. Below are the benefits each of our former named
executive officers received upon his or her separation from employment.
Mr.
Herzog.
Mr. Herzog
separated from AIG on April 8, 2016, and was entitled to termination without cause benefits under the 2012 ESP. Upon separation, he received a lump sum severance payment of $6,173,333 and was entitled to a lump sum payment of $40,000 that may
be applied towards continued health coverage and life insurance. For 2016, Mr. Herzog earned a prorata short-term incentive award of $200,000, 100 percent of which was vested and paid in March 2017.
Mr. Herzogs outstanding 2013 LTI, 2014 LTI, 2015 LTI and 2016 LTI awards vested upon his separation. Mr. Herzogs
earned but unpaid 2013 LTI and 2014 LTI awards will be paid on the normal payment schedule applicable to all 2013 and 2014 LTI award recipients. PSUs earned under the 2015 and 2016 LTI awards, if any, will be based on actual performance following
the applicable performance period and paid on the normal payment schedule applicable to all 2015 and 2016 LTI award recipients. Mr. Herzogs 2015 LTI and 2016 LTI award amounts also include additional PSUs accrued in respect of dividend
equivalent rights, which are subject to the same vesting and performance conditions as the related PSUs and are paid when such related earned shares (if any) are delivered.
Mr. Herzogs severance payments and benefits are subject to his release of claims against AIG and restrictive covenants, as
described above in Executive Severance PlanRestrictive Covenants.
Ms.
Macia
.
Ms. Macia separated from AIG on March 31, 2016, and was entitled to termination without cause benefits under the 2012 ESP. Upon separation, she received a lump sum severance payment of $3,000,000 and was entitled to a lump sum payment of
$40,000 that may be applied towards continued health coverage and life insurance. For 2016, Ms. Macia earned a prorata short-term incentive award of $170,000, 100 percent of which was vested and paid in March 2017.
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AIG | 2016 Form 10-K/A
40
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|
ITEM 11 |
Executive
Compensation
|
AIG
Ms. Macias outstanding 2014 LTI and 2015 LTI awards vested upon her
separation. Ms. Macias earned but unpaid 2014 awards will be paid on the normal payment schedule applicable to all 2014 LTI award recipients. PSUs earned under the 2015 LTI award, if any, will be based on actual performance following the
performance period and paid on the normal payment schedule applicable to all 2015 LTI award recipients. Ms. Macias 2015 LTI award amount also includes additional PSUs accrued in respect of dividend equivalent rights, which are subject to
the same vesting and performance conditions as the related PSUs and are paid when such related earned shares (if any) are delivered. In lieu of a 2016 LTI award, Ms. Macia received a lump sum payment of $1,800,000.
Ms. Macias severance payments and benefits are subject to her release of claims against AIG and restrictive covenants, as
described above in Executive Severance PlanRestrictive Covenants.
Mr.
Schreiber.
Mr. Schreiber separated from AIG on March 31, 2016, and was entitled to termination without cause benefits under the 2012 ESP. Upon separation, he received a lump sum severance payment of $5,999,250 and was entitled to a lump sum
payment of $40,000 that may be applied towards continued health coverage and life insurance. For 2016, Mr. Schreiber earned a prorata short-term incentive award of $175,000, 100 percent of which was vested and paid in March 2017.
Mr. Schreibers outstanding 2013 LTI, 2014 LTI and 2015 LTI awards vested upon his separation. Mr. Schreibers earned
but unpaid 2013 and 2014 awards will be paid on the normal payment schedule applicable to all 2013 and 2014 LTI award recipients. PSUs earned under the 2015 LTI award, if any, will be based on actual performance following the performance period and
paid on the normal payment schedule applicable to all 2015 LTI award recipients. Mr. Schreibers 2015 LTI award amount also includes additional PSUs accrued in respect of dividend equivalent rights, which are subject to the same vesting
and performance conditions as the related PSUs and are paid when such related earned shares (if any) are delivered. In lieu of a 2016 LTI award, Mr. Schreiber received a lump sum payment of $3,300,000.
Mr. Schreibers severance payments and benefits are subject to his release of claims against AIG and restrictive covenants, as
described above in Executive Severance PlanRestrictive Covenants.
The following table sets forth the
compensation and benefits that would have been provided to each of the current named executives if he had been terminated on December 31, 2016 under the circumstances indicated (including following a Change in Control).
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AIG | 2016 Form 10-K/A
41
|
ITEM 11 |
Executive
Compensation
|
AIG
Termination Payments and Benefits for the Current Named Executive Officers as of December 31,
2016
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Name
|
|
Annual
Short-Term
Incentive(1)
|
|
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Severance(2)
|
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Medical and
Life Insurance(3)
|
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Pension
Plan
Credit(4)
|
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Unvested
Options(5)
|
|
|
Unvested
Stock
Awards(6)
|
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Total
|
|
Peter D. Hancock
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By AIG for Cause
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
By AIG w/o Cause
|
|
$
|
0
|
|
|
$
|
9,528,890
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
38,307,711
|
|
|
$
|
47,876,601
|
|
By Executive w/o Good Reason
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
27,928,907
|
|
|
$
|
27,928,907
|
|
By Executive with Good Reason
|
|
$
|
0
|
|
|
$
|
9,528,890
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
27,928,907
|
|
|
$
|
37,497,797
|
|
Qualifying Termination following a Change in Control
(7)
|
|
$
|
0
|
|
|
$
|
9,528,890
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
38,307,711
|
|
|
$
|
47,876,601
|
|
Death
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,918
|
|
|
$
|
0
|
|
|
$
|
38,125,953
|
|
|
$
|
38,129,871
|
|
Disability
(8)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
38,307,711
|
|
|
$
|
38,307,711
|
|
Retirement
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Siddhartha Sankaran
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By AIG for Cause
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
By AIG w/o Cause
|
|
$
|
680,000
|
|
|
$
|
5,146,511
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,270,220
|
|
|
$
|
17,136,731
|
|
By Executive w/o Good Reason
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
By Executive with Good Reason
|
|
$
|
680,000
|
|
|
$
|
5,146,511
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
5,866,511
|
|
Qualifying Termination following a Change in Control
(7)
|
|
$
|
680,000
|
|
|
$
|
5,146,511
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,270,220
|
|
|
$
|
17,136,731
|
|
Death
|
|
$
|
680,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
57,717
|
|
|
$
|
0
|
|
|
$
|
11,223,066
|
|
|
$
|
11,960,783
|
|
Disability
(8)
|
|
$
|
680,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,270,220
|
|
|
$
|
11,950,220
|
|
Retirement
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Douglas A. Dachille
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By AIG for Cause
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
232
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
232
|
|
By AIG w/o Cause
|
|
$
|
800,000
|
|
|
$
|
3,840,000
|
|
|
$
|
40,000
|
|
|
$
|
232
|
|
|
$
|
0
|
|
|
$
|
9,423,057
|
|
|
$
|
14,103,289
|
|
By Executive w/o Good Reason
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
232
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
232
|
|
By Executive with Good Reason
|
|
$
|
800,000
|
|
|
$
|
3,840,000
|
|
|
$
|
40,000
|
|
|
$
|
232
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
4,680,232
|
|
Qualifying Termination following a Change in Control
(7)
|
|
$
|
800,000
|
|
|
$
|
5,120,000
|
|
|
$
|
40,000
|
|
|
$
|
232
|
|
|
$
|
0
|
|
|
$
|
9,423,057
|
|
|
$
|
15,383,289
|
|
Death
|
|
$
|
800,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,630
|
|
|
$
|
0
|
|
|
$
|
9,423,057
|
|
|
$
|
10,225,687
|
|
Disability
(8)
|
|
$
|
800,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
9,423,057
|
|
|
$
|
10,223,057
|
|
Retirement
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
232
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
232
|
|
Kevin T. Hogan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By AIG for Cause
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
By AIG w/o Cause
|
|
$
|
760,000
|
|
|
$
|
4,070,375
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
18,246,896
|
|
|
$
|
23,117,271
|
|
By Executive w/o Good Reason
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
13,690,413
|
|
|
$
|
13,690,413
|
|
By Executive with Good Reason
|
|
$
|
760,000
|
|
|
$
|
4,070,375
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
13,690,413
|
|
|
$
|
18,560,788
|
|
Qualifying Termination following a Change in Control
(7)
|
|
$
|
760,000
|
|
|
$
|
5,427,167
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
18,246,896
|
|
|
$
|
24,474,063
|
|
Death
|
|
$
|
760,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
18,152,261
|
|
|
$
|
18,912,261
|
|
Disability
(8)
|
|
$
|
760,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
18,246,896
|
|
|
$
|
19,006,896
|
|
Retirement
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Robert S. Schimek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By AIG for Cause
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
By AIG w/o Cause
|
|
$
|
700,000
|
|
|
$
|
5,579,444
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,842,989
|
|
|
$
|
18,162,433
|
|
By Executive w/o Good Reason
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,413,077
|
|
|
$
|
7,413,077
|
|
By Executive with Good Reason
|
|
$
|
700,000
|
|
|
$
|
5,579,444
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,413,077
|
|
|
$
|
13,732,521
|
|
Qualifying Termination following a Change in Control
(7)
|
|
$
|
700,000
|
|
|
$
|
5,579,444
|
|
|
$
|
40,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,842,989
|
|
|
$
|
18,162,433
|
|
Death
|
|
$
|
700,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,795,443
|
|
|
$
|
12,495,443
|
|
Disability
(8)
|
|
$
|
700,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
11,842,989
|
|
|
$
|
12,542,989
|
|
Retirement
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
(1)
|
These amounts represent annual short-term incentive payments for which the named executives would have been
eligible pursuant to the 2012 ESP had they been terminated on December 31, 2016. Under the 2012 ESP, earned short-term incentives are prorated based on the number of full months the executive was employed in the
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
42
|
|
|
|
|
ITEM 11 |
Executive
Compensation
|
AIG
|
termination year. Except in the case of death, these short-term incentive payments are based on the named executives target amount and actual company performance and paid at the same time
such short-term incentives are regularly paid to similarly situated active employees. In the case of death, a named executives short-term incentive payment is based on his or her target amount and paid as soon as administratively possible
after the date of death (but in no event later than March 15th of the following year). These amounts would have been solely in lieu of, and not in addition to, the annual short-term incentives for 2016 actually paid to the named executives as
reported in the 2016 Summary Compensation Table.
|
(2)
|
Severance would have been paid as a lump sum cash payment as soon as practicable and in no event later than 60
days following the termination date.
|
(3)
|
The amounts in this column reflect a lump sum payment of $40,000 that can be used to pay for continued healthcare
and life insurance coverage following a qualifying termination. None of the current named executives are eligible for company-subsidized retiree medical benefits. The amounts do not include medical and life insurance benefits upon permanent
disability or death to the extent that they are generally available to all salaried employees. All of the current named executives are eligible participants under the AIG medical and life insurance plans.
|
(4)
|
The amount shown for all of the termination events is the increase, if any, above the accumulated value of
pension benefits shown in the 2016 Pension Benefits table, calculated using the same assumptions. Where there is no increase in value, the amount shown in this column is zero.
|
In the event of termination as a result of death, the beneficiaries of the named executives or their estates would have received benefits
under AIGs pension plans. The death benefit payable to a vested participants designated beneficiary under the Qualified Retirement Plan and the
Non-Qualified
Retirement Plan generally equals the
participants lump sum benefit or cash balance account pursuant to the plan provisions applicable to all salaried employees. The death benefits for the named executives are calculated using the actual dates of birth for these individuals
spouses, and generally are less than the amounts shown in the 2016 Pension Benefits table on a present value basis. In the event of termination as a result of disability, the named executives would have received benefits under AIGs pension
plans. The amounts in this column for termination due to permanent disability represent the increase in the present value, if any, of the named executives accumulated pension benefits attributed to interest credits, which continue to accrue on
existing cash balance accounts, and service credits, for purposes of vesting and early retirement eligibility subsidies, that would accrue during a period of disability pursuant to the plan provisions applicable to all salaried employees.
All termination benefits, except disability benefits, are assumed to commence at the earliest permissible retirement date. Disability
benefits are assumed to commence at age 65.
For information on pension benefits generally, see Post-Employment
CompensationPension Benefits.
(5)
|
No options that become exercisable on retirement, death or permanent disability were in the money as of
December 31, 2016.
|
(6)
|
The amounts in this column represent the total market value (based on the closing sale price on the NYSE of
$65.31 on December 30, 2016) of shares of AIG Common Stock underlying unvested equity-based awards as of December 31, 2016.
|
For the 2013 LTI awards, the amounts in this column include the remaining
two-thirds
of the named
executives actual earned PSUs for the 20132015 performance period (as determined by the Committee in the first quarter of 2016 and described under Compensation Discussion and AnalysisEarned 2013 Long-Term Incentive
Awards) in the case of a named executives involuntary termination without Cause, involuntary termination without Cause within 24 months following a Change in Control, retirement or disability, or if the named executive experienced a
qualifying resignation.
For the 2014 LTI awards, the amounts in this column include the named executives actual earned PSUs
for the 20142016 performance period (as determined by the Committee in the first quarter of 2017 and described under Compensation Discussion and AnalysisAdjudication of 2014 Long-Term Incentive Awards) in the case of a
named executives involuntary termination without Cause, involuntary termination without Cause within 24 months following a Change in Control, retirement or disability, or if the named executive experienced a qualifying resignation. In the case
of death, the amounts reflect the target amount of PSUs under each named executives 2014 LTI award.
In addition, the amounts
in this column include, for all of the named executives, the outstanding PSUs granted under the 2015 LTI and 2016 LTI awards assuming target performance, except that the amounts shown for a termination by executive with or without Good Reason for
Messrs. Hancock, Hogan and Schimek include only 2015 LTI awards that are eligible for qualifying resignation treatment under the 2013 Long Term Incentive Plan. Qualifying resignation
|
|
|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
43
|
ITEM 11 |
Executive
Compensation
|
AIG
treatment is only available upon a voluntary termination after the first year of a performance period for participants who meet the age and years of service requirements. For the 2015 LTI and
2016 LTI awards, the actual number of PSUs (if any) vesting upon a qualifying termination by AIG without Cause, by executive with or without Good Reason, disability, retirement and, in certain circumstances, following a Change in Control, would be
based on actual performance. 2015 LTI and 2016 LTI award amounts also include additional PSUs accrued in respect of dividend equivalent rights, which are subject to the same vesting and performance conditions as the related PSUs and are paid when
such related earned shares (if any) are delivered.
(7)
|
Under the 2012 ESP, includes a termination by AIG without Cause or by the executive for Good Reason within 24
months following a Change in Control. Under the 2013 LTI, 2014 LTI, 2015 LTI and 2016 LTI awards, includes only termination by AIG without Cause within 24 months following a Change in Control, with the amount of PSUs vesting shown at the remaining
two-thirds
of the actual amounts earned for the 2013 LTI awards (as determined by the Committee in the first quarter of 2016 and described under Compensation Discussion and AnalysisEarned 2013
Long-Term Incentive Awards), at the actual amounts earned for the 2014 LTI awards (as determined by the Committee in the first quarter of 2017 and described under Compensation Discussion and AnalysisAdjudication of 2014
Long-Term Incentive Awards) and at target for the 2015 LTI and 2016 LTI awards. However, with respect to the 2015 LTI and 2016 LTI awards, for a Change in Control that occurs following a performance period, the actual PSUs vesting, if any,
would be based on actual performance, and for a Change in Control that occurs during a performance period, the Committee may determine to use actual performance through the date of the Change in Control rather than target performance to determine
the actual PSUs vesting, if any.
|
(8)
|
Amounts shown in this row represent the amounts the executive would be entitled to receive upon qualifying for
benefits under AIGs long-term disability plan.
|
Transition Arrangements for our Chief Executive Officer
As disclosed on AIGs Current Report on Form
8-K
dated March 17, 2017, upon the
Committees recommendation, the Board approved a letter agreement between AIG and Mr. Hancock that provides that Mr. Hancock will continue to serve as President, Chief Executive Officer and director until a successor has been
appointed or, if earlier, December 31, 2017 (the Transition Period). Upon his separation from AIG, Mr. Hancock will receive benefits consistent with a termination without Cause under the 2012 ESP, as generally reflected in the
Termination Payments and Benefits for the Current Named Executive Officers as of December 31, 2016 table above. Mr. Hancocks severance payments and benefits will be subject to his release of claims against AIG and
restrictive covenants, as described above in Executive Severance PlanRestrictive Covenants. In consideration of his service during the Transition Period, Mr. Hancock also will be eligible to receive a cash payment of
$5,000,000 for service through the Transition Period and will continue to receive his normal 2017 compensation, including short-term and long-term incentive award opportunities.
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AIG | 2016 Form 10-K/A
44
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ITEM 11 |
Executive
Compensation
|
AIG
COMPENSATION OF DIRECTORS
The following table describes the compensation structure for AIGs
non-management
directors
in 2016.
Compensation Structure for
Non-Management
Directors
|
|
|
|
|
Base Annual Retainer
|
|
|
|
|
Cash Retainer
|
|
|
$ 150,000
|
|
Deferred Stock Units (DSUs) Award
|
|
|
$ 130,000
|
|
|
|
Annual Independent Chairman Cash Retainer
|
|
|
$ 260,000
|
|
|
|
Annual Committee Chair Retainers
|
|
|
|
|
Audit Committee
|
|
|
$ 40,000
|
|
Risk and Capital Committee
|
|
|
$ 40,000
|
|
Compensation and Management Resources Committee
|
|
|
$ 30,000
|
|
Other Committees
|
|
|
$ 20,000
|
|
Non-management
directors can elect to receive annual retainer
amounts and Committee retainer amounts in the form of DSUs and are also eligible for the AIG Matching Grants Program on the same terms and conditions that apply to AIG employees. Each DSU provides that one share of AIG Common Stock will be delivered
when a director ceases to be a member of the Board and includes dividend equivalent rights that entitle the director to a quarterly payment, in the form of DSUs, equal to the amount of any regular quarterly dividend that would have been paid by AIG
if the shares of AIG Common Stock underlying the DSUs had been outstanding. DSUs are granted under the American International Group, Inc. 2013 Omnibus Incentive Plan.
Under director stock ownership guidelines,
non-management
directors should own a number of shares
of AIG Common Stock (including deferred stock and DSUs) with a value equal to at least five times the annual retainer for
non-management
directors.
Mr. Hancock did not receive any compensation for service as a director.
FW Cook provided advice to the Nominating and Corporate Governance Committee with respect to AIG director compensation and related market
practices.
The following table contains information with respect to the compensation of the individuals who served as
non-management
directors of AIG for all or part of 2016.
2016
Non-Management
Director Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Management
Members of the Board in
2016
|
|
Fees
Earned or
Paid in
Cash(1)
|
|
|
Stock
Awards(2)
|
|
|
All Other
Compensation(3)
|
|
|
Total
|
|
W. Don Cornwell
|
|
$
|
180,000
|
|
|
$
|
129,995
|
|
|
$
|
10,000
|
|
|
$
|
319,995
|
|
Peter R. Fisher
|
|
$
|
150,000
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
279,995
|
|
John H. Fitzpatrick
|
|
$
|
190,000
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
319,995
|
|
William G. Jurgensen
|
|
$
|
190,000
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
319,995
|
|
Christopher S. Lynch
|
|
$
|
150,000
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
279,995
|
|
Samuel J. Merksamer
|
|
$
|
95,192
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
225,187
|
|
George L. Miles, Jr.
|
|
$
|
150,000
|
|
|
$
|
129,995
|
|
|
$
|
10,000
|
|
|
$
|
289,995
|
|
Henry S. Miller
|
|
$
|
150,000
|
|
|
$
|
129,995
|
|
|
$
|
10,000
|
|
|
$
|
289,995
|
|
Robert S. Miller
|
|
$
|
150,000
|
|
|
$
|
129,995
|
|
|
$
|
10,000
|
|
|
$
|
289,995
|
|
Linda A. Mills
|
|
$
|
150,000
|
|
|
$
|
129,995
|
|
|
$
|
10,000
|
|
|
$
|
289,995
|
|
Suzanne Nora Johnson
|
|
$
|
170,000
|
|
|
$
|
129,995
|
|
|
$
|
10,000
|
|
|
$
|
309,995
|
|
John A. Paulson
|
|
$
|
95,192
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
225,187
|
|
Ronald A. Rittenmeyer
|
|
$
|
170,000
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
299,995
|
|
Douglas M. Steenland
|
|
$
|
410,000
|
|
|
$
|
129,995
|
|
|
$
|
0
|
|
|
$
|
539,995
|
|
Theresa M. Stone
|
|
$
|
170,000
|
|
|
$
|
129,995
|
|
|
$
|
10,000
|
|
|
$
|
309,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
45
|
ITEM 11 |
Executive
Compensation
|
AIG
(1)
|
This column represents annual retainer fees and Committee Chair retainer fees. For Messrs. Merksamer and Paulson,
the amounts include prorated annual retainer fees for their service as directors from the date of the 2016 Annual Meeting.
|
(2)
|
This column represents the grant date fair value of DSUs granted in 2016 to directors, based on the closing sale
price of AIG Common Stock on the date of grant.
|
(3)
|
This column represents charitable contributions by AIG under AIGs Matching Grants Program.
|
The following table sets forth information with respect to the option and stock awards outstanding at
December 31, 2016 for the
non-management
directors of AIG.
Stock and Option Awards Outstanding
at December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Management
Members of the Board in
2016
|
|
Option Awards(1)
|
|
|
Deferred
Stock(2)
|
|
|
Deferred
Stock Units(3)
|
|
W. Don Cornwell
|
|
|
0
|
|
|
|
0
|
|
|
|
13,159
|
|
Peter R. Fisher
|
|
|
0
|
|
|
|
0
|
|
|
|
6,570
|
|
John H. Fitzpatrick
|
|
|
0
|
|
|
|
0
|
|
|
|
12,044
|
|
William G. Jurgensen
|
|
|
0
|
|
|
|
0
|
|
|
|
8,629
|
|
Christopher S. Lynch
|
|
|
0
|
|
|
|
0
|
|
|
|
13,307
|
|
Samuel J. Merksamer
|
|
|
0
|
|
|
|
0
|
|
|
|
2,349
|
|
George L. Miles, Jr.
|
|
|
0
|
|
|
|
90
|
|
|
|
13,570
|
|
Henry S. Miller
|
|
|
0
|
|
|
|
0
|
|
|
|
13,307
|
|
Robert S. Miller
|
|
|
0
|
|
|
|
0
|
|
|
|
13,307
|
|
Linda A. Mills
|
|
|
0
|
|
|
|
0
|
|
|
|
4,070
|
|
Suzanne Nora Johnson
|
|
|
0
|
|
|
|
0
|
|
|
|
16,531
|
|
John A. Paulson
|
|
|
0
|
|
|
|
0
|
|
|
|
3,368
|
|
Ronald A. Rittenmeyer
|
|
|
0
|
|
|
|
0
|
|
|
|
13,307
|
|
Douglas M. Steenland
|
|
|
0
|
|
|
|
0
|
|
|
|
13,307
|
|
Theresa M. Stone
|
|
|
0
|
|
|
|
0
|
|
|
|
18,997
|
|
(1)
|
There are no outstanding option awards.
|
(2)
|
No deferred stock was awarded in 2016. Deferred stock shown was awarded in 2007 and prior years. Receipt of
deferred stock is deferred until the director ceases to be a member of the Board.
|
(3)
|
DSUs shown include DSUs awarded in 2016 and prior years, directors fees deferred into DSUs and DSUs awarded
as dividend equivalents. Receipt of shares of AIG Common Stock underlying DSUs is deferred until the director ceases to be a member of the Board. DSUs granted prior to April 2010 were granted under the Amended and Restated 2007 Stock Incentive Plan
(2007 Stock Incentive Plan). DSUs granted after April 2010 and prior to May 15, 2013 were granted under the 2010 Stock Incentive Plan and DSUs granted commencing on or after May 15, 2013 were granted under the 2013 Omnibus Incentive Plan.
|
COMPENSATION AND MANAGEMENT RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During his or her service on the Compensation and Management Resources Committee, no member served as an officer or employee of AIG at
any time or had any relationship with AIG requiring disclosure as a related-party transaction under SEC rules. During 2016, none of AIGs executive officers served as a director of another entity, one of whose executive officers served on the
Compensation and Management Resources Committee; and none of AIGs executive officers served as a member of the compensation committee of another entity, one of whose executive officers served as a member of the Board of Directors of AIG.
|
|
|
|
|
|
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|
AIG | 2016 Form 10-K/A
46
|
|
|
|
|
ITEM 11 |
Executive
Compensation
|
AIG
NON-GAAP
FINANCIAL MEASURES
Certain of the operating performance measurements used by AIG management are
non-GAAP
financial measures under SEC rules and regulations. GAAP is the acronym for accounting principles generally accepted in the United States. The
non-GAAP
financial measures presented may not be comparable to similarly named measures reported by other companies.
Short-Term Incentive Performance
|
|
|
Normalized insurance company
pre-tax
operating income
is Insurance
company
pre-tax
operating income as adjusted by the Insurance Company Normalizations (defined below).
|
|
|
|
Insurance company
pre-tax
operating income
is the sum of the
Pre-tax
operating income (defined below) for the Commercial Insurance and Consumer Insurance segments, Institutional Markets, United Guaranty and Fuji Life in the Other Operations Category, as well as certain Legacy
Life businesses previously categorized as Insurance Operations.
Pre-tax
operating income is derived by excluding the following items from
Pre-tax
income: changes in fair
values of securities used to hedge guaranteed living benefits; net realized capital gains and losses; changes in benefit reserves and deferred policy acquisition costs (DAC), value of business acquired (VOBA) and sales inducement assets (SIA)
related to net realized capital gains and losses; other income and expensenet; net loss reserve discount benefit (charge); and
non-operating
litigation reserves and settlements.
|
|
|
|
Insurance Company Normalizations
are normalizations for variance from expectations with respect to severance
costs, acceleration of incentive vesting for terminations, fluctuations in compensation expense associated with changes in the share price of AIG Common Stock, direct marketing expenses, acquisition costs, alternative investment returns, fair value
option asset returns, natural catastrophe losses different from the budgeted modeled average annual losses and the impact of foreign exchange rates.
|
|
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|
Normalized return on equity (excluding accumulated other comprehensive income and deferred tax assets)
is
(i) After-tax
operating income attributable to AIG (defined below), adjusted by the tax adjusted ROE Normalizations (defined below), divided by (ii) average Shareholders equity, adjusted to exclude
the average accumulated other comprehensive income and the average deferred tax assets (DTA). DTA represents U.S. tax attributes related to net operating loss carryforwards and foreign tax credits.
|
|
|
|
After-tax
operating income attributable to AIG
is derived by excluding
the following items from Net income attributable to AIG: deferred income tax valuation allowance releases and charges; changes in fair value of securities used to hedge guaranteed living benefits; changes in benefit reserves and DAC, VOBA, and SIA
related to net realized capital gains and losses; reserve development related to
non-operating
run-off
insurance business; restructuring and other costs related to
initiatives designed to reduce operating expenses, improve efficiency and simplify the AIG organization; other income and expensenet, related to Legacy Portfolio
run-off
insurance lines; loss (gain) on
extinguishment of debt; net realized capital gains and losses;
non-qualifying
derivative hedging activities, excluding net realized capital gains and losses; income or loss from discontinued operations; income
and loss from divested businesses; uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; net loss reserve discount benefit (charge); pension expense related to a
one-time
lump sum payment to former employees; and
non-operating
litigation reserves and settlements.
|
|
|
|
ROE Normalizations
are (i) normalizations for variance from expectations with respect to catastrophe losses,
alternative investment returns, and Direct Investment book and Global Capital Markets income; and (ii) the exclusion of the following items: fair value changes on investments in PICC Property & Casualty Company Limited and
Peoples Insurance Company (Group) of China Limited, update of actuarial assumptions, and life insurance incurred but not reported death claim charges.
|
|
|
|
Normalized gross general operating expenses
represents general operating expenses adjusted to normalize for
variance from expectations with respect to severance costs, acceleration of incentive vesting for terminations, certain expenses associated with long-term and short-term incentive plans,
non-deferrable
acquisition costs associated with sales, fluctuations in compensation expense associated with changes in the share price of AIG Common Stock and the impact of foreign exchange rates.
|
|
|
|
Normalized production risk-adjusted profitability
is the underwriting profit or loss for Commercial Insurance and
Personal Insurance plus net investment income, less tax, net of the cost of capital. Underwriting profit or loss is based on net premiums written during the performance year, estimated ultimate loss ratio adjusted for
|
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|
|
|
|
|
|
|
|
|
|
AIG | 2016 Form 10-K/A
47
|
ITEM 11 |
Executive
Compensation
|
AIG
|
catastrophic annual average losses, and variable expenses. The net investment income is imputed based upon the prevailing interest rate environment of the performance year. The cost of capital is
the product of the capital deployed and the cost of capital rate. The capital deployed is based on an internal capital allocation model and reflects the capital needed for the business underwritten during the performance period. The cost of capital
rate is derived from an internal capital asset pricing model. This result is adjusted to normalize for the impact of fluctuations in foreign exchange rates.
|
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|
Normalized value of new business
is the sum of (i) with respect to Consumer Insurance (excluding Personal
Insurance), Institutional Markets and Fuji Life, the present value, measured at point of sale, of projected
after-tax
statutory profits emerging in the future from new business sold in the period, as adjusted
to normalize fixed annuity sales and margins based on indexing fixed annuity sales to the prevailing interest rate environment less the cost of capital and (ii) with respect to United Guaranty, the present value, measured at point of sale, of
projected
after-tax
cash flow profits emerging in the future from new business sold in the period less the cost of capital.
|
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|
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|
AIG | 2016 Form 10-K/A
48
|
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|