American International Group Inc.’s incoming Chief Executive Officer will be earning less than the outgoing Robert Benmosche, who had a targeted salary of $13 million after repaying a U.S. bailout in 2012.
The 56-year-old Peter Hancock will get a compensation package of $11.8 million a year as the insurer’s new CEO, taking over on September 1, as he prepares
AIG for the increased supervision from the Federal Reserve after the company was named a systemically important financial institution.
“Hancock will have the critical role of managing the company while it is newly regulated by the Fed,” Jay Gelb, an analyst at Barclays Plc. told reporters back in June when the transition was announced.
According to AIG, the short-term incentive will be $3.2 million of cash and the long-term will be $7 million in performance share units for meeting targets, plus he will get an annual salary of $1.6 million.
Hancock’s package compares with a total target of $9 million last year when he was CEO of the property-casualty operation, the company’s largest business.
The new CEO will also get a $2.05 million grant on Sept. 1; equal to the difference between his new long-term target of $7 million and the prior figure of $4.95 million.
Hancock was promoted to the property-casualty post in 2011 after joining a year earlier to manage finance and risk. The initial job included oversight of the credit-default swaps unit whose money-losing contracts forced AIG to take an $85 billion bailout in 2008. He previously spent 20 years at a predecessor to JPMorgan Chase & Co. where he established the derivatives group and served as chief financial officer.
