AIG gives incoming operating chief Peter Zaffino US$23.5 million

[NEW YORK] American International Group Inc's incoming chief operating officer Peter Zaffino is getting a US$23.5 million pay package, including a US$15 million sign-on award.

Mr Zaffino, who's joining the insurer next month, also will receive US$1.25 million in salary, a cash bonus with a US$3 million target and US$4.25 million in restricted stock units, AIG said Thursday in a regulatory filing. The restricted shares are split so that 70 per cent are based on performance and vest in December 2019. Mr Zaffino must remain with the company until then to get the rest.

Chief executive officer Brian Duperreault, who took over in May to improve AIG's profitability, is seeking to expand a bench of talent. Hiring executives like Mr Zaffino is critical to succession planning at the New York-based insurer, Credit Suisse Group AG analyst Ryan Tunis said in a note to clients earlier this year. Mr Zaffino, 50, previously worked at insurance brokerage Marsh & McLennan Cos, where Mr Duperreault, 70, had been CEO.

Mr Zaffino's US$15 million sign-on package includes 1 million stock options, with a third vesting annually over three years and the rest tied to the performance of the insurer's stock. The remainder of that award will be paid in cash in February 2018 and January 2019.

Marsh & McLennan gave him a US$9.11 million pay package last year, according to a March filing.