AIG CEO's annual salary is $7m

New York - American International Group Inc's new CEO will be paid a yearly salary worth $7m and could earn millions more in performance-based incentives, the bailed-out insurance giant said on Monday.

Robert Benmosche will receive $3m in cash and $4m in stock under his annual compensation package, AIG said in a filing with the Securities and Exchange Commission.

During the credit crisis last fall, the government rescued AIG from the brink of collapse with a bailout package worth up to $182.5bn. The government now owns roughly 80% of the huge insurer. AIG is now shedding assets and cutting costs as it restructures.

Benmosche, a former MetLife chairman and CEO, was named president and CEO of AIG on August 3. He replaced CEO Edward Liddy, former CEO of Allstate, who took over after the government rescued the New York-based insurer.

Liddy, who agreed to run the company for an annual salary of $1, refused an equity grant he was expected to receive as compensation.

Benmosche will also be eligible for a yearly performance-based bonus of up to $3.5m in stock, the company said. AIG said the amount of Benmosche's bonus will be decided by AIG's compensation committee and will be subject to restrictions under the government's Troubled Asset Relief Programme. He will not be entitled to severance pay should he leave for any reason.

The company said the government's new federal pay czar, Kenneth Feinberg, has agreed in principle to Benmosche's pay package. Seven firms, including AIG, were required to submit compensation plans for top earners to Feinberg's office last week.

Treasury spokesperson Andrew Williams said Benmosche's pay package "will be formally approved as part of the broader review" of compensation at bailed-out companies.

-AP