AIG secures ‘exceptional’ CEO Zaffino for next 5-years with $20m+ pay package

Global insurer  American International Group (AIG) has secured an agreement to retain industry veteran Peter Zaffino (Pictured), its president and chief executive officer and chairman of the board, for at least the next five years, following his “exceptional performance” in executing the company’s “complex, multi-faceted turnaround and transformation” since joining AIG in 2017.

Under the agreement, Zaffino will continue to serve as the company as president and CEO for a five-year employment term which will continue through November 10, 2027.

Zaffino will receive an annual base salary of $1.5 million and will continue to be eligible to receive a target annual cash bonus of $4.5 million, based on the board’s assessment of corporate and individual performance goals under AIG’s Annual Short-Term Incentive Plan.

He will also be eligible to annually receive shares and stock options valued at $14 million under the long-term incentive plan, according to the company’s Form 8-K filing with the US Securities and Exchange Commission.

AIG said its board has approved an additional one-time grant of $50 million in the form of restricted stock unit to Zaffino “in recognition of his continued leadership and the highly competitive market for talent”.

During the five-year period, Zaffino will be nominated to continue to serve as a member of the Board and, if elected by AIG’s shareholders as a director, will continue to serve as chairman of the Board.

In the event of a termination of Zaffino’s employment without “good reason” or due to his retirement, he will be required to provide AIG with at least 12 months’ notice.

“The Board considered the critical nature of retaining Mr. Zaffino to lead the Company over the long term, his exceptional performance since joining AIG in 2017, and the importance of leadership continuity as the Company continues to execute on significant strategic and operational initiatives, including continued profitability improvement in the General Insurance business, AIG’s reinsurance strategy, the continued operational separation of Corebridge Financial, Inc. and eventual full separation of Corebridge from AIG, and the redesign of AIG’s investment management strategy,” AIG said in the filing.

“The Board also expects that Mr. Zaffino will continue to build on his prior achievements, which include AIG’s strong financial results, particularly over the last two years, his exceptional leadership and financial, technical and operational capabilities, the recruitment of high caliber executives to AIG across the global organization, and his significant contributions to AIG’s overall performance during his tenure, including during the COVID-19 pandemic, an unstable geopolitical environment, and volatile market conditions,” it noted.

Speaking on behalf of AIG’s board of directors, John Rice said: “We are fortunate to have Peter continue as the CEO of AIG for at least the next five years. Throughout his career, Peter has developed an excellent track record as a visionary, insightful leader, with an ability to execute comprehensive transformational programs that turn his strategic vision into tangible, measurable success.  Under Peter’s leadership, AIG has delivered on ambitious operational and financial objectives and is well positioned to continue to drive long-term value for the company’s shareholders and other stakeholders.”

Zaffino stated: “Over the last few years, our global team has executed a complex, multi-faceted turnaround and transformation to elevate AIG’s performance, and deliver value to our clients, distribution partners, shareholders, and other stakeholders. We instilled a culture of underwriting and operating excellence, dramatically changed our risk tolerance, and transformed the way we work and collaborate across the organization. It is a privilege to lead AIG and our talented group of colleagues, and I look forward to continuing to build on our significant momentum on our journey to become a top performing company and market leader in everything we do.”

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