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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.       )
Filed by the Registrant ☑
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12
American International Group, Inc.
(Name of Registrant as Specified In Its Charter)
   
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 ( ):
(4)
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(5)
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Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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April 2, 2019​
Dear Fellow AIG Shareholder,
In 2018 we made significant foundational progress across AIG to strengthen core processes and position the company to become a profitable leader in the industry. AIG’s executive leadership team continues to work diligently to best position AIG to deliver long-term, sustainable value to all our stakeholders.
Additional detail on the many actions undertaken over the past year is included in this 2019 Proxy Statement and the 2018 Annual Report. The Board asks that you please review these materials and vote on the enclosed proposals.
The Board encourages you to vote for the first four proposals and against the fifth proposal, which would reduce the ownership threshold required to call a special shareholder meeting. The Board unanimously believes this fifth proposal is not in the best interest of our shareholders and that our existing governance practices, including shareholders’ existing right to call a special meeting, ensure Board and management accountability to shareholders.
We also invite you to attend the 2019 Annual Meeting of Shareholders, which will be held on Tuesday, May 21, 2019, at 11:00 a.m., at 175 Water Street, New York, NY. We encourage you to vote in advance of the meeting even if you plan to join in person. Every vote matters.
As always, thank you for your continued support and investment in AIG.
Sincerely,
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Douglas M. Steenland
Independent Chairman of the Board
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Brian Duperreault
President and Chief Executive Officer

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Notice of Annual Meeting of Shareholders​
Notice of Annual Meeting of Shareholders
To Be Held May 21, 2019April 2, 2019
American International Group, Inc.
175 Water Street, New York, N.Y. 10038
To the Shareholders of
AMERICAN INTERNATIONAL GROUP, INC.:
The Annual Meeting of Shareholders of AMERICAN INTERNATIONAL GROUP, INC. (AIG) will be held at 175 Water Street, New York, New York, on May 21, 2019, at 11:00 a.m., for the following purposes:
1.
To elect the thirteen nominees specified under “Proposal 1—Election of Directors” as directors of AIG to hold office until the next annual election and until their successors are duly elected and qualified;
2.
To vote, on a non-binding advisory basis, to approve executive compensation;
3.
To vote, on a non-binding advisory basis, on the frequency of future executive compensation votes;
4.
To act upon a proposal to ratify the selection of PricewaterhouseCoopers LLP as AIG’s independent registered public accounting firm for 2019;
5.
To consider a shareholder proposal to give shareholders who hold at least 10 percent of our outstanding common stock the right to call special meetings; and
6.
To transact any other business that may properly come before the meeting.
Shareholders of record at the close of business on March 25, 2019 will be entitled to vote at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 21, 2019. The Proxy Statement and 2018 Annual Report to Shareholders and other Soliciting Material are available in the Investors section of AIG’s corporate website at www.aig.com.
By Order of the Board of Directors
ROSE MARIE E. GLAZER
Corporate Secretary
If you plan on attending the meeting, please remember to bring photo identification with you. In addition, if you hold shares in “street name” and would like to attend the meeting, you must bring an account statement or other acceptable evidence indicating ownership of AIG Common Stock as of the close of business on March 25, 2019. Even if you intend to be present at the meeting, to ensure your shares are represented, please vote your shares over the internet or by telephone, or sign and date your proxy and return it at once by mail.

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Proxy StatementApril 2, 2019
American International Group, Inc.
175 Water Street, New York, N.Y. 10038
TIME AND DATE
11:00 a.m. on Tuesday, May 21, 2019.
Place
175 Water Street, New York, New York 10038.
Mailing Date
This Proxy Statement, 2018 Annual Report and proxy card or voting instructions were either made available to you over the internet or mailed to you on or about April 2, 2019.
Items of Business

To elect the thirteen nominees specified under “Proposal 1—Election of Directors” as directors of AIG to hold office until the next annual election and until their successors are duly elected and qualified;

To vote, on a non-binding advisory basis, to approve executive compensation;

To vote, on a non-binding advisory basis, on the frequency of future executive compensation votes;

To act upon a proposal to ratify the selection of PricewaterhouseCoopers LLP as AIG’s independent registered public accounting firm for 2019;

To consider a shareholder proposal to give shareholders who hold at least 10 percent of our outstanding common stock the right to call special meetings; and

To transact any other business that may properly come before the meeting.
Record Date
You can vote if you were a shareholder of record at the close of business on March 25, 2019.
Inspection of List of Shareholders of Record
A list of the shareholders of record as of March 25, 2019 will be available for inspection during ordinary business hours during the ten days prior to the meeting at AIG’s offices, 175 Water Street, New York, New York 10038.
Additional Information
Additional information regarding the matters to be acted on at the meeting is included in this proxy statement.
Proxy Voting
You can vote your shares over the internet or by telephone. if you received a paper proxy card by mail, you may also vote by signing, dating and returning the proxy card in the envelope provided.

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Table of Contents
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8
16
16
21
22
25
27
28
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
30
30
31
33
33
35
61
66
69
73
78
PROPOSAL 2—NON-BINDING ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION
79
PROPOSAL 3—non-binding advisory VOTE on the frequency of future executive compensation votes
81
REPORT OF AUDIT COMMITTEE AND RATIFICATION OF SELECTION OF ACCOUNTANTS
82
82
PROPOSAL 4—RATIFICATION OF SELECTION OF PRICEWATERHOUSECOOPERS LLP
84
85
86
PROPOSAL 5—SHAREHOLDER PROPOSAL ON SPECIAL SHAREHOLDER MEETINGS
87
87
88
90
95
95
95
95
96
96
96
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
97
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Executive Summary​
Executive Summary
This summary highlights information contained in this Proxy Statement. It does not contain all of the information you should consider in making a voting decision, and you should read the entire Proxy Statement carefully before voting. These proxy materials are first being sent to shareholders of American International Group, Inc., a Delaware corporation (AIG), commencing on or about April 2, 2019. For information on the details of the voting process and how to attend the AIG Annual Meeting of Shareholders to be held on May 21, 2019, or at any adjournment thereof  (Annual Meeting or 2019 Annual Meeting of Shareholders), please see “Voting Instructions and Information” on page 90.
Voting Matters and Vote Recommendation
Matter
Board Vote
Recommendation
For More Information, see:
Management Proposals
1.
Election of 13 Directors
FOR EACH DIRECTOR NOMINEE
Proposal 1—Election of Directors, page 8
2.
Advisory vote on executive compensation
FOR
Proposal 2—Non-Binding Advisory Vote to Approve Executive Compensation, page 79
3.
Advisory vote on the frequency of future executive compensation votes
ANNUAL
Proposal 3—Non-Binding Advisory Vote on the Frequency of Future Executive Compensation Votes, page 81
4.
Ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2019
FOR
Proposal 4—Ratification of Selection of PricewaterhouseCoopers LLP, page 84
Shareholder Proposal
5.
Shareholder proposal to give shareholders who hold at least 10 percent of our outstanding common stock the right to call special meetings
AGAINST
Proposal 5—Shareholder Proposal on Special Shareholder Meetings, page 87
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Executive Summary
PROPOSAL 1—ELECTION OF DIRECTORS
The following table provides summary information about each of our thirteen director nominees. AIG aims to maintain a balanced and independent board that is committed to representing the long-term interests of AIG’s shareholders, and which has the substantial and diverse expertise necessary to oversee AIG’s strategic and business planning as well as management’s approach to addressing the significant risks and challenges facing AIG. We are asking our shareholders to elect all thirteen director nominees at the Annual Meeting, to hold office until the next annual election and until their successors are duly elected and qualified or their earlier resignation. Each nominee is elected annually by a majority of votes cast.
Name
Age
Director
Since
Occupation/Background
Independent
Other Public Boards
Current
Committee
Memberships(1)
W. Don Cornwell 71 2011 Former Chairman and CEO of Granite Broadcasting Corporation Avon Products, Inc.; Pfizer Inc. CMRC (Chair)
NCGC
Brian Duperreault 71 2017 President and CEO of AIG
John H. Fitzpatrick 62 2011 Former Secretary General of The Geneva Association; Former Chief Financial Officer, Head of the Life and Health Reinsurance Business Group and Head of Financial Services of Swiss Re RCC (Chair)
Audit
William G. Jurgensen
67 2013 Former CEO of Nationwide Insurance
Lamb Weston Holdings, Inc.
Audit (Chair)
RCC
Christopher S. Lynch 61 2009 Former National Partner in Charge of Financial Services of KPMG LLP NCGC (Chair)
RCC
Tech
Henry S. Miller 73 2010 Chairman of Marblegate Asset Management, LLC; Former Chairman and Managing Director of Miller Buckfire & Co., LLC The Interpublic Group of Companies, Inc. CMRC
RCC
Linda A. Mills 69 2015 Former Corporate Vice President of Operations of Northrop Grumman Corporation Navient Corporation Audit
CMRC
Tech
Thomas F. Motamed 70 2019
Former Chairman and CEO of CNA Financial Corporation
CMRC
RCC
Suzanne Nora Johnson 61 2008 Former Vice Chairman of The Goldman Sachs Group, Inc. Intuit Inc.; Pfizer Inc.; Visa Inc. NCGC
RCC
Tech
Peter R. Porrino 62 N/A Former Executive Vice President and Chief Financial Officer of XL Group Ltd N/A
Amy L. Schioldager 56 N/A Former Senior Managing Director and Global Head of Beta Strategies at BlackRock, Inc. N/A
Douglas M. Steenland
67 2009 Former President and CEO of Northwest Airlines Corporation Hilton Worldwide Holdings Inc.; Travelport Worldwide Limited (2)
Therese M. Vaughan 62 N/A Former CEO of the National Association of Insurance Commissioners; Visiting Distinguished Professor and Former Dean of the College of Business and Public Administration at Drake University Verisk Analytics, Inc.; West Bancorporation, Inc.(3) N/A
(1)
The full Committee names are as follows:
Audit—Audit Committee
CMRC—Compensation and Management Resources Committee
NCGC—Nominating and Corporate Governance Committee
RCC—Risk and Capital Committee
Tech—Technology Committee
(2)
Mr. Steenland, as Independent Chairman of the Board, is an ex-officio, non-voting member of all Board Committees.
(3)
Ms. Vaughan is standing for election at West Bancorporation, Inc.’s Annual Meeting scheduled for April 25, 2019.
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Executive Summary
We believe our nominees’ diverse and complementary experiences and skills, along with the Board’s balanced tenure mix, promotes a well-functioning, highly qualified and independent Board of Directors. The Board has identified the following key qualifications and the range of professional experience as relevant and aligned to our current strategy and business needs.
KEY QUALIFICATIONS
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INDEPENDENT DIRECTOR NOMINEE EXPERIENCE
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INDEPENDENT DIRECTOR
NOMINEE TENURE
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INDEPENDENT DIRECTOR
NOMINEE DIVERSITY
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Executive Summary
Strong Corporate Governance Practices
The AIG Board is committed to good corporate governance and regularly reviews our practices, corporate governance developments and shareholder feedback to ensure continued effectiveness.

AIG has a highly engaged Board with balanced tenure and substantial and diverse expertise necessary to evaluate and oversee strategy and performance.

Independent Chairman is required in AIG’s By-laws.

Independent Chairman role is clearly defined, and the Chairman generally does not serve longer than a five-year term.

Directors are elected annually by a majority of votes cast (in uncontested elections).

All directors are independent (except CEO).

Former AIG CEOs cannot serve on the Board.

Directors’ interests are aligned with those of our shareholders through robust stock ownership requirements.

The Board, through the Nominating and Corporate Governance Committee, conducts annual evaluations of the Board and individual directors, and all Board Committees conduct annual self-evaluations.

No director attending less than 75 percent of meetings for two consecutive years will be re-nominated.

Directors generally may not stand for election after reaching age 75.

All directors may contribute to the agenda for Board meetings.

The Board Committee structure is organized around key strategic issues and designed to facilitate dialogue and efficiency.

Board Committee Chairs generally do not serve longer than a five-year term.

The Board provides strong risk management oversight including through the Risk and Capital Committee, Audit Committee and other Board Committees.

AIG has an extensive shareholder engagement program with director participation.

AIG’s By-laws include a proxy access right for shareholders.

AIG’s By-laws provide shareholders the ability to call a special meeting.
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Executive Summary
PROPOSAL 2—NON-BINDING ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
In his first full year as our President and Chief Executive Officer, Mr. Duperreault, together with his reshaped leadership team, began implementing a multi-year strategy focused on long-term, sustainable and profitable growth. In making decisions with respect to our 2018 executive compensation program, our Compensation Management and Resources Committee (the Committee) considered the scope and scale of the foundational changes achieved and milestones reached, as well as our absolute performance and shareholder return over the year.
Increased Shareholder Engagement
After our 2018 Annual Meeting, the Committee and senior management undertook a robust review of our executive compensation program that included direct engagement with our shareholders. In addition to soliciting shareholder feedback on our executive compensation program, the 2018 engagement meetings were intended to strengthen AIG’s relationship with our shareholders and develop a regular cadence for sustained outreach.
Shareholder Engagement in 2018 and Early 2019
What We Heard
How We Responded

Lack of clarity around use of discretion in compensation decisions

Increased transparency about compensation decisions, including clearly articulating assessment of achievements

Concern about alignment of accountability to stock performance

Directly aligned management’s interests to investors’ through 2018 long-term incentive awards which are 100 percent equity-based and comprise 75 percent performance-based vehicles in the form of performance share units and stock options

Committee largely exercised negative discretion to reduce 2018 short-term incentive awards to reflect our absolute performance and shareholder return in 2018

Need to address director over-boarding

Ensured all active CEO directors standing for re-election in 2019 serve on only one outside board

Desire for more disclosure regarding AIG’s sustainability practices

Committed in 2019 to explore the issuance of a climate-risk report aligned to the Task Force on Climate-related Financial Disclosure’s (TCFD) framework and to undertake a review of a climate change scenario analysis

Request for clear oversight by the Board over cybersecurity risks and human capital topics

Amended Technology Committee charter to specifically reference oversight of cybersecurity and CMRC charter to reference human capital topics, including diversity and inclusion

Focus on maintaining appropriate level of diversity within Board

Identified diversity as a critical component of an ongoing director search process and increased our diversity ratio in the 2019 slate of nominated directors
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Executive Summary
Chief Executive Officer Compensation
The 2018 annual target total direct compensation opportunity and pay mix for Mr. Duperreault, our President and Chief Executive Officer, is set forth below.
Annual
Base Salary​
Target
Short-Term
Incentive​
Target
Long-Term
Incentive​
Target
Total Direct
Compensation​
Brian Duperreault
President and Chief Executive Officer
$ 1,600,000 $ 3,200,000 $ 11,200,000 $ 16,000,000
CEO ANNUAL TARGET TOTAL DIRECT
COMPENSATION
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2018 Performance-Based Compensation
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Short-Term Incentive. For our named executive officers, our restructured short-term incentive award program in 2018 used both quantitative business performance metrics reflecting business unit accountability for performance and qualitative goals measuring individual performance. Following the end of 2018, the Committee reviewed the business performance results for the various business units applicable to the named executives, which ranged from approximately 89 percent to 140 percent of target, including an overall AIG quantitative performance score for our President and Chief Executive Officer of 108 percent. The Committee determined that these results, while reflecting significant strides toward achieving our multi-year strategy, were not reflective of our absolute performance or shareholder return over the year. As a result, the Committee adjusted final earned amounts for each of our named executives to 95 percent of target.
Long-Term Incentive. We revised our long-term incentive program for the 2018 to 2020 performance period to base performance share units on pre-established financial goals common for insurance companies aligned with the fundamental objectives of our new strategic plan. We also introduced stock options to tie our long-term incentive pay directly to enhancing shareholder value and reduced the percentage of restricted stock units as part of an executive’s long-term incentive opportunity. The Committee also evaluated modifying the award value granted each year above or below target based on individual performance and the executive’s role in advancing AIG’s success over the award’s term.
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Executive Summary
2018 Earned Short-Term Incentives and 2016-2018 Long-Term Incentives
The following table summarizes the earned 2018 short-term incentive and long-term incentive for the 2016 to 2018 performance period as a percentage of target pay opportunity for each current named executive.
Named Executive
Officer
2018 Short-Term Incentive
Cash, earned based on quantitative
business metrics and individual
performance
2016-2018 Long-Term Incentive
Equity, earned based on relative total
shareholder return
Brian Duperreault 95% Not a Participant (Joined AIG in 2017)
Mark D. Lyons 95% Not a Participant (Joined AIG in 2018)
Peter Zaffino 95% Not a Participant (Joined AIG in 2017)
Douglas A. Dachille 95% 0%
Kevin T. Hogan 95% 0%
Pre-2018 Pay for Performance History
Our long-term incentive awards, representing the largest part of any named executive’s target compensation, are granted entirely in equity and tie pay directly to performance. As a result of our stock performance over the past three years the realized value to date of our 2015 through 2017 long-term incentive awards has been a small percentage of the value on the grant date. The table on the right shows the value of our 2015, 2016 and 2017 long-term incentive awards as a percentage of target as of December 31, 2018. The 2015 and 2016 awards are shown at actual earned amounts as determined by the Committee. The amount for 2017 awards is subject to change based on actual performance through the 2017-2019 performance period as determined in the first quarter of 2020.
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PROPOSAL 3—Non-Binding Vote on the Frequency of Future Executive Compensation Votes
We are asking shareholders to vote to hold the non-binding advisory vote on executive compensation annually.
PROPOSAL 4—RATIFICATION OF SELECTION OF PRICEWATERHOUSECOOPERS LLP
We are asking shareholders to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2019.
The Audit Committee annually evaluates the qualifications, performance and independence of the independent auditor, including the lead partner. As a result of this evaluation, the Audit Committee and Board believe the continued retention of PricewaterhouseCoopers LLP is in the best interests of AIG and its shareholders.
PROPOSAL 5—SHAREHOLDER PROPOSAL ON SPECIAL SHAREHOLDER MEETINGS
The proponent is asking shareholders to vote to ask the Board to lower the threshold required for shareholders to call a special meeting from holders who together own an aggregate of at least 25 percent of our outstanding common stock, which is currently provided in AIG’s By-laws, to holders who together own an aggregate of at least 10 percent of our outstanding common stock (or the closest percentage to 10 percent according to state law).
The Board recommends that you vote AGAINST this proposal.
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Proposal 1—Election of Directors
  
PROPOSAL 1—ELECTION OF DIRECTORS
AIG’s Board of Directors currently consists of twelve directors. All directors serve a one-year term. Ms. Stone is not standing for re-election and is retiring from the Board this year because, at the time of the Annual Meeting, she will have reached the age of 75, which is the general retirement guideline under our Corporate Governance Guidelines. Mr. Rittenmeyer has informed AIG that he will not be standing for re-election to the Board at the Annual Meeting. The Board would like to thank Ms. Stone and Mr. Rittenmeyer, whose terms will end at the Annual Meeting, for their service and valuable contributions as directors. We are asking our shareholders to re-elect the remaining ten directors at the Annual Meeting and to elect three additional nominees, Mr. Porrino and Mss. Schioldager and Vaughan, who are not current members of AIG’s Board of Directors. If elected, the thirteen directors will hold office until the next annual election and until their successors are duly elected and qualified or their earlier resignation.
It is the intention of the persons named in the accompanying form of proxy to vote for the election of the nominees listed below. All of the nominees are currently members of AIG’s Board of Directors. It is not expected that any of the nominees will become unavailable for election as a director, but if any should become unavailable prior to the Annual Meeting, proxies will be voted for such persons as the persons named in the accompanying form of proxy may determine in their discretion.
Directors will be elected by a majority of the votes cast by the shareholders of AIG’s common stock, par value $2.50 per share (AIG Common Stock), which votes cast are either “for” or “against” election. Pursuant to AIG’s By-laws and Corporate Governance Guidelines, each nominee has submitted to the Board an irrevocable resignation from the Board that would become effective upon (1) the failure of such nominee to receive the required vote at the shareholder meeting and (2) Board acceptance of such resignation. In the event that a nominee fails to receive the required vote, AIG’s Nominating and Corporate Governance Committee will then make a recommendation to the Board on the action to be taken with respect to the resignation. The Board will accept such resignation unless the Nominating and Corporate Governance Committee recommends and the Board determines that the best interests of AIG and its shareholders would not be served by doing so.
The Board believes that, if elected, the nominees will continue to provide effective oversight of AIG’s business and continue to advance our shareholders’ interests by drawing upon their collective qualifications, skills and experiences, as summarized on page 3 and below.
Below are biographies of each of the nominees for director, including the principal occupation or affiliation and public company directorships held by each nominee during the past five years. The nominees have extensive direct experience in the oversight of public companies as a result of their service on AIG’s Board and the boards of other public companies and their involvement in the other organizations described below.
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Proposal 1—Election of Directors​
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Director since: 2011
Age: 71
Committees:

Compensation and Management Resources (Chair)

Nominating and Corporate Governance
Other Directorships:

Current: Avon Products, Inc.; Pfizer Inc.
W. DON CORNWELL
Former Chairman of the Board and Chief Executive Officer of Granite Broadcasting Corporation
CAREER HIGHLIGHTS
Mr. Cornwell is the former Chairman of the Board and Chief Executive Officer of Granite Broadcasting Corporation, serving from 1988 until his retirement in August 2009, and Vice Chairman until December 2009. Mr. Cornwell spent 17 years at Goldman, Sachs & Co. where he served as Chief Operating Officer of the Corporate Finance Department from 1980 to 1988 and Vice President of the Investment Banking Division from 1976 to 1988.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Cornwell’s experience in finance and strategic business transformations, as well as his professional experience across the financial services industry, AIG’s Board has concluded that Mr. Cornwell should be re-elected to the Board.
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Director since: 2017
Age: 71
Other Directorships:

Former (past 5 years): Johnson Controls International plc (formerly Tyco International, plc)
BRIAN DUPERREAULT
President and Chief Executive Officer of AIG
CAREER HIGHLIGHTS
Mr. Duperreault has been AIG’s President and Chief Executive Officer since May 2017, when he also joined the Board of Directors. Previously, Mr. Duperreault was the Chief Executive Officer of Hamilton Insurance Group, Ltd. (Hamilton), a Bermuda-based holding company of property and casualty insurance and reinsurance operations in Bermuda, the U.S. and the UK, from December 2013 to May 2017, and served as Chairman of Hamilton from February 2016 to May 2017. He served as President and Chief Executive Officer of Marsh & McLennan Companies, Inc. from February 2008 until his retirement in December 2012. Before joining Marsh & McLennan Companies, he served as non-executive Chairman of ACE Limited from 2006 through the end of 2007 and as Chief Executive Officer from October 1994 to May 2004. Prior to joining ACE, Mr. Duperreault served in various senior executive positions with AIG and its affiliates from 1973 to 1994.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Duperreault’s deep experience in the insurance industry, his history with AIG and his management of large, complex, international institutions, AIG’s Board has concluded that Mr. Duperreault should be re-elected to the Board.
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Proposal 1—Election of Directors
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Director since: 2011
Age: 62
Committees:

Risk and Capital (Chair)

Audit
Other Directorships:

None
JOHN H. FITZPATRICK
Former Secretary General of The Geneva Association; Former Chief Financial Officer, Head of the Life and Health Reinsurance Business Group and Head of Financial Services of Swiss Re
CAREER HIGHLIGHTS
Mr. Fitzpatrick has been Chairman of Oak Street Management Co., LLC, an insurance/management consulting company, and Oak Family Advisors, LLC, a registered investment advisor, since 2010. He was Chairman of White Oak Global Advisors LLC, an asset management firm lending to small and medium sized companies, from September 2015 to September 2017. In 2014, Mr. Fitzpatrick completed a two-year term as Secretary General of The Geneva Association. From 2006 to 2010, he was a partner at Pension Corporation and a director of Pension Insurance Corporation Ltd. From 1998 to 2006, Mr. Fitzpatrick was a member of Swiss Re’s Executive Board Committee and served at Swiss Re as Chief Financial Officer, Head of the Life and Health Reinsurance Business Group and Head of Financial Services. From 1996 to 1998, Mr. Fitzpatrick was a partner in insurance private equity firms sponsored by Zurich Financial Services, Credit Suisse and Swiss Re. From 1990 to 1996, Mr. Fitzpatrick served as the Chief Financial Officer and a Director of Kemper Corporation, a New York Stock Exchange (NYSE)-listed insurance and financial services organization where he started his career in corporate finance in 1978. Mr. Fitzpatrick is a Certified Public Accountant and a Chartered Financial Analyst.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Fitzpatrick’s broad experience in the insurance and reinsurance industry, as well as his professional experience in insurance policy and regulation, AIG’s Board has concluded that Mr. Fitzpatrick should be re-elected to the Board.
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Proposal 1—Election of Directors​
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Director since: 2013
Age: 67
Committees:

Audit (Chair)

Risk and Capital
Other Directorships:

Current: Lamb Weston Holdings, Inc.

Former (past 5 years): Conagra Foods, Inc.
WILLIAM G. JURGENSEN
Former Chief Executive Officer of Nationwide Insurance
CAREER HIGHLIGHTS
Mr. Jurgensen is the former Chief Executive Officer of Nationwide Mutual Insurance Company and Nationwide Financial Services, Inc., serving from May 2000 to February 2009. During this time, he also served as director and Chief Executive Officer of several other companies within the Nationwide enterprise. Prior to his time in the insurance industry, he spent 27 years in the commercial banking industry. Before joining Nationwide, Mr. Jurgensen was an Executive Vice President with BankOne Corporation (now a part of JPMorgan Chase & Co.) where he was responsible for corporate banking products, including capital markets, international banking and cash management. He managed the merger integration between First Chicago Corporation and NBD Bancorp, Inc. and later was Chief Executive Officer for First Card, First Chicago’s credit card subsidiary. At First Chicago, he was responsible for retail banking and began his career there as Chief Financial Officer in 1990. Mr. Jurgensen started his banking career at Norwest Corporation (now a part of Wells Fargo & Company) in 1973. The majority of Mr. Jurgensen’s career has involved capital markets, securities trading and investment activities, with the balance in corporate banking.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Jurgensen’s experience in insurance, financial services and risk management, AIG’s Board has concluded that Mr. Jurgensen should be re-elected to the Board.
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Director since: 2009
Age: 61
Committees:

Nominating and Corporate Governance (Chair)

Risk and Capital

Technology
Other Directorships:

Former (past 5 years): Federal Home Loan Mortgage Corporation
CHRISTOPHER S. LYNCH
Former National Partner in Charge of Financial Services of KPMG LLP
CAREER HIGHLIGHTS
Mr. Lynch has been an independent consultant since 2007, providing a variety of services to public and privately held companies, including enterprise strategy, corporate restructuring, risk management, governance, financial accounting and regulatory reporting, and troubled-asset management. Prior to that, Mr. Lynch was the former National Partner in Charge of KPMG LLP’s Financial Services Line of Business. He held a variety of positions with KPMG over his 29-year career, including chairing KPMG’s Americas Financial Services Leadership team and being a member of the Global Financial Services Leadership and the U.S. Industries Leadership teams. Mr. Lynch was an audit signing partner under Sarbanes-Oxley and served as lead or client service partner for some of KPMG’s largest financial services clients. He also served as a Partner in KPMG’s National Department of Professional Practice and as a Practice Fellow at the Financial Accounting Standards Board. Mr. Lynch is a member of the Advisory Board of the Stanford Institute for Economic Policy Research and a member of the Audit Committee Chair Advisory Council of the National Association of Corporate Directors.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Lynch’s experience in finance, accounting and risk management and strategic business transformations, as well as his professional experience across the financial services industry, AIG’s Board has concluded that Mr. Lynch should be re-elected to the Board.
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Proposal 1—Election of Directors
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Director since: 2010
Age: 73
Committees:

Compensation and Management Resources

Risk and Capital
Other Directorships:

Current: The Interpublic Group of Companies, Inc.

Former (past 5 years): Ally Financial Inc.
HENRY S. MILLER
Chairman of Marblegate Asset Management, LLC; Former Chairman and Managing Director of Miller Buckfire & Co., LLC
CAREER HIGHLIGHTS
Mr. Miller co-founded and has been Chairman of Marblegate Asset Management, LLC since 2009. Mr. Miller was co-founder, Chairman and a Managing Director of Miller Buckfire & Co., LLC, an investment bank, from 2002 to 2011 and Chief Executive Officer from 2002 to 2009. Prior to founding Miller Buckfire & Co., LLC, Mr. Miller was Vice Chairman and a Managing Director at Dresdner Kleinwort Wasserstein and its predecessor company Wasserstein Perella & Co., where he served as the global head of the firm’s financial restructuring group. Prior to that, Mr. Miller was a Managing Director and Head of both the Restructuring Group and Transportation Industry Group of Salomon Brothers Inc. From 1989 to 1992, Mr. Miller was a managing director and, from 1990 to 1992, co-head of investment banking at Prudential Securities.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Miller’s experience in strategic business transformations as well as his professional experience across the financial services industry, AIG’s Board has concluded that Mr. Miller should be re-elected to the Board.
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Director since: 2015
Age: 69
Committees:

Audit

Compensation and Management Resources

Technology
Other Directorships:

Current: Navient Corporation
LINDA A. MILLS
Former Corporate Vice President of Operations of Northrop Grumman Corporation
CAREER HIGHLIGHTS
Ms. Mills is the former Corporate Vice President of Operations for Northrop Grumman Corporation, with responsibility for operations, including risk management, engineering and information technology. During her 12 years with Northrop Grumman, from 2002 to 2014, Ms. Mills held a number of operational positions, including Corporate Vice President and President of Information Systems and Information Technology sectors; President of the Civilian Agencies Group; and Vice President of Operations and Process in the firm’s Information Technology Sector. Prior to joining Northrop Grumman, Ms. Mills was Vice President of Information Systems and Processes at TRW, Inc. She began her career as an engineer at Bell Laboratories, Inc.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Ms. Mills’ in-depth experience with large and complex, often international, operations, risk management, information technology and cyber security, and her success in managing a significant line of business at Northrop Grumman, AIG’s Board has concluded that Ms. Mills should be re-elected to the Board.
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Proposal 1—Election of Directors​
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Director since: 2019
Age: 70
Committees:

Compensation and Management Resources

Risk and Capital
Other Directorships:

Former (past 5 years): CNA Financial Group; Verisk Analytics, Inc.
THOMAS F. MOTAMED
Former Chairman and Chief Executive Officer of CNA Financial Corporation
CAREER HIGHLIGHTS
Mr. Motamed was Chairman and Chief Executive Officer of CNA Financial Corporation from 2009 to 2016. Prior to CNA, Mr. Motamed spent 31 years at The Chubb Corporation, where he began his career as a claims trainee and rose to Vice Chairman and Chief Operating Officer. He is a past Chairman of the Insurance Information Institute and is Chair Emeritus for Adelphi University.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Motamed’s deep experience in the insurance industry, risk management and management of insurance organizations, AIG’s Board has concluded that Mr. Motamed should be re-elected to the Board.
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Director since: 2008
Age: 61
Committees:

Nominating and Corporate Governance

Risk and Capital

Technology
Other Directorships:

Current: Intuit Inc.; Pfizer Inc.; Visa Inc.
SUZANNE NORA JOHNSON
Former Vice Chairman of The Goldman Sachs Group, Inc.
CAREER HIGHLIGHTS
Ms. Nora Johnson is the former Vice Chairman of The Goldman Sachs Group, Inc., serving from 2004 to 2007. During her 21 years at Goldman Sachs, she also served as the Chairman of the Global Markets Institute, Head of the Global Investment Research Division and Head of the Global Investment Banking Healthcare Business.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Ms. Nora Johnson’s experience in managing large, complex, international institutions, her experience in finance as well as her professional experience across the financial services industry, AIG’s Board has concluded that Ms. Nora Johnson should be re-elected to the Board.
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Proposal 1—Election of Directors
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Age: 62
Other Directorships:

None
Peter R. Porrino
Former Executive Vice President and Chief Financial Officer of XL Group Ltd
CAREER HIGHLIGHTS
Mr. Porrino is the former Executive Vice President and Chief Financial Officer of XL Group Ltd, a role which he held from 2011 to 2017. He was Senior Advisor to the Chief Executive Officer at XL Group from 2017 to 2018. Prior to joining XL Group, Mr. Porrino served as the Global Insurance Industry Leader at Ernst & Young LLP from 1999 through 2011, where he was responsible for Ernst & Young’s Americas and Global insurance industry practices and served as the lead partner on Ernst & Young’s largest insurance account until his departure. Prior to Ernst & Young, Mr. Porrino served as President and Chief Executive Officer of Consolidated International Group and as Chief Financial Officer and Chief Operating Officer of Zurich Re Centre, a subsidiary of Zurich Insurance Group focused on property and casualty reinsurance. Mr. Porrino began his career as an auditor at Ernst & Young.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Porrino’s experience in finance, accounting and risk management, as well as his professional experience across the insurance industry, AIG’s Board has concluded that Mr. Porrino should be elected to the Board.
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Age: 56
Other Directorships:

None
Amy L. Schioldager
Former Senior Managing Director and Global Head of Beta Strategies at BlackRock, Inc.
CAREER HIGHLIGHTS
Ms. Schioldager is the former Senior Managing Director and Global Head of Beta Strategies at BlackRock, Inc. In this role, which she held from 2006 to 2017, Ms. Schioldager was responsible for managing the Index Equity business across seven global offices. During her more than 25 years at BlackRock, Ms. Schioldager held various other leadership positions and also served as a member of the Global Executive Committee from 2012 to 2017 and Vice Chair of the Corporate Governance Committee from 2008 to 2015. She also founded and led BlackRock’s Women’s Initiative. Ms. Schioldager began her career as a fund accountant at Wells Fargo Investment Advisors.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Ms. Schioldager’s experience in managing international organizations, as well as her professional experience in investments, asset management and across the financial services industry, AIG’s Board has concluded that Ms. Schioldager should be elected to the Board.
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Proposal 1—Election of Directors​
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Director since: 2009
Age: 67
Committees:

As Independent Chairman, Mr. Steenland is an ex-officio, non-voting member of all Board committees
Other Directorships:

Current: Hilton Worldwide Holdings Inc.; Travelport Worldwide Limited

Former (past 5 years): Chrysler Group LLC; International Lease Finance Corporation; Digital River, Inc.; Performance Food Group Company
DOUGLAS M. STEENLAND
Former President and Chief Executive Officer of Northwest Airlines Corporation
CAREER HIGHLIGHTS
Mr. Steenland is the former Chief Executive Officer of Northwest Airlines Corporation, serving from 2004 to 2008, and President, serving from 2001 to 2004. Prior to that, he served in a number of Northwest Airlines executive positions after joining Northwest Airlines in 1991, including Executive Vice President, Chief Corporate Officer and Senior Vice President and General Counsel. Mr. Steenland retired from Northwest Airlines upon its merger with Delta Air Lines, Inc. Prior to joining Northwest Airlines, Mr. Steenland was a senior partner at a Washington, D.C. law firm that is now part of DLA Piper.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Mr. Steenland’s experience in managing large, complex, international institutions and his experience in strategic business transformations, AIG’s Board has concluded that Mr. Steenland should be re-elected to the Board.
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Age: 62
Other Directorships:

Current: Verisk Analytics, Inc.; West Bancorporation, Inc. (standing for election at its Annual Meeting scheduled for April 25, 2019)

Former (past 5 years): Validus Holdings, Ltd.
THERESE M. VAUGHAN
Former Chief Executive Officer of the National Association of Insurance Commissioners; Visiting Distinguished Professor and Former Dean of the College of Business and Public Administration at Drake University
CAREER HIGHLIGHTS
Ms. Vaughan has been the Robb B. Kelley Visiting Distinguished Professor of Insurance and Actuarial Science at Drake University since 2017. She previously served as the Dean of the College of Business and Public Administration at Drake University from 2014 to 2017. From 2009 to 2012, she served as the Chief Executive Officer of the National Association of Insurance Commissioners (NAIC). During her time at NAIC, Ms. Vaughan also served as a member of the Executive Committee of the International Association of Insurance Supervisors and the steering committee for the U.S./E.U. Insurance Dialogue Project. In 2012, she chaired the Joint Forum, a Basel, Switzerland-based group of banking, insurance, and securities supervisors. Additionally, Ms. Vaughan was the first female Insurance Commissioner for the State of Iowa, a role which she held for over ten years.
KEY EXPERIENCE AND QUALIFICATIONS
In light of Ms. Vaughan’s experience in the insurance industry as well as her professional experience in insurance regulation, education, research and corporate governance, AIG’s Board has concluded that Ms. Vaughan should be elected to the Board.
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Corporate Governance  Governance
Corporate Governance
GOVERNANCE
AIG’s Board regularly reviews corporate governance developments and modifies its Corporate Governance Guidelines, charters and practices from time to time. AIG’s current Corporate Governance Guidelines (which include our Director Independence Standards) and the charters of the Audit Committee, the Compensation and Management Resources Committee, the Nominating and Corporate Governance Committee, the Risk and Capital Committee and the Technology Committee are available in the Leadership and Governance section of AIG’s corporate website at www.aig.com or in print by writing to American International Group, Inc., 175 Water Street, New York, New York 10038, Attention: Investor Relations.
AIG’s Director, Executive Officer and Senior Financial Officer Code of Business Conduct and Ethics and Code of Conduct for employees are both available in the Leadership and Governance section of AIG’s corporate website at www.aig.com or in print by writing to American International Group, Inc., 175 Water Street, New York, New York 10038, Attention: Investor Relations. Any amendment to AIG’s Director, Executive Officer and Senior Financial Officer Code of Business Conduct and Ethics and any waiver applicable to AIG’s directors, executive officers or senior financial officers will be posted on AIG’s website within the time period required by the United States Securities and Exchange Commission (SEC) and the NYSE.
Strong Corporate Governance Practices
The AIG Board is committed to good corporate governance and regularly reviews our practices, corporate governance developments and shareholder feedback to ensure continued effectiveness.

AIG has a highly engaged Board with balanced tenure and substantial and diverse expertise necessary to evaluate and oversee strategy and performance.

Independent Chairman is required in AIG’s By-laws.

Independent Chairman role is clearly defined, and the Chairman generally does not serve longer than a five-year term.

Directors are elected annually by a majority of votes cast (in uncontested elections).

All directors are independent (except CEO).

Former AIG CEOs cannot serve on the Board.

Directors’ interests are aligned with those of our shareholders through robust stock ownership requirements.

The Board, through the Nominating and Corporate Governance Committee, conducts annual evaluations of the Board and individual directors, and all Board Committees conduct annual self-evaluations.

No director attending less than 75 percent of meetings for two consecutive years will be re-nominated.

Directors generally may not stand for election after reaching age 75.

All directors may contribute to the agenda for Board meetings.

The Board Committee structure is organized around key strategic issues and designed to facilitate dialogue and efficiency.

Board Committee Chairs generally do not serve longer than a five-year term.

The Board provides strong risk management oversight including through the Risk and Capital Committee, Audit Committee and other Board Committees.

AIG has an extensive shareholder engagement program with director participation.

AIG’s By-laws include a proxy access right for shareholders.

AIG’s By-laws provide shareholders the ability to call a special meeting.
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Corporate Governance  Governance
Director Independence and Effectiveness
AIG aims to maintain a balanced and independent board that is committed to representing the long-term interests of AIG’s shareholders, and which has the substantial and diverse expertise necessary to oversee AIG’s strategic and business planning as well as management’s approach to addressing significant risks and challenges facing AIG.
Director Independence Assessment. Using the AIG Director Independence Standards, the Board, on the recommendation of the Nominating and Corporate Governance Committee, determined that each of AIG’s twelve non-management director nominees—Mss. Nora Johnson, Mills, Schioldager and Vaughan and Messrs. Cornwell, Fitzpatrick, Jurgensen, Lynch, Miller, Motamed, Porrino and Steenland—are independent under NYSE listing standards and the AIG Director Independence Standards. Mr. Duperreault is the only director nominee who holds an AIG management position and, therefore, is not an independent director. Messrs. Fisher and Merksamer, who did not stand for election at the 2018 Annual Meeting, Ms. Stone who is retiring from the Board at the 2019 Annual Meeting and Mr. Rittenmeyer who is not standing for re-election to the Board, were also determined by the Board, on the recommendation of the Committee, to be independent under the NYSE listing standards and the AIG Director Independence Standards.
In making the independence determinations, the Nominating and Corporate Governance Committee and the Board of Directors considered relationships arising from: (1) in the case of certain directors, contributions by AIG to charitable organizations with which they are affiliated; (2) in the case of certain directors, investments and insurance products provided to them by AIG in the ordinary course of business and on the same terms made available to third parties; and (3) in the case of Mr. Lynch, the summer internship in 2014 and the offer, acceptance and commencement of full-time employment of his son with AIG in 2016. None of these relationships exceeded the thresholds set forth in the AIG Director Independence Standards.
Independent Chairman. AIG’s By-laws require that the role of the Chairman be separate from that of the Chief Executive Officer and that the Chairman be an independent director. AIG believes that this structure is optimal because it permits the Chairman to focus on the governance of the Board and to interact with AIG’s various stakeholders while permitting the Chief Executive Officer to focus more on AIG’s business. AIG’s Corporate Governance Guidelines provide for an annual review of the Chairman and that the Chairman generally not serve for longer than a five-year term. Our current Chairman, Mr. Steenland, has served in this position since 2015.
The duties of the Chairman are clearly defined and include:

Overseeing Board meeting agenda preparation in consultation with the Chief Executive Officer and preparing agendas for meetings of the independent directors;

Chairing Board meetings and executive sessions of the independent directors;

Leading the independent directors in the Chief Executive Officer review process and discussions regarding management succession;

Interacting regularly with the Chief Executive Officer, including discussing strategic initiatives and their implementation;

Overseeing distribution of information and reports to the Board;

Overseeing the Board and Board Committees’ annual self-evaluation process;

Serving as non-voting member of each Board Committee; and

Participating in engagement with shareholders.
Director Tenure and Board Refreshment and Diversity. Board composition, supplemented by a thoughtful approach to refreshment, is a priority for AIG. The Board believes that it is desirable to maintain a mix of longer-tenured, experienced directors and newer directors with fresh perspectives. In 2019, the Board added one new independent director—Mr. Motamed—and we have nominated for election at the Annual Meeting three additional new directors—Mr. Porrino and Mss. Schioldager and Vaughan. These new Directors will further strengthen our Board with their extensive experience, including in the insurance industry, risk management, financial services, investments, regulatory matters and operations.
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Corporate Governance  Governance
The average tenure of the independent director nominees is less than six years. In addition, under AIG’s Corporate Governance Guidelines, the Chairman and Committee Chairs generally do not serve for longer than a five-year term and former Chief Executive Officers of AIG cannot serve as directors. No individual may stand for election as a director after reaching the age of 75, and the Board may only waive this requirement for a one-year period if, on the recommendation of the Nominating and Corporate Governance Committee, it determines such waiver to be in the best interests of AIG.
As part of its approach to Board refreshment, the Board believes in maintaining a highly diverse Board. In that regard, and as described below under “—Report of the Nominating and Corporate Governance Committee—Board Membership and Composition—Diversity Considerations,” the Nominating and Corporate Governance Committee considers a broad spectrum of diversity characteristics when evaluating director candidates.
Director and Board Accountability and Evaluations. The AIG Board believes that self-evaluations of the Board, the standing Committees of the Board and individual directors are important elements of corporate governance. Pursuant to AIG’s Corporate Governance Guidelines, the Board, acting through the Nominating and Corporate Governance Committee and under the general oversight of the Chairman, conducts an annual self-evaluation and an evaluation of each member of the Board, and each standing Committee conducts an annual self-evaluation.
The Board considers director attendance at Board and Committee meetings an essential duty of a director. As a result, AIG’s Corporate Governance Guidelines also provide that any director who, for two consecutive calendar years, attends fewer than 75 percent of the total regular meetings of the Board and the meetings of all Committees of which such director is a voting member, will not be nominated for re-election at the annual meeting in the next succeeding calendar year, absent special circumstances that may be taken into account by the Board and the Nominating and Corporate Governance Committee in making its recommendations to the Board. As described below, all director nominees satisfied this attendance threshold.
Oversight of Risk Management
The Board oversees the management of risk (including, for example, risks related to market conditions, reserves, catastrophes, investments, liquidity, capital and cybersecurity) through the complementary functioning of the Risk and Capital Committee and the Audit Committee and interaction with other Committees of the Board. The Risk and Capital Committee oversees AIG’s Enterprise Risk Management (ERM) as one of its core responsibilities and reviews AIG’s significant risk assessment and risk management policies. The Audit Committee also discusses the guidelines and policies governing the process by which AIG assesses and manages risk and considers AIG’s major risk exposures and how they are monitored and controlled. The Chairs of the two Committees then coordinate with each other and the Chairs of the other Committees of the Board to help ensure that each Committee has received the information that it needs to carry out its responsibilities with respect to risk management. Both the Risk and Capital Committee and the Audit Committee report to the Board with respect to any notable risk management issues. The Compensation and Management Resources Committee, in conjunction with AIG’s Chief Risk Officer, is responsible for reviewing the relationship between AIG’s risk management policies and practices and the incentive compensation arrangements applicable to senior executives. For further information regarding the annual risk assessment of compensation plans, see “Executive Compensation—Report of the Compensation and Management Resources Committee.”
The Technology Committee reviews AIG’s cybersecurity risks, policies, controls and procedures, including: (1) AIG’s procedures to identify and assess internal and external cybersecurity risks, (2) AIG’s controls to protect from cyberattacks, unauthorized access or other malicious acts and risks, (3) AIG’s procedures to detect, respond to, mitigate negative effects from and recover from cybersecurity attacks, and (4) AIG’s controls and procedures for fulfilling applicable regulatory reporting and disclosure obligations related to cybersecurity risks, costs and incidents.
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Corporate Governance  Governance
Sustainability and Corporate Social Responsibility
The Nominating and Corporate Governance Committee oversees and reports to the Board as necessary with respect to sustainability, corporate social responsibility and public policy matters. Information describing AIG’s philosophy and practices regarding sustainability, corporate citizenship, human capital matters and governance can be found in our 2018 Annual Report to Shareholders, which is available in the Investors section of AIG’s corporate website at www.aig.com. Additional information on developments in AIG’s reporting with regards to sustainability—including our commitment to explore the issuance of a climate-risk report aligned to the TCFD’s framework and to undertake a review of a climate change scenario analysis—can be found on the Citizenship section of AIG’s corporate website at www.aig.com.
Shareholder Engagement
Fostering long-term relationships with our shareholders and maintaining their trust is a priority for the Board. Direct engagement with shareholders helps us gain useful feedback on a wide variety of topics, including corporate governance, executive compensation, corporate social responsibility, business strategy and performance and related matters. Shareholder feedback also helps in better tailoring the public information provided to address the interests and inquiries of shareholders.
Accordingly, AIG has long maintained an active, ongoing dialogue with shareholders and other stakeholders. As part of this process, the Independent Chairman, other members of our Board and members of senior management periodically participate in meetings with shareholders to discuss and obtain feedback on a variety of matters.
After our 2018 Annual Meeting, AIG renewed our efforts to engage consistently and productively with our shareholders. During 2018, senior management reached out to 29 of our shareholders representing more than 63 percent of outstanding shares (including all of our top 12 shareholders representing more than 50 percent of outstanding shares). We met with each shareholder who accepted our invitation, including 23 of our institutional investors owning more than 53 percent of outstanding AIG Common Stock. These meetings included members of senior management and in many instances representatives of our Board and covered topics such as corporate strategy, succession planning, corporate governance and Board practices, environmental and social issues and our executive compensation program. These meetings were intended to strengthen AIG’s relationship with our shareholders and develop a regular cadence for sustained governance-focused outreach that positions AIG to engage consistently and productively with shareholders. For further information about shareholder engagement and feedback received after our 2018 Annual Meeting, see “Executive Compensation—Compensation Discussion and Analysis—Our Shareholder Engagement.”
These efforts are complementary to outreach conducted by our President and Chief Executive Officer and other members of senior management through AIG’s Investor Relations department as they regularly meet with shareholders and participate in investor conferences in the United States and abroad. Investor presentations are made available in the Investors—Webcasts and Presentations section of AIG’s corporate website at www.aig.com.
Shareholder feedback is communicated directly to our directors and helps inform Board discussions on a range of key areas. Going forward, AIG and the Board remain committed to consistent and substantive shareholder engagement and to incorporating shareholder perspectives in our governance and compensation decisions.
Director Recommendations by Shareholders. The Nominating and Corporate Governance Committee considers shareholder feedback when determining whether to recommend that the Board nominate a director for re-election and takes into account the views of interested shareholders as appropriate when filling a vacancy on the Board. The Nominating and Corporate Governance Committee gives appropriate consideration to candidates for the Board submitted by shareholders and evaluates such candidates in the same manner as other candidates identified by or submitted to the Committee.
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Corporate Governance  Governance
Proxy Access. AIG’s By-laws permit eligible shareholders with a significant long-term interest in AIG to include their own director nominees in AIG’s proxy statement for the annual meeting. The Board believes such proxy access is an additional mechanism for Board accountability and for ensuring that Board nominees are supported by AIG’s long-term shareholders.
Under the proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning three percent or more of AIG Common Stock continuously for at least three years may nominate and include in AIG’s annual meeting proxy materials director nominees constituting up to the greater of two individuals or 20 percent of the Board of Directors, so long as the shareholder(s) and the nominee(s) satisfy the requirements specified in AIG’s By-laws. Shareholders who wish to submit director nominees for election at the 2020 Annual Meeting of Shareholders pursuant to the proxy access by-law may do so in compliance with the procedures described in “Other Matters—Shareholder Proposals for the 2020 Annual Meeting.”
Board Meetings and Attendance
There were 13 meetings of the Board during 2018. The independent directors meet in executive session, without the President and Chief Executive Officer present, in conjunction with each regularly scheduled Board meeting. Mr. Steenland, as Independent Chairman of the Board, presided at the executive sessions. For 2018, all of the directors attended at least 75 percent of the aggregate of all meetings of the Board and of the Committees of the Board on which they served.
Pursuant to the Corporate Governance Guidelines, all directors are expected to attend the Annual Meeting. All directors standing for election at the 2018 Annual Meeting attended the 2018 Annual Meeting.
Communicating with Directors
AIG has adopted procedures on the reporting of concerns regarding accounting and other matters and on communicating with non-management directors. These procedures are available in the Leadership and Governance section of AIG’s corporate website at www.aig.com.
Shareholders and other interested parties may communicate with any of the independent directors, including the Chairman and Committee Chairs, by writing in care of Vice President—Corporate Governance, American International Group, Inc., 175 Water Street, New York, New York 10038 or by email to: boardofdirectors@aig.com.
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Corporate Governance  Report of the Nominating and Corporate Governance Committee
REPORT OF THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Overview
The role of the Nominating and Corporate Governance Committee is to identify individuals qualified to become Board members and recommend these individuals to the Board for nomination, election or appointment as members of the Board and its Committees, to advise the Board on corporate governance matters and to oversee the evaluation of the Board and its Committees.
Committee Organization
Committee Charter. The Nominating and Corporate Governance Committee’s charter is available in the Leadership and Governance section of AIG’s corporate website at www.aig.com.
Independence. The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is independent, as required by NYSE listing standards.
Conduct of meetings and governance process. During 2018, the Nominating and Corporate Governance Committee held 7 meetings. In discussing governance initiatives and in preparation for meetings, the Chairman of the Board, the Chair of the Nominating and Corporate Governance Committee and the Vice President—Corporate Governance met and consulted frequently with the other Committee and Board members.
Board Membership and Composition
Nomination and Election of Directors. The Nominating and Corporate Governance Committee evaluated and recommended to the Board of Directors the thirteen nominees under “Proposal 1—Election of Directors” who are standing for election at the 2019 Annual Meeting of Shareholders. In making its determinations, the Committee considered the criteria set forth in AIG’s Corporate Governance Guidelines. These criteria are: high personal and professional ethics, values and integrity; ability to work together as part of an effective, collegial group; commitment to representing the long-term interests of AIG; skill, expertise, diversity, background, and experience with businesses and other organizations that the Board deems relevant; the interplay of the individual’s experience with the experience of other Board members; the contribution represented by the individual’s skills and experience to ensuring that the Board has the necessary tools to perform its oversight function effectively; ability and willingness to commit adequate time to AIG over an extended period of time; and the extent to which the individual would otherwise be a desirable addition to the Board and any Committees of the Board.
A description of the nominees recommended by the Nominating and Corporate Governance Committee is set forth under “Proposal 1—Election of Directors.” The process for identification of director nominees when standing for election for the first time is provided below in “—Committees—Nominating and Corporate Governance Committee.”
Independence. The Board of Directors, on the recommendation of the Nominating and Corporate Governance Committee, determined that each of AIG’s twelve non-management director nominees is independent within the meaning of the NYSE listing standards and the AIG Director Independence Standards. Mr. Duperreault is the only director nominee who holds an AIG management position and, therefore, is not an independent director.
Diversity Consideration. The Board strives to maintain a diverse Board, and diversity continues to be an important consideration in the Nominating and Corporate Governance Committee’s director search and nomination process. While the Board has not adopted a specific diversity policy, we believe that important diversity characteristics include race, gender, ethnicity, religion, nationality, disability, sexual orientation and cultural background. Additionally, in assessing each director candidate, the Committee considers diversity in a broad sense, including a candidate’s work experience, skills and diversity of perspective. Approximately 42% of AIG’s independent director nominees are women or ethnically diverse.
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Corporate Governance  Report of the Nominating and Corporate Governance Committee
Conclusion
During 2018, the Nominating and Corporate Governance Committee performed its duties and responsibilities under the Nominating and Corporate Governance Committee charter.
Nominating and Corporate Governance Committee
American International Group, Inc.
Christopher S. Lynch, Chair
W. Don Cornwell
Suzanne Nora Johnson
Theresa M. Stone
COMMITTEES
AIG’s Board Committee structure is organized around key strategic issues to facilitate oversight of management. Committee Chairs regularly coordinate with one another to ensure appropriate information sharing. To further facilitate information sharing, all Committees provide a summary of significant actions to the full Board, and Committee meetings are scheduled to allow all directors to attend each meeting, with many directors attending such meetings. As required under AIG’s Corporate Governance Guidelines, each standing Committee conducts an annual self-assessment and review of its charter.
The following table sets forth the current membership on each standing Committee of the Board and the number of Committee meetings held in 2018. Mr. Duperreault does not serve on any Committees of the Board. Mr. Steenland serves as an ex-officio non-voting member of each Committee.
Director
Audit
Committee
Compensation
and
Management
Resources
Committee
Nominating
and
Corporate
Governance
Committee
Risk and
Capital
Committee
Technology
Committee
W. Don Cornwell
C

John H. Fitzpatrick

C
William G. Jurgensen
C

Christopher S. Lynch
C


Henry S. Miller


Linda A. Mills



Thomas F. Motamed


Suzanne Nora Johnson



Ronald A. Rittenmeyer


C
Douglas M. Steenland





Theresa M. Stone


Number of meetings in 2018
8
5
7
11
3
C
= Chair

= Member

Mr. Steenland, as Independent Chairman of the Board, is an ex-officio, non-voting member.
At its meeting on May 8, 2018, the Board took action to dissolve the Regulatory, Compliance and Public Policy Committee. Certain duties and responsibilities of the Regulatory, Compliance and Public Policy Committee were reallocated to the Audit Committee and the Nominating and Corporate Governance Committee. The Regulatory, Compliance and Public Policy Committee held one meeting in 2018 prior to its dissolution.
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Corporate Governance  Committees
Audit Committee
The Audit Committee, which held 8 meetings during 2018, assists the Board in its oversight of AIG’s financial statements, including internal control over financial reporting, and compliance with legal and regulatory requirements; the qualifications, independence and performance of AIG’s independent registered public accounting firm; and the performance of AIG’s internal audit function. As part of these oversight responsibilities, the Audit Committee reviews and discusses with senior management the guidelines and policies by which AIG assesses and manages risk. In carrying out its risk management oversight responsibilities, the Audit Committee coordinates with the Risk and Capital Committee to help ensure the Board and each Committee has received the information it needs to carry out their responsibilities with respect to risk assessment and risk management. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of AIG’s independent registered public accounting firm. In its oversight of AIG’s internal audit function, the Audit Committee also is involved in the appointment or removal, performance reviews and determining the compensation of AIG’s Chief Internal Auditor. The Audit Committee assists the Board of Directors in its oversight of AIG’s handling of legal, regulatory and compliance matters. The Committee’s duties and responsibilities include reviewing periodically with management any significant legal, compliance and regulatory matters that have arisen or that may have a material impact on AIG’s business, financial statements or compliance policies, and AIG’s relations with regulators and governmental agencies.
The Board has determined, on the recommendation of the Nominating and Corporate Governance Committee, that all members of the Audit Committee are independent under both NYSE listing standards and SEC rules. The Board has also determined, on the recommendation of the Nominating and Corporate Governance Committee, that all members of the Audit Committee are financially literate and have accounting or related financial management expertise, each as defined by NYSE listing standards, and that Messrs. Fitzpatrick, Jurgensen, Rittenmeyer and Steenland and Ms. Stone are audit committee financial experts, as defined under SEC rules. Although designated as audit committee financial experts, no member of the Committee is an accountant for AIG or, under SEC rules, an “expert” for purposes of the liability provisions of the Securities Act of 1933, as amended (the Securities Act), or for any other purpose.
Compensation and Management Resources Committee
The Compensation and Management Resources Committee, which held 5 meetings during 2018, is responsible for determining and approving the compensation awarded to AIG’s President and Chief Executive Officer (subject to ratification or approval by the Board), approving the compensation awarded to the other senior executives under its purview (which includes all of the named executives in the 2018 Summary Compensation Table) and reviewing and approving the performance measures and goals relevant to such compensation. The Compensation and Management Resources Committee is also responsible for AIG’s compensation programs generally; for reviewing, in conjunction with AIG’s Chief Risk Officer, the relationship between AIG’s risk management policies and practices and the incentive compensation arrangements applicable to senior executives; for overseeing AIG’s management development and succession planning programs for executive management; and for reviewing initiatives and progress in the area of human capital, including diversity and inclusion. These responsibilities, which may not be delegated to persons who are not members of the Compensation and Management Resources Committee, are set forth in the Committee’s charter, which is available in the Leadership and Governance section of AIG’s corporate website at www.aig.com.
Our President and Chief Executive Officer participates in meetings of the Compensation and Management Resources Committee and makes recommendations with respect to the annual compensation of employees under the Committee’s purview other than himself. Pursuant to AIG’s By-laws, the Board ratifies or approves the determination of the Compensation and Management Resources Committee as to the compensation paid or to be paid to AIG’s President and Chief Executive Officer.
The Compensation and Management Resources Committee does not determine the compensation of the Board of Directors. The compensation of directors is recommended by the Nominating and Corporate Governance Committee and is approved by the Board.
To provide independent advice, the Compensation and Management Resources Committee engaged Frederic W. Cook & Co. (FW Cook) as a consultant and has used the services of FW Cook since 2005. The Compensation and Management Resources Committee directly engaged FW Cook to provide independent, analytical and evaluative advice about AIG’s compensation programs for senior executives, including comparisons to industry
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Corporate Governance  Committees
peers and comparisons to “best practices” in general. FW Cook reports directly to the Chair of the Compensation and Management Resources Committee. A senior consultant of FW Cook regularly attends Committee meetings and provides information on compensation trends along with specific views on AIG’s compensation programs.
FW Cook has provided advice to the Nominating and Corporate Governance Committee on AIG director compensation and market practices with respect to director compensation. Other than services provided to the Compensation and Management Resources Committee and the Nominating and Corporate Governance Committee, neither FW Cook nor any of its affiliates provided any other services to AIG. For services related to board and executive officer compensation, FW Cook was paid $223,577 in 2018.
The Board has determined, on the recommendation of the Nominating and Corporate Governance Committee, that all members of the Compensation and Management Resources Committee are independent under NYSE listing standards and SEC rules.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee held 7 meetings in 2018. The Board of Directors has determined that all members of the Nominating and Corporate Governance Committee are independent under NYSE listing standards. The primary responsibilities of the Nominating and Corporate Governance Committee are to identify individuals qualified to become Board members, consistent with criteria approved by the Board of Directors, and recommend these individuals to the Board of Directors for nomination, election or appointment as members of the Board and its Committees, to advise the Board on corporate governance matters, to oversee the evaluation of the Board and its Committees and to review AIG’s position and policies that relate to current and emerging corporate social responsibility and public policy issues of significance to AIG. The Nominating and Corporate Governance Committee also periodically reviews and makes recommendations to the Board regarding the form and amount of non-management director compensation.
The AIG Corporate Governance Guidelines include characteristics that the Nominating and Corporate Governance Committee considers important for nominees for director and information for shareholders with respect to director nominations. The Nominating and Corporate Governance Committee will consider director nominees recommended by shareholders and will evaluate shareholder nominees on the same basis as all other nominees. Shareholders who wish to submit nominees for director for consideration by the Nominating and Corporate Governance Committee may do so by submitting names and supporting information to: Chair, Nominating and Corporate Governance Committee, c/o Vice President—Corporate Governance, American International Group, Inc., 175 Water Street, New York, New York 10038.
In addition, AIG’s By-laws permit a shareholder, or a group of up to 20 shareholders, owning three percent or more of AIG Common Stock continuously for at least three years to nominate and include in AIG’s annual meeting proxy materials director nominees constituting up to the greater of two individuals or 20 percent of the Board of Directors, so long as the shareholder(s) and the nominee(s) satisfy the requirements specified in AIG’s By-laws (as further described above in “—Governance—Shareholder Engagement—Proxy Access”).
Risk and Capital Committee
The Risk and Capital Committee held 11 meetings in 2018. The Risk and Capital Committee reports to and assists the Board in overseeing and reviewing information regarding AIG’s ERM, including the significant policies, procedures, and practices employed to manage liquidity risk, credit risk, market risk, operational risk and insurance risk. The Risk and Capital Committee also assists the Board in its oversight responsibilities by reviewing and making recommendations to the Board with respect to AIG’s financial and investment policies, provides strategic guidance to management as to AIG’s capital structure and financing, the allocation of capital to its businesses, methods of financing its businesses and other related strategic initiatives. The Risk and Capital Committee also approves issuances, investments, dispositions and other transactions and matters as authorized by the Board. The Risk and Capital Committee also coordinates with the Board, the Compensation and Management Resources Committee and the Audit Committee to help ensure the Board and each Committee has received the information it needs to carry out their responsibilities with respect to risk management. The Risk and Capital Committee’s charter is available in the Leadership and Governance section of AIG’s corporate website at www.aig.com.
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Corporate Governance  Committees
The Board has determined, on the recommendation of the Nominating and Corporate Governance Committee, that all members of the Risk and Capital Committee are independent under NYSE listing standards and SEC rules.
Technology Committee
The Technology Committee held 3 meetings in 2018. The Technology Committee assists the Board in its oversight of AIG’s information technology projects and initiatives by, among other things, reviewing the financial, tactical and strategic benefits of proposed significant information technology-related projects and initiatives, reviewing and making recommendations to the Board regarding significant information technology investments in support of AIG’s information technology strategy, reviewing AIG’s risk management and risk assessment guidelines and policies regarding information technology security, including the quality and effectiveness of AIG’s information technology security and disaster recovery capabilities, and reviewing AIG’s cybersecurity risks, policies, controls and procedures. The Technology Committee’s charter is available in the Leadership and Governance section of AIG’s corporate website at www.aig.com.
The Board has determined, on the recommendation of the Nominating and Corporate Governance Committee, that all members of the Technology Committee are independent under NYSE listing standards and SEC rules.
COMPENSATION OF DIRECTORS
The following table describes the compensation structure for AIG’s non-management directors in 2018.
2018 Compensation Structure for Non-Management Directors
Until 2018
Annual
Meeting​
As of 2018
Annual
Meeting​
Base Annual Retainer
Cash Retainer
$ 150,000 $ 125,000
Deferred Stock Units (DSUs) Award
$ 130,000 $ 170,000
Annual Independent Chairman Cash Retainer
$ 260,000 $ 260,000
Annual Committee Chair Retainers
Audit Committee
$ 40,000 $ 40,000
Risk and Capital Committee
$ 40,000 $ 40,000
Compensation and Management Resources Committee
$ 30,000 $ 30,000
Other Committees
$ 20,000 $ 20,000
Non-management directors can elect to receive annual retainer amounts and Committee retainer amounts in the form of DSUs. For information on current Committee memberships, see “Committees” above. Non-management directors are also eligible for the AIG Matching Grants Program on the same terms and conditions that apply to AIG employees, through which AIG provides a two-for-one match on charitable donations in an amount of up to $10,000 per employee or director annually.
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 AIG 2013 Omnibus Incentive Plan (2013 Omnibus Incentive Plan).
In March 2018, the Nominating and Corporate Governance Committee completed its annual review of the AIG non-management director compensation program. The review used the same peer group used for the executive compensation program. Based on that review, the Committee recommended to the Board, and the Board approved, a decrease in the cash retainer component and an increase in the DSU component of the annual retainer amount to increase the ratio of equity to cash to better align the director compensation program with the peer group, effective as of the date of the 2018 Annual Meeting, as reflected in the table above.
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Corporate Governance  Compensation of Directors
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. AIG’s Insider Trading Policy prohibits directors from pledging AIG securities.
Mr. Duperreault 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. Both the cash and equity components of non-management director compensation remain subject to the shareholder-approved limits established in the 2013 Omnibus Incentive Plan.
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 2018.
2018 Non-Management Director Compensation
Non-Management Members of the Board in 2018
Fees Earned
or Paid in
Cash(1)​
Stock
Awards(2)​
All Other
Compensation(3)​
Total​
W. Don Cornwell $ 164,135 $ 169,975 $ 10,000 $ 344,110
Peter R. Fisher $ 54,808 $ 0 $ 0 $ 54,808
John H. Fitzpatrick $ 174,135 $ 169,975 $ 0 $ 344,110
William G. Jurgensen $ 174,135 $ 169,975 $ 10,000 $ 354,110
Christopher S. Lynch $ 154,135 $ 169,975 $ 0 $ 324,110
Samuel J. Merksamer $ 54,808 $ 0 $ 0 $ 54,808
Henry S. Miller $ 134,135 $ 169,975 $ 10,000 $ 314,110
Linda A. Mills $ 134,135 $ 169,975 $ 10,000 $ 314,110
Suzanne Nora Johnson $ 134,135 $ 169,975 $ 10,000 $ 314,110
Ronald A. Rittenmeyer $ 154,135 $ 169,975 $ 0 $ 324,110
Douglas M. Steenland $ 394,135 $ 169,975 $ 0 $ 564,110
Theresa M. Stone $ 141,443 $ 169,975 $ 10,000 $ 321,418
(1)
This column represents annual retainer fees and Committee Chair retainer fees. For Messrs. Cornwell, Fitzpatrick, Jurgensen, Lynch, Miller, Rittenmeyer and Steenland and Mss. Mills, Nora Johnson and Stone, the amounts include a prorated decrease in the annual retainer fees, effective as of the date of the 2018 Annual Meeting. For Ms. Stone, the amount includes a prorated annual Committee Chair retainer fee for her service as Chair of the Regulatory, Compliance and Public Policy Committee until its dissolution on May 8, 2018. For Messrs. Fisher and Merksamer, the amounts include prorated annual retainer fees for their service as directors until the date of the 2018 Annual Meeting. For Mr. Fisher, the amount does not include $467,139, which represents the value of shares of AIG Common Stock delivered when he ceased to be a member of the Board as of the 2018 Annual Meeting in accordance with the terms of DSUs previously granted. For Mr. Merksamer, the amount does not include $237,027, which represents the value of shares of AIG Common Stock delivered when he ceased to be a member of the Board as of the 2018 Annual Meeting in accordance with the terms of DSUs previously granted.
(2)
This column represents the grant date fair value of DSUs granted in 2018 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 AIG’s Matching Grants Program.
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Corporate Governance  Compensation of Directors
The following table sets forth information with respect to the stock awards outstanding at December 31, 2018 for the non-management directors of AIG. None of the non-management directors hold option awards.
Outstanding Stock Awards at December 31, 2018
Non-Management Members of the Board in 2018
Deferred
Stock Units(1)​
W. Don Cornwell 19,090
Peter R. Fisher 0
John H. Fitzpatrick 17,925
William G. Jurgensen 14,362
Christopher S. Lynch 19,243
Samuel J. Merksamer 0
Henry S. Miller 19,243
Linda A. Mills 9,598
Suzanne Nora Johnson 22,605
Ronald A. Rittenmeyer 19,243
Douglas M. Steenland 19,243
Theresa M. Stone 30,783
(1)
DSUs shown include DSUs awarded in 2018 and prior years, director’s 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 May 12, 2010 were granted under the Amended and Restated AIG 2007 Stock Incentive Plan (2007 Stock Incentive Plan). DSUs granted on or after May 12, 2010 and prior to May 15, 2013 were granted under the AIG 2010 Stock Incentive Plan (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 2018, none of AIG’s 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 AIG’s 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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Ownership of Certain Securities
Ownership of Certain Securities
The following table contains information regarding the only persons who, to the knowledge of AIG, beneficially own more than five percent of AIG Common Stock at January 31, 2019.
Shares of Common Stock
Beneficially Owned
Name and Address
Number​
Percent​
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
64,768,700(1)
7.4%
Capital Research Global Investors
333 South Hope Street
Los Angeles, CA 90071
47,237,956(2)
5.4%
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
67,664,554(3)
7.8%
(1)
Based on a Schedule 13G/A filed on February 11, 2019 by BlackRock, Inc. reporting beneficial ownership as of December 31, 2018. Item 4 to this Schedule 13G/A provides details as to the voting and investment power of BlackRock, Inc. as well as the right to acquire AIG Common Stock within 60 days. All information provided in “Ownership of Certain Securities” with respect to this entity is provided based solely on information set forth in the Schedule 13G/A. This information may not be accurate or complete, and AIG takes no responsibility therefor and makes no representation as to its accuracy or completeness as of the date hereof or any subsequent date.
(2)
Based on a Schedule 13G/A filed on February 14, 2019 by Capital Research Global Investors reporting beneficial ownership as of December 31, 2018. Item 4 to this Schedule 13G/A provides details as to the voting and investment power of Capital Research Global Investors as well as the right to acquire AIG Common Stock within 60 days. All information provided in “Ownership of Certain Securities” with respect to this entity is provided based solely on information set forth in the Schedule 13G/A. This information may not be accurate or complete, and AIG takes no responsibility therefor and makes no representation as to its accuracy or completeness as of the date hereof or any subsequent date.
(3)
Based on a Schedule 13G/A filed on February 11, 2019 by The Vanguard Group reporting beneficial ownership as of December 31, 2018. Item 4 to this Schedule 13G/A provides details as to the voting and investment power of The Vanguard Group as well as the right to acquire AIG Common Stock within 60 days. All information provided in “Ownership of Certain Securities” with respect to this entity is provided based solely on information set forth in the Schedule 13G/A. This information may not be accurate or complete, and AIG takes no responsibility therefor and makes no representation as to its accuracy or completeness as of the date hereof or any subsequent date.
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Ownership of Certain Securities​
The following table summarizes the ownership of AIG Common Stock by the current and nominee directors, by the current and former executive officers named in the 2018 Summary Compensation Table in “Executive Compensation—2018 Compensation” and by the current directors and current executive officers as a group.
AIG Common Stock Owned Beneficially
as of January 31, 2019
Amount and Nature
of Beneficial Ownership(1)(2)​
Percent of
Class​
W. Don Cornwell 19,244    (3)
Douglas A. Dachille 65,190 0.01%
Brian Duperreault 246,692 0.03%
John H. Fitzpatrick 18,068 (3)
Kevin T. Hogan 148,501 0.02%
William G. Jurgensen 29,477    (3)
Christopher S. Lynch 22,567    (3)
Mark D. Lyons 0
Henry S. Miller 19,397    (3)
Linda A. Mills 9,675    (3)
Thomas F. Motamed 26,386    (3)
Suzanne Nora Johnson 22,786    (3)
Peter R. Porrino 0
Ronald A. Rittenmeyer 19,397    (3)
Siddhartha Sankaran 229,831 0.03%
Amy L. Schioldager 0
Douglas M. Steenland 24,197    (3)
Theresa M. Stone 31,819    (3)
Therese M. Vaughan 0
Peter Zaffino 111,000 0.01%
All current Directors and current Executive Officers of AIG as a group (22 individuals) 910,422 0.10%
(1)
Amount of equity securities shown includes (i) shares of AIG Common Stock subject to options which may be exercised within 60 days as follows: Duperreault—166,666 shares, Sankaran—86,224 shares and Zaffino—111,000 shares; (ii) shares receivable upon the exercise of warrants which may be exercised within 60 days as follows: Duperreault—9 shares, Hogan—137 shares and all current directors and current executive officers of AIG as a group—285 shares; (iii) net shares received in March 2019 upon settlement of RSU awards that vested in March 2019: Dachille—57,667 shares, Hogan—53,548 shares, Sankaran—45,563 shares and all current executive officers of AIG as a group—142,108 shares; and (iv) DSUs granted to each non-management director with delivery of the underlying AIG Common Stock deferred until such director ceases to be a member of the Board as follows: Cornwell—19,244 shares, Fitzpatrick—18,068 shares, Jurgensen—14,477 shares, Lynch—19,397 shares, Miller—19,397 shares, Mills—9,675 shares, Motamed—1,386 shares, Nora Johnson—22,786 shares, Rittenmeyer—19,397 shares, Steenland—19,397 shares, and Stone—31,819 shares.
(2)
Amount of equity securities shown excludes the following securities owned by or held in trust for members of the named individual’s immediate family as to which securities such individual has disclaimed beneficial ownership: Fitzpatrick—100 shares.
(3)
Less than .01 percent.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act) requires directors, certain officers, and greater than ten percent holders of AIG Common Stock to file reports with respect to their ownership of AIG equity securities. Based solely on the review of the Forms 3, 4 and 5 and amendments thereto furnished to AIG and certain representations made to AIG, AIG believes that the only filing deficiencies under Section 16(a) by its directors, officers and greater than ten percent holders during 2018 were (i) an amendment to the original Form 3 filed by Mr. Duperreault in 2017 (the amendment corrected the number of shares of AIG Common Stock and warrants held directly by Mr. Duperreault at the time he became an officer) and (ii) a late report by Alessandrea C. Quane reporting partial lapsing of restrictions on certain long-term incentive awards held by her spouse to cover Federal Insurance Contributions Act obligations.
Relationships and Related-Party Transactions
Employment of a Family Member
The spouse of Alessandrea C. Quane, AIG’s Executive Vice President and Chief Risk Officer, was a non-executive officer employee of AIG during 2018. Ms. Quane has been an employee of AIG since 1996 and an executive officer since February 2016. Mr. Quane was an employee of AIG from 1996 until June 2018. His 2018 base salary and short-term incentive award was approximately $300,000 in the aggregate based on six months of active service, and his 2018 target long-term incentive award was approximately $400,000. Mr. Quane’s 2018 compensation was determined in accordance with our standard employment and compensation practices applicable to employees with similar responsibilities and positions. He also received benefits generally available to all employees. Additionally, upon Mr. Quane’s departure from AIG, he received a severance package valued at just over one times his total annual target compensation in accordance with the terms and conditions of AIG’s 2012 Executive Severance Plan and taking into account equity compensation opportunities that were not available to him.
Related-Party Transactions Approval Policy
The Board of AIG has adopted a related-party transaction approval policy. Under this written policy, any transaction that involves more than $120,000 and would be required to be disclosed in AIG’s Proxy Statement, between AIG or any of its subsidiaries and any director or executive officer, or their related persons, must be approved by the Nominating and Corporate Governance Committee (or, in certain circumstances where it is impractical or undesirable to seek the approval of the full Committee, by its Chair, acting on behalf of the full Committee). In determining to approve a related-party transaction, the Nominating and Corporate Governance Committee or its Chair, as applicable, considers:

Whether the terms of the transaction are fair to AIG and on terms at least as favorable as would apply if the other party was not or did not have an affiliation with a director, executive officer or employee of AIG;

Whether there are demonstrable business reasons for AIG to enter into the transaction;

Whether the transaction would impair the independence of a director; and

Whether the transaction would present an improper conflict of interest for any director, executive officer or employee of AIG, taking into account the size of the transaction, the overall financial position of the director, executive officer or employee, the direct or indirect nature of the interest of the director, executive officer or employee in the transaction, the ongoing nature of any proposed relationship and any other factors the Nominating and Corporate Governance Committee or its Chair, as applicable, deems relevant.
AIG has not identified any transaction since the beginning of 2018 with respect to which the requirements of the related-party transaction approval policy were not followed.
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Our Executive Officers  
Our Executive Officers
Information concerning the executive officers of AIG as of the date hereof is set forth below.
Name
Title
Age​
Served
as
Officer
Since​
Brian Duperreault President and Chief Executive Officer
71​
2017​
Douglas A. Dachille Executive Vice President and Chief Investment Officer
54​
2015​
Lucy Fato Executive Vice President and General Counsel and Interim Head of Human Resources
52​
2017​
Kevin T. Hogan Executive Vice President—Chief Executive Officer, Life & Retirement
56​
2013​
Thomas B. Leonardi Executive Vice President—Government Affairs, Public Policy and Communications
65​
2017​
Mark D. Lyons Executive Vice President and Chief Financial Officer
62​
2018​
Seraina Macia Executive Vice President
50​
2017​
Naohiro Mouri Executive Vice President and Chief Auditor
60​
2018​
Alessandrea C. Quane Executive Vice President and Chief Risk Officer
49​
2016​
John P. Repko Executive Vice President and Chief Information Officer
56​
2018​
Peter Zaffino Executive Vice President—Chief Executive Officer, General Insurance and Global Chief Operating Officer, AIG
52​
2017​
All of AIG’s executive officers are elected to one-year terms but serve at the pleasure of the Board of Directors. There are no arrangements or understandings between any executive officer and any other person pursuant to which the executive officer was elected to such position.
For information on Mr. Duperreault’s experience, please see “Proposal 1—Election of Directors.” Each of Ms. Quane and Mr. Hogan has, for more than five years, occupied a senior management position with AIG or one or more of its subsidiaries.
Douglas A. Dachille joined AIG in September 2015 as Executive Vice President and Chief Investment Officer. Before joining AIG, from September 2003, Mr. Dachille served as Chief Executive Officer of First Principles Capital Management, LLC (First Principles), an investment management firm acquired by AIG as a wholly-owned subsidiary. Prior to co-founding First Principles, from May 2002, he was President and Chief Operating Officer of Zurich Capital Markets, an integrated alternative investment asset management and structured product subsidiary of Zurich Financial Services. He began his career at JPMorgan Chase, where he served as Global Head of Proprietary Trading and co-Treasurer.
Lucy Fato joined AIG in October 2017 as Executive Vice President and General Counsel and was also appointed as Interim Head of Human Resources in October 2018. Prior to joining AIG, she was Managing Director, Head of the Americas and Global General Counsel of Nardello & Co. LLC. Previously, she worked at S&P Global (formerly known as McGraw Hill Financial) where she served as Executive Vice President and General Counsel from August 2014 to October 2015, and as a Consultant from October 2015 to October 2016. Prior to that, Ms. Fato was Vice President, Deputy General Counsel and Corporate Secretary at Marsh & McLennan Companies from September 2005 to July 2014. Ms. Fato began her legal career at Davis Polk & Wardwell LLP where she was a partner in the Capital Markets Group.
Thomas B. Leonardi joined AIG as Executive Vice President—Government Affairs, Public Policy and Communications in November 2017. From January 2015 to October 2017, he was a Senior Advisor to Evercore’s Investment Advisory business. Previously, from February 2011 to December 2014, Mr. Leonardi was Commissioner of the Connecticut Insurance Department and, for 22 years prior to his appointment as Commissioner, he was Chairman and Chief Executive Officer of Northington Partners Inc., a Connecticut-based venture capital and investment banking boutique.
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Our Executive Officers  
Mark D. Lyons joined AIG in June 2018 as Senior Vice President and Chief Actuary and was appointed Executive Vice President and Chief Financial Officer in December 2018. Prior to joining AIG, Mr. Lyons served since 2012 as Executive Vice President, Chief Financial Officer and Treasurer at Arch Capital Group, Ltd. (ACGL), a Bermuda-based public insurance company. Mr. Lyons joined ACGL in 2002 and had served in various capacities within Arch Insurance U.S. operations, including as Chairman and Chief Executive Officer of Arch Worldwide Insurance Group. Prior to joining ACGL, Mr. Lyons held various positions at Zurich U.S., Berkshire Hathaway and AIG.
Seraina Macia joined AIG as Executive Vice President in July 2017 to lead Blackboard Insurance, our technology-driven subsidiary. She joined AIG in conjunction with AIG’s acquisition from Hamilton Insurance Group, Ltd. of Hamilton USA, of which she served as Chief Executive Officer since October 2016. She was previously employed at AIG as Executive Vice President and Chief Executive Officer of Regional Management & Operations from December 2015 to February 2016 and Senior Vice President and Chief Executive Officer of the EMEA Region from November 2013 to December 2015. Prior to AIG, from September 2010, she served as Chief Executive of North American Property & Casualty at the XL Group. Prior to joining XL Group, Ms. Macia served in various roles at Zurich Insurance Group, including as President and Chief Financial Officer of Zurich North America’s Commercial Specialties business unit and as head of Investor Relations and Rating Agencies for Zurich Financial Services. Previously, Ms. Macia was a founding partner and financial analyst for NZB Neue Zuercher Bank, and she held various management positions in underwriting and finance at Swiss Reinsurance in Switzerland and Australia.
Naohiro Mouri joined AIG in July 2015 as Senior Managing Director of Asia Pacific Internal Audit and was appointed Executive Vice President and Chief Auditor in March 2018. Previously, from November 2013 toJuly 2015, he was a Statutory Executive Officer, Senior Vice President and Chief Auditor for MetLife Japan and, from July 2007 to November 2013, he was Chief Auditor at JP Morgan Chase for Asia Pacific. He has also held chief auditor positions at Shinsei Bank, Morgan Stanley Japan and Deutsche Bank Japan.
John P. Repko joined AIG in September 2018 as Executive Vice President and Chief Information Officer. Prior to joining AIG, he was Vice President and Global Chief Information Officer of Johnson Controls International plc, taking up this position with the merger of Johnson Controls, Inc. and Tyco International plc. Previously, he worked at Tyco International plc as Senior Vice President, Chief Information Officer and Enterprise Transformation Leader from 2012 to 2016. Prior to joining Tyco International plc, Mr. Repko held various chief information officer roles at Covance Inc., SES Global and General Electric’s GE Americom division.
Peter Zaffino joined AIG as Executive Vice President—Global Chief Operating Officer, AIG in July 2017 and was also appointed Chief Executive Officer, General Insurance in November 2017. Prior to joining AIG, he served in various roles at Marsh & McLennan Companies (MMC), including as Chief Executive Officer of Marsh, LLC since 2011 and as President and Chief Executive Officer of Guy Carpenter from 2008 to 2011. Additionally, Mr. Zaffino served as Chairman for the Risk and Insurance Services Segment of MMC from 2015 to 2017. Mr. Zaffino has 30 years of experience in the insurance and reinsurance industry. Prior to joining Guy Carpenter in 2001, he held several senior positions, most recently serving in an executive role with a GE Capital portfolio company.
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Executive Compensation  Report of the Compensation and Management Resources Committee
Executive Compensation
REPORT OF THE COMPENSATION AND MANAGEMENT RESOURCES COMMITTEE
Overview
The Compensation and Management Resources Committee determines and approves the compensation awarded to AIG’s President and 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 AIG’s compensation programs and makes recommendations to the Board with respect to these programs where appropriate. The Compensation and Management Resources Committee also oversees AIG’s management development and succession planning programs for executive management 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.
Our executive compensation program includes the following features:

Balanced mix of base, short-term and long-term pay. Annual target long-term incentive opportunity comprises the largest component of an executive’s annual target total direct compensation under our pay structure, which also includes a market-competitive base salary and annual target short-term incentive opportunity. We believe this structure provides an appropriate balance of fixed and variable compensation, drives achievement of AIG’s short- and long-term objectives and business strategies and aligns the economic interests of our executives with the long-term interests of AIG and our shareholders.

Defined earn-out ranges for incentive awards. Executive incentive awards are subject to a defined earn-out framework. For our President and Chief Executive Officer and his leadership team (Executive Leadership Team), 2018 short-term incentive awards and performance share units (PSUs) granted under 2018 long-term incentive awards can each range from 0 to 200 percent of target, in each case taking into account performance against pre-established goals.

Short-term incentives reward annual performance and business results. Short-term incentive awards for our Executive Leadership Team are based on both quantitative business performance metrics reflecting business unit accountability for performance, and qualitative goals for individual performance to evaluate an executive’s contributions to key strategic organizational and operational initiatives. Awards are earned in cash with individual target amounts reflecting responsibilities and experience.

Long-term incentives reward performance and manage risk. All 2018 long-term incentive awards for our Executive Leadership Team are equity based, including 50 percent in the form of PSUs, 25 percent in the form of stock options and 25 percent in the form of restricted stock units (RSUs), with each award vesting at the end of a three-year period. PSUs are earned based on achievement of certain key long-term financial objectives for AIG during a three-year performance period. Stock options, which were introduced in 2018, align with shareholder interests by rewarding only stock price appreciation and the creation of shareholder value after grant. RSUs, which help further balance risk in our long-term incentive program, are earned based on continued employment through the three-year vesting period.

Target compensation in line with peer benchmarking. The Compensation and Management Resources Committee reviews benchmarking and considers competitive compensation levels to ensure executives’ target total direct compensation are in line with peers.

Share ownership guidelines and holding requirements. Executive officers must retain 50 percent of the after-tax shares they receive as compensation until they achieve a specified ownership level of AIG Common Stock, further fostering an ownership culture focused on long-term performance.

Broad Recovery Policy. At least 75 percent of each executive’s annual target total direct compensation is subject to our clawback policy, which applies while awards are outstanding and to covered incentive compensation paid in the year preceding the triggering event.
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Executive Compensation  Report of the Compensation and Management Resources Committee
Risk and Compensation Plans
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. AIG’s compensation practices are essential parts of the company’s approach to risk management, and the Committee regularly monitors AIG’s compensation programs to ensure they align with sound risk management principles. Since 2009, the Committee’s charter has expressly included the Committee’s duty to meet periodically to discuss and review, in consultation with the Chief Risk Officer, the relationship between AIG’s risk management policies and practices and the incentive compensation arrangements applicable to senior executives.
In September 2018, the Committee conducted its annual review with AIG’s Chief Risk Officer of AIG’s compensation plans to ensure that they appropriately balance risk and reward. As recommended by AIG’s Chief Risk Officer, the Committee continued to focus its review on incentive-based compensation plans, which totaled 95 active plans with approximately 63,800 participants for performance year 2017. (Some employees are eligible to participate in more than one plan.)
ERM conducted its annual risk assessment to evaluate AIG’s 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 2018 annual risk review, ERM reviewed all plans, which included two plans previously rated medium risk (there were no plans previously rated high risk). Also, as part of its 2018 risk review, ERM reviewed 2017 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 2018, no plans were categorized as high risk. As part of this risk review, and as discussed with the Committee, ERM concluded that AIG’s compensation policies and practices do not encourage unnecessary or excessive risk-taking and have the appropriate safeguards in place to discourage fraudulent behavior.
Compensation Discussion and Analysis
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. On behalf of the Committee, FW Cook worked with management and outside counsel to review the Compensation Discussion and Analysis. Based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and in AIG’s Annual Report on Form 10-K for the year ended December 31, 2018 (2018 Annual Report on Form 10-K).
Compensation and Management Resources Committee
American International Group, Inc.
W. Don Cornwell, Chair
Henry S. Miller
Linda A. Mills
Thomas F. Motamed
Ronald A. Rittenmeyer
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Executive Compensation  Compensation Discussion and Analysis
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
In his first full year as President and Chief Executive Officer, Mr. Duperreault, together with his reshaped Executive Leadership Team, began implementing a multi-year strategy focused on long-term, sustainable and profitable growth. In making decisions with respect to our executive compensation program, the Committee considered the scope and scale of the foundational changes achieved and milestones reached, as well as our absolute performance and shareholder return over the year.
Multi-Year Strategy for Long-Term, Sustainable and Profitable Growth

Strengthen AIG’s senior leadership throughout the organization

Realign AIG’s organizational structure and deploy capital efficiently to support profitable growth

Renew focus on underwriting excellence and the performance of AIG’s core businesses

Optimize use of reinsurance to reduce exposure to losses and volatility

Focus on improving combined ratio, book value per share and return on equity, along with expense discipline
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In the first quarter of 2018, the Committee restructured our short-term incentive award program, establishing both quantitative business performance metrics reflecting business unit accountability for performance and qualitative goals measuring each executive’s individual performance. Following the end of 2018, the Committee determined that performance against these pre-established goals, while reflecting significant strides toward achieving our multi-year strategy and resulting in an overall AIG performance score for our President and Chief Executive Officer of 108 percent, was not reflective of our absolute performance or shareholder return over the year. As a result, the Committee adjusted final earned amounts for each of our named executives to 95 percent of target.
The Committee adjusted awards for all named executives to reflect their shared accountability for overall company performance at this stage of implementing our strategy, notwithstanding varying financial performance of our individual businesses. The Committee believes the adjusted awards align with the company’s 2018 performance while appropriately rewarding our named executives for their individual achievements, in the face of significant challenges, in strengthening the foundation of our businesses and setting the course for long-term success. The Committee remains committed to aligning performance metrics with each executive’s individual responsibilities and has established quantitative and qualitative metrics for 2019, but will continue to consider results in the context of our overall company performance.
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Our Shareholder Engagement
Last year’s say-on-pay advisory vote was 62.3 percent in favor of the 2017 compensation of our named executives. The Committee and senior management responded by undertaking a robust shareholder engagement process to solicit feedback from shareholders and obtaining input from the Committee’s independent compensation consultant. Proxy advisory firms were also consulted to understand their perspectives on our executive compensation program and to address their questions.
Shareholder Meetings
After our 2018 Annual Meeting, senior management reached out to 29 of our shareholders representing more than 63 percent of outstanding shares (including all of our top 12 shareholders representing more than 50 percent of outstanding shares). We met with each shareholder who accepted our invitation, including 23 of our institutional investors owning more than 53 percent of outstanding shares. Representatives of our Board participated in eight meetings with shareholders representing approximately 24 percent of outstanding shares.
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Executive Compensation  Compensation Discussion and Analysis
In addition to soliciting shareholder feedback on our executive compensation program, the 2018 meetings were intended to strengthen AIG’s relationship with our shareholders and develop a regular cadence for sustained governance-focused outreach that positions AIG to engage consistently and productively with shareholders. Senior management, including our General Counsel, Corporate Secretary and Head of Compensation, led the meetings. In some cases, they were followed by discussions with the independent Chairs of our Board and of the Committee. In many instances, senior management and independent directors spoke with both governance representatives and with portfolio and equity analysts.
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Shareholder Feedback
Our shareholders explained the basis for their voting decisions on our 2017 compensation program. Some voiced concerns about the transition payment to our departing President and Chief Executive Officer and the RSUs granted in 2017 to other named executives to support continuity during the search for and transition to a new President and Chief Executive Officer. With respect to Mr. Duperreault’s cash sign-on award, we acknowledged that our disclosure last year should have clarified that this one-time payment was in lieu of the required cash repurchase by his prior employer of Mr. Duperreault’s equity in the company. We chose to make the payment directly to Mr. Duperreault, which we viewed as more transparent, as opposed to reimbursing his prior employer for the repurchase. We also should have highlighted more prominently that Mr. Duperreault then used approximately $5 million of these funds to purchase AIG common stock. This purchase, in combination with Mr. Duperreault’s equity-based sign-on awards and long-term incentive awards, provides him with a significant, direct stake in AIG’s long-term performance.
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Executive Compensation  Compensation Discussion and Analysis
The Committee considered this shareholder feedback in its decision-making. Below is a summary of the feedback and our response.
Shareholder Engagement in 2018 and Early 2019
What We Heard
How We Responded

Lack of clarity around use of discretion in compensation decisions

Increased transparency about compensation decisions, including clearly articulating assessment of achievements

Concern about alignment of accountability to stock performance

Directly aligned management’s interests to investors’ through 2018 long-term incentive awards which are 100 percent equity-based and comprise 75 percent performance-based vehicles in the form of performance share units and stock options

Committee largely exercised negative discretion to reduce 2018 short-term incentive awards to reflect our absolute performance and shareholder return in 2018

Need to address director over-boarding

Ensured all active CEO directors standing for re-election in 2019 serve on only one outside board

Desire for more disclosure regarding AIG’s sustainability practices

Committed in 2019 to explore the issuance of a climate-risk report aligned to the Task Force on Climate-related Financial Disclosure’s (TCFD) framework and to undertake a review of a climate change scenario analysis

Request for clear oversight by the Board over cybersecurity risks and human capital topics

Amended Technology Committee charter to specifically reference oversight of cybersecurity and CMRC charter to reference human capital topics, including diversity and inclusion

Focus on maintaining appropriate level of diversity within Board

Identified diversity as a critical component of an ongoing director search process and increased our diversity ratio in the 2019 slate of nominated directors
Shareholders raised other matters, such as the potential negative impact of cost cutting on long-term performance and AIG’s use of capital. We and our Board will take our shareholders’ perspectives on such matters into consideration as we continue to execute on our multi-year strategy. Shareholders also provided positive feedback regarding changes to our compensation program implemented in 2018 and the caliber of new talent hired to fill senior positions.
AIG is fully committed to maintaining this increased level of engagement regularly throughout the year and to incorporating shareholders’ perspectives in designing and implementing our compensation program, particularly with respect to aligning shareholder expectations with our evolving business strategy.
Paying for Performance
Our compensation philosophy centers around creating a culture of pay for performance by offering total direct compensation opportunities that reward employees for individual contributions and business performance.

Earned 2018 Short-Term Incentive Award. The Committee reviewed both quantitative business performance and qualitative individual performance.

For our named executives, the quantitative business performance scores ranged from 89 percent to 140 percent of target. The overall AIG quantitative performance score for our President and Chief Executive Officer was 108 percent.

The Committee decided to adjust final earned awards for all of our named executives to 95 percent of target to better align with AIG’s absolute business and stock performance, while still reflecting the significant progress by our Executive Leadership Team in 2018 in setting and advancing our multi-year strategy.
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Executive Compensation  Compensation Discussion and Analysis

For Mr. Duperreault, this resulted in an earned 2018 short-term cash incentive award of  $3,040,000.

Long-Term Incentive Pay for Performance. Our long-term incentive awards, representing the largest part of any named executive’s target compensation, are granted entirely in equity and tie pay directly to company performance. As a result of our stock performance over the past three years, and as illustrated in the table below, the realized value to date has been a small percentage of the value on the grant date.

2015 Long-Term Incentive. As reported last year, the 2015 long-term incentive awards were earned at 25 percent of target.

2016 Long-Term Incentive. The three-year performance period for our 2016 long-term incentive awards ended December 31, 2018. The awards were in the form of PSUs earned based on relative total shareholder return (TSR). The Committee assessed performance in the first quarter of 2019 and determined that threshold performance was not met and therefore none of our named executives who participated in the 2016 program earned an award (i.e., the realized value of the award was $0).

2017 Long-Term Incentive. The 2017 long-term incentive awards were granted 70 percent in the form of PSUs based on relative TSR and 30 percent in the form of RSUs. The 2017 PSUs would not have achieved threshold performance based on relative TSR as of December 31, 2018, and therefore would not have been earned as of that date. The Committee will determine actual performance of the 2017 PSUs in the first quarter of 2020 based on performance through December 31, 2019.
The following table shows the value of PSUs and RSUs granted from 2015 through 2017 as of December 31, 2018, including 2017 awards which are subject to change based on actual performance through the 2017-2019 performance period, as described above. For additional detail regarding the tie to pay for performance for our long-term incentive award program, see “—Pay for Performance” below.
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Executive Compensation  Compensation Discussion and Analysis

2018 Long-Term Incentive Award Opportunity. In 2018 we revised our long-term incentive program to base PSUs on pre-established financial goals common for insurance companies and aligned with the fundamental objectives of our new strategic plan. We also introduced stock options to tie our long-term incentive pay directly to enhancing shareholder value and reduced the percentage of RSUs awarded as part of an executive’s long-term incentive opportunity. The Committee also evaluated modifying the award value granted each year relative to target based on individual performance and the executive’s role in advancing AIG’s success over the award’s term.

In March 2018, the Committee set an $11.2 million target 2018 long-term equity incentive award for Mr. Duperreault, the same as his 2017 amount.

To provide a continuing and meaningful stake in our new multi-year strategic plan, the Committee modified Mr. Duperreault’s target opportunity by applying an upward adjustment of 50 percent based on his role in executing the plan. His 2018 award was 50 percent PSUs, 25 percent options and 25 percent RSUs.
2018 Compensation Structure and Pay Mix
Guided by our compensation philosophy, our 2018 compensation program focused on providing a balance of fixed and variable pay, driving achievement of AIG’s long-term business objectives and strategies, accounting for risk and aligning the economic interests of our named executives with the long-term interests of AIG and our shareholders.
CEO ANNUAL TARGET TOTAL DIRECT
COMPENSATION
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AVERAGE ANNUAL TARGET TOTAL DIRECT
COMPENSATION OF OTHER CURRENT NEOS*
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*
Includes Mr. Lyons’ target total direct compensation annualized for service as Executive Vice President and Chief Financial Officer, to which he was appointed in December 2018.
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Executive Compensation  Compensation Discussion and Analysis

Balanced Structure: Annual target total direct compensation for our current named executives consists of market-competitive base salary, approximately 20 to 35 percent annual target short-term incentive opportunity and approximately 50 percent or greater annual target long-term incentive opportunity, which the Committee may grant above or below annual target levels for the year.

Direct Link to AIG Performance: At least 83 percent of each current named executive’s annual target total direct compensation is “at risk” and the majority of incentive pay opportunity is provided in equity, in the form of PSUs, stock options and RSUs.

Emphasis on Long-Term Incentives: All long-term incentive awards for our current named executives are equity-based, including 50 percent in the form of PSUs earned over a three-year period and based on the achievement of key long-term financial objectives. An additional 25 percent is granted in the form of stock options, which align with shareholder interests by rewarding only stock price appreciation and the creation of shareholder value after grant.

Broad Recovery Policy: Short-term and long-term incentives are subject to our clawback policy. The policy applies while awards are outstanding and to covered compensation paid in the year preceding the triggering event.
Compensation Philosophy
Our compensation philosophy guides how we structure our compensation program and make enterprise-wide compensation decisions. It reflects the following objectives:

Attracting and retaining the best employees and leaders for AIG’s various business needs by offering market-competitive compensation opportunities.

Creating a culture of pay for performance by offering short- and long-term incentive compensation opportunities that reward employees for individual contributions and business performance.

Providing a market-competitive, performance-driven compensation structure through a four-part program that consists of base salary, short-term incentives, long-term incentives and benefits.

Motivating all AIG employees to deliver long-term, sustainable and profitable growth while balancing risk to create long-term, sustainable value for shareholders.

Aligning the long-term economic interests of key employees with those of shareholders by ensuring that a meaningful component of their compensation is provided in equity.

Avoiding incentives that encourage employees to take unnecessary or excessive risks that could threaten the value or reputation of AIG by rewarding both annual and long-term performance.

Maintaining strong compensation best practices by meeting evolving standards of compensation governance and complying with regulations applicable to employee compensation.
Consistent with this philosophy, our short-term and long-term incentive programs are designed to provide appropriate upside opportunity and downside risk to align with shareholder interests. The Committee evaluates and adjusts the programs annually based on strategic priorities, stakeholder feedback and market considerations.
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2018 Compensation Structure—Annual Direct Compensation Components
In the first quarter of 2018, the Committee established annual base salaries, short-term incentive opportunities and long-term incentive opportunities for our named executives. For each of Messrs. Duperreault, Sankaran and Zaffino, the Committee set annual base salary, target short-term incentive award opportunity and target long-term incentive award opportunity for 2018 at 2017 levels. For Messrs. Dachille and Hogan, a review of their performance and comparison of their pay to comparable positions and levels of experience at competitors resulted in an increase of their respective annual base salaries (effective March 26, 2018) and target short-term and long-term incentive opportunities. Mr. Lyons joined AIG in June 2018 and succeeded Mr. Sankaran as Executive Vice President and Chief Financial Officer effective December 4, 2018. The Committee increased his annual 2018 base salary, short-term incentive opportunity and long-term incentive opportunity to account for his new role, as set forth below.
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The 2018 annual target total direct compensation opportunity for each of our current named executives is set forth in the following table.
Named Executive Officer
Annual
Base Salary*​
Target
Short-Term
Incentive​
Target
Long-Term
Incentive**​
Target
Total Direct
Compensation​
Brian Duperreault
President and Chief Executive Officer
$ 1,600,000 $ 3,200,000 $ 11,200,000 $ 16,000,000
Mark D. Lyons***
Executive Vice President and Chief Financial Officer
$ 1,000,000 $ 1,104,467 $ 275,000 $ 2,379,467
Peter Zaffino
Executive Vice President—Chief Executive Officer, General Insurance and Global Chief Operating Officer, AIG
$ 1,250,000 $ 3,000,000 $ 4,250,000 $ 8,500,000
Douglas A. Dachille
Executive Vice President and Chief Investment Officer
$ 1,250,000 $ 2,500,000 $ 4,250,000 $ 8,000,000
Kevin T. Hogan
Executive Vice President—Chief Executive Officer, Life & Retirement
$ 1,250,000 $ 2,250,000 $ 4,000,000 $ 7,500,000
*
For Messrs. Dachille and Hogan, represents annual base salaries effective March 26, 2018. For Mr. Lyons, represents annual base salary effective December 4, 2018. Their actual base salaries paid in 2018 are reported under “—Summary Compensation Table.”
**
In connection with establishing our 2018 long-term incentive program, the Committee determined to evaluate modifying the award value granted each year relative to target based on factors that include individual performance and the importance of the executive’s role in advancing AIG’s success over the term of the award. In order to provide a continuing and meaningful stake in our new multi-year strategic plan and enhance the incentive for key leaders, the Committee modified the long-term incentive awards to our named executives in March 2018 as described below under “—Long-Term Incentive—Grant of 2018 Long-Term Incentive Awards.”
***
Mr. Lyons’ target short-term and target long-term incentive opportunities as shown include 11 months for his role as Chief Actuary of General Insurance and one month as amended in December 2018 in connection with his appointment as our Executive Vice President and Chief Financial Officer. The Committee approved a prorated adjustment to Mr. Lyons’ 2018 target short-term incentive opportunity (based on the timing of his December appointment) and a prorated 2018 long-term incentive award (representing one month of Mr. Lyons’ 2019 target opportunity) in the same form as awards to other Executive Leadership Team members. See “—Transition Arrangements for Named Executives who Joined AIG in 2018” below for more information, including Mr. Lyons’ target total direct compensation opportunity for 2019. Actual amounts paid in 2018 are reported under —Summary Compensation Table.”
Base Salary.
Each named executive’s base salary is established based on his or her experience, performance and salaries for comparable positions at competitors, and did not exceed 17 percent of the executive’s annual target total direct compensation opportunity in 2018. This allocation is intended to fairly compensate the executive for the responsibilities of his or her position, achieve an appropriate balance of fixed and variable pay and provide the executive with sufficient liquidity to discourage excessive risk-taking. Annual base salary is paid in cash.
Short-Term Incentive.
Our short-term incentive represents approximately 20 to 35 percent of a named executive’s annual target total direct compensation opportunity. It is designed to reward annual performance and drive AIG’s 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.
In the first quarter of 2018, the Committee restructured our short-term incentive program, establishing both quantitative business performance metrics and targets reflecting our realigned organizational structure and qualitative goals measuring each executive’s individual performance, with a potential final earned award ranging from 0 to 200 percent of target. The Committee uses the qualitative individual assessment to evaluate an executive’s contributions to key strategic, organizational and operational initiatives. The Committee also considers the executive’s performance in the context of our company culture and leadership that is consistent with our corporate values. The Committee’s individual evaluation provides a comprehensive assessment of an executive’s
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leadership and achievements during the year, including those that are potentially critical to implementing our multi-year strategic plan, but may not be evident in short-term financial results. The Committee has discretion to determine the final award amount. All short-term incentive awards our executives earn are subject to our clawback policy.
Business Performance. In March 2018, the Committee established business performance metrics that were aligned with AIG’s updated organizational structure and were designed to drive accountability in each of AIG’s business units. The metrics that apply to an executive relate to the business unit the executive oversees or, for executives with corporate responsibilities or cross-business accountability, metrics measuring overall AIG performance.
Accordingly, the business performance metrics for Messrs. Duperreault and Sankaran (who served as our Chief Financial Officer until December 4, 2018) were based on overall AIG performance, including the weighted average performance for General Insurance, Life and Retirement, Legacy and Blackboard. The business performance metrics that apply to Messrs. Dachille, Hogan and Zaffino relate to Investments, Life and Retirement and General Insurance, respectively. The metrics for overall AIG or business unit performance include financial metrics, such as profitability and growth measures, and strategic, organizational and operational objectives. The Committee chose the particular metrics for each business unit because they were important to the respective business strategies for the year while also being visible and understandable to participants. The Committee remains committed to metrics that are directly tied to business unit strategy and transparent to participants and intends to enhance the selection and operation of metrics based on the experience gained in 2018.
Business performance against the pre-established metrics can range from 0 to 150 percent of target. For 2018, our short-term incentive metrics included adjustments designed to ensure that results properly reflect management contributions. These include limiting the impact of macroeconomic market factors outside the control of management, such as changes in foreign exchange rates; normalizing catastrophe losses to budgeted average annual losses; excluding the impact of both favorable and adverse prior year developments, which were based on underwriting decisions made in previous years and could otherwise overwhelm metric results; limiting the impact of financial events that could discourage proper business decision making, such as strategic restructuring charges, one-time costs related to merger and acquisition activity or reinsurance purchases; and excluding the impact of the Tax Cuts and Jobs Act. We use the same adjustment principles with the metrics for our 2018 long-term incentive program. See Appendix A for an explanation of how these metrics are calculated for AIG from our audited financial statements. The Committee also retained the discretion to adjust the performance criteria and results.
Individual Assessment. Individual assessments provide the Committee an opportunity to thoroughly review an executive’s performance. The Committee considers an executive’s achievements during the year and various qualitative factors, including the executive’s contributions to key strategic, organizational and operational initiatives in a particular business unit or across AIG. The Committee also reviews the executive’s performance in the context of our company culture and leadership that reflects our corporate values. In 2018, the Committee considered the significance of an executive’s individual achievements in implementing and advancing our long-term strategic plan and laying the foundation for AIG’s sustainable, profitable growth.
Our President and Chief Executive Officer assesses individual contributions and makes recommendations to the Committee with respect to each named executive other than himself. The Committee assesses our President and Chief Executive Officer’s individual contributions and the Committee’s assessment is ratified by the Board.
Determination of Earned Short-Term Incentive Awards. The Committee reviewed the business performance results and individual assessments in the first quarter of 2019. As described below, business performance results for the various business units applicable to the named executives ranged from approximately 89 percent to 140 percent of target. The overall AIG quantitative performance score for our President and Chief Executive Officer was 108 percent.
The Committee analyzed these results in the context of AIG’s absolute business performance and shareholder return in 2018. After discussions with Mr. Duperreault, the Committee decided to adjust final earned awards for all named executives to 95 percent of target. The Committee believes treating the named executives uniformly for 2018 is appropriate in light of the continued realignment of our businesses. The Committee also believes
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this approach reflects shared accountability for overall company performance at this stage of implementing AIG’s long-term strategic plan. The Committee also recognized the significant achievements of our named executives, in the face of significant challenges, to strengthen the foundation of our businesses and set the course for long-term success.
2018 SHORT-TERM INCENTIVE DETERMINATION
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As described above, in the first quarter of 2019, the Committee determined (and the Board ratified in the case of Mr. Duperreault) the following 2018 short-term incentive amounts for our named executives:
Named Executive Officer*
Individual Target
Amount​
Percent of
Target Earned​
Earned Award
Amount​
Brian Duperreault $ 3,200,000 95% $ 3,040,000
Mark Lyons** $ 1,104,467 95% $ 1,050,000
Peter Zaffino $ 3,000,000 95% $ 2,850,000
Douglas Dachille $ 2,500,000 95% $ 2,375,000
Kevin Hogan $ 2,250,000 95% $ 2,137,500
*
The earned award for Mr. Sankaran was based on company performance, as adjusted by the Committee, pursuant to our 2012 Executive Severance Plan, which was 95 percent of target resulting in an award amount of  $1,615,000.
**
Pursuant to his offer letter dated May 10, 2018, Mr. Lyons’ 2018 short-term incentive was guaranteed at least at target ($1,050,000) in respect of his services as Chief Actuary for General Insurance. Upon his appointment as Executive Vice President and Chief Financial Officer, the Committee approved a prorated adjustment to his 2018 target short-term incentive opportunity (based on the timing of his December appointment), which resulted in a new target of  $1,104,467.
AIG paid 2018 short-term incentive awards in cash in the first quarter of 2019. These awards are subject to our clawback policy.
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Brian Duperreault, President and Chief Executive Officer. The business performance metrics that apply to Mr. Duperreault’s 2018 short-term incentive award measure overall AIG performance and are set forth in the following table:
Overall AIG
Performance Metric
Threshold
(50%)​
Target
(100%)​
Maximum
(150%)​
Actual​
%
Achieved​
Weighting​
% Achieved
(Weighted)​
Business Unit Performance*
N/A​
N/A​
N/A​
N/A​
109%​
80%​
87%​
Headquarters Adjusted General Operating Expenses**
$2.3 billion​
$2.15 billion​
$2.0 billion​
$2.12 billion​
110%​
10%​
11%​
Organizational Redesign***
Partially
Achieved​
Achieved​
Exceeded​
Achieved​
100%​
10%​
10%​
Overall AIG Quantitative Performance:
108%​
Overall AIG Quantitative Performance, as Adjusted:
95%​
Note: We use interpolation to determine the payout (as a percentage of target) for a performance result between threshold and target or between target and maximum.
*
Represents the weighted average performance for General Insurance, Life and Retirement, Legacy and Blackboard. The weighted average is based on 2018 average attributed equity for such business units.
**
This performance metric is a non-GAAP financial measure. See Appendix A for an explanation of how this metric is calculated for AIG from our audited financial statements.
***
The Organizational Redesign metric consists of the following threshold, target and maximum goals: (1) Threshold: organizational redesign plan adopted by April 2018 and achievement of 80 percent of major 2018 milestones and tasks; (2) Target: adoption of organizational redesign plan by April 2018 and achievement of all major 2018 milestones and tasks; and (3) Maximum: in addition to achieving target goals, achievement of 20 percent of major 2019 milestones and tasks.
In assessing Mr. Duperreault’s individual contributions to AIG, the Committee considered the following key achievements against goals established by the Board in early 2018:
Achievements Against Goals

Provided leadership and guidance as foundational changes were implemented across AIG, including reorganizing AIG’s operating model, repositioning AIG’s businesses, renewing focus on underwriting fundamentals to help position General Insurance for profitability, increasing accountability, reducing risk and volatility and prioritizing operational and expense discipline.

Positioned AIG as a thought leader in the insurance industry, and restored relationships and credibility with numerous stakeholders, including clients, distribution and reinsurance partners, investors, regulators, rating agencies and employees.

Revised AIG’s capital allocation priorities to balance and prudently manage investments in AIG’s businesses, acquisitions of strategic complimentary businesses and returns to shareholders through stock buybacks and dividends.

Strengthened AIG’s talent base by attracting world class talent and enhancing diversity and inclusion initiatives.
Earned Award Determination
The Committee analyzed the Overall AIG quantitative performance in the context of AIG’s absolute business and stock performance in 2018 and decided to adjust Mr. Duperreault’s final earned short-term incentive award to 95 percent of target.
Mark D. Lyons, Chief Financial Officer. The Committee decided to adjust Mr. Lyons’ final earned short-term incentive award to 95 percent of the blended annualized target for his roles as Chief Actuary for General Insurance and as our Executive Vice President and Chief Financial Officer, which equaled approximately $1,050,000. Pursuant to his offer letter dated May 10, 2018, Mr. Lyons’ 2018 short-term incentive was guaranteed at least at target ($1,050,000) in respect of his services as Chief Actuary for General Insurance.
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Peter Zaffino, Executive Vice President—Chief Executive Officer, General Insurance and Global Chief Operating Officer, AIG. The business performance metrics that apply to Mr. Zaffino’s 2018 short-term incentive award measure performance in our General Insurance business and are set forth in the following table:
General Insurance
Performance Metric
Threshold
(50%)​
Target
(100%)​
Maximum
(150%)​
Actual​
%
Achieved​
Weighting​
% Achieved
(Weighted)​
General Insurance Normalized Return on Attributed Equity*
4.5%​
7.0%-8.5%​
9.5%​
4.9%​
59%​
20%​
12%​
Accident Year Combined Ratio, As Adjusted, including Average Annual Losses*
2 point
deterioration
over full
year 2017​
1-3 point
improvement
over full
year 2017​
4 point
improvement
over full
year 2017​
1 point
deterioration
over full
year 2017​
68%​
40%​
27%​
Organizational Design**
Partially
Achieved​
Achieved​
Exceeded​
Partially
Exceeded​
125%​
30%​
38%​
Validus Transition***
Partially
Achieved​
Achieved​
Exceeded​
Partially
Exceeded​
125%​
10%​
13%​
General Insurance Quantitative Performance:
89%​
General Insurance Quantitative Performance, as Adjusted:
95%​
Note: We use interpolation to determine the payout (as a percentage of target) for a performance result between threshold and lower end of target or between higher end of target and maximum.
*
These performance metrics are non-GAAP financial measures. See Appendix A for an explanation of how these metrics are calculated for AIG from our audited financial statements.
**
The Organizational Design metric consists of the following threshold, target and maximum goals: (1) Threshold: fill substantially all positions at certain management levels and make available financial and operating key performance indicators at each business unit; (2) Target: in addition to achieving threshold goals, fill substantially all critical positions one level deeper in the organization and make available financial and operating key performance indicators at that organizational level; and (3) Maximum: in addition to achieving target goals, the new organization structure results in certain measurable financial benefits (which includes expense reduction, premium growth and loss ratio improvement).
***
The Validus Transition metric consists of the following threshold, target and maximum goals: (1) Threshold: the successful completion of the Validus acquisition and key talent at Validus is substantially retained; (2) Target: in addition to achieving threshold goal, Validus successfully achieves its 2018 business plan; and (3) Maximum: in addition to achieving target goal, Validus delivers $650 million in dividends to the parent company.
In assessing Mr. Zaffino’s individual contributions to AIG, the Committee considered Mr. Duperreault’s evaluation of the following key achievements against goals established by the Committee in January 2018:
Achievements Against Goals

Implemented General Insurance’s new organizational structure, governance and operating model designed around business unit integrity to improve alignment with clients and distribution partners and improve the quality and efficiency of decision making.

Achieved significant progress in reducing volatility through improving underwriting governance, rebuilding processes and developing disciplined risk management practices, including through developing an Underwriting Scorecard to ensure effective measurement against established standards and reviewing, validating and reissuing all underwriting authorities to more than 2,500 underwriters.

Drove design and execution of General Insurance’s reinsurance strategy and spearheaded partnerships with major reinsurance brokers to reduce net exposures and volatility, build credibility in the marketplace and enhance the portfolio, overcoming significant challenges in the business.

Strengthened and added depth to General Insurance’s leadership by filling key roles such as Chief Actuary, Chief Underwriter and Heads of Global Reinsurance, International, Claims and Lexington, and establishing new professional standards for these business leaders.

Led acquisition and integration of two complimentary businesses, Validus and Glatfelter, to expand General Insurance’s business lines and improve underwriting capabilities and platforms.
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Restored relationships with clients and distribution partners, including through improving the claims organization and creating focused distribution strategies to drive local accountability and better serve stakeholders.
The Committee noted that, in addition to the above achievements, Mr. Zaffino, with Mr. Duperreault’s support, made significant changes in 2018 in the General Insurance business critical to its ongoing turnaround and future success. General Insurance made significant progress toward strengthening its underwriting function and rebuilding its processes while introducing greater discipline and risk management to reinforce a culture of underwriting excellence. General Insurance introduced a new reinsurance strategy in 2018, strengthened its risk appetite framework to reduce volatility and improve overall results, and made significant progress in improving its claims organization and reducing expenses. The Committee also considered Mr. Zaffino’s contributions as AIG’s Global Chief Operating Officer.
Earned Award Determination
The Committee analyzed the General Insurance quantitative performance in the context of AIG’s absolute business and stock performance in 2018. Combined with the assessment of Mr. Zaffino’s individual achievements, the Committee decided to adjust Mr. Zaffino’s final earned short-term incentive award to 95 percent of target.
Douglas A. Dachille, Executive Vice President and Chief Investment Officer. The business performance metrics that apply to Mr. Dachille’s 2018 short-term incentive award measure performance in our Investments function and are set forth in the following table:
Investments
Performance Metric
Threshold
(50%)​
Target
(100%)​
Maximum
(150%)​
Actual​
%
Achieved​
Weighting​
% Achieved
(Weighted)​
Investment Performance against Internal Benchmarks*
Benchmark
minus 100
basis points​
Performance
equal to
benchmark​
Benchmark
plus 100
basis points​
Maximum​
150%​
60%​
90%​
Development of Performance Benchmarks for Certain Investment Portfolios**
Partially
Achieved​
Achieved​
Exceeded​
Achieved​
100%​
20%​
20%​
Investments Adjusted General Operating Expenses (net of third-party income)***
$392 million​
$373 million​
$354 million​
$346 million​
150%​
20%​
30%​
Investments Quantitative Performance:
140%​
Investments Quantitative Performance, as Adjusted:
95%​
Note: We use interpolation to determine the payout (as a percentage of target) for a performance result between threshold and target or between target and maximum.
*
The metric is based on a total return basis, where available, and adjusted for costs of capital employed and related expenses. The metric excludes cash, policy loans and other assets that are not bought or sold by Investments or managed by an external manager selected by Investments.
**
The metric consists of the following threshold, target and maximum goals: (1) Threshold: design and implement more granular benchmarks that cover 80 percent of total invested assets, along with a repeatable, well-controlled and auditable process for measuring performance; (2) Target: same as threshold goals, except achieve coverage of 90 percent of total invested assets; and (3) Maximum: same as threshold goals, except achieve coverage of 100 percent of total invested assets.
***
The threshold, target and maximum for Investments’ Adjusted General Operating Expenses metric were updated to reflect certain efficiency initiatives. This performance metric is a non-GAAP financial measure. See Appendix A for an explanation of how this metric is calculated for AIG from our audited financial statements.
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In assessing Mr. Dachille’s individual performance, the Committee considered Mr. Duperreault’s evaluation of Mr. Dachille’s contributions to AIG, including the following key achievements against goals established by the Committee in January 2018:
Achievements Against Goals

Established Fortitude Re to manage a large portion of AIG’s run-off policies, freeing up approximately $2 billion of statutory capital for AIG, and successfully executed the sale of a 19.9 percent stake in the entity for $500 million while developing a separation plan to ensure the company can operate on a standalone basis.

Enhanced accountability, transparency and efficiency of Investments’ operations, including implementing a performance benchmarking approach to drive results and prioritizing profit and loss responsibility to enable growth.

Increased and diversified assets under management, including adding to Investments’ robust credit platform through acquisition of Covenant Credit Partners LP and reducing dependencies on third-party managers.

Successfully integrated First Principles Capital Management within Investments, which has enhanced and broadened institutional client offerings and created efficiencies in the management of general accounts.

Prioritized and fostered employee engagement through the launch of the Investing in People program and strengthened analyst and internship programs to better identify and attract top talent.
Earned Award Determination
The Committee analyzed the Investments quantitative performance in the context of AIG’s absolute business and stock performance in 2018 and decided to adjust Mr. Dachille’s final earned short-term incentive award to 95 percent of target.
Kevin T. Hogan, Executive Vice President—Chief Executive Officer, Life & Retirement. The business performance metrics that apply to Mr. Hogan’s 2018 short-term incentive award measure performance in our Life and Retirement business and are set forth in the following table:
Life and Retirement
Performance Metric*
Threshold
(50%)​
Target
(100%)​
Maximum
(150%)​
Actual​
%
Achieved​
Weighting​
% Achieved
(Weighted)​
Life and Retirement Normalized Return on Attributed Equity**
10.8%​
12.3% – 13.3%​
14.8%​
12.3%​
100%​
70%​
70%​
Value of New Business
$349
million​
$627 – 767
million​
$1,046
million​
$1,298
million​
150%​
30%​
45%​
Life and Retirement Quantitative Performance:
115%​
Life and Retirement Quantitative Performance, as Adjusted:
95%​
Note: We use interpolation to determine the payout (as a percentage of target) for a performance result between threshold and lower end of target or between higher end of target and maximum.
*
See Appendix A for an explanation of how these metrics are calculated for AIG from our audited financial statements.
**
We updated the threshold, target and maximum for Life and Retirement’s Normalized Return on Attributed Equity metric to reflect the impact of the first quarter 2018 internal capital recalibration and evolving interpretations of the Tax Cuts and Jobs Act, as applicable. These performance metrics are non-GAAP financial measures.
In assessing Mr. Hogan’s individual contributions to AIG, the Committee considered Mr. Duperreault’s evaluation of the following key achievements against goals established by the Committee in January 2018:
Achievements Against Goals

Achieved strong economic, accounting and statutory returns on allocated capital across Life and Retirement’s diverse product mix while maintaining risk levels consistent with risk appetite.

Implemented organizational structure promoting end-to-end business unit integrity and accountability and enhancing transparency in total cost of ownership to allow for more informed, efficient decision-making.

Drove strategy to increase the profile and understanding of the Life and Retirement business with stakeholders, including by actively engaging with investors and identifying and forming strategic partnerships.
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Continued to execute on a multi-year plan to reduce balance sheet exposure to volatile product offerings and demonstrated success in improving liquidity and risk profiles.

Recruited and appointed leaders to key management positions, including creating new roles to enhance risk management, business security and data strategy and innovation, and establishing robust programs for talent review and succession planning.
Earned Award Determination
The Committee analyzed the Life and Retirement quantitative performance in the context of AIG’s absolute business and stock performance in 2018 and decided to adjust Mr. Hogan’s final earned short-term incentive award to 95 percent of target.
Siddhartha Sankaran, Former Chief Financial Officer. Mr. Sankaran separated from AIG on February 28, 2019. Pursuant to our 2012 Executive Severance Plan, Mr. Sankaran’s earned 2018 short-term incentive award was determined based solely on company performance, which was aligned at 95 percent as described above.
Long-Term Incentive.
Long-term incentive comprises the largest percentage of a named executive’s annual target compensation opportunity, representing 50 percent or greater of the annual target total direct compensation opportunity for each of our current named executives. The Committee may grant amounts above or below annual target levels. We believe that providing a significant portion of executive compensation in equity that is earned over a three-year period will drive long-term value creation for our shareholders and appropriately account for the time horizon of risks.
For named executives, our 2018 long-term incentive program grants consisted 50 percent in the form of PSUs, which are earned between 0 and 200 percent of target based on achieving key long-term financial objectives for AIG over a three-year performance period, 25 percent in the form of stock options, which directly tie our long-term incentive pay to enhancing shareholder value and 25 percent in the form of RSUs. The PSUs, stock options and RSUs cliff-vest after the three-year period in January 2021.
2018 Long-Term Incentives
Mix​
Why We Use Them​
PSUs
50 percent​
Reward the achievement of
key long-term financial objectives
for AIG​
Stock Options
25 percent​
Align with shareholder interests by
rewarding stock price appreciation
and shareholder value creation​
RSUs
25 percent​
Further align the financial interests
of our Executive Leadership Team
with our shareholders while
supporting retention​
We believe providing this mix of PSUs, stock options (which we have introduced into our long-term incentive program for the first time in 2018), and RSUs will support maintaining a high-performance culture and attracting and retaining key talent through competitive compensation opportunities that do not encourage excessive risk-taking. We consider PSUs and stock options to be performance-based awards. Employees earn PSUs only when AIG achieves our key long-term financial objectives. Stock options have value only if our stock price increases from the date of grant, rewarding shareholder value creation. RSUs further align the financial interests of our named executives with our shareholders while supporting retention.
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The following table illustrates our outstanding long-term incentive awards granted from 2015 to 2018.
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Grant of 2018 Long-Term Incentive Awards
Beginning in March 2018, in order to further incentivize long-term individual performance, align interests with those of shareholders and encourage long-term, sustainable and profitable growth balanced with risk, the Committee may modify an individual’s target award grant above or below annual target levels based on individualized factors. In determining modifications for 2018 long-term incentive award amounts for our named executives, the Committee considered the benefit of providing the executive a continuing and meaningful stake at the start of our multi-year strategic plan and the strength of the executive’s other stakes in the plan’s success. The Committee also weighed the executive’s 2017 individual performance, historic realized compensation and existing stake in the plan’s success, and the importance of the executive’s role in achieving our strategic plan over the term of the award. Based on these considerations, in March 2018, the Committee determined (and the Board ratified for Mr. Duperreault) the following 2018 target long-term incentive amounts for our named executives:
Named Executive Officer
2018 LTI Target
Amount​
2018 LTI
Individual
Performance
Modifier​
Modified LTI
Target Award
Amount​
Brian Duperreault $ 11,200,000 150 % $ 16,800,000
Mark Lyons* $ 275,000 $ 275,000
Peter Zaffino $ 4,250,000 150 % $ 6,375,000
Douglas Dachille $ 4,250,000 150 % $ 6,375,000
Kevin Hogan $ 4,000,000 150 % $ 6,000,000
Former Executive Officer
Siddhartha Sankaran $ 3,300,000 125 % $ 4,125,000
*
In connection with Mr. Lyons’ appointment as our Chief Financial Officer in December 2018, the Committee approved a prorated 2018 long-term incentive award (representing one month of Mr. Lyons’ 2019 target opportunity) in the same form as awards to other Executive Leadership Team members.
To determine long-term incentive grants, we convert the Committee-approved target dollar amount of an executive’s long-term incentive award to a number of PSUs (50 percent), stock options (25 percent) and RSUs (25 percent). The number of PSUs or RSUs is determined 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,
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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 recipient’s promotion. The number of stock options is determined based on the grant date fair value of a stock option to purchase a share of AIG Common Stock. Grants are made pursuant to the AIG Long Term Incentive Plan (the LTI Plan).
2018 PSUs (50 percent)
Executives will earn 2018 PSU awards based on achieving pre-established goals across three fundamental financial objectives over a three-year performance period (2018 through 2020). Two performance metrics, Accident Year Combined Ratio, as Adjusted, including Average Annual Losses and Core Normalized Book Value per Share, measure improvement or growth in these areas for each year during the three-year performance period. The third performance metric, Core Normalized Return on Attributed Equity, is measured once for the final year of the three-year performance period. In previous years, executives earned PSU awards based on achieving TSR relative to peers.
We chose the performance metrics for 2018 PSUs because they are based on financial objectives that are fundamental to insurance companies, are readily understood, can be monitored by awardees and align with our multi-year strategic plan focused on long-term, sustainable and profitable growth. These performance metrics measured over the three-year performance period also reflect our long-term business strategy while balancing risk, profitability and growth to drive shareholder value.
The table below summarizes the three performance metrics. Actual performance below threshold will result in no payout, while threshold performance will result in a 50 percent payout. Achieving target payout of 100 percent requires improvement in each of the performance metrics. The maximum payout of 200 percent reflects ambitious goals that require performance beyond targets.
Metric*
Rationale​
Performance​
Weighting​
Accident Year Combined Ratio, As Adjusted, including Average Annual Losses**
(Annual Improvement)
Measures the underlying risk
selection, expense discipline
and underwriting profitability of
General Insurance​
Threshold, Target and
Maximum goals for
improvement in each
of 2018, 2019 and 2020​
33.3%​
Core Normalized Book Value per Share
(Annual Growth)
Measures the overall
profitability and growth of AIG’s core businesses, adjusted for
cumulative dividends paid to
shareholders​
Threshold, Target and
Maximum goals for growth in
each of 2018, 2019 and 2020​
33.3%​
Core Normalized Return on Attributed Equity
(2020)
Measures the profitability
of AIG’s Core businesses as
well as its use of capital​
Threshold, Target and
Maximum goals for full
year 2020​
33.3%​
Note: We use interpolation to determine the payout (as a percentage of target) for a performance result between threshold and target or between target and maximum.
*
These performance metrics are non-GAAP financial measures. See Appendix A for an explanation of how these measures will be calculated for AIG from our audited financial statements.
**
We cap earned performance at 100 percent regardless of annual improvements if the full year 2020 performance has not improved from full year 2017 performance.
We adjust our long-term incentive metrics to ensure that results properly reflect management contributions. These adjustment principles are the same as those described above for our 2018 short-term incentive program metrics. See Appendix A for an explanation of how these metrics will be calculated for AIG from our audited financial statements. The Committee will certify the results in the first quarter of 2021.
Any earned PSUs will vest in January 2021 and will be settled in AIG Common Stock. Dividend equivalent rights in the form of additional PSUs also accrue starting with the first dividend record date of AIG Common Stock following the grant date. They are subject to the same vesting and performance conditions as the underlying units 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
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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.
2018 Stock Options (25 percent)
All stock options are granted with an exercise price equal to the closing price of the underlying shares on the date of grant (except Mr. Duperreault’s options have the same exercise price as those granted to other named executives in March 2018, but were granted one day later after ratification by the Board). Stock options granted in 2018 will vest in January 2021 and have a 10-year term.
2018 RSUs (25 percent)
RSUs granted in 2018 will vest in 2021 and will be settled in AIG Common Stock. As with PSUs, dividend equivalent rights in the form of additional RSUs also accrue starting with the first dividend record date of AIG Common Stock following the grant date. They are subject to the same vesting conditions as the underlying units and are paid when the underlying shares are delivered. The number of additional RSUs earned in respect of dividend equivalent rights is determined in the same manner as PSUs, as described above.
Adjudication of 2016 Long-Term Incentive Awards
The three-year performance period for our 2016 long-term incentive awards ended on December 31, 2018. The Committee assessed performance in the first quarter of 2019 and certified the results, which are shown in the following table. The 2016 long-term incentive awards, which were 100 percent in the form of PSUs, were earned based 100 percent on relative TSR, which is targeted at median. Actual performance below threshold results in no payout. Relative option-adjusted spread (OAS) acted as a gating metric to protect against excessive risk-taking, which would reduce the payout level (if any) resulting from the relative TSR score in half if our relative OAS percentile were below the 20th percentile of the peer group. As shown in the table, our TSR relative to peers was below threshold and no awards were earned:
Performance Metric
Threshold​
Target​
Maximum​
Actual​
%
Achieved​
Weighting​
% Achieved
(Weighted)​
Relative TSR
25th
percentile​
50th
percentile​
75th
percentile​

percentile​
0%​
100%​
0%​
Relative OAS
Acts as a gating metric:
If OAS percentile is less than 20th
percentile of peer group, the payout
level is reduced by half.
N/A​
N/A​
N/A​
N/A​
Payout:
50%​
100%​
150%​
0%​
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Pre-2018 Pay for Performance
Our long-term incentive awards have represented the largest part of any named executive’s target compensation and have been granted entirely in equity. The following table demonstrates the tie to pay for performance of our long-term incentive award program. It shows the value of past equity awards (granted in 2015, 2016 and 2017) as a percentage of their target value at grant, based on our stock price of  $39.41 on December 31, 2018, both including and excluding one-time awards outside of our annual long-term incentive program. Mr. Lyons joined AIG in 2018 and did not receive any equity awards prior to 2018.
Performance of
Pre-2018 LTI
Awards to Date*
Value at
12/31/18
Closing
Price**
Performance of
Pre-2018
One-Time
Awards
Value at
12/31/18
Closing
Price**
Aggregate
Value at
12/31/18
Closing
Price**
Named Executive
2015
PSUs
2016
PSUs
2017
PSUs &
RSUs
RSUs***
Sign-on
Options****
Brian Duperreault
N/A
N/A
30%
20%
N/A
0%
0%
8%
Peter Zaffino
N/A
N/A
30%
19%
N/A
0%
0%
5%
Kevin Hogan
25%
0%
30%
12%
100%
N/A
61%
31%