American International Group (NYSE: AIG) has approved a compensation plan that will payout $380 million to executives based on their performance, according to recent reports. The plan comes as the insurer works to find a balance between responsible pay on performance, while still offering enough compensation to retain top talent.
The plan will payout roughly 3,000 managers through a long-term incentive plan, said two people with knowledge of the program, according to a Bloomberg report. The average payout per receipt is about $125,000.
AIG’s new compensation plan, which was approved by its board of directors in March, worked toward employee retention as most of the compensation is vested as opposed to guaranteed payouts in prior plans.
The new plan was also approved by the U.S. Treasury Department in January, according to the report.
The insurance giant had to handle the latest compensation plan with delicate care following the bonus fallout from early 2009. At that time, derivative traders received total bonuses around $1 billion even though they were largely blamed for the company’s near collapse that led to a taxpayer bailout.
