(Bloomberg) -- AmericanInternational Group Inc., the insurer being pressured byactivist investors to split up, cut short-term incentive pay forChief Executive Officer Peter Hancock by 29% last year as he missedprofit targets.

The CEO received $2.5 million from the non-equity incentive planas he failed to meet goals tied to return-on-equity and expensereductions, AIG said Tuesday in a regulatory filing. That compareswith $3.5 million in 2014.

“Mr. Hancock and our other executives received an earned awardequal to 78% of their target amount,” AIG said in the filing.“Payment of 50% of this amount is deferred until 2017.”

Hancock has been reshaping management since taking over inSeptember 2014, including a shakeup late last year amidpressure from billionaire investors Carl Icahn and John Paulson toshrink the insurer. Some of the firm’s highest-paid executives haveannounced their departures, including longtime Chief FinancialOfficer David Herzog and John Doyle, who led commercial insuranceoperations.

Icahn’s view

AIG agreed in February to name Paulson and a representative fromIcahn’s firm to the insurer’s board. Icahn won anothervictory with the announcement in Tuesday’s filing thatcredit-default swaps, a metric of creditworthiness, will no longercount toward setting Hancock’s compensation. The activist had saidthat the link between swaps and pay reduced the CEO’s incentive toconsider breaking up the company.

Long-term incentive awards starting this year will probably bebased 100% on total shareholder return relative to peers, AIG saidTuesday. Still, “to protect against excessive risk-taking,” thereis a provision to account for creditworthiness in settingcompensation if bond yields perform poorly compared with industryrivals, AIG said. Hancock’s total package rose 3.6% to $12.5million as his stock awards climbed in his first full year asCEO.

Herzog leaves with an exit package worth more than $18 million,according to company filings. That is based on Tuesday’s shareprice, assumes that AIG meets performance targets set by the boardand includes equity awards that will be fully paid out by 2020.Herzog has been appointed as a director at insurer Ambac FinancialGroup Inc.

Related: Marsh hires ex-AIG executive Doyle aspresident

Doyle has a similar package. Insurance broker Marsh Inc. hassaid Doyle will join as president, starting next month.

Fasano, Dachille

Philip Fasano, who was hired by Hancock, received an $8.4 millionpackage as his annual pay at AIG was disclosed for the first timein the newly created position of chief information officer. Theinsurer also said it paid $20 million in cash and restricted stockto Doug Dachille when AIG acquired his First Principles CapitalManagement last year.

Dachille, a former colleague of Hancock at J.P. Morgan &Co., became chief investmentofficer when AIG acquired the firm. He had a stake of43% in First Principles, according to the document.

--With assistance from Katherine Chiglinsky.

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