American International Group currently owes the U.S. government $83.6 billion, the company said in a statement released to clear up what it characterized as "continuing confusion regarding the amount of assistance AIG has received" and what it still must repay.
AIG said its total government-authorized assistance is $182.3 billion, and its total outstanding assistance–defined by spokesman Mark Herr as the amount of authorized money that AIG has not used–is $120.7 billion.
Mr. Herr said while the $83.6 billion owed could conceivably rise if the company is forced to use more of the $120.7 billion, AIG has actually been moving in the opposite direction.
Drilling down into the numbers, AIG said The Federal Reserve Bank of New York provided the company with a revolving credit facility of up to $60 billion for a five-year period–on which, as of Sept. 2, 2009, AIG owed $38.8 billion, including accrued compounding interest and fees.
AIG also received equity capital totaling $44.8 billion in the form of Treasury Department investments in AIG preferred stock through the Troubled Asset Relief Program. "The U.S. Treasury has also provided a commitment of up to $29.835 billion in connection with the issuance of additional TARP equity, of which AIG has drawn $3.2 billion," the company said.
AIG and the Fed agreed that AIG will issue to the Fed preferred interests in special-purpose vehicles holding equity in certain AIG subsidiaries, and in return, AIG's debt to the Fed would be reduced by a total of $25 billion.
In addition, the Fed made loans totaling around $44 billion to financing entities it created, called Maiden Lane II and Maiden Lane III. The loans were used to buy "value-impaired assets from AIG and its counterparties," such as residential mortgage-backed securities and collateralized debt obligations held by AIG.
The loan to Maiden Lane II has a balance of $16.9 billion, and the loan to Maiden Lane III has a balance of $20.2 billion.
Meanwhile, AIG's new president and chief executive officer, Robert Benmosche, will receive an annual salary that could reach up to $10.5 million, according to a proposal approved by Kenneth Feinberg, the Special Master for TARP Executive Compensation.
Mr. Feinberg, who was appointed by President Barack Obama to be the so-called "pay czar," wrote in a letter to AIG's Compensation and Management Resources Committee that their CEO's total compensation package was determined to be appropriate "when compared to…other applicable presidents and chief executive officers of similarly situated companies."
Mr. Benmosche's salary consists of a $3 million cash salary per year, "stock salary" of $4 million per year and long-term incentive awards of up to $3.5 million.
In his letter, Mr. Feinberg said the stock salary "is determined to be performance-based because the value of such stock salary will be determined by the value of the company's stock over the long term and cannot be sold until [Aug. 10, 2014]."
The long-term incentive award is also performance-based, Mr. Feinberg wrote, and "will not vest unless Mr. Benmosche continues to provide services to the company for two years following the grant date of the award, and will be subject to an annual performance" by AIG's compensation committee.
Mr. Feinberg also added that "any and all incentive compensation paid to Mr. Benmosche will be subject to recovery or 'clawback' if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metrics."
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