AIG 2011 Annual Report Download - page 356

American International Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair value of restricted stock and RSUs is based on the closing price of AIG Common Stock on the date of
grant.
The following table summarizes outstanding share-settled awards and RSUs that are fully vested on the date of
grant but subject to transfer restrictions under the foregoing plans*:
Number of Shares/RSUs Weighted Average Grant-Date Fair Value
Time- Total Total Time- Total Total
As of or for the Year vested AIG SICO vested AIG SICO
Ended December 31, 2011 RSUs 2002 Plan Plan Plans RSUs 2002 Plan Plans Plans
Unvested, beginning of year 117,664 43,064 160,728 238,613 $ 171.21 $ 1,016.42 $ 397.67 $ 1,215.16
Granted 1,502,238 - 1,502,238 - 24.36 - 24.36 -
Vested (1,410,100) (2,193) (1,412,293) (17,945) 29.13 313.33 29.58 (1,112.87)
Forfeited (18,128) (1,913) (20,041) (24,761) 377.94 1,003.73 437.68 (1,229.84)
Unvested, end of year 191,674 38,958 230,632 195,907 $ 45.95 $ 1,043.08 $ 214.39 $ 1,209.45
* Excludes DSUs and options, which are discussed under the Non-Employee Plans and Stock Options sections above.
The total unrecognized compensation cost (net of expected forfeitures) related to unvested SICO awards is
$71 million and the weighted-average and expected period of years over which those costs are expected to be
recognized are 5.41 years and 28 years, respectively. The unrecognized expense for all other awards total
$1 million, with a weighted average period of less than one year.
AIG has issued various share-based grants, including restricted stock units, linked to AIG Common Stock, but
providing for cash settlement to certain of its most highly compensated employees and executive officers. Share-
based cash settled awards are recorded as liabilities until the final payout is made or the award is replaced with a
stock-settled award. Unlike stock-settled awards, which have a fixed grant-date fair value (unless the award is
subsequently modified), the fair value of unsettled or unvested liability awards is remeasured at the end of each
reporting period based on the change in fair value of one share of AIG Common Stock. The liability and
corresponding expense are adjusted accordingly until the award is settled.
Stock Salary Awards
In 2009, AIG established a program of regular grants of vested stock or units that is generally referred to as
‘‘Stock Salary’’. Stock Salary is determined as a dollar amount through the date that salary is earned and accrued
at the same time or times as the salary would otherwise be paid in cash. Stock Salary was granted to any
individual qualifying as a senior executive officer or one of AIG’s next twenty most highly compensated employees
(the Top 25). Stock Salary for a Top 25 employee (other than AIG’s CEO) is settled in three equal installments on
the first, second and third anniversary of grant. Stock Salary was also granted to individuals qualifying as an
executive officer or one of AIG’s next 75 most highly compensated employees (Top 26-100), and will be settled on
either the first or third anniversary of grant in accordance with the terms of an employee’s award. The Stock
Salary grants issued in 2009 were awarded in the form of immediately vested RSUs, and the number of units
awarded was based on the value of AIG Common Stock on the grant date. The RSUs are settled in cash based on
the value of AIG Common Stock on the applicable settlement date. During 2011 and 2010, AIG paid $6 million
and $18 million to settle awards and recognized a reduction of $39 million and a charge of $36 million in
compensation expense in the respective years for unsettled awards to reflect fluctuations in the price of AIG
Common Stock.
342 AIG 2011 Form 10-K
RESTRICTED STOCK AND RESTRICTED STOCK UNIT VALUATION
LIABILITY AWARDS