AIG 2015 Annual Report Download - page 320

ITEM 8 / NOTE 19. SHARE-BASED AND OTHER COMPENSATION PLANS
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Our non-employee directors, who serve on our Board of Directors, receive share-based compensation in the form of fully
vested deferred stock units (DSUs) with delivery deferred until retirement from the Board. DSUs granted in 2015, 2014 and
2013 accrue DEUs 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. In 2015, 2014 and 2013, we granted to non-employee
directors 32,342, 28,477 and 25,735 DSUs, respectively, under the 2013 Plan, and recognized expense of $1.9 million, $1.5
million and $1.2 million, respectively.
Stock Options
Options granted under the AIG 2007 Stock Incentive Plan and the 1999 Stock Option Plan generally vested over four years (25
percent vesting per year) and expire 10 years from the date of grant. All outstanding options are vested and out of the money
at December 31, 2015. There were no stock options granted since 2008. The aggregate intrinsic value for all unexercised
options is zero.
The following table provides a roll forward of stock option activity:
Weighted
Average
Remaining
Weighted Average Contractual
As of or for the Year Ended December 31, 2015 Shares Exercise Price Life
Options:
Exercisable at beginning of year 202,275 $ 1,037.74 2.17
Expired (108,763) $ 1,261.25
Exercisable at end of year 93,512 $ 777.78 2.16
Cash-settled Awards
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. Compensation expense is recognized over the vesting periods, unless the award is fully vested on the grant
date in which case the entire award value is immediately recognized as expense.
Unlike stock-settled awards, which generally have a fixed grant-date fair value (unless the award is subsequently modified),
the fair value of unsettled or unvested cash-settled 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.
During the period we were subject to Troubled Asset Relief Program (TARP) restrictions, we issued various cash-settled share-
based grants, including Stock Salary, TARP RSU awards, and other cash-settled RSU awards, to certain of our most highly
compensated employees and executive officers in the form of restricted stock units that were either fully vested with payment
deferred, or subject to specified service and performance conditions. After the repayment of our TARP obligations in
December 2012, all performance conditions were satisfied; as a result, we no longer issue awards that are subject to TARP
restrictions.
Restricted Stock Units
Stock Salary was earned and accrued at the same time or times as the salary would otherwise be paid in cash and is generally
settled in installments on the first, second or third anniversary of grant in accordance with the terms of an employee’s award.
Stock Salary grants were generally issued in the form of fully vested RSUs and are settled in cash based on the value of AIG