AIG 2009 Annual Report Download - page 330

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The total unrecognized compensation cost (net of expected forfeitures) related to non-vested share-based
compensation awards granted under the 2002 Plan, the 2007 Plan, the AIG DCPPP, the AIG Partners Plan and the
SICO Plans and the weighted-average periods over which those costs are expected to be recognized are as follows:
At December 31, 2009 Unrecognized Weighted-
Compensation Average Expected
(in millions) Cost Period Period
Plans:
Time-vested RSUs – 2002 Plan $ 3 0.63 years 2 years
Time-vested RSUs – 2007 Plan $ 58 0.65 years 2 years
AIG DCPPP $ 22 0.92 years 2 years
AIG Partners Plan $ 8 1.11 years 2 years
Total AIG Plans $ 91 0.76 years 2 years
Total SICO Plans $ 138 5.42 years 30 years
Liability Awards
In December 2009, AIG issued to certain of its most highly compensated employees various share-based grants,
including restricted stock units, linked to AIG’s stock, but requiring cash settlement. Cash settled awards are recorded
as a liability until the final payout is made or the award is replaced with a stock-settled award. At the end of each
reporting period, any unsettled award or unvested RSU is remeasured based on the change in fair value of one share
of AIG Common Stock and the liability and expense are adjusted accordingly.
Stock Salary
Stock salary is determined as a dollar amount through the date that salary is earned, accrues at the same time or
times as the salary would otherwise be paid in cash and vests immediately upon grant. Stock salary was granted in 2009
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 second, third and fourth anniversary of grant, with settlement accelerated by one year if AIG
reduces its federal obligations prior to the schedule of installment dates included in the award agreements. Stock
salary granted to any individual qualifying as an executive officer or one of AIG’s next 75 most highly compensated
employees (‘‘Top 26-100’’) is settled on either the first or third anniversary of grant in accordance with the terms of an
employee’s award. The 2009 stock salary grants issued in December 2009, were awarded retroactively to January 1,
2009 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 will be settled in cash based on the value of AIG Common Stock on the
applicable settlement date.
TARP RSUs and Other Long Term Incentive Plans
TARP RSUs were granted on December 28, 2009 based on achievement of objective performance metrics and,
when vested and transferable, will be settled in 25 percent installments in proportion to AIG’s reduction of its TARP
obligations. TARP RSUs granted to the Top 25 vest on the third anniversary of grant, while TARP RSUs granted to
the Top 26-100 vest on the second anniversary of grant and are subject to transferability restrictions for an additional
year after vesting. As a result, TARP RSUs will be proportionally cash-settled three years from the date of grant for
vested participants provided that AIG settles at least 25 percent of its TARP obligation.
AIG 2009 Form 10-K 322