AIG 2012 Annual Report Download - page 332

.....................................................................................................................................................................................
21. SHARE-BASED COMPENSATION AND OTHER PLANS
..............................................................................................................................................................................................
Our Consolidated Statement of Operations included share-based compensation expense as follows:
Share-based compensation expense – pre-tax*$ (16) $ 333
Share-based compensation expense – after tax (10) 216
* As of December 31, 2012, compensation expense for the majority of our outstanding share-based awards is attributed to liability-classified
awards, the value of which are based on our share price at the reporting date. Our share price was $35.30, $23.20 and $57.62 at December 31,
2012, December 31, 2011 and December 31, 2010, respectively, and is the primary driver of the volatility in share-based compensation expense.
Pre-tax share-based compensation expense related to discontinued operations for the years ended December 31, 2012, 2011 and 2010 of
$15 million ($10 million after tax), ($4 million) (($3 million) after tax) and $18 million ($13 million after tax), respectively, is also included.
Employee Plans
..............................................................................................................................................................................................
Our employees are granted awards under the AIG 2010 Stock Incentive Plan, as amended (2010 Plan), under which
we have issued restricted stock, restricted stock units (RSUs) and stock appreciation rights (SARs). The 2010 Plan
supersedes all plans for which share-based awards remain outstanding and is currently the only plan under which
share-based awards can be issued.
However, of all grants made under the legacy plans, only grants under the 2007 Stock Incentive Plan (the 2007
Plan) and the Starr International Company, Inc. Deferred Compensation Profit Participation Plans (the SICO Plans)
remain unvested as of December 31, 2012.
Our share-settled awards are settled with newly-issued shares of AIG Common Stock. Share awards made by SICO
are settled by SICO.
Non-Employee Plans
..............................................................................................................................................................................................
Our non-employee directors received share-based compensation in the form of deferred stock units (DSUs) under the
2010 Plan with delivery deferred until retirement from the Board. In 2012, 2011 and 2010, we granted to directors
19,434, 21,203 and 14,484 DSUs, respectively.
Stock Options
..............................................................................................................................................................................................
AIG Stock Option Plan
..............................................................................................................................................................................................
Options granted under the 2007 Plan and the 1999 Stock Option Plan are vested and out of the money at
December 31, 2012. These awards generally vested over four years (25 percent vesting per year) and expired
10 years from the date of grant. There were no stock options granted since 2008; however, in 2012, we issued
558,358 shares in connection with previous exercises of options with delivery deferred.
The following table provides a roll forward of stock option activity:
Options:
Exercisable at beginning of year 710,298 $ 1,172.25 2.96
Expired (196,053) $ 1,284.58
Exercisable at end of year 514,245 $ 1,129.42 2.49
The aggregate intrinsic value for all unexercised options is zero, and no unrecognized compensation costs remain for
stock options under these plans at December 31, 2012.
..................................................................................................................................................................................................................................
AIG 2012 Form 10-K 315
$ 286
186
Years Ended December 31,
(in millions) 2012 2011 2010
Weighted
Average
Remaining
As of or for the Year Weighted Average Contractual
Ended December 31, 2012 Shares Exercise Price Life
ITEM 8 / NOTE 21. SHARE-BASED COMPENSATION AND OTHER PLANS