AIG 2015 Annual Report Download - page 321

ITEM 8 / NOTE 19. SHARE-BASED AND OTHER COMPENSATION PLANS
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Common Stock on the applicable settlement date. During 2015, 2014 and 2013, we paid $42 million, $89 million and
$180 million, respectively, to settle awards. For those awards that were vested and unsettled at the end of each year, we
recognized charges of $2 million, $7 million and $73 million in compensation expense for the years ended December 31, 2015,
2014 and 2013, respectively, to reflect fluctuations in the value of AIG Common Stock. At December 31, 2015, the number of
vested but unsettled RSUs totaled 24,405, all of which were settled in January 2016.
In addition, other TARP-related cash-settled RSU granted and issued in March 2013 and 2012 remained unvested as
follows:
Number of Units
Year Ended December 31, 2015 RSUs*
Unvested, beginning of year 1,404,645
Granted -
Vested (975,715)
Forfeited (15,972)
Unvested, end of year 412,958
Net compensation expense for the year (in millions) $ 17
* Total unrecognized compensation as of December 31, 2015 is $1 million; the unvested RSUs will vest and settle in March 2016.
Long Term Incentive Plans
Certain employees were provided the opportunity to receive additional compensation in the form of cash and cash-settled
SARs under the 2011 LTIP award or 100 percent cash for the 2012 LTIP award if certain performance measures were met.
The ultimate value of these awards was contingent on AIG achieving performance measures over a two-year performance
period and such value could range from zero to twice the target amount. Subsequent to the performance period, the earned
awards were subject to an additional time-vesting period. This resulted in a graded vesting schedule for the cash portion of up
to two years, while the SARs portion cliff-vests two years after the end of performance period.
The cash portion of the awards expensed in 2015, 2014 and 2013 totaled approximately $19 million, $57 million and $249
million, respectively. All payments remaining under these awards were made in January 2016.
20. EMPLOYEE BENEFITS
Pension Plans
We offer various defined benefit plans to eligible employees.
The U.S. AIG Retirement Plan (the qualified plan) is a noncontributory defined benefit plan that is subject to the provisions of
ERISA. U.S. salaried employees who are employed by a participating company and who have completed 12 months of
continuous service are eligible to participate in the plan. Effective April 1, 2012, the qualified plan was converted to a cash
balance formula comprised of pay credits based on six percent of a plan participant’s annual compensation (subject to IRS
limitations) and annual interest credits. In addition, employees can take their vested benefits when they leave AIG as a lump
sum or an annuity option after completing at least three years of service. However, employees satisfying certain age and
service requirements (i.e. grandfathered employees) remain covered under the old plan formula, which is based upon a
percentage of final average compensation multiplied by years of credited service, up to 44 years. Grandfathered employees
will receive the higher of the benefits under the cash balance or final average pay formula at retirement. Non-U.S. defined
benefit plans are generally either based on the employee’s years of credited service and compensation in the years preceding
retirement or on points accumulated based on the employee’s job grade and other factors during each year of service.