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AIG confirms Paulson to leave board, Icahn’s representative to stay

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(Reuters) — American International Group Inc.’s proxy filing with the U.S. Securities and Exchange Commission Thursday confirmed that hedge fund manager John Paulson will leave the board of directors but that billionaire Carl Icahn’s board representative will remain on the insurer’s board.

The filing also confirmed the previously announced decision by the board not to award outgoing Chief Executive Officer Peter Hancock a cash bonus for his work last year, after the company’s dismal financial performance roiled shareholders.

According to the filing, Mr. Paulson is leaving the board because of “other time commitments.” Mr. Paulson owned 4.55 million AIG shares as of March 15, according to the filing.

The insurer’s board also re-nominated Samuel Merksamer, who represents Mr. Icahn, to serve on the board for another term. Mr. Merksamer, who last year left the activist investor’s firm, Icahn Capital, a unit of Icahn Enterprises L.P., will continue as Mr. Icahn’s representative, according to the proxy filing.

Mr. Icahn, AIG’s fourth-largest investor, began acquiring his stake in the insurance firm in 2015. He advocated splitting AIG into three parts. The company instead embarked on a two-year turnaround plan developed by Mr. Hancock, which intended to return $25 billion to shareholders.

Last year, AIG returned a total of $13.1 billion of capital to shareholders, the company said.

According to the filing, Mr. Hancock, despite losing his short-term bonus, will still receive a total of nearly $9.6 million in 2016 compensation, according to the filing. The figure includes his $1.6 million base salary, longer-term incentive pay in stock worth $7.8 million and additional funds. The stock incentive starts to pay out in 2019.

In addition, Mr. Hancock, who announced that he would resign last month, will receive an extra $5 million this year to stay with AIG until his replacement is found.

His total compensation for 2016 fell 23% from 2015, the filings show.

While Mr. Hancock must forgo a 2016 cash bonus, other AIG executives will receive bonuses of $680,000 or more, representing 40% of possible target amounts, according to the filing.