American International Group Inc said shareholders approved a $43.1 million pay package for 2017 for Chief Executive Officer Brian Duperreault during the company’s annual meeting on Wednesday.
A nonbinding resolution to endorse the executive compensation passed with a majority of votes cast, Chairman Doug Steenland announced, adding that further details would be released later in the day.
Influential proxy advisory firms International Shareholder Services (ISS) and Glass Lewis had advised shareholders to reject the resolution, saying the pay package did not align with AIG’s performance.
AIG’s stock has dropped 13 percent since Duperreault took charge of the company a year ago.
The company’s pay arrangements include $24.2 million for former CEO Peter Hancock, who stepped down last year under pressure, with a $5 million cash award “for his service through the transition” to Duperreault, according to its annual proxy filing with the U.S. Securities and Exchange Commission in March.
It is unusual for both advisory firms to recommend voting against pay measures for the same company. ISS recommended voting against pay only about 12 percent of the time for companies listed on the broad-based Russell 3000 stock index, an ISS spokesman said.
“When I spoke to you last year, I said my priority was to grow the business,” Duperreault said in prepared remarks to shareholders. “That has not changed.”
AIG laid a foundation in 2017, including restructuring business units and empowering underwriters in the company’s general insurance unit to better select better risks, Duperreault said.
“2018 is the year of execution,” Duperreault said.
Glass Lewis gave AIG’s compensation package a letter grade of “F.”
“Overall, the company paid significantly more than its peers, but performed significantly worse than its peers,” the report said.
ISS said one-time awards to Duperreault when he joined the company, including a $12 million cash bonus, were not tied to performance.
AIG declined to comment on the proxy recommendations.
AIG’s board compensation committee “believes this award properly motivates Mr. Duperreault to create sustainable, profitable growth for AIG, aligning his interests with those of our shareholders,” the proxy filing states.
Some investors have said they would approve of Duperreault’s pay so long as he performs.
Duperreault’s other areas of focus include revamping technology and installing new executives across the insurer to jumpstart profits.
AIG is preparing to finalize its acquisition of reinsurer Validus Holdings Ltd.
But his steps have yet to boost the bottom line.
In March, AIG said it paid Duperreault $43.1 million last year, according to the proxy filing. Excluding one-time components, Duperreault earned $14.9 million.
That figure was similar to the $15.3 million paid to MetLife Inc CEO and Chairman Steven Kandarian in 2016 and less than the $27.1 million paid in 2017 to John Strangfeld, chairman and CEO of Prudential Financial Inc, according to proxy filings by those companies.
AIG shares closed as high as $66.06 on Aug. 3, compared with $61.82 on the first trading day following his mid-May appointment.
The stock dipped 0.19 percent at $52.98 on Wednesday. (Additional reporting by Ross Kerber in Boston.)