Peter Zaffino
AMERICAN INTERNATIONAL GROUPAbout Peter Zaffino
Peter Zaffino is Chairman & Chief Executive Officer of AIG (Chairman since 2022; CEO since 2021; President since 2020) and has served on AIG’s Board since 2020; age 58 . Prior roles include Executive Vice President & Global COO (2017–2021) and CEO of General Insurance (2017–2019) at AIG, and multiple senior leadership positions at Marsh & McLennan and GE Capital . Under his tenure, AIG delivered 2024 underwriting income of $1.9B, AYCR as adjusted of 88.2%, CYCR of 91.8%, NPW of $23.9B, AATI per share of $4.95 and Core Operating ROE of 9.1% . AIG’s cumulative TSR from 12/31/2019 to 12/31/2024 reached $161.81 per $100 initial investment versus $227.67 for the S&P 500 P&C peer index; 2024 net income was a loss of $926M, reflecting portfolio actions and non-GAAP adjustments discussed in the proxy .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AIG | Chairman | 2022–present | Combined Chair/CEO role to maintain single strategic voice; supported Board refresh and succession planning enhancements |
| AIG | Chief Executive Officer; President | CEO: 2021–present; President: 2020–present | Led multi-year transformation, completed Corebridge deconsolidation, focused on underwriting excellence and capital returns |
| AIG | EVP & Global COO | 2017–2021 | Advanced operating model, risk framework, AIG Next cost actions |
| AIG | CEO, General Insurance | 2017–2019 | Initiated underwriting and portfolio optimization to improve combined ratios |
| Marsh & McLennan | Chairman, Risk & Insurance Services; CEO, Marsh; President & CEO, Guy Carpenter | 2008–2017 | Led major insurance brokerage and reinsurance operating units |
| GE Capital | Various roles | 1995–2001 | Financial and operating experience in diversified financial services |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Corebridge Financial, Inc. | Chair (former) | 2021–2024 | Stepped down following deconsolidation and stake reduction |
| Current US public company boards | None | — | AIG overboarding policy limits CEO service; he serves on none |
Fixed Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $1,571,923 | $1,500,000 | $1,500,000 |
| Perquisites & Other (All Other Compensation) | $264,397 | $258,645 | $298,442 |
| Pay Ratio | — | — | 300:1 |
Perquisites detail (2024): personal use of aircraft ($161,466), cars/driver ($8,788), financial/tax services ($17,750), residential security ($75,093), spousal travel ($2,100), medical ($1,895); total $267,092; aircraft personal use required by policy with $195,000 allowance and no excise tax gross-ups .
Performance Compensation
| Component | Design & Targets | 2024 Actual |
|---|---|---|
| Target STI | $4,500,000 target; single company scorecard with four equally weighted metrics (AYCR adj; Diluted AATI per share; Adjusted ROE; Parent GOE exit run-rate); overall cap 200% | Company score 143%; Individual score 150%; capped payout 200% = $9,000,000 |
| Target LTI | $14,000,000; CEO mix 75% PSUs / 25% stock options; no RSUs in annual LTI | Granted $14,000,000 (100% of target) |
| Special Awards | — | None in 2024 for CEO (special RSU from 2022 outstanding) |
2024 STI Company Scorecard Results
| Metric | Threshold | Target | Stretch | Max | Actual | % Achieved | Weight | Weighted % |
|---|---|---|---|---|---|---|---|---|
| AYCR, as adjusted (%) | 91.0 | 89.5 | 88.7 | 87.9 | 88.2 | 139% | 25% | 35% |
| Diluted AATI per share ($) | 4.00 | 4.40 | 4.75 | 5.10 | 4.93 | 138% | 25% | 35% |
| Adjusted ROE (%) | 5.7 | 6.1 | 6.4 | 6.8 | 6.7 | 141% | 25% | 35% |
| Parent GOE Exit Run-Rate ($M) | 725 | 675 | 625 | 575 | 548 | 150% | 25% | 38% |
| Company Quantitative Score | — | — | — | — | — | 143% | — | 143% |
2024 Annual LTI Vehicles and Vesting
- PSUs: four equally weighted metrics (Diluted AATI/share growth; Parent GOE exit run-rate improvement; AYCR adj sub-90%; relative TSR vs peers AXA, Allianz, Chubb, CNA, Hartford, Tokio Marine, Travelers, W.R. Berkley), performance period 1/1/2024–12/31/2026; cliff vest 1/1/2027; payout capped at 200% .
- Options: 10-year term; strike at grant close; vest in equal thirds on year 1/2/3 anniversaries .
- CEO annual LTI excludes RSUs; special 2022 RSUs cliff vest 11/10/2027 .
PSU Achievement (2012 grant cohort example for context): 2022 PSUs (performance period ended 12/31/2024) paid at 178% on AYCR adj improvements, normalized AATI/share, and relative TSR .
Equity Ownership & Alignment
| Ownership Item | Data |
|---|---|
| Beneficial ownership (common + in-scope derivatives) | 1,946,890 shares; includes 1,305,924 options exercisable within 60 days; <1% of shares outstanding |
| Director independence/board role | Only non-independent director; combined Chairman & CEO; Lead Independent Director provides robust counterbalance |
| Stock ownership guidelines (execs) | CEO: 5x base salary; retention of 50% of net shares until threshold met; 6-month post-employment compliance; all named executives are in compliance |
| Anti-hedging/pledging | Prohibited; no pledging by executives/directors |
| Options outstanding (unexercisable) | 2024: 199,543; 2023: 154,936; 2022: 65,350; earlier grants fully vested; expiration per schedule |
| Unvested PSUs and RSUs (select balances at 12/31/2024) | 2024 PSUs: 225,418 units ($16,410,430); 2023 PSUs: 255,432 ($18,595,449); 2022 PSUs: 189,578 ($13,801,278); 2022 special RSUs: 909,771 ($66,231,328) |
Option exercises and vesting activity (2024): 533,000 options exercised ($40,169,144 realized); 415,852 shares vested from stock awards ($28,634,417) .
Employment Terms
| Term | Summary |
|---|---|
| Agreement & Board nomination | 2022 employment agreement includes Board nomination for five-year term as Chairman while serving as CEO |
| Severance (no CIC) | 1.5x (salary + average prior 3 years STI), pro-rata STI, accelerated vesting of equity, $40,000 benefits; lump-sum |
| Severance (double trigger CIC within 2 years) | 2x (salary + greater of average 3-year STI or target), pro-rata STI based on greater of target/actual, accelerated vesting |
| Restrictive covenants | 1-year non-compete, non-solicit, and interference prohibitions; confidentiality ongoing; 12 months’ notice required for certain voluntary departures |
| Clawbacks | Financial Restatement Clawback (Section 16 officers; look-back 3 years) and broad Clawback Policy (risk failures, misconduct, etc.); no 2024 clawback actions |
| Change in control quantification (as of 12/31/2024) | Qualifying termination following a CIC: Severance $19,553,333; STI $6,435,000; Medical/Life $40,000; Unvested options $3,689,695; Unvested stock awards $112,913,906; Total $142,631,934 |
Potential Payments on Termination (as of 12/31/2024)
| Scenario | Annual STI ($) | Severance ($) | Medical/Life ($) | Unvested Options ($) | Unvested Stock Awards ($) | Total ($) |
|---|---|---|---|---|---|---|
| By AIG w/o Cause | $6,435,000 | $14,665,000 | $40,000 | $3,689,695 | $112,913,906 | $137,743,601 |
| Good Reason (exec) | $6,435,000 | $14,665,000 | $40,000 | $3,689,695 | $112,913,906 | $137,743,601 |
| Qualifying Termination post-CIC | $6,435,000 | $19,553,333 | $40,000 | $3,689,695 | $112,913,906 | $142,631,934 |
| Death | $4,500,000 | — | — | $3,689,695 | $106,513,958 | $114,703,653 |
| Disability | $6,435,000 | — | — | $3,689,695 | $112,913,906 | $123,038,601 |
Board Governance
- Service history and roles: Director since 2020; Chairman since 2022; only non-independent director; not a member of Board committees; Lead Independent Director (John G. Rice) has comprehensive responsibilities including executive sessions, agenda oversight, strategy/risk liaison .
- Attendance and oversight: 10 Board meetings and 18 committee meetings in 2024 with 98% average attendance; independent directors meet without management each regular meeting .
- Dual-role implications: Board affirms combined Chair/CEO structure with robust Lead Independent Director function and annual evaluations; agreement ensures Zaffino’s nomination as Chair during five-year term, reinforcing continuity but placing extra weight on independence safeguards .
Compensation Structure Analysis
| Element | Structure | Alignment / Risks |
|---|---|---|
| Cash vs Equity mix | 2024 total comp: salary $1.5M; STI $9.0M; stock awards $10.34M; options $3.50M; majority variable and equity-based; CEO annual LTI entirely PSUs/options (no RSUs) | High at-risk pay supports alignment; options viewed as performance-based; payouts capped; metrics disclosed |
| Metric changes | Simplified STI metrics and removed normalization from Diluted AATI/share; PSU weightings equalized; relative TSR peer updated (added Allianz) | Greater transparency and comparability; shareholder feedback generally supportive |
| Clawbacks/Policies | Two clawback policies; anti-hedging and pledging; strong ownership requirements; no tax gross-ups except relocation/tax equalization; no single-trigger CIC benefits | Reduces risk-taking incentives; promotes retention and accountability |
| Special awards | Large 2022 special RSU remains outstanding and will cliff vest in 2027 | Creates retention hook and potential future supply upon vesting |
Director Compensation (for board service)
- Non-independent directors (e.g., CEO) receive no director-specific compensation; independent director program is cash retainer plus DSUs with ownership guidelines (5x base retainer) .
Compensation Peer Group (Benchmarking)
- Compensation peer group (17 companies) includes insurers and financial services (e.g., ALL, CB, MET, PGR, TRV, JPM, WFC); relative TSR peer group includes AXA, Allianz, Chubb, CNA, Hartford, Tokio Marine, Travelers, W.R. Berkley; Allianz added in 2024 .
Performance & Track Record
| Measure | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| AYCR, as adjusted (%) | 91.0 | 88.7 | 87.7 | 88.2 |
| CY Combined Ratio (%) | 95.8 | 91.9 | 90.6 | 91.8 |
| AATI per diluted share ($) | — | — | 4.42 | 4.95 |
| Core Operating ROE (%) | — | — | — | 9.1 |
| NPW ($B, comparable) | — | — | — | 23.9 |
| Underwriting income ($B) | — | — | — | 1.9 |
Strategic achievements include Corebridge deconsolidation and stake reduction to ~22.7%, divestiture of the Personal Travel Business ($600M), debt reduction ($1.6B), $6.6B buybacks, $1.0B dividends, and enhanced reinsurance program via Lloyd’s Syndicate 2478 .
Risk Indicators & Red Flags
- No pledging or hedging; strong clawbacks; no single-trigger CIC; no tax gross-ups beyond relocation/tax equalization; aircraft personal use controlled by policy and capped allowance .
- Related party transactions: none in 2024 beyond ordinary-course dealings with large shareholders; delinquent Section 16 filings noted for other individuals, not Zaffino .
- Say-on-Pay: support improved versus 2023 amid simplification and transparency enhancements .
Equity Award Grant Detail (2024)
| Grant | Date | Shares/Options | Terms |
|---|---|---|---|
| PSUs | 02/20/2024 | Target 150,279; threshold 75,139; max 300,558; grant-date fair value $10,339,947 | 3-year performance; cliff vest 1/1/2027; equal metric weights; capped at 200% |
| Stock Options | 02/20/2024 | 199,543 options; strike $68.13; fair value $3,499,984 | 10-year term; vest 1/3 annually over 3 years |
Vesting Schedules to Monitor
- 2024 options tranches: 2/20/2025, 2/20/2026, 2/20/2027 .
- 2024 PSUs: earn over 2024–2026; vest 1/1/2027 .
- 2022 special RSUs: cliff vest 11/10/2027 .
- 2022 PSUs: vested 1/1/2025 at 178% .
Investment Implications
- Pay-for-performance is tight: majority of CEO comp is variable and equity-based with clear metrics tied to underwriting and profitability; 2024 STI paid at cap due to strong Company and individual performance .
- Retention appears strong: large unvested PSU blocks and 2022 special RSUs cliff vest in 2027, creating long-dated alignment and potential future supply events; double-trigger CIC protection reduces forced turnover risk .
- Trading signals: monitor vesting and option exercise dates (notably 2025–2027) and potential settlement-related share supply; 2024 realized value from exercises/vesting was significant ($40.2M options, $28.6M stock awards), indicating liquidity but not necessarily net selling given plan mechanics .
- Governance mitigates dual-role concerns: robust Lead Independent Director responsibilities, independent committees, and frequent executive sessions help balance the combined Chair/CEO structure .
- Benchmarking and clawbacks: competitive peer groups and strong clawback/anti-pledging policies lower governance risk; watch future metric changes as programs evolve to ensure targets remain rigorous .