AIG sets pay, awards of up to $58.5 million for new CEO

NEW YORK (Reuters) - American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) on Friday granted new chief executive Robert Willumstad compensation of up to $22 million in his first year in the job, and additional one-time awards that could add another $36.5 million.

AIG named Willumstad as CEO on June 15. The former Citigroup executive replaced Martin Sullivan, who left the post amid more than $13 billion in losses over two consecutive quarters.

AIG, in a filing with the U.S. Securities and Exchange Commission, said it will pay Willumstad a base salary of $1 million, and set annual bonus and incentive pay targets. He will also be required to use a corporate jet for personal travel.

Earlier this month, AIG agreed to pay outgoing CEO Sullivan a $47 million severance package.

AIG said Willumstad's target annual cash bonus was set at $8 million, and his target for annual long-term incentive pay was put at $13 million.

For 2008, Willumstad's minimum annual cash bonus will be $4 million, deferred until he is no longer employed by AIG.

Willumstad also is to receive a one-time $24.5 million restricted stock award, and a one-time $12 million options award, both subject to vesting restrictions, among other benefits.

(Reporting by Lilla Zuill and Jonathan Stempel, editing by Gerald E. McCormick, Phil Berlowitz)