American International Group’s new Global Chief Operating Officer Peter Zaffino starts his tenure at the struggling insurer with an initial pay package worth more than $8.5 million, according to a regulatory filing.

The former Marsh president will get an annual base salary of $1.25 million, a short-term annual incentive target of $3 million and an annual long-term incentive award of $4.25 million.

AIG said the long-term incentive award is consistent with what it pays other executives: 70% reflecting performance share units earned based on meeting performance criteria for the three-year period covering January 2017 through December 2019, and 30% in the form of restricted stock units earned if Zaffino stays employed at AIG through those three years.

Additional pay package elements reflect the compensation Zaffino gave up when he left Mash. The main thing: a one-time sign-on bonus with a target value of $15 million. Part of this will include stock options to purchase 1 million shares of AIG common stock, with a seven-year term. That stock will vest in groups, and in stages, once share price and time requirements are met.

AIG noted that any bonus, equity-based award or other incentive compensation will be subject to the AIG Clawback policy, among other requirements.

Zaffino, 50, has more than 25 years of insurance and reinsurance industry experience, the AIG filing noted.

Zaffino was Brian Duperreault’s first big executive hire since he took over as AIG’s new CEO in May. Both men worked together at Marsh parent Marsh & McLennan Cos. when Duperreault was CEO there from 2008 through 2012.

Duperreault himself was running Hamilton Insurance before he was recruited to take over at AIG. AIG agreed to pay Duperreault $20 million to release him from any contract restrictions that would prevent or restrict him from working for AIG or serving on its board of directors. He also gets an additional $20 million once he completes his second year as CEO. Beyond that, there is an annual base salary of $1.6 million, a short-term annual incentive target of $3.2 million, and an annual long-term incentive award of $11.2 million.

Source: AIG/SEC filing