SHARE-BASED AND OTHER COMPENSATION PLANS (Tables)

12 Months Ended

Dec. 31, 2015

SHARE-BASED AND OTHER COMPENSATION PLANS

Schedule of share-based compensation expense recognized in Consolidated Statements of Income

Years Ended December 31,
(in millions)		2015		2014		2013
Share-based compensation expense - pre-tax*	$	365	$	349	$	457
Share-based compensation expense - after tax		237		227		297

* For the years ended December 31,2015, 2014 and 2013, $19 million, $86 million and $315 million, respectively, of pre-tax compensation expense was attributed to unsettled liability-classified awards, the values of which are based on our share price at the reporting date. Our share price was $61.97, $56.01 and $51.05 at December 31,2015, 2014 and 2013, respectively. In addition, we recognized $147 million, $120 million and $101 million for immediately vested stock-settled awards issued to retirement eligible employees in 2015, 2014 and 2013, respectively.

Schedule of assumptions used to estimate the fair value of PSUs based on AIG's TSR

	2015		2014		2013
Expected dividend yield(a)	1.78	%	1.13	%	0.38	%
Expected volatility(b)	22.71	%	23.66	%	30.79	%
Risk-free interest rate(c)	1.01	%	0.76	%	0.50	%

(a) The dividend yield is the projected annualized AIG dividend yield estimated by Bloomberg Professional service as of the valuation date.

(b) The expected volatility is based on the implied volatilities of actively traded stock options from the valuation date through the end of the PSU performance period as estimated by Bloomberg Professional service.

(c) The risk-free interest rate is the continuously compounded interest rate for the term between the valuation date and the end of the performance period that is assumed to be constant and equal to the interpolated value between the closest data points on the U.S. dollar LIBOR-swap curve as of the valuation date

Summary of outstanding share-settled awards

				Weighted Average
As of or for the Year	Number of PSUs(b)			Grant-Date Fair Value
Ended December 31, 2015	2015 LTI	2014 LTI	2013 LTI		2015 LTI		2014 LTI		2013 LTI
Unvested, beginning of year	-	4,036,527	4,066,182	$	-	$	48.72	$	37.09
Granted	6,445,639	10,225	-		54.55		52.83		-
Vested	(3,212,976)	(1,270,263)	(1,593,595)		54.09		48.56		37.09
Forfeited	(185,705)	(217,130)	(222,478)		53.66		48.78		37.38
Unvested, end of year	3,046,958	2,559,359	2,250,109	$	55.08	$	48.82	$	37.07

(a) Excludes SICO awards, DSUs and options, which are discussed under the SICO Plans, Non-Employee Plans and Stock Options sections, respectively.

(b) Represents target number of PSUs granted, and does not reflect potential increases or decreases that could result from the final outcome of the performance goals to be determined after the applicable performance period ends. The performance period for 2013 LTI awards ended December 31, 2015; the number of earned PSUs based on the results of the 2013 performance goals will be adjudicated in March 2016 by the Compensation and Management Resources Committee.

Schedule of stock option activity

					Weighted
					Average
					Remaining
		Weighted Average			Contractual
As of or for the Year Ended December 31, 2015	Shares	Exercise Price			Life
Options:
Exercisable at beginning of year	202,275		$	1,037.74	2.17
Expired	(108,763)		$	1,261.25
Exercisable at end of year	93,512		$	777.78	2.16

Summary of SARs (based on target amounts) and cash-settled RSUs (excluding stock salary) including the related expenses

		Number of Units
Year Ended December 31, 2015		RSUs*
Unvested, beginning of year		1,404,645
Granted		-
Vested		(975,715)
Forfeited		(15,972)
Unvested, end of year		412,958
Net compensation expense for the year (in millions)	$	17

* Total unrecognized compensation as of December 31, 2015 is $1 million; the unvested RSUs will vest and settle in March 2016.