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American International Group’s Hamilton Insurance Group CEO Brian Duperreault as its next leader won’t come cheap.

To begin with, AIG will pay Hamilton $20 million to release Duperreault from contract restrictions that would prevent or restrict him from working for AIG or serving on its board of directors, according to AIG’s regulatory filing on the matter.

That waiver agreement also calls for AIG to pay an additional $20 million once Duperreault completes his second year as CEO, which would still be in play even if the 70-year-old Duperreault is no longer AIG’s leader “due to his death or disability.”

As well, as part of the transition, Hamilton has canceled or will repurchase all of Duperreault’s equity and equity-related interests in Hamilton and its affiliates. This addresses assets Duperreault accumulated as a founding member of Hamilton and as its CEO from 2013-2017 and chairman from 2016-2017, the regulatory filing points out.

In his capacity with Hamilton, Duperreault held shares and warrants representing approximately 1.6 percent of Hamilton’s outstanding common stock.

There were further complications with Attune, a data-focused small-business insurance platform that Duperreault chaired since its formation in September 2016 through a partnership between AIG, Two Sigma and Hamilton. To bring Duperreault on board, Attune as well as some Two Sigma affiliates waived their respective rights to enforce employee non-solicitation restrictions relating to Attune. According to the regulatory filing, AIG affiliates made a $10 million capital contribution to Attune, and Duperreault also had an indirect ownership interest in the startup by way of his Hamilton interests.

And then there’s the structure of his AIG CEO pay.

Duperreault will be getting an annual base salary of $1.6 million, but a number of incentive payments will lead to a much larger compensation if realized.

Duperreault gets a short-term annual incentive target of $3.2 million, to be prorated for 2017. AIG said there’s also an annual long-term incentive award of $11.2 million, consistent with its compensation program for other executive officers.

AIG explained in a regulatory filing that 70 percent of Duperreault’s long-term incentive award will come from performance share units—restricted stock awards—earned if he hits performance goals for January 2017 through December 2019. The remaining 30 percent comes in the form of restricted stock units earned based on continued employment through such three-year period.

There is also a one-time $12 million cash award as compensation for unvested Hamilton equity awards Duperreault must give up to become AIG’s president and CEO, as well as a one-time sign-on award of stock options to snatch up 1.5 million shares of AIG common stock, with the option to cash in once certain share price benchmarks are met over a period of time.

What’s more, , something that likely would not have happened if Duperreault had not agreed to join AIG.

Duperreault replaces Peter Hancock, who resigned as AIG CEO earlier this year after pressure from activist shareholders at the company to produce better results and even break the company up.

When Hancock first became CEO in mid-2014, . The short-term incentive was targeted at $3.2 million of cash and $7 million in performance share units for meeting targets, on top of a $1.6 million annual salary.

After Hancock announced his resignation, the AIG board declined to give Hancock a cash bonus for his 2016 work, after a dismal financial performance. But including his $1.6 million base salary, $7.8 million in longer-term stock incentive pay and other funds.

Hancock to stay on during the transition.

Topics Legislation Talent AIG