Benmosche, who took over as CEO of the embattled insurer three months ago, will receive an annual salary of $3 million in cash and $4 million in AIG common stock under the pay agreement.

In November, a Wall Street Journal report said Benmosche had threatened to leave his post as he struggled to deal with the heavy government oversight and restrictions on what the bailed-out company could pay employees. Benmosche acknowledged frustrations with the oversight in a recent letter to employees but said he plans to stay on the job.

The Wall Street Journal reported online on November 24 that Benmosche signed a non-compete agreement, and reiterated at a board meeting his commitment to stay CEO.

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Under the pay agreement with AIG, Benmosche will also be eligible for a yearly performance-based bonus of up to $3.5 million in stock.