Rescued insurance giant AIG will pay new CEO Robert Benmosche a package worth $US7 million ($8.46 million) a year.

In a filing with US regulator the Securities and Exchange Commission, AIG says Mr Benmosche will receive $US3 million ($3.63 million) in cash and $US4 million ($4.83 million) in shares which are bound for five years.

The package has been approved in principle by Kenneth Feinberg, the Special Master for Troubled Asset Relief Program (TARP) compensation arrangements.

Mr Benmosche, who took up the reins on August 10, will also be eligible for a long-term performance-based stock incentive of up to $US3.5 million ($4.23 million), but won't be entitled to severance pay.

Former CEO Martin Sullivan left AIG with $US47 million ($56.8 million) in July last year. His predecessor, Hank Greenberg, declined a severance package when he left in March 2005, as did both Robert Willumstad in September last year and Edward Liddy this year.

Mr Liddy agreed to work for $US1 a year, but has maintained his tenure was not intended to be long-term.