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CORRESP
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CORRESP

October 26, 2007

Tim Buchmiller

Senior Attorney

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, DC 20549

    Re:

    American International Group, Inc.

Definitive Proxy Statement

File No. 001-08787

Dear Mr. Buchmiller:

     We are in receipt of your letter dated September 26, 2007 and thank you for your comments
concerning the captioned filing of American International Group, Inc. (“AIG”). We are pleased to
respond to the questions and comments in your letter (the “Comment Letter”) with respect to the
executive compensation and related disclosure set forth in AIG’s Definitive Proxy Statement on Form
14A, filed with the Commission on April 5, 2007 (the “Proxy Statement”).

     We have repeated your questions below in bold-face type to facilitate your review, followed by
the responses of AIG in regular type. The numbers correspond to the numbers in the Staff’s letter.

2006 Non-Management Director Compensation Table, page 18

    1.

    Disclose the assumptions made in the valuation of the option awards by reference to a
discussion of those assumptions in your financial statements, footnotes to the financial
statements or discussion in Management’s Discussion and Analysis. Refer to the Instruction to
Item 402(k) of Regulation S-K.

The amounts recognized for the director option awards described in the Proxy Statement were
calculated based on AIG’s binomial option-pricing model. The model and underlying assumptions are
described in Note 14 of the Notes to Consolidated Financial Statements included in AIG’s audited
Consolidated Financial Statements in AIG’s Annual Report on Form 10-K for the year ended December
31, 2006. AIG will include this information in future filings.

Compensation Discussion and Analysis, page 24

    2.

    It appears from your disclosure that you establish performance goals for the payment of your
annual cash bonuses, performance RSUs granted under the Partners Plan and long-term
performance cash awards granted under the Senior Partners Plan at the beginning of each performance year. Your Compensation
Discussion and Analysis appears, however, only to discuss the targets and goals for the
elements of your compensation packages for 2006 compensation. Please disclose the goals
you have set for the current year and provide an analysis of how such goals will affect the
calculation of amounts awarded to your named executive officers under the various and
related elements of your compensation program. See Item 402(b)(2)(v) and Instruction 2 to
Item 402(b). To the extent you believe that disclosure of the information would result in
competitive harm such that the information could be excluded under Instruction 4 to Item
402(b), please provide us with a detailed explanation supporting your conclusion. To the
extent that it is appropriate to omit specific targets or performance objectives you are
required to provide appropriate disclosure pursuant to Instruction 4 to Item 402(b) of
Regulation S-K. Refer also to Question 3.04 of Item 402 of Regulation S-K Interpretations
available on our website at www.sec.gov. In discussing how difficult or likely it will be
for the registrant to achieve the target levels or other factors, you should provide as
much detail as necessary without disclosing information that poses a reasonable risk of
competitive harm.

T. Buchmiller

October 26, 2007, page 2

AIG believes that it has complied with Item 402(b)(2)(v). In particular, AIG respectfully notes
the disclosure on pages 27 and 28 of the Proxy Statement with respect to Performance RSUs granted
under the Partners Plan and long-term performance cash awards granted under the Senior Partners
Plan. On page 27, the Proxy Statement describes the applicable performance goals for both the
2006-2007 Performance RSUs and the 2007-2008 Performance RSUs. There have been no other
Performance RSUs granted in 2007 to date. On page 28, AIG provides the performance formula that
applies to long-term cash awards under the Senior Partners Plan, so long as performance RSUs are
earned for the applicable period. This formula will apply until it is changed by the Committee.
The Committee has not changed the formula to date. With respect to annual cash bonuses, as
described in more detail in response 4 in this letter, there are no specific performance goals,
formulas or targets that formulaically determine the size of the named executives’ annual cash
bonuses. Instead, such annual cash bonuses are determined in the discretion of the Committee,
which takes into account the total mix of available information.

AIG believes that its disclosure with respect to 2007 compensation actions has been voluntary and
that Instruction 2 to Item 402(b) does not mandate such discussion with respect to AIG’s
compensation programs for the current fiscal year. After evaluating actions taken with respect to
2007 compensation, AIG does not believe any of them were material to the determination of 2006
compensation described in the Proxy Statement or to a fair understanding of such compensation.
(AIG notes its specific discussion on page 30 of its Proxy Statement with respect to the effect of
prior years’ compensation on future years’ compensation.) AIG expects to continue its practice of
voluntarily discussing certain post-fiscal year actions and will discuss in future filings any such
actions that are material either to the determination or a fair understanding of the compensation
for the last fiscal year.

T. Buchmiller

October 26, 2007, page 3

    3.

    Please discuss and analyze how each of the various elements of compensation fit into your
overall compensation objectives and affect decisions regarding other elements under your
compensation program. See Item 402(b)(1)(vi) of Regulation S-K.

AIG respectfully notes the discussion on pages 24 and 25 of the Proxy Statement beginning with the
subheading “Multiple components reward balanced short-term and long-term performance” and the
discussion on pages 26 through 28 of the Proxy Statement beginning
with the heading “Direct
compensation components.” The discussion under “Multiple components reward balanced short-term and
long-term performance” describes the primary elements of performance intended to be rewarded by
AIG’s programs and how each element is intended both to incorporate these metrics and to provide a
balance of financial and market incentives covering annual, mid-term and long-term measurement
periods. The discussion under the heading “Direct compensation components” describes how the
amount of each element is determined. AIG will continue to include a similar discussion in future
filings.

Multiple components reward balanced short-term and long-term performance, page 24

    4.

    We note that the amounts paid under your various compensation elements depend on achieving
the corporate performance goals that are generally described in the first three bullet points
of this section. Please disclose the specific corporate objectives required to be achieved in
order for each named executive officer to receive the related form of compensation. See Item
402(b)(2)(v) and Instruction 2 to Item 402(b). To the extent you believe that disclosure of
the information would result in competitive harm such that the information could be excluded
under Instruction 4 to Item 402(b), please provide us with a detailed explanation supporting
your conclusion. To the extent that it is appropriate to omit specific targets or performance
objectives, you are required to provide appropriate disclosure pursuant to Instruction 4 to
Item 402(b) of Regulation S-K. Refer also to Question 3.04 of the Item 402 of Regulation S-K
Interpretations available on our website at www.sec.gov. In discussing how difficult or
likely it will be for the registrant to achieve the target levels or other factors, you should
provide as much detail as necessary without disclosing information that poses a reasonable
risk of competitive harm.

The four bullets listed under the subheading “Multiple components reward balanced short-term and
long-term performance” describe the general design objectives of AIG’s compensation framework and
how each compensation element fits into the overall design objectives. The specific performance
goals for each compensation element for the last fiscal year are discussed separately under the
heading “Direct Compensation Components,” beginning on page 26, and specific compensation decisions
are discussed under the heading “Compensation Decisions in 2006,” beginning on page 31. As
discussed in more detail below, AIG believes that this discussion appropriately included

T. Buchmiller

October 26, 2007, page 4

the specific corporate objectives required to be achieved in order for each named executive officer
to receive the related form of compensation.

Bullet 1: Growth in adjusted net income and return on equity

The first bullet relates to growth in adjusted net income and return on equity. These metrics are
considered in setting annual cash bonuses for AIG’s employees at the Senior Partner level,
including the named executives. The specifics of that process for 2006 are described under the
subheading “Performance objectives” on page 31 of the Proxy Statement.

As noted on page 31, the Committee established annual performance objectives for 2006 pertaining to
growth in adjusted net income and return on equity, both in absolute terms and relative to
competitors; articulation of business strategy; relationships with clients, producers and
regulatory bodies; diversity; and organization management. The discussion notes that the Committee
determined not to establish a particular formula for evaluating performance, and the objectives
were not weighted. The discussion goes on to state that the Committee concluded that AIG would be
best served with a discretionary approach in light of the fact that the long-term incentive
components of its new compensation program are formula-based (as discussed below). In light of its
discretionary approach and the multiple measures employed, AIG does not believe that there are
specific annual goals that are material to an understanding of its compensation and understands
that it is not required to disclose specific annual goals in this context.

Bullet 2: Growth in adjusted net income (earnings) per share

Growth in adjusted net income (earnings) per share is the performance measure used to determine the
number of Performance RSUs earned under the Partners Plan. The target performance for 2006-2007
Performance RSUs and for 2007-2008 Performance RSUs is disclosed on page 27 of the Proxy Statement.

Bullet 3: Growth in adjusted book value per share

Growth in adjusted book value per share is used to determine the value of long-term performance
cash awards under the Senior Partners Plan. The specific formula for determining the amounts
earned by the named executives under the Senior Partners Plan is discussed on pages 27-28, 32 and
35 of the Proxy Statement.

Performance RSUs granted under the Partners Plan, page 27

    5.

    You disclose that the “target performance corridor” was established at 10 percent to 12
percent growth in AIG’s adjusted earnings per share for 2006 and 2007 for the Performance
RSUs. Please also disclose the relevant percentages for the “threshold” and “maximum” levels.

The “threshold” performance level for the 2006 and 2007 Performance RSUs described in the Proxy
Statement is four percent growth in AIG’s adjusted earnings per
share. The “maximum” performance level is 16 percent growth in AIG’s adjusted earnings per share. AIG will
include this information in future filings.

T. Buchmiller

October 26, 2007, page 5

Long-term performance cash awards granted under the Senior Partners Plan, page 27

    6.

    Please disclose how the number of units granted under the Senior Partners Plan to each named
executive officer is determined.

The number of units granted under the Senior Partners Plan is discussed on page 32 of the Proxy
Statement, under the subheading “Long-term performance cash awards granted under the Senior
Partners Plan.” As described and illustrated in the table on page 33 of the Proxy Statement, the
number of units awarded in 2006 was based on the prior year’s level (because the Committee does not
intend for the program to have significant year-to-year changes), except that Mr. Sullivan’s Senior
Partner Units were increased in recognition of the fact that no increase was made at the time of
his promotion to CEO in 2005, and Mr. Bensinger’s Senior Partner Units were increased from 625 to
1,000 for 2007 in recognition of his strong contributions to overall AIG performance.

Independent consultant, page 30

    7.

    With respect to the engagement of Frederic W. Cook & Co., Inc., disclose the nature and scope
of the consultant’s assignment and the material elements of the instructions or directions
given to the consultant with respect to the performance of its duties under the engagement.
See Item 407(e)(3)(iii) of Regulation S-K.

Mr. Cook and other senior consultants of the Cook firm regularly attend the Committee’s meetings
and are instructed to provide independent, analytical and evaluative advice about AIG’s
compensation programs for senior executives, including comparisons to industry peers and
comparisons to “best practices” in general. Mr. Cook and other senior consultants of the Cook firm
respond on a regular basis to questions from the Committee and the Committee’s other advisors,
providing their opinions with respect to the design and implementation of current or proposed
compensation programs. AIG will include material information in future filings about the nature
and scope of the independent consultant’s assignment and the instructions relating thereto.

Cash bonuses, page 31

    8.

    The Compensation Discussion and Analysis should be sufficiently precise to capture material
differences in compensation policies with respect to individual named executive officers.
Refer to Section II.B.1 of Commission Release No. 33-8732A. In this regard, we note the
significant disparity in the amounts of the target performance based bonuses and the actual
amounts awarded to Mr. Sullivan and Mr. Bensinger in 2006 as cash bonuses. Please provide a
more detailed discussion of how and why the compensation of your chief executive officers
materially differs from that of the other named executive officers. If policies or decisions relating to a named executive officer are
materially different than those that apply to the other officers, those policies or
decisions should be discussed on an individualized basis.

T. Buchmiller

October 26, 2007, page 6

There are no material differences in compensation policies applicable to AIG’s executive officers.
Rather, the decisions made with respect to compensation of each named executive are based on an
individual assessment of the executive’s level of responsibility for the oversight and management
of AIG’s businesses and the executive’s contribution to AIG’s performance for the period under
review. For example, Mr. Sullivan’s total compensation for 2006 is higher than that of the other
named executives because the Committee has determined in its discretion that the amount awarded is
commensurate with his greater responsibility for such management and oversight.

With respect to Messrs. Sullivan’s and Bensinger’s annual cash bonuses for 2006, as described in
the Proxy Statement on page 32, the Committee concluded that 2006 was an excellent year for AIG and
that the leadership of Messrs. Sullivan and Bensinger played a critical role in AIG’s results.
Therefore, the Committee determined in its discretion to award Mr. Sullivan, and upon Mr.
Sullivan’s recommendation, the Committee determined in its discretion to award Mr. Bensinger,
larger annual cash bonuses than had been set forth as targets in those e