UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

OVERSEAS SHIPHOLDING GROUP, INC.
666 THIRD AVENUE, NEW YORK, N.Y. 10017
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

June 9, 2009

         TO THE STOCKHOLDERS OF OVERSEAS SHIPHOLDING GROUP, INC.:

        You are cordially invited to attend the Annual Meeting of Stockholders of Overseas Shipholding Group, Inc., which will be held at the corporate headquarters of Overseas Shipholding Group, Inc., 666 Third Avenue, Sixth Floor, New York, New York, on Tuesday, June 9, 2009, at 2:00 P.M.

        The meeting will be held for the following purposes:

(1)

To elect thirteen directors, each for a term of one year;



(2)

To consider and act upon a proposal to approve the Overseas Shipholding Group, Inc. Amended and Restated Executive Performance Incentive Plan, including re-approval of the section 162(m) performance goals under such plan; and



(3)

To transact such other business as may properly be brought before the meeting.

        Stockholders of record at the close of business on April 17, 2009 will be entitled to vote at the meeting. The stockholders list will be open to the examination of stockholders for any purpose germane to the meeting, during ordinary business hours, for ten days before the meeting at the Corporation's offices, 666 Third Avenue, Fifth Floor, New York, N.Y.

        Whether or not you expect to be present at the meeting in person, please date and sign the enclosed proxy and return it without delay in the enclosed envelope, which requires no postage if mailed in the United States.

        We urge you to exercise your privilege of attending the meeting in person. In that event, the Corporation's receipt of your proxy will not affect in any way your right to vote in person.

New York, N.Y.
April 30, 2009

IMPORTANT
PLEASE SIGN, DATE AND PROMPTLY RETURN THE
ENCLOSED PROXY IN THE ENCLOSED RETURN ENVELOPE

Important Notice Regarding the Availability of
Proxy Materials for the Annual Meeting of Stockholders to be held on June 9, 2009

        The Corporation's proxy statement is attached. Financial and other information concerning the Corporation is contained in the Corporation's Annual Report for the fiscal year ended December 31, 2008. Pursuant to rules promulgated by the Securities and Exchange Commission ("SEC"), the Corporation has elected to provide access to proxy materials both by sending you this full set of proxy materials, including a proxy card, and by notifying you of the availability of its proxy materials on the Internet. In accordance with the SEC rules, you may access this proxy statement and the Corporation's 2008 Annual Report at http://www.osg.com/proxy, which does not have "cookies" that identify visitors to the site.

OVERSEAS SHIPHOLDING GROUP, INC.
666 Third Avenue, New York, N.Y. 10017

PROXY STATEMENT

        The accompanying proxy is solicited on behalf of the Board of Directors of Overseas Shipholding Group, Inc. (the "Corporation") for use at the Annual Meeting of Stockholders to be held on June 9, 2009. Any stockholder giving a proxy may revoke it at any time before it is exercised at the meeting.

        Only stockholders of record at the close of business on April 17, 2009 (the "record date") will be entitled to vote at the Annual Meeting. The Corporation has one class of voting securities, its Common Stock, of which 26,861,638 shares were outstanding on the record date and entitled to one vote each. This proxy statement and the accompanying proxy will first be sent to stockholders on or about April 30, 2009.

ELECTION OF DIRECTORS

        The thirteen nominees for election at the forthcoming meeting, all of whom are presently directors of the Corporation, are listed below. The nominees listed below were selected by the Board upon the recommendation of the Corporate Governance and Nominating Committee. Unless otherwise directed, the proxy will be voted for the election of these nominees, to serve for the ensuing year and until their successors are elected and qualify.

        The table below sets forth information as to each nominee, and includes the amount and percentage of the Corporation's Common Stock of which each nominee, and all directors, nominees and executive officers as a group, were the "beneficial owners" (as defined in regulations of the Securities and Exchange Commission (the "SEC")) on the record date, all as reported to the Corporation. In accordance with SEC regulations, the table includes, in the case of certain of the directors, shares owned by entities in which the nominee, by reason of his position or interest, shares the power to vote or to dispose of securities.

1

2

(a)

Includes the shares of Common Stock issuable within 60 days of April 17, 2009 upon the exercise of all options owned by the indicated stockholders on that date. Unless otherwise indicated, the persons named in the table have sole voting and sole investment control with respect to all shares beneficially owned.

(b)

Includes 82,141 shares granted to Mr. Arntzen by the Corporation pursuant to restricted stock agreements which are subject to vesting restrictions on April 17, 2009. Also includes 237,397 shares of Common Stock issuable upon exercise of stock options.

(c)

Includes 3,053,215 shares as to which Mr. Oudi Recanati may be deemed to share the power to vote and dispose of under a stockholders agreement, dated as of April 16, 2003 among members of the Recanati family, as amended (the "Stockholders Agreement"); and 70,384 shares as to which he may be deemed to share the power to vote and dispose of by virtue of his positions as an officer and director of the Recanati Foundation. Also includes 5,000 shares of Common Stock issuable upon the exercise of stock options.

(d)

Does not include 4,537 restricted stock units, none of which can be converted into shares of Common Stock while such non-employee director remains a member of the Board.

(e)

Consists of 7,500 shares of Common Stock issuable upon exercise of stock options.

(f)

Includes 5,000 shares of Common Stock issuable upon exercise of stock options.

(g)

Mr. Batkin shares with his wife voting and investment control over 1,000 shares of Common Stock.

(h)

Includes 8,500 shares of Common Stock issuable upon exercise of stock options.

(i)

Includes 11,500 shares of Common Stock issuable upon exercise of stock options.

(j)

Includes 2,000 shares of Common Stock issuable upon exercise of stock options.

(k)

Includes 3,000 shares of Common Stock issuable upon exercise of stock options.

(l)

Includes 3,053,215 shares of Common Stock as to which Mr. Ariel Recanati may be deemed to share the power to vote pursuant to the Stockholders Agreement (he may be deemed to share the power to dispose of only 2,533,340 of these shares); and 70,384 shares as to which he may be deemed to share the power to vote and dispose of by virtue of his position as a director of the Recanati Foundation. Also includes 2,000 shares of Common Stock issuable upon exercise of stock options.

(m)

Mr. Oudi Recanati is the first cousin of Mr. Ariel Recanati.

(n)

Does not include 3,448 restricted stock units, none of which can be converted into shares of Common Stock while such non-employee director remains a member of the Board.

(o)

Does not include 2,375 restricted stock units, none of which can be converted into shares of Common Stock while such non-employee director remains a member of the Board.

(p)

Includes 513,758 shares of Common Stock issuable upon exercise of stock options. See Notes (b), (c), (e), (f), and (h) through (l) above.

        Each director has been principally engaged in his present employment for the past five years, except: Mr. Andreas who served from October 2004 to March 2009 as Director of Delaware Street

3

Capital, LLC, an investment management company and for more than five years prior to October 2004 as Vice President of Allen & Company, an investment banking and asset management company; Mr. Batkin, who served as Vice Chairman of Kissinger Associates, Inc., a geopolitical consulting firm, for more than five years prior to February 28, 2007; Mr. Robards, who served as Senior Vice President and Chief Financial Officer of the American Museum of Natural History from 2003 until 2004; and Mr. Vettier, who served as Chairman and Chief Executive Officer of Total Refining and Marketing (formerly TotalFinaElf Refining and Marketing) and a member of the Executive Committee of Total (formerly TotalFinaElf) for at least five years prior to April 1, 2006.

        Mr. Arntzen is a director of Royal Caribbean Cruises Ltd. and OSG America LLC, the general partner of OSG America L.P. Mr. Batkin is a director of Hasbro, Inc., Cantel Medical Corp. and Omnicom Group, Inc. Mr. Robards is a director of HSBC Investor Funds. Mr. Vettier is a director of Dresser-Rand Group Inc. Mr. Zimmerman is a director of Financial Federal Corporation and KBW, Inc. and is an advisory director of Smithfield Foods, Inc.

        If, for any reason, any nominee should not be available for election or able to serve as a director, the accompanying proxy will be voted for the election of a substitute nominee designated by the Board of Directors. The Board has no reason to believe that it will be necessary to designate a substitute nominee.

4

BENEFICIAL OWNERSHIP OF COMMON STOCK BY NAMED EXECUTIVE OFFICERS

        The following table sets forth the beneficial ownership of shares of the Corporation's Common Stock as of April 17, 2009 by each of the Named Executive Officers listed in the Summary Compensation Table in this proxy statement other than Morten Arntzen, whose information is disclosed above along with the other directors.

(1)

Includes 47,156 shares of Common Stock issuable upon the exercise of stock options.

(2)

Includes 37,891 shares of Common Stock issuable upon the exercise of stock options.

(3)

Includes 42,008 shares of Common Stock issuable upon the exercise of stock options.

(4)

Includes 16,048 shares of Common Stock issuable upon the exercise of stock options.

5

INFORMATION AS TO STOCK OWNERSHIP

        Set forth below are the names and addresses of those persons, other than nominees for directors and entities they control (see "Election of Directors"), that are known by the Corporation to have been "beneficial owners" (as defined in regulations of the SEC) of more than 5% of the outstanding shares of the Corporation's Common Stock, as reported to the Corporation and the SEC.

*

Unless otherwise stated in the notes to this table, the share and percentage ownership information presented is as of December 31, 2008.

**

Messrs. Oudi Recanati, Ariel Recanati and Leon Recanati, Mrs. Diane Recanati and Mrs. Yudith Yovel Recanati all share the power to vote 3,053,215 shares subject to a stockholders agreement dated as of April 16, 2003 among members of, or trusts for the benefit of members of, the Recanati family, as amended (the "Stockholders Agreement"). All of these persons also share the power to vote and dispose of the 70,384 shares owned by the Recanati Foundation. All of the shares that are subject to the Stockholders Agreement or owned by the Recanati Foundation are listed as beneficially owned by each of the foregoing persons under "Election of Directors" or in this table and are included in calculating such person's ownership percentage. The share and percentage ownership information for these persons is as of April 17, 2009.

(1)

Mrs. Diane Recanati is the mother of Messrs. Oudi Recanati, a director of the Corporation, and Michael Recanati, the aunt of Mr. Ariel Recanati, a director of the Corporation, and the aunt of Mr. Leon Recanati and Mrs. Yudith Yovel Recanati, who are brother and sister.

(2)

Includes 3,053,215 shares subject to the Stockholders Agreement, as to which she may be deemed to share the power to vote (she shares the power to dispose of these shares with Messrs. Oudi

6

Recanati and Michael Recanati). Also includes 70,384 shares held by the Recanati Foundation, which Mrs. Recanati may be deemed to share the power to vote and dispose of by virtue of her position as a director of the Recanati Foundation.

(3)

Includes 3,053,215 shares subject to the Stockholders Agreement, as to which he may be deemed to share the power to vote (he shares the power to dispose of only 2,533,340 of these shares); and 70,384 shares which he may be deemed to share the power to vote and dispose of by virtue of his position as a director of the Recanati Foundation.

(4)

Includes 3,053,215 shares subject to the Stockholders Agreement, as to which he may be deemed to share the power to vote and dispose; and 70,384 shares which he may be deemed to share the power to vote and dispose of by virtue of his position as a director of the Recanati Foundation.

(5)

Includes 3,053,215 shares subject to the Stockholders Agreement, as to which she may be deemed to share the power to vote (she shares the power to dispose of only 2,533,340 of these shares); and 70,384 shares which she may be deemed to share the power to vote and dispose of by virtue of her position as a director of the Recanati Foundation.

(6)

As of December 31, 2008, FMR LLC has the sole dispositive power over 3,223,883 of these shares and sole voting power over 106,573 of these shares. FIL Limited ("FIL"), the beneficial owner of 6,400 of these shares, is a separate and independent corporate entity from FMR LLC. FIL and FMR LLC believe that they are not acting as a "group" for purposes of section 13(d) under the Securities Exchange of 1934 but have voluntarily reported ownership of these shares on a joint basis.

(7)

As of December 31, 2008, Advisory Research, Inc. has the sole dispositive power and sole voting power over all of these shares.

(8)

As of December 31, 2008, Barclays Global Fund Advisors has the sole dispositive power over all of these shares and sole voting power over 1,369,040 of these shares.

(9)

The information with respect to this beneficial ownership is according to such beneficial owner's filings with the SEC.

7

INFORMATION ABOUT THE BOARD AND CORPORATE GOVERNANCE

        Corporate Governance Guidelines.    The Board has adopted Corporate Governance Guidelines to promote the effective functioning of the Board and its committees, to promote the interests of all stockholders, and to ensure a common set of expectations as to how the Board, its various committees, individual directors and management should perform their functions. The Board believes that ethics and integrity cannot be legislated or mandated by directive or policy and that the ethics, character, integrity and values of the Corporation's directors and senior management remain the most important safeguards in quality corporate governance. The Corporate Governance Guidelines are posted on the Corporation's website, which is www.osg.com, and are available in print upon the request of any stockholder of the Corporation. Under the Corporate Governance Guidelines, each director is expected to attend all Board meetings and all meetings of committees of which he is a member. Meeting materials are provided to Board and Committee members prior to meetings, and members are expected to review such materials prior to each meeting.

        Policies and Procedures for Approval of Related Party Transactions.    Related party transactions may present potential or actual conflicts of interest and create the appearance that Corporation decisions are based on considerations other than the best interests of the Corporation and its stockholders. The Corporation's Code of Business Conduct and Ethics requires all directors, officers and employees who may have a potential or apparent conflict of interest to disclose fully all the relevant facts to the Corporation's legal department. In addition to this reporting requirement, to identify related party transactions, each year the Corporation submits and requires its directors and executive officers to complete Director and Officer questionnaires identifying any transactions with the Corporation in which the director or officer has an interest. Management and the legal department carefully review the terms of all related party transactions. Management reports to the Board on all proposed related party transactions with directors and executive officers. Upon the presentation of a proposed related party transaction to the Board, the related party if a director is excused from participation and voting on the matter. In deciding whether to approve the related party transaction, the Board determines whether the transaction is on terms that could be obtained in an arm's length transaction with an unrelated third party. If the related party transaction is not on such terms, it will not be approved.

        Independence.    Under the Corporate Governance Guidelines, which incorporate the standards established by the New York Stock Exchange ("NYSE"), the Board must consist of a majority of independent directors. As determined by the Board, as of the date of this Proxy Statement, twelve of the thirteen nominees, namely Messrs. Oudi Recanati, Andreas, Batkin, Coleman, Fribourg, Komaroff, Merkin, Picket, Ariel Recanati, Robards, Vettier and Zimmerman, have been determined to be independent under the Corporate Governance Guidelines because no relationship was identified that would automatically bar them from being characterized as independent, and any relationships identified were not so material as to impair their independence The Board annually reviews relationships that directors may have with the Corporation to make a determination of whether there are any material relationships that would preclude a director from being independent.

        The Corporation and Maritime Overseas Corporation ("MOC"), a private family management company whose President is Mr. Ariel Recanati, a director of the Corporation, are parties to a sublease pursuant to which the Corporation subleases to MOC approximately 2,850 square feet of office space at its New York offices. The sublet space is separate from the Corporation's offices and has a separate entrance. The sublease began at the end of January 2007 and is for a term of five years plus one month, which may be reduced to three years by notice from either the Corporation or MOC given prior to June 2009. The annual rent is approximately $185,000, plus additional rent for increases in real estate taxes, operating expenses and electricity. An independent real estate brokerage firm has determined that the rent under the sublease was the fair market rental value of the rental space at the time the sublease was entered into. The Board of Directors believes that the terms of the sublease

8

were fair and reasonable to the Corporation at the time the sublease was entered into and that the terms were comparable to terms that could be obtained in an arm's length transaction with an unrelated third party.

        In determining that this relationship was not material with respect to Mr. Ariel Recanati or his first cousin Mr. Oudi Recanati, the Board considered that the annual payments to be made by MOC to the Corporation under the sublease would never approach an amount that would bar independence under the NYSE listing standards. The Board concluded that based on all of the relevant facts and circumstances the sublease did not constitute a material relationship with the Corporation that represents a potential conflict of interest or otherwise interferes with the exercise by either Ariel Recanati or Oudi Recanati of his independent judgment from management of the Corporation.

        Meetings of the Board.    The Board held seven meetings during 2008. Each director attended at least 75% of the total number of meetings of the Board and Board committees of which he was a member, except for Solomon N. Merkin, who missed a two day Board meeting and a Board committee meeting because the meetings were inadvertently scheduled on a religious holiday, and missed another Board committee meeting because of illness.

        Annual Meetings of Stockholders.    Directors are not required, but are strongly encouraged, to attend the Annual Meeting of Stockholders. In 2008, all of the Directors attended the Annual Meeting of Stockholders, except for Solomon N. Merkin because the meeting was inadvertently scheduled on a religious holiday.

        Communications with Board Members.    Interested parties, including stockholders, may communicate with any director, with the nonexecutive Chairman of the Board or with the non-management directors as a group by sending a letter to the attention of such director, the nonexecutive Chairman of the Board or such non-management directors as a group, as the case may be, in care of the Corporation's Corporate Secretary, 666 Third Avenue, Fifth Floor, New York, New York 10017. The Corporate Secretary opens and forwards all such correspondence (other than advertisements and other solicitations) to directors unless the director to whom the correspondence is addressed has requested that the Corporate Secretary forward correspondence unopened. Unless the context otherwise requires, the Corporate Secretary will provide any communication addressed to the Board to the director most closely associated with the nature of the request based on Committee membership and other factors.

        Code of Ethics.    The Corporation has adopted a code of ethics which is an integral part of the Corporation's business conduct compliance program and embodies the commitment of the Corporation and its subsidiaries to conduct operations in accordance with the highest legal and ethical standards. The Code of Ethics applies to all of the Corporation's officers, directors and employees. Each is responsible for understanding and complying with the Code of Ethics. The Code of Ethics is posted on the Corporation's website and is available in print upon the request of any stockholder of the Corporation.

        Executive Sessions of the Board.    To ensure free and open discussion and communication among the non-management directors, the Corporate Governance Guidelines provide that non-management directors meet in executive session at the end of each regular meeting of the Board; at least one of such executive sessions shall exclude non-management directors who do not qualify as independent. In accordance with the Guidelines, the nonexecutive Chairman of the Board of Directors chairs the executive sessions. Any non-management director can request that an additional executive session be scheduled.

9

Committees

        The Corporation has three standing committees of its Board: the Audit Committee, the Corporate Governance and Nominating Committee and the Compensation Committee. Each of these committees has a charter that is posted on the Corporation's website and is available in print upon the request of any stockholder of the Corporation.

        Audit Committee.    The Audit Committee is required to have no fewer than three members all of whom must be and are independent directors. During 2008, the Audit Committee consisted of Messrs. Robards (Chairman), Picket, Andreas and Ariel Recanati. The Board determined that Mr. Robards is an audit committee financial expert, as defined by rules of the SEC. The Audit Committee met six times during 2008.

        The Audit Committee oversees the Corporation's accounting, financial reporting process, internal controls and audits and consults with management, internal auditors and the Corporation's independent registered public accounting firm on, among other things, matters related to the annual audit, and published financial statements and the accounting principles applied. As part of its duties, the Audit Committee retains the Corporation's independent registered public accounting firm, subject to stockholder ratification (except that for 2009 the schedule for selection of the independent registered public accounting firm does not allow for such selection to be submitted to stockholders—see page 40 of this proxy statement). It maintains direct responsibility for the compensation and oversight of the Corporation's independent registered public accounting firm and evaluates the independent registered public accounting firm's qualifications, performance and independence. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the Corporation's independent registered public accounting firm.

        Corporate Governance and Nominating Committee.    The Corporate Governance and Nominating Committee is required to have no fewer than two members, all of whom must be and are independent directors. During 2008, the Corporate Governance and Nominating Committee consisted of Messrs. Oudi Recanati (Chairman), Komaroff, Merkin, Zimmerman and Batkin. The Committee is required to meet as many times as necessary each year. In 2008, the Corporate Governance and Nominating Committee met three times. The Corporate Governance and Nominating Committee considers and makes recommendations on matters related to the practices, policies and procedures of the Board and takes a leadership role in shaping the corporate governance of the Corporation. As part of its duties, the Committee assesses the size, structure and composition of the Board and Board committees, coordinates evaluation of Board performance, reviews Board compensation and recommends changes in director compensation to the Board. The Committee also acts as a screening and nominating committee for candidates considered for election to the Board. In this capacity it concerns itself with the composition of the Board with respect to depth of experience, balance of professional interests, required expertise and other factors set forth in the Corporate Governance Guidelines. The Committee evaluates prospective nominees identified on its own initiative or referred to it by other Board members, management, stockholders or external sources and all self-nominated candidates. The Committee uses the same criteria for evaluating candidates nominated by stockholders and self-nominated candidates as it does for those proposed by other Board members, management and search consultants.

        The Committee considers the following criteria for identifying and recommending qualified candidates for membership on the Board, seeking to maintain within these criteria appropriate diversity of individuals on the basis of gender, ethnic heritage, international background and life experiences:

•

judgment, character, age, integrity, expertise, tenure on the Board, skills and knowledge useful to the oversight of the Corporation's business;

10

•

status as "independent" or an "audit committee financial expert" or "financially literate" as defined by the NYSE or the SEC;



•

high level managerial, business or other relevant experience, including, but not limited to, experience in the industries in which the Corporation operates, and, if the candidate is an existing member of the Board, any change in the member's principal occupation or business associations;



•

absence of conflicts of interest with the Corporation;



•

status as a U.S. citizen; and



•

ability and willingness of the candidate to spend a sufficient amount of time and energy in furtherance of Board matters.

        A stockholder may recommend a person as a nominee for director by writing to the Corporate Secretary of the Corporation. Recommendations must be received by December 31, 2009 in order for a candidate to be considered for election at the 2010 Annual Meeting. Each recommendation for nomination should contain the following information: (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had such nominee been nominated, or intended to be nominated, by the Board of Directors; and (e) the consent of each nominee to serve as a director of the Corporation if so elected. All the director nominees named in this proxy statement were evaluated under the criteria set forth above and recommended by the Corporate Governance and Nominating Committee for election by stockholders at the Annual Meeting.

        All nominees for election at the Annual Meeting were previously elected to the Board by stockholders.

        Compensation Committee.    The Compensation Committee is required to have no fewer than two members, all of whom must be and are independent directors. During 2008 the Compensation Committee consisted of Messrs. Fribourg (Chairman), Oudi Recanati, Coleman and Vettier. The Committee met four times during 2008. The Compensation Committee makes recommendations to the Board as to the Corporation's general compensation philosophy, determines which of the corporate goals and objectives established by the Board are relevant to the compensation of the Corporation's Chief Executive Officer ("CEO"), evaluates the performance of the CEO in light of those goals and objectives, and determines and approves the CEO's compensation level based on this evaluation; establishes annual compensation, including benefits and perquisites of all executive officers of the Corporation, and reports such determinations and actions to the Board; reviews and approves employment agreements, severance agreements, change of control agreements and other similar agreements relating to executive officers; and establishes, modifies and makes grants under incentive- compensation plans and equity-based plans, and monitors such plans and their administration. The Compensation Committee also reviews the Compensation Discussion and Analysis, discusses it with management and makes a recommendation to the Board as to whether it should be included in the proxy statement.

11

COMPENSATION AND CERTAIN TRANSACTIONS

Compensation Discussion and Analysis

        The following Compensation Discussion and Analysis provides information regarding the compensation program for the Corporation's Chief Executive Officer, its Chief Financial Officer and its three other most highly compensated executive officers serving at the end of 2008, all of whom are listed in the Summary Compensation Table on page 27 of this proxy statement (collectively the "Named Executive Officers"). The Compensation Discussion and Analysis describes the objectives of the Corporation's compensation program, the elements of the compensation program and how each element fits into the Corporation's overall compensation objectives. The Compensation Committee is responsible for overseeing the compensation paid to all executive officers of the Corporation, including the Named Executive Officers.

Compensation Philosophy and Objectives

        The Corporation's compensation philosophy is to structure compensation to drive and support the Corporation's long-term goal of total stockholder return and sustainable growth. Sustainable growth means investing in long-term opportunities while meeting short-term commitments. The compensation program is designed to promote the following objectives:

•

to attract and motivate talented executives, and to encourage their long-term tenure with the Corporation;



•

to compensate executives directly based upon the value of their individual contributions in achieving corporate goals and objectives; and



•

to align incentive compensation with performance measures that motivate executives to maximize shareholder value.

Role of the Compensation Committee

        The Compensation Committee makes all compensation decisions with respect to the Named Executive Officers. The Chief Executive Officer assists the Compensation Committee in reaching compensation decisions with respect to the Named Executive Officers other than himself. The other Named Executive Officers do not play a role in their own compensation determination other than discussing individual performance objectives with the Chief Executive Officer. All decisions relating to the Chief Executive Officer's compensation are made by the Compensation Committee without management present. The Compensation Committee then reports these decisions to the Board of Directors.

Use of Outside Advisors

        The Compensation Committee has the authority to engage independent advisors to assist it in carrying out its duties. For 2008, the Compensation Committee engaged Frederic W. Cook & Co. ("FWC") as its independent advisor with respect to executive compensation and incentive plan design. The Compensation Committee selected FWC based on the Committee's satisfaction with FWC's performance as the Committee's independent compensation advisors since 2004, as well as FWC's experience, reputation, familiarity with the business environment and knowledge of the shipping industry, current practices and emerging trends. During 2008, FWC's services to the Compensation Committee included compiling data on senior management compensation in the shipping industry (which included data provided by the Hay Group at the request of management), providing a detailed comparative analysis of compensation for each Named Executive Officer, advising on equity compensation design and on severance payment and change of control arrangements and assisting in

12

preparing certain of the compensation disclosures in the Corporation's Proxy Statement for the 2008 Annual Meeting of Stockholders. Except for providing services to the Compensation Committee and to the Corporate Governance and Nominating Committee, FWC has never provided any services to the Corporation. The amount of fees paid to FWC for their services for 2008 totaled approximately $160,000.

        The Compensation Committee takes many factors into account when making compensation decisions with respect to the Named Executive Officers, including the individual's performance, tenure and experience, internal equity among the Named Executive Officers, potential retention concerns and the individual's historical compensation. In addition, the Compensation Committee considers the performance of the Corporation and the executive's contribution to that performance. Finally, the Compensation Committee compares Named Executive Officer compensation against external market data.

Elements of the Corporation's Compensation Program

        The principal elements of the Corporation's compensation program are base pay, annual cash incentive awards and equity-based compensation. The Corporation also provides severance and termination payments, retirement benefits and limited welfare benefits (medical, disability and life insurance). In general, the Corporation targets total compensation at the top quartile of competitive positions of a select group of companies that the Compensation Committee believes to be an appropriate reference group (the "Compensation Comparison Group"). The Corporation's compensation program targets total compensation at the top quartile because the Corporation's compensation philosophy is to reward performance and place a large portion of total compensation at risk, dependent on the achievement of earnings goals by the Corporation and business units and specified safety, quality and environmental compliance objectives. The Corporation's Compensation Comparison Group consists of marine transportation or service corporations based in the United States whose executive compensation information is publicly available, which for 2008 were:

        The Compensation Comparison Group for 2008 consisted of the same corporations as for 2007, except for OMI Corporation which was acquired by a third party in 2007. While the Compensation Committee believes that the Compensation Comparison Group consists of those companies for which executive compensation information is publicly available that are most comparable to the Corporation, it views such companies as an imperfect peer group. The Corporation's direct competitors are principally either privately held and/or incorporated in foreign jurisdictions which do not require public disclosure of executive compensation. For this reason, a large number of companies in the Compensation Comparison Group are tangentially related to the Corporation (i.e. oil and gas equipment, storage and service providers) but are not tanker companies. In establishing certain elements of compensation for the Named Executive Officers, such as base salaries, the Compensation Committee, assisted by FWC, focused on such elements of compensation of the senior management of General Maritime Corporation, which is the tanker company in the Compensation Comparison Group that is the most direct competitor of the Corporation. The Compensation Committee, with the

13

assistance of FWC, plans to conduct a thorough study of the Compensation Comparison Group in 2009.

        The Corporation believes that the combination of competitive base salaries, annual incentives paid in cash, and equity-based compensation paid in the form of restricted stock and stock options comprises an effective and motivational executive compensation program. The program is designed to attract and retain talented executives and align the interests of senior management with those of stockholders in seeking to achieve, over time, above-average performance.

        In 2008, base salary, annual cash incentive awards, and long term equity awards were each benchmarked against such forms of compensation paid by companies in the Compensation Comparison Group. The Corporation's compensation program targets total compensation at the top quartile of competitive positions in the Compensation Comparison Group. The Corporation seeks to provide competitive base salaries but places a greater emphasis on pay for performance by allocating a larger portion of total compensation "at risk" in the way of cash incentives and equity awards. For 2008, 76.2% of the total compensation for the Named Executive Officers consisted of "at risk" compensation. Cash incentive compensation paid by the Corporation was generally higher than that paid by companies in the Compensation Comparison Group due to the Corporation's strong earnings from shipping operations performance in 2008 (as discussed below), while the equity awards granted by the Corporation as a percentage of total compensation was less than such awards granted by companies in the Compensation Comparison Group. The Corporation has made a concerted effort over the last several years to allocate a greater percentage of compensation to equity awards, including through the grant in January 2007 of performance share units whose vesting on December 31, 2009 depends on the achievement of challenging "stretch" performance targets. See pages 21 and 22 of this proxy statement. While the percentage of total compensation that consisted of equity awards for the Named Executive Officers decreased from 41.3% for 2007 to 29.1% for 2008, this decrease is attributable to an increase in the percentage attributable to the cash incentive award (31.9% for 2007 compared with 47% for 2008) due to the Corporation's strong earnings from shipping operations.

Base Salary

        The Corporation pays a base salary to attract talented executives and provide a secure base level of compensation. The Compensation Committee reviews executive base salaries in December or January of each year. The Committee does not have predetermined targets or ranges for base salaries. The Compensation Committee compares salaries of senior management of shipping companies in the Compensation Comparison Group that are most comparable to the Corporation with those of the Named Executive Officers and determines whether the salaries of the Named Executive Officers are at a level that is sufficient to attract and retain strong leaders when combined with the higher percentage of total potential compensation payable in the form of cash and equity incentives based on achievement of Corporation, business unit, and individual performance.

        Annual increases in base salary are not assured and adjustments take into account the individual's performance, responsibilities, experience, internal equity and external market practices. The Compensation Committee relies to a large extent on the Chief Executive Officer's evaluation of each Named Executive Officer's performance (other than his own) in deciding whether to make an adjustment to his base salary in a given year. In the case of a change in role, the Chief Executive Officer and the Compensation Committee consider new responsibilities, external pay practices and internal equity in addition to past performance and experience. The Compensation Committee applies the same factors in deciding whether to adjust the base salary of the Chief Executive Officer.

14

        The base salaries of the Named Executive Officers for 2006, 2007 and 2008 are set forth in the Summary Compensation Table. There were no increases in the base salaries of the Named Executive Officers for 2008 except for the base salary of Ms. Lois K. Zabrocky, the Head of the Product Carrier Business Unit, which was increased from $312,500 to $375,000 in July 2008 in connection with Ms. Zabrocky's promotion as a Senior Vice President of the Corporation. The salary change reflects Ms. Zabrocky's promotion, past performance, greater experience and a more competitive salary compared with the salaries of other executives leading business units at shipping companies in the Compensation Comparison Group. The new salary is consistent with salary data for comparable positions compiled at the request of management by the Hay Group and provided to FWC.

        In connection with the Corporation's initiative to limit general and administrative expenses, the Chief Executive Officer recommended to the Compensation Committee that there be no increase in 2009 in the base salaries of the Corporation's executives, including the Named Executive Officers. The Compensation Committee approved this recommendation, which is consistent with the Corporation's philosophy to reward performance and place a larger portion of total compensation at risk.

Annual Cash Incentive Awards

        The Corporation maintains its Executive Performance Incentive Plan (the "Incentive Compensation Plan") pursuant to which Named Executive Officers may receive annual cash incentive based upon the achievement of performance goals established by the Compensation Committee under the Incentive Compensation Plan for a given year during the first quarter of such year. The performance goals established for one year have no effect on the performance goals established for another year. For 2008, the Compensation Committee determined that maximum awards would be based on the Corporation's achievement of specified levels of earnings from shipping operations ("ESO"), defined as the Corporation's pre-tax net income adjusted to exclude amounts related to non-shipping income such as investment income and gains or losses on unplanned vessel sales reduced by interest expense and impairment charges. The potential incentive cash awards were established as a percentage of the executive's base salary with a maximum incentive award range of 55% to 300% of base salary depending on the Corporation's earnings from shipping operations. The ESO measure is an objective requirement and the maximum percentages of base salary serve as a limit on the amount of the cash award. The ESO measure is the same measure that was used for 2007 and that will be used for 2009, except that for 2009 ESO excludes gains or losses from planned vessel sales. It was chosen because the Compensation Committee believes that it is the most objective measure for determining achievement.

        At the same time the Compensation Committee adopted the performance goal for establishing the maximum amounts of the cash award, the Compensation Committee adopted three measures for determining the actual incentive awards for 2008. They were (i) the Corporation's ESO for such year; (ii) ESO and specified performance metrics of such executive's business unit (if any) for such year and (iii) the executive's achievement of individual goals. Each individual's objectives were carefully chosen to ensure integration and alignment with the Corporation's long-term objectives. To the extent applicable, awards made under the Incentive Compensation Plan are intended to satisfy the requirements for performance based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and the maximum payment applying the three measures is subject to the maximum payment determined by the Compensation Committee as described above.

        For 2008, the Chief Executive Officer had a target bonus of 200% of base salary and each other Named Executive Officer had a target bonus of 100% of base salary. For the Chief Executive Officer potential bonuses, if earned, ranged from 110% to 300% of base salary. For the other Named Executive Officers, potential bonuses, if earned, ranged from 55% to 150% of base salary. Under the Incentive Compensation Plan, if the minimum performance measures are not achieved for a Named Executive Officer, the executive is not paid a bonus. The Compensation Committee established these

15

target bonus percentages in order to target total compensation for the Named Executive Officers in the top quartile of comparable positions in the Compensation Comparison Group, based on target cash incentive awards provided by the companies in the Compensation Comparison Group and other external market data compiled or evaluated by FWC. In addition, the target levels reflect FWC's comparison of compensation levels of the Corporation's executives with one another. The difference in target bonus percentages and the range of potential bonus percentage between the Chief Executive Officer and the Named Executive Officers in general reflects the differences in total compensation levels of chief executive officers in the Compensation Comparison Group compared with other executives in the Compensation Comparison Group.

        The three measures used to determine an individual's actual bonus for 2008, Corporation performance, business unit performance and individual performance, were given different weightings depending on whether the individual was a member of a business unit or the corporate staff. The Chief Executive Officer, the Chief Financial Officer and Mr. Robert E. Johnston (the Senior Vice President and Head of Shipping Operations) are members of the corporate staff. Mr. Mats Berglund (the Senior Vice President and Head of Crude Transportation) and Ms. Lois K. Zabrocky (the Senior Vice President and Head of the Product Carrier Unit) are members of business units. For members of the corporate staff, the Corporation performance and individual performance measures were each weighted 50% in determining such member's annual bonus. For members of a business unit, business unit performance was weighted 50% and Corporation and individual performance measures were each weighted 25%.

        For each of the foregoing three measures for each Named Executive Officer other than the Chief Executive Officer there is a rating assigned on a scale of 0% to 150%, with 100% as the rating assigned for meeting each of (i) targeted ESO for the Corporation measure, (ii) targeted performance for the specific business unit calculated by averaging the ESO for the specific business unit with specified performance metrics and (iii) specified individual goals for the individual measure. The rating scale for each measure is based on 5% or 10% increments from 50% to 150%. If a rating for a financial measure is below 50%, the rating assigned to that measure is zero. No bonus is payable if the rating for the individual measure is below 50%. The amount of each Named Executive Officer's actual annual cash incentive award is determined as follows:

Base Salary times (A plus B plus C) where

A

equals the Corporation rating measure times the weighting assigned to such measure,



B

equals the business unit rating measure (if any) times the weighting assigned to such measure, and



C

equals the individual rating measure times weighting assigned to such measure.

        For the Chief Executive Officer, the same methodology applies except that the ratings for the measures are assigned on a scale of 100% to 300% with 200% being the rating for meeting the target for each measure and the rating scale is based on 10% or 20% increments. The bonuses paid to the Named Executive Officers under the Incentive Compensation Plan for 2008 are set forth in the Summary Compensation Table and were paid on December 31, 2008 after the Compensation Committee certified to the attainment of the performance goals.

        The table below sets forth for the Corporation performance measure (achievement of specified levels of ESO for 2008 for the Corporation) and for the business unit performance measure (achievement of specified levels of ESO for 2008 for the Crude Transportation business unit for Mr. Mats Berglund and for the Product Carrier Unit for Ms. Lois K. Zabrocky) the corresponding

16

percentage of base salary that would be earned by each Named Executive Officer other than the Chief Executive Officer.

        For the Chief Executive Officer, the percentage achievement of target ESO were the same percentages as specified above but the corresponding performance percentages of base salary were double the percentages specified above (110% - 300% rather than 55% - 150%).

        For 2008 ESO for the Corporation was $456,247,000, ESO for the Crude Transportation Unit was $430,187,000 and ESO for the Product Carrier Unit was $35,338,000.

        As noted earlier, the business unit performance measure consists of target ESO for such business unit and specified performance metrics. For 2008, such performance metrics for the Crude Transportation unit consisted of two commercial measures and three operational measures. The commercial metrics were (i) daily time charter equivalent ("TCE") revenues achieved by the Aframax International pool of vessels compared with daily TCE revenues achieved by competitors' Aframax fleets and (ii) the number of days of the Aframax International pool of vessels was subject to contracts of affreightment (based on cargo capacity), the higher the number of days the greater the stability of the amount of revenue. The operational measures were lost revenue days per vessel, lost time injury frequency and vetting observations per vessel. The Crude Transportation unit performance metrics score for 2008 was 125%. The performance metrics for the Product Carrier unit for 2008 consisted of five commercial measures and the same three operational measures as were used for the Crude Transportation unit. The commercial metrics were (i) daily TCE revenues achieved by the Product Carrier unit's vessels compared with TCE revenues achieved by specified competitors, (ii) achievement of a laden to ballast ratio of 75%, (iii) increase in the Product Unit fleet by two vessels, (iv) increased time charter coverage of single hull product carriers to 80% and (v) optimize daily TCE revenues of middle range Product Carriers. The Product Carrier unit performance metrics score for 2008 was 127%.

        The individual performance measure consists of the different individual performance goals of each of the Named Executive Officers. The Compensation Committee, assisted by the Chief Executive Officer with respect to all the Named Executive Officers other than himself and exercising its subjective judgment, determines each Named Executive Officer's level of achievement of his individual performance goals.

17

        The principal individual performance goals for 2008 for the Chief Executive Officer were to develop the corporate infrastructure in OSG America L.P., to facilitate its achievement of targeted earnings, to expand the Crude Transportation and Product Carrier business units, to identify and capitalize on attractive growth opportunities in all sectors, to improve processes and systems to obtain efficiencies and improve cost effectiveness, to reduce general and administrative expenses in 2008 from, or at least, maintain such expenses at, the amount of such expenses in 2007, to improve the operational performance of the Corporation's fleet focusing on satisfying high standards for safety, quality and environmental compliance and to enhance the Corporation's government outreach program so that the Corporation's interests are appropriately considered by the federal government. The individual rating measure for the Chief Executive Officer was 150%. For the Chief Financial Officer, his principal goals were to develop screening tools for investments in adjacent markets, to complete risk management programs in the Corporation's business units, to identify and pursue strategic and financial growth opportunities and to propose a company wide framework to implement and manage process improvement. The Chief Financial Officer's individual rating measure was 130%. The principal individual goals for Mr. Robert E. Johnston were to decrease lost revenue days, lost time incidents and spills at sea, to implement audits of vessel operations by the Corporation's external environmental auditor in accordance with the Corporation's environmental compliance plan, to implement a near miss reporting system with respect to incidents at sea, develop and implement an environmental plan for the fleet and to implement a strategy for crew retention in Manila. Mr. Johnston's individual rating measure was 123%. For Mr. Mats Berglund, his principal goals for 2008 were to expand the Crude Transportation fleet by establishing a Suezmax business and by entering agreements to convert the Corporation's ULCC vessels into Floating Storage and Offloading vessels and chartering such vessels, to grow the lightering business in the United States Gulf of Mexico and West Coast regions through increased market share, and to ensure that newbuildings are delivered according to contracted technical specifications. The individual rating measure for Mr. Berglund was 131%. For Ms. Lois Zabrocky, her principal individual goals were to develop a strategic plan for entry into chemical markets, to restructure the Product Carrier business so that the unit's general and administrative expenses in 2008 did not increase from their levels in 2007 and to identify and explore growth opportunities in the Product Carrier sector. Ms. Zabrocky's individual rating measure was 125%.

        For 2008, the Incentive Compensation Plan target for the Chief Executive Officer was 200% of base salary and the range for performance was from 110% - 300%. The results of the Corporate ESO for 2008 exceeded the 200% target and the maximum 300% performance factor. In addition, the Chief Executive Officer's score on individual performance was the 150% maximum. The achieved compensation performance incentive was 300% of the Chief Executive Officer's salary of $900,000, or $2,700,000 which was greater than the maximum Performance Award of $2,500,000 under the Incentive Compensation Plan for any performance period. As a result, the Compensation Committee granted the Chief Executive Officer an additional discretionary bonus of $200,000 to reflect his actual level of achievement. This additional bonus was not granted pursuant to the Incentive Compensation Plan and was not a deductible expense for income tax purposes in accordance with Section 162(m) of the Code.

        In connection with determining the actual cash incentive awards for 2008 for the Named Executive Officers, the Compensation Committee, advised by FWC, considered the economic downturn and its effect on equity awards, including performance share unit awards, previously granted to the Named Executive Officers. The economic downturn has caused the value of the equity awards, which were granted to retain the Named Executive Officers as employees of the Corporation, to decrease significantly and, in the case of the performance share units, it is unlikely they will have any value on their vesting and expiration date of December 31, 2009. The Compensation Committee noted the dilutive effect of grants of additional equity to the Named Executive Officers beyond targeted ranges because of the lower price of the Corporation's common stock. The Compensation Committee also reviewed data compiled by FWC as to how other companies were compensating executives in the economic downturn and received strategic guidance from FWC. After consideration, taking into account the foregoing factors and the maximum ESO target being achieved, the Compensation

18

Committee decided to award each Named Executive Officers other than Chief Executive Officer, an additional cash incentive award for 2008 equal to 25% of the amount of such executive's equity award.

        The three measures for determining actual incentive awards for 2008, namely (i) the Corporation's ESO for such year, (ii) the ESO and specified performance metrics of such executive's business unit (if any) for such year and (iii) the executive's achievement of individual goals, are the same measures that were used for 2007 and that will be used for 2009. They were selected because the Compensation Committee believes they are the most appropriate measures to be used to determine incentive compensation. For 2009, the Chief Executive Officer has a target bonus of 180% of base salary and the other Named Executive Officers have a target bonus of 90% of base salary. For the Chief Executive Officer potential bonuses range from 100% to 240% of base salary. For the other Named Executive Officers, potential bonuses range from 50% to 120% of base salary. The Compensation Committee decreased the 2009 target bonuses and potential bonus ranges from the target bonuses and bonus ranges for 2008 because of the Corporation's significantly more challenging financial environment. The Compensation Committee also raised the minimum individual rating that a Named Executive Officer must achieve for 2009 to receive a bonus from 50% to 60%.

Equity-Based Compensation

        The Corporation's equity-based compensation program is intended to align the interests of the Corporation's executive officers with those of the stockholders, and to focus executives on the achievement of long-term performance objectives that are aligned with the Corporation's business strategy, thereby establishing a direct relationship between compensation and operating performance. The Compensation Committee determined that for 2008 50% of total equity based compensation for the Named Executive Officers would be paid in restricted stock and 50% would be paid in stock options, consistent with the allocation used in 2007. The Corporation believes that combined grants of restricted stock and stock options effectively balances the Corporation's objective of focusing the Named Executive Officers on delivering long-term value to stockholders with the goal of retaining talented executives and encouraging their long-term tenure with the Corporation. Grants of restricted stock provide executives with full ownership of Common Stock on the date the restriction lapses, providing value to executives. Unlike restricted stock, stock options only have value to the extent the price of Common Stock grows over the term of the award and, in this sense, are a motivational tool. Awards of restricted stock have historically vested in four equal annual installments commencing one year after the date of the stock award. Awards of stock options have historically vested in three equal annual installments commencing one year after the date of the option grant and have had an exercise term of ten years from the date of grant. The long-term vesting provisions of both the restricted stock and stock options further the goal of executive retention. All equity awards are made under the Corporation's 2004 Stock Incentive Plan, as amended and restated as of June 10, 2008 (the "2004 Stock Incentive Plan").

        Annual restricted stock and stock option awards to eligible executives, including the Named Executive Officers, historically have been made by the Compensation Committee each December (for the current year) or January (for the preceding year) at the meeting at which the Committee determines equity and non-equity awards. The Compensation Committee does not grant equity awards at other times of the year except in connection with the employment of a new executive or the renewal of a retention agreement with an executive. The fair market value and the exercise price of stock options are determined as of the closing price on the grant date. The Corporation does not backdate options or grant options retroactively. The Corporation does not time awards of restricted stock or stock options in coordination with the release of material nonpublic information.

        The value of equity awards granted to an executive, including each Named Executive Officer, is determined subjectively based on a number of factors, including the executive's general level of performance, salary level and recent noteworthy achievements. For an executive who has satisfied the individual objectives during the prior year, if the Corporation's performance goals and the executive's business unit performance objectives have been met, then the executive's total compensation of base

19

salary, cash incentive award and equity-based compensation should place the executive in the top quartile of competitive positions in the shipping industry.

        On December 17, 2008, the Compensation Committee granted the Named Executive Officers, as part of their 2008 compensation, the number of shares of restricted stock and stock options set forth in the following table. The exercise price of the stock options is $40.95 per share, the closing price of a share of Common Stock on the date of grant.

        For 2008, the target equity award for the Chief Executive Officer was 200% of base salary and for the other Named Executive Officers was 100% of base salary. The Chief Executive Officer received equity awards equal to 244% of his base salary, Mr. Itkin received equity awards equal to 65% of base salary, Mr. Johnston received equity awards equal to 57% of base salary, Mr. Berglund received equity awards equal to 77% of base salary and Ms. Zabrocky received equity awards equal to 87% of base salary. These awards are reflective of the Named Executive Officers' individual performance, the performance of their respective business units where applicable, their leadership performance, their contributions to the long term strategy of the Company and a comparison of their total compensation to the compensation of their counterparts at corporations in the Compensation Comparison Group so that with their equity awards their total compensation is in the top quartile of compensation for companies in the Compensation Comparison Group.

        The target equity awards for 2008 were the same as for 2007 and will be the same for 2009. The Compensation Committee has decided that the allocation of total equity based compensation for the Named Executive Officers for 2009 be changed from 50% to be paid in restricted stock and 50% to be paid in stock options to 60% to be paid in restricted stock and 40% to be paid in stock options. The reason for this change is that the decrease in the market price of the Corporation's common stock during 2008 and the beginning of 2009 has resulted in the exercise prices of all stock options granted to the Named Executive Officers since 2004, which constitute all the stock options held by them, exceeding the current market price of the common stock so that all the stock options are currently out of the money. Although the value of restricted stock awards granted to the Named Executive Officers have also decreased during 2008 and the beginning of 2009, those awards continue to have material value and, to the extent the awards are unvested, remain an incentive for the Named Executive Officer to continue to desire to be employed by the Corporation.

Stock Ownership Guidelines

        The Corporation requires that all employees at the senior management level who are granted equity awards retain all of the shares of Common Stock they receive upon the vesting, conversion or exercise of such awards (other than shares needed to pay income taxes arising from such vesting, conversion or exercise), unless after such disposition they would continue to own shares of Common Stock having a value which is a specified multiple of their base salary. For the Chief Executive Officer, the multiple is three times base salary and for the other Named Executive Officers the multiple is two times base salary. The Compensation Committee has maintained the stock ownership guidelines notwithstanding the decrease in the market price of the Corporation's common stock during the past 15 months because it believes that over the long-term the amount of common stock the Named Executive Officers are required to own is appropriate and that the price of the Corporation's common stock will increase over the long-term.

20

Performance Share Units

        To further the Corporation's long-term goal of increasing total stockholder return and sustainable growth, the Compensation Committee at its meeting on January 10, 2007 awarded performance share units to each Named Executive Officer other than the Chief Executive Officer (whose special long term equity awards are described below) pursuant to the Corporation's 2004 Stock Incentive Plan in an amount equal to 1.5 times the executive's 2006 base salary. The grant of these performance share units in 2007, which was a special one-time program, was intended to align closely the interests of the senior executives and the Corporation's stockholders by conditioning vesting of the units on achieving challenging "stretch" performance targets. Each unit converts into one share of Common Stock upon vesting. Each unit vests after three years (on December 31, 2009) if (a) total stockholder return of a share of Common Stock of the Corporation relative to a peer group of 18 shipping companies during the period from January 1, 2007 through December 31, 2009 is in the highest 25% (rounding to the closest whole number as appropriate—e.g. for the 18 company peer group, the highest 25% would be from 1 to 4.5 which would be rounded to 5) and (b) total stockholder return of a share of Common Stock during such performance period is at least 15.76%, assuming reinvestment of dividends when paid. Total stockholder return for this purpose is the percentage change in the value of the Common Stock from January 1, 2007 through December 31, 2009, assuming any dividends on the Common Stock paid during the three year period are reinvested in additional shares (fractional shares) of Common Stock of the Corporation at the time of payment on a pre-tax basis. The company peer group (which with the acquisition of OMI Corporation in 2007 by a third party is now a 17 company peer group) consists of the following entities:

        This 17 company peer group is different from the Corporation's Compensation Comparison Group because for many of the companies in this peer group there is no public disclosure of executive compensation levels or the executives are based in foreign countries for which comparison of compensation levels with executives based in the United States is not meaningful and subject to exchange rate fluctuations. The operations of these companies better match the Corporation's business than those of the Compensation Comparison Group, providing a more accurate group of global peers that are in effect the Corporation's key competitors.

        The number of performance share units granted in 2007 to the Named Executive Officers other than the Chief Executive Offer are set forth in the following table:

Special Long-Term Equity Awards for the Chief Executive Officer

        In connection with amendments made in 2007 to the employment letter agreement between the Chief Executive Officer and the Corporation and the change in control agreement between the Chief

21

Executive Officer and the Corporation (as described on pages 33 and 34 of this proxy statement), which extended the term of Mr. Arntzen's employment letter by five years, on February 15, 2007 the Compensation Committee granted the Chief Executive Officer restricted stock, stock options and restricted stock units ("RSUs") under the Corporation's 2004 Stock Incentive Plan as performance based awards, with a targeted total value at the end of the award of approximately $9 million. These equity awards are different from the performance share units granted to the other Named Executive Officers because they were designed to retain the services of the Chief Executive Officer for at least the five years ending in February 2012 (rather than three years) and to incentivize the Chief Executive Officer to achieve more demanding performance goals based on compound annual growth rate in the price of Common Stock of the Corporation over a longer period.

        The Chief Executive Officer was granted 23,645 shares of restricted stock, and stock options for 73,135 shares at an exercise price of $63.44 per share (the closing price on the grant date), which restricted stock vests, and stock options become exercisable, on February 15, 2012 (the "Vesting Date"). The Chief Executive Officer will become fully vested in such restricted stock and stock options prior to the Vesting Date upon a change of control of the Corporation and will vest in a pro rata portion of such restricted stock and stock options if his employment by the Corporation terminates prior to the Vesting Date for certain reasons, including death, disability, without cause or for good reason. The stock options expire on February 15, 2017. These grants were made as incentive for the Chief Executive Officer to extend his employment agreement with the Corporation for an additional five years.

        The Chief Executive Officer was also granted 47,289 RSUs and stock options for 146,270 shares of Common Stock at an exercise price of $63.44 per share. These RSUs convert into an equal number of shares of Common Stock, and these stock options become exercisable, if the performance goals discussed below are achieved. If performance goals are achieved during the three or four year periods commencing January 1, 2007, 50% of the RSUs and stock options applicable to such achieved performance goals are converted into Common Stock or become exercisable, as the case may be, on each of January 1, 2011 and January 1, 2012. If performance goals are achieved during the five year period, all of the RSUs and stock options applicable to such achieved performance goals are converted into Common Stock or become exercisable, as the case may be, on January 1, 2012. The RSUs have no voting rights. There will be credited to a dividend book entry account on behalf of the Chief Executive Officer with respect to his RSUs the same cash dividend as is paid on shares of Common Stock from the grant date of the RSUs. Such dividends will be held un-invested and without interest and paid in cash to the Chief Executive Officer if and when the RSUs vest. If the options become exercisable, they expire on February 15, 2017.

        The performance goals for the RSUs and stock options are based on the compound annual growth rate ("CAGR") of a share of the Corporation's Common Stock, which is based solely on the annual stock price growth rate, compounded (adjusted for stock splits and stock dividends), and without regard to cash dividends from the opening price on January 3, 2007 which was $56.55 per share. The following table sets forth the performance goals.

Minimum Price of Share of Common Stock

(1)

Represents a 9.88% CAGR

(2)

Represents a 18.25% CAGR

22

Benefits

        In general, the Corporation provides benefits to its executives that it believes are important to maintain a competitive total compensation program. Benefits are designed to provide a reasonable level of retirement income and to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death. The benefits offered to the Corporation's employees located in the United States, including all Named Executive Officers, are consistent with benefits offered by peer companies in the Compensation Comparison Group.

        The Corporation provides a tax qualified employee benefit plan to employees, the Savings Plan for Employees of OSG Ship Management, Inc. (the "Savings Plan"). Under the Savings Plan, eligible employees may contribute on a pre-tax basis an amount up to the limit imposed by the Code. Under the Savings Plan, the Corporation will match 100% of the first 6% of a participant's pre-tax contribution (subject to the Code limit). The maximum matching contribution for 2008 was $13,800.

        In addition, under the Savings Plan, the Corporation contributes to the plan account of each eligible employee an amount equal to 6% of the employee's cash compensation, generally base salary and an annual cash incentive up to limits imposed by the Code. For those employees who were employed by the Corporation on January 1, 2006 and were at least 50 years old on January 1, 2006, the Corporation contributes the additional percentage of such employee's cash compensation set forth below during the period beginning on January 1, 2006 and ending on the earlier of (i) the date the employee ceases to be employed by the Corporation and (ii) December 31, 2010, in all cases up to limits imposed by the Code:

        The Corporation's Supplemental Executive Savings Plan (the "Supplemental Plan") supplements the Savings Plan. Under the Supplemental Plan, for each employee for whom the Code limits on compensation and/or contributions restrict the amount the Corporation may contribute under the Savings Plan (other than matching contributions), the Corporation makes a book entry contribution with respect to such employee equal to the excess of the non-matching employer contributions the Corporation could have made under the Savings Plan had the Code limitations not applied over the amount it actually contributed under the Savings Plan.

Employment Agreements and Severance and Termination

        The terms and features of the employment agreements, change of control agreements and severance protection benefits applicable to the Named Executive Officers are described on pages 33 - 38 of this proxy statement. Such terms and features are based on an evaluation by the Compensation Committee of comparable agreements and arrangements adopted by companies in the Compensation Comparison Group and general industry, using data compiled by FWC. The difference in the terms of such agreements between those applicable to the Chief Executive Officer and those applicable to the other Named Executive Officers reflects the differences found in comparable agreements of companies in the Compensation Comparison Group and general industry between those applicable to chief executive officers and to other executives. The adoption of these agreements is intended to make all arrangements for the Named Executive Officers competitive with companies in the Compensation Comparison Group.

        The Corporation has entered into employment agreements with the Chief Executive Officer and Mr. Mats Berglund. The Corporation has also entered into change of control protection agreements with each of the Named Executive Officers and adopted the Overseas Shipholding Group, Inc. Severance Protection Plan (the "Severance Plan") which covers the Named Executive Officers other

23

than the Chief Executive Officer. The Corporation believes that its employment agreements, change of control protection agreements and Severance Plan are consistent with its overall compensation objective of attracting, motivating and retaining talented top executives and offering a compensation package that is fair. The change of control protection agreements are intended to retain executives and provide continuity of management in the event of an actual or threatened change of control of the Corporation and ensure that the executive's compensation and benefits expectations would be satisfied in such event. The employment agreements and Severance Plan are designed to offer executives protection for a possible loss of income in the event their employment is terminated without Cause.

        The employment agreement between the Corporation and the Chief Executive Officer was amended as of December 31, 2008 to add (i) a provision that if the Chief Executive Officer's employment is terminated by the Corporation without Cause or the executive terminates his employment for Good Reason, the Corporation would pay the executive a pro rata annual bonus for the year in which the executive's employment is terminated based on actual results for such year and (ii) terms that address the requirements of Section 409A of the Code regarding the tax rules on deferred compensation.

        The change of control protection agreements with the Named Executive Officers have a "double trigger", meaning the executive officer's right to receive severance payments and benefits arise only if there is both a change of control and termination of employment within a specified period. A double trigger was selected because unless the Named Executive Officer's employment is terminated in connection with a change of control, a Named Executive Officer's salary and bonus would continue to be paid by the acquiring entity, which is what the severance payment is based on and intended to replace. To address the requirements of Section 409A of the Code, the term Change of Control as used in the change of control protection agreements was modified to mean the acquisition of at least 30% interest in the Corporation, the change in majority Board composition during any period of twelve consecutive months or the merger or other business combination, sale of all or substantially all of the Corporation's assets or combination of the foregoing transactions other than one in which shareholders before the transaction continue to hold a majority of voting power after the transaction.

        The change of control protection agreement between the Corporation and Mr. Arntzen was amended and restated as of December 31, 2008 to (i) provide that following both a change of control and termination of employment within a specified period, Mr. Arntzen would be eligible to receive a pro rata annual bonus for the year in which Mr. Arntzen's employment is terminated, (ii) add a "modified gross-up" as described below to the existing "parachute payment" provision in such agreement, and (iii) provide terms that address the requirement of Section 409A of the Code regarding the tax rules on deferred compensation. If and to the extent that payments, benefits and other amounts received by Mr. Arntzen as a result of a change of control that are subject to excise tax ("parachute payments" under Section 280G of the Code) exceed the Section 280G safe harbor threshold by 10% or less, the Corporation will not provide a gross-up to Mr. Arntzen. Instead, the amounts to be paid to Mr. Arntzen will be reduced or "cutback", to an amount that would result in no excise tax being due but only if the reduced payments, benefits and other amounts (after tax) would be greater than the unreduced amounts less the payment by Mr. Arntzen of applicable excise and other taxes. If such amounts exceed the Section 280G safe harbor threshold by more than 10%, the Corporation will provide Mr. Arntzen with a gross-up on any excise tax incurred by him. The Compensation Committee determined to provide to Mr. Arntzen (and to the other Named Executive Officers as described in the next paragraph) a gross-up on any excise tax if "parachute payments" exceed the Section 280G safe harbor threshold by more than 10%, a "modified gross-up", because it believed that such benefit was competitive with the benefit offered to chief executive officers and other senior executives of companies in the Compensation Comparison Group.

        The Corporation also entered into amended and restated change of control protection agreements with each of Messrs. Itkin, Johnston and Berglund and Ms. Zabrocky as of December 31, 2008 which agreements replaced similar agreements which expired by their terms on December 31, 2008. The Corporation entered into these new agreements for the same reasons it entered into the agreements

24

they replaced, namely to retain executives and provide continuity of management in the event of an actual or threatened Change of Control of the Corporation and ensure the executive's compensation and benefit expectations would be satisfied in such event. The change of control protection agreements are substantially similar to the prior agreements except the amended and restated agreements provide that such executives will be eligible to receive a pro rata annual bonus for the year in which the executive's employment is terminated, the "modified gross-up" described in the preceding paragraph with respect to Mr. Arntzen, and terms that address the requirements of Section 409A of the Code regarding the tax rules on deferred compensation.

        As of December 31, 2008, the Corporation amended and restated the Severance Plan to address the requirements of Section 409A of the Code regarding the tax rules on deferred compensation and to provide that participants will be eligible to receive a pro rata annual bonus for the year of termination based on actual results for such year. The Severance Plan offers protection for a possible loss of income to certain key employees including Messrs. Itkin, Johnston and Berglund and Ms. Zabrocky, in the event their employment with the Corporation is terminated without Cause. The calculation of the benefits payable to Ms. Zabrocky under the Severance Plan were changed as of December 31, 2008 to be similar to those for Messrs. Itkin, Johnston and Berglund, increasing Ms. Zabrocky's benefits under the Severance Plan, to reflect her promotion to Senior Vice President of the Corporation in July 2008.

        The Compensation Committee believes that all of the amendments described above were necessary to continue providing the Named Executive Officers with compensation and benefits that are comparable to that offered to executives of companies in the Compensation Comparison Group.

Risk Mitigation

        The Corporation does not believe that the performance-based nature of the compensation of the Named Executive Officers encourages excessive risk-taking by the Named Executive Officers that would potentially threaten the economic viability of the Corporation. Each component of performance based compensation is subject to a limit on the cash paid or the number of shares delivered. The performance criteria are designed to focus on performance metrics that deliver value to stockholders and that focus on the strength of the business. Further, as noted above, the Corporation has instituted stock ownership guidelines that require the Named Executive Officers to maintain a substantial ownership interest in the Corporation, further aligning their interests to those of other stockholders while mitigating the chance of excessive risk taking.

Tax Compliance Policy

        Pursuant to Section 162(m) of the Code, compensation exceeding $1 million paid to the Corporation's Chief Executive Officer and the three other most highly compensated executive officers (other than the Chief Financial Officer) generally may not be deducted by the Corporation. An exception is compensation that is performance based pursuant to criteria under a plan approved by the stockholders. The 2004 Stock Incentive Plan contains performance-based conditions and has been approved by stockholders so that awards may be granted under the 2004 Stock Incentive Plan that are not intended to be limited by Section 162(m) of the Code. The Incentive Compensation Plan, which is proposed to be amended and restated, contains (and will continue to contain) performance-based conditions, and stockholders are being requested to approve such amendment and restatement, including to reapprove the section 162(m) performance goals under such plan, so that the Corporation's ability to deduct payments under the Amended and Restated Incentive Compensation Plan will not be limited by Section 162(m) of the Code. The Compensation Committee has structured, where possible, awards to executive officers under the Corporation's Incentive Compensation Plan and long-term incentive program to qualify for the performance based exception. However, the Committee believes that stockholder interests are best served if the Compensation Committee's discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expenses. Such action may be necessary in order for the Corporation to meet competitive market pressures and to ensure that it is able to attract and retain top talent to lead the organization successfully.

25

REPORT OF THE COMPENSATION COMMITTEE

        The Compensation Committee has reviewed the Compensation Discussion and Analysis included in this proxy statement and discussed that Analysis with management. Based on its review and discussion with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement (and be incorporated by reference into the Corporation's 2008 Annual Report on Form 10-K).

        In accordance with the rules of the SEC, the report of the Compensation Committee does not constitute "soliciting material" and is not incorporated by reference in any filings with the SEC made pursuant to the Securities Act of 1933, as amended (the "1933 Act"), or the Securities Exchange Act of 1934, as amended (the "1934 Act").

26

SUMMARY COMPENSATION TABLE

        The following Summary Compensation Table includes individual compensation information for services in all capacities for the Corporation and its subsidiaries by the Named Executive Officers.

(1)

This amount reflects a discretionary bonus granted to Mr. Arntzen to reflect his actual level of achievement in 2008 which exceeded the maximum award permitted under the Incentive Compensation Plan for any performance period. See page 18 of this proxy statement for additional information regarding such bonus.

(2)

Stock Awards and Option Awards represent the dollar amount recognized for financial statement reporting purposes with respect to the relevant year for the fair value of restricted stock, performance share units, restricted stock units and stock options granted in such year as well as prior fiscal years in accordance with SFAS 123R. Pursuant to the SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Fair value of stock awards is calculated as the closing price of the Corporation's Common Stock on the date of grant. Fair value of stock option awards is calculated using the Black-Scholes method of option valuation. See the Grants of Plan-Based Awards Table for information concerning awards made in 2008. These amounts reflect the Corporation's accounting expense for these awards and do not correspond to the actual value that will be recognized by the Named Executives Officers. For a discussion of the assumptions made in determining the fair value of stock awards and option awards, see Note M—Capital Stock and Stock Compensation in the Corporation's annual financial statements for 2008 contained in the Corporation's Annual Report on Form 10-K for 2008.

(3)

The amounts shown in this column for 2007 and 2006 reflect the amounts paid in 2008 and 2007 under the Corporation's Incentive Compensation Plan for 2007 and 2006, respectively. The amounts shown in this column for 2008 reflect the amounts paid in 2008 under the Corporation's Incentive Compensation Plan for 2008.

(4)

See All Other Compensation Table below for additional information.

27

ALL OTHER COMPENSATION TABLE

        The following table describes each component of the All Other Compensation column in the Summary Compensation Table.

(1)

Constitutes the Corporation's matching contributions under the Savings Plan, which is described in the Compensation Discussion and Analysis section of this proxy statement.

(2)

Constitutes the Corporation's contributions under the defined contribution plan portion of the Savings Plan, which is described in the Compensation Discussion and Analysis section of this proxy statement.

(3)

Constitutes the Corporation's contributions under the Corporation's Supplemental Executive Savings Plan, which is described in the Compensation Discussion and Analysis section of this proxy statement.

(4)

Life insurance premiums represent the cost of term life insurance paid on behalf of the Named Executive Officer.

(5)

Other includes for each Named Executive Officer premiums of $8,501 to pay medical coverage ($5,468 for Messrs. Itkin and Johnston), $700 to pay long term disability coverage equal to 60% of base annual salary and $720 paid under the Corporation's Transportation Program, a tax-free, commuter subsidy program. It also includes for each Named Executive Officer a premium of $2,025 for "umbrella" liability insurance coverage in the amount of $10,000,000 and a portion of their health insurance premiums.

28

GRANTS OF PLAN-BASED AWARD

        The following table lists the grants made in fiscal 2008 under the Corporation's Incentive Compensation Plan and the Corporation's 2004 Stock Incentive Plan, the Corporation's only incentive award plans.

(1)

Awards made under the Corporation's Incentive Compensation Plan.

(2)

Awards made under the Corporation's 2004 Stock Incentive Plan.

(3)

For a discussion of the assumptions made in determining the fair value on the grant date of the stock option awards, see Note M—Capital Stock and Stock Compensation to the Corporation's audited financial statements for 2008 contained in the Corporation's Annual Report on Form 10-K for 2008.

(4)

These awards vest in four equal annual installments as described on page 19 of this proxy statement.

(5)

These awards vest in three equal annual installments as described on page 19 of this proxy statement.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

        The following table provides information as of December 31, 2008 concerning the holdings of stock options and stock awards by the Named Executive Officers. This table includes unexercised and unvested option and stock awards. Awards of options vest in three equal annual installments commencing one year after the date of the option grant. Awards of restricted stock vest in four equal annual installments commencing one year after the date of the stock award. The market value of the stock awards is based on the closing market price of the Corporation's Common Stock as of

29

December 31, 2008, which was $42.11 per share. Additional information regarding these awards is included in the Compensation Discussion and Analysis on pages 19 and 20.