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by the employee. Some agreements also contain termination and related pay provisions in the event of a change in
control. These change-in-control provisions do not apply unless there is both a change in control and a termination
by the Company without cause or a resignation by the executive for good reason. This is commonly referred to as a
“double trigger” requirement. Further, each agreement stipulates that the subject executive may not compete with the
Company for a prescribed period following termination of employment, or disclose confidential information.
The payments that may be made under each NEO’s employment agreement upon termination of employment
under specified circumstances are described in more detail below under “Potential Payments Upon Termination or
Change in Control.”
Change-in-Control Policy and Severance Agreements
The Company has no formal change-in-control or severance policy. However, as noted above, individual
employment agreements generally have provisions related to these matters. These agreements provide no excise
tax gross-ups.
In June 2017, Paul S. Amos II, former President, Aflac, entered into a separation agreement. For more information,
see “Separation Arrangements for Mr. Paul S. Amos II” on page 59.
Compensation Recovery (“Clawback”) Policy
The Company has a “clawback” policy that allows the Compensation Committee to review any adjustment or
restatement of performance measures and determine whether that adjustment or restatement warrants modifying
or recovering non-equity incentive awards. If it is deemed that such a modification or recovery is appropriate, the
Compensation Committee is charged with determining the amount of recovery and the officer group to be affected.
Certain Tax Implications of Executive Compensation
Section 162(m) of the Internal Revenue Code generally limits to $1 million annually the federal income tax
deduction that a publicly held corporation may claim for compensation payable to certain of its respective
current and former executive officers, but that deduction limitation historically did not apply to performance-
based compensation that met certain requirements. As part of the tax reform legislation passed in December
2017, Section 162(m) was amended, effective for taxable years beginning after December 31, 2017, to expand
the scope of executive officers subject to the deduction limitation and also to eliminate the performance-based
compensation exception, though the exception generally continues to be available on a “grandfathered” basis to
compensation payable under a written binding contract in effect on November 2, 2017.
In determining compensation for our executive officers, the Compensation Committee considers the extent to
which the compensation is deductible, including the effect of Section 162(m). In prior years, the Compensation
Committee generally sought to structure our executive incentive compensation awards so that they qualified
as performance-based compensation exempt from the Section 162(m) deduction limitation where doing so
was consistent with the Company’s compensation objectives, but it reserved the right to award nondeductible
compensation and on occasion did so. The Compensation Committee continues to evaluate the changes to
Section 162(m) and their significance to the Company’s compensation programs, but in any event its primary focus
in its compensation decisions will remain on most productively furthering the Company’s business objectives and
not on whether the compensation is deductible. The Compensation Committee did not make significant changes
to the Company’s executive compensation program for 2018 in response to the tax code changes.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the preceding CD&A with management and, based on
that review and discussion, has recommended to the Board to include the CD&A in this Proxy Statement.
Compensation Committee
Robert B. Johnson, Chairman
Douglas W. Johnson
Joseph L. Moskowitz
Compensation Discussion & Analysis
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Compensation Committee Report
AFLAC INCORPORATED
2018 PROXY STATEMENT
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