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ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM
Base Salary
The primary purpose of the base salary component of
our executive compensation program is to provide the
recipient with a steady stream of income consistent with
his or her level of responsibility, qualifications and
contribution over time. The Consultant annually gathers
comparative market data on salaries for (i) the
Compensation Committee to use in reviewing and
determining the CEO’s salary and (ii) the CEO to use in
making recommendations for the salaries of the
President/CFO and all other executive officers.
In the aggregate, the total base salaries of all of the
Company’s executive officers are near the 50
th
percentile of the survey results for these same positions
at peer group companies. Virtually all executive officers,
including NEOs, receive salaries that are within a plus
or minus range of 20% from the survey median for their
positions. Only Mr. Cloninger’s salary is above this
range, which we consider appropriate given his tenure
with the Company and since his role as both President
and CFO is more expansive than many of the second
highest paid executives at our peer companies. In
general, executive officers who are new to their role are
likely to be below the median and executive officers
who have been in their jobs for extended periods are
more likely to be above the median.
In 2014, Mr. Daniel P. Amos did not receive a salary
increase and he has not received a salary increase in
the last three years. Messrs. Cloninger, Paul Amos and
Kirsch received approximately 2.5%, 1.5% and 3.3%
base salary increases, respectively. Mr. Tonoike’s
annual base salary in yen terms increased 2.5% in
2014.
Management Incentive Plan (MIP)
All of the NEOs are eligible to participate in an annual
non-equity incentive plan sponsored by the Company,
referred to as the MIP, which was submitted to and
approved by shareholders in 2012 (the Amended and
Restated 2013 Management Incentive Plan).
The Company’s MIP uses specific performance
objectives at both the Corporate and the Business
Segment level (both of which are described below) to
provide potential annual non-equity incentive awards for
the NEOs and all other non-sales officers. Performance
targets are set annually for the plan, and cash payouts
are made to executives based on actual performance.
We believe the segment measures described below,
along with corporate-level objectives, are among the
key incentive factors for the business in terms of
creating shareholder value and aligning management’s
interests and rewards with those of our shareholders.
Target Bonus Opportunity and Setting of Payout
Opportunities:
Target bonuses for 2014 for the NEOs were determined
to be in line with industry standards for the respective
positions and were as follows:
Named Executive Officer
Target MIP
(as percent of
base salary)
Daniel P. Amos (Chairman & CEO)
220%
Kriss Cloninger III (President, CFO
& Treasurer)
150%
Paul S. Amos II (President, Aflac)
125%
Eric M. Kirsch (EVP, Global Chief
Investment Officer, Aflac)
200%
Tohru Tonoike (President & COO,
Aflac Japan)
100%
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