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The key elements of our executive compensation programs directly link compensation incentives with our business
goals and shareholder interests:
Element
Vehicle
Performance Link
Base Salary
Cash
Set at competitive levels to attract and retain key
talent
MIP
Cash
Annual incentive award performance metrics
align with our business strategy, geographic
goals, and key value drivers of our Company
•
Corporate Goals:
EPS, OROE, SMR, Net
Investment Income
•
U.S. Goals:
increase in new annualized
premiums, increase in premium income,
increase in pretax operating earnings
•
Japan Goals:
increase in new annualized
premiums, increase in premium income,
increase in pretax operating earnings
Metrics are
rigorous and
set with the
intention of
achieving
target
performance
50%-60% of
the time
LTI
PBRS and
Stock
Options
PBRS (100% of LTI for CEO and President; 80% of
LTI for other NEOs)
• RBC ratio metric represents key industry
performance measures that align with long-
term value creation
Stock Options (0% of CEO and President LTI; 20%
of other NEOs)
• Align executive’s interests with shareholder
interests; only provides value if share price
increases
PBRS vest on
three-year
financial
performance
Options cliff
vest after
three years
Peer Group
Each year, the Compensation Committee reviews the
composition of the peer group against which the
Company’s executive compensation programs and
financial performance are benchmarked. Key factors
the Compensation Committee considers during its
annual review of companies in the peer group include
the following: operating characteristics, revenue size,
asset size, profitability, market value, and total number
of employees. Based on the annual review, a peer
group is selected among companies that are engaged
in businesses similar to that of the Company, are of size
similar to that of the Company, and compete against the
Company for talent. The following 17 companies, which
were unchanged since 2013, were selected to comprise
the 2015 peer group:
Aetna Inc.
Lincoln National Corporation
The Allstate Corporation
Manulife Financial Corporation
Assurant, Inc.
MetLife, Inc.
The Chubb Corporation
Principal Financial Group, Inc.
CIGNA Corporation
The Progressive Corporation
CNO Financial Group, Inc.
Prudential Financial, Inc.
Genworth Financial, Inc.
The Travelers Companies, Inc.
The Hartford Financial Services Group, Inc.
Unum Group
Humana Inc.
Overall, the Company’s revenues and total assets were
somewhat higher than the median of the peers, and our
market value was slightly higher than the peer group
median. The data shown below reflect those metrics
relevant at the time of the peer group review:
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