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Compensation Discussion & Analysis
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Elements of Our Executive Compensation Program
AFLAC INCORPORATED
2017 PROXY STATEMENT
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Elements of our Executive Compensation Program
Importance of the Peer Group
As discussed in this CD&A, the Compensation Committee considers
our peer group when setting compensation amounts or targets.
Each year, the Compensation Committee reviews the composition
of the peer group to ensure it remains appropriate. Key factors the
Compensation Committee considers during this annual review include
operating characteristics, revenue size, asset size, profitability, market
value, and total number of employees. Based on the annual review, the
Compensation Committee selects a peer group of companies that are
engaged in businesses similar to that of the Company, are of a similar
size, and compete against the Company for talent.
The 2016 peer group, which has not changed since 2013, consists of
the companies shown at right.
The data below shows how the Company’s revenues, total assets, and
market value compare to the peer group medians for those metrics.
(in millions)
Revenue
(1)
Total Assets
(2)
Market Value
(3)
Aflac Incorporated
$21,216
(4)
$129,530
(4)
$28,404
Peer Median
$27,095
$108,537
$27,294
(1) For the trailing twelve months ending September 30, 2016
(2) As of September 30, 2016
(3) As of December 31, 2016, when data was compiled for the performance review by the
Compensation Committee
(4) Figures are net of foreign currency effect
2016 Peer Group
●●
Aetna Inc.
●●
The Allstate Corporation
●●
Assurant, Inc.
●●
The Chubb Corporation
●●
CIGNA Corporation
●●
CNO Financial Group, Inc.
●●
Genworth Financial, Inc.
●●
The Hartford Financial Services
Group, Inc.
●●
Humana Inc.
●●
Lincoln National Corporation
●●
Manulife Financial Corporation
●●
MetLife, Inc.
●●
Principal Financial Group, Inc.
●●
The Progressive Corporation
●●
Prudential Financial, Inc.
●●
The Travelers Companies, Inc.
●●
Unum Group
We show the Company’s 2016 performance relative to the peer group on a variety of metrics below in the “CEO
and President Compensation and Pay-for Performance” section of this CD&A.
Base Salary
Base salary is typically the smallest component of total compensation for the NEOs; the majority of their
compensation comes from performance-based cash and equity awards.
The base salaries of our executive officers are competitively positioned relative to comparable executives
at our peers and in the broader insurance sector, but also reflect each individual’s scope of responsibilities
and performance. The Compensation Committee uses comparative market data on salaries in reviewing and
determining the CEO’s salary, and the CEO uses that data to inform his recommendations for the salaries of the
other executive officers.
Mr. Daniel P. Amos has not received a salary increase in the last five years. Messrs. Crawford, Cloninger, and
Kirsch did not receive salary increases in 2016. Mr. Paul S. Amos received a base salary increase of approximately
3.3% for 2016 due to a change in his role and responsibilities and in order to align his base salary competitively
relative to similar roles in the market.
Management Incentive Plan (MIP)
All of the NEOs are eligible to participate in an annual non-equity incentive plan, referred to as the MIP, which was
submitted to and approved by shareholders in 2012. See proposal 6 for the adoption of a new MIP, which will be
effective January 1, 2018 (Appendix B).