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AFLAC INCORPORATED
2017 PROXY STATEMENT
66
Proposal 5: Proposal to Approve the Aflac Incorporated Long-Term Incentive Plan
compensation paid based on the achievement of pre-established performance goals is excluded from this
deduction limit if the material terms under which the compensation is to be paid, including the performance goals
to be used, are approved by shareholders. Our shareholders previously approved the LTIP at our 2012 annual
meeting, which satisfied these approval requirements.
Where, as is the case under the 2017 LTIP, the applicable targets under the performance goals may be varied
(for instance, where the approved goal is any earnings per share measure and the Committee is then free to
establish specific required earnings per share metrics and levels), Section 162(m) requires that shareholders
reapprove the performance goals every five years. In addition, the 2017 LTIP includes changes to the authorized
performance goals under the LTIP. Accordingly, as part of this proposal, we are asking shareholders to approve
the performance goals for use in regard to performance-based awards under the 2017 LTIP so that we may be
able to deduct incentive compensation paid pursuant to such awards if we determine it is appropriate to do so.
As approved by the Board of Directors, subject to shareholder approval, the 2017 LTIP provides that the Committee
in its sole discretion may condition the vesting or exercisability of any award granted under it on the attainment of
performance goals that are pre-established by the Committee and that are based, for any period specified by the
Committee in its sole discretion, on one or more of the following criteria: new premium sales; premium income;
investment income; revenues; total insurance benefits (cash claims, increase in future benefits and incurred but not
reported claims); expense levels; premium payment levels; persistency rate (based on premiums or policies); policy
renewals; profit margins; operating earnings (excluding in the Committee’s sole discretion the effects of one or more
of the following items: realized gains or losses on investments, the impact from passive derivative activities and
hedging, the change in fair value of the interest rate component of cross-currency swaps, and items considered by
the Committee to be nonrecurring in nature such as restructuring or subsidiary conversion charges, assessments by
a state guaranty association or similar entity, or other nonrecurring charges, or items excluded from the presentation
of operating earnings in the information filed or furnished by the Company with the United States Securities and
Exchange Commission from time to time); net earnings (either before or after provision for the cumulative effect of
required accounting changes for the applicable period); return on equity (operating earnings excluding the impact of
foreign exchange divided by the average of common shareholders’ equity in the Company as of the beginning and
end of the applicable period, excluding in the Committee’s sole discretion accumulated comprehensive income as
recognized under ASC 320); new money investment yield; return on invested assets; shareholders’ equity; operating
return on shareholders’ equity; regulatory capital levels; return on regulatory capital; risk-based capital levels or ratios;
solvency margin ratio; stock price; total return to shareholders; or, to the extent an award is made to an individual
who is not a covered employee under Section 162(m) of the IRC, such other performance goals as the Committee
shall deem appropriate.
As approved by the Board of Directors, subject to shareholder approval, the 2017 LTIP also provides that
as determined by the Committee, achievement of the performance goals may be measured (a) individually,
alternatively or in any combination, (b) with respect to the Company, a subsidiary, division, business unit or
segment, product line, product, or any combination of the foregoing, (c) on an absolute basis, or relative to a
target, to growth levels, to a designated comparison group, to results in other periods, to an index, or to other
external measures, and (d) on an aggregate or per-share basis. Performance goals may include a threshold level of
performance below which no award will be earned, levels of performance at which an award will become partially
earned and a level at which an award will be fully earned. To the extent required to qualify payment under an award
as performance-based compensation within the meaning of Section 162(m) of the IRC, awards whose vesting or
exercise is conditioned on the attainment of performance goals shall become vested or exercisable (as the case may
be) only after the attainment of such performance goals has been certified by the Committee. The Committee may
provide that the achievement of performance goals shall be determined without regard to the impact of any event or
occurrence which the Committee determines should be appropriately excluded, such as restructuring or subsidiary
conversion charges, assessments by any state guaranty association or similar entity, or other nonrecurring charges,
a change in accounting standards required by U.S. generally accepted accounting principles (“GAAP”), items of an
unusual or infrequently recurring nature, changes in applicable laws or regulations, or by excluding all or a portion
of the effect of translating foreign currently of business segments to U.S. dollars for financial reporting purposes;
provided that with respect to awards that are intended to satisfy the requirements for “qualified performance-based
compensation” under Section 162(m) of the IRC, the Committee shall not exercise any discretion with respect to such
an award that would cause it to fail to qualify as performance-based compensation. With respect to participants
who are not covered employees, performance goals may also include such qualitative performance goals as
the Committee shall, from time to time, establish; and with respect to participants who are covered employees,
the Committee may, subject to attainment of performance goals described above, impose additional qualitative
performance goals as the Committee shall, from time to time, establish.