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Key Elements of Our Executive Compensation Programs
Element
Objective
Purpose
Base Salary
Talent attraction and retention
Alignment with shareholder value
creation
Provide annual cash income that is both market
competitive and commensurate with an individual’s talents
and level in the organization
Motivate and retain key talent
Management
Incentive Plan
(“MIP”)
Pay-for-performance
Alignment with operating growth
metrics that drive shareholder
value creation
Motivate executives and reward achievement for
performance on key annual operational and strategic goals
Focus on key short-term value drivers for our business
Motivate and retain key talent
Long-term Incentives
(“LTI”)
Pay-for-performance
Alignment with shareholder value
creation
Motivate executives and reward achievement for
performance on key long-term operational and strategic
goals
Focus on key long-term value drivers for our business
Motivate and retain key talent
Retirement &
Benefits
Talent retention
Tax effective pay
Security
Provide market competitive retirement benefits (pension,
401(k), etc.) to aid in talent retention
Satisfy employee health and welfare needs
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 from the 2013 peer group, were
selected to comprise the 2014 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 were near the median
of the peers, total assets were larger than the median of
the peer group, and our market value was higher than
the peer group median. The data shown below reflect
those metrics relevant at the time of the peer group
review:
(in millions)
Revenue
(1)
Total Assets
(2)
Market Value
(3)
Aflac Incorporated
$24,668
(4)
$137,112
(4)
$27,526
Peer Median
$24,337
$104,522
$22,024
(1)
(2)
(3)
(4)
For the trailing 12 months ending September 30, 2014
As of September 30, 2014
As of December 31, 2014 when data was compiled for the performance review by the Compensation Committee
Figures are net of foreign currency effect
The assessment of the Company’s 2014 performance relative to the peer group can be found below in the “CEO
Compensation and Pay-for Performance” section of this CD&A.
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