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The targeted LTI mix for 2014 by officer group is as follows:
For PBRS awards that were granted in 2014, the
performance period is January 1, 2014 through
December 31, 2016. The performance measures for
determining vesting for these awards are based on the
achievement of the following specified ratios:
RBC as determined on a U.S. statutory
accounting basis at each calendar year end.
This performance measure was selected
because of the Company’s belief that capital
adequacy is a significant concern for the
financial markets and shareholder confidence.
SMR, associated with our regulatory reporting
to the Financial Services Agency in Japan, was
added as a performance metric for 2014. We
view maintaining a strong capital position as an
important priority. From a corporate
perspective, SMR is an equally important
capital metric as RBC. By adding the SMR
metric, we have included both the U.S. and
Japan
regulatory
capital
metrics
as
performance targets.
Operating return on shareholders’ equity
excluding foreign currency effect (“OROE”),
which was also added in 2013 as a MIP
performance metric for senior vice presidents
and above, is part of our financial management
process as this return metric measures our
earnings relative to our capital as reported to
our shareholders. The use of this metric allows
our shareholders to evaluate our financial
achievements relative to other organizations in
terms of how effectively we are using capital to
generate earnings. We believe this metric has a
significant influence on the value our
shareholders place on the Company.
We believe the capital measures (RBC and SMR) and
OROE results are equally important to our
shareholders. Accordingly, we have assigned equal
weights to RBC and SMR (target 25% each) to assess
how well we have met our performance based financial
objectives over the three year period beginning in 2014.
OROE has been assigned 50% weighting for target.
Performance Based Restricted
Credit for
Credit for
Credit for
Stock Performance Objectives Minimum Minimum Target
Target
Maximum Maximum
2014 to 2016
Value Attainment
Value Attainment Value Attainment
RBC
500% 12.5% 625% 25% 750% 37.5%
SMR
500% 12.5% 575% 25% 650% 37.5%
OROE
16% 25% 20% 50% 50% 75%
35
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