42 / 68
Based upon an analysis of the Company’s relative
financial performance and total shareholder return, the
Company ranked 14 out of 18 companies (17 peers
plus the Company); the lower the total weighted
composite score, the higher a company’s overall
ranking (rankings on each metric are out of 18
companies):
2014 Financial Performance Ranking Matrix
Aflac Incorporated Relative Ranking Among Peer Group
Aflac
Incorporated
Revenue
1-Year
Growth
Net
Income
1-Year
Growth
Premium
Income
1-Year
Growth
EPS
1-Year
Growth
Return on
Revenues
2014
Return on
Average
Equity
2014
Return on
Average
Assets
2014
1Yr
Indexed
TSR
(12/31/13-
12/31/14)
3Yr
Indexed
TSR
(12/31/11-
12/31/14)
Composite
Score
Performance
Rank
Relative
Ranking
(out of 18
companies)
14
14
12
14
3
1
8
17
17
—
—
Weightings
1
1
1
1
2
2
2
4
4
—
—
Totals
14
14
12
14
6
2
16
68
68
214
14
The CEO PBRS grant process is summarized below:
Determination of CEO Compensation
In conjunction with the relative performance
assessment, CEO total compensation relative to the
peer group is evaluated with the help of the Consultant.
The highest and lowest paid CEOs among the peers
are removed from the data set to mitigate the effect of
the outliers. Then, the Company’s relative performance
percentile ranking (14 out of 18, or 24
th
percentile
ranking) is applied to the remaining peer CEO
compensation data for the applicable year to derive an
implied total compensation amount for the Company’s
CEO. The resulting implied compensation level was
used in determining the CEO’s PBRS grant for 2014.
In addition to having to earn the PBRS grant amount
based upon the Company’s relative performance, the
grant of PBRS is not guaranteed and is contingent
Step 2:
Determine Aflac Incorporated’s relative financial performance against its peers
Step 3: Assess CEO TDC at peers
Step 4: Calculate TDC amount for Aflac Incorporated’s CEO based upon the Company’s
performance percentile ranking versus peers
Step 5: Determine CEO’s
final PBRS grant based on prior steps
—
adjust contingent
PBRS grant from February to reflect actual relative performance ranking
December
ecember
Step 1: Contingent PBRS grant issued
based on prior year’s performance
February
Grant
received
contingent on
performance
over next
three years;
thus, CEO has
to earn award
twice
38