Third, threshold, target, and maximum performance levels for our 2017 AIP and 2015-2017 LTIP are discussed in more
detail in the Annual Incentive Plan and 2015-2017 PBRSUs sections below. For our 2018 Proxy, we are disclosing threshold levels for our AIP and LTIP. We consistently have disclosed, and will continue to
disclose, our performance goals at the end of each respective performance cycle.
The Committee continues to believe that the overall structure of our executive
compensation plans, the absence of excessive perquisites, and our demonstrated
pay-for-performance
practices reflect the strength of the Companys executive
compensation programs.
Frequency of Say on Pay Advisory Votes
Pursuant to Section 14(a) of the Securities Exchange Act, the Board asked Shareholders to vote on the frequency of future Say on Pay advisory votes on
NEOs compensation. Specifically, the Board asked whether Say on Pay advisory votes should occur every year, every two years or every three years. 76% of the Shareholder votes cast were in favor of annual Say on Pay
advisory votes. The next vote on the frequency of future Say on Pay advisory votes will be conducted in 2023.
Executive
Compensation Program
Guiding Principles
The Committee has
established a set of core principles that underlie our executive compensation program. These core principles provide guidance to the Committee and management in making decisions while administering the program or when considering changes. These core
principles include strong alignment between pay and performance, incentive to drive Shareholder value, and market competiveness.
Strong pay for performance
alignment
We target compensation around the median of the competitive market, with executives earning more or less than median, generally based on the
performance of the Company and value delivered to Shareholders. Our core executive compensation program includes base salary, an annual cash incentive plan under the AIP, and long-term equity awards under the LTIP. Both the AIP and LTIP are
administered under the Shareholder-approved 2010 Comprehensive Executive Compensation Plan, as amended (CECP). Incentive awards are earned upon the achievement of short-term and long-term business goals that are reviewed and approved by
the Committee at the beginning of each performance period. Performance goals are structured to reward business growth, profitability, and relative total shareholder return, balanced with productivity and risk and capital management.
Executive interests should be aligned with Shareholders
To encourage
executive performance on a long-term basis, the Committee grants equity awards with multi-year performance periods and multi-year vesting. In 2017, Ms. Zuraitis received approximately 48% of her target compensation in equity. With respect to
the other NEOs, approximately 37% to 46% of their compensation was equity-based.
Incentive compensation should drive long-term value creation and reward strong
performance
The AIP performance goals are based on premiums and adjusted operating income to reward strong performance. The LTIP performance goals are directly
linked to multi-year growth and return measures to keep executives focused on value creation.
A significant portion of compensation should be at
risk based on the Companys performance
For 2017, over 70% of the CEOs target total pay (base salary, target annual incentive, and target
long-term incentive) and over 60% of target total pay for all other NEOs is at risk, and is variable from year to year, and for much of it, the level of payout is dependent on the Companys performance.
|
|
|
2018 Proxy Statement
Compensation Discussion and Analysis
|
|
23
|