Allstate 2013 Annual Report Download - page 38

Allstate’s Executive Compensation Practices
Allstate’s executive compensation program features many ‘‘best practices.’’
A significant percentage, 91%
for our CEO, of total target direct compensation is
‘‘pay at risk’’ that is connected to actual
performance. Change-in-control severance benefits are three times
target cash compensation for the CEO and two times
Performance measures for target cash compensation for senior executives.
incentive compensation are linked to both strategic
and near-term operating objectives designed to Dividend
create long-term stockholder value. equivalents are accrued but not paid on PSAs until
The the performance conditions are satisfied and the
Committee retains an independent compensation PSAs vest after the performance measurement
consultant to review the executive compensation period.
program and practices.
We do not provide tax gross ups
beyond what is generally available to all full-time
employees. Awards to executive officers made after
May 19, 2009, under short- and long-term incentive
Beginning with awards granted in 2012, compensation plans are subject to clawback in the
long-term equity incentive awards have a ‘‘double- event of certain financial restatements. The
trigger;’’ that is they will not vest in the event of a clawbacks are designed to discourage imprudent risk
change-in-control unless also accompanied by a taking.
qualifying termination of employment. Executives are
required to hold stock equal to a multiple of six
Our equity incentive plan does not permit times salary for our CEO and three times salary for
repricing or exchange of underwater stock options or each other named executive. In addition, 75% of net
stock appreciation rights without stockholder after-tax shares received as equity compensation
approval, except in connection with certain corporate must be retained until an executive meets the stock
transactions involving Allstate or a change-in-control. ownership guideline.
Our executives are ‘‘at
will’’ employees with no employment agreements.
Elements of 2012 Executive Compensation Program
The following table lists the elements of target direct compensation for our 2012 executive compensation program. The
program uses a mix of fixed and variable compensation elements and provides alignment with both short- and long-term
business goals through annual and long-term incentives. Our incentives are designed to drive overall corporate
performance, specific business unit strategies, and individual performance using performance and operational measures
that correlate to stockholder value and align with our strategic vision and operating priorities. The Board establishes the
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Executive Compensation
⻬Pay for performance. ⻬Policy on insider trading that prohibits hedging of
Allstate securities.
⻬Moderate change-in-control benefits.
⻬Linkage between performance measures and
strategic objectives.
⻬No dividends or dividend equivalents paid on
unearned performance stock awards.
⻬Independent compensation consultant.
⻬Maximum payout caps for annual cash incentive
⻬No tax gross ups. compensation and performance stock awards.
⻬‘‘Clawback’’ of certain compensation in the event of
restatement.
⻬‘‘Double trigger’’ in the event of a change-in-
control.
⻬Robust stock ownership guidelines.
⻬No repricing or exchange of underwater stock
options.
⻬No employment contracts. ⻬No inclusion of equity awards in pension
calculations.
⻬Limited executive perquisites.
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