Allstate 2015 Annual Report Download - page 38

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EXECUTIVE COMPENSATION
Allstate’s Executive Compensation Principles
Allstate’s executive compensation program includes industry best practices.
What We Do
Pay for Performance. A significant percentage of total target direct compensation is pay at-risk and is
connected to performance.
Strong Link between Performance Measures and Strategic Objectives. Performance measures for incentive
compensation are linked to operating priorities designed to create long-term stockholder value.
Independent Compensation Consultant. The committee retains an independent compensation consultant
to review the executive compensation programs and practices.
Targeted Pay at 50thPercentile of Peers. The committee targets total direct compensation at the
50th percentile of peers.
Benchmark Peers of Similar Revenues and Business Complexity. The committee benchmarks our executive
compensation program and reviews the composition of the peer group annually with the assistance of the
independent compensation consultant.
Moderate Change-in-Control Benefits. Change-in-control severance benefits are three times target cash
compensation for the CEO and two times target cash compensation for other executive officers.
Double Trigger in the Event of a Change in Control. Beginning with grants made in 2012, equity incentive
awards have a double trigger; that is, they will not vest in the event of a change in control unless also
accompanied by a qualifying termination of employment.
Maximum Payout Caps for Annual Cash Incentive Compensation and PSAs.
Robust Equity Ownership and Retention Requirements. We extended holding requirements beginning with
awards granted in 2014. Senior executives must hold their equity for one additional year after vesting of the
PSAs or exercise of options.
Clawback of Certain Compensation if Restatement or Covenant Breach. Certain awards made to executive
officers are subject to clawback in specified circumstances.
What We Don’t Do
No Employment Agreements for Executive Officers. Our executive officers are at-will employees with no
employment contracts.
No Guaranteed Annual Salary Increases or Bonuses. For the named executives, annual salary increases are
based on evaluations of individual performance, while their annual cash incentives are tied to corporate and
individual performance.
No Special Tax Gross Ups. No tax gross ups are provided beyond limited items which are generally available
to all full-time employees.
No Repricing or Exchange of Underwater Stock Options. Our equity incentive plan does not permit
repricing or exchange of underwater stock options or stock appreciation rights without stockholder
approval, except in connection with certain transactions involving Allstate or a change in control.
No Plans that Encourage Excessive Risk-Taking. Based on the annual review, it was determined that the
company’s compensation practices are appropriately structured and avoid incenting employees to engage
in unnecessary and excessive risk-taking.
No Hedging or Pledging of Allstate Securities. Officers, directors, and employees are prohibited from
hedging Allstate securities. Directors, executive officers and other senior executives are prohibited from
pledging Allstate securities as collateral or holding securities in a margin account, except when an exception
is granted by the chairman or lead director.
No Inclusion of Equity Awards in Pension Calculations.
No Dividends or Dividend Equivalents Paid on Unvested PSAs. Dividend equivalents are accrued but
not paid on PSAs until the performance conditions are satisfied and the PSAs vest after the performance
measurement period.
No Excessive Perks. We offer only limited benefits as required to remain competitive and to attract and
retain highly talented executives.