Allstate 2015 Annual Report Download - page 46

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EXECUTIVE COMPENSATION
(2) Including medical, dental, vision, life, accidental death and dismemberment, long-term disability, and group
legal insurance. For named executives and other officers, Allstate offers an executive physical program.
(3) All officers are eligible for tax preparation services. Financial planning services were provided only to senior
executives.
(4) The Board encourages the CEO to use our corporate aircraft when it improves his efficiency in managing
the company, even if it is for personal purposes. Personal usage is counted as taxable compensation. The
committee also approved the President’s usage of corporate aircraft for personal use up to 40 hours annually.
In limited circumstances approved by the CEO, other senior executives are permitted to use our corporate
aircraft for personal purposes. Ground transportation is available to senior executives. Mobile devices are
available to senior executives, other officers, and certain managers and employees depending on their job
responsibilities.
(5) Tickets to Allstate sponsored events or the Allstate Arena are offered occasionally as recognition for service.
Retirement Benefits
Each named executive participates in two different
defined benefit pension plans. The Allstate
Retirement Plan (ARP) is a tax qualified defined
benefit pension plan available to all of our regular
full-time and regular part-time employees who
meet certain age and service requirements. The
ARP provides an assured retirement income based
on an employee’s level of compensation and length
of service at no cost to the employee. As the ARP
is a tax qualified plan, federal tax law limits (1) the
amount of an individual’s compensation that can
be used to calculate plan benefits and (2) the total
amount of benefits payable to a plan participant
on an annual basis. For certain employees, these
limits may result in a lower benefit under the ARP
than would have been payable otherwise. Therefore,
the Supplemental Retirement Income Plan (SRIP)
is used to provide ARP-eligible employees whose
compensation or benefit amount exceeds the
federal limits with an additional defined benefit in
an amount equal to what would have been payable
under the ARP if the federal limits did not exist.
Effective January 1, 2014, Allstate modified its
defined benefit pension plans so that all eligible
employees earn future pension benefits under a new
cash balance formula.
Change-in-Control and Post-Termination
Benefits
Consistent with our compensation objectives, we
offer these benefits to attract, motivate, and retain
executives. A change in control of Allstate could
have a disruptive impact on both Allstate and our
executives. Change-in-control benefits and post-
termination benefits are designed to mitigate that
impact and to maintain alignment between the
interests of our executives and our stockholders.
We substantially reduced change-in-control benefits
in 2011:
• Compared with the previous arrangements,
the change-in-control severance plan (CIC Plan)
eliminated all excise tax gross ups and the lump
sum cash pension enhancement.
• For the CEO, the amount of cash severance
payable is three times the sum of base
salary and target annual incentive. For the
other named executives, the amount of cash
severance payable is two times the sum of base
salary and target annual incentive.
• In order to receive the cash severance benefits
under the CIC Plan, a participant must have
been terminated (other than for cause, death,
or disability) or the participant must have
terminated employment for good reason (such
as adverse changes in the terms or conditions
of employment, including a material reduction
in base compensation, a material change in
authority, duties, or responsibilities, or a material
change in job location) within two years following
a change in control.
• Long-term equity incentive awards granted
after 2011 will vest on an accelerated basis due
to a change in control only if the participant has
been terminated (other than for cause, death,
or disability) or the participant terminated
employment for good reason (as defined above)
within two years following a change in control.
The change-in-control and post-termination
arrangements which are described in the Potential
Payments as a Result of Termination or Change in
Control section on pages 57-61 are not provided
exclusively to the named executives. A larger group
of management employees is eligible to receive
many of the post-termination benefits described in
that section.
Clawback of Compensation
Awards made to executive officers after
May 19, 2009, under short- and long-term incentive
compensation plans, are subject to clawback in the
event of certain financial restatements. Annual cash
incentive and equity awards granted after May 19,
2009 are also subject to cancellation or recovery
in certain circumstances if the recipient violates
non-solicitation covenants. Equity awards granted
after February 21, 2012, are subject to cancellation in
certain circumstances if the recipient violates non-
competition covenants.