Allstate 2015 Annual Report Download - page 70

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EXECUTIVE COMPENSATION
Performance Stock Award Performance
Measures for the 2016-2018
Performance Cycle
• Three-Year Average Adjusted Operating Income
Return on Equity (measure weighted at 70%): This
measure is used to assess financial performance.
It is calculated in a similar manner to the 2014-2016
and 2015-2017 Cycles as disclosed above, but it is
adjusted to reflect the foreign exchange rate used
in establishing the measure (in place of actual
foreign currency translation) for any period if the
Total Premiums measure for the Annual Incentive
Plan is adjusted for foreign exchange rates (if the
impact exceeds a threshold).
• Earned Book Value (measure weighted at
30%): This measure is used to assess financial
performance. Earned book value is the increase
between common shareholders’ equity at
December 31, 2015 and adjusted common
shareholders’ equity at December 31, 2018
expressed as a compound annual growth rate.
Adjusted common shareholders’ equity is equal
to common shareholders’ equity at December 31,
2018 adjusted to:
— Add back reductions for common share
repurchases and declared common shareholder
dividends during the three-year period.
— Remove the impact of other significant non-
recurring, infrequent or unusual items in excess
of a threshold.
— Reflect a minimum or maximum amount of
after-tax catastrophe losses if the actual
after-tax catastrophe losses are more or less
than +/- 20% respectively of the three years
of catastrophe losses used to establish the
measure.
— Be consistent with the financial reporting used
in establishing the measure.
— Exclude the effects of acquiring and
selling businesses.
— Reflect the foreign exchange rate used in
establishing the measure (in place of actual
foreign currency translation) for any period if
the Total Premiums measure for the Annual
Incentive Plan is adjusted for foreign exchange
rates (if the impact exceeds a threshold).