Allstate 2008 Annual Report Download - page 63

following calculation for all of the long-term cash incentive performance measures. For the 2008-2010 cycle, the
target award opportunities for the named executives, stated as a percentage of salary, are as follows: Mr. Wilson—
140% for the portion of his cycle prior to his promotion to chairman and 155% for the remainder of the cycle,
Mr. Ruebenson—100%, Messrs. Civgin, Hale and Simonson—80%, Ms. Mayes—70%, and Mr. Pilch-40%.
Actual performance interpolated X Weighting X Target award opportunity as a X Salary*
relative to threshold and target on a percentage of salary*
range of 0% to 100% and relative to
target and maximum on a range of
100% to 300%
* Base salary in effect at the beginning of the cycle, as adjusted by any promotional increases granted during the course of the cycle
on a prorated basis.
The weighting for each named executive is provided below. The amount specified in the Grants of Plan Based
Awards Table as the threshold, target, and maximum long-term cash incentive award for each named executive is
the amount that will be earned if Allstate achieves the threshold, target, and maximum goals, respectively, on all
of the performance measures.
The performance measures, weighting, and goals for the 2008-2010 cycle are set forth in the following table.
A description of each performance measure is provided under the ‘‘Performance Measures’’ caption at the end of
this CD&A.
LONG-TERM CASH INCENTIVE AWARDS, 2008-2010 CYCLE
PERFORMANCE MEASURES, WEIGHTING, AND TARGET GOALS(1)
Percentage weight of the
total potential
Performance Measures award(2) Target
Average adjusted return on equity relative to peers 50% 5th position relative to
peers
Allstate Protection growth in policies in force over the 3-year
cycle 25% 5%
Allstate Financial return on total capital 25% 9.5%
(1) Information regarding our performance measures is disclosed in the limited context of our annual and long-term cash incentive
awards and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We
specifically caution investors not to apply these statements to other contexts.
(2) Same weight applied for all named executives.
For the return on equity measure, Allstate’s performance will be ranked relative to the peer insurance
companies listed on page 38 as indicated in the following table. However, for the 2008-2010 cycle, Cincinnati
Financial Corporation and Safeco Corporation were excluded. Cincinnati Financial Corporation was excluded
because it pursues a buy-and-hold equity investment strategy different than the other peers that has resulted in a
significant build up of unrealized capital gains in its equity portfolio, which impacts its adjusted return on equity
making it less comparable to Allstate’s performance, and Safeco Corporation was excluded due to its acquisition
by the Liberty Mutual Group in 2008.
AVERAGE ADJUSTED RETURN ON EQUITY RELATIVE
TO PEER GROUP, 2008-2010 CYCLE
Peer Position % of Target Award
Threshold 9 0%
8 40%
7 60%
6 80%
Target 5 100%
4 150%
3 200%
2 250%
Maximum 1 300%
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