AFLAC INC
For the period ended May 6, 2024. Filed Mar 21, 2024.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 6, 2024 · Filed Mar 21, 2024
Contents
Summary of Our Executive Compensation Program
As a leader in our industry segment, we recognize that a sound executive compensation program is one element of why we are an employer of choice. Our executive compensation program directly links compensation incentives with our business goals and shareholder interests.
We consider annual incentive and long-term incentive compensation to be the most important compensation awarded because these pay elements represent the largest part of total rewards for executives and provide the strongest link to Company results and shareholder value creation. Moreover, incentive compensation enables us to attract, retain, motivate, and reward talented individuals who have the necessary skills to manage our growing global enterprise now and for the future. Due to our focus on incentive compensation, base salary is the smallest component of compensation for the NEOs.
Key Elements of Our 2023 Executive Compensation Program
| CEO Pay Mix and Element | Terms | Performance Measure(s) | Objective(s) | ||
|---|---|---|---|---|---|
| BASE SALARY | The fixed amount of annual cash compensation for performing day-to-day responsibilities. Generally reviewed biennially for potential increase based on a number of factors, including market levels, performance, and internal equity. | Levels set based on market data, job scope, responsibilities, experience, and individual performance. | •Attract and retain talent | ||
| MANAGEMENT INCENTIVE PLAN (“MIP”) | Annual variable cash incentive compensation based on the achievement of predetermined annual performance goals.Weighting of performance metrics varies based on NEO role | Performance metrics align with our business strategy, geographic segment goals, and key value drivers:•Corporate goal: adjusted earnings per diluted share, excluding the impact of foreign currency•U.S. goals: new annualized premium, net earned premium, cost savings from transformation initiatives•Japan goals: new annualized premium, net earned premium, cost savings from transformation initiatives•Global Investments goals: net investment income; credit losses/impairmentsPerformance goals are rigorous and set to align the Company’s business plan with the expectation of achieving target performance. | •Motivate executives and reward annual operational and strategic performance•Drive enterprise growth•Focus on key near-term drivers of long-term value for our business•Retain key talent•Exercise sound risk-management practices | ||
| MIP Modifier can adjust total MIP compensation up or down by 5% based on achievement of sustainability goals. | |||||
| LONG-TERM INCENTIVES (“LTI”) | Long-term variable equity awards granted annually in performance-based restricted stock (“PBRS”) (100% of LTI for the CEO and other NEOs) under the Company’s Long-Term Incentive Plan. PBRS vests based on three-year financial performance and relative total shareholder return.100% performance-based LTI with 3-year performance period | Adjusted Return on Shareholders’ Equity (AROE) EX-FXRisk-Based Capital (RBC)Solvency Margin Ratio (SMR)Relative TSR Modifier | AROE, RBC, and SMR are metrics that affect our long-term business strategy and operating environment. Payout is also contingent on a relative TSR modifier, which can adjust PBRS payouts up or down by 20%. | •Motivate executives and reward long-term operational and strategic performance•Focus on key long-term value drivers for our business•Align executives’ interests with shareholders’ interests•Retain key talent•Exercise sound risk-management practices | |
| 44 | AFLAC INCORPORATED | EXECUTIVE COMPENSATION |
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