TRAVELERS COMPANIES INC
For the period ended May 15, 2024. Filed Apr 2, 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 15, 2024 · Filed Apr 2, 2024
Contents
Proxy Statement Summary
This summary highlights certain information contained in this Proxy Statement, but does not contain all of the
information you should consider when voting your shares. Please read the entire Proxy Statement carefully before
voting.
| ITEM1 | Election of Directors | Your Board recommends a vote FOR each director nominee. |
|---|---|---|
| See Page 7 |
Director Nominees
| Russell G. Golden INDEPENDENTChairman of Financial Accounting Standards Board (retired)Committees: Audit, RiskDirector Since: 2023 | Todd C. Schermerhorn INDEPENDENTSenior Vice President and Chief Financial Officer of C. R. Bard, Inc. (retired) Independent Lead DirectorCommittees: Audit, Executive, Risk (Chair)Director Since: 2016 |
| William J. Kane INDEPENDENTAudit Partner with Ernst & Young (retired)Committees: Audit (Chair), Executive, RiskDirector Since: 2012 | Alan D. SchnitzerChairman and Chief Executive Officer of TravelersCommittees: Executive (Chair)Director Since: 2015 |
| Thomas B. Leonardi INDEPENDENTExecutive Vice President of American International Group, Inc. and Vice Chairman of AIG Life Holdings, Inc. (retired)Committees: Compensation, Investment and Capital Markets, Nominating and GovernanceDirector Since: 2021 | Laurie J. Thomsen INDEPENDENTCo-Founder and Partner of Prism Venture Partners (retired)Committees: Audit, Risk Director Since: 2004 |
| Clarence Otis Jr. INDEPENDENTChairman and Chief Executive Officer of Darden Restaurants, Inc. (retired)Committees: Compensation (Chair), Executive, Investment and Capital Markets, Nominating and GovernanceDirector Since: 2017 | Bridget van Kralingen INDEPENDENTSenior Partner, Motive PartnersCommittees: Audit, RiskDirector Since: 2022 |
| Elizabeth E. Robinson INDEPENDENTGlobal Treasurer of The Goldman Sachs Group, Inc. (retired)Committees: Compensation, Executive, Investment and Capital Markets (Chair), Nominating and GovernanceDirector Since: 2020 | David S. Williams INDEPENDENTPrincipal, Deloitte LLPDirector Nominee |
| Rafael Santana INDEPENDENTPresident and CEO of Westinghouse Air Brake Technologies CorporationCommittees: Compensation, Investment and Capital Markets, Nominating and GovernanceDirector Since: 2022 |
SUMMARY
| 2024 Proxy Statement | The Travelers Companies, Inc. | 1 |
|---|
The nominees represent a broad range of expertise, experience, viewpoints and backgrounds, as well as a mix of
tenure of service on the Board.
| Recent Board Refreshment | ||
| 20211 new director added•Thomas Leonardi1 director retired | 20222 new directors added•Rafael Santana•Bridget van Kralingen | 20231 new director added•Russell Golden |
INDEPENDENCE10 of 11
AGE~62 years average
TENURE~6 years average
DIVERSITY~55% diverse
For a discussion of the specific considerations with respect to these nominees, see “Director Nominations—Specific
Considerations Regarding the 2024 Nominees” on page 18.
Corporate Governance Highlights
The Board of Directors (the “Board”) of The Travelers Companies, Inc. (the “Company”) is committed to high standards
of corporate governance. Highlights include:
| Board Composition andAccountability | •All committees other than the Executive Committee are comprised solely of independent directors •Engaged independent Lead Director •Regular executive sessions of independent directors | •Active risk oversight •Director education on matters relevant to the Company, its business plan and risk profile •Annual Board evaluations |
|---|---|---|
| Shareholder Rights | •Annually elected directors •Majority voting standard for director elections •Single voting class | •Proxy access •No poison pill |
| Board Compensation | •Robust director stock ownership guidelines •Non-management directors currently receive more than 50% of their annual board and committee compensation in the form of deferred stock units | •Biennial review to assess the appropriateness of the Director Compensation Program |
SUMMARY
| 2 | The Travelers Companies, Inc. | 2024 Proxy Statement |
| ITEM2 | Ratification of Independent Registered Public Accounting Firm | Your Board recommends a vote FOR this Item. |
|---|---|---|
| See Page 29 |
| ITEM3 | Non-Binding Vote to Approve Executive Compensation | Your Board recommends a vote FOR this Item. |
|---|---|---|
| See Page 31 |
Executive Compensation Highlights
With our pay-for-performance philosophy and compensation objectives as our guiding principles, we deliver annual
executive compensation through the following elements:
| Element · CEOCompensation Mix · Other NEOs | ||||
|---|---|---|---|---|
| FIXED | Base SalaryPage 45 | •Base salaries are appropriately aligned with Compensation Comparison Group. | 7% | 13% |
| PERFORMANCE-BASED CASH | Annual Cash BonusPage 46 | •The Compensation Committee evaluates a broad range of financial and non-financial metrics in awarding performance-based incentives.•Core return on equity is a principal factor in the Committee’s evaluation of the Company’s performance. The Committee also considers other metrics, including core income and core income per diluted share, and the metrics that contribute to those results. | 28% | 40% |
| PERFORMANCE- BASED EQUITY | Long-Term Stock IncentivesPage 52 | •Annual awards of stock-based compensation are typically in the form of stock options and performance shares. Because our performance shares only vest if specified core return on equity thresholds are met, and because stock options provide value only if our stock price appreciates, the Compensation Committee believes that such compensation is all performance-based.•The mix of long-term incentives for the CEO and other named executive officers is 60% performance shares and 40% stock options, based on the grant date fair value of the awards. | 65% | 47% |
SUMMARY
| 2024 Proxy Statement | The Travelers Companies, Inc. | 3 |
|---|
The Compensation Committee has adopted the following practices, among others:
| What We DO | What We DO NOT Do |
|---|---|
| Provide for a cap on the maximum cash bonus opportunity with regard to our Chief Executive Officer Maintain a robust share ownership requirement Maintain clawback policies giving us the ability to recover incentive awards from our executive officers Prohibit hedging transactions as specified in our securities trading policy Prohibit pledging shares without the consent of the Company (no pledges have been made) Engage in extensive outreach and maintain a regular dialogue with shareholders relating to the Company’s governance, compensation and sustainability practices Engage an independent consultant that works directly for the Compensation Committee and does not work for management | No excise tax “gross-up” payments in the event of a change in control No tax “gross-up” payments on perquisites for named executive officers No repricing of stock options and no buy-out of underwater options No excessive or unusual perquisites No dividends or dividend equivalents paid on unvested performance shares No above-market returns provided for in deferred compensation plans No guaranteed equity awards or bonuses for named executive officers |
| ITEMS4-7 | Shareholder Proposals | Your Board recommends a vote AGAINST these Items. |
|---|---|---|
| See Pages 75–93 |
SUMMARY
| 4 | The Travelers Companies, Inc. | 2024 Proxy Statement |
Shareholder Engagement and Board
Responsiveness
Since 2009, the Nominating and Governance Committee
has overseen a comprehensive shareholder engagement
program. Under this program, at the direction of the
Nominating and Governance Committee, management
reaches out to the Company’s largest shareholders
throughout the year to facilitate a dialogue with respect to
the Company’s financial results, corporate strategy,
compensation practices and environmental, social and
governance (ESG) matters.
Management reports on the conversations with those
investors to the Nominating and Governance Committee
and, as appropriate, to the Compensation Committee (as
described in “Shareholder Engagement” in the
“Compensation Discussion and Analysis” section of this
Proxy Statement).
Travelers has long understood and valued the importance
of a comprehensive shareholder outreach program to
solicit investor feedback and perspectives on topics that
are important to the Company and its shareholders. Our
shareholder engagement program continues to influence
and inform the Company’s policies, practices and
disclosures. For example, in the past few years, based in
part on investor input, the Company has taken the
following actions:
SHAREHOLDER ENGAGEMENT AND BOARD RESPONSIVENESS
| 2024 Proxy Statement | The Travelers Companies, Inc. | 5 |
|---|
Committed to
become carbon
neutral across the
Company’s owned
operations by
2030 and adopted
a new policy
related to the
underwriting of,
and investment in,
coal and tar sands
Began publishing
comprehensive
sustainability reports
on an annual basis,
including reports that
generally align with
SASB standards and
TCFD
recommendations
disclosure regarding
the Board’s
oversight of the
enterprise risk
management
program, including
with respect to risks
related to changing
climate conditions
disclosure regarding
pay equity practices,
board tenure,
workforce gender
diversity, and
political
contributions and
lobbying activities
Amended the
Nominating and
Governance
Committee charter to
reference diversity
and inclusion, political
contributions, lobbying
and charitable giving
Clarified the authority
of the Board’s
independent Lead
Director in the
Governance
Guidelines
Further enhanced
disclosure
regarding political
contributions and
lobbying activities
enhanced the
disclosures in
the Company’s
TCFD Report
with respect to
the Company’s
underwriting
and investment
portfolios
Fully
implemented
the lobbying
proposal
submitted at
the 2022
Annual Meeting
by providing
trade
association
disclosure
disclosure on
our
sustainability
site regarding
our robust
governance
and controls
relating to
underwriting
and pricing
Implemented a
cap on the
maximum cash
bonus
opportunity for
our CEO
Amended the
executive stock
ownership
policy
Significantly enhanced the
Company’s TCFD Report,
including by disclosing the
results of climate scenario
analyses conducted by
independent, third-party firms
with respect to the Company’s
investment portfolio and certain
aspects of its underwriting
portfolio
Enhanced the Company’s
workforce diversity disclosure by
disclosing its consolidated
EEO-1 report
Pre-2020
In 2023, the Company again took an integrated approach to its shareholder engagement efforts, including with respect
to its financial results, corporate strategy, compensation practices and ESG matters. Throughout the year, we also
sought additional opportunities to connect directly with our investors to discuss current and emerging trends and to hear
investor feedback.
| With whom we engaged | In 2023, the Company sought to meet with shareholders representing approximately 52% of its outstanding shares and engaged with shareholders representing more than 40% of its outstanding shares. As part of our extensive outreach program, we met with many of our largest shareholders multiple times. In 2023, we: •sought to meet with each of our top 20 shareholders and met with eight of our top 10 shareholders and 13 of our top 20 shareholders; and•met with five of our top 10 shareholders three or more times and four of our top 20 shareholders four or more times. | |
| Ourrepresentatives | Members of the Company’s senior management participated in our extensive engagements. Participants included, as appropriate, Travelers’: | |
| •CEO and Chairman of the Board•Independent Lead Director•Chief Underwriting Officer•Co-Chief Investment Officer | •Corporate Secretary•Chief Sustainability Officer•Chief Ethics and Compliance Officer•Senior Vice President, Investor Relations | |
| Topics discussed | Topics discussed included, among others:•board composition and refreshment; •our comprehensive climate strategy and the board’s oversight of that strategy;•our thoughtful risk/reward approach to underwriting;•our thoughtful investment philosophy that focuses on stable and appropriate risk-adjusted returns; | •the robust governance, processes and controls we have in place with respect to underwriting and pricing;•our long-term approach to human capital management, including our numerous diversity and inclusion initiatives; and•our unique corporate culture. |
| We also discussed our executive compensation program, including the mix of equity compensation and the use of stock options, the use of a discretionary bonus plan and the limitations of total shareholder return as a measure of performance. See “Compensation Discussion and Analysis - Shareholder Engagement” for a more comprehensive discussion of the Company’s engagement efforts relating to its executive compensation program. In light of the numerous conversations the Company has had with its largest shareholders and the results of the Company’s advisory vote on executive compensation over the years, the Company believes that a significant majority of its shareholders are supportive of the design and operation of the Company’s executive compensation program. | ||
| Responseto feedback | Based in part on investor feedback from engagements in 2023 and prior, the Company:•Implemented a maximum cash bonus opportunity for its CEO;•Amended its executive stock ownership policy to: (i) increase the target stock ownership level for its CEO from 500% to 600% of base salary, and (ii) exclude certain unvested and unexercised awards from the stock ownership calculation for its named executive officers;•Provided increased disclosure regarding the Company’s comprehensive underwriting governance and controls designed to ensure that its rating factors comply with all applicable laws and do not consider race or other legally protected characteristics;•Significantly enhanced the disclosures contained in its TCFD Report; and•Provided increased disclosure regarding trade associations and social welfare organizations to which the Company pays dues. |
SHAREHOLDER ENGAGEMENT AND BOARD RESPONSIVENESS
| 6 | The Travelers Companies, Inc. | 2024 Proxy Statement |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.