HUMANA INC
For the period ended Apr 16, 2026. Filed Mar 6, 2026.
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Apr 16, 2026 · Filed Mar 6, 2026
Contents
Associate Incentive Plan (AIP)
Short-Term Incentives
Our enterprise short-term incentive (STI) is administered through the Associate Incentive Plan (AIP), a discretionary, annual cash-based incentive plan. The goal of our plan is to recognize and reward participating associates, including our executive officers, for their contributions to the Company’s overall performance, while also uniting associates around a common purpose for the year.
Associate Incentive Plan
The AIP plan year is effective January 1 through December 31 of each fiscal year. Associates who participate in other Company incentive plans, such as Sales Incentive/Commission Plans and Targeted Incentive Plans, are not dually eligible to participate in the AIP. Associates may not participate in more than one incentive plan. For our executive officers, the AIP is administered through the Executive Incentive Compensation Plan, as filed with the SEC as an exhibit to our annual reports on Form 10-K and can be accessed on our website. From thewww.humana.com website, click on “More Humana,” then click on “For Investors,” then click on “SEC Filings and Financial Reports,” and then click on “SEC Filings.”
AIP payout is calculated based on Annual Base Salary (or Annualized Base Salary for hourly associates) during the AIP Performance Period, as defined under the AIP Plan Document. Annual Base Salary under AIP excludes any unpaid leave or overtime and is pro-rated for the number of days eligible during the plan year. Further, in the event of a pay change during the plan year, the Annual Base Salary is pro-rated for the number of days at each base salary, which will result in a blended base salary. Refer to section titled“2025 AIP Performance Results” for discussion of AIP payout of our Named Executive Officers.
On an annual basis the Committee, in consultation with its independent compensation consultant, reviews and approves the AIP as illustrated below:
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| | 52 | | | Humana | 2026 Proxy Statement • Compensation Discussion and Analysis | |
The Committee selected the following performance and strategic measures for the 2025 AIP, aligning our executives to the key financial and operational objectives of our overall strategy:
| | Pre-Tax Earnings | | | 50% Weighting | | | • Pre-tax earnings measures the adjusted consolidated income before taxes and equity in net earnings, a key metric reflecting the Company’s financial performance. • The 2025 threshold, target and maximum opportunities were determined by the Committee after taking into account the prior year’s performance, historical peer performance, the long-term operating plan as presented to stockholders during our 2025 Investor Day, and the volatile operating environment in which the Company is operating. • The Committee determined to move from Adjusted Earnings per Share (Adjusted EPS) to pre-tax earnings to incentivize performance utilizing a measure within the Company’s control, as EPS can be overly impacted by external factors outside of the Company’s control. | |
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| | Stars Performance | | | 20% Weighting | | | • Achieving top-quartile Stars performance is a key strategic imperative. This metric measures the weighted composite of 16 Healthcare Effectiveness Data and Information Sets (HEDIS) and Patient Safety measures, in each case included in the Bonus Year 2028 Stars program (measuring year 2025). • These Stars measures are particularly relevant to an assessment of the clinical quality and beneficial health outcomes of our members, which is central to our efforts to deliver integrated healthcare, and represent the areas of focus within the Company’s control for the 2025 period. | |
| | Integrated Health | | | 15% Weighting | | | • Integrated health is a key strategic imperative as we believe it leads to better clinical outcomes and improved customer experience for our members. This performance measure is based on either (i) the number of Humana health plan members utilizing two or more of CenterWell’s health services offerings (pharmacy, primary care, and home) or (ii) the net growth of Humana health plan members in CenterWell primary care. • The Committee believes that focusing on “two plus” utilization and net growth of CenterWell primary care drives (a) better clinical outcomes, and (b) more touchpoints with our members and patients, balanced against the highest value of integration through growth in the primary care business. | |
| | Clinical Innovations | | | 15% Weighting | | | • This measure incentivizes continued focus on reducing medical costs through advanced clinical innovation, better clinical outcomes and customer experiences. • Performance is measured based on actual cost reductions, with a threshold, target and maximum opportunity based upon previous years’ experience and the Company’s five-year financial plan. | |
As noted above, the Committee elected to change the financial metric for the 2025 AIP from Adjusted EPS to Pre-Tax Earnings. In making that determination, the Committee considered the importance of using a financial metric within the Company’s control, rather than one that can be overly impacted by external factors outside of the Company’s control, resulting in a compensation program that is more likely to drive overall Company performance against key strategic measures while also continuing to retain and incentivize executive officers. Considering historical performance, the Company’s five-year financial plan, and the current volatility in the external environment, the Committee determined that the threshold or minimum (50%) level for Pre-Tax Earnings would be $2.45 billion, the target level (100%) for Pre-Tax Earnings would be a range from $2.63 billion to $2.77 billion and the maximum (200%) level for Pre-Tax Earnings would be $2.96 billion.
Under our AIP, individual performance and contributions are taken into consideration when determining each associate’s final payout.
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| | Compensation Discussion and Analysis • 2026 Proxy Statement | Humana | | | 53 | |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.