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INFORMATION ABOUT EXECUTIVE OFFICERS
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Executive officers of Triple-S Management Corporation
The Company’s executive officers are listed below. Biographical information of Mr. García-Rodríguez, our president and chief executive officer, who also serves as director of the Company, is in the section entitled “Directors continuing in office- Management director” of this proxy statement.
Name
| | Position(s) with the Company | | | Age | |
| Juan J. Román-Jiménez | | | Executive Vice President and Chief Financial Officer | 53
| | 55 | |
| Madeline Hernández-Urquiza | | | Executive Vice President and Chief Operating Officer; President of Triple-S Salud, Inc. and President of Triple-S Advantage, Inc | 55
| | 57 | |
| José M. Del Amo Mojica | | | President of Triple-S Propiedad, Inc. | 52
| | 54 | |
| Arturo L. Carrión-Crespo | | | President of Triple-S Vida, Inc. | 61
| | 63 | |
| José E. Novoa-Loyola | | | Chief Medical Officer of Triple-S Salud, Inc. | 54
| | 56 | |
| Ilia S. Rodríguez-Torres | | | Chief Human Resources Officer | 49
| | 51 | |
| Carlos L. Rodríguez-Ramos | | | Chief Legal Counsel and Corporate Secretary | 40
| | 42 | |
| Ivelisse M. Fernández-Cruz | | | Chief Marketing and Communications Officer | 47
|
| 49| | | Pedro Aponte Gil De Lamadrid | | | Chief Information Officer of Triple-S Salud, Inc. | | | 51 | | | | Juan R. Serrano | | | Executive Vice President and Chief Strategy and Healthcare Delivery Officer | | | 57 | |
| Juan J. Román-Jiménez, Executive Vice President and Chief Financial Officer, rejoined our Company and assumed his current position in January 2016. Previously, he served as Executive Vice President and Chief Financial Officer of EVERTEC, INC., a full-service transaction processing company in Latin America and a NYSE listed company, from April 2012 to August 2015, and as Executive Vice President and Chief Financial Officer of EVERTEC Group, LLC from 2011 to 2012. | | | Madeline Hernández-Urquiza has been our Executive Vice President and Chief Operating Officer since August 2017, and the President of our managed care subsidiaries Triple-S Salud, Inc. and Triple-S Advantage, Inc., since January 2016 and January 2015, respectively. She rejoined our Company in 2010 and assumed various positions in Triple-S Salud, Inc., including Vice President of Risk Management and Chief Risk Officer before assuming her current roles. | | | Jose Del Amo Mojicawas appointed President of Triple-S Propiedad, Inc. in March 2017. Previously, he served as Senior Vice President of Underwriting and Claims of Triple-S Propiedad, Inc. from 2014 to February 2017. | | | Arturo L. Carrión-Crespo is the President of Triple-S Vida, Inc., our life insurance subsidiary, since 1998. | | | Ivelisse M. Fernández-Cruz, Chief Marketing and Communications Officer, joined our Company and assumed her position in May 2018. From 2012 to 2018, she served as Chief Administrative Officer of MMM Holdings, LLC, a provider of healthcare related services in Puerto Rico. | | | | José E. Novoa-Loyola, Chief Medical Officer, joined our company and assumed his position in July 2015. Previously, he served at the Cardiovascular Center of Puerto Rico and the Caribbean from 2002 to 2015 in various positions, including Medical Director, Chief of the Cardiology Department and member of the Pharmacy and Therapeutics Committee. | | | Carlos L. Rodríguez-Ramos, Chief Legal Counsel and Corporate Secretary, joined our Company in 2013 and assumed his current position in January 2016. Mr. Rodríguez-Ramos’ previous positions at the Company include Associate General Counsel, Acting General Counsel and Assistant Secretary. Before joining our Company, he served as Adjunct Professor at the School of Law of the University of Puerto Rico from 2010 to 2014 and as Deputy Chief of Staff of Programmatic Affairs for the Governor of Puerto Rico from 2011 to 2012. | |
TABLE OF CONTENTS | | Ilia S. Rodríguez-Torres, Chief Human Resources Officer, joined our Company and assumed her position in May 2018. Before joining the Company, she served as Human Resources Director of Beliv, a multinational beverages company with operations in Central America, the Caribbean and South America, from 2017 to 2018, Regional Senior Human Resources Director of Ferring Pharmaceuticals, Inc., a biopharmaceutical company, from 2015 to 2017, and Executive Vice President of Corporate Human Resources at Doral Financial Corporation, holding company of Doral Bank, from 2013 to 2015. | | Carlos L. Rodríguez-Ramos, Chief Legal Counsel and Corporate Secretary
| Pedro Aponte Gil De Lamadrid, joined our Companywas appointed Chief Information Officer in 2013 and assumed his current position in January 2016. Mr. Rodríguez-Ramos previous positions include Associate General Counsel, Acting General Counsel and Assistant Secretary. Before joining our CompanyDecember 2019. Previously he served as Adjunct ProfessorActing Chief Information Officer and Vice President of STARS, Quality and Business Innovation at the School of LawCompany. He is also member of the UniversityBoard of Puerto Rico from 2010 to 2014 and as Deputy ChiefAdvisors of Staff of Programmatic Affairs for the Governor of Puerto Rico from 2011 to 2012.Abartys Health, a health analytics company. | | Ivelisse M. Fernández-Cruz,
| Juan R. Serrano, Executive Vice President and Chief MarketingStrategy and CommunicationsHealthcare Delivery Officer, joined our Company and assumed herhis position in May 2018. Previously, sheJuly 2020. From 2018 to 2020, he served on the Board of Palliative Care NewCo, Inc., an early-stage venture focused on population health management for high-risk, high-cost and vulnerable populations. From 2015 to 2017, he was President and Chief Executive Officer of Munich Health North America, Inc., a U.S health reinsurer. Mr. Serrano previously served as Chief Administrative OfficerSVP of MMM Holdings, LLC,Payer Strategy for Catholic Health Initiatives, a provider of healthcare related services in Puerto Rico.U.S. hospital company. | |
| | COMPENSATION DISCLOSURE
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Compensation discussion and analysis
This compensation discussion and analysis describes our executive compensation program, policies and practices applicable to our named executive officers (“NEOs”) and to other executive officers of our Company. For 2018,2020, our NEOs were: Name
| | | Position (as of December 31, 2018)2020) | | | Roberto García-Rodríguez | | | President and Chief Executive Officer | | | Juan J. Román-Jiménez | | | Executive Vice President and Chief Financial Officer | | | Madeline Hernández-Urquiza | | | Executive Vice President and Chief Operating Officer | | | | President of Triple-S Salud, Inc. , our managed care subsidiary | | | | President of Triple-S Advantage, Inc., our Medicare Advantage subsidiary | | | José E. Novoa-Loyola | | | Chief Medical Officer of Triple-S Salud, Inc. | | | Arturo L. Carrión-Crespo | | | President of Triple-S Vida, Inc., our life insurance subsidiary | |
The Board’s Compensation and Talent Development Committee oversees the design and administration of our executive compensation program. The program is designed to support the attainment of our vision, financial and strategic goals and operating imperatives, apply good corporate governance principles, and align our interests with those of our shareholders. We believe that anAn effective executive compensation program recognizes individual contributions as well as overall business results, rewards executives for achieving our annual and long-term goals, aligns executive and shareholder interests and reflects responsible corporate governance practices to ultimately improve shareholder value. We believe the compensation of our executive officers reflects our results and further promotes the achievement of our goals. The following table summarizes our compensation program and the decisions made by the Compensation and Talent Development Committee in 2018.2020. These decisions considered the Company’s executive compensation philosophy, the Company’s financial and operating performance for 20172019 and 2018,2020, individual executive performance, prevailing compensation trends in our comparable group, which includes companies located in Puerto Rico and the United States, and our industry. Compensation
component
| | Description of component | 2018
| | 2020 highlights | | | Base salary | | | • Designed to recognize individual contribution to the organization based on experience, knowledge and responsibilities.
• Aimed to provide competitive compensation, appropriate incentives and financial stability to the NEOs for assuming a significant level of responsibility.
• Targeted to be between the 25th and 50th percentile of comparable group.•Considers market-level salary, individual performance, and the Company’s overall financial results.
| | | •After a comprehensive evaluation of various factors, including the Company financial and operating results, corporate budget, peer group data, and individual performance, during 2018, the Compensation and Talent Development Committee approved During 2020, there were no salary increases for Messrs. Roberto García-Rodríguez, Juan J. Román-Jiménez, Arturo L. Carrión Crespo and Ms. Madeline Hernández-Urquiza. Details are provided in this CD&A.changes to our NEO’s. | |
Compensation
component
| | Description of component | 2018
| | 2020 highlights | | | Annual short-term cash incentive | | | • Focuses executives on achieving annual financial, operating, and individual objectives.
• Supports long-term objective of creating shareholder value.
•Provides, together with base salary, competitive cash compensation when our targeted performance objectives are met. | | | •During 2018 and 2019,2020, NEOs received annual short-term compensation for 2017based on 2019 performance, and 2018, respectively,in 2021 NEOs received annual short-term compensation based on 2020 performance, as described in this CD&A and in the Summary Compensation Table. | | | Long-term equity incentive | | | • Aligns management and shareholder interests.interests
• Provides a variable portion of total compensation tied to our long-term market and financial performance.performance
• Holds management responsible for their long-term decisions.
• Supports the retention of a talented management team over time.
•Emphasizes long-term performance by delivering 75% of the annual award value in performance equity grants that may be earned based on our operating and stock price performance over a three-year period, with cliff vestingcliff-vesting at the end of the third year. RemainingThe remaining 25% of the annual equity award value is delivered in restricted stock, which vests over three years in increments of one third per year. | | | • For the three-year plan beginning in 2018,2020, the Compensation and Talent Development Committee established threshold, target and maximum performance goals for three-year growth in premiums earned, operating income and earnings per share (“EPS”), and determined the corresponding award size for each performance level for each NEO. Under this design, our performance against these measures determines an initial award that then may be increased or decreased based on (i) our TSR percentileperformance relative to the TSR of the other companies in the S&P Health Care Services Select Industry Index for the performance period, and (ii) our operating performance measured in terms of growth in premiums and operating income versus local market peers for the performance period.
•Long-term incentives were granted to NEOs in 20182020 as described in the Summary Compensation Table. | |
Other compensation decisions
Enhanced performance metricsmetrics.. During 2018,2020, the Compensation and Talent Development Committee approved non-financial metrics for annual incentives that we believe better align individual performance with our strategic transformation. For more information, see “Components of executive compensation—Short-term annual cash incentive” section of this proxy statement.
TABLE OF CONTENTS Our compensation philosophy
Our executive compensation program is designed to support our vision, our strategic and financial goals, and operating imperatives. It applies to our NEOs and other executive officers of our Company and subsidiaries. | | | •Reinforce our values by combining our efforts to deliver superior business results with good governance, socially responsible business practices, and high ethical standards.
•Promote a high performancehigh-performance culture with clear emphasis on accountability and variable pay that is tied to both short and long-term results.
•Ensure compensation is paid based on accurate financial data.
•Attract, motivate and retain top talent in a cost-effective way by offering competitive compensation.
•Require share ownership that increases with executives’ scope of responsibilities.
•Emphasize uniformity of design features to reinforce collaboration, limit program complexity, and increase the effectiveness of the entire executive team.
•Align executive and shareholder interests through long-term equity based plans.
•Maintain a clear and understandable framework for evaluating the effectiveness of the program’s design.
•Prohibit any activity that hedges employee’s economic risk of owning Company stock.
•Provide a balanced total compensation to ensure that management is not encouraged to take unnecessary and excessive risks that may harm the Company.
| | | •Provide a total compensation opportunity targeted around averagebetween the 25th and 50th percentile levels within comparable group.of identified peers, using variables such as experience and expertise.
• High performers, successors to key positions, and individuals in critical assignments may be targeted at a higher level to ensure engagement, motivation, and retention.•Newly promoted or inexperienced executives may be paid at a lower level of target pay until they become fully-seasoned contributors.
| | | •We compare our compensation against companies with whom we compete for talent, capital, and customers using peer references used for competitive pay comparisons, and use general industry surveys for positions for which compensation peer group data is not available.
•The Compensation and Talent Development Committee, and management, as applicable, will use their judgment when making adjustments to compensation and review executive pay from a holistic perspective, including reference to compensation peer group pay practices, importance of the position to the Company, level of responsibility of the position, individual performance and growth in position, our financial performance and ability to pay, and internal equity considerations. | |
Description of compensation policies
Equity award grant policypolicy.. The purpose of the equity award grant policy is to ensure the integrity of the award granting process and avoid the possibility or appearance of timing of equity grants for the personal benefit of executives. Under the policy, equity awards are madeapproved at the Compensation and Talent Development Committee’sa regularly scheduled meeting taking place inof the monthCommittee to discuss the executive compensation performance goals and objectives for the year of March.the annual grant. Equity grants to certain newly hired employees or promoted individuals, including executive officers,to the extent that such new hire or promoted individual constitutes an officer for purposes of Section 16 of the Securities Exchange Act of 1934, are made on the last business day prior to the 15th day of each month or the last business day of each month, whichever day first follows the date on which the newly-hired individual commences providing active services to the Company or the promoted individual commences providing active services to the Company at the promoted level. No off-cycle awards may be granted to the Company’s executive officers during quarterly and event-specific blackout periods under the Company’s insider trading policy. Our equity incentive plans prohibit the re-pricing or exchange of equity awards without shareholder’s approval.
Recoupment PolicyPolicy.. Our recoupment policy applies to any current or former employee who received cash- or equity-based incentive compensationcompensation: (1) based on a miscalculation of incentive compensation; (ii) based on financial data on which the Company is required to prepare an accounting restatement due to the material TABLE OF CONTENTS noncompliance with any financial reporting requirement under the securities laws.laws, or (iii) in the event that any employee engaged in fraud or misconduct that caused an incentive compensation to be overpaid even if it does not require an accounting restatement. The recoupment policy aligns management’s interests with the interests of shareholders and supports good governance practices. The policy provides that the Company may, in the exercise of its discretion (as determined by the Compensation and Talent Development Committee) , take action to recoup the amount by which such award exceeded the correct payment that would have been made based on the restated financial results.amount. Our right of recoupment expires three years following the year for which the inaccurate performance criteria were measured; however, our right of recoupment is not subject to an expiration period in the event of fraud or misconduct. Insider trading and anti-hedging policypolicy.. We prohibit directors, officers, employees and consultants of the Company from trading in the securities of the Company or its affiliates (e.g., customers, suppliers, etc.), directly or through family members or other persons or entities, if they are aware of material nonpublic information relating to the Company or its affiliates. Trading includes purchases and sales of stock, derivative securities such as put and call options and convertible debentures or preferred stock, and debt securities (debentures, bonds and notes). Trading also includes certain transactions under the Company’s plans (e.g., sale of underlying stock acquired upon the exercise of stock options, certain transactions associated with the Company’s retirement savings plan, and voluntary additional contributions to the Company’s dividend reinvestment plan). Our insider trading policy also prohibits our directors, officers, certain designated employees and certain other employeesconsultants of the Company and its subsidiaries from engaging in any hedging or monetization transactions involving Company securities.Stock ownership guidelines for executivesexecutives.. We have stock ownership guidelines for our executive officers and other key employees to align their interests with those of our shareholders. The guidelines require executives and other employees to own Company stock in an amount equal to a multiple of base salary, as follows:Level
| | | Value of Stock as a
Multiple of Base Salary | | CEO
| CEO | | | 5x | | COO
| COO | | | 3x | | | CFO and subsidiary presidents | | | 3x | | | Corporate and subsidiary executivesofficers | | | 2x | | Other selected
| All other employees that receive long-term incentive awards | | | 1x | |
Until an executive reaches his or her applicable ownership level, he or she must retain 50% of the equity received from long-term compensation plans (after meeting tax withholding obligations), and once the ownership level is met, he or she may not sell shares if doing so would cause his or her ownership to fall below that level. The Compensation and Talent Development Committee reviews progress toward meeting the ownership guidelines on an annual basis.guidelines. The Committee has also approved stock ownership guidelines for non-management directors. See the section entitled “Director compensation—Stock ownership guidelines for non-management directors” of this proxy statement for more information. Pay-for-performance
Consistent with our compensation philosophy, we aim to promote a high-performance culture with clear emphasis on accountability and variable pay that is tied to both short and long-term results. We accomplish this by delivering a significant portion of total NEO pay in variable, performance-based compensation. Under our short-term cash incentive, payouts may range from zero to 150% of the target opportunity depending on the Company’s financial results relative to predetermined performance goals, achievement of important strategic goals, and the Compensation and Talent Development Committee’s review of each executive’s individual performance. Under the 2020-22 performance share plan, actual awards may vary from zero to 150% of the target opportunity depending on the Company’s financial results relative to predetermined performance goals, which may then be reduced by -30% if our TSR is at or below the 25th percentile, or increased by +30% if our TSR is at or above the 95th percentile, of the S&P Health Care Services Select Industry Index. For the 2020-22 performance share award, the Committee included two additional relative performance modifiers based on Triple-S’s managed care operating performance versus the local market competitors to reinforce relative performance versus our peers over the next TABLE OF CONTENTS three years. Specifically, the awards may be reduced by an additional -10% if our 3-year growth in premiums or operating income is at or below the 25th percentile of peers or may be increased by an additional +10% if our 3-year growth in premiums or operating income is at or above the 75th percentile of peers. As illustrated below, actual short-term cash incentives and performance share payouts have varied over the past five years based on our actual performance: The table below compares the 3-year aggregate target total pay to the 3-year realizable pay for our CEO as well as the Company’s 3-year total shareholder return (“TSR”) for the period 2018-2020. Target total pay represents the aggregate salary, target bonus amount, and grant date values of long-term incentive awards for the 3-year period from 2018-2020. Realizable pay represents the aggregate salary and actual bonuses paid, value of restricted stock grants and actual and estimated payout values of Performance Share Units (“PSUs”) granted for the 3-year period from 2018-2020, using our closing stock price as of December 31, 2020. As shown below, Mr. Garcia-Rodriguez’s 3-year realizable pay of $10,487,942 is below his 3-year target total pay of $11,640,829 by approximately -10% and 3-year TSR is also down by approximately -10% over the same period (2018-20), indicating strong alignment between pay and performance. The Compensation and Talent Development Committee has sole authority to engage and terminate the services of outside consultants. In 2018,2020, the committee retained Pay Governance to assist the committee on matters related to executive officer and director compensation, including the committee’s review of the competitiveness of our executive pay levels relative to peer practice, the review of the design of our compensation program and our compensation policies, reporting on trends and regulatory developments, assisting the Committee in performing risk assessment of our compensation programs, and providing support for the preparation of our compensation disclosure in this proxy statement.
TABLE OF CONTENTS The Board has determined that Pay Governance is an independent compensation consultant pursuant to Section 10C of the Exchange Act. Pay Governance reports exclusively to the Compensation and Talent Development Committee and does not provide any additional services to the Company. Results of advisory vote on say-on-pay and frequency of the vote
Rule 14a-21 of the Exchange Act enables our shareholders to vote to approve, on an advisory basis, the compensation of our NEOs. The rule also enables our shareholders to advise the Company on the frequency of their vote on the compensation of our NEOs. In 2017, our shareholders voted that such compensation be presented for shareholder’s advisory approval on an annual basis and the Board accepted the advice of our shareholders. In 2018, 99.5%2020, 99.13% of our shareholders voted in favor of the compensation of our NEOs. The Compensation and Talent Development Committee believes this vote was indicative of our shareholders’ support of the Company’s approach to executive compensation. The Committee will continue to consider shareholder feedback and the outcome of the Company’s say-on-pay votes when making future NEO compensation decisions. In accordance with Rule 14a-21 of the Exchange Act, the next shareholder vote on the frequency of the vote on executive compensation will be held no later than the 2023 annual meeting of shareholders.
Determining executive compensation
We compare the compensation of the NEOs to that of companies with which we compete or could compete for executive talent, capital and customers. These companies include private or publicly-held companies, stand-alone businesses and/or divisions of larger corporations. Our size and organizational complexity is considered when selecting comparable companies in Puerto Rico and the United States and data analysis methods. Within our general competitive framework, specific comparisons may vary by type of role. Based on our compensation philosophy, a significant percentage, an average of 73% for our CEO and 64%65% for all other NEOs in 2018,2020, is delivered through our incentive compensation plans in the form of at-risk variable pay. The Compensation and Talent Development Committee has not adopted a policy or formula to allocate total compensation among its various components. As a general matter, the committee reviews competitive pay information provided by its compensation consultant as well as our current operating goals and environment to determine the appropriate level and mix of incentive compensation. Actual amounts earned from incentive compensation are realized only as a result of individual or Company performance, depending on the type of award, based on a comparison of actual results to pre-established goals. The Compensation and Talent Development Committee collects relevant market data to consider when making executive compensation decisions. In 2018,2020, market data for total compensation was gathered for 19 comparable companies, including companies in Puerto Rico and direct industry competitors located within the United States (the “comparable group”“Peer Group”), taking into consideration industry relevance, comparability of size in terms of total revenue and market capitalization, business competitors and input from management. The 2018 Peer Group comprisesFor 2020, the following 19 companies, with three deletions from the 2018 Peer Group originally included in the 2018 Proxy Statement, as explained below: | | | Acadia Healthcare Company, Inc.
| Firstbank Corp.
| Quorum Health Corporation
| Alleghany Corporation
| HealthEquity, Inc.
| Selective Insurance Group, Inc.
| Argo Group International Holdings, LTD.
| Magellan Health, Inc.
| State Auto Financial Corporation
| Aspen Insurance Holdings, Ltd
| Mednax, Inc.
| United Fire Group, Inc.
| Encompass Health Corp.
| Molina Healthcare, Inc.
| WellCare Health Plans, Inc.
| Erie Indemnity Co.
| OFG Bancorp
|
| Evertec, Inc.
| Popular, Inc.
|
|
Kindred Healthcare, Inc., Infinity Property & Casualty Corp. and LifePoint Health, Inc. were acquired during 2018 and are not included in the 2018 Peer Group. Finally, HealthSouth Corporation changed its name in 2018 to Encompass Health Corporation, which is included above.
The Compensation and Talent Development Committee regularly reviews the peer group to reflect changes in our operating environment or business model. For 2018, the Compensation and Talent Development Committee, with the assistance of Pay Governance, modified the peer group2019 Peer Group to better reflect the nature of our business by removing severalWellCare Health Plans, mainly due to its size in comparison to ours, and two property and casualty insurers, State Auto Financial Corporation and United Fire Group, Inc., and adding severaltwo healthcare businesses, Diplomat Pharmacy, Inc. and related businesses thatSelect Medical Holdings Corporation, which are also relevant from a size perspective.to our business. The companies comprising the 2020 Peer Group are:
| | Acadia Healthcare Company, Inc. | | | Firstbank Corp. | | | Quorum Health Corporation | | | | Alleghany Corporation | | | HealthEquity, Inc. | | | Selective Insurance Group, Inc. | | | | Argo Group International Holdings, LTD. | | | Magellan Health, Inc. | | | Diplomat Pharmacy, Inc. | | | | Aspen Insurance Holdings, Ltd* | | | Mednax, Inc. | | | Select Medical Holdings Corp. | | | | Encompass Health Corp. | | | Molina Healthcare, Inc. | | | | | | | Erie Indemnity Co. | | | OFG Bancorp | | | | | | | Evertec, Inc. | | | Popular, Inc. | | | | |
*
| Aspen Insurance Holdings was recently acquired by Apollo Global Management in February 2019. |
TABLE OF CONTENTS Components of executive compensation
Executive compensation is delivered through a combination of base salary, an annual short-term cash incentive, long-term equity incentive compensation, retirement programs and a non-qualified deferred compensation plan. Base salarysalary.. Base salaries are designed to recognize an individual’s contribution to the organization and his or her experience, knowledge and responsibilities. Base salaries also aim to provide competitive compensation, appropriate incentives and financial stability to the NEOs for assuming a significant level of responsibility.According to our salary adjustment policy, salary determinations are based on a number of factors, including importance of the position, level of responsibility, individual performance, growth in position, market-level relative salary, our financial and operating performance, and the Company’s ability to pay. Also, our policy establishes that base pay adjustments send clear performance messages and make moderate distinctions based on performance. Significant distinctions in performance by executives are recognized through our annual short-term cash incentive plan. In addition, this policy requires that timing for increases, promotions and changes in responsibilities be consistent with market practice and that base salaries for executives be reviewed on an annual basis and adjusted as necessary to ensure pay levels remain competitive. Short-term annual cash incentiveincentive.. The short-term annual cash incentive portion of an executive’s total compensation opportunity is intended to accomplish a number of objectives, such as reinforcing the optimization of operating results throughout the year, facilitating the achievement of our stated objectives, paying for performance, reinforcing individual accountability, supporting our long-term objective to create shareholder value, and providing market competitive cash compensation when performance objectives for the year are met or exceeded. This incentive compensation can be highly variable from year to year depending on actual performance results.The Company sets cash incentive target amounts as a percentage of base salary for all eligible executives at the beginning of each year based on job responsibilities, position within the Company, and a review of competitive market data. Actual incentive payouts may range from zero to 150% of the target opportunity depending on the Company’s financial results relative to predetermined performance goals and the Compensation and Talent Development Committee’s review of each executive’s individual performance. The Compensation and Talent Development Committee approves the awards and has discretion to determine any changes to the final amount to be paid. For 2018,2020, the target short-term annual cash incentive for each of the NEOs as a percentage of salary was as follows: Executive
| Target Bonus
Percent
| Roberto García-Rodríguez | | | 100% | | | Juan J. Román-Jiménez | | | 70% | | | Madeline Hernández-Urquiza | | | 70% | | | José E. Novoa-Loyola | | | 70% | | | Arturo L. Carrión-Crespo | | | 70% | |
The Compensation and Talent Development Committee determines short-term annual cash incentives based on two types of performance measures: the Company’s financial and operating results and individualnon-financial/strategic criteria. The Company’s financial and operating results account for 75% of each NEO evaluation and non-financial performance criteria account for the remaining 25%. The weighting of financial results, in turn, is divided betweentarget opportunity, with Adjusted Premiums Earned (35%)weighted at 35% and Adjusted Net Income (40%)weighted at 40% (each term as defined in the following paragraph). Non-financial/strategic performance criteria account for the remaining 25%. This mix of performance measures focuses executives appropriately on improving both top-line and bottom-line growth, while also emphasizing individual accountability through each executive’s individual performance goals (25%).
other important strategic imperatives of the Company. The Company believes that premiums earned and net income are key drivers of shareholder value and― adjusted to exclude non-budgeted items—are the most relevant measures by which to assess the Company’s short-term business performance and promote profitable revenue growth. Adjusted Premiums Earned represent the annual premiums earned in the calendar year as presented in the consolidated financial statements in accordance with
TABLE OF CONTENTS U.S. Generally Accepted Accounting Principles (“U.S. GAAP”), adjusted to include only operations existing at the beginning of the year. Adjusted Net Income is measured as the net income earned in the calendar year, as presented in the consolidated financial statements in accordance with U.S. GAAP, minus realized and unrealized gains/losses in investment (net of the related income tax effect) and other non-budgeted items. The financial results component of our short-term cash incentive performance goalsaccounts for 75% of an executive’s short-term cash incentive opportunity with the Company’sremaining 25% based on non-financial performance. For Corporate executives, including our chief executive officer and chief financial officer, financial performance is solely based on consolidated results. Awards toFor our business unit executives areExecutive Vice President, COO, President of Triple-S Salud, Inc. and President of Triple-S Advantage, Inc., financial performance measurement is split 45%50% based on our consolidated results and 30%50% based on the results of the relevant business unit. The remaining 25% considers non-financial metrics.For the President of Triple-S Vida, Inc., financial performance measurement is split 40% based on consolidated results and 60% based on the results of the relevant business unit. For our Chief Medical Officer of Triple-S Salud, Inc., financial performance measurement is split 30% based on consolidated results and 70% based on the relevant business unit. The Compensation and Talent Development Committee, based on the recommendation of management, determined the non-financial metrics considered for executive compensation to align individual performance with our Company’s strategic transformation. These metrics are established to support our strategic priorities and are categorized as follows: Non -Financial Metrics
| Purpose
| Net Promoter Score
| | | Drives behavior to be customer centric. | | | Employee Engagement | | | Drives excellence in leadership to attract, develop, and retain qualified talent to enable an effective and efficient execution of doing business. | | | Strategic Initiatives | | | Drives excellence in execution of key initiatives that allows for company short and long-term results. | |
We believe these metrics provide the Board, the committee, and our chief executive officer, with respect to those executives under his supervision, adequate guidance in evaluating how individual performance is aimed to accomplish our goals. This distribution in weighting is designed to encourage each executive with responsibility for a business unit to focus on his or her individual business while working as a team to achieve the Company’s overall success. For 2018,2020, performance measures of the short-term cash incentive plan were as follows:included below. Thresholds were set at 2019 actual levels for all business units, except for managed care which was set at 95% of the 2020 budget. | | Roberto García-Rodríguez and Juan J. Román-Jiménez
| | | | | | | | | | | | | Maximum | | | $4,187.0 | | | $75.7 | | | See table above | | | | Target | | | $3,489.2 | | | $63.1 | | | (Non-Financial | | | | Minimum | | | $3,262.8 | | | $61.5 | | | Metrics) | |
| | Madeline Hernández-Urquiza – Managed Care Segment
| | | | Maximum | | | $4,187.0 | | | $75.7 | | | $3,852.0 | | | $40.1 | | | See table above | | | | Target | | | $3,489.2 | | | $63.1 | | | $3,210.0 | | | $33.4 | | | (Non-Financial | | | | Minimum | | | $3,262.8 | | | $61.5 | | | $3,001.8 | | | $31.7 | | | Metrics) | |
| | | | Corporate Executives | Performance Measure and Weighting | | 35% | 40% | 25% | (dollar amounts in millions) Performance | Consolidated
Premiums
Earned | Consolidated
Adjusted
Net Income | Non-Financial
Metrics | Roberto García-Rodríguez and Juan J. Román-Jiménez | | | | Maximum | $3,524.4 | $56.4 | See table above | Target | $2,937.0 | $47.0 | (Non-Financial | Minimum | $2,790.2 | $44.7 | Metrics) |
47
| | | | | | Business Unit
Executives | Performance Measure and Weighting | | Consolidated Results | Business Unit | (dollar amounts in millions) Performance | 20%
Premiums
Earned | 25%
Adjusted
Net Income | 15%
Premiums
Earned | 15%
Net
Income | 25%
Non-Financial
Metrics | Madeline Hernández-Urquiza and José E. Novoa-Loyola – Managed Care Segment | Maximum | $3,524.4 | $56.4 | $3,242.6 | $33.5 | See table above | Target | $2,937.0 | $47.0 | $2,702.2 | $27.9 | (Non-Financial | Minimum | $2,790.2 | $44.7 | $2,567.1 | $26.5 | Metrics) | Arturo L. Carrión-Crespo – Life Insurance Segment | | Maximum | $3,524.4 | $56.4 | $195.2 | $15.4 | See table above | Target | $2,937.0 | $47.0 | $162.7 | $12.8 | (Non-Financial | Minimum | $2,790.2 | $44.7 | $154.6 | $12.2 | Metrics) |
| | Jose E. Novoa Loyola– Managed Care Segment
| | | | Maximum | | | $4,187.0 | | | $75.7 | | | $3,852.0 | | | $40.1 | | | See table above | | | | Target | | | $3,489.2 | | | $63.1 | | | $3,210.0 | | | $33.4 | | | (Non-Financial | | | | Minimum | | | $3,262.8 | | | $61.5 | | | $3,001.8 | | | $31.7 | | | Metrics) | | | | | | | | | | | | | | | | | | | | |
| | Arturo L. Carrión-Crespo – Life Insurance Segment
| | | | Maximum | | | $4,187.0 | | | $75.7 | | | $233.6 | | | $20.9 | | | See table above | | | | Target | | | $3,489.2 | | | $63.1 | | | $194.7 | | | $17.4 | | | (Non-Financial | | | | Minimum | | | $3,262.8 | | | $61.5 | | | $182.2 | | | $16.8 | | | Metrics) | |
Annual non-performance cash bonusbonus.. We pay an annual non-performance cash bonus each December to active employees. Under Puerto Rico law, as a general rule, we are only required to pay employees who were hired before January 26, 2017 (the “Date”) and worked more than a certain number of hours in the 12-month period commencing October 1 of the previous year and are employees at the date of payment a bonus in an amount which cannot be less than 6% of the employees’ total base salary up to a maximum of $10,000, earned within that period. Also, under Puerto Rico law, as a general rule, we are only required to pay employees who were hired on or after the Date and worked more than a certain number of hours in the 12-month period commencing October 1 of the previous year and are employees at the date of payment a bonus in an amount of 2% of the employee’s total base salary up to a maximum of $600. TheNevertheless, the amount paid by the Company to active employees under this bonus ranges approximately between 6% and 9% of the employee’s base salary, varying among business units, which may be greater than the minimum amount required by law in order to offer a competitive compensation to our employees. Neither NEOs nor our Section 16 officers participate in the annual non-performance cash bonus program. During 20182020 and 2017,2019, our NEOs received the minimum amount of the bonus required under Puerto Rico law, as further described in the summary compensation table in this proxy statement.Long-term incentive awards . We believe that long-term incentives in the form of equity-based compensation are an important and essential component of our total compensation program that ensure our ability to attract, motivate, and retain top talent responsible for our long-term success. Our long-term incentives to key executive employees are designed to accomplish a number of important objectives, including to align management and shareholder’s interests, balance the short-term orientation of other compensation elements, provide a variable portion of total compensation tied to long-term market and financial performance, build executive stock ownership, hold executives accountable for their long-term decisions, reinforce collaboration across the Company, retain key talent over the long term, and share success with those who directly impact our performance results.The Compensation and Talent Development Committee has an annual equity award program for executives under the Company’s incentive plan, based on recommendations from its compensation consultants and the principles contained in the Company’s executive compensation philosophy. The program aims to better focus and reward executives for multiple performance objectives that drive long-term value creation and in part to mitigate the possibility of excessive risk-taking. The program’s design provides both performance equity grants (“performance shares”) that may be earned based on our operating and stock price performance and time-based vesting restricted
TABLE OF CONTENTS stock that is earned only if the executive remains employed with the Company over the vesting period. Long-term incentive grants provide for accelerated vesting only upon death, disability, termination without cause, or retirement, provided that the executive releases the Company from liability by the execution of a general release and non-disparagement agreement. We assigned a weighting of 75% of the total equity award value to performance shares consistent with our stated philosophy of promoting a high performance culture with clear emphasis on accountability and variable pay that is tied to long-term results, and 25% of the total equity award value to restricted stock to emphasize the retention of key executives and alignment with shareholders. Performance share awards may be earned based on our operating and stock price performance over a three-year period. Specifically, threshold, target and maximum performance goals for identified operating measures are established at the outset of the 3-year performance period. Consistent with prior years, operating goals were defined in terms of 3-year growth in net premiums earned, 3-year growth in operating income, and 3-year growth in EPS. A summary of the performance share metrics and rationale for each is presented in the following table. Performance metric
| Weighting
| Rationale
| 3-Year
Growth in
Premiums Earned, Net | 20%
| | 20% | | | Premiums earned, net improvement is critical to the continued growth and health of our business. Premiums earned, net is a key contributor to EPS and shareholder value creation. | | | 3-Year
Growth in
Operating Income | 35%
| | 35% | | | Operating income improvement emphasizes cost control and is important as we continue to grow our top line. Operating income is also a key contributor to EPS and shareholder value creation. | | | 3-Year
Growth in EPS | 45%
| | 45% | | | EPS sets the expectation of the Company’s success for our shareholders. We use EPS as the key accounting measure and evaluation of how the Company is performing. | |
Actual performance for each measure is compared to the goals established by the Compensation and Talent Development Committee at the start of the performance period. This determines a preliminary award level, which is then multiplied by a modifier (“TSR modifier”) depending on the Company’s TSR percentile for the performance period relative to the TSR of the other companies in the S&P Health Care Services Select Industry Index for the performance period. TheFor the 2020-22 award, the TSR modifier ranges from 75%70% (if our 3-year TSR ranks at the 25th25th percentile or below) to 130% (if our TSR ranks at the 90th95th percentile or above), and is capped at 100% if the Company’s absolute TSR is negative at the end of the cycle. Additionally, for the 2020-22 award, the Committee added two relative performance modifiers based on Triple-S’s managed care operating performance versus the local market competitors to reinforce relative performance versus our peers over the next three years. Specifically, the awards may be reduced by an additional -10% if our 3-year growth in premiums or operating income is at or below the 25th percentile of peers or may be increased by an additional +10% if our 3-year growth in premiums or operating income is at or above the 75th percentile of peers. The Compensation and Talent Development Committee approved aggressive financial goals in a challenging economic environment that are consistent with the Company’s budget and long-range plan. Restricted stock may be earned only if the executive remains employed with the Company over the vesting period. Restricted stock vests in equal proportions over the three-year vesting period (i.e., one-third per year beginning on the first anniversary of the grant date). The Compensation and Talent Development Committee believes that the three-year performance period associated with performance shares and the three-year vesting period of restricted stock focuses our executives on sustained performance and supports retention objectives. The Company’s
Under the policy, is to make annual long-term incentive grants to its executives during the first quarterequity awards are approved at a regularly scheduled meeting of the year.Committee to discuss the executive compensation performance goals and objectives for the year of the annual grant. Also, we may make grants to newly hired or promoted individuals, to the extent that such new hire or promoted individual constitutes an officer for purposes of Section 16 of the Securities Exchange Act of 1934, in connection with their employment. The Compensation and Talent Development Committee carefully considers the impact of the cost of equity awards, as well as dilution, in order to achieve a balance between our costs, competitiveness and the continuity of employee incentives.
TABLE OF CONTENTS Retirement programs . Our qualified and non-qualified employee retirement plans provide a retirement income base to a substantial majority of our employees, including our eligible executive officers. Ms. Hernández-Urquiza also participated in these retirement programs until 2010 and Mr. Juan J. Román-Jiménez until 2011. Union employees hired after December 19, 2006, as well as non-union employees hired after September 30, 2007, were ineligible to participate. Employees who participate in our qualified plan also participate in our non-qualified plan to the extent their income levels exceed compensation and benefit limits imposed by the United States Internal Revenue Code of 1986, as amended. Effective January 1, 2017, the Company froze the accumulation of benefits under the non-contributory defined-benefit pension plan. Effective February 1, 2017, all employees including our NEOs are eligible to participate in the Defined Contribution Plan.Non-qualified deferred compensation plan. Under our non-qualified deferred compensation plan, senior executives, including our NEOs, who elect to become participants, may defer until a future date a portion of their annual compensation and benefit from the tax advantages related to such deferral. Role of executive officers in compensation decisions
The Compensation and Talent Development Committee is responsible for all compensation decisions with respect to NEOs of the Company. In determining the compensation of NEOs other than the chief executive officer, the committee takes into account the recommendations of the chief executive officer. The chief executive officer annually reviews the performance of the other NEOs. The conclusions reached and recommendations based on these reviews, including with respect to base salary adjustments and short-term cash incentive and equity incentive award amounts, are presented to the committee. The committee reviews and approves the compensation of the NEOs, including the chief executive officer.
Compensation of named executive officers for 2018During 2018, there were salary2020
For 2020, in light of the challenging operating environment, the Compensation and Talent Development Committee determined that no increases to our NEOs with the exception of Mr. José E. Novoa-Loyola. With the assistance of Pay Governance,base salary were appropriate. In reaching their conclusion, the Compensation and Talent Development Committee evaluated in 20182020 the different components of executive compensation to ascertain that total compensation was targeted at adequate levels (that is, within the 25th to 50th percentile of external pay levels) when compared with companies in the comparable group. The main purpose was to assure that we maintained a competitive compensation program. Base SalarySalary. . In setting base salaries for 2018,2020, the Compensation and Talent Development Committee considered the following factors:•
Company financial and operating results. •
The corporate budget, meaning our overall budget for base salaries. The corporate budget was established based on planned performance for 2018.2020. The objective of the budget is to allow salary increases to retain and motivate successful performers while maintaining affordability within our business plan. •
The relative pay differences for different job levels. •
Evaluation of peer group data specific to each executive position, where applicable. | | Roberto García-Rodríguez | | | $825,000 | | | $825,000 | | | 0 | | | | Madeline Hernández-Urquiza | | | $580,860 | | | $580,860 | | | 0 | | | | Juan J. Román-Jimenez | | | $525,000 | | | $525,000 | | | 0 | | | | José E. Novoa-Loyola | | | $410,000 | | | $410,000 | | | 0 | | | | Arturo L. Carrión-Crespo | | | $367,016 | | | $367,016 | | | 0 | |
| | | | NEO | Previous base salary | 2018 Base salary(1) | Percentage Increase | Roberto García-Rodríguez | $750,000 | $825,000 | 10.00% | Madeline Hernández-Urquiza | $525,000 | $580,860 | 10.64% | Juan J. Román-Jimenez | $500,000 | $525,000 | 5.00% | José E. Novoa-Loyola | $410,000 | $410,000 | — | Arturo L. Carrión-Crespo | $324,700 | $367,016 | 13.03% |
(1)On April 1, 2018, Ms. Madeline Hernández-Urquiza and Messrs. Roberto García-Rodríguez, Juan J. Román-Jiménez and Arturo L. Carrión-Crespo received a salary adjustment due to individual performance.
Salary determinations were based on the aforementioned principles and were in line with budget and salary determinations for all other employees. Short-term annual cash incentiveincentive.. On March 5, 2019,February 16, 2021, the Compensation and Talent Development Committee determined that NEOs will receive the short-term cash incentive award for 20182020 detailed in the Summary Compensation Table. For 2018, based on reportedWhile the Company’s 2020 actual financial performance would have yielded an above target payout under the scorecard, the Committee determined to reduce incentives tied to the adjusted net income metric
TABLE OF CONTENTS from maximum to target performance for Consolidated results and the Managed Care business to account for the lower claims during the COVID-19 pandemic which positively impacted the results of the Company and to recognize the ongoing challenges that the community in which we operate continues to face. Similarly, the Committee reduced the adjusted net income results for the Life Insurance and Property and Casualty businesses from maximum to between target and maximum. Accordingly, the Compensation and Talent Development Committee approved 20182020 bonuses as follows: | | Roberto García-Rodríguez | | | 93.30% | | | $769,725 | | | | Madeline Hernández-Urquiza | | | 91.90% | | | $373,667 | | | | Juan J. Román-Jimenez | | | 93.30% | | | $342,878 | | | | José E. Novoa-Loyola | | | 91.20% | | | $261,744 | | | | Arturo L. Carrión-Crespo | | | 104.80% | | | $269,243 | |
| | | NEO | Bonus as a % of Target | Bonus Amount | Roberto García-Rodríguez | 57.9% | $477,675 | Madeline Hernández-Urquiza | 57.4% | $233,569 | Juan J. Román-Jimenez | 57.9% | $212,783 | José E. Novoa-Loyola | 57.4% | $164,805 | Arturo L. Carrión-Crespo | 81.6% | $209,632 |
Long-term incentive awardsawards.. Long-term incentives were granted to NEOs in 20182020 as described in the Summary Compensation Table. Equity award targets for our NEOs are established based on dollar values and then converted into a specific number of shares based on the closing price of our Class B common stock on the grant date. All long-term incentives granted to NEOs were approved by the Compensation and Talent Development Committee in accordance with the 2017 Triple-S Management Incentive Plan.Plan, as amended. See the section entitled “Components of executive compensation—Long-term incentive awards” of this proxy statement for more detail regarding the operation of performance share awards.
Compensation and Talent Development Committee report
The Compensation and Talent Development Committee has reviewed and discussed the compensation discussion and analysis set forth above with management. Based on such review and discussion, the Committee recommended to the Board that the compensation discussion and analysis be included in this proxy statement. Joseph A. Frick, Chair
Cari M. Dominguez
Manuel Figueroa-Collazo Antonio F. Faría-SotoStephen L. Ondra Compensation and Talent Development Committee interlocks and insider participation
None of the members of the Compensation and Talent Development Committee is or has been one of our executive officers or employees. None of our executive officers served on the board of directors’ compensation committee of any other company for which any of our directors served as an executive officer at any time during 2018.2020. Except as disclosed in “Other relationships, transactions and events” in this proxy statement, none of the members of the Compensation and Talent Development Committee had any relationship with us requiring disclosure under Item 404 of Regulation S-K. Risk considerations in our executive compensation program
In 2018,2020, the Compensation and Talent Development Committee reviewed the Company’s risk profile and related risk management processes to determine if any material risks were deemed likely to arise from our compensation policies and programs and whether these risks are reasonably likely to have a material adverse effect on our business. The Compensation and Talent Development Committee determined that the Company’s then-current pay plans and policies were not reasonably likely to have a material adverse effect on the Company. The Compensation and Talent Development Committee thereafter reported its findings to the Board. During 2018,2020, the committee reviewed and determined that risk considerations and risk inventory of the compensation programs have remained unchanged. We believe that ourthe compensation programs for our executives do not encourage excessive or unnecessary risk, as they are designed to, among others, reinforce responsible business practices, provide a balanced distribution of compensation elements, tie compensation to short and long-term results, provide for the recovery of compensation in the event of inaccurate financial disclosures, fraud or misconduct, require moderate levels of share ownership and prohibit hedging transactions involving Company securities. TABLE OF CONTENTS Summary compensation table
The following table sets forth the total compensation paid to or earned by our NEOs for each of the three years ending December 31, 2018, 20172020, 2019 and 20162018 for services rendered in all capacities to the Company. | | Roberto Garcia-Rodriguez
President & CEO, Triple-S
Management Corporation
| | | 2020 | | | $856,731 | | | $600.00 | | | $2,093,845 | | | $0 | | | $769,725 | | | $0 | | | $9,263 | | | $3,730,163 | | | | 2019 | | | $825,000 | | | $600.00 | | | $2,678,376 | | | $0 | | | $680,625 | | | $0 | | | $9,100 | | | $4,193,701 | | | | 2018 | | | $811,442 | | | $600.00 | | | $1,949,972 | | | $0 | | | $477,675 | | | $0 | | | $9,452 | | | $3,249,141 | | | | Juan J. Román-Jimenez
Executive Vice President & CFO,
Triple-S Management Corporation | | | 2020 | | | $545,192 | | | $600.00 | | | $799,470 | | | $0 | | | $342,878 | | | $310,000 | | | $13,200 | | | $2,011,340 | | | | 2019 | | | $525,000 | | | $600.00 | | | $1,033,852 | | | $0 | | | $347,288 | | | $220,000 | | | $13,100 | | | $2,139,840 | | | | 2018 | | | $517,789 | | | $600.00 | | | $749,965 | | | $0 | | | $212,783 | | | (8) | | | $13,000 | | | $1,494,137 | | | | Madeline Hernandez-Urquiza
President of Triple-S Salud, Inc.
and Triple-S Advantage, Inc.
| | | 2020 | | | $603,201 | | | $600.00 | | | $884,536 | | | $0 | | | $373,667 | | | $40,000 | | | $9,785 | | | $1,911,788 | | | | 2019 | | | $580,860 | | | $600.00 | | | $1,043,731 | | | $0 | | | $335,853 | | | $20,000 | | | $11,089 | | | $1,992,133 | | | | 2018 | | | $572,338 | | | $600.00 | | | $829,781 | | | $0 | | | $233,569 | | | (7) | | | $11,085 | | | $1,647,373 | | | | José E. Novoa-Loyola
Chief Medical Officer | | | 2020 | | | $425,769 | | | $600.00 | | | $416,210 | | | $0 | | | $261,744 | | | $0 | | | $5,700 | | | $1,110,023 | | | | 2019 | | | $410,000 | | | $600.00 | | | $446,115 | | | $0 | | | $237,062 | | | $0 | | | $5,600 | | | $1,099,377 | | | | 2018 | | | $410,000 | | | $600.00 | | | $409,975 | | | $0 | | | $164,805 | | | $0 | | | $5,500 | | | $990,880 | | | | Arturo L. Carrión-Crespo
President of Triple-S Vida, Inc. | | | 2020 | | | $367,016 | | | $600.00 | | | $372,591 | | | $0 | | | $269,243 | | | $0 | | | $17,100 | | | $1,026,550 | | | | 2019 | | | $367,016 | | | $600.00 | | | $449,093 | | | $0 | | | $259,480 | | | $0 | | | $16,900 | | | $1,093,089 | | | | 2018 | | | $363,216 | | | $600.00 | | | $352,876 | | | $0 | | | $209,632 | | | $0 | | | $15,400 | | | $941,724 | |
(1)
| Amount represents base salary. In 2020, the Compensation and Talent Development Committee did not grant base salary increases to NEOs. Differences in base pay between 2019 and 2020 for Messrs. García-Rodríguez, Román-Jiménez, Novoa-Loyola and Ms. Hernández-Urquiza are due to the fact that there were 27 biweekly pay periods in the 2020 calendar year for the Company and its subsidiaries, except for Triple- S Vida, Inc., as compared to 26 biweekly pay periods in 2019. Some of the NEOs deferred a portion of their salary under the non-qualified deferred compensation plan. The deferred amounts have been included in the Non-Qualified Deferred Compensation Table below. |
(2)
| Represents discretionary payments made under the non-equity incentive compensation plan and an annual non-performance based bonus required by Puerto Rico law which cannot be less than $600. |
(3)
| Represents the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 for the grants given during 2020. |
(4)
| Actuarial increase in the present value of benefits for defined benefit plan and supplemental benefit plan. |
(5)
| To the extent that an individual’s aggregate amount of perquisites received is less than $10,000, such amounts have been excluded from the “Other Compensation” calculation. |
(6)
| Other annual compensation whose value exceeds $10,000 consists of the following: |
| | Juan J. Román-Jiménez | | | $0 | | | $0 | | | $13,200 | | | $13,200 | | | | Arturo L. Carrión-Crespo | | | $0 | | | $0 | | | $17,100 | | | $17,100 | |
(a)
| Effective January 1, 2018, the Compensation and Talent Development Committee discontinued the vehicle allowance for executives. |
(b)
| Effective January 1, 2017, executive officers of the Company, including our NEOs, accrue twenty-five days during the year that can be used as vacation days and sick leave. Unused accrued days may be carried forward to the next year to accumulate a total of twenty-five days. |
(7)
| | Name and Principal Position
| Year
| Salary(1)
| Bonus(2)
| Stock
Awards(3)
| Option
Awards
| Non-Equity
Incentive Plan
Compensation
| Change in pension value for Ms. Madeline Hernández-Urquiza during 2018 was -$10,000. |
(8)
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings(4) | All Other
Compensation(5)
| Total
| Roberto García-Rodríguez
President & CEO, Triple-S
Management Corporation
| 2018
2017
2016
| $811,442
$750,000
$744,385
| $600
$600
$600
| $1,949,972
$1,874,986
$1,874,972
| $0
$0
$0
| $477,675
$510,010
$215,769
| $0
$0
$0
| $9,452
$37,996
$37,728
| $3,249,141
$3,173,592
$2,873,454
| Change in Pension value for Mr. Juan J. Román-Jimenez
Executive Vice President & CFO,
Triple-S Management Corporation | n-Jiménez during 2018 2017
2016
| $517,789
$503,846
$471,154
| $600
$600
$600
| $749,965
$749,977
$749,981
| $0
$0
$0
| $212,783
$348,950
$102,747
| (7)
$185,000
$45,000
| $13,000
$12,900
$12,800
| $1,494,137
$1,801,273
$1,382,282
| Madeline Hernandez-Urquiza
President of Triple-S Salud, Inc. was -$30,000 and Triple-S Advantage, Inc.
| 2018
2017
2016
| $572,338
$525,000
$514,135
| $600
$600
$600
| $829,781
$787,471
$524,998
| $0
$0
$0
| $233,569
$366,525
$150,186
| (6)
$15,000
$10,000
| $11,085
$39,086
$33,683
| $1,647,373
$1,733,682
$1,233,602
| José E. Novoa Loyola
Chief Medical Officer
| 2018
2017
2016
| $410,000
$404,231
$390,000
| $600
$600
$600
| $409,975
$389,999
$109,971
| $0
$0
$0
| $164,805
$271,789
$56,100
| $0
$0
$0
| $5,500
$5,400
$3,000
| $990,880
$1,072,019
$559,671
| Arturo L. Carrión-Crespo
President of Triple-S Vida, Inc.
| 2018
2017
2016
| $363,216
$324,700
$324,700
| $600
$600
$600
| $352,876
$324,665
$249,978
| $0
$0
$0
| $209,632
$203,958
$153,760
| $0
$0
$0
| $15,400
$43,385
$44,000
| $941,724
$897,308
$773,038
-$55,000 for the Supplemental Retirement Program. |
(1)Amount represents base salary. Some of the NEOs deferred a portion of their salary under the non-qualified deferred compensation plan. The deferred amounts have been included in the Non-Qualified Deferred Compensation Table below.
(2)Represents discretionary payments made under the non-equity incentive compensation plan and an annual non-performance based bonus required by Puerto Rico law which cannot be less than $600.
(3)Represents the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 for the grants given during 2018.
(4)Actuarial increase in the present value of benefits for defined benefit plan and supplemental benefit plan.
(5)Other annual compensation consists of the following:
| | | | | | | | | | | | | Vehicle
Allowance(a) | | Sick Leave &
Vacation
Paid(b) | | Contributions
to Defined
Contributions Plan | | | Total | | Roberto García-Rodríguez | | $0 | | $0 | | $9,452 | | | $9,452 | | Juan J. Román-Jimenez | | $0 | | $0 | | $13,000 | | | $13,000 | | Madeline Hernández-Urquiza | | $0 | | $0 | | $11,085 | | | $11,085 | | José E. Novoa Loyola | | $0 | | $0 | | $5,500 | | | $5,500 | | Arturo L. Carrión-Crespo | | $0 | | $0 | | $15,400 | | | $15,400 | |
52
(a)Effective January 1, 2018, the Compensation and Talent Development Committee discontinued the vehicle allowance for executives.
(b)Effective January 1, 2017, executive officers of the Company, including our NEOs, accrue twenty-five days during the year that can be used as vacation days and sick leave. Unused accrued days may be carried forward to the next year to accumulate a total of twenty-five days.
(6)Change in pension value for Ms. Madeline Hernández-Urquiza during 2018 was -$10,000.
(7) Change in Pension value for Mr. Juan J. Román-Jiménez during 2018 was -$30,000 and -$55,000 for the Supplemental Retirement Program.
TABLE OF CONTENTS Grants of plan-based awards during fiscal year 20182020
The following table sets forth summary information regarding the grants of plan-based awards held by each of our NEOs at December 31, 2018. 2020. | | Roberto García-Rodríguez | | | — | | | $412,500 | | | $825,000 | | | $1,237,500 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | 3/2/2020 | | | — | | | — | | | — | | | 30,753 | | | 108,476 | | | 216,952 | | | 36,158 | | | — | | | — | | | $2,093,845 | | | | Juan J. Román-Jiménez | | | — | | | $183,750 | | | $367,500 | | | $551,250 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | 3/2/2020 | | | — | | | — | | | — | | | 11,742 | | | 41,418 | | | 82,836 | | | 13,806 | | | — | | | — | | | $799,470 | | | | Madeline Hernández-Urquiza | | | — | | | $203,301 | | | $406,602 | | | $609,903 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | 3/2/2020 | | | — | | | — | | | — | | | 12,991 | | | 45,825 | | | 91,650 | | | 15,275 | | | — | | | — | | | $884,536 | | | | José E. Novoa-Loyola | | | — | | | $143,500 | | | $287,000 | | | $430,500 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | 3/2/2020 | | | — | | | — | | | — | | | 6,113 | | | 21,563 | | | 43,126 | | | 7,187 | | | — | | | — | | | $416,210 | | | | Arturo L. Carrión-Crespo | | | — | | | $128,456 | | | $256,911 | | | $385,367 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | 3/2/2020 | | | — | | | — | | | — | | | 5,472 | | | 19,303 | | | 38,606 | | | 6,434 | | | — | | | — | | | $372,591 | |
(1)
| The Compensation and Talent Development Committee established the performance measures for purposes of determining the amounts payable for the year ended December 31, 2020. The amounts shown under the Threshold column assume the lowest performance level is achieved by the Company or business unit. The amount of the annual non-equity incentive bonus can be zero if the lowest level is not achieved. Awards under this plan, if any, are payable in the first quarter of the following year. Amounts approved with respect to 2020 results are reflected in the “Summary compensation table — Non-Equity Incentive Plan Compensation” column. |
(2)
| The amounts shown under “Threshold” represent estimated payment of 50% of the performance award granted if threshold performance is met for all performance measures, and may be further reduced by -30% for relative TSR performance, -10% for relative performance in terms of growth in premiums and -10% for relative performance in terms of growth in operating income. The amounts shown under “Target” represent estimated payment of 100% of the performance award granted. The amounts shown under “Maximum” represent estimated payment of 150% of the performance award granted, with upward modification of +30% for relative TSR performance, +10% for relative performance in terms of growth in premiums, and +10% for relative performance in terms of growth in operating income, subject to a maximum payout cap at 200% of target. |
(3)
| Represents the number of restricted shares awarded on each grant date. Restricted stocks are considered issued and outstanding as of December 31, 2020; however, they have a three-year vesting period, and vest in equal installments on each anniversary date. Owners of restricted share have the same right as any other shareholder to receive any dividend declared by the Company on its Class B shares. |
(4)
| The grant date fair value of these awards was determined in accordance with the provisions of FASB Accounting Standards Codification Topic 718. See footnote 21 of the Company’s audited consolidated financial statements. There is no assurance that the value realized by NEOs, if any, will be at or near the amounts shown in this column. |
(#)
| | | | | | | |
|
| Estimated Future Payouts
Under Non- Equity Incentive
Plan Awards(1)
| Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
| All Other
Stock
Awards:
Number of
| All Other
Option
Awards:
Number of
Securities Underlying
| Exercise
Price of
| Grant
Date Fair
Value of
Stock and
| Name
| Grant
Date
| Threshold
| Target
| Maximum
| Threshold (#)
| Target (#)
| Maximum (#)
| Shares of
Stock (#)(3)
| Options
(#)
| Option
Awards
| Option
Awards(4)
| Roberto García-Rodríguez
| —
3/6/2018
| $412,500
—
| $825,000
—
| $1,237,500
—
| —
20,641
| —
55,043
| —
107,334
| —
18,347
| —
—
| —
—
| —
$1,949,972
| Juan J. Román-Jiménez
| —
3/6/2018
| $183,750
—
| $367,500
—
| $551,250
—
| —
7,939
| —
21,170
| —
41,282
| —
7,056
| —
—
| —
—
| —
$749,965
| Madeline Hernández-Urquiza
| —
3/6/2018
| $203,301
—
| $406,602
—
| $609,903
—
| —
8,784
| —
23,423
| —
45,675
| —
7,807
| —
—
| —
—
| —
$829,781
| José E. Novoa-Loyola
| —
3/6/2018
| $143,500
—
| $287,000
—
| $430,500
—
| —
4,340
| —
11,573
| —
22,567
| —
3,857
| —
—
| —
—
| —
$409,975
| Arturo L. Carrión-Crespo
| —
3/6/2018
| $128,456
—
| $256,911
—
| $385,367
—
| —
3,735
| —
9,961
| —
19,424
| —
3,320
| —
—
| —
—
| —
$352,876
Represents a non-monetary value. |
(1) The Compensation and Talent Development Committee established the performance measures for purposes of determining the amounts payable for the year ended December 31, 2018. The amounts shown under the Threshold column assume the lowest performance level is achieved by the Company or business unit. The amount of the annual non-equity incentive bonus can be zero if the lowest level is not achieved. Awards under this plan, if any, are payable in the first quarter of the following year. Amounts approved with respect to 2018 results are reflected in the “Summary compensation table — Non-Equity Incentive Plan Compensation” column.
(2) Performance awards vest at the end of a three-year period following their grant date, based on operating and stock price performance. The amounts shown under “Threshold” represent estimated payment of 50% of the performance awarded granted, with downward modification of 25%, our estimate of the minimum amount payable if the threshold performance level is met for all performance measures. The amounts shown under “Target” represent estimated payment of 100% of the performance awarded granted. The amounts shown under “Maximum” represent estimated payment of 150% of the performance awarded granted, with upward modification of 30%, our estimate of the maximum amount payable.
(3) Represents the number of restricted shares awarded on each grant date. Restricted stocks are considered issued and outstanding as of December 31, 2018; however, they have a three year vesting period, and vest in equal installments on each anniversary date. Owners of restricted share have the same right as any other shareholder to receive any dividend declared by the Company on its Class B shares.
(4) The grant date fair value of these awards was determined in accordance with the provisions of FASB Accounting Standards Codification Topic 718. See footnote 21 of the Company’s audited consolidated financial statements. There is no assurance that the value realized by NEOs, if any, will be at or near the amounts shown in this column.
(#) Represents a non-monetary value.
TABLE OF CONTENTS Outstanding Class B equity awards at 20182020 fiscal year-end
The following table sets forth summary information regarding the outstanding equity awards held by each of our NEOs at December 31, 2018.2020. Please note that ownership of vested shares of stock is set forth under “Security ownership of certain beneficial owners and management” in this proxy statement. | | Roberto García-Rodríguez | | | (2) | | | — | | | — | | | — | | | — | | | — | | | 6115 | | | $130,555 | | | 55,043 | | | $1,175,168 | | | | (3) | | | — | | | — | | | — | | | — | | | — | | | 30,394 | | | $648,912 | | | 62,323 | | | $1,330,596 | | | | (4) | | | — | | | — | | | — | | | — | | | — | | | 36,158 | | | $771,973 | | | 108,476 | | | $2,315,963 | | | | Juan J. Román-Jimenez | | | (2) | | | — | | | — | | | — | | | — | | | — | | | 2,352 | | | $50,215 | | | 21,170 | | | $451,980 | | | | (3) | | | — | | | — | | | — | | | — | | | — | | | 11,906 | | | $254,193 | | | 23,796 | | | $508,045 | | | | (4) | | | — | | | — | | | — | | | — | | | — | | | 13,806 | | | $294,758 | | | 41,418 | | | $884,274 | | | | Madeline Hernández-Urquiza | | | (2) | | | — | | | — | | | — | | | — | | | — | | | 2,602 | | | $55,553 | | | 23,423 | | | $500,081 | | | | (3) | | | — | | | — | | | — | | | — | | | — | | | 10,483 | | | $223,812 | | | 26,328 | | | $562,103 | | | | (4) | | | — | | | — | | | — | | | — | | | — | | | 15,275 | | | $326,121 | | | 45,825 | | | $978,364 | | | | José E. Novoa-Loyola | | | (2) | | | — | | | — | | | — | | | — | | | — | | | 1,285 | | | $27,435 | | | 11,573 | | | $247,084 | | | | (3) | | | — | | | — | | | — | | | — | | | — | | | 3,724 | | | $79,507 | | | 12,389 | | | $264,505 | | | | (4) | | | — | | | — | | | — | | | — | | | — | | | 7,187 | | | $153,442 | | | 21,563 | | | $460,370 | | | | Arturo L. Carrión-Crespo | | | (2) | | | — | | | — | | | — | | | — | | | — | | | 1,106 | | | $23,613 | | | 9,961 | | | $212,667 | | | | (3) | | | — | | | — | | | — | | | — | | | — | | | 4,670 | | | $99,705 | | | 11,090 | | | $236,772 | | | | (4) | | | — | | | — | | | — | | | — | | | — | | | 6,434 | | | $137,366 | | | 19,303 | | | $412,119 | |
(1)
| | | | | | | | | | |
|
| Option Awards
| Stock Awards
| Name
|
| NumberThe market value of
Securities
Underlying
Unexercised
Options (#)
Exercisable
| Number restricted stock and performance awards that have not vested was calculated by multiplying the closing price of
Securities
Underlying
Unexercised
Options (#) Unexercisable
| Equity
Incentive
Plan Awards:
Number our Class B shares on December 31, 2020 ($21.35) by the applicable number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
| Option
Exercise
Price
| Option
Expiration
Date
| Number
of Shares
of Stock
That Have
Not Vested
(#)
| Market
Value of
Shares of
Stock That
Have Not Vested(1)
| Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares That
Have Not
Vested(#)
| Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares That
Have Not
Vested(1)
| Roberto García-Rodríguez
| (2)
(4)
(5)
| —
—
—
| —
—
—
| —
—
—
| —
—
—
| —
—
—
| 6,025
17,477
18,347
| $104,775
$303,925
$319,054
| 54,232
78,649
55,043
| $943,094
$1,367,706
$957,198
| Juan J. Román-Jimenez
| (3)
(4)
(5)
| —
—
| —
—
| —
—
| —
—
| —
—
| 2,691
6,991
7,056
| $46,796
$121,573
$122,704
| 24,214
31,459
21,170
| $421,081
$547,072
$368,146
| Madeline Hernández-Urquiza
| (3)
(4)
(5)
| —
—
—
| ���
—
—
| —
—
—
| —
—
—
| —
—
—
| 1,884
7,340
7,807
| $32,763
$127,643
$135,764
| 16,950
33,032
23,423
| $294,761
$574,426
$407,326
| José E. Novoa-Loyola
| (3)
(4)
(5)
| —
—
—
| —
—
—
| —
—
—
| —
—
—
| —
—
—
| 395
3,635
3,857
| $6,869
$63,213
$67,073
| 3,551
16,359
11,573
| $61,752
$284,483
$201,254
| Arturo L. Carrión-Crespo
| (3)
(4)
(5)
| —
—
—
| —
—
—
| —
—
—
| —
—
—
| —
—
—
| 896
3,026
3,320
| $15,581
$52,622
$57,735
| 8,071
13,619
9,961
| $140,355
$236,834
$173,222
shares. |
(1)The market value of restricted stock and performance awards that have not vested was calculated by multiplying the closing price of our Class B shares on December 31, 2018 ($17.39) by the applicable number of shares.
(2)Stock awards granted on February 22, 2016 vest yearly in three equal installments. Performance awards vest at the end of a three-year period on December 31, 2018, subject to the achievement of performance measures.
(3)Stock awards granted on May 10, 2016 vest yearly in three equal installments. Performance awards will vest after the end of a three-year period on December 31, 2018, subject to the achievement of performance measures.
(4)Stock awards granted on March 7, 2017 vest yearly in three equal installments. Performance awards will vest after the end of a three-year period on December 31, 2019, subject to the achievement of performance measures.
(5)Stock awards granted on March 6, 2018 vest yearly in three equal installments. Performance awards will vest after the end of a three-year period on December 31, 2020, subject to the achievement of performance measures.
(#)Represents a non-monetary value.
(2)
| Stock awards granted on March 6, 2018 vest yearly in three equal installments. Performance awards vest at the end of a three-year period on December 31, 2020, subject to the achievement of performance measures. |
(3)
| Stock awards granted on March 5, 2019 vest yearly in three equal installments. Performance awards will vest after the end of a three-year period on December 31, 2021, subject to the achievement of performance measures. |
(4)
| Stock awards granted on March 3, 2020 vest yearly in three equal installments. Performance awards will vest after the end of a three-year period on December 31, 2022, subject to the achievement of performance measures. |
(#)
| Represents a non-monetary value. |
Options exercised and stock vested in fiscal year 20182020
The following table summarizes the options exercised and stock awards vested for each of our NEOs for the year ended December 31, 2018. | | | | | | | | | | | Option Awards | | Stock Awards | Name | | Number of
Shares Acquired
on Exercise
(#) | | Value Realized
on Exercise | | Number of
Shares Acquired
on Vesting
(#) | | Value Realized
on Vesting | Roberto García-Rodríguez | | — | | — | | 41,989 | | $1,053,158 | Juan J. Román-Jimenez | | — | | — | | 6,185 | | $178,886 | Madeline Hernández-Urquiza | | — | | — | | 22,306 | | $569,253 | José E. Novoa-Loyola | | — | | — | | 2,592 | | $70,047 | Arturo L. Carrión-Crespo | | — | | — | | 12,881 | | $326,127 |
(#)Represent a non-monetary value.
| | Roberto García-Rodríguez | | | — | | | — | | | 142,910 | | | $2,547,115 | | | | Juan J. Román-Jimenez | | | — | | | — | | | 56,944 | | | $1,015,422 | | | | Madeline Hernández-Urquiza | | | — | | | — | | | 58,914 | | | $1,052,495 | | | | José E. Novoa-Loyola | | | — | | | — | | | 28,439 | | | $509,733 | | | | Arturo L. Carrión-Crespo | | | — | | | — | | | 24,497 | | | $437,164 | |
(#)
| Represent a non-monetary value. |
TABLE OF CONTENTS The Compensation and Talent Development Committee has discontinued the grant of stock options because the Company believes that performance shares better reflect our compensation philosophy. The Company granted stock options to certain executive officers, including some NEOs, in connection with the initial public offering of our Class B shares in 2007. Additionally, the Company granted stock options to Mr. García-Rodríguez and other two employees in 2009 and 2010, respectively, as part of their respective compensation packages. Currently, all stock options that were granted have been exercised.
We sponsor a non-contributory retirement program for certain employees of our Company. The pension plan covers the NEOs annual salary set forth in the Summary Compensation Table. Our supplemental retirement program covers benefits in excess of the United States Internal Revenue Code (“IRC”) limits that apply to the non-contributory retirement program, which is a tax-qualified program under IRC rules. The following is a summary of the provisions of our defined-benefit pension plans. Non-contributory defined-benefit pension planplan.. Employees age 21 or older with one year of service with a BCBSA organization who were hired by the Company or its subsidiaries on or before December 19, 2006 in the case of union employees (on or before September 30, 2007, in the case of non-union employees) were eligible to participate in our non-contributory defined-benefit pension plan. Union employees hired after December 19, 2006 were not eligible to participate. Non-union employees hired after September 30, 2007 were not eligible to participate. Effective January 31, 2017, the Company froze the accumulation of benefits under the non-contributory defined-benefit pension plan.The average earning calculated is based on the highest average annual rate of pay from any five consecutive calendar year periods out of the last ten years. Each year’s earnings are limited by IRC Section 401(a)(17) and 415. For 2018,2020, the pension earnings are limited to $275,000.Since$285,000.
From July 1, 2012 through January 31, 2017, the accrued benefit for single life benefit was calculated using the following formula: 1% of final average earnings multiplied by plan service (defined as full and partial years of employment with the Company or any of its subsidiaries) up to 30 years, minus any benefit accrued under a prior BCBSA plan. Previously, this benefit was calculated on a 2% basis of the final average earnings. Normal retirement. To be eligible for normal retirement benefits, termination of employment must occur after both (i) the attainment of age 65 and (ii) after five years of participation in the plan. The accrued benefit is payable at the normal retirement date. Early retirement. To be eligible for early retirement benefits, termination of employment must occur after both (i) the attainment of age 55 and (ii) five years of participation in the plan. The benefit will be the accrued benefit at normal retirement date minus a reduction factor for each year prior to age 62. There is no reduction if retirement occurs on or after age 62. The plan also has a special early retirement provision. To be eligible, the termination of employment must occur after attaining 30 years of benefit service and election of immediate benefit commencement. Forms of payment. The standard form of payment for a single participant is a straight life annuity; for a married participant, a reduced qualified joint and survivor annuity begins at the benefit commencement date, with 50% of the benefit continuing to the surviving spouse upon the earlier death of the participant. In lieu of the standard form of payment, a participant may elect, with the proper spousal consent, one of the optional forms of annuity payment or, alternatively, a single lump sum payment. Supplemental retirement planplan.. Employees with non-contributory retirement program benefits limited by the IRC maximum compensation and benefit limits are eligible to participate in a supplemental retirement plan. The accrued benefit is calculated by the same formula used in the defined-benefit plan using the amount of salary in excess of the IRC limit. Normal retirement, early retirement, and special early retirement provisions are the same as provided for the non-contributory defined-benefit plan, described above. TABLE OF CONTENTS Forms of payment. The standard form of payment for a single participant is a straight life annuity; for a married participant, a reduced qualified joint and survivor annuity begins at the benefit commencement date, with 50% of the benefit continuing to the surviving spouse upon the earlier death of the participant. The lump sum payment is not available in the Supplemental Retirement Plan. The following table presents pension plan information as of December 31, 20182020 for the NEOs under our non-contributory retirement and supplemental retirement plans. | | Roberto García-Rodríguez | | | Non-Contributory Retirement | | | — | | | — | | | — | | | | Supplemental Retirement | | | — | | | — | | | | | | | Juan J. Román-Jiménez | | | Non-Contributory Retirement | | | 20.53 | | | $930,000 | | | — | | | | Supplemental Retirement | | | | | | $590,000 | | | — | | | | Madeline Hernandez-Urquiza | | | Non-Contributory Retirement | | | 16.05 | | | $150,000 | | | — | | | | Supplemental Retirement | | | | | | — | | | — | | | | José E. Novoa-Loyola | | | Non-Contributory Retirement | | | — | | | __ | | | __ | | | | Supplemental Retirement | | | | | | | | | | | | | Arturo L. Carrión Crespo | | | Non-Contributory Retirement | | | — | | | — | | | — | | | | Supplemental Retirement | | | | | | — | | | — | |
(1)
| | | | | Name
| Plan Name
| NumberThe number of Yearsactual years of Credited Service(1)
| Present Valueservice with the Company of Accumulated Benefit(2)
| Payments During
Last Fiscal Year
| Roberto García-Rodríguez
| Non-Contributory Retirement
Supplemental Retirement
| —
| —
—
| —
—
| Juan J. Román-Jiménez
| Non-Contributory Retirement
Supplemental Retirement
| 18.53
| $595,000
$395,000
| —
—
| Madeline Hernandez-Urquiza
| Non-Contributory Retirement
Supplemental Retirement
| 14.05
| $90,000
—
| —
—
| José E. Novoa-Loyola
| Non-Contributory Retirement
Supplemental Retirement
| __
| __
| __
| Arturo L. Carrión Crespo
| Non-Contributory Retirement
Supplemental Retirement
| —
| —
—
| —
—
each NEO is the same as the years of service under both plans. |
(1) The number of actual years of service with the Company of each NEO is the same as the years of service under both plans.
(2) For additional information on the material assumptions applied in determining the present value of accumulated benefits, see note to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
(2)
| For additional information on the material assumptions applied in determining the present value of accumulated benefits, see note to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
401(k) defined contribution savings plans
The Company maintains three tax-qualified 401(k) savings plans. Effective February 1, 2017, all employees including our NEOs are eligible to participate in the Define Contribution Plan. For all its business, the Company matches fifty percent of participant’s contribution of up to six percent of the participant’s pre-tax compensation. During 2018,2020, Messrs. García-Rodríguez, Román-Jiménez and Carrión-Crespo and Ms. Hernández-Urquiza contributed to the defined contribution savings plan. Also, the Company makes an additional contribution to the Trust for the benefits of Participants.
Non-qualified deferred compensation table
The following table presents compensation for the NEOs that has been deferred under a plan that is not tax-qualified: | | Roberto García-Rodríguez | | | $307,735.53 | | | $153,735.66 | | | — | | | $13,239.89 | | | — | | | $474,711.08 | | | | Juan J. Román-Jiménez | | | $91,511.27 | | | $27,000.00 | | | — | | | $3,481.77 | | | — | | | $121,993.04 | | | | Madeline Hernández Urquiza | | | $1,268,004.55 | | | $361,853.00 | | | — | | | $50,363.07 | | | — | | | $1,680,220.62 | | | | José E. Novoa-Loyola | | | — | | | — | | | — | | | — | | | — | | | — | | | | Arturo L. Carrión-Crespo | | | $108,360.17 | | | $30,854.96 | | | — | | | $4,175.09 | | | — | | | $143,390.22 | |
| | | | | | | Name | Balance | Executive
Contribution
Last
Fiscal Year | Registrant
Contribution
in Last
Fiscal Year | Aggregate
Earnings
in Last
Fiscal Year | Aggregate
Withdrawals/
Distributions | Aggregate
Balance at Last
Fiscal Year | Roberto García-Rodríguez | $70,948.00 | $138,995.80 | — | $5,302.88 | — | $215,246.68 | Juan J. Román-Jiménez | $36,991.00 | $26,000.00 | — | $1,797.44 | — | $64,788.44 | Madeline Hernández Urquiza | $549,847.00 | $390,525.00 | — | $29,456.67 | — | $969,828.67 | José E. Novoa-Loyola | — | — | — | — | — | — | Arturo L. Carrión-Crespo | — | — | — | — | — | — |
Under our current non-qualified deferred compensation plan, commencing on 2017 participants may elect to defer up to 100% of their gross annual cash compensation. The deferred compensation and accumulated interest will be paid on the occurrence of the following events: termination of employment, retirement, six months of continued disability, death, or an elected fixed date occurring after the 5th but not later than the 25th anniversary of deferral. Deferred compensation accumulates interest at an annual rate equivalent to the actual annualbook yield of the fixed income portion of the Company’s consolidated investment portfolio for the corresponding year.
TABLE OF CONTENTS Description of employment agreements
We have no employment agreements with any of our NEOs, except for Mr. García-Rodríguez, our chief executive officer. On December 31, 2015, we entered into a three-year employment agreement with Mr. García-Rodríguez, our chief executive officer, effective January 1, 2016. On December 19, 2018, the Company and Mr. García-Rodríguez amended his employment agreement to, among other things, extend the term of the agreement until December 2021. This amendment became effective on January 1, 2019. The agreement provides for a base salary of $825,000, which may be increased from time to time pursuant to the terms of the contract and our compensation policies. Under the agreement, Mr. García-Rodríguez is eligible to receive an annual short-term cash incentive, contingent upon the achievement of annual performance objectives established in accordance with our policies. Payments and benefits under the employment agreement with our chief executive officer is subject to the Company’s recoupment policy. The agreement of Mr. García-Rodríguez also provides for certain benefits and perquisites, including the annual membership fees for a private club, the payment of premiums in connection with long-term disability insurance and life insurance coverage, the payment of premiums in connection with health and medical benefits, including his dependents under our group health insurance plan, and the right to participate in all employee benefit plans and programs, including long-term incentive compensation programs, generally available to senior executives. Under the terms of the contract with Mr. García-Rodríguez, we would be required to make payments in the event of the expiration of the agreement, termination of the agreement with or without cause, or change in control, as further described below. | | | Termination
for cause
| | | In the event the agreement with our chief executive officer terminates for “cause,” or as a result of his death or resignation, he will receive the base salary earned until the date of death or resignation, the liquidation of any applicable fringe benefits and the payment of amounts due under our deferred compensation plan and any vested rights under our incentive plan and pension plan. | For “cause” means:
•a material breach by the chief executive officer of his obligations and duties as specified in the contract;
•a conviction or allegation of nolo contendere of any felony or the conviction or allegation of nolo contendere of a misdemeanor involving fraud, dishonest or disreputable conduct or moral turpitude;
•insubordination;
•material non-compliance of the contract or the rules, regulations, guidelines, policies or code of ethics of the Company
•improper or disorderly conduct; or
•the existence of a conflict of interest not previously disclosed to the Board.
|
For “cause” means: a material breach by the chief executive officer of his obligations and duties as specified in the contract; a conviction or allegation of nolo contendere of any felony or the conviction or allegation of nolo contendere of a misdemeanor involving fraud, dishonest or disreputable conduct or moral turpitude; 49
material non-compliance of the contract or the rules, regulations, guidelines, policies or code of ethics of the Companyimproper or disorderly conduct; or the existence of a conflict of interest not previously disclosed to the Board. | | | Termination
without cause
| | | In the event of termination of the agreement without “cause” (other than for death or disability), we would provide the following severance benefits: | | | | • | | | the payment of the base salary up to the normal expiration of the contract, or the base salary of one year, whichever is greater. | | | | • | | | the continuation of long term disability insurance, life insurance and health and medical benefits for the chief executive officer and his dependents until the later of one year or the remainder of the term of the contract; | | | | • | | ��� | the payment of any amounts due under our deferred compensation plan and/or related to vested rights under our pension plan; and | | | | • | | | the accelerated vesting of equity grants, provided that the chief executive officer releases the Company from liability with the execution of a general release. | |
TABLE OF CONTENTS | Expiration of
employment term | | | In the event the employment contract terminates as a result of the expiration of the employment term (other than through the chief executive officer’s request and regardless of whether there is any period of at-will employment following the employment term), we would provide the following severance: | | | | • | | | an amount equal to one year’s base salary payable in monthly installments; and | | | | • | | | the continuation of long-term disability insurance, life insurance and health benefits for the chief executive officer and his dependents for a 12-month period following termination. | | | Termination upon
change in control | | | If upon the event of a change in control, the Company terminates the chief executive officer without cause or he resigns for good reason (“double trigger”), the chief executive officer is entitled to receive the following payment: | | | | • | | | an amount equal to twice (1) the highest base salary received by the chief executive officer in any of the three years prior to the date of the change in control and (2) the average annual cash bonus received by the chief executive officer during the prior three years; and | | | | • | | | the continuation of long-term disability insurance, life insurance and health and medical benefits for the chief executive officer and his dependents for 24 months or until the chief executive officer obtains employment with comparable benefits. | |
“Change in control” is defined as: •
the acquisition by any party of ownership of 25% or more of the total votes required for the election of our directors, or of such amount which, based on the cumulative vote, if this were allowed by the articles of incorporation and bylaws, would permit such party to elect 25% or more of our directors; •
as a result of, or in connection with, a tender offer or exchange offer of the Company’s stock, a consolidation, merger or other business combination, sale of assets or any combination thereof, the persons who were our directors prior to such transaction fail to constitute a majority of the Board; •
a change of at least 30% of our directors as a result of a “proxy fight,” as such term is defined in Regulation 14A of the Exchange Act; or •
a sale or transfer of substantially all of the assets of the Company to a non-affiliated corporation. For purposes of the agreement, “good reason” means: •
a change in the nature or scope of the chief executive officer’s duties or functions from those performed on the date immediately preceding the change in control; •
a reduction in base salary from that received on the date immediately preceding the change in control; •
a reduction in the ability to participate in the compensation plans, such as bonus, stock options, incentives or other compensation plans, in which the chief executive officer participated on the date immediately preceding the change in control; •
a change in the location of the chief executive officer’s principal place of employment of more than twenty-five miles from the place maintained as work office on the date immediately preceding the change in control; or •
the reasonable determination by the Board to the effect that, as a result of the change in control and a change in the circumstances thereafter affecting the employment position, the chief executive officer is unable to exercise the authority, powers, functions or duties assigned to his position on the date immediately preceding the change in control.
TABLE OF CONTENTS | | | Non-Compete and Non-Solicitation Agreement
| | | On December 19, 2018, the Company also entered into a Non-Compete and Non-Solicitation Agreement (the “Non-Compete Agreement”) with Mr. García-Rodríguez in connection with his employment as President and Chief Executive Officer of the Company. The Non-Compete Agreement applies to Mr. García-Rodríguez during his Employment (as defined in the Non-Compete Agreement) and for a period of twelve months following the termination of his employment with the Company. | |
Potential payments upon termination or change in control
Mr. García-Rodríguez is entitled to certain benefits upon a change in control or upon a termination of employment. These benefits are payable in accordance with his employment agreement. We describe this agreement, including the material conditions or obligations applicable to the receipt of these benefits, under the caption “Description of employment agreements” above. The table below sets forth the value of the benefits (other than payments that were generally available to salaried team members) that would have been due to Mr. García-Rodríguez upon termination of his contract. | | | | | | Expiration of
Employment
Agreement(1) | Termination
Without
Cause(2) | Termination
With
Cause or Upon
Resignation or
Death | Change of Control –
Resignation for
Cause or
Termination
Without
Cause(3) | Roberto García-Rodríguez* | | | | | Base salary | Up to$825,000
| Up to$2,268,750
| ― | $1,650,000 | Annual short-term bonus | ― | ― | ― | $2,475,000 | Fringe benefits | Up to$25,459
| Up to$70,012
| ― | Up to $50,918 | Total | $850,459 | $2,338,762 | ― | $4,175,918 |
*Based on base compensation currently paid to Mr. García-Rodríguez under his contract as chief executive officer.
(1)Base Salary and Fringe Benefits are payable in 12 equal monthly installments, provided the chief executive officer did not end negotiations or notify his desire not to renew.
(2)Base Salary and Fringe Benefits payable are equal to the greater of the amount due at the expiration of the agreement or one year. For purposes of this table, we are estimating potential payments due to a termination without cause on or after April 1, 2019.
(3)Base Salary and Annual Short Term Bonus payable is equal to twice the highest Base Salary paid in any of the prior three fiscal years and twice the average Annual Short Term Bonus for the prior three fiscal years. For purposes of this table we calculated the annual short-term bonus with the maximum payout allowed under the Non-equity Incentive Plan. The obligations to pay Fringe Benefits expires on the earlier of 24 months after the termination of employment or the date employment with comparable benefits is obtained.
| | Roberto García-Rodríguez*
| | | | Base salary | | | Up to $825,000 | | | Up to $825,000 | | | — | | | $1,650,000 | | | | Annual short-term bonus | | | — | | | — | | | — | | | $2,475,000 | | | | Fringe benefits | | | Up to $25,459 | | | Up to $25,459 | | | — | | | Up to $50,918 | | | | Total | | | $850,459 | | | $850,459 | | | — | | | $4,175,918 | |
*
| Based on base compensation currently paid to Mr. García-Rodríguez under his contract as chief executive officer. |
(1)
| Base Salary and Fringe Benefits are payable in 12 equal monthly installments, provided the chief executive officer did not end negotiations or notify his desire not to renew. |
(2)
| Base Salary and Fringe Benefits payable are equal to the greater of the amount due at the expiration of the agreement or one year. For purposes of this table, we are estimating potential payments due to a termination without cause on or after April 1, 2021. |
(3)
| Base Salary and Annual Short Term Bonus payable is equal to twice the highest Base Salary paid in any of the prior three fiscal years and twice the average Annual Short Term Bonus for the prior three fiscal years. For purposes of this table we calculated the annual short-term bonus with the maximum payout allowed under the Non-equity Incentive Plan. The obligations to pay Fringe Benefits expires on the earlier of 24 months after the termination of employment or the date employment with comparable benefits is obtained. |
TABLE OF CONTENTS Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the chief executive officer (the pay ratio rule). The Company’s chief executive officer (CEO) is Mr. García-Rodríguez. For the fiscal year ended December 31, 2018,2020, the compensation for our CEO in 20182020 was approximately 9799 times the median pay of our employees as described as follows: | | | | Median Employee total annual compensation, based on all employees other than the CEO | | | $33,58537,753 | | | CEO total annual compensation | | | $3,249,1413,730,163 | | | Ratio of CEO to Median Employee Compensation | | 97:
| 99:1 | |
We identified the median employee by examining the 20182020 reportable Medicare wages for all individuals, excluding our CEO, who were employed by us on December 31, 2018,2020, except as set forth below. Since the Company does not have part-time or seasonal employees, we included all employees hired on a full-time basis. Wages and salaries were not annualized for employees hired during 2018.2020. We did not make any assumptions, adjustments, or estimates with respect to total compensation. As permitted under the rule, we also excluded 3941 non-U.S. employees in Costa Rica under the “de minimis” exemption since they account for less than 5% of the total employees. | | | | Total number of U.S. employees | | 3,636
| 3,906 | | | Total number of non-U.S. employees | | 39
| 41 | | | Total number of employees | | 3,675
| 3,947 | | | Jurisdiction and number of employees excluded under the “de minimis” exemption | | | Costa Rica, 3941 | | | Total number of U.S. employees | | 3,636
| 3,906 | | | Total number of non-U.S. employees (excluding employees under the “de minimis” exemption) | | | 0 | |
After identifying the median employee based on Medicare wages of covered employees, we calculated the annual total compensation for such employee using the same methodology we use for our named executive officers as set forth in the 20182020 summary compensation table included in this proxy statement. Our CEO’s annual total compensation for purposes of the pay ratio rule disclosure is equal to the amount reported in the “Total” column in the 20182020 Summary Compensation Table. TABLE OF CONTENTS The Board evaluates and approves the compensation of non-management directors taking into account the recommendation of the Compensation and Talent Development Committee. Under our current directors’ compensation structure, each non-management director receives an annual cash retainer, paid in monthly installments, and equity compensation in the form of restricted stock units, as detailedunits. At the director’s election, all or a portion of the annual cash retainer may be payable in the following table:form of restricted stock units. The table below sets forth the compensation of the non-management directors for 2020. Compensation components for non-management directors
| | | Amount | | | Annual cash retainer | $80,000
| | $80,000 | | | Annual equity retainer | | | $110,000 | | | | | | | | | | Additional annual cash retainer | | | | | | Chair of the Board | | | $120,000 | | | Vice Chair/ Lead Independent Director | $18,000
| | $25,000 | | | Audit Committee Chair | $18,000
| | $20,000 | | | Compensation and Talent Development Committee Chair | $18,000
| | $15,000 | | Corporate
| Governance and NominatingSustainability Committee Chair | $12,000
| | $12,000 | | Investment and Financing
| Finance Committee Chair | $12,000
| | $12,000 | | | | Enterprise Risk Management Committee Chair | | | $12,000 | |
Directors who are also our employees do not receive any compensation for service rendered as members of the Board or any committee of the Board, or of any subsidiary board or subsidiary board committee.
Non-management directorsdirectors’ compensation for fiscal year 20182020
The following table summarizes the fees or other compensation that our non-employee directors earned for services rendered as members of the Board or any committee of the Board during fiscal year 2018,2020, pursuant to our current compensation structure. | | Cari M. Dominguez | | | $105,000 | | | $110,000 | | | $215,000 | | | | David H. Chafey, Jr. | | | $92,000 | | | $110,000 | | | $202,000 | | | | Gail B. Marcus | | | $92,000 | | | $110,000 | | | $202,000 | | | | Jorge L. Fuentes-Benejam(2) | | | $33,600 | | | — | | | $33,600 | | | | Joseph A. Frick | | | $95,000 | | | $110,000 | | | $205,000 | | | | Luis A. Clavell-Rodríguez | | | $200,000 | | | $110,000 | | | $310,000 | | | | Manuel Figueroa-Collazo | | | $80,000 | | | $110,000 | | | $190,000 | | | | Roberto Santa María | | | $100,000 | | | $110,000 | | | $210,000 | | | | Stephen L. Ondra(3) | | | $20,000 | | | $64,167 | | | $84,167 | |
(1)
| Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the restricted stock units grant given on 4/27/2020 (6,732 shares at $16.34). Restricted stock units vest one year after grant date, with settlement upon the termination of service of the director. |
(2)
| Mr. Jorge L. Fuentes-Benejam was a director until April 24, 2020 (2020 Annual Meeting of Shareholders). |
(3)
| Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the restricted stock units grant given on 7/14/2020 (3,463 shares at $18.53). Dr. Stephen L. Ondra’s appointment to the Board was effective October 1, 2020. The amount included is the annual equity retainer of $110,000 payable in RSUs, prorated for the months remaining after the effective date of this appointment. |
| | | | Name | Fees Earned or
Paid in Cash(1) | Stock
Awards(2) | Total | Antonio F. Faría-Soto | $86,000 | $110,000 | $196,000 | Cari M. Dominguez | $95,333 | $110,000 | $205,333 | David H. Chafey, Jr. | $91,333 | $110,000 | $201,333 | Gail B. Marcus | $80,000 | $110,000 | $190,000 | Jorge L. Fuentes-Benejam | $83,333 | $110,000 | $193,333 | Joseph A. Frick | $92,000 | $110,000 | $202,000 | Luis A. Clavell-Rodríguez | $209,989 | $110,000 | $319,989 | Manuel Figueroa-Collazo | $92,333 | $110,000 | $202,333 | Roberto Santa María | $92,000 | $110,000 | $202,000 |
(1)Excludes annual offsite meeting.
(2)Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the restricted stock units grant given on 5/31/2018 (3,001 shares at $36.65). Restricted stock units vest one year after grant date, with settlement upon the termination of service of the director.
Stock ownership guidelines for non-management directors
Our stock ownership guidelines for non-management directors require that non-management directors own Company stock in an amount equal to threefive times their annual retainer, excluding additional retainers related to committee or chair service. TABLE OF CONTENTSAUDIT COMMITTEE MATTERS | | AUDIT COMMITTEE MATTERS | |
Report of the Audit Committee
The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the year ended December 31, 2018.2020. The information in this report shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or Exchange Act, or otherwise considered “filed” with the SEC, except to the extent that the Company specifically incorporates this report or a portion of it by reference. The Audit Committee reports to and acts on behalf of the Board. The committee operates under a written charter adopted by the Board. The committee reviews the charter annually and a copy is available at http://investors.triplesmanagement.com/govdocs. The Board has determined that each member of the committee is independent. In making this determination, the Board follows the audit committee independence standards set forth in the NYSE’s director independence rules. The members of the committee are not our employees or employees of any of our subsidiaries.The Audit Committee assists the Board in its oversight of our financial reporting process, internal control over financial reporting, as well as our internal and external audit processes, and the independent registered public accounting firm’s qualifications and performance of the internal audit function. The committee is also responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm and the establishment of procedures for handling complaints. The committee appoints or terminates the engagement of the independent registered public accounting firm and reviews the proposed audit scope and approach, including coordination of the audit effort with the Internal Audit Office. The committee does not itself prepare the financial statements or perform audits of the Company’s financial statements. The Audit Committee meets regularly with the chief audit executive to review and discuss the internal audit scope, plan and the results of internal audit activities. The committee oversees the appointment, removal, performance, and compensation of the chief audit executive. In the performance of its oversight function, the Audit Committee has considered and discussed our audited consolidated financial statements for the fiscal year ended December 31, 2018—2020—including critical accounting policies, reasonableness of significant estimates and judgment and financial statements disclosures—disclosures, material alternative treatments within GAAP that have been discussed with management, including the ramification of the alternative treatment as well as the auditor’s preference, and other material written communications between the auditor and management (e.g. letter of representation)—with management and D&T, our independent registered public accounting firm. The Audit Committee has also discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard 16, 1301, Communications with Audit Committee. The committee has also discussed with D&T the matters required by the Public Company Accounting Oversight Board Rule 3526 regarding “Communication with Audit Committee Concerning Independence”. In addition, the committee has received the written disclosures and the letter from D&T required by applicable requirements of the Public Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the committee concerning independence, and has discussed with D&T its independence. The committee has also considered whether the provision of non-audit services by the independent registered public accounting firm to us is compatible with maintaining the auditors’ independence. The committee has evaluated D&T’s qualifications, performance and independence, including that of the lead partner. As part of its auditor engagement process, the committee considers whether to rotate the independent audit firm.Based on the Audit Committee’s consideration of the audited consolidated financial statements and the discussions referred to above with management and the independent registered public accounting firm, and subject to the limitations on the role and responsibilities of the committee set forth in the charter and those discussed above, the committee recommended and the Board approved that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20182020 for filing with the SEC. Roberto Santa María, Chair
David H. Chafey, Jr.
Antonio F. Faría-Soto
Gail B. Marcus TABLE OF CONTENTSOTHER RELATIONSHIPS, TRANSACTIONS AND EVENTS | | OTHER RELATIONSHIPS, TRANSACTIONS AND EVENTS | |
Transactions with related parties
In the ordinary course of business, we or our subsidiaries may occasionally enter into transactions with our executive officers, directors, or nominees, or their respective immediate families. Also, certain executive officers, directors and nominees have material ownership interests in, or occupy senior positions, including as president, or director, at certain entities to which one or more of our subsidiaries provided insurance during 2018,2020, as further detailed below: | | Mr.Dr. Clavell-Rodríguez, Chair of the Board
| | | | • | | | Chief medicalexecutive officer of San Jorge Children’s Hospital,the Comprehensive Cancer Center of the University of Puerto Rico until March 2020, which paid insurance premiums to the Company totaling $706,369,$714,581.50, and received insurance payments totaling $20,993,738.$3,168,015.31. | Mr. Figueroa-Collazo, Director
•Chief executive officer and owner of VERNET, Inc., which paid insurance premiums totaling $136,385.38.
|
The terms on which we and our subsidiaries enter into business transactions with a related party are the same as the terms offered to unrelated parties. In addition, Mr.Dr. Clavell-Rodríguez, a physician, or his affiliated entities, may also render services as providers to TSS or TSA in the ordinary course of business. Mr.Dr. Clavell-Rodríguez, nor his immediate family members and affiliated entities, received more than $120,000 in compensation for services as healthcare providers during 2018.2020. However, Mr. Clavell-Rodríguez’s employer, San Jorge Children’s Medical Specialties PSC, Dr. Clavell-Rodríguez’s employer, received approximately $401,000$445,490.47 from the Company’s affiliates and subsidiaries.subsidiaries, and paid insurance premiums to the Company totaling $41,947.40. The terms of the provider agreements with TSS or TSA pursuant to which payments are made are the same as the terms of the provider agreements of physicians and healthcare organizations who are not directors or affiliated with our directors. Policies and procedures for related party transactions
The Company has adopted a policy directed at the review and approval of transactions with related parties. This policy instructs our directors and executive officers to inform the Corporate Governance and NominatingSustainability Committee of proposed related party transactions that would need to be disclosed pursuant to Item 404(a) of Regulation S-K, and provides guidelines for the review and approval of such transactions. Additionally, under our Code of Ethics, all employees, officers and directors are required to avoid conflicts of interest. Employees, including officers, must review with, and obtain the approval of, their supervisors or the office of the chief legal counsel, for any situation that may involve a conflict of interest. The Code of Ethics broadly defines a conflict of interest as whenever an individual’s personal interests interfere or diverge in any way (or appear to interfere or diverge) with our interest, and specifically notes involvement (either personally or through a family member) in a business that is a competitor, supplier or customer of the Company. Moreover, on an annual basis, each of our directors and executive officers are required to complete a director and officer questionnaire that requires disclosure of any transactions with the Company in which the director or executive officer, or any member of his or her immediate family, has a direct or indirect material interest. TABLE OF CONTENTSANNUAL REPORT Our 20182020 Annual Report to shareholders accompanies the proxy materials that have been provided to all shareholders. Those documents are not a part of the proxy solicitation materials. We will provide, without charge, additional copies of our 20182020 Annual Report to shareholders upon the receipt of a written request by any shareholder. | | INCORPORATION BY REFERENCE | |
INCORPORATION BY REFERENCENotwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act or the Exchange Act, which might incorporate all or portions of our filings, including this proxy statement, with the SEC, in whole or in part, the Compensation and Talent Development Committee Report and the Report of the Audit Committee contained in this proxy statement shall not be deemed to be incorporated by reference into any such filing or deemed filed with the SEC under the Securities Act or the Exchange Act. San Juan, Puerto Rico, March 15, 2019.18, 2021. | | | | | | LUIS A. CLAVELL-RODRÍGUEZ, MD | | | CARLOS L. RODRÍGUEZ-RAMOS | Chair of the Board | CARLOS L. RODRÍGUEZ-RAMOS
| | Secretary |
1441 F.D. Roosevelt Avenue | San Juan, PR 00920
64TABLE OF CONTENTS March 18, 2021 Dear Sirs: The Annual Meeting of Stockholders of Triple-S Management Corporation (the “Company”) will be held on April 30, 2021 (the “Annual Meeting”). In order for a person to represent a deceased shareholder at the Annual Meeting, the Company must receive the following documents certifying the representative’s authority: 1-
| | TRIPLE-S MANAGEMENT CORPORATION
OFFICE OF LEGAL AFFAIRS
P.O. BOX 363628
SAN JUAN, PR 00936-3628
| 
VOTE BY INTERNET - www.proxyvote.comIf a will exists and an executor or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
| | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | E61871-P16268 | KEEP THIS PORTION FOR YOUR RECORDS | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLYjudicial administrator has been designated: |
⇒
| Copy of the will or document designating the judicial administrator, if one has been designated, |
⇒
| Certificate from the Registry of Wills as to the effectiveness of the will, and |
⇒
| Testamentary Letters issued by the appropriate court certifying the executor. |
2-
| If a will exists but an executor has not been designated or the executor is not authorized to participate at the Annual Meeting as a representative of the estate: |
⇒
| Copy of the declaration of heirs (if the will does not distribute the entire estate among the heirs), |
⇒
| Certificate from the Registry of Wills as to the effectiveness of the will, and |
⇒
| A letter signed by all heirs to the deceased shareholder included in the will or the declaration of heirs, as the case may be, designating and authorizing the person to participate at the Annual Meeting and to vote therein as set forth in such letter. |
3-
| If a will does not exist: |
⇒
| Copy of the declaration of heirs, and |
⇒
| A letter signed by all heirs to the deceased shareholder included in the declaration of heirs, designating and authorizing the person to participate at the Annual Meeting and to vote therein as set forth in such letter. |
In order to participate at the Annual Meeting, the Company must receive all required documents prior to April 22, 2021. All documents must be addressed to the Secretary of the Company at P.O. Box 363628, San Juan, P.R. 00936-3628. If you had sent them previously, please notify us to verify them. For more information, please call (787) 749-4949, Ext. 8321953. If the representative of the estate of a deceased shareholder cannot attend the Annual Meeting, he/she may exercise the right to vote by completing and sending the Proxy Card, together with the corresponding documentation described above, to the attention of the Secretary of the Corporation. | | | | | Sincerely, | | | | TRIPLE-S MANAGEMENT CORPORATION | | | | | | | | | | | | | | The Board of Directors recommends a vote “FOR” the following proposals: | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | Election of Two “Group 3” Directors: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees:
| For | Against | Abstain | | | | | | | | | | | | | | | | | | | | | | | | | | 1a. David H. Chafey, Jr. | | | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | 1b. Manuel Figueroa-Collazo | | | ☐ | ☐ | ☐ | | | | | | | | | | | For | Against | Abstain | | | | | | | | | | | | | 2. | Ratification of the selection of Deloitte & Touche LLP as the independent registered public accounting firm of the Company. | ☐ | ☐ | ☐ | | | | | | | | | | | | | 3. | Advisory vote on the compensation of our named executive officers. | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NOTE: Such other business as may properly come before the meeting or any adjournment thereof. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” PROPOSALS 1, 2 AND 3. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | Signature (Joint Owners) | Date | | | | | | | | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
E61872-P16268
| | | | TRIPLE-S MANAGEMENT CORPORATION
Annual Meeting of Shareholders
April 26, 2019 9:00 A.M. (Local Time)
This proxy is solicited by the Board of Directors
The shareholder(s) hereby appoint(s) Roberto García-Rodríguez, Esq. and Carlos L. Rodríguez-Ramos, Esq. or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of TRIPLE-S MANAGEMENT CORPORATION that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 A.M. (Local Time) on April 26, 2019, at the Triple-S Building,1441 F.D. Roosevelt Ave., San Juan, PR 00920, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Continued and to be signed on reverse side
Secretary | | | | | | | |
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