(6)
| (1)For each performance measure, there is no payout at or below the threshold. The payout would be 200% for performance at or above the maximum. For performance between defined levels, the payout is interpolated. (2)After-tax adjusted operating earnings per share is defined as net income adjusted to exclude after-tax net investment gains or losses and amortization of the cost of reinsurance as well as certain other items specified in the reconciliation of non-GAAP financial measures in Appendix A of this proxy statement divided by dilutive outstanding weighted average shares. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. (3)Consolidated adjusted operating return on equity is calculated by dividing after-tax adjusted operating income by the average of the beginning- and end-of-year stockholders’ equity adjusted to exclude the net unrealized gain or loss on securities and the net gain or loss on hedges. (4)Earned premium is calculated for our core operations (Unum US, Unum International, and Colonial Life). (5)Customer experience is based on the quality of our customers' experiences (via customer surveys) and includes measures focused on areas that impact customer loyalty and satisfaction. In 2022, we transitioned to a 100% scale to improve clarity of reporting; however, the methodology for setting and measuring the customer experience goal was unchanged. (6)The operating expense ratio is equal to operating expenses as a percentage of earned premium (or total company expense over total company earned premium) inclusive of the Closed Block and Corporate segments.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 63 |
COMPENSATION DISCUSSION AND ANALYSIS
ApplyingAs discussed above, the Committee applied the criteria and standards approved by the Committee when it established the 20202022 annual incentive targets as discussed beginning on page 68, the Committee adjusted the Annual Incentive Planto adjust annual incentive plan performance calculations for the impact of the following fivefour items on our 2020 financial plan results thatwhich were not included in the 20202022 financial plan from which the targets were initially derived:derived. Each item impacted both earnings and equity unless otherwise noted below:•The effect of differences between actual debt issuances and resulting interest expense and the amountamounts assumed in the financial plan (impact to earnings); •The effect of differences between actual stock repurchases and the amount assumed in the financial plan (no actual(actual repurchases which impacted equity)were slightly more than plan and the impact to equity was immaterial); •The effect of differences between actual foreign currency rates and exchange rates assumed in the financial plan; and The effect of a tax rate change in the U.K.; and
•The effect of a global pandemic and other economic and environmental pressures impacting results. These adjustments included the following impacts related to COVID-19: ° | Elevated mortality within the Life and LTC product lines; |
° | Increased short-term disability COVID-19 claims; |
° | Higher costs associated with leave management claims; and |
° | Lower travel and incentive expenses, offset by increased expenses related to transitioning employees to work from home, creating a safe office environment and increasing allowances for uncollectible premiums. |
–The net effect of the COVID-19 impacts in 20202022 was a decrease in operating results, with the negative implications of Life mortality overshadowing favorable impacts to the LTClong-term care (LTC) product line and travel-related expenses.line. Importantly, we did not make any explicit adjustmentadjustments to sales or earned premium in the Annual Incentive Plan.premium. While we know that these metrics were negatively impacted by COVID-19, the actual impact was difficult to isolate and therefore not considered. Based on the adjustments described above, the calculated achievement was 88.7%151.4% of the plan target. Each year, the Committee also undertakes an overall assessment of the results, maintaining the discretion to make final adjustments. Any discretionary adjustments by the Committee are based on a review of the actual achievement level for each performance measure compared to the annual incentive targets, as well as a qualitative assessment of the results. For 2020, the Committee recognized management's resiliency scorecard achievements, noting efforts to position the company to not only survive the pandemic but to thrive after it ends. This included the response to work from home and a focus on responsiveness to our customers in their time of need, which showed up in the positive customer experience metric. The Committee balanced financial achievements and resiliency with the impact to shareholders from our reduced stock price. Based on this assessment, the Committee exercised modest negative discretion and approved the Unum Group Annual Incentive Plan payout level for 20202022 at 80%150% of target, as shown below. | | | | | | Unum Group 20202022 Annual Incentive Plan Achievement Level | | | 80%
| 150% |
The table below sets forth the target incentive and the actual annual incentive awards approved by the Committee for each NEO for 20202022 performance. For a discussion of 2021 annual incentive award targets for the NEOs, see the “Performance Assessment and Highlights” summary beginning on page 74.TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS
The annual incentive awards of all NEOs are based on Unum Group performance, though the individual goalsachievements for Mr.Messrs. Simonds and Mr. Arnold include financial goals related to their respective business units. The following table outlinesIn addition, based on discussions between Mr. McKenney and the Committee, a +10% adjustment was approved for Messrs. Zabel and Simonds. A detailed explanation of each NEO's individual achievements during 2022, which were considered in approving this adjustment, as well as a discussion of 2023 annual incentives awarded for 2020 performance.incentive targets, can be found in the "Performance Assessment and Highlights" section. | | | | | | | | | | | | ANNUAL INCENTIVE PAID IN 2023 (for 2022 performance) | | Annual Incentive Target | Target Annual Incentive Award ($) | Actual Annual Incentive ($) | | McKenney | 230% | 2,507,886 | 3,761,828 | | Zabel | 135% | 860,107 | 1,419,176 | | Simonds | 140% | 1,002,616 | 1,654,317 | | Iglesias | 100% | 562,116 | 843,174 | | Arnold | 95% | 494,189 | 741,284 |
ANNUAL INCENTIVE PAID IN 2021 | (for 2020 performance)
| | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 64 |
| | Mr. McKenney | | | 210% | | | X | | | 1,078,846 | | | X | | | 80% | | | X | | | 100% | | | = | | | 1,812,462 | | | | Mr. Zabel | | | 110% | | | X | | | 617,308 | | | X | | | 80% | | | X | | | 110% | | | = | | | 597,554 | | | | Mr. Simonds(1) | | | 127.95% | | | X | | | 718,846 | | | X | | | 80% | | | X | | | 100% | | | = | | | 735,785 | | | | Mr. Arnold | | | 90% | | | X | | | 519,267 | | | X | | | 80% | | | X | | | 95% | | | = | | | 355,179 | | | | Ms. Iglesias | | | 95% | | | X | | | 571,154 | | | X | | | 80% | | | X | | | 100% | | | = | | | 434,077 | |
COMPENSATION DISCUSSION AND ANALYSIS (1)
| Mr. Simonds was appointed to his new role in February 2020 and the Committee increased his annual incentive target from 110% to 130%. His actual incentive target was prorated (rounded to two decimal places) based on his time in each position. |
Our long-term incentive plan aligns the long-term interests of management and shareholders by tying a substantial portion of executive compensation directly to the company’s stock price. Long-term incentive awards are granted in the year following the performance year that determines their size (i.e., the grant values of awards made in 2020March of 2022 were based on 2019the Committee's assessment of 2021 performance). All long-term incentive awards granted in 2020 were granted under the Stock Incentive Plan of 2017. Our long-term incentive award mix is based on a review of peer practices as well as what the Committee believes most appropriately retains and rewards our NEOs and ensures a significant portion of each executive’s compensation is tied to the increase of our stock price over the long-term. The mix of awards granted to each NEO in early 20202022 was 50% performance-based restricted stock units (PBRSUs)(RSUs) and 50% performance sharecash incentive units (PSUs). All of our NEOs received a long-term incentive grant in March 2020 in the form of PBRSUs and PSUs. All grants were conditioned on the company first achieving the corporate performance threshold for 2019 (as described on page 68)(CIUs). ActualThe awards were based ongranted under the target incentive and individual performance for 2019. PBRSUsStock Incentive Plan of 2017.RSUs vest ratably over three years subject to continued employment or service with the company, while PSUsCIUs vest at the end of the three-year performance period dependent upon actual performance on each applicable vesting date, modified (up to +/- 20%) by relative TSR.total shareholder return (TSR). The process for determining long-term incentive awards granted in March 20202022 was as follows: | If the 2019 Performance Threshold was met, then:
| |
| ($)
| | | ×
| | | (%)
| | | =
| | | ($)
| | ($) | 2019×
| (%) | = | ($) | | | 2021 Long-term
Incentive Target for NEOs | | 2021 Individual Performance | 2019 Individual
Performance(1)
| | | 20202022 Long-term
Incentive Award | | | | | | | | | | | | | | | | |
| If threshold was not met, then no award granted
| |
| (1)
| | | Individual performance may range from 0% to 125%. Individual performance achievement percentages for 2019 performance are described beginning on page 66 of our 2020 Proxy Statement. | |
TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS
As outlined in the diagram, once it was determined that the performance threshold had been met, the total value of the long-term incentive award granted to each NEO was determined by multiplying: •The NEO's long-term incentive target (a specified percentage of base salary for all NEOs except the CEO, which was set as a specific dollar amount), which was set by the Committee in early 20192021 after considering market data from the appropriate comparator group (as described beginning on page 5274 of our 20202022 Proxy Statement) and the individual’s target relative to other NEOs given their respective levels of responsibility; and • | The individual performance percentage (from 0% to 125%) assigned to the NEO by the Committee using the individual assessment process described beginning on page 61 (for a discussion of the individual NEO performance assessments for 2019 that determined the individual performance percentage for these 2020 grants, see disclosure beginning on page 66 of our 2020•The individual performance percentage (from 0% to 125%) assigned to the NEO by the Committee using the individual assessment process (for a discussion of the individual NEO performance assessments for 2021 that determined the individual performance percentage for these 2022 grants, other than for Mr. Arnold, see disclosure beginning on page 68 of our 2022 Proxy Statement). For Mr. Arnold, the Committee applied an individual performance percentage of 110% based on his leadership of the voluntary benefit brands. The individual performance applied for each of the NEOs is shown below in the "Long-Term Incentive Granted in 2022" table. |
Once the long-term incentive award value was determined, it was divided evenly between PBRSUsRSUs (50%) and PSUsCIUs (50%) for each NEO. The PBRSUsRSUs vest annually based on each NEO’s continued service over a three-year period. The PSUsCIUs are subject to additional company performance and vest based on the company's achievement of three-year (2020-2022) pre-established goals for averagecritical, multi-year shareholder return measures of adjusted operating return on equitybook value growth and average adjusted operating earnings per share,dividend yield, modified (up to +/- 20%) by relative TSR as described below.
LONG-TERM INCENTIVE GRANTED IN 2020 | | | (for 2019 Performance)
| | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 65 |
| | Mr. McKenney(1) | | | $6,500,000 | | | X | | | 98% | | | = | | | $6,370,000 | | | | Mr. Zabel | | | 656,027 | | | X | | | 110% | | | = | | | 721,630 | | | | Mr. Simonds | | | 1,120,000 | | | X | | | 110% | | | = | | | 1,232,000 | | | | Mr. Arnold | | | 625,044 | | | X | | | 110% | | | = | | | 687,548 | | | | Ms. Iglesias | | | 742,500 | | | X | | | 100% | | | = | | | 742,500 | |
(1)
COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | | | | | | | | | | | | | | | | | | | LONG-TERM INCENTIVE GRANTED IN 2022 | (for 2021 Performance) | | 2021 Long-Term Incentive Target ($) | | Individual Performance | | 2022 Long-Term Incentive Grant ($)(2) | | McKenney | 7,500,000 | | | | n/a(1) | | 8,400,000 | | | | Zabel | 1,406,250 | | | X | 110% | = | 1,546,875 | | | | Simonds | 1,925,000 | | | X | 100% | = | 1,925,000 | | | | Iglesias | 742,500 | | | X | 100% | = | 742,500 | | | | Arnold | 625,044 | | | X | 110% | = | 687,548 | | |
(1)After consideration of Mr. McKenney's strategic leadership as well as the fact that his total targeted compensation was below the market median, the Committee awarded Mr. McKenney a grant of $8.4 million. (2)The amount shown is the targeted value of the long-term incentive award approved by the Committee for each NEO. Half of the amount is then converted to the respective number of RSUs based on the closing stock price on the date of grant. The remaining half of the amount is granted in the form of CIUs, which are tracked and denominated in dollars. The amount included in the Summary Compensation Table was calculated using the closing stock price for RSUs. CIUs are reported in the Summary Compensation Table when vested. | | | | | | | | | | | | | | | | Executive | RSUs Granted (Mar. 2022) | CIUs Granted (Mar. 2022) | | (#) | ($) | | McKenney | 156,250 | | | 4,200,000 | | | Zabel | 28,774 | | | 773,438 | | | | Simonds | 35,807 | | | 962,500 | | | | Iglesias | 13,811 | | | 371,250 | | | | Arnold | 12,789 | | | 343,774 | | |
| Mr. McKenney’s target was set as a dollar amount, rather than as a percentage of salary as for the other NEOs. |
(2)
| The amount shown is the award approved by the Committee for each NEO. This amount is then converted to the respective number of PBRSUs and PSUs based on the closing stock price on the date of grant. The amount included in the “Summary Compensation Table” on page 87 was calculated using the closing stock price for PBRSUs and the Monte Carlo valuation methodology for PSUs. |
| | Mr. McKenney | | | 136,636 | | | 136,637 | | | | Mr. Zabel | | | 15,479 | | | 15,479 | | | | Mr. Simonds | | | 26,426 | | | 26,426 | | | | Mr. Arnold | | | 14,748 | | | 14,748 | | | | Ms. Iglesias | | | 15,927 | | | 15,927 | |
No stock is issued when the PBRSUsRSUs are granted. Instead, company stock is issued only when the grant vests and is settled. In addition, there are no shareholder voting rights unless and until the award is settled in shares. Beginning with the March 1, 2020 grant, duringDuring the performance period, dividend equivalents will accrue and settle in cash to the extent that the underlying PBRSUsRSUs vest. TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS
As previously disclosed, the Committee decided to replace performance share units (PSUs) with CIUs that reward for financial performance (rather than financial performance and stock price changes), beginning with the long-term incentive grants in March 2021. The PSUsCommittee determined that CIUs will vestbe earned based on the achievement of critical, multi-year shareholder return measures of adjusted book value growth and dividend yield. CIUs will be measured over a three-year prospective (2020-2022) average adjusted operating earnings per share and average adjusted operating returnperformance period. Awards can be earned up to a maximum of 200% of the targeted CIU award value following completion of the performance period based on equity goals, and the company's performance against these metrics. The achievement will be modified (up to +/-20%) based on our TSR relative to the eight members of our “Performance"Performance Peer Group. ” Assuming performance above the threshold, PSUs can be paid out at 40% to 180% of target." The eight companies in the Performance Peer Group (Aflac, Hartford Financial Services,Globe Life, Lincoln Financial, MetLife, Principal Financial, Prudential Financial, Globe Life (f/k/a Torchmark)The Hartford Financial Services, and Voya Financial) were selected because they are considered to be direct business competitors of Unum and remain unchanged from the Performance Peer Group used for 2021 CIUs (see discussion beginning on page 58in the "Compensation Benchmarking" section for the differences between our Proxy Peer Group and Performance Peer Group). We believe it is appropriate to modify these awards based on relative TSR performance, since Unum’s individual TSR performance directly affects the value realized by our shareholders. The tableillustration below outlines the three-year performance targetsmetrics established by the Committee for the PSUCIU grants made in March 2020. PSUs are notional units that will track the value of our share price over the three-year performance period, and will vest and be settled through the issuance of shares based upon the achievement of the predetermined performance metrics. Dividend equivalents accrue during the three-year performance period and will vest only when and to the extent that the underlying PSUs vest.2022. TARGETS FOR PERFORMANCE SHARE UNITS (PSUs) GRANTED IN 2020
| Corporate Performance Factors
| | | Driver of
Shareholder Value
| | | Component
Weighting
| | | Threshold
| | | Target
| | | Maximum
| | | Unum Group
| | | | | | | | | | | | | | | | | | Average 3-year Consolidated Adjusted Operating Return on Equity (2020-2022)
| | | Capital Management
Effectiveness
| | | 50%
| | | | | | Average 3-year After-Tax Adjusted Operating EPS (2020-2022)
| | | Profitability
| | | 50%
| | | | | | Relative Total Shareholder Return
| | | Modifier
Percentile
| | | -20% @
35th
| | | 0 @
50th
| | | +20% @
75th
| 2023 UNUM GROUP PROXY STATEMENT | 66 |
COMPENSATION DISCUSSION AND ANALYSIS Vesting of 20182020 Performance Share Units (PSUs) The long-term incentive mix for our NEOs' 20182020 awards included 50% in the form of PSUs, which vested based on performance over a three-year performance period that ended on December 31, 2020.2022. The table below provides an overview of the three-year goals for the 20182020 PSU grant as well as their actual achievement levels. 2018 PERFORMANCE SHARE UNIT (PSU) AWARDS | | | | | | | | | | | | | | | | | | | 2020 PERFORMANCE SHARE UNIT AWARDS | | Corporate Performance Factors | Component Weighting | Threshold | Component
Weighting
Target | Maximum | | Threshold
| | | Target
| | | Maximum
| | | Result | | | Unum Group
| | | | | | | | | | | | | | | | | | Average 3-year Adjusted Operating Return on Equity (2018-2020)(2020-2022) | 50% | | | | 50%
| | | | | | Below Target
12.23%
| At Maximum 11.2% | | Average 3-year After-Tax Adjusted Operating EPS (2018-2020)Earnings Per Share (2020-2022) | 50% | | | | 50%
| | | | | | Below Target
$5.19
| Above Maximum $5.59 | | Relative Total Shareholder Return | Modifier Percentile | | Modifier
Percentile
| | | -20% @
35th
35th | | | 0 @
50th
50th | | | +20% @
75th
75th | | | -20%
+20% @ 0th | 87.5th |
Based on the above performance, and after taking into account the factors described below, in February 2021,2023, the Committee certified the results for this grant and approved a payout. Thefinal payout of 180%, with business goals were achieved at 91.8%, with150% and relative TSR at the lowest87.5th percentile which resulted in a 20% decrease for a final payout of 73.4%.+20% adjustment. TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS
As discussed under “Items"Items Excluded When Determining Company Performance, ” beginning on page 68," when setting the performance measures and weightings for the 20182020 PSU grant, the Committee determined that certain items not included in the financial plan for fiscal years 20182020 to 20202022 would be excluded from the calculation of the company’s performance. Applying the criteria and standards approved by the Committee, PSU targets were adjusted for the impact of the following items. Each item impacted both earnings and equity unless otherwise noted below: The effect of accounting policy changes for ASC 825 (Financial Instruments - Overall) and ASC 842 (Leases) (impact to equity only);
•The effect of accounting policy changes for ASC 326 (Financial Instruments - Credit Losses);Losses; •The effect of the UK tax rate change;change from planned rate of 17% to 19%; The effect of unplanned acquisition expenses, the majority of which were related to our acquisition of Pramerica Życie TUiR SA;
The effect of an individual disability reinsurance treaty, a long-term care reserve increase and a group pension reserve increase, each within the Closed Block of business (impact to equity only);
The effect of differences between actual stock repurchases and the amount assumed in the financial plan (impact to equity only);
•The effect of differences between actual debt issuances and the amount assumed in the financial plan; The cost related to early retirement of debt (impact to equity only);
•The effect of differences between actual foreign currency rates and the exchange rates assumed in the financial plan;
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 67 |
COMPENSATION DISCUSSION AND ANALYSIS •The effect of differencesa global pandemic and other economic environmental pressures impacting results. –The net effect of the COVID-19 impacts was a decrease in operating results, with the market valuenegative implications of net investment income;Life mortality overshadowing favorable impacts to the long-term care (LTC) product line. Importantly, we did not make any adjustments to sales or earned premium. While we know that these metrics were negatively impacted by COVID-19, the actual impact was difficult to isolate and therefore not considered. •The effect of UK tax rate increase from 19% to 25% (impact to equity only); •The effect of impairment loss on right of use (ROU) asset related to operating lease for office space not planned to support general operations (impact to equity only).; No adjustments were made•The effect of an individual disability reserve increase, an individual disability transaction, a long-term care reserve increase and a group pension reserve increase, each within the Closed Block of business (impact to equity only);
•The effect of differences between actual stock repurchases and the 2018 PSU targetsamount assumed in the financial plan (impact to reflect the impactequity only); and •The cost related to early retirement of the COVID-19 pandemic on our business.debt (impact to equity only). Performance Assessment and Highlights The NEOs’ achievement levels, for purposes of the 2020 annual incentive awards paid and long-term incentive awards granted in March 2021,2023 as well as the adjustments to Messrs. Zabel and Simonds' 2022 annual incentive award payouts, were determined in part based on the individual performance goal areas listed in the “Individual"Individual Performance Evaluations”Evaluations" beginning on page 61.59. The NEO summaries beginning on the next page,below detail the Committee's decisions for each element of compensation as well as highlights of each executive's performance. These summaries also include each NEO's annual compensation as well as their compensation targets for 20202022 and 2021.2023.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 68 |
COMPENSATION DISCUSSION AND ANALYSIS
| | | | | | | | | | | | | | | | | President, Chief Executive Officer and a Director |
| |
| | | | ACTUAL COMPENSATION(1)
| | In assessing Mr. McKenney's performance for 2020,2022, the Committee noted that he:
•Effectively guided the company through an exceptionally challenging year, delivering solid financial results. Despite metrics pressured by the pandemic, the company still reached $1 billion in after-tax adjusted operating earnings; | | 2020
| | Base Salary
| | | $1,078,846
| | AI
| | | $1,812,462
| | LTI
| | | $7,500,000
| | 2019
| | Base Salary
| | | $1,000,000
| | •Proactively managed capital generation and deployment in an uncertain environment, positioning the company well to respond to future opportunities. Unum’s strong capital position allowedLed the company to weatherrecord profitability, exceeding plan for nearly all operational and financial metrics. Strong sales, healthy premium income, new digital capabilities, active management of the currentClosed Block and investment portfolio performance delivered robust growth. The company also benefited from favorable economic uncertaintytailwinds and the lessening volume of COVID-19 claims.•Strengthened the company’s capital position to maximize financial flexibility while maintainingdeploying capital to address key needs. Unum was able to generate significant capital from statutory earnings and other sources, allowing significant investments in key capabilities, accelerated funding of planned contributions to long term care reserves and returning $455 million to shareholders. •Set a clear tone for accountability and commitment to Unum’s purpose of helping the flexibility needed to makeworking world thrive throughout life’s moments. Elevated investments in our product portfolio, technology infrastructurepeople through training, career development and talent development. Through dividend payments,recruitment and retention ensured the company also returned $233 million to shareholders;remained competitive in a challenging talent market. Strong employee engagement practices and a focus on integrity and transparency reinforced an already vibrant corporate culture.
•Successfully led the company through rapid change and realignment as the company implemented a new operating model, shifted to remote work and introduced new digital capabilities for customers. Mr. McKenney managed key senior leadership and organizational transitions, introduced workplace flexibility in response to the pandemic and invested in technologies that enhance collaboration, engagement and experiences for customers and employees;
•EnhancedDeepened the company’s commitment to sustainability and social responsibility. Significant engagement efforts with employeesthrough a variety of environmental, social and communities duringgovernance programs that reflect the pandemicgoals of the company, investors and social unrest of 2020 and the completion of an ESG materiality assessment demonstrated Mr. McKenney’sother key stakeholders. A strong advocacy forfocus on inclusion and diversity corporate citizenship, employee wellbeing,of thought, mental health and good governance practices;social justice throughout the company and
•Led the company’s ongoing externally led to independent recognition of Unum’s efforts to responsibly manage its Closed Blockdrive long-term company sustainability.
•Drove a proactive change agenda focused on enhancing customer experiences, introducing new capabilities, and implementing a hybrid workplace. Adoption of business. Active managementdigital tools elevated customer satisfaction while new technologies modernized workflows and internal processes. Unum’s continued evolution of the closed LTC block and pursuing a reinsurance agreement forworkplace balanced the Closed Block individual disability segment provided predictable performance and effective capital planning. | | AI
| | | $1,710,000
| | LTI
| | | $6,370,000
| | | | | | | COMPENSATION TARGETS
| | 2021
| | Base Salary
| | | $1,050,000
| | AI Target
| | | 210%
| | LTI Target
| | | $7,500,000
| | 2020
| | Base Salary
| | | $1,050,000
| | AI Target
| | | 210%
| | LTI Target
| | | $7,000,000
| |
| | |
| | Although stock price is not a direct criterion for assessing the CEO’s performance, the Committee considered its impact on TSR while weighing the above individual achievements and overall performanceneeds of the company. Investor perceptionsbusiness with employee flexibility.
As outlined in the industry surrounding LTC continue"Business and Performance Review" section, Unum delivered exceptional value to negatively impact our stock price. Even so, the Committee believesshareholders in 2022 as the company is well positionedaccelerated its recovery to pre-pandemic operating levels. The company experienced increased demand for long-term success through the actions of Mr. McKenney.its products and services, highlighted by double-digit sales growth and strong persistency in our core operations. Given these accomplishments and considerations, the Committee awarded Mr. McKenney an individual performance percentage of 100% for his 2020 annual incentive award and anfor 2022 of $3,761,828, which represents his target award multiplied by the final company achievement factor of 150%. Additionally, they granted Mr. McKenney a LTI award of $7,500,000 with no specific individual/ strategic factor applied for his LTI award granted$9.0 million in March 2021. For more information on2023. Further, the Committee's decisions related toCommittee with its consultant, Pay Governance LLC, reviewed Mr. McKenney's 2021total targeted compensation see “2021 Compensation” on page 15. |
(1)
| Baserelative to proxy peers. After considering his experience, his performance in the CEO role, and the leadership that he has shown during his almost eight years in the role, the Committee decided to keep Mr. McKenney's annual base salary shown is the earningsat $1,100,000, increase his annual incentive target for the year. Annual incentive (AI)2023 from 230% to 250% and increase his long-term incentive (LTI) amounts aretarget opportunity from $8.4 million to $9.5 million. With these adjustments, Mr. McKenney's targeted total direct compensation is positioned between the decisions related to that performance year (e.g., annual50th and long-term incentive paid/granted in 2021 were determined based on 2020 performance and therefore are shown as 2020 compensation). For LTI, this presentation75th percentile of our proxy peers, which the Committee believes is different than the Summary Compensation Table (see page 87), which reports equity awardsappropriate given his tenure in the year granted.job and his steady leadership and strategic positioning of the company. | ACTUAL COMPENSATION(1) | | 2022 | | | Base Salary | $1,090,385 | | AI | $3,761,828 | | LTI | $9,000,000 | | 2021 | | | Base Salary | $1,050,000 | | AI | $2,646,000 | | LTI | $8,400,000 | | | | COMPENSATION TARGETS | | 2023 | | | Base Salary | $1,100,000 | | AI Target | 250% | | LTI Target | $9,500,000 | | 2022 | | | Base Salary | $1,100,000 | | AI Target | 230% | | LTI Target | $8,400,000 | |
(1) Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2023 were determined based on 2022 performance and therefore are shown as 2022 compensation). For LTI, this presentation is different than amounts shown in the Summary Compensation Table, which reports equity awards in the year granted and cash-based awards in the year earned. The above is not a replacement for the Summary Compensation Table.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 69 |
COMPENSATION DISCUSSION AND ANALYSIS
| | | | | | | | | | | | | | STEVEN A. ZABEL Executive Vice President, Chief Financial Officer |
| |
| | | | ACTUAL COMPENSATION(1)
| | In assessing Mr. Zabel's performance for 2020,2022, the Committee noted that he:
•Navigated significant challenges in his second year as Chief Financial Officer.Continued to grow and develop into a strong chief financial officer and critical member of executive management. Within a quickly evolving economic and regulatory environment, Mr. Zabel led key efforts to drive enterprise efficiency and improved forecasting, guidedstrengthened the company through complex regulatory issues, and negotiated a series of reinsurance agreements for our Closed Block individual disability products; | | 2020
| | Base Salary
| | | $617,308
| | AI
| | | $597,554
| | LTI
| | | $1,200,000
| | 2019
| | Base Salary
| | | $456,308
| | AI
| | | $410,335
| | LTI
| | | $721,630
| | •Delivered solid financial results given the external challenges posed by the pandemic. Growth in premiums and book value were impressive accomplishments in the current environment, and Mr. Zabel ensured we were able to continue supporting our customers, remained focused on risk management and responded quickly to the unique challengescapabilities of the pandemic;
•Maintained a strong capital position. We returned value to shareholders through dividend payments, unlocked significant capital throughFinance organization, effectively managed relationships with the reinsurance transaction, enhanced the stability offinancial and investment community, addressed key needs in the Closed Block and further improvedguided the company’s capital management strategy. These efforts have helped to accelerate the company’s results and position Unum well for future growth.
•Guided the company through a strong recovery that delivered impressive financial results in an evolving market. Growing premium income, active risk management across multiple product lines and a balanced expense management approach resulted in industry-leading margins and investments in growth. •Further enhanced overall capital position through sustained engagement across key initiatives. Deployment of capital to fund growth initiatives, address long-term needs in our flexibilityClosed Block and return significant value to invest in growth;shareholders were undertaken while maintaining significant financial flexibility.
•Strengthened relationships with key internal and external constituents.Oversaw ongoing active management of the Closed Block. Mr. Zabel partnered with new leadership of the block to implement changes to further enhance the effectiveness of the operation. The company continued to develop partnerships and credibility with Unum’s Board and senior leadership team, key insurance regulators and the investment community; andaccelerate funding of planned contributions to long term care reserves.
•Strengthened the leadership and culture of the Finance team. Throughteam. Internal promotion enhanced communicationsthe senior leadership team in Finance while further developing bench strength within the organization. Mr. Zabel’s implementation of a clear organizational vision and proactive change management,key values such as inclusion and social responsibility drove strong employee engagement.
The Committee approved Mr. Zabel strengthenedZabel's 2022 annual incentive of $1,419,176, which represents his target award multiplied by the resiliencefinal company achievement factor of 150%, plus an additional 10%, as recommended by the CEO in recognition of Mr. Zabel's above achievements and his leadership through a strong recovery as well as his efforts in enhancing of the organization incompany's overall capital position. Additionally, after considering the above accomplishments, he was granted a challenging environment, further developed his leadership team and advanced engagement on inclusion and diversity. | | | | | | | COMPENSATION TARGETS
| | 2021
| | Base Salary
| | | $625,000
| | AI Target
| | | 120%
| | LTI Target
| | | 225%
| | 2020
| | Base Salary
| | | $600,000
| | AI Target
| | | 110%
| | LTI Target
| | | 200%
| |
| | |
| | Given the challenges posed by the pandemic, in combination with the complex regulatory issues and negotiating the reinsurance transaction, the Committee applied individual performance percentages of 110% for Mr. Zabel’s 2020 annual incentive award and 100% for his long-term incentive award grantedof $1,760,000 in March 2021.
2023.
As previously disclosed, the Committee has a practice of positioning our executives' pay below median pay of external peers as they are promoted into a role and gradually making adjustments to full competitive norms as performance and experience in the job grows. Mr. Zabel was promoted to CFO in July 2019 and afterAfter considering his performance in the CFO role as well as his positioning relative to the market, the Committee increaseddecided to increase Mr. Zabel's annual base salary by 3.1% to $660,000, keep his annual incentive target for 2023 at 135% and increase his long-term incentive targets for 2021target opportunity from 250% to 120% and 225%, respectively.280%. |
ACTUAL COMPENSATION(1)
| 2022 | | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in Salary | $637,116 | | AI | $1,419,176 | | LTI | $1,760,000 | 2021 were determined based on 2020 performance and therefore are shown as 2020 compensation). For | | | Base Salary | $620,192 | | AI | $937,730 | | LTI | $1,546,875 | | | | COMPENSATION TARGETS | | 2023 | | | Base Salary | $660,000 | | AI Target | 135% | LTI this presentation is different than the Summary Compensation Table (see page 87), which reports equity awards in the year granted.Target | 280% | | 2022 | | | Base Salary | $640,000 | | AI Target | 135% | | LTI Target | 250% | |
(1) Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2023 were determined based on 2022 performance and therefore are shown as 2022 compensation). For LTI, this presentation is different than amounts shown in the Summary Compensation Table, which reports equity awards in the year granted and cash-based awards in the year earned. The above is not a replacement for the Summary Compensation Table.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 70 |
COMPENSATION DISCUSSION AND ANALYSIS
| | | | | | | | | | | | | | MICHAEL Q. SIMONDS Executive Vice President, Chief Operating Officer |
| |
| | | | ACTUAL COMPENSATION(1)
| | In assessing Mr. Simonds' performance for 2020,2022, the Committee noted that he:
•EffectivelyLed Unum’s business segments to record performance in 2022, as our operations successfully transitioned from a pandemic stance to one fully embracing a robust recovery. Our group lines performed particularly well, and all our operations are well-positioned to take advantage of favorable economic tailwinds to continue growth. •Guided the refresh of our enterprise strategy to ensure a comprehensive, cohesive and measurable approach for our long-term direction. Clear goals and sharper prioritization will allow us to direct investments into key capabilities that will drive future success. •Steered the introduction of new roleproducts, services and capabilities to deliver workplace solutions and enhanced customer experiences. The external launch of Chief Operating Officer. DespiteUnum Solutions continues the challengesmomentum created by earlier launches of digital-first offerings like Unum Total Leave™ and Unum Behavioral Health. Platforms like HR Connect®, MyUnum and Gathr™ are market differentiators that provide companies with modern enrollment capabilities and integrated management of employee benefits. •Championed an employee-centric culture with an emphasis on developing people. Mr. Simonds effectively engaged across all segments of the pandemic,company to drive change and inspire high performance toward common goals. Mr. Simonds leveraged strong existing relationships to build a robust leadership team and clear structure for Unum's business operations; | | 2020
| | Base Salary
| | | $718,846
| | AI
| | | $735,785
| | LTI
| | | $1,694,918
| | 2019
| | Base Salary
| | | $634,817
| | AI
| | | $628,469
| | •Drove resiliency and adaptability of the organization during a time of significant disruption. Through economic uncertainty and an evolving health crisis, Mr. Simonds was a key leader in Unum's shift to remote work and deployment of digital capabilities to better serve customers while ensuring his team remained focused on consistent delivery, productivity and employee engagement;
•Maintained a strong focus on delivering for customers. Under Mr. Simonds'also brought new leadership and developed key bench talent in the midstour operational areas.
•Advanced our inclusion efforts and cultivated diversity of a challenging environment, the company exceeded customer service goals and delivered critical support to customers facing illness and loss;
•Drove transformational change across the enterprise. In partnership with the CEO and Board, Mr. Simonds realigned the business operations, established a new COO leadership team and developed strategic transformational goals to position us for stronger growth; and
•Strengthened culture of inclusion and diversity. Through his strong leadership team,thought. Mr. Simonds has helped to lead efforts to address social justice issues externallyled by example through active mentorships, participation in ally groups, setting clear expectations for inclusive hiring practices and drove progress on inclusion, agility and accountability within the organization.
encouraging greater embrace of differences.
| | LTI
| | | $1,232,000
| | | | | | | COMPENSATION TARGETS
| | 2021
| | Base Salary
| | | $700,000
| | AI Target
| | | 130%
| | LTI Target
| | | 275%
| | 2020
| | Base Salary
| | | $700,000
| | AI Target
| | | 130%
| | LTI Target
| | | 250%
| |
| | | | | Given these accomplishments, theThe Committee applied individual performance percentages of 100% forapproved Mr. Simonds’ 2020Simonds' 2022 annual incentive of $1,654,317, which represents his target award multiplied by the final company achievement factor of 150%, plus an additional 10%, as recommended by the CEO in recognition of Mr. Simonds' above achievements and 100% for his leadership in a robust recovery as well as the work to refresh our enterprise strategy. Additionally, after considering the above accomplishments, he was granted a long-term incentive award grantedof $2,376,000 in March 2021.
2023.
Based on a review of Mr. Simonds' performance in the COO role, as well as his competitive positioning relative to the market, the Committee increaseddecided to increase his annual base salary by 4.2% to $750,000, increase his annual incentive target for 2023 from 140% to 150% and increase his long-term incentive target for 2021opportunity from 300% to 275%325%. |
ACTUAL COMPENSATION(1)
| 2022 | | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in Salary | $716,154 | | AI | $1,654,317 | | LTI | $2,376,000 | 2021 were determined based on 2020 performance and therefore are shown as 2020 compensation). For | | | Base Salary | $700,000 | | AI | $1,146,600 | | LTI | $1,925,000 | | | | COMPENSATION TARGETS | | 2023 | | | Base Salary | $750,000 | | AI Target | 150% | LTI this presentation is different than the Summary Compensation Table (see page 87), which reports equity awards in the year granted.Target | 325% | | 2022 | | | Base Salary | $720,000 | | AI Target | 140% | | LTI Target | 300% | |
(1) Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2023 were determined based on 2022 performance and therefore are shown as 2022 compensation). For LTI, this presentation is different than amounts shown in the Summary Compensation Table, which reports equity awards in the year granted and cash-based awards in the year earned. The above is not a replacement for the Summary Compensation Table.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 71 |
COMPENSATION DISCUSSION AND ANALYSIS
| | | | | | | | | | | | |
| LISA G. IGLESIAS Executive Vice President, General Counsel
In assessing Ms. Iglesias' performance for 2022, the Committee noted that she:
•Provided strategic leadership of a diverse organization beyond the scope of most general counsels. Led by Ms. Iglesias, the company's legal, audit, government affairs, ethics, compliance and corporate services teams continue to provide excellent support of evolving corporate needs during a time of ongoing change. Ms. Iglesias has also expanded her role by becoming a member of the company’s operating committee. •Advanced our commitment to strong disclosures related to environmental, social and governance issues. With operations in the U.S. and Europe, the legal and sustainability teams have provided key guidance of trends and requirements across numerous jurisdictions, and through their efforts, strengthened our approach. •Remains a key and compelling voice for inclusion across the enterprise. Ms. Iglesias’ championing of diversity of thought, encouraging active participation among employees, advocating for social justice and serving as a thought leader in this space have enhanced our inclusion and diversity programs throughout Unum. •Continued her work to further strengthen our culture of ethical conduct. Ms. Iglesias and her team remained persuasive advocates for company values, and through the efforts of the team Unum was again recognized as among the World’s Most Ethical Companies by Ethisphere. •Effectively guided our real estate strategy, including the ongoing evolution of our workplace. Ms. Iglesias’ leadership of our Corporate Services team ensured a smooth transition to hybrid work for our employees, and effective use of our owned and leased office properties in a changing workplace environment.
Given these accomplishments, the Committee approved Ms. Iglesias' 2022 annual incentive of $843,174, which represents her target award multiplied by the final company achievement factor of 150%. Additionally, she was granted a long-term incentive award of $901,175 in March 2023.
Based on a review of Ms. Iglesias' performance, as well as her competitive positioning relative to the market, the Committee decided to keep her annual base salary at $565,000, keep her annual incentive target for 2023 at 100% and increase her long-term incentive target opportunity from 145% to 170%. | ACTUAL COMPENSATION(1) | | 2022 | | | Base Salary | $562,116 | | AI | $843,174 | | LTI | $901,175 | | 2021 | | | Base Salary | $550,000 | | AI | $627,000 | | LTI | $742,500 | | | | COMPENSATION TARGETS | | 2023 | | | Base Salary | $565,000 | | AI Target | 100% | | LTI Target | 170% | | 2022 | | | Base Salary | $565,000 | | AI Target | 100% | | LTI Target | 145% | |
(1) Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2023 were determined based on 2022 performance and therefore are shown as 2022 compensation). For LTI, this presentation is different than amounts shown in the Summary Compensation Table, which reports equity awards in the year granted and cash-based awards in the year earned. The above is not a replacement for the Summary Compensation Table.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 72 |
COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | | | | | | | | TIMOTHY G. ARNOLD Executive Vice President, Voluntary Benefits &
President, Colonial Life |
| | | | | | ACTUAL COMPENSATION(1)
| | In assessing Mr. Arnold's performance for 2020,2022, the Committee noted that he:
•Took important steps to strengthenProvided effective leadership of the company’s voluntary business. With oversightbenefit brands. While results for both Unum and Colonial Life voluntary products,lines were mixed, Mr. Arnold took stepsled his team through significant staffing and expense challenges to streamline the organization, consolidate field officesdeliver strong earnings, improved satisfaction metrics and leverage the strengthsnew digital capabilities. •Drove sustained adoption of both brands in the market in innovative ways; | | 2020
| | Base Salary
| | | $519,267
| | AI
| | | $355,179
| | LTI
| | | $656,296
| | 2019
| | Base Salary
| | | $500,035
| | AI
| | | $405,029
| | LTI
| | | $687,548
| | •Drove continued digital adoption. platforms. Tools such as AgentAssist® and our Agent Assist app,newly launched Gathr™ platform provide modern and effective capabilities for agents to reach clients, employers to manage benefits and individuals to seamlessly enroll in valuable coverage. Customer satisfaction is increasing as digital adoption grows.
•Leveraged new virtual enrollment capabilities and ongoing progress in automation and modernization are improving our support of partners and customers during a critical time;
•Differentiatedto differentiate Colonial Life in a crowded marketplace. marketplace.In addition to new digital capabilities, the company’s cross-brand sales initiative allows Colonial Life agents to pair traditional Unum group disability with Colonial Life voluntary products.
•Continued development of our already-strong capabilities in enrollment, benefits execution and product portfolio enhancements provide a meaningful competitive differentiatorto position the voluntary business for the brand;
•Was instrumental in establishing a future vision for voluntary benefits at Unum. Hissuccess. Drawing on deep knowledge of the voluntary benefits industrymarket, Mr. Arnold championed key initiatives that will strengthen the business, including Unum’s cross-brand sales efforts, enhancing customer satisfaction by driving digital adoption of new capabilities, investing in new products, maintaining underwriting discipline and his success at Colonial Life are keyemphasizing new approaches to taking advantage of significant growth opportunities for both brands;recruiting and training agents.
•StrengthenedProvided strong enterprise leadership that reinforced the culture and reputation of the company.company. Through deep, personal engagement and broad community and industry involvement, Mr. Arnold further developedcontinued to deliver on Unum’s purpose with a strong sense of shared mission and community across his organization, and promoted the company's commitment to social responsibility, championed workplace inclusion and diversity and fostered a deep talent pipeline.
development. | |
| | | | | COMPENSATION TARGETS
| | 2021
| | Base Salary
| | | $500,035
| | AI Target
| | | 90%
| | LTI Target
| | | 125%
| | 2020
| | Base Salary
| | | $500,035
| | AI Target
| | | 90%
| | LTI Target
| | | 125%
| |
| | | | | TheBased on the above accomplishments, the Committee applied individual performance percentages of 95% forapproved Mr. Arnold’s 2020Arnold's 2022 annual incentive of $741,284, which represents his target award multiplied by the final company achievement factor of 150%. In addition, he was granted a long-term incentive award of $656,250 in March 2023.
Based on a review of Mr. Arnold's performance, as well as his competitive positioning relative to the market, the Committee decided to increase his annual base salary by 1.9% to $535,000, keep his annual incentive target for 2023 at 95% and given his leadership in positioning the Unum and Colonial voluntary businesses for future growth, 105% forincrease his long-term incentive award granted in March 2021.target opportunity from 125% to 135%. |
ACTUAL COMPENSATION(1)
| 2022 | | Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2021 were determined based on 2020 performance and therefore are shown as 2020 compensation). For Salary | $520,199 | | AI | $741,284 | | LTI | $656,250 | | | | COMPENSATION TARGETS | | 2023 | | | Base Salary | $535,000 | | AI Target | 95% | LTI this presentation is different than the Summary Compensation Table (see page 87), which reports equity awards in the year granted.Target | 135% | | 2022 | | | Base Salary | $525,000 | | AI Target | 95% | | LTI Target | 125% | | | | | | | | | | |
(1) Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2023 were determined based on 2022 performance and therefore are shown as 2022 compensation). For LTI, this presentation is different than amounts shown in the Summary Compensation Table, which reports equity awards in the year granted and cash-based awards in the year earned. The above is not a replacement for the Summary Compensation Table.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 73 |
COMPENSATION DISCUSSION AND ANALYSIS
Roles of the Committee, Chief Executive Officer and Consultant
The Committee, CEO, and compensation consultant each have important roles in our compensation program. The Committee, with input from the CEO and compensation consultant, has the final authority to: •Evaluate, design, and administer a compensation program for our executive officers that appropriately links pay, company and individual performance, and the creation of shareholder value; •Establish performance goals and certify whether they have been attained; •Review the performance of the CEO, with input from the full Board, and determine his compensation; and •Determine the compensation of the other NEOs.
The CEO provides to the Committee: •A self-assessment outlining his own performance for the year; •His perspective on the business environment and the company’s performance; and •Performance assessments and compensation recommendations for executives who report directly to him, which includes Messrs. Zabel and Simonds and Ms. Iglesias (Mr. Simonds provides performance assessments and compensation recommendations for Mr. Arnold who reports to Mr. Simonds). The CEO does not participate in any decisions related to his own compensation. Pay Governance LLC, as independent compensation consultant to the Committee, provides objective, expert analyses, independent advice, and comparative data on executive and director compensation. Pay Governance reports directly to the Committee, which is responsible for the appointment, compensation, retention, and oversight of the work performed by the compensation consultant. A senior representative of the compensation consultant generally attends Committee meetings, participates in executive sessions of the Committee without management present, and communicates directly with Committee members outside of meetings. The Committee has adopted a policy requiring its compensation consultant to be independent, consistent with NYSE listing standards and SEC rules. During 2022, the Committee completed its annual assessment of the independence of Pay Governance, taking into account the following factors: •Compliance with the Committee’s independence policy; •Other services, if any, provided to the company by the consultant; •The amount of fees paid by the company to the consultant as a percentage of the consultant’s total revenues; •Any business or personal relationships between the consultant (including its representatives) and the company’s directors or senior officers; and •The policies and procedures the consultant has in place to prevent conflicts of interest, which include a prohibition against stock ownership in the company.
Pay Governance has attested to its independence and does not provide any services to the company other than those related to director and executive compensation consulting. Fees paid to Pay Governance for such services provided in 2022 totaled $195,524. Based on its assessment, the Committee concluded that Pay Governance is independent under the Committee’s policy and that Pay Governance's work does not give rise to a conflict of interest. The company’s finance (including the Chief Financial Officer (CFO)), human resources, and legal staff support the Committee in its work, interacting with Pay Governance only when doing so on behalf of the Committee or concerning proposals the Committee will review for approval. Employees from these departments discuss various executive compensation topics with the Committee and Pay Governance, including how compensation plans fit in
| LISA G. IGLESIAS, Executive Vice President and General Counsel |
| | | | | | | | | | | | | ACTUAL COMPENSATION(1)
| | | In assessing Ms. Iglesias' performance for 2020, the Committee noted that she:
•Effectively led and aligned various corporate teams with the needs of the business. Through her leadership of legal, audit, government affairs, ethics, compliance and corporate services, these teams supported the swiftly evolving needs of the business during a time of unprecedented change;
| | 2020
| | | Base Salary
| | | $571,154
| | | AI
| | | $434,077
| | | LTI
| | | $742,500
| | | 2019
| | | Base Salary
| | | $544,277
| | | AI
| | | $465,357
| | | •Was influential in driving workplace change. Ms. Iglesias has continued to be a leader in our efforts to build a culture of inclusion, advocate for social justice and create a more collaborative, flexible and dynamic work environment;
•Enhanced our brand and reputation with external constituents. She and her team have taken a leadership role in communicating the social value of our business and our strong governance practices to legislators, advocacy groups and regulators;
•Continued her work to further strengthen our culture of ethical conduct. Ms. Iglesias and her team are persuasive advocates for our Unum values and encourage ethical conduct through ongoing communication, education and awareness; and
•Prepared her organization for the future. From building a strong leadership pipeline to streamlining her organizational structure and operations, Ms. Iglesias has driven efficiency, productivity and accountability across her teams.
| | LTI
| | | $742,500
| | | | | | | | | COMPENSATION TARGETS
| | | 2021
| | | Base Salary
| | | $550,000
| | | AI Target
| | | 95%
| | | LTI Target
| | | 135%
| | | 2020
| | | Base Salary
| | | $550,000
| | | AI Target
| | | 95%
| | | LTI Target
| | | 135%
| | |
| | | | | | Given these accomplishments, the Committee applied individual performance percentages of 100% for Ms. Iglesias' 2020 annual incentive award and 100% for her long-term incentive award granted in March 2021.
|
(1)
| Base salary shown is the earnings for the year. Annual incentive (AI) and long-term incentive (LTI) amounts are the decisions related to that performance year (e.g., annual and long-term incentive paid/granted in 2021 were determined based on 2020 performance and therefore are shown as 2020 compensation). For LTI, this presentation is different than the Summary Compensation Table (see page 87), which reports equity awards in the year granted. The above is not a replacement for the Summary Compensation Table. |
COMPENSATION DISCUSSION AND ANALYSIS
with other programs and business objectives. Although these employees may make recommendations, the authority to make final decisions on all executive compensation matters rests solely with the Committee.
Compensation Benchmarking The Committee compares the compensation of our NEOs to the median pay of executives in similar positions at industry companies. By generally targeting each pay element to the approximate median of the applicable comparator group (as described below), we ensure the balance among the elements is competitive, while at the same time allowing company and individual performance to determine a majority of the compensation received by our NEOs. Overall, these benchmarking comparisons are used as points of reference and are secondary to the primary factors considered by the Committee when making compensation decisions. The primary factors are company performance, individual performance, the executive’s level of responsibility and tenure, internal equity considerations, the creation of shareholder value, our executive compensation philosophy, and the results of the most recent shareholder say-on-pay vote and feedback received from engagement with shareholders. The two sources used by the Committee for benchmarking executive compensation are: •For CEO and CFO compensation, a proxy peer group comprising insurance and financial services companies that are either our business competitors or primary competitors for talent (the "Proxy Peer Group"). The Proxy Peer Group is also a reference for compensation programs and practices. The composition of the Proxy Peer Group is determined by the Committee and reviewed annually as outlined below; and •For the compensation of our other NEOs, the Willis Towers Watson Diversified Insurance Study of Executive Compensation (the "Diversified Insurance Study"). This source is used because responsibilities of our other NEOs may not be directly comparable with those of named executives at other companies in the Proxy Peer Group. In addition to benchmarking executive compensation, the Committee uses a subset of the Proxy Peer Group (which we refer to as the "Performance Peer Group") for purposes of measuring relative total shareholder return (TSR) for our performance share unit (PSU) and cash incentive unit (CIU) awards (see the "Long-Term Incentive" section above for details on these awards). This subset is selected because they are considered to be direct business competitors of Unum. The Committee evaluates the composition of the Proxy Peer Group every year. Peer companies are determined based on five primary criteria (life and health GICS code; reasonable range of: assets, revenues, and market capitalization; and competition with Unum for talent and/or market share). In the past, the Committee has discussed insurance brokers and property and casualty insurers as potential peers. However, the Committee decided not to include these companies due to the differences in business models, performance cycles and executive talent markets. Based on the most recent peer review in August 2022, on average, the companies in the Proxy Peer Group met three of the five criteria. Overall, Unum is at approximately 73% of the revenue median (as of the 12 months ended December 31, 2021). Additionally, 10 of the 12 peers (83%) selected Unum as a peer for compensation benchmarking purposes in their 2022 proxy statements. During its annual Proxy Peer Group analysis in August 2022, the Committee with its consultant, Pay Governance, considered other insurance and financial services companies and determined that, based on the criteria described above, no companies should be removed and no additional companies were appropriate for inclusion in the Proxy Peer Group at the time. Annual sensitivity tests are performed to understand the impact of both larger and smaller peers on median CEO compensation levels. For the tests conducted in 2022, excluding the two smallest and two largest peers for testing purposes had no impact on CEO targeted total direct compensation. An additional sensitivity test was conducted using a common statistical approach known as regression analysis. Regression analysis considers the correlation between two factors and is commonly used to adjust compensation data to remove the effects of company size.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 75 |
COMPENSATION DISCUSSION AND ANALYSIS The regression analysis considered the correlation between revenue and compensation. Based on these tests, the Committee determined that the Proxy Peer Group is appropriate. The following table lists the companies in the Diversified Insurance Study (DIS), Performance Peer Group and Proxy Peer Group. BENCHMARKING EXECUTIVE COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proxy Peer Group Indicators | | DIS Survey Participant(1) | Perf. Peer Group(2) | 2022 Proxy Peer Group(3) | Life &
Health
GICS | 0.4x to 2.5x
Unum
Revenues | 0.4x to 2.5x
Unum
Assets | 0.5x to 5.0x
Unum Market
Capitalization | List Unum
as a Peer | | Aflac | ● | ● | ● | ● | ● | ● | | ● | | AIG | ● | | | | | | | | | Allstate | ● | | | | | | | | | Brighthouse Financial | ● | | ● | ● | ● | | ● | ● | | Cigna | ● | | | | | | | | | CNO Financial Group | ● | | ● | ● | | ● | ● | ● | | Equitable Holdings | ● | | ● | | ● | | ● | ● | | Genworth Financial | ● | | | | | | | | | Globe Life | | ● | ● | ● | ● | ● | ● | ● | | Guardian Life | ● | | | | | | | | | John Hancock | ● | | | | | | | | | Lincoln Financial Group Corporation | ● | ● | ● | ● | ● | | ● | ● | | Massachusetts Mutual | ● | | | | | | | | | MetLife | ● | ● | ● | ● | | | | | | Nationwide | ● | | | | | | | | | New York Life | ● | | | | | | | | | Northwestern Mutual | ● | | | | | | | | | OneAmerica Financial Partners | ● | | | | | | | | | Pacific Life | ● | | | | | | | | | Principal Financial Group | ● | ● | ● | ● | ● | | ● | ● | | Protective Life | ● | | | | | | | | | Prudential Financial | ● | ● | ● | ● | | | | | | Reinsurance Group of America | | | ● | | ● | ● | ● | ● | | Securian Financial Group | ● | | | | | | | | | Sun Life Financial | ● | | | | | | | | | Symetra Financial | ● | | | | | | | | | The Hartford Financial Services Group | ● | ● | ● | | ● | ● | ● | ● | | Thrivent Financial | ● | | | | | | | | | Transamerica | ● | | | | | | | | | USAA | ● | | | | | | | | | Voya Financial Services | ● | ● | ● | | ● | | ● | ● |
(1)For compensation decisions made in early 2022, benchmarking comparisons were made using the 2022 Proxy Peer Group and the 2021 DIS (the latest data available at the time). Although Unum participates in the DIS, we are excluded from this table. The number of participants in the 2021 DIS decreased by one (Allianz Life Insurance) from the prior year. (2)The Performance Peer Group will be used for the relative TSR comparison under the 2022 and 2023 CIU grants. These companies are our direct competitors, are generally followed by the same sell-side research analysts, and generally compete with us for talent.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 76 |
COMPENSATION DISCUSSION AND ANALYSIS (3)The Proxy Peer Group includes multiline insurers, reinsurers and life and health insurers, with Unum’s revenue at 73% of the peer median for the 12 months ended March 31, 2022 (the most current data as of the date of the analysis). Unum is not part of the Proxy Peer Group. Compensation Policies and Practices Equity Grant Practices Equity grants awardedThe Committee meets in February each year to consider prior year performance under the company’s incentive programs. As appropriate, annual awards of equity-based compensation under the company’s long-term incentive program are approved at this meeting. For many years, such awards have been valued and granted on a predetermined future date, which is intended to coincide with a time when the company is not in possession of material nonpublic information. In February meeting of2023, the Committee which typically occurs twoapproved a formal equity grant policy reflecting this practice. Under the policy, except as otherwise determined by the Committee, annual awards of equity-based compensation to three weeks afterexecutive officers (including the company’s annual earnings are released to the public. Long-term incentive awards are granted in the year following the performance year that determines their size (i.e., awards in 2020 were based on 2019 performance). TheNEOs) will have a March 1 2020 grant was approved atdate, and non-annual awards to executive officers relating to new hires or promotions will be granted on, or as soon as administratively practicable following, as applicable, the February 2020 meeting of the Committee.individual's start date or promotion date. The closing stock price on the grant date is used to determine the number of equity units awarded.
Stock Ownership and Retention Requirements Ensuring that senior officers have a significant ownership stake in the company aligns the long-term interests of management andwith those of the company's shareholders and promotes a culture of ownership and accountability. The following table reflects the stock ownership and retention requirements for senior level officers. | | | STOCK OWNERSHIP AND RETENTION REQUIREMENTS FOR SENIOR OFFICERS
| | | |
| | | | Chief Executive Officer
| | | 6x
| | | 75%
| | | 3 years
| | | | | | | | | Executive Vice President
| | | 3x
| | | 60%
| | | 1 year
| | | | | | | | | Senior Vice President
| | | 1x
| | | 50%
| | | 1 year
| | | | |
We require these senior officers, including each current NEO, to: Holdto hold a multiple of the officer’shis or her base salary in Unum shares (including, as applicable, unvested restricted stock units) throughout employment;
Meetunits (RSUs) and stock success units (SSUs)). These officers are required to meet the ownership requirement within five years following their date of employmenthire or promotion. Not meeting the requirementsrequirement may impact the officer's eligibility for, or amount of, future equity grants; and
Priorgrants. Covered officers are required to January 1, 2021, retain a fixed percentage of the net shares (shares after the payment of taxes and the costs of exercise and commissions) received as compensation for a specified period of time. These holding period requirements apply to shares acquired upon the exercise of options and the vesting of PBRSUs and PSUs even if the stock ownership requirements have been met. Exceptions to this requirement may be made only by the Board.
As part of the changes approved by the Committee in August 2020 (see “Key Compensation Decisions” beginning on page 62), the retention requirements were changed effective January 1, 2021. Beginning in 2021, a covered officer must hold all net after-tax shares acquired upon the exercise of options and the vesting of PBRSUs,RSUs, SSUs or PSUsperformance share units (PSUs) until his or herthe ownership requirement is met. Once the requirement is met, the officer can sell shares only to the extent that the sale would not reduce his or her holdings below the required ownership requirement. This change is aligned with the majority practice of our Proxy Peer Group. level.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 77 |
COMPENSATION DISCUSSION AND ANALYSIS For purposes of calculating stock ownership, the Committee determined that the greater of the spot price or the preceding 12-month average closing stock price should be used to reduce volatility in outcomes. TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS
The following table presents the stock ownership and retention requirements for each current NEO. Mr. McKenney, Mr. Simonds, Mr. Arnold and Ms. IglesiasEach of the NEOs exceeded thetheir applicable ownership requirements as of December 31, 2020. Mr. Zabel, who became an Executive Vice President2022. | | | | | | | | | | | | | | | | | | | STOCK OWNERSHIP AND RETENTION REQUIREMENTS FOR CURRENT NEOs (as of December 31, 2022) | | Common Stock ($)(1)(2) | RSUs and SSUs ($)(1)(3) | Total Current Ownership ($)(1) | Ownership as Multiple of Salary | | Owned | Required | | McKenney | 22,716,229 | 16,277,340 | 38,993,569 | 35.4x | 6x | | Zabel | 1,356,592 | 2,314,379 | 3,670,971 | 5.7x | 3x | | Simonds | 4,287,786 | 3,975,192 | 8,262,978 | 11.5x | 3x | | Iglesias | 623,515 | 1,707,546 | 2,331,061 | 4.1x | 3x | | Arnold | 2,226,936 | 1,519,587 | 3,746,523 | 7.1x | 3x |
(1)Shares were valued based on the closing stock price of $41.03 on December 30, 2022, the last trading day of the year. (2)Amount includes shares held in July 2019, is expected to meetcertificate form, brokerage accounts, and 401(k) Plan accounts. (3)RSUs vest over three years and SSUs vest upon the ownership requirements withinearlier of the applicable time period provided.achievement of performance metrics or August 24, 2026 (see "Vesting Schedule for Unvested Restricted Stock Units" below). STOCK OWNERSHIP AND RETENTION REQUIREMENTS FOR CURRENT NEOs (as of December 31, 2020)
|
| | Mr. McKenney | | | $10,482,189 | | | $7,801,092 | | | $18,283,281 | | | 17.4x | | | 6x | | | 75% | | | 3 years | | | | Mr. Zabel | | | 263,326 | | | 727,141 | | | 990,467 | | | 1.7x | | | 3x | | | 60% | | | 1 year | | | | Mr. Simonds | | | 2,151,803 | | | 2,045,290 | | | 4,197,093 | | | 6.0x | | | 3x | | | 60% | | | 1 year | | | | Mr. Arnold | | | 765,944 | | | 922,807 | | | 1,688,751 | | | 3.4x | | | 3x | | | 60% | | | 1 year | | | | Ms. Iglesias | | | 1,177,368 | | | 1,047,477 | | | 2,224,845 | | | 4.0x | | | 3x | | | 60% | | | 1 year | |
(1)
| Amount includes shares held in certificate form, brokerage accounts, and 401(k) Plan accounts. Shares were valued using a closing stock price of $22.94 on December 31, 2020. |
(2)
| Performance-based restricted stock units (PBRSUs) vest over three years and stock success units (SSUs) vest upon the earlier of the achievement of performance metrics or August 24, 2026 (see the “Vesting Schedule for Unvested Restricted Stock Units” table on page 93). Restricted stock units were valued using a closing stock price of $22.94 on December 31, 2020. |
(3)
| “Total Current Ownership” was valued using a closing stock price of $22.94 on December 31, 2020. |
(4)
| Retention percentage is the net percentage of shares to be held after the payment of taxes and the costs of exercise and commissions. Retention requirements apply to shares acquired upon the exercise of options and the vesting of PBRSUs, PSUs and SSUs. After the holding period, the officer would then be able to sell the shares as long as his or her ownership requirement is met or would be reached in the time period allotted. As discussed above, the holding period is no longer applicable beginning on January 1, 2021. |
Hedging, Pledging and Insider Trading Policies We believe our directors and executive officers, which includes our NEOs, should not speculate or hedge their interests in our stock. We therefore have a policy prohibiting them from buying or selling options, puts, calls, straddles, equity swaps or other derivatives directly linked to our stock. This policy generally does not apply to other employees, although employees who are “corporate insiders”"corporate insiders" under our insider trading policy are prohibited from making “short sales”"short sales" of our stock. We also prohibit directors and executive officers from pledging our stock as security for a loan. Our insider trading policy prohibits our directors, executive officers and other employees from buying or selling our stock while in possession of material nonpublic information about the company and from conveying any such information to others. Under this policy, additional trading restrictions apply to “corporate insiders”"corporate insiders" (which includes our directors and executive officers), who are generally permitted to buy or sell our stock only during predetermined window periods following earnings announcements, and only after they have pre-cleared the transactions with our general counsel or designee. Recoupment Policy If the company makes a material restatement of its financial results, then the Board will, to the extent permitted by applicable law, seek recoupment of performance-based compensation paid to certain senior officers, including each of the NEOs, if it determines that: •The senior officer has committed or engaged in fraud or willful misconduct that resulted, either directly or indirectly, in the need to make such restatement; and TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS
•Such performance-based compensation paid or awarded to the senior officer would have been a lesser amount if calculated using the restated financial results. The amount of performance-based compensation to be recouped will be determined by the Board after taking into account the relevant facts and circumstances. Performance-based compensation includes annual cash incentive awards, bonuses and all forms of equity compensation. The company’s right to recoup compensation is in addition to other remedies that may be available under applicable law.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 78 |
COMPENSATION DISCUSSION AND ANALYSIS The company expects to update its recoupment policy later in 2023 as necessary to comply with NYSE listing standards implementing Rule 10D-1 under the Securities Exchange Act of 1934 (the "Exchange Act"), as adopted by the SEC in October 2022. Accounting Considerations Section 162(m)
Section 162(m) of the Internal Revenue Code (the “Code”) generally disallows a tax deduction to a public corporation for compensation over $1 million paid in any fiscal year to certain “covered employees,” which includes our named executive officers.
As a result, the Committee expects compensation granted or paid in 2018 and future tax years will not be fully deductible for income tax purposes. The Committee believes that shareholder interests are best served if it retains discretion and flexibility in awarding compensation, even though some compensation awards may result in nondeductible compensation expenses.
ASC TopicTOPIC 718 We account for stock-based payments under the requirements of FASBFinancial Accounting Standards Board (FASB) ASC Topic 718 “Compensation"Compensation - Stock Compensation”Compensation" (ASC 718). A complete discussion of the assumptions made as well as the financial impact of this type of compensation can be found in Notes 1 and 11 of the Consolidated Financial Statements in Part II, Item 8 of our 20202022 Form 10-K. Each year, the company provides a report to the Committee of the expense for stock-based payments. Additionally, in the event the Committee is considering new equity-based compensation programs or changes to existing programs, the accounting implications of the program or change are presented and discussed as part of the decision process. Perquisites and Other Personal Benefits We provide a limited number of perquisites and other personal benefits to our employees (including our NEOs), which are described below: •One of our largest employee locations is in Tennessee, which has no state income tax. Due to the frequency of travel between our corporate offices and other locations, employees often incur nonresident state taxes in multiple states. Therefore, when any employee travels to other company locations outside of his or her primary state of employment and incurs state income tax based on another state’s law, we pay the non-resident state taxes and provide a tax gross- upgross-up on this amount. Prior to 2019, •Mr. McKenney is allowed 20 hours of personal use of the gross-up only included FICA and Medicare taxes since state taxes were deductible on federal returns; however,company aircraft paid by the company per year. This allows for effective use of Mr. McKenney's time, given the new $10,000 limitcompany's various locations and, with respect to certain of such locations, distance from major commercial airports. Additionally, this enables Mr. McKenney to work more productively on deductibility of stateconfidential and sensitive matters while traveling. Income is imputed to Mr. McKenney for this usage and he is responsible for the taxes imposed byincurred in connection therewith (i.e., the Tax Cuts and Jobs Act, we made the decision to cover federal taxes as part of the gross-up beginning in 2019.amount is not grossed-up for taxes). During 2022, Mr. McKenney used 12.8 hours. •The company has also entered into an aircraft time-sharing agreement with Mr. McKenney, pursuant to which he agrees to reimburse the company for the costs of his personal use of the corporate aircraft.company aircraft above the 20 annual hours allowed. During 2020,2022, Mr. McKenney had no personaldid not use the aircraft time-sharing arrangement. •U.S.-based Executive Vice Presidents and the CEO, which includes all of our NEOs, receive executive financial counseling and tax planning services. While the corporate aircraft.company provides financial planning services to all employees, we provide supplemental services to executives due to the amount of pay they have at risk and other complexities of their compensation packages. Utilization of these services began in early 2023. •A tax gross-up is provided to employees who incur income on company-sponsored events where attendance is expected, including a limited number of events we host each year to recognize the contributions of various employees. These functions serve specific business purposes, and in some cases the attendance of a NEO and his or her spouse or guest is expected. If so, we attribute income to the NEO for these costs when required under Internal Revenue Service regulations. •For more information, see the "All Other Compensation" table.
• | A tax gross-up is provided to employees who incur income on company-sponsored events where attendance is expected, including a limited number of events we host each year to recognize the contributions of various employees. These functions serve specific business purposes, and in some cases the attendance of a NEO and his or her spouse or guest is expected. If so, we attribute income to the NEO for these costs when required under Internal Revenue Service regulations. For more information, see the “All Other Compensation” table on page 88. | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 79 |
COMPENSATION DISCUSSION AND ANALYSIS
Retirement and Workplace Benefits We provide a competitive benefits package for employees (including our NEOs) and their dependents, portions of which are paid for, in whole or in part, by the employee. Among the retirement benefits we offer are: The Unum Group 401(k) Retirement Plan On January 1, 2014, Unum replaced its defined benefit pension plans, which were frozenWe offer a 401(k) plan to further accruals as of December 31, 2013, with an enhanced defined contribution retirement offering. This includes: (1) a noncontributory tax-qualified defined contribution plan for all regular U.S. employees who meet eligibility requirements, under which a portion of employee contributions is matched.
•We match dollar-for-dollar up to 5% of base salary and are generally scheduled to work at least 1,000 hours per year, which is offered within our existing tax-qualified 401(k) retirement plan (401(k) Plan),any recognized sales and (2) a separate, non- qualified defined contribution plan (Non-Qualified Plan)performance-based incentive compensation for employees whose benefits underemployee contributions into the tax- qualified plan are limited by the Code. plan. •New hires are automatically enrolled in the qualified 401(k) Plan at a 5% deferral rate 45 days after hire but are able to make adjustments to their deferral rate. Base pay and annual incentives are included in covered •We make an additional non-elective contribution of 4.5% of earnings for these defined contribution plans, but long-term incentive awards are not. Unum provides the following contributions:all eligible employees. A 5% match contribution (for elected deferrals provided through the 401(k) and Non-Qualified Plans);
A 4.5% contribution (provided through the 401(k) and Non-Qualified Plans); and
For employees who meet certain age and service requirements,We also offer a 3.5% transition contribution on covered earnings and an additional 3.5% transition contribution for covered earnings above $70,000 (provided through the 401(k) Plan and, for those eligible employees whose earnings exceed the qualified plan limits, the Non-Qualified Plan).
The transition contributions were made to active eligible employees until December 31, 2020. They were provided to eligible employees to more closely align with the benefits accrued under the frozen defined benefit plans. This benefit was provided to those employees who, due to their age and years of service, would not have the same opportunity to adjust to theseparate, non-qualified defined contribution plan as other employees. During 2020, Mr. Arnold was(Non-Qualified Plan) for employees whose benefits under the only NEO that was eligible fortax-qualified plan are limited by the transition contributions.Internal Revenue Code (the "Code").
Other Workplace Benefits The other workplace benefits we offer include life, medical, pharmacy, telehealth, EHE preventive care, dental, vision, voluntary products and disability insurance; dependent and health care reimbursement accounts; health savings accounts; tuition, commuter and fitness reimbursement; on site and virtual fitness options; on site health resource centers; virtual behavioral health support; subsidized healthy food choices; an employee stock purchase plan; student debt relief, an employee assistance program; family building, paid time off; caregiver and paid parental leave; holidays; and a matching gifts program for charitable contributions. | | | | | | | | | | | | | | | | Insurance: medical, pharmacy, dental, vision, life, short- and long-term disability, voluntary products (whole life, hospital indemnity, critical illness, accident) | | Programs: preventive services, telehealth services, family building resources, back-up child care services | | Accounts: healthcare and dependent reimbursement accounts, Health Savings Account | | Paid Time Away: paid time off, paid holidays, parental and caregiver leave | | Financial Resources: financial planning resources, employee stock purchase plan, student debt relief, tuition assistance | | Health and Wellness: onsite & virtual fitness memberships, digital behavioral health support, employee assistance program, subsidized healthy food options in home office locations | | Other: matching gifts program for charitable contributions, pet insurance |
In April 2018, we purchased corporate owned life insurance (COLI) on all officers who gave their approval. In the event of a covered officer's death while still employed, we will provide a death benefit to the officer's beneficiary in the amount of $200,000. In the event of a covered officer's death while no longer employed, we will provide a death benefit to the officer's beneficiary in the amount of $50,000. Each of the NEOs is covered under the policy. Mr. Arnold is also covered under a similar COLI policy purchased in April 2000 that would provide a death benefit to his beneficiary in the amount of $200,000 in the event of his death while still employed.
2021 PROXY STATEMENT 83 | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 80 |
COMPENSATION DISCUSSION AND ANALYSIS
Pension Benefits The Unum Group Pension Plan (the Qualified Plan) and the Unum Group Supplemental Pension Plan (the Excess Plan) were frozen on December 31, 2013. Benefits earned under these plans have been determined based on service and eligible earnings through December 31, 2013. NEOs hired prior to this date and who met the participation requirements atas of the freeze date participated in both the Unum Group Pension and Supplemental Pension Plans. Benefits earned before the freeze will be paid to employees under the terms of the plans as they terminate employment or retire. Generally, employees who terminate employment are eligible to elect to start receiving benefits under the pension plans as early as age 55 but no later than age 65. FROZEN DEFINED BENEFIT PLANS
| | | | FROZEN DEFINED BENEFIT PLANS | | Unum Group Pension Plan (Qualified Plan) | | | Provides funded, tax-qualified benefits up to the limits on compensation and benefits under the Code. The Qualified Plan was designed to provide tax-qualified pension benefits for most employees. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Qualified Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
| Unum Group Supplemental Pension Plan (Excess Plan) | | | Provides unfunded, non-qualified benefits for compensation that exceeds the Code limits applicable to the Qualified Plan. On June 12, 2013, the Human Capital Committee approved a change to the terms of the Excess Plan to freeze the further accrual of retirement benefits provided to employees on December 31, 2013. | |
Plan Descriptions Following are details of how each of the frozen pension plan benefits are calculated. These formulas incorporate base pay received in each plan year during which the employee accrued credited service through December 31, 2013, and payments received from the regular Annual Incentive Plan and any field or sales compensation plans through that date. Not included are other bonuses, long-term incentive awards, commissions, prizes, awards, or allowances for incidentals. Qualified PlanQUALIFIED PLAN
In calculating the basic pension benefits in the Qualified Plan, three criteria are used: FROZEN QUALIFIED PLAN CRITERIA
| Credited service
| | FROZEN QUALIFIED PLAN CRITERIA | Credited service | | Measures of the time individuals are employed at the company. One year of credited service is granted for each plan year in which 1,000 hours of employment are completed. No additional credited service will accrue to any participant after December 31, 2013. | |
| Highest average earnings | | | The average of the highest five years of compensation (whether or not consecutive) during the earlier of the last 10 years of employment or as of the date the plan was frozen on December 31, 2013. | |
| Social Security covered compensation | | | The average of the taxable wage bases in effect for each calendar year during the 35-year period ending when the plan was frozen on December 31, 2013. |
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 81 |
COMPENSATION DISCUSSION AND ANALYSIS
The basic benefit is provided as an annual single life annuity and is calculated as follows:
(1)Can range from 3%, if the sum of an employee’s age and years of credited service is less than 30, to 8%, if the sum equals or exceeds 95.
(1)
| Can range from 3%, if the sum of an employee’s age and years of credited service is less than 30, to 8%, if the sum equals or exceeds 95. |
(2)
| Equal to 9.0 for retirement at age 65 and increased by 0.2 for each whole year retirement occurs prior to age 65. |
(2)Equal to 9.0 for retirement at age 65 and increased by 0.2 for each whole year retirement occurs prior to age 65.
All frozen pension benefits are indexed on the first day of each plan year (January 1st) following December 31, 2013 using the National Average Wage rate of increase published by the Social Security Administration in the preceding year (minimum of 2.75% and maximum of 5%). As of January 2017, the retirement benefits are indexed using the Internal Revenue Service regulations. Benefits provided under the Qualified Plan are based on pensionable earnings through December 31, 2013 up to the 2013 compensation limit of $255,000 under the Code. In addition, as of 2020,2022, benefits may not exceed $230,000$245,000 (payable as a single life annuity beginning at any age from 62 through Social Security Normal Retirement Age) under the Code. Excess PlanEXCESS PLAN
As described above in the Frozen Defined Benefit Plans table, the Excess Plan disregards the annual benefit limit under Section 415 of the Code. The Excess Plan takes into account pension benefits outside of the Qualified Plan and is calculated as follows: Retirement AgeRETIREMENT AGE
Participants in the pension plans outlined above are eligible to retire as early as age 55. Under the Qualified Plan, participants may retire early at age 55 with five years of vesting service. Under the Excess Plan, generally participants can retire at the later of age 60 or termination. However, if a participant begins receiving a benefit prior to the normal retirement age of 65, the normal retirement benefit will be reduced based on the applicable early reduction factors defined in the plan. The benefit formulas for the Qualified and Excess Plans are shown above. Mr. Arnold is the only NEO currently eligible for early retirement under the Qualified Plan.
2021 PROXY STATEMENT 85 | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 82 |
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE REPORTCompensation Committee ReportThe Human Capital Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on such review and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2022. 2020
Human Capital Committee:
Committee
Cynthia L. Egan, Chair
Theodore H. Bunting, Jr.
Kevin T. Kabat
Gale V. King Ronald P. O’Hanley
86 2021 PROXY STATEMENT | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 83 |
COMPENSATION TABLES
COMPENSATION TABLESCompensation Tables2022 Summary Compensation Table | | Richard P. McKenney
| | | | | | | | | | | | | | | | | | | | | | | | | President and Chief Executive Officer, and a Director | | | 2020 | | | 1,078,846 (2) | | | 9,906,877 (3) | | | 1,812,462 (4) | | | 167,000 (5) | | | 293,553 (6) | | | 13,258,738 | | | | 2019 | | | 1,000,000 | | | 6,420,903 | | | 1,710,000 | | | 161,000 | | | 435,283 | | | 9,727,186 | | | | 2018 | | | 1,000,000 | | | 6,564,575 | | | 1,900,000 | | | — | | | 432,286 | | | 9,896,861 | | | | Steven A. Zabel | | | | | | | | | | | | | | | | | | | | | | | | | Executive Vice President, Chief
Financial Officer | | | 2020 | | | 617,308 (2) | | | 938,550 (3) | | | 597,554 (4) | | | — (5) | | | 120,050 (6) | | | 2,273,462 | | | | 2019 | | | 456,308 | | | 280,159 | | | 410,335 | | | — | | | 73,235 | | | 1,220,037 | | | | | | | | | | | | | | | | | | | | | | | | | | Michael Q. Simonds | | | | | | | | | | | | | | | | | | | | | | | | | Executive Vice President, Chief Operating Officer | | | 2020 | | | 718,846 (2) | | | 2,114,113 (3) | | | 735,785 (4) | | | 368,000 (5) | | | 139,885 (6) | | | 4,076,629 | | | | 2019 | | | 634,817 | | | 1,261,822 | | | 628,469 | | | 340,000 | | | 143,048 | | | 3,008,156 | | | | 2018 | | | 627,418 | | | 1,125,485 | | | 627,418 | | | — | | | 146,822 | | | 2,527,143 | | | | Timothy G. Arnold
| | | | | | | | | | | | | | | | | | | | | | | | | Executive Vice President, Voluntary Benefits and President, Colonial Life | | | 2020 | | | 519,267 (2) | | | 1,004,033 (3) | | | 355,179 (4) | | | 299,000 (5) | | | 227,746 (6) | | | 2,405,225 | | | | 2019 | | | 500,035 | | | 682,420 | | | 405,029 | | | 304,000 | | | 298,749 | | | 2,190,233 | | | | 2018 | | | 497,144 | | | 636,801 | | | 447,429 | | | — | | | 245,965 | | | 1,827,339 | | | | Lisa G. Iglesias
| | | | | | | | | | | | | | | | | | | | | | | | | Executive Vice President, General Counsel | | | 2020 | | | 571,154 (2) | | | 1,118,060 (3) | | | 434,077 (4) | | | — (5) | | | 109,804 (6) | | | 2,233,095 | | | | 2019 | | | 544,277 | | | 780,971 | | | 465,357 | | | — | | | 112,906 | | | 1,903,511 | | | | 2018 | | | 521,315 | | | 690,652 | | | 469,184 | | | — | | | 104,501 | | | 1,785,652 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | Year | Salary | | Bonus | | Stock Awards | | Non-Equity Incentive Plan Compensation | | Change in Pension Value & Non-Qualified Deferred Compensation Earnings | | All Other Compensation | | Total | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | Richard P. McKenney | | | | | | | | | | | | | | | President and Chief Executive Officer, and a Director | 2022 | 1,090,385 | | | — | | 4,200,000 | | (1) | 3,761,828 | | (2) | — | (4) | 544,654 | | (5) | 9,596,867 | | | 2021 | 1,050,000 | | | — | | 3,750,010 | | | 4,263,000 | | (3) | — | | 286,670 | | | 9,349,680 | | | 2020 | 1,078,846 | | (6) | — | | 9,906,877 | | (7) | 1,812,462 | | | 167,000 | | 293,553 | | | 13,258,738 | | | Steven A. Zabel | | | | | | | | | | | | | | Executive Vice President, Chief Financial Officer | 2022 | 637,116 | | | 129,016 | | (2) | 773,445 | | (1) | 1,290,160 | | (2) | — | (4) | 174,770 | | (5) | 3,004,507 | | | 2021 | 620,192 | | | — | | 600,005 | | | 1,214,930 | | (3) | — | | 128,138 | | | 2,563,265 | | | 2020 | 617,308 | | (6) | — | | 938,550 | | (7) | 597,554 | | | — | | 120,050 | | | 2,273,462 | | | Michael Q. Simonds | | | | | | | | | | | | | | Executive Vice President, Chief Operating Officer | 2022 | 716,154 | | | 150,393 | | (2) | 962,492 | | (1) | 1,503,924 | | (2) | — | (4) | 237,662 | | (5) | 3,570,625 | | | 2021 | 700,000 | | | — | | 847,470 | | | 1,550,850 | | (3) | — | | 144,113 | | | 3,242,433 | | | 2020 | 718,846 | | (6) | — | | 2,114,113 | | (7) | 735,785 | | | 368,000 | | 139,885 | | | 4,076,629 | | | Lisa G. Iglesias | | | | | | | | | | | | | | | | Executive Vice President, General Counsel | 2022 | 562,116 | | | — | | 371,240 | | (1) | 843,174 | | (2) | — | (4) | 125,588 | | (5) | 1,902,118 | | | 2021 | 550,000 | | | — | | 371,253 | | | 798,518 | | (3) | — | | 103,624 | | | 1,823,395 | | | 2020 | 571,154 | | (6) | — | | 1,118,060 | | (7) | 434,077 | | | — | | 109,804 | | | 2,233,095 | | | Timothy G. Arnold | | | | | | | | | | | | | | | Executive Vice President,
Voluntary Benefits & President, Colonial Life | 2022 | 520,199 | | | — | | 343,768 | | (1) | 741,284 | | (2) | — | (4) | 272,438 | | (5) | 1,877,689 | | | 2021 | 500,035 | | | — | | 328,141 | | | 738,417 | | (3) | — | | 62,985 | | | 1,629,578 | | | 2020 | 519,267 | | (6) | — | | 1,004,033 | | (7) | 355,179 | | | 299,000 | | 227,746 | | | 2,405,225 | |
(1)These amounts reflect the value of restricted stock units (RSUs) granted on March 1, 2022 for performance in 2021 (see page 66 for details). See Note 11 ("Stock-Based Compensation") to our consolidated financial statements in our 2022 Form 10-K for additional information about the company's accounting for share-based compensation arrangements. The grant date fair value of the RSUs was calculated in accordance with ASC Topic 718 as the number of units granted multiplied by $26.88, the closing market price of shares of company stock on the grant date. (2)Amounts reflect the annual incentive awards paid in March 2023 for performance in 2022 and are discussed in further detail on page 64. As required under SEC rules, the 10% adjustments approved for Messrs. Zabel and Simonds are reported in the "Bonus" column and are discussed in further detail on pages 70 and 71, respectively. (3)These amounts reflect both annual and long-term incentive awards. The annual incentive awards were paid in March 2022 for performance in 2021. The long-term incentive awards consist of cash success units (CSUs) which were granted in 2020 under the one-time Success Incentive Plan. One-third of the CSUs vested at the end of the first performance period, on December 31, 2021. (4)Pension values may fluctuate from year-to-year depending on a number of factors, including age at benefit commencement and the assumptions used to determine the present value, such as the discount rate and mortality rate. The assumptions used by the company in calculating the change in pension value are described beginning on page 90 and are consistent with those set forth in Note 9 of our Consolidated
(1)
| “Stock Awards” consist of performance share units (PSUs), performance-based restricted stock units (PBRSUs) and stock success units (SSUs). The number of shares payable under the PSU awards will be based on the actual performance, modified (up to +/- 20%) based on relative TSR, and may result in the ultimate award of 40-180% of the initial number of PSUs issued, with the potential for no award if company performance goals are not achieved during the three-year performance period. | | | | | | | |
(2)
| There were 27 pay periods during 2020; therefore, the amount shown is higher than annual base salary for each of our NEOs.2023 UNUM GROUP PROXY STATEMENT | 84 |
COMPENSATION TABLES
(3)
| These awards were comprised of PSUs and PBRSUs granted on March 1, 2020 for performance in 2019 (see page 72 for details), as well as SSUs granted on August 24, 2020 with a one-for-one proportional share retention commitment (see details beginning on page 62). The grant date fair value of the PSUs was calculated in accordance with ASC 718 as the number of units multiplied by the Monte Carlo simulation value of $23.58 on the grant date. See Note 11 (“Stock-Based Compensation”) to our consolidated financial statements in our 2020 Form 10-K for additional information about the company's accounting for share-based compensation arrangements, including the assumptions used for calculating the grant date value of PSUs. The grant date fair value of the PBRSUs was calculated in accordance with ASC 718 as the number of units multiplied by the closing market price of $23.31 on the grant date. The grant date fair value of the SSUs was calculated as the number of units multiplied by the closing market price of $18.78 on the grant date, August 24, 2020. The value of PSUs, assuming the highest possible outcomes of performance conditions (180%) to which 2020 awards are subject, determined based on the award amount at the time of grant and thus excluding dividend equivalent units that accrue during the performance period, would be: $5,799,421 for Mr. McKenney; $656,991 for Mr. Zabel; $1,121,625 for Mr. Simonds; $625,964 for Mr. Arnold; and $676,006 for Ms. Iglesias. |
(4)
| Amounts reflect the annual incentive awards paid in March 2021 for performance in 2020. These are discussed in further detail beginning on page 66. |
(5)
| The amounts shown reflect the actuarial present value increases from December 31, 2019 through December 31, 2020. Pension values may fluctuate from year-to-year depending on a number of factors, including age at benefit commencement and the assumptions used to determine the present value, such as the discount rate and mortality rate. The assumptions used by the company in calculating the change in pension value are described beginning on page 94 and are consistent with those set forth in Note 9 of our Consolidated Financial Statements in Part II, Item 8 of our 2020 Form 10-K, except as otherwise provided in footnotes to the “Pension Benefits” table on page 94. |
(6)
| “All Other Compensation” amounts are set forth in the following table. |
Financial Statements in Part II, Item 8 of our 2022 Form 10-K, except as otherwise provided in footnotes to the "Pension Benefits" table on page 902020 ALL OTHER COMPENSATION | | Employee and Spouse /Guest Attendance at Company Business Functions(a) | | | — | | | — | | | — | | | 45,738 | | | — | | | | Total Perquisites | | | — | | | — | | | — | | | $45,738 | | | — | | | | Matching Gifts Program(b) | | | 10,000 | | | 10,000 | | | 9,992 | | | 10,000 | | | 10,000 | | | | Company Matching Contributions Under our Qualified and Non-Qualified Defined Contribution Retirement Plan(c) | | | 139,442 | | | 51,382 | | | 67,366 | | | 46,215 | | | 51,825 | | | | Company Contributions to the Qualified and Non Qualified Defined Contribution Retirement Plan(d) | | | 125,498 | | | 46,244 | | | 60,629 | | | 103,844 | | | 46,643 | | | | Non-Resident State Taxes(e) | | | 10,666 | | | 6,873 | | | 1,124 | | | 590 | | | 767 | | | | Tax Reimbursement Payments(f) | | | 7,947 | | | 5,486 | | | 729 | | | 21,354 | | | 569 | | | | Wellness Reward(g) | | | — | | | 65 | | | 45 | | | 5 | | | — | | | | Total All Other Compensation | | | $293,553 | | | $120,050 | | | $139,885 | | | $227,746 | | | $109,804 | |
(a)
| Spouses or guests sometimes accompany the NEO at company business functions. When this happens, we report the aggregate incremental cost to the company of such attendance. When spouse or guest attendance is expected, a tax gross up payment is provided. Where applicable, these payments have been included under “Tax Reimbursement Payments.” For purposes of compensation disclosure, the use of company aircraft is valued using an incremental cost that takes into account fuel costs, landing fees, parking, weather monitoring and maintenance fees per hour of flight. Crew travel expenses are included based on the actual amount incurred for a particular trip. Fixed costs that do not change based on usage, such as pilot salaries and depreciation of the aircraft, are excluded. Amounts represent the imputed income each NEO incurred for such attendance plus the incremental cost of the aircraft when the aircraft was used. |
(b)
| Amounts represent those provided through our Matching Gifts Program, available to all full-time employees and non-employee directors. During 2020, the company matched eligible gifts from a minimum of $50 to an aggregate maximum gift of $10,000 per employee. Amounts listed only represent company matching gifts made to qualified non-profit organizations and educational institutions on behalf of the NEOs, and do not represent total charitable |
(5)"All Other Compensation" amounts are set forth in the following table. 88 2021 PROXY STATEMENT
| | | | | | | | | | | | | | | | | | | 2022 ALL OTHER COMPENSATION | | | | | | McKenney | Zabel | Simonds | Iglesias | Arnold | Employee and Spouse/Guest Attendance at Company Business Functions(a) | $74,344 | $7,090 | $23,723 | — | $75,847 | Personal Use of Company Aircraft(b) | 43,686 | — | — | — | — | | Total Perquisites | $118,030 | $7,090 | $23,723 | — | $75,847 | Matching Gifts Program(c) | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | Company Matching Contributions Under our Qualified and Non-Qualified Defined Contribution Retirement Plan(d) | 186,819 | 78,742 | 93,138 | 59,456 | 55,712 | Company Contributions to the Qualified and Non-Qualified Defined Contribution Retirement Plan(e) | 168,137 | 70,868 | 83,824 | 53,510 | 50,141 | Non-Resident State Taxes(f) | 19,122 | 1,939 | 3,978 | 1,608 | 3,612 | Tax Reimbursement Payments(g) | 42,546 | 6,081 | 22,999 | 1,014 | 67,606 | Other(h) | — | 50 | — | — | 9,520 | | Total All Other Compensation | $544,654 | $174,770 | $237,662 | $125,588 | $272,438 |
(a)Spouses or guests sometimes accompany the NEOs at company business functions. Amounts shown represent the incremental cost to the company for such attendance.TABLE OF CONTENTS
COMPENSATION TABLES
When these trips included travel on the company aircraft, the incremental cost to the company of such travel was calculated to determine amounts to be reported. For purposes of compensation disclosure, the use of company aircraft is valued using an incremental cost that takes into account fuel costs, landing fees, parking, weather monitoring and maintenance fees per hour of flight. Crew travel expenses are included based on the actual amount incurred for a particular trip. Fixed costs associated with travel on the company aircraft that do not change based on level of usage, such as pilot salaries and depreciation of the aircraft, are excluded. On occasion, executives and/or their spouses fly on the company aircraft as additional passengers on business flights, for which there is no incremental cost.
When spouse or guest attendance is expected, a tax gross-up payment is provided. Where applicable, these payments have been included under "Tax Reimbursement Payments".
(b)Mr. McKenney is allowed 20 hours of personal use of the company aircraft paid by the company per year. For purposes of compensation disclosure, the use of company aircraft is valued using an incremental cost that takes into account fuel costs, landing fees, parking, weather monitoring and maintenance fees per hour of flight. Crew travel expenses are included based on the actual amount incurred for a particular trip. Fixed costs associated with travel on the company aircraft that do not change based on level of usage, such as pilot salaries and depreciation of the aircraft, are excluded. Income is imputed to Mr. McKenney for this usage and he is responsible for the taxes incurred (i.e., the amount is not grossed-up for taxes).(c)Amounts represent those provided through our Matching Gifts Program, available to all full-time employees and non-employee directors. During 2022, the company matched eligible gifts from a minimum of $50 to an aggregate maximum gift of $10,000 per employee. Amounts listed only represent company matching gifts made to qualified non-profit organizations and educational institutions on behalf of the NEOs, and do not represent total charitable contributions made by them during the year. Additionally, all full-time employees and non-employee directors were eligible to make a Unum PACPolitical Action Committee (PAC) contribution. For those who chose to make a contribution to the Unum PAC and take advantage of the matching contribution feature, the company will make a matching contribution to the qualifying charity of the employee's choice up to the $10,000 matching gift limit in the following year. Therefore, if ana NEO elected a match for their 20192021 Unum PAC contributions, the matching gift was made in 20202022 and is reflected in this amount. (d)Amounts represent the aggregate matching contributions into our 401(k) Plan as well as matching contributions into our Non-Qualified Plan. Matching contributions under our 401(k) Plan are provided to all eligible employees participating in the plan as described in the "Retirement and Workplace Benefits" section. Matching contributions under our Non-Qualified Plan are provided to eligible officers participating in the plan. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2022 under both the 401(k) Plan and Non-Qualified Plan.
(c)
| Amounts represent the aggregate matching contributions into our 401(k) Plan as well as matching contributions into our Non-Qualified Plan. Matching contributions under our 401(k) Plan are provided to all eligible employees participating in the plan as described beginning on page 83 in the “Retirement and Workplace Benefits” section. Matching contributions under our Non-Qualified Plan are provided to eligible officers participating in the plan as described beginning on page 83 in the “Retirement and Workplace Benefits” section. The company matched contributions dollar-for-dollar up to 5% of eligible earnings in 2020 under both the 401(k) Plan and Non-Qualified Plan. | | | | | | | |
(d)
| These amounts represent the aggregate of company and transition contributions under our 401(k) and Non- Qualified Plans as described beginning on page 83 in the “Retirement and Workplace Benefits” section. Full-time employees with one year of service with the company receive 4.5% of their salary and annual incentive contributed into their 401(k) Plan. Full-time employees who, as of December 31, 2013, had either: (i) reached a minimum of 60 points (age plus service) and at least 15 years of service or (ii) reached the age of 50 with 10 years of service with the company, receive an additional contribution into their 401(k) and Non-Qualified Plans through the transition contributions, as disclosed above in the Retirement and Workplace Benefits section. |
(e)
| Many of our employees are required to travel to other company locations outside of their primary state of employment. While working in a state other than their primary state of employment, employees may become subject to state income taxes in that state if days worked or earnings accrued exceed an amount specified under state law. When this happens, we pay the state income tax on behalf of those employees (including our NEOs) and gross up the income amount for taxes (gross ups on these amounts are included in “Tax Reimbursement Payments”). The employee remains responsible for any taxes they would have incurred had they worked only in their primary state of employment. |
(f)
| Amounts represent tax payments made by us on behalf of each NEO relating to Employee and Spouse/Guest Attendance at Company Business Functions and/or Non-Resident State Taxes. As disclosed on page 82, given the changes with the Tax Cuts and Jobs Act, the Non-Resident State Taxes now includes a federal tax gross up in addition to the FICA and Medicare. |
(g)
| During 2020, full-time employees in the U.S. were eligible to complete healthy activities to earn cash rewards.2023 UNUM GROUP PROXY STATEMENT | 85 |
COMPENSATION TABLES
(e)These amounts represent the aggregate of company contributions under our 401(k) and Non-Qualified Plans as described in the "Retirement and Workplace Benefits" section. Full-time employees with one year of service with the company receive 4.5% of their salary and annual incentive contributed into their 401(k) Plan.
(f)Many of our employees are required to travel to other company locations outside of their primary state of employment. While working in a state other than their primary state of employment, employees may become subject to state income taxes in that state if days worked or earnings accrued exceed an amount specified under state law. When this happens, we pay the state income tax on behalf of those employees (including our NEOs) and gross-up the income amount for taxes (gross-ups on these amounts are included in "Tax Reimbursement Payments"). The employee remains responsible for any taxes they would have incurred had they worked only in their primary state of employment. (g)Amounts represent tax payments made by us on behalf of each NEO relating to Employee and Spouse/Guest Attendance at Company Business Functions and/or Non-Resident State Taxes. (h)Amounts represent other de minimis gifts and fringe benefits. Mr. Arnold participated in the company's student debt relief program, which allows employees to apply unused paid time off towards student loans. (6)There were 27 pay periods during 2020; therefore, the amount shown is higher than annual base salary for each of the NEOs. (7)These awards were comprised of performance share units (PSUs), RSUs and stock success units (SSUs). SSUs were granted as part of the one-time Success Incentive Plan in 2020. Beginning with the March 2021 long-term incentive grants, cash incentive units (CIUs) replaced the prior PSU awards. Since CIUs are tracked and denominated in cash, these awards are no longer reported in the "Stock Awards" column and will only be reported in the Summary Compensation Table under the "Non-Equity Incentive Plan Compensation" column at the time of vesting.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 86 |
2022 Grants of Plan-Based Awards | | Mr. McKenney | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | 566,394 | | | 2,265,577 | | | 4,247,957 | | | | | | | | | | | | | | | | | | | 3/1/2020 | | | | | | | | | | | | | | | | | | | | | 136,636 | | | 3,184,986 (6) | | | | 3/1/2020 | | | | | | | | | | | | 54,655 | | | 136,637 | | | 245,947 | | | | | | 3,221,900 (7) | | | | 8/24/2020 | | | | | | | | | | | | | | | | | | | | | 186,368 | | | 3,499,991 (8) | | | | 8/24/2020 | | | | | | 4,900,000 | | | | | | | | | | | | | | | | | | | | | | Mr. Zabel | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | 169,760 | | | 679,039 | | | 1,273,198 | | | | | | | | | | | | | | | | | | | 3/1/2020 | | | | | | | | | | | | | | | | | | | | | 15,479 | | | 360,815 (6) | | | | 3/1/2020 | | | | | | | | | | | | 6,192 | | | 15,479 | | | 27,862 | | | | | | 364,995 (7) | | | | 8/24/2020 | | | | | | | | | | | | | | | | | | | | | 11,328 | | | 212,740 (8) | | | | 8/24/2020 | | | | | | 840,000 | | | | | | | | | | | | | | | | | | | | | | Mr. Simonds | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | 233,625 | | | 934,500 | | | 1,752,188 | | | | | | | | | | | | | | | | | | | 3/1/2020 | | | | | | | | | | | | | | | | | | | | | 26,426 | | | 615,990 (6) | | | | 3/1/2020 | | | | | | | | | | | | 10,570 | | | 26,426 | | | 47,567 | | | | | | 623,125 (7) | | | | 8/24/2020 | | | | | | | | | | | | | | | | | | | | | 46,592 | | | 874,998 (8) | | | | 8/24/2020 | | | | | | 1,225,000 | | | | | | | | | | | | | | | | | | | | | | Mr. Arnold(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | 116,835 | | | 467,340 | | | 876,263 | | | | | | | | | | | | | | | | | | | 3/1/2020 | | | | | | | | | | | | | | | | | | | | | 14,748 | | | 343,776 (6) | | | | 3/1/2020 | | | | | | | | | | | | 5,899 | | | 14,748 | | | 26,546 | | | | | | 347,758 (7) | | | | 8/24/2020 | | | | | | | | | | | | | | | | | | | | | 16,640 | | | 312,499 (8) | | | | 8/24/2020 | | | | | | 437,500 | | | | | | | | | | | | | | | | | | | | | | Ms. Iglesias | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | 135,649 | | | 542,596 | | | 1,017,368 | | | | | | | | | | | | | | | | | | | 3/1/2020 | | | | | | | | | | | | | | | | | | | | | 15,927 | | | 371,258 (6) | | | | 3/1/2020 | | | | | | | | | | | | 6,371 | | | 15,927 | | | 28,669 | | | | | | 375,559 (7) | | | | 8/24/2020 | | | | | | | | | | | | | | | | | | | | | 19,768 | | | 371,243 (8) | | | | 8/24/2020 | | | | | | 519,750 | | | | | | | | | | | | | | | | | | | |
(1)
| These amounts reflect the threshold, target, and maximum award under the Annual Incentive Plan and the target cash success units (CSUs) awarded under the Success Incentive Plan (SIP). For the Annual Incentive Plan, the threshold is 25% of the amount shown in the Target | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | All Other Stock Awards (Number of Shares of Stock or Units) (#)(1) | Grant Date Fair Value of Stock Awards ($) | | | Threshold | Target | Max | | | McKenney | | | | | | | | | 626,972 | 2,507,886 | 5,015,772 | | (2) | | | | | 3/1/2022 | | 4,200,000 | 8,400,000 | | (3) | | | | | 3/1/2022 | | | | | 156,250 | 4,200,000 | | (4) | | Zabel | | | | | | | | | 215,027 | 860,107 | 1,720,214 | | (2) | | | | | 3/1/2022 | | 773,438 | 1,546,876 | | (3) | | | | | 3/1/2022 | | | | | 28,774 | 773,445 | | (4) | | Simonds | | | | | | | | | 250,654 | 1,002,616 | 2,005,232 | | (2) | | | | | 3/1/2022 | | 962,500 | 1,925,000 | | (3) | | | | | 3/1/2022 | | | | | 35,807 | 962,492 | | (4) | | Iglesias | | | | | | | | | 140,529 | 562,116 | 1,124,232 | | (2) | | | | | 3/1/2022 | | 371,250 | 742,500 | | (3) | | | | | 3/1/2022 | | | | | 13,811 | 371,240 | | (4) | | Arnold | | | | | | | | | 123,547 | 494,189 | 988,378 | | (2) | | | | | 3/1/2022 | | 343,774 | 687,548 | | (3) | | | | | 3/1/2022 | | | | | 12,789 | 343,768 | | (4) |
(1)Restricted stock units (RSUs) were granted on March 1, 2022 under the Stock Incentive Plan of 2017. Details are provided in the "Long-Term Incentive Granted in 2022" table and related footnotes. (2)The amounts in this row reflect the threshold, target, and maximum award that could be earned in 2022 under the Annual Incentive Plan. For the Annual Incentive Plan, the threshold is 25% of the amount shown in the "Target" column and reflects the payout that would have been earned based on threshold achievement of each of the performance measures. Target amounts are based on the individuals’ earnings for 2020 and their annual incentive target. The maximum award is 187.5% of such target (150% plan maximum multiplied by 125% individual maximum). For the CSUs under the SIP, the target is equal to 70% of each officers 2020 annual long-term incentive target. CSUs are eligible for accelerated vesting after one-, three- and five-year performance periods, in each case conditioned upon achievement of the performance hurdles during the applicable performance period. See the details of the SIP on page 62. |
(2)
| The vesting of performance share units (PSUs) ranges from 40% to 180% of target based on the performance and market conditions described beginning on page 71 assuming threshold performance goals are exceeded. The grant date |
TABLE OF CONTENTS
fair value of each PSU was calculated in accordance with ASC 718 using a Monte Carlo simulationof the performance measures. Target amounts are based on historical volatility, risk-free ratesthe individuals’ earnings for 2022 and their annual incentive target. The maximum award is 200% of interest,such target.
(3)The amounts in this row reflect the target and pairwise correlation coefficients.maximum award for the cash incentive units (CIUs) awarded under the Long-Term Incentive plan. The actual amount that will be issued will be determined based on the achievement of the three-year performance goals (2020-2022)(2022-2024), modified by relative TSR,total shareholder return, as described in further detail in the “Long-Term Incentive” section beginning"Long-Term Incentive" section. (4)The grant date fair value of the RSUs granted on page 71. (3)
| The grants of performance-based restrictedMarch 1, 2022 was calculated as the number of units granted multiplied by $26.88, the closing market price of shares of company stock units (PBRSUs) made on March 1, 2020 were based on the achievement of a threshold of statutory after-tax operating earnings and individual performance for 2019 and vest ratably over three years. These awards were granted under the Stock Incentive Plan of 2017. Details are provided in the “Long-Term Incentive Awards Granted in 2020” table and related footnotes beginning on page 72. For Mr. McKenney, 50% of these shares will be stock settled and 50% will be cash settled upon vesting. |
(4)
| The grant of stock success units (SSUs) on August 24, 2020 were part of the one-time SIP and will vest in full after six years on August 24, 2026. SSUs are eligible for accelerated vesting after one-, three- and five-year performance periods, in each case conditioned upon achievement of the performance hurdles during the applicable performance period. See the details of the SIP on page 62. |
(5)
| Mr. Arnold's PBRSUs and PSUs were no longer subject to service-based risk of forfeiture at the date of grant since he met the age and years of service requirements for retirement eligibility under the Stock Incentive Plan of 2017. Mr. Arnold's PBRSUs will continue to vest ratably over the three-year vesting period on each anniversary of the grant date. The actual amount of PSUs that will vest will be determined based on the achievement of the three-year performance goals, modified by relative TSR, as described in further detail in the “Long-Term Incentive” section beginning on page 71. |
(6)
| The grant date fair value of the PBRSUs granted on March 1, 2020 was calculated as the number of units multiplied by the closing market price of $23.31 on the grant date. |
(7)
| As noted above, the grant date fair value of PSUs granted on March 1, 2020 was calculated in accordance with ASC 718 using a Monte Carlo simulation based on historical volatility, risk-free rates of interest, and pairwise correlation coefficients as of March 1, 2020. The Monte Carlo valuation per share was $23.58. See Note 11 (“Stock-Based Compensation”) to our consolidated financial statements in our 2020 Form 10-K for additional information about the company's accounting for share-based compensation arrangements, including the assumptions used for calculating the grant date value of PSUs. |
(8)
| The number of SSUs granted on August 24, 2020 was equal to the number of company shares held by the executive that he or she committed to hold during the SIP vesting period, subject to a cap equal to 50% of the executive's 2020 annual long-term incentive target. The grant date fair value of SSUs was calculated as the number of units multiplied by the closing market price of $18.78 on the grant date.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 87 |
COMPENSATION TABLES
20202022 Outstanding Equity Awards at Fiscal Year-End | | Mr. McKenney | | | | | | | | | | | | | | | | | | | | | | | | | 39,760 | | | — | | | 24.25 | | | 2/20/2021 | | | 408,383 | | | 9,368,306 | | | 226,006 | | | 5,184,578 | | | | Mr. Zabel | | | | | | | | | | | | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | 31,698 | | | 727,152 | | | 17,467 | | | 400,693 | | | | Mr. Simonds | | | | | | | | | | | | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | 89,158 | | | 2,045,285 | | | 43,989 | | | 1,009,108 | | | | Mr. Arnold | | | | | | | | | | | | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | 40,227 | | | 922,807 | | | 24,246 | | | 556,203 | | | | Ms. Iglesias | | | | | | | | | | | | | | | | | | | | | | | | | — | | | — | | | — | | | — | | | 45,662 | | | 1,047,486 | | | 26,797 | | | 614,723 | |
(1)
| The amounts in this column represent the aggregate value of performance-based restricted stock units (PBRSUs) and stock success units (SSUs), including accrued dividend equivalents reinvested into additional restricted stock units for grants prior to March 1, 2020, shown in the “Number of Shares or Units of Stock That Have Not Vested” column based on the closing price of $22.94 on December 31, 2020, the last trading day of the year. Beginning with the March 1, 2020 grant, dividends are accrued in cash and paid at the same time that the underlying PBRSUs vest. As of December 31, 2020, our NEOs had the following amounts (rounded) of accrued cash dividends on their outstanding PBRSUs and SSUs: $169,939 for Mr. McKenney; $16,463 for Mr. Zabel; $35,873 for Mr. Simonds; $17,352 for Mr. Arnold and $19,251 for Ms. Iglesias. |
(2)
| This column reflects PSU awards that were granted on March 1, 2019 and March 1, 2020. They vest at the end of the respective performance period, subject to the level of achievement of applicable performance targets. In accordance with Instruction 3 to Regulation S-K Item 402(f)(2), the values for these awards in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” and the “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” columns are reported at target levels since the company’s performance and relative TSR for 2019 and 2020 awards were below target. Actual shares to be issued under PSUs granted in connection with the 2019-2021 and 2020-2022 performance periods are not yet determinable and may differ from the performance level required to be disclosed in this table. The PSUs that were granted in 2018 (for the 2018-2020 performance period) vested on December 31, 2020 and are shown in the “2020 Option Exercises and Stock Vested” table. |
(3)
| The amounts in this column represent the aggregate value of PSUs (including accrued dividend equivalents reinvested into additional PSUs for the 2019 grant) shown in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” column based on the closing price of $22.94 on December 31, 2020, the last trading day of the year. Beginning with the March 1, 2020 grant, dividends are accrued in cash and paid at the same time that the underlying PSUs vest. As of December 31, 2020, our NEOs had the following amounts (rounded) of accrued cash dividends on their 2020 outstanding PSU grant: $116,825 for Mr. McKenney; $13,235 for Mr. Zabel; $22,594 for Mr. Simonds; $12,610 for Mr. Arnold; and $13,618 for Ms. Iglesias. |
TABLE OF CONTENTS
Vesting Schedule for Unvested Performance Based Restricted Stock Units | | March 1, 2021 | | | 3/1/2018 | | | 25,502 | | | 895 | | | 4,373 | | | 2,474 | | | 2,683 | | | | March 1, 2021 | | | 3/1/2019 | | | 29,491 | | | 1,968 | | | 5,795 | | | 3,135 | | | 3,587 | | | | March 1, 2021 | | | 3/1/2020 | | | 45,088 | | | 5,108 | | | 8,720 | | | 4,866 | | | 5,255 | | | | March 1, 2022 | | | 3/1/2019 | | | 30,386 | | | 2,028 | | | 5,972 | | | 3,230 | | | 3,697 | | | | March 1, 2022 | | | 3/1/2020 | | | 45,090 | | | 5,108 | | | 8,721 | | | 4,867 | | | 5,256 | | | | March 1, 2023 | | | 3/1/2020 | | | 46,458 | | | 5,263 | | | 8,985 | | | 5,015 | | | 5,416 | | | | August 24, 2026 (3) | | | 8/24/2020 | | | 186,368 | | | 11,328 | | | 46,592 | | | 16,640 | | | 19,768 | | | | Total | | | | | | 408,383 | | | 31,698 | | | 89,158 | | | 40,227 | | | 45,662 | |
| | | | | | | | | | | | | | | | | | | | | | | | Number of Units Vesting(1) | | Vesting Date | Grant Date | McKenney | Zabel | Simonds | Iglesias | Arnold | | March 1, 2023 | 3/1/2020 | 46,458 | 5,263 | 8,985 | 5,416 | 5,015 | | March 1, 2023 | 3/1/2021 | 45,496 | 7,279 | 10,282 | 4,504 | 3,981 | | March 1, 2023 | 3/1/2022 | 51,562 | 9,495 | 11,816 | 4,557 | 4,220 | | March 1, 2024 | 3/1/2021 | 46,876 | 7,501 | 10,594 | 4,641 | 4,102 | | March 1, 2024 | 3/1/2022 | 51,563 | 9,495 | 11,816 | 4,558 | 4,220 | | March 1, 2025 | 3/1/2022 | 53,125 | 9,784 | 12,175 | 4,696 | 4,349 | August 24, 2026(2) | 8/24/2020 | 124,867 | 7,590 | 31,217 | 13,245 | 11,149 | | Total | | 419,947 | 56,407 | 96,885 | 41,617 | 37,036 |
(1)Dividend equivalents accrue and settle in cash to the extent that the underlying RSUs and SSUs vest. (2)These SSUs are eligible for accelerated vesting after three- and five-year performance periods, in each case conditioned upon achievement of the performance hurdles during the applicable performance period. See the details of the Success Incentive Plan beginning on page 62 of our 2021 Proxy Statement.
(1)
| These PBRSUs and SSUs include dividend equivalents earned through December 31, 2020. Beginning with the March 1, 2020 grant, dividend equivalents accrue and settle in cash to the extent that the underlying PBRSUs and SSUs vest. | | | | | | | |
(2)
| Mr. Arnold’s PBRSUs are no longer subject to the risk of forfeiture because he meets the age and years of service requirement for retirement eligibility. |
(3)
| These SSUs are eligible for accelerated vesting after one-, three- and five-year performance periods, in each case conditioned upon achievement of the performance hurdles during the applicable performance period. See the details of the SIP on page 62. |
2020 Option Exercises and Stock Vested| | Mr. McKenney | | | — | | | — | | | 127,653 | | | 2,954,988 | | | | Mr. Zabel | | | — | | | — | | | 4,291 | | | 99,775 | | | | Mr. Simonds | | | — | | | — | | | 22,800 | | | 527,945 | | | | Mr. Arnold | | | — | | | — | | | 12,371 | | | 286,364 | | | | Ms. Iglesias | | | — | | | — | | | 14,040 | | | 325,097 | |
(1)
| Reflects the PBRSUs and PSUs that vested during 2020. |
(2)
| Includes the total number of unrestricted shares acquired upon the vesting of PBRSUs and PSUs. A portion of these shares were withheld to cover taxes due upon vesting. |
(3)
| PBRSUs were multiplied by the closing stock price on the vesting date. PSUs that were granted in 2018 (for the 2018-2020 performance period) and which vested on December 31, 2020, were multiplied by the closing stock price of $22.94 on December 31, 2020. The PSUs granted in 2018 were distributed on February 23, 2021 on which date the closing stock price was $26.63 per share.2023 UNUM GROUP PROXY STATEMENT | 88 |
COMPENSATION TABLES
2022 Stock Vested
| | | | | | | | | | Stock Awards | | Number of Shares Acquired on Vesting(1) | Value Realized on Vesting(2)(3) | | (#) | ($) | McKenney(4) | 368,617 | 14,355,240 | | Zabel | 42,391 | 1,645,738 | | Simonds | 72,874 | 2,820,650 | | Iglesias | 42,331 | 1,655,264 | | Arnold | 38,805 | 1,521,935 |
(1)Reflects the number of restricted stock units (RSUs) and performance share units (PSUs) that vested during 2022. Accrued dividend equivalents were reinvested into additional RSUs for grants prior to March 1, 2020, which are included in the number of shares in this column. A portion of these shares were withheld to cover taxes due upon vesting. (2)Beginning with March 1, 2020 grants, dividends are accrued in cash and paid at the same time that the underlying RSUs and PSUs vest. Our NEOs had the following amounts (rounded) of accrued cash dividends on their vested RSUs and PSUs: $966,681 for Mr. McKenney; $112,029 for Mr. Zabel; $188,716 for Mr. Simonds; $111,734 for Ms. Iglesias and $103,238 for Mr. Arnold. Accrued cash dividends were distributed on March 1, 2022 for the RSUs and February 17, 2023 for the PSUs, respectively, and are included in the "Value Realized on Vesting" column. Prior to the distribution of the vested PSU awards, the first quarter 2023 dividend was paid in February 2023 and was due on the PSUs which had vested on December 31, 2022. Therefore, the following amounts were included in the distributions of the PSUs: $81,162 for Mr. McKenney, $9,195 for Mr. Zabel; $15,697 for Mr. Simonds; $9,461 for Ms. Iglesias and $8,760 for Mr. Arnold. These February 2023 amounts were excluded from the "Value Realized on Vesting" column above since they were earned after the vesting date of the PSUs. A portion of the cash was withheld to cover taxes due upon vesting. (3)RSUs were multiplied by the closing stock price on the vesting date, March 1, 2022. PSUs that were granted in 2020 (for the 2020-2022 performance period) vested on December 31, 2022. They were multiplied by the closing stock price of $41.03 on December 30, 2022, the last trading day of the year. PSUs were distributed on February 17, 2023 on which date the closing stock price was $42.81 per share. (4)Per the terms of the award agreement, 50% of Mr. McKenney's 2020 RSU awards (representing 22,545 shares) were settled in cash.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 89 |
Current Value of Pension Benefits Pension benefits payable to each NEO are summarized in the following table: PENSION BENEFITS | | | | | | | | | | | | | | | | PENSION BENEFITS | | Plan Name | Number of Years of Credited Service(2) (#) | Present Value of Accumulated Benefits(3) ($) | Payments During Last
Fiscal Year
($) | | McKenney | Qualified | 4.42 | 91,000 | — | | Excess | 4.42 | 500,000 | — | Zabel(1) | Qualified | — | — | — | | Excess | — | — | — | | Simonds | Qualified | 16.25 | 420,000 | — | | Excess | 16.25 | 557,000 | — | Iglesias(1) | Qualified | — | — | — | | Excess | — | — | — | | Arnold | Qualified | 28.83 | 1,063,000 | — | | Excess | 28.83 | 540,000 | — |
| | Mr. McKenney | | | Qualified | | | 4.42 | | | 151,000 | | | — | | | | Excess | | | 4.42 | | | 825,000 | | | — | | | | Mr. Zabel(1) | | | Qualified | | | — | | | — | | | — | | | | Excess | | | — | | | — | | | — | | | | Mr. Simonds | | | Qualified | | | 16.25 | | | 795,000 | | | — | | | | Excess | | | 16.25 | | | 1,055,000 | | | — | | | | Mr. Arnold | | | Qualified | | | 28.83 | | | 1,478,000 | | | — | | | | Excess | | | 28.83 | | | 751,000 | | | — | | | | Ms. Iglesias(1) | | | Qualified | | | — | | | — | | | — | | | | Excess | | | — | | | — | | | — | |
(1)
| No amounts are shown for Mr. Zabel and Ms. Iglesias because the plans were frozen to further accruals on December 31, 2013, before their eligibility and/or employment began. |
(2)
| All calculations utilize credited service and pensionable earnings as of the pension freeze date, December 31, 2013. Therefore the credited service shown reflects service through December 31, 2013. While all named executives have continued in service through the December 31, 2020 measurement date, no additional pensionable earnings or credited service have been accrued following the freeze date. |
(3)
| The “Present Value of Accumulated Benefits” is based upon a measurement date of December 31, 2020, which is the same measurement date used for financial statement reporting purposes for the company’s audited financial statements as found in Note 9 to the Consolidated Financial Statements contained in the company’s 2020 Form 10-K. All calculations utilize the following assumptions: |
(1)No amounts are shown for Mr. Zabel and Ms. Iglesias because the plans were frozen to further accruals on December 31, 2013, before their eligibility and/or employment began. (2)All calculations utilize credited service and pensionable earnings as of the pension freeze date, December 31, 2013. Therefore the credited service shown reflects service through December 31, 2013. While all named executives have continued in service through the December 31, 2022 measurement date, no additional pensionable earnings or credited service have been accrued following the freeze date. (3)The "Present Value of Accumulated Benefits" is based upon a measurement date of December 31, 2022, which is the same measurement date used for financial statement reporting purposes for the company’s audited financial statements as found in Note 9 to the Consolidated Financial Statements contained in the company’s 2022 Form 10-K. All calculations utilize the following assumptions: •Retirement Age: Assumes age 65. •Discount Rate: 2.90%5.70% •Salary Increase Rate: Not applicable. •Social Security Indexing Rate: 3.5% to index the Qualified and Excess Plan benefits from the measurement date to commencement date. •Pension Increase Rate: Not applicable. •Pre-Retirement Decrements: None. •Post-Retirement Mortality Table: Pri-2012 Mortality Tables projected using fully generational Scale MP-2020.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 90 |
COMPENSATION TABLES
Non-Qualified Deferred Compensation We havemaintain one active non-qualified defined contribution plan (Non-Qualified Plan) that allows for deferrals of compensation by our NEOs. NON-QUALIFIED DEFERRED COMPENSATION | | | | | | | | | | | | | | | | | | | | | | NON-QUALIFIED DEFERRED COMPENSATION | | Plan | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(4) | | | ($) | ($) | ($) | ($) | ($) | | McKenney | Non-Qualified DC | 171,569 | 325,982 | (776,309) | — | 4,235,722 | | Zabel | Non-Qualified DC | 63,492 | 120,635 | (93,826) | — | 483,671 | | Simonds | Non-Qualified DC | 77,888 | 147,987 | (193,028) | — | 1,777,299 | | Iglesias | Non-Qualified DC | 176,823 | 83,991 | (288,365) | — | 1,484,668 | | Arnold | Non-Qualified DC | 80,953 | 76,878 | (446,575) | — | 1,732,716 |
| | Mr. McKenney | | | Non-Qualified DC | | | 125,192 | | | 237,865 | | | 450,614 | | | — | | | 3,406,877 | | | | Mr. Zabel | | | Non-Qualified DC | | | 37,132 | | | 70,551 | | | 32,026 | | | — | | | 214,181 | | | | Mr. Simonds | | | Non-Qualified DC | | | 53,116 | | | 100,920 | | | 152,080 | | | — | | | 1,284,377 | | | | Mr. Arnold | | | Non-Qualified DC | | | 95,894 | | | 112,397 | | | 284,682 | | | — | | | 1,614,307 | | | | Ms. Iglesias | | | Non-Qualified DC | | | 150,302 | | | 71,393 | | | 172,134 | | | — | | | 1,140,823 | |
(1)These amounts are included in the Summary Compensation Table in the "Salary" and "Non-Equity Incentive Plan Compensation" columns for 2022 for each NEO. (2)These amounts represent company contributions through our Non-Qualified Plan, as described in the "Retirement and Workplace Benefits" section. The amounts are included in the "All Other Compensation" column of the Summary Compensation Table for 2022 for each NEO. (3)These amounts were not included in the Summary Compensation Table because investment earnings were not preferential or above market. The investment options under the non-qualified retirement plans are the same choices available to all employees that are eligible to participate in the 401(k) Plan and NEOs do not receive preferential earnings on their investments. (4)This column includes the following amounts that were reported in prior years' Summary Compensation Tables in the "Salary," "Non-Equity Incentive Plan Compensation," or "All Other Compensation" columns, as applicable, to the extent that the NEO was a NEO at the time: $2,665,887 for Mr. McKenney; $259,117 for Mr. Zabel; $1,103,722 for Mr. Simonds; $1,046,877 for Ms. Iglesias, and $569,749 for Mr. Arnold.
(1)
| These amounts are included in the Summary Compensation Table in the “Salary” and “Non-Equity Incentive Plan Compensation” columns for 2020 for each NEO. | | | | | | | |
(2)
| These amounts represent company contributions through our Non-Qualified Plan, as described in the “Retirement and Workplace Benefits” section beginning on page 83. The amounts are included in the “All Other Compensation” column of the Summary Compensation Table for 2020 for each NEO. |
(3)
| These amounts were not included in the Summary Compensation Table because investment earnings were not preferential or above market. The investment options under the non-qualified retirement plans are the same choices available to all employees that are eligible to participate in the 401(k) Plan and NEOs do not receive preferential earnings on their investments. |
(4)
| This column includes the following amounts that were reported in prior years' Summary Compensation Tables in the “Salary,” “Non-Equity Incentive Plan Compensation,” or “All Other Compensation” columns, as applicable, to the extent that the NEO was an NEO at the time: $1,929,823 for Mr. McKenney; $16,911 for Mr. Zabel; $783,547 for Mr. Simonds; $361,458 for Mr. Arnold; and $620,430 for Ms. Iglesias.2023 UNUM GROUP PROXY STATEMENT | 91 |
TABLE OF CONTENTS POST-EMPLOYMENT COMPENSATION
COMPENSATION TABLES POST-EMPLOYMENT COMPENSATIONPost-Employment CompensationThe discussion below outlines estimated benefits payable to our NEOs under various termination scenarios as of December 31, 2020.2022. The following terminology will be used throughout the discussion of the various termination scenarios: TERMINATION DEFINITIONS
| | | | | | | TERMINATION DEFINITIONS | | Termination with cause | | One or more of the following factors is present: the failure to substantially perform duties; the willful engagement in illegal conduct or gross misconduct harmful to the company; or the conviction of a felony (or plea of “guilty”"guilty" or “no contest”"no contest").
| | Termination without cause | | One or more of the following factors is present: poor performance, other than for misconduct or cause (as defined above); job elimination; job requalification; or the decision to fill the position with a different resource consistent with the direction of the company.
| | Resignation for good reason | | One or more of the following events have preceded the resignation of the NEO: assignment to a position inconsistent with his or her existing position or any other action that diminishes such position; reduction of his or her base salary or annual incentive target; failure to continue any material employee benefit or compensation plan in which he or she participates; or relocation to an office more than 50 miles from his or her location.
| | Change in control | | A change in control occurs when one of the following situations exists: (a) the incumbent directors at the beginning of any two-year period cease to constitute a majority of the Board during such period; (b) an entity acquires 20% of our voting stock (30% in some instances); (c) we consummate certain transactions such as a merger or disposition of substantially all of our assets; or (d) shareholders approve a plan of liquidation or distribution. |
In the event of any termination of employment, each NEO would receive benefits to which he or she is entitled, including any unpaid base salary through the date of termination, accrued vacation, and accrued benefits under the retirement plans. Severance and Change in Control Arrangements We have the following severance and change in control contracts and plans covering the NEOs. Severance BenefitsSEVERANCE BENEFITS
The company provides severance benefits to all employees (including our NEOs) in the event of involuntary termination, other than for death, disability or cause. In general, we provide severance in order to give our employees competitive benefits with respect to the possibility of an involuntary termination of their employment. Pursuant to arrangements more fully described in the next section, severance benefits would be provided to the NEOs as follows: (1) to Mr. McKenney under a severance agreement dated effective as of April 1, 2015, and (2) to the other NEOs under our Separation Pay Plan for Executive Vice Presidents and applicable change in control severance agreements. When termination of employment is accompanied by severance payments, the former executive is required to release claims he or she may have against us, and to provide us with certain confidentiality, non-solicitation, non-competition, and non-disparagement covenants. We also agree to indemnify the former executive for certain actions taken on the company’s behalf during his or her employment.
96 2021 PROXY STATEMENT | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 92 |
TABLE OF CONTENTS POST-EMPLOYMENT COMPENSATION
COMPENSATION TABLES Change in Control AgreementsCHANGE IN CONTROL AGREEMENTSEach NEO, other than Mr. McKenney, is covered by a standalone change in control severance agreement with the company. These agreements provide an enhanced severance benefit in the event of a termination following a change in control. This ensures the covered executives remain focused during the critical times before and after a major corporate transaction, regardless of any uncertainty with respect to their future employment. None of the NEOs havehas an excise tax gross-up provision in their agreements.his or her agreement. As indicated above, change in control benefits are available to Mr. McKenney under his severance agreement. Mr. McKenney's agreement specifically addresses post-employment payments, including in the event of a termination of employment in connection with a change in control. In the event of termination within the two yearsyear period immediately following the occurrence of a change in control, our NEOs (including Mr. McKenney) would receive the following benefits under their respective agreements: •A multiple of the sum of base salary and annual incentive, which for Mr. McKenney is three times the sum of his annual base salary and the average of the annual incentive paid to him in the three years prior to the date of termination, and for the other NEOs is two times the sum of his or her annual base salary and annual incentive (the greater of the current year target or the prior year annual incentive paid); •Prorated annual incentive through the date of termination of employment, which for Mr. McKenney is based on the average of the annual incentive paid to him in the three most recent calendar years, and for the other NEOs is based on the greater of the current year target or the prior year annual incentive paid; •Health and welfare benefits, which for Mr. McKenney are provided for up to three years, and for the other NEOs are provided for up to two years; •Outplacement services (20% of base salary, maximum of $50,000); and •Accelerated vesting of unvested CSUscash incentive units (CIUs), cash success units (CSUs) and equity awards (including SSUs)stock success units (SSUs)), that were assumed upon the change in control, but only if the termination of employment was due to death or disability, by the company without cause, or by the executive for good reason (provided that PSUs wouldreason. The date of a change in control shall be deemed earned at target performance and outstanding stock options would remain exercisable until the earlierlast day of the expiration date orperformance period solely for the 90th day after such terminationpurpose of employment).calculating performance for CIUs. Notwithstanding the above, the change in control payments would be reduced if the reduction would result in greater after-tax proceeds to the executive absent the reduction. Otherwise, the executive would receive the above payments and be responsible for paying any excise tax imposed on the payments. Terminations Not Related to a Change in ControlTERMINATIONS NOT RELATED TO A CHANGE IN CONTROL
There are instances in which a NEO’s employment may be terminated that dodoes not involve a change in control. The company may terminate for cause or without cause. Additionally, termination of employment may occur upon a NEO’s voluntary resignation, retirement, death, or becoming disabled. In the event of the death, disability or retirement (if eligible) of a NEO, all of the NEO’s unvested PBRSUs andrestricted stock optionsunits (RSUs) would vest and the stock options would remain exercisable until the earlier of the expiration date or, as applicable, the third anniversary of the date of death or the fifth anniversary of the date of retirement.vest. In the event of termination of employment as a result of job elimination or TABLE OF CONTENTS
POST-EMPLOYMENT COMPENSATION
requalification (or, in the case of Mr. McKenney, resignation for good reason), the NEOs would vest in a pro-rata portion of earned PSUsCIUs and in the event of termination of employment as a result of death, disability, or retirement, the NEOs would vest in earned PSUs,CIUs, in each case on the date that such awards would otherwise be settled based on actual performance. However, to the extent necessary to avoid the imposition of penalty taxes under Code Section 409A, stock would not be distributed until at least six months after the date of termination.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 93 |
NEOs receive additional benefits depending upon the termination scenario as outlined in the following table: TERMINATION BENEFITS AVAILABLE TO CEO AND OTHER NEOs UNDER NON-CHANGE IN CONTROL SCENARIOS
| | | | | | | | | | | | | | | | | | | TERMINATION BENEFITS AVAILABLE TO CEO AND OTHER NEOs UNDER NON-CHANGE IN CONTROL SCENARIOS | | Benefits Received | | | Termination
for Cause or Voluntary
Resignation | | | Termination
Without Cause or Resignation
with Good
Reason* | Disability | Death | Disability
| | | Death
| | | Retirement | | | Severance(1) | | CEO, Other NEOs | | | | CEO, NEOs
| | | | | | | | | | | | Prorated Annual Incentive(2) | | CEO | CEO, Other NEOs | CEO, Other NEOs | | CEO
| | | CEO, NEOs
| | | CEO, NEOs
| | | If Retirement Eligible | | | Early Vesting of EquityLong-Term Incentive(3)(4) | | CEO | CEO, Other NEOs | CEO, Other NEOs | | CEO
| | | CEO, NEOs
| | | CEO, NEOs
| | | If Retirement Eligible | | | Benefit Continuation(5) | | CEO | | | | CEO
| | | | | | | | | | | | Outplacement Services(6) | | CEO, Other NEOs | | | | CEO, NEOs
| | | | | | | | | | | | Disability Benefits(7) | | | CEO, Other NEOs | | | | | | CEO, NEOs
| | | | | | | | | Group Life Ins.Insurance Benefits(8) | | | | CEO, Other NEOs | | | | | | | | CEO, NEOs
| | | | | | Corporate Owned Life Ins.Insurance(8) | | | | | | | | | | | | CEO/Other NEOs who gave approval | | | | |
*
| Mr. McKenney is the only NEO entitled to benefits in the event of a resignation for good reason absent a change in control. |
(1)
| If Mr. McKenney is terminated without cause or resigns with good reason, he will receive severance of two times the sum of his annual base salary and the average of the annual incentive paid to him in the three years prior to the date of termination. Other NEOs who are terminated without cause will receive 18 months of base salary. See the following table for termination benefits related to a change in control. |
(2)
| Annual incentive will be prorated based on the date of termination of employment. For all NEOs other than Mr. McKenney, the NEO will be eligible for prorated annual incentive in the event of death, disability, or retirement (if eligible) only if such termination occurs on or after the last pay period in June. |
(3)
| If Mr. McKenney is terminated without cause, a prorated portion of his unvested equity awards, with the exception of his SSUs, will accelerate vesting under the terms of the award agreements. In the event of his death, disability, or retirement (if eligible at the time) or if he is terminated without cause or resigns for good reason, Mr. McKenney would be eligible to receive a prorated portion of the PSUs based on actual performance at the end of the three-year performance cycle. |
(4)
| For all NEOs, absent a change in control, their unvested PBRSUs will accelerate only in the event of death, disability, or retirement (if eligible). Additionally, they would be eligible to receive a prorated portion of the PSUs based on actual performance at the end of the three-year performance cycle. Absent a change in control, all unvested CSUs and SSUs would be forfeited. |
(5)
| If Mr. McKenney is terminated without cause or resigns with good reason, he will receive health and welfare benefits for up to two years. |
(6)
| Outplacement services are capped at 20% of base salary (up to a maximum of $50,000). |
(7)
| Monthly benefits from the company’s long-term disability plan until the earlier of age 65 or death. |
* Mr. McKenney is the only NEO entitled to benefits in the event of a resignation for good reason other than in connection with a change in control. (1)If Mr. McKenney is terminated without cause or resigns with good reason, he will receive severance of two times the sum of his annual base salary and the average of the annual incentive paid to him in the three years prior to the date of termination. Other NEOs who are terminated without cause will receive 18 months of base salary. See the following table for termination benefits related to a change in control. 98 2021 PROXY STATEMENT
(3)If Mr. McKenney is terminated without cause or resigns for good reason, a prorated portion of his unvested RSUs will accelerate vesting under the terms of the award agreements. Additionally, he would be eligible to receive a prorated portion of unvested CIUs based on actual performance at the end of the three-year performance cycle.TABLE OF CONTENTS
POST-EMPLOYMENT COMPENSATION
(4)For all NEOs, absent a change in control and in the event of death, disability, or retirement (if eligible), their unvested RSUs will accelerate. Additionally, they would be eligible to receive any unvested CIUs based on actual performance at the end of the three-year performance cycle. Absent a change in control, all unvested CSUs and SSUs would be forfeited.
(5)If Mr. McKenney is terminated without cause or resigns with good reason, he will receive health and welfare benefits for up to two years.
(6)Outplacement services are capped at 20% of base salary (up to a maximum of $50,000).(7)Consists of monthly benefits from the company’s long-term disability plan until the earlier of age 65 or death. (8)
(8)Group life insurance benefits are $50,000 for each full-time employee. Corporate owned life insurance (COLI) benefits are applicable for each NEO who was eligible at the time of purchase and gave their approval. The beneficiary (as defined in the policy) will receive $200,000 if the NEO is an active employee at death, or $50,000 if the NEO is not an active employee at death. Mr. Arnold is covered under two COLI benefits; his beneficiary will receive a total of $400,000 if Mr. Arnold is active at death, or $50,000 if he is not an active employee at death.
| Group life insurance benefits are $50,000 for each full-time employee. Corporate owned life insurance (COLI) benefits are applicable for each NEO who gave their approval. The beneficiary (as defined in the policy) of Mr. McKenney, Mr. Zabel, Mr. Simonds, and Ms. Iglesias will receive $200,000 if the NEO is an active employee at death, or $50,000 if the NEO is not an active employee at death. Mr. Arnold is covered under two COLI benefits; his beneficiary will receive a total of $400,000 if Mr. Arnold is an active employee at death, or $50,000 if he is not an active employee at death. |
Termination PaymentsTERMINATION PAYMENTS
Termination payments are provided to NEOs as outlined in the following table and vary with the circumstances under which the termination occurs. In the event of termination as a result of death, payments will be made to the named executive officer’s beneficiary. Consistent with SEC requirements, all termination scenarios in the table below assume a termination date of December 31, 2020.2022. Accordingly, all calculations in the following table were made using the closing market price of our common stock as of $41.03 per share on December 31, 2020 ($22.94 per share).30, 2022, the last trading day of the year. We have excluded amounts received as an annuity under our retirement plans and the “in-the-money” value of vested unexercised stock options held by NEOs since these amounts are not impacted by a termination.plans. The amounts shown in the table also do not include distributions of plan balances under the Non- QualifiedNon-Qualified Plan. Those amounts are shown in the “Non-Qualified"Non-Qualified Deferred Compensation”Compensation" table on page 9591.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 94 |
The amounts in the following table are hypothetical based on the rules of the SEC. Actual payments depend on the circumstances and timing of any termination. The information provided in this table constitutes forward-looking statements for purposes of the Private Litigation Securities Reform Act of 1995. | | | | | | | | | | | | | | | | | | | TERMINATION TABLE | | Termination Scenario | McKenney | Zabel | Simonds | Iglesias | Arnold | | ($) | ($) | ($) | ($) | ($) | | Termination for Cause or Voluntary Resignation | | — | — | — | — | — | | Total | — | — | — | — | — | | Termination Without Cause or Resignation with Good Reason (CEO) | | Severance | 6,312,308 | | 960,000 | | 1,080,000 | | 847,500 | | 787,500 | | Prorated Annual Incentive(1) | 2,056,154 | | — | | — | | — | | — | | Early Vesting of Long-Term Incentive(2) | 12,207,842 | | — | | — | | — | | — | | | Benefit Continuation | 90,889 | | — | | — | | — | | — | | | Outplacement Services | 50,000 | | 50,000 | | 50,000 | | 50,000 | | 50,000 | | | Total | $20,717,193 | $1,010,000 | $1,130,000 | $897,500 | $837,500 | | Disability | Prorated Annual Incentive(1)(3) | 2,056,154 | | 1,419,176 | | 1,654,317 | | 843,174 | | 741,284 | | Early Vesting of Long-Term Incentive(4) | 20,557,885 | | 3,453,015 | | 4,612,987 | | 1,957,269 | | 1,780,155 | | | Disability Benefits | 244,336 | | 238,958 | | 316,913 | | 182,835 | | 120,795 | | | Total | $22,858,375 | $5,111,149 | $6,584,217 | $2,983,278 | $2,642,234 | | Death | Prorated Annual Incentive(1)(3) | 2,056,154 | | 1,419,176 | | 1,654,317 | | 843,174 | | 741,284 | | Early Vesting of Long-Term Incentive(4) | 20,557,885 | | 3,453,015 | | 4,612,987 | | 1,957,269 | | 1,780,155 | | | Group Life Ins. Benefits | 50,000 | | 50,000 | | 50,000 | | 50,000 | | 50,000 | | | Corporate Owned Life Ins. | 200,000 | | 200,000 | | 200,000 | | 200,000 | | 400,000 | | | Total | $22,864,039 | $5,122,191 | $6,517,304 | $3,050,443 | $2,971,439 | | Termination Related to a Change in Control | | Severance | 9,468,462 | | 3,155,460 | | 3,733,200 | | 2,384,000 | | 2,238,084 | | Prorated Annual Incentive(1)(3) | 2,056,154 | | 864,000 | | 1,008,000 | | 565,000 | | 498,750 | | | Early Vesting of Long-Term Incentive | 29,303,192 | | 4,347,840 | | 6,799,325 | | 2,884,904 | | 2,560,993 | | | Benefit Continuation | 136,333 | | 82,862 | | 106,806 | | 106,184 | | 85,381 | | | Outplacement Services | 50,000 | | 50,000 | | 50,000 | | 50,000 | | 50,000 | | DC Enhancement(5) | 336,000 | | — | | 168,000 | | — | | — | | 280G Cut-back(6) | — | | — | | (2,430,345) | | (320,884) | | — | | | Total | $41,350,141 | $8,500,162 | $9,434,986 | $5,990,088 | $5,433,208 | | Retirement | Prorated Annual Incentive(7) | — | — | — | — | 741,284 | | Early Vesting of Long-Term Incentive(2) | — | — | — | — | 1,780,155 | | | Total | — | — | — | — | $2,521,439 |
2021 PROXY STATEMENT 99 | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 95 |
TABLE OF CONTENTS POST-EMPLOYMENT COMPENSATION
COMPENSATION TABLES TERMINATION TABLE
| | Termination for Cause or Voluntary Resignation | | | | | | | — | | | — | | | — | | | — | | | — | | | | Total | | | $— | | | $— | | | $— | | | $— | | | $— | | | | Termination Without Cause or Resignation with Good Reason (CEO) | | | | Severance | | | 6,116,667 | | | 900,000 | | | 1,050,000 | | | 750,053 | | | 825,000 | | | | Prorated Annual Incentive(1) | | | 2,008,333 | | | — | | | — | | | — | | | — | | | | Early Vesting of Equity(2) | | | 11,788,175 | | | — | | | — | | | — | | | — | | | | Benefit Continuation | | | 85,460 | | | — | | | — | | | — | | | — | | | | Outplacement Services | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | | Total | | | $20,048,635 | | | $950,000 | | | $1,100,000 | | | $800,053 | | | $875,000 | | | | Disability | | | | Prorated Annual Incentive(1)(3) | | | 2,008,333 | | | 597,554 | | | 735,785 | | | 355,179 | | | 434,077 | | | | Early Vesting of Equity(2)(4) | | | 11,788,175 | | | 909,354 | | | 2,249,682 | | | 1,246,381 | | | 1,370,299 | | | | Disability Benefits | | | 321,940 | | | 315,216 | | | 419,556 | | | 179,337 | | | 247,979 | | | | Total | | | $14,118,448 | | | $1,822,124 | | | $3,405,023 | | | $1,780,897 | | | $2,052,355 | | | | Death | | | | Prorated Annual Incentive(1)(3) | | | 2,008,333 | | | 597,554 | | | 735,785 | | | 355,179 | | | 434,077 | | | | Early Vesting of Equity(2)(4) | | | 11,788,175 | | | 909,354 | | | 2,249,682 | | | 1,246,381 | | | 1,370,299 | | | | Group Life Ins. Benefits | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | | Corporate Owned Life Ins. | | | 200,000 | | | 200,000 | | | 200,000 | | | 400,000 | | | 200,000 | | | | Total | | | $14,046,508 | | | $1,756,908 | | | $3,235,467 | | | $2,051,560 | | | $2,054,376 | | | | Termination Related to a Change in Control | | | | Severance | | | 9,175,000 | | | 2,520,000 | | | 3,177,676 | | | 1,900,133 | | | 2,145,000 | | | | Prorated Annual Incentive(1)(3) | | | 2,008,333 | | | 660,000 | | | 888,838 | | | 450,032 | | | 522,500 | | | | Early Vesting of Cash Success Units | | | 4,900,000 | | | 840,000 | | | 1,225,000 | | | 437,500 | | | 519,750 | | | | Early Vesting of Equity | | | 16,116,572 | | | 1,172,447 | | | 3,331,781 | | | 1,632,845 | | | 1,829,411 | | | | Benefit Continuation | | | 128,191 | | | 78,119 | | | 102,362 | | | 111,614 | | | 98,732 | | | | Outplacement Services | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | 50,000 | | | | DC Enhancement(5) | | | 251,000 | | | — | | | 121,000 | | | — | | | — | | | | 280G Cut-back(6) | | | (2,074,424) | | | — | | | (148,245) | | | — | | | — | | | | Total | | | $30,554,672 | | | $5,320,566 | | | $8,748,412 | | | $4,582,124 | | | $5,165,393 | | | | Retirement | | | | Prorated Annual Incentive(7) | | | — | | | — | | | — | | | — | | | — | | | | Early Vesting of Equity(2)(4) | | | — | | | — | | | — | | | 1,246,381 | | | — | | | | Total | | | $— | | | $— | | | $— | | | $1,246,381 | | | $— | |
(1)
| (1)In these scenarios, per the terms of Mr. McKenney’s severance agreement, he would be entitled to a prorated annual incentive. The amount is to be calculated using the average of the annual bonuses paid for the three most-recent calendar years. (2)In the event Mr. McKenney resigns with good reason, the amount shown in the table represents the value of the prorated RSUs (and their related accrued cash dividends) that would vest at a market price of $41.03, the closing price of our stock on December 30, 2022, the last trading day of the year plus the prorated amount of CIUs. In the event of job elimination, Mr. Arnold is eligible for retirement status under the terms of the Stock Incentive Plan of 2017 and the 2022 Stock Incentive Plan. Therefore, the amount shown in the table for retirement represents the value of the prorated RSUs (and their related accrued cash dividends) that would vest at a market price of $41.03, the closing price of our stock on December 30, 2022, the last trading day of the year plus the prorated amount of CIUs. In the event Mr. McKenney resigns with good reason or Mr. Arnold has a job elimination (which would be treated as 'retirement' given his eligibility), the CIUs would vest based on actual performance at the end of the three-year performance cycle. In the event of job elimination for each of the NEOs, except Mr. Arnold, the prorated early vesting of RSUs (and their related accrued cash dividends) would be as follows: Mr. McKenney $8,307,842; Mr. Zabel $1,318,775; Mr. Simonds $1,824,699 and Ms. Iglesias $821,357. These NEOs would also be eligible to receive a prorated portion of their unvested CIUs in the event of job elimination or requalification. The prorated amount would be calculated based on their termination date and the vesting of the CIUs would be based on achievement of the prospective three-year goals, modified by relative total shareholder return (TSR). Assuming a job elimination date of December 31, 2022, the prorated CIUs that each NEO would be eligible to receive would be as follows: Mr. McKenney $3,900,000; Mr. Zabel $657,813; Mr. Simonds $885,806 and Ms. Iglesias $371,250. In accordance with Regulation S-K, Item 402(j), the CIUs are reported at target levels since the final achievement is not yet determined. (3)Per the terms of the Annual Incentive Plan, in the event of death or disability during the plan year, on or after the last payday of June, the participant or their beneficiary (as applicable) would receive a prorated payment based on plan results. Per the terms of the change in control severance agreements, in the event of a change in control for NEOs other than Mr. McKenney, each NEO is eligible for a prorated annual incentive based on the higher of the executive's prior year actual or the current year target bonus. (4)The amounts reported include RSUs (and their related accrued cash dividends) that would accelerate vesting in the event of disability, death or retirement (if eligible) plus the value of CIUs at target. The CIUs may be fully earned in the event of disability, death or retirement, based on the satisfaction of the performance goals. The awards would not be payable until the end of the applicable performance period. In accordance with Regulation S-K, Item 402(j), the CIUs are reported at target levels since the final achievement is not yet determined. (5)Defined Contribution (DC) enhancement is a lump sum payment representing the amount resulting from multiplying the company’s non-contributory retirement plan contributions times two additional years of eligible earnings for Messrs. McKenney and Simonds. (6)Mr. Simonds and Ms. Iglesias' benefits and payments are subject to a cutback to eliminate any excise tax payable under Section 4999 of the Code if the net after-tax amount that each would receive with respect to such payments or benefits exceeds the net after-tax amount Mr. Simonds and Ms. Iglesias respectively would receive if the amounts of such payments and benefits were not reduced and each paid the excise tax. In respect of a termination occurring as of December 31, 2022, both Mr. Simonds and Ms. Iglesias would receive a greater benefit by having such benefits and payments reduced than by receiving such benefits and payments and paying the excise tax. The amounts included above (which reduces the total for the termination scenario) is the amount by which such payments and benefits must be reduced in order for Mr. Simonds and Ms. Iglesias to avoid paying the excise tax. (7)Mr. Arnold is eligible for retirement status under the terms of the Annual Incentive Plan as of December 31, 2022 and would be eligible for a prorated annual incentive in the event of retirement. The remaining NEOs did not meet the eligibility criteria for retirement status under the terms of the Annual Incentive Plan as of December 31, 2022 and therefore would not have been eligible for a prorated annual incentive payment in the event of retirement.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 96 |
TABLE OF CONTENTS POST-EMPLOYMENT COMPENSATION
(2)
| In the event of job elimination, the prorated early vesting of equity awards would be as follows: Mr. McKenney $3,187,582; Mr. Zabel $269,201; Mr. Simonds $607,658; and Ms. Iglesias $370,573. These NEOs would also be eligible to receive a prorated portion of their unvested PSUs in the event of job elimination or requalification. The prorated amount would be calculated based on their termination date and the vesting of those units would be based on achievement of the prospective three-year goals, modified by relative TSR. Assuming a job elimination date of December 31, 2020, the prorated number of PSUs that each NEO would be eligible to receive would be as follows: Mr. McKenney 105,125; Mr. Zabel 6,485; Mr. Simonds 20,517; and Ms. Iglesias 12,556. Mr. Arnold is eligible for retirement status under the terms of the Stock Incentive Plan of 2017. Therefore, he would receive full vesting of his unvested PBRSUs, as noted in the Retirement section of this table. The amounts shown in the table represent the value of the shares at a market price of $22.94, the closing price of our stock on the last trading day of the year. Mr. Arnold would also be eligible to earn the full amount of earned PSUs based on his retirement status. The PSUs would vest based on the actual achievement of the prospective three-year goals, modified by relative TSR. |
(3)
| Per the terms of the Annual Incentive Plan, in the event of death or disability during the plan year, on or after the last payday of June, the participant or their beneficiary (as applicable) would receive a prorated payment based on plan results. Per the terms of the change in control severance agreements, in the event of a change in control for NEOs other than Mr. McKenney, each NEO is eligible for a prorated annual incentive based on the higher of the executive's prior year actual or the current year target bonus. |
(4)
| The amounts reported include PBRSUs and PSUs that would accelerate vesting in the event of disability, death or retirement. The PSUs granted in 2019 and 2020 may be fully earned, in the event of disability, death or retirement, based on the satisfaction of the performance goals. In each of these scenarios the awards would not be payable until the end of the applicable performance period. In accordance with Regulation S-K, Item 402(j), the PSUs reported in connection with the PSU awards granted in 2019 and 2020 are reported at target levels since the company’s performance and relative TSR to date for these awards is not yet determinable. Actual shares to be issued under PSUs granted in connection with the 2019 and 2020 awards may differ from the performance level required to be disclosed in this table. |
(5)
| Defined Contribution (DC) enhancement is a lump sum payment representing the amount resulting from multiplying the company’s non-contributory retirement plan contributions times two additional years of eligible earnings for Messrs. McKenney and Simonds. |
(6)
| Mr. McKenney and Mr. Simonds' benefits and payments are subject to a cutback to eliminate any excise tax payable under section 4999 of the Code if the net after-tax amount that each would receive with respect to such payments or benefits exceeds the net after-tax amount Messrs. McKenney and Simonds respectively would receive if the amounts of such payments and benefits were not reduced and each paid the excise tax. In respect of a termination occurring as of December 31, 2020, both Mr. McKenney and Mr. Simonds would receive a greater benefit by having such benefits and payments reduced than by receiving such benefits and payments and paying the excise tax. The amounts included above (which reduces the total for the termination scenario) is the amount by which such payments and benefits must be reduced in order for Messrs. McKenney and Simonds to avoid paying the excise tax. |
(7)
| None of the NEOs met the eligibility criteria for retirement status under the terms of the Annual Incentive Plan as of December 31, 2020 and therefore would not have been eligible for a prorated annual incentive payment in the event of retirement. |
TABLE OF CONTENTS
As required by SEC rules, we are providing the following information about the ratio of the annual total compensation of our median compensated employee to the annual total compensation of our Chief Executive Officer. The 20202022 annual total compensation of the median employee as of December 31, 20202022 was $68,394.$71,268. The 20202022 annual total compensation of Richard McKenney, our Chief Executive Officer, was $13,258,738.$9,596,867. The ratio of these amounts (also referred to as the “CEO"CEO pay ratio”ratio") was 1-to-194. We understand that the CEO pay ratio is intended to provide greater transparency to annual CEO pay and how it compares to the pay of the median employee on an ongoing basis. As such, we are providing a supplemental ratio that compares the pay of the median-paid employee to our CEO's regular annual pay, excluding the special one-time Success Incentive Plan award (see page 62), as we believe that this supplemental ratio reflects a more representative comparison. The resulting supplemental CEO pay ratio is 1-to-143.1‑to‑135.The CEO pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records. The SEC’s rules regarding the identification of the median compensated employee and the process of calculating the pay ratio allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their unique employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the CEO pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. The CEO pay ratio for the 20202022 fiscal year wasis calculated using the same median employee identified with respect to the 2019 and 20182021 fiscal yearsyear as there was no material change in our employee population or employee compensation arrangements during the 20202022 fiscal year that we reasonably believe would significantly impact our CEO pay ratio disclosure. The steps described below were performed in 2020early 2022 to determine the annual total compensation of the median employee.employee for the 2021 fiscal year. To identify our median employee, we began with our entire active employee population of approximately 10,20010,250 employees as of December 31, 20182021 (after excluding approximately 200276 employees that were acquired in connection with our acquisition of Pramerica Życie TUiR SA, a leading financial protection provider in Poland). For these purposes, we identified the median compensated employee using base salary or hourly wages earned during fiscal 20182021 and cash bonus paid for fiscal 2018.2021. We annualized base salary or hourly wages, as applicable, for employees who were not designated as temporary or seasonal employees but who did not work for the entire year. As permitted under SEC guidance, because our originally identified median employee had anomalous pay characteristics, we substituted another employee with substantially similar compensation. Using this methodology, we determined that the median compensated employee was a full-time, exemptnon-exempt employee who holds a core business role that supports field employees who deliver Unum products to ourwhose accountabilities include billing and premium reconciliation, plan changes and other service requests from customers. This employee is located in the northeasterneastern United States.
To calculate the CEO pay ratio for 2020,2022, we identified the elements of suchour median employee's compensation for 20202022 using the same methodology applied for calculating our CEO's total compensation as reported in the Summary Compensation Table, resulting in annual total compensation of $68,394.$71,268.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 97 |
PAY VERSUS PERFORMANCE Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” and certain financial performance measures of the company. For information concerning the company’s pay for performance philosophy and how the company aligns executive compensation with the company’s performance, refer to the "Compensation Discussion and Analysis" beginning on page 53. It is important to note that the "Total" amount set forth in the Summary Compensation Table (SCT) and the compensation actually paid (CAP) in the Pay Versus Performance (PVP) Table are not directly comparable. Each year presented in the SCT includes only the equity compensation granted during that year, whereas each year's CAP includes: (a) the year-end fair value of equity awards granted during the year, (b) the change in value during the year of unvested prior year equity awards and (c) the change in value from the beginning of the year to the vesting date for awards that vested during the year. Thus, the CAP includes both amounts paid or earned, as well as amounts derived from incremental accounting valuations for unvested equity awards that may never be earned or that could have different intrinsic values when earned. In accordance with the SEC’s disclosure requirements, the following table sets forth information pertaining to the compensation of our principal executive officer (PEO) and our non-PEO named executive officers (collectively, the "other NEOs") and certain financial performance measures, for each of the fiscal years ended December 31, 2020, 2021 and 2022. | | | | | | | | | | | | | | | | | | | | | | | | | | | | PAY VERSUS PERFORMANCE TABLE | | | | | | Value of Initial Fixed $100 Investment Based On: | | CSM: After-Tax Adjusted Operating Earnings Per Share(8) | | SCT Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average SCT Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Income (in millions)(7) | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2022 | 9,596,867 | 24,116,706 | 2,588,735 | 4,574,016 | 162.5 | 136.5 | 1,314.2 | 6.21 | | 2021 | 9,349,680 | 11,191,987 | 2,351,144 | 2,586,034 | 93.6 | 123.7 | 824.2 | 4.35 | | 2020 | 13,258,738 | 11,827,507 | 2,747,103 | 2,451,121 | 83.7 | 90.5 | 793.0 | 4.93 |
(1)The dollar amounts reported in this column are the amounts reported for our PEO, Mr. McKenney (the Chief Executive Officer), for each of the corresponding years in the "Total" column in the SCT above. (2)The dollar amounts reported in this column represent the CAP to Mr. McKenney, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the total compensation actually realized or received by Mr. McKenney. In accordance with these rules, these amounts reflect the "Total" as set forth in the SCT for each year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 98 |
| | | | | | | | | | | | | COMPENSATION ACTUALLY PAID TO PEO | | 2022 | 2021 | 2020 | | SCT Total | $9,596,867 | $9,349,680 | $13,258,738 | | Less, value of “Stock Awards” reported in SCT | (4,200,000) | (3,750,010) | (9,906,877) | | Less, Change in Pension Value reported in SCT | — | — | (167,000) | | Plus, year-end fair value of outstanding and unvested equity awards granted in the year | 6,560,938 | 3,509,430 | 10,464,357 | | Plus (less), year-over-year change in fair value of outstanding and unvested equity awards granted in prior years | 4,672,711 | 1,535,973 | (954,629) | | Plus (less), year-over-year change in fair value of equity awards granted in prior years that vested in the year | 7,486,190 | 546,914 | (867,082) | | Plus, pension service cost for services rendered during the year | — | — | — | | CAP to Mr. McKenney | $24,116,706 | $11,191,987 | $11,827,507 |
(3)The dollar amounts reported in this column represent the average of the amounts reported for our other NEOs as a group (excluding Mr. McKenney) in the "Total" column of the SCT in each applicable year. The names of each of the other NEOs included for these purposes in each applicable year are as follows: (i) for 2022 and 2020, Messrs. Zabel, Simonds and Arnold and Ms. Iglesias; and (ii) for 2021, Messrs. Zabel, Simonds and Bhasin and Ms. Iglesias. (4)The dollar amounts reported in this column represent the average CAP for the other NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with these rules, these amounts do not reflect the total compensation actually realized or received. In accordance with these rules, these amounts reflect the average "Total" as set forth in the SCT for each year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. | | | | | | | | | | | | | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOS | | 2022 | 2021 | 2020 | | Average SCT Total | $2,588,735 | $2,351,144 | $2,747,103 | | Less, average value of Stock Awards reported in SCT | (612,736) | (539,057) | (1,293,689) | | Less, average Change in Pension Value reported in SCT | — | — | (166,750) | | Plus, average year-end fair value of outstanding and unvested equity awards granted in the year | 957,173 | 504,474 | 1,362,533 | | Plus (less), average year-over-year change in fair value of outstanding and unvested equity awards granted in prior years | 646,295 | 198,884 | (108,536) | | Plus (less), average year-over-year change in fair value of equity awards granted in prior years that vested in the year | 994,549 | 70,589 | (89,540) | | Plus, average pension service cost for services rendered during the year | — | — | — | | Average CAP to Non-PEO NEOs | $4,574,016 | $2,586,034 | $2,451,121 |
(5)Total Shareholder Return (TSR) is calculated by dividing the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the company’s share price at the end of each fiscal year shown and the beginning of the measurement period by (b) the company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2019. (6)The peer group used for this purpose is the S&P 500 Life & Health Insurance Sub Industry Index, which is consistent with the disclosure required under Regulation S-K Item 201(e). (7)The dollar amounts reported represent the amount of net income reflected in the company’s audited financial statements for the applicable year. (8)The company-selected measure (CSM) is after-tax adjusted operating earnings per share (EPS), which is defined as net income adjusted to exclude after-tax net investment gains or losses and amortization of the cost of reinsurance as well as certain other items specified in the reconciliation of non-GAAP financial measures in Appendix A of this proxy statement divided by dilutive outstanding weighted average shares. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 99 |
Relationships Between Compensation Actually Paid and Performance Measures As described in more detail in the "Compensation Discussion and Analysis" section above, the company's executive compensation program reflects a variable pay-for-performance philosophy. While the company utilizes several performance measures to align executive compensation with company performance, all of those measures are not presented in the PVP table above. Moreover, as discussed above, the company generally seeks to incentivize long-term performance, and therefore does not specifically align the company's performance measures with CAP for a particular year. In accordance with SEC rules, the following information explains how the CAP to our PEO, as well as the average CAP to our other NEOs, each compares to our cumulative total shareholder return (TSR), net income, and after-tax adjusted operating earnings per share. We've also addressed how our three-year TSR compares to the three-year TSR of the S&P 500 Life & Health Insurance Sub Industry Index ("S&P Life & Health Index"). Over the three-year period from 2020 to 2022, like many other companies, we have faced challenges as the COVID-19 pandemic caused significant disruption to global markets, employment and business. During 2020 and 2021, we experienced significant increases in COVID-based claims incidence in our group life and disability lines, as well as leaves administered through our leave management business. During 2022, the impacts of COVID-19 lessened and we returned to pre-pandemic operating levels, resulting in record earnings and strong growth. Compensation actually paid to our PEO and other NEOs directionally aligns with our financial performance as summarized below. •2022: The CAP to our PEO and other NEOs increased relative to 2021 and 2020, which was reflective of an excellent year for the company in 2022, as evidenced by 42.8% growth in after-tax adjusted operating earnings per share, 59.5% growth in net income, and TSR well above the S&P Life & Health Index and other peer companies. Other key factors driving the increase in CAP were the increase in achievement of our 2020 performance share unit (PSU) grant as well as the increase in our stock price during 2022. •2021: The CAP to our PEO was 5.4% lower, and the average CAP for other NEOs was 5.5% higher, than 2020. We had solid financial results despite negative impacts of the COVID-19 pandemic, with after-tax adjusted operating earnings per share 11.8% lower, and net income 3.9% higher, than 2020. Our TSR, though still lagging the S&P Life & Health Index TSR, was up 11.8% relative to 2020. •2020: With the onset of the pandemic during the year, we experienced lower after-tax adjusted operating earnings per share and net income levels than historical performance. Our TSR was more negatively impacted than the S&P Life & Health Index and other peer companies due in part to the impact of historically low interest rates and investor perceptions surrounding the long-term care industry. The CAP to our PEO and other NEOs was impacted by a one-time special performance grant during the year that was designed to encourage the achievement of critical business outcomes and to incent executives to continue employment with the company over the long term.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 100 |
Financial Performance Measures As described in greater detail in the “Compensation Discussion and Analysis" above, the company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the company uses for both short- and long-term incentive awards are selected based on an objective of incentivizing NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the company to link executive compensation actually paid to the PEO and other NEOs, for the most recently completed fiscal year, to the company’s performance are as follows:
| | | | Most Important Performance Measures | After-tax adjusted operating earnings per share(1) | Consolidated adjusted operating return on equity(2) | Earned premium(3) | | Sales | | Relative total shareholder return |
(1)After-tax adjusted operating earnings per share is defined as net income adjusted to exclude after-tax net investment gains or losses and amortization of the cost of reinsurance as well as certain other items specified in the reconciliation of non-GAAP financial measures in Appendix A of the proxy statement divided by dilutive outstanding weighted average shares. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. (2)Consolidated adjusted operating return on equity is calculated by dividing after-tax adjusted operating income by the average of the beginning- and end-of-year stockholders’ equity adjusted to exclude the net unrealized gain or loss on securities and the net gain or loss on hedges. Information about the non-GAAP financial measures used in this proxy statement is set forth in “A Note About Non-GAAP Financial Measures” on page 2. For a reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures, refer to Appendix A of this proxy statement. (3)Earned premium is calculated for our core operations (Unum US, Unum International, and Colonial Life).
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 101 |
OWNERSHIP OF COMPANY SECURITIES
OWNERSHIP OF COMPANY SECURITIESOwnership of Company SecuritiesThe following table shows the number of shares of our common stock beneficially owned by each of our directors and named executive officers and by all directors and executive officers as a group, as of April 1, 2021.March 27, 2023. The table and related footnotes also include information about deferred share rights, restricted stock units (RSUs), and stock success units (SSUs) credited to the accounts of directors and executive officers under various compensation and benefit plans.plans, in the column entitled "Shares Subject to Settleable Rights or Units". Based upon the representations made by each director and executive officer, we do not believe that any shares held by them are pledged as security. Except as otherwise indicated below, the beneficial owners have sole voting and investment power with respect to the shares beneficially owned. | BENEFICIAL OWNERSHIP OF COMMON STOCK
| | | (as of April 1, 2021)
| |
| | Theodore H. Bunting, Jr. | | | 2,903 | | | 27,480 | | | 30,383 | | | * | | | | Susan L. Cross | | | 80 | | | 12,011 | | | 12,091 | | | * | | | | Susan D. DeVore | | | 9,810 | | | 10,463 | | | 20,274 | | | * | | | | Joseph J. Echevarria | | | — | | | 53,871 | | | 53,871 | | | * | | | | Cynthia L. Egan | | | 24,623 | | | 10,463 | | | 35,086 | | | * | | | | Kevin T. Kabat | | | 64,890 | | | 24,586 | | | 89,475 | | | * | | | | Timothy F. Keaney | | | 20,204 | | | 11,413 | | | 31,617 | | | * | | | | Gloria C. Larson | | | 10,374 | | | 89,976 | | | 100,350 | | | * | | | | Ronald P. O'Hanley | | | 18,900 | | | 27,255 | | | 46,125 | | | * | | | | Francis J. Shammo | | | 11,224 | | | 20,109 | | | 31,333 | | | * | | | | Richard P. McKenney | | | 529,600 | | | — | | | 529,600 | | | * | | | | Steven A. Zabel | | | 17,989 | | | — | | | 17,989 | | | * | | | | Michael Q. Simonds | | | 87,951 | | | — | | | 87,951 | | | * | | | | Timothy G. Arnold | | | 38,152 | | | 25,212 | | | 63,364 | | | * | | | | Lisa G. Iglesias | | | 64,423 | | | — | | | 64,423 | | | * | | | | All directors and executive officers as a group (20 persons) | | | 961,070 | | | 312,810 | | | 1,273,879 | | | * | |
(1)
| Includes shares credited to the accounts of certain current and former executive officers, including Mr. Arnold - 680 shares, under the company’s 401(k) Plan. Does not include shares credited to the accounts of certain executive officers under non-qualified defined contribution plans because, though measured in share value, they will be settled only in cash. |
(2)
| | | | | | | | | | | | | | | | | BENEFICIAL OWNERSHIP OF COMMON STOCK (as of March 27, 2023) | | | Name | Shares of Common Stock(1) | Shares Subject to Settleable Rights or Units(2)(3)(4) | Total Shares Beneficially Owned | Percent of Class | | Theodore H. Bunting, Jr. | 12,922 | 28,917 | 41,839 | * | | Susan L. Cross | 1,889 | 46,307 | 48,196 | * | | Susan D. DeVore | 25,767 | 4,448 | 30,215 | * | | Joseph J. Echevarria | — | 77,142 | 77,142 | * | | Cynthia L. Egan | 30,018 | 15,738 | 45,756 | * | | Kevin T. Kabat | 100,821 | 7,576 | 108,397 | * | | Timothy F. Keaney | 36,162 | 5,473 | 41,634 | * | | Gale V. King | 1,366 | — | 1,366 | * | | Gloria C. Larson | 29,601 | 90,245 | 119,846 | * | | Ronald P. O'Hanley | 17,955 | 24,313 | 42,268 | * | | Francis J. Shammo | 26,284 | 21,265 | 47,549 | * | | Richard P. McKenney | 775,775 | — | 775,775 | * | | Steven A. Zabel | 63,255 | — | 63,255 | * | | Michael Q. Simonds | 148,216 | — | 148,216 | * | | Lisa G. Iglesias | 16,277 | — | 16,277 | * | | Timothy G. Arnold | 76,754 | — | 76,754 | * | | All directors and executive officers as a group (21 persons) | 1,531,094 | 321,424 | 1,852,517 | * |
* Denotes less than 1%. (1)Includes 730 shares held indirectly by Mr. Arnold through the company’s 401(k) Plan as of March 27, 2023. (2)Represents the number of shares underlying deferred share rights and RSUs payable solely in shares (including dividend equivalents accrued on such rights or units) that may be settled within 60 days after March 27, 2023, including deferred share rights and RSUs payable solely in shares (including dividend equivalents accrued on such rights or units) that may be settled within 60 days after April 1, 2021, including deferred |
TABLE OF CONTENTS
OWNERSHIP OF COMPANY SECURITIES
share rights and RSUs that may be settled upon the termination of a director’s service on the Board. For each non-employee director other than Ms. Cross and Ms. DeVore,King, the amount includes shares underlying unvested RSUs that would vest upon retirement because the director meets the years of service requirement. Also doesDoes not include shares underlying RSUs (including dividend equivalents accrued thereon) and SSUs that will not vest or cannot be settled within 60 days after April 1, 2021.March 27, 2023.
(3)
| As of April 1, 2021, the total number of shares underlying deferred share rights (including dividend equivalents accrued thereon) held by our non-employee directors, including those rights which cannot be settled in shares or within 60 days after April 1, 2021 and thus are not deemed to be beneficially owned for purposes of this table, was as follows: | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 102 |
Mr. Bunting | | | — | | | Mr. Kabat | | | 3,262 | Ms. Cross | | | 12,011 | | | Mr. Keaney | | | 950 | Ms. DeVore | | | — | | | Ms. Larson | | | 46,049 | Mr. Echevarria | | | 24,333 | | | Mr. O'Hanley | | | 15,008 | Ms. Egan | | | — | | | Mr. Shammo | | | — |
(4)
OWNERSHIP OF COMPANY SECURITIES (3)As of March 27, 2023, the total number of shares underlying deferred share rights (including dividend equivalents accrued thereon) held by our non-employee directors, including those rights which cannot be settled in shares or within 60 days after March 27, 2023 and thus are not deemed to be beneficially owned for purposes of this table, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bunting | — | | | | Egan | — | | | | Larson | 49,689 | | | Cross | 19,364 | | | | Kabat | — | | | | O'Hanley | 17,973 | | | DeVore | — | | | | Keaney | 1,025 | | | | Shammo | — | | | Echevarria | 35,295 | | | | King | 3,336 | | | | | | | | | | | | | | | |
(4)As of March 27, 2023, the total number of shares underlying RSUs (including dividend equivalents accrued thereon) held by our directors and executive officers, including those units which will not vest, or be settled in shares, within 60 days after March 27, 2023 and thus are not deemed to be beneficially owned for purposes of this table, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bunting | 40,229 | | | | Kabat | 7,576 | | | | McKenney | 250,313 | | | Cross | 26,942 | | | | Keaney | 4,448 | | | | Zabel | 46,091 | | | DeVore | 4,448 | | | | King | 4,448 | | | | Simonds | 60,655 | | | Echevarria | 41,847 | | | | Larson | 40,556 | | | | Iglesias | 23,783 | | | Egan | 15,738 | | | | O'Hanley | 9,179 | | | | Arnold | 19,871 | | | | | | Shammo | 21,265 | | | | All directors and executive officers as a group | 704,245 | | | | | | | | | |
| As of April 1, 2021, the total number of shares underlying RSUs (including dividend equivalents accrued thereon) held by our directors and executive officers, including those units which will not vest, or be settled in shares, within 60 days after April 1, 2021 and thus are not deemed to be beneficially owned for purposes of this table, was as follows: |
Mr. Bunting | | | 37,964 | | | Mr. Kabat | | | 23,149 | | | Mr. McKenney(a) | | | 260,141 | Ms. Cross | | | 16,693 | | | Mr. Keaney | | | 10,463 | | | Mr. Zabel | | | 34,481 | Ms. DeVore | | | 10,463 | | | Ms. Larson | | | 43,927 | | | Mr. Simonds | | | 54,901 | Mr. Echevarria | | | 29,538 | | | Mr. O'Hanley | | | 14,848 | | | Mr. Arnold | | | 25,212 | Ms. Egan | | | 10,463 | | | Mr. Shammo | | | 20,109 | | | Ms. Iglesias | | | 28,058 | | | | | | | | | | | | | All directors and executive officers as a group(a) | | | 700,618 |
(a)
| Includes 45,774 shares underlying cash-settled RSUs that have been granted to Mr. McKenney. |
In addition, as of April 1, 2021,March 27, 2023, the total number of shares underlying SSUs held by our executive officers (none are held by non-executive directors), which will not vest, or be settled in shares, within 60 days of April 1, 2021March 27, 2023 and thus are not deemed to be beneficially owned for purposes of this table, was as follows: Mr. McKenney - 186,368;124,867; Mr. Zabel - 11,328;7,590; Mr. Simonds - 46,592;31,217; Ms. Iglesias - 13,245; Mr. Arnold - 16,640; Ms. Iglesias - 19,768;11,149; and All executive officers as a group - 309,539.207,393.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 103 |
OWNERSHIP OF COMPANY SECURITIES
Security Ownership of Certain Shareholders Detailed information about the shareholders known to us to beneficially own more than 5% of our common stock can be found in the table below, including beneficial ownership based on sole and/or shared voting power and investment (dispositive) power. Information is given as of the dates noted in the footnotes below. BENEFICIAL OWNERSHIP | | | | | | | | | | | | | BENEFICIAL OWNERSHIP | | | | | Address of Beneficial Owner | Amount of Beneficial Ownership | Percent of Common Stock Outstanding | BlackRock, Inc.(1) | 55 East 52nd Street
New York, NY 10055 | 24,773,115 | 12.50% | The Vanguard Group, Inc.(2) | 100 Vanguard Blvd.
Malvern, PA 19355 | 19,431,945 | 9.76% | FMR LLC(3) | 245 Summer Street
Boston, MA 02210 | 17,801,879 | 8.94% | Norges Bank(4) | Bankplassen 2
PO Box 1179 Sentrum
NO 0107 Oslo Norway | 10,393,936 | 5.22% |
| | The Vanguard Group, Inc.(1) | | | 100 Vanguard Blvd.
Malvern, PA 19355 | | | 25,058,682 | | | 12.30% | | | | FMR LLC(2) | | | 245 Summer Street
Boston, MA 02210 | | | 18,204,505 | | | 8.94% | | | | BlackRock, Inc.(3) | | | 55 East 52nd Street
New York, NY 10055 | | | 16,167,499 | | | 7.90% | |
(1)
| This information is based on the Schedule 13G/A filed with the Securities and Exchange Commission by The Vanguard Group, Inc. on February 10, 2021, which reflects beneficial ownership as of December 31, 2020. The Vanguard Group, Inc. reported that, in its capacity as investment adviser, it had sole voting power with respect to none of our shares of our common stock, shared voting power with respect to 281,558 shares of our common stock, sole dispositive power with respect to 24,322,833 shares of our common stock, and shared dispositive power with respect to 735,849 shares of our common stock. |
(2)
| This information is based on the Schedule 13G/A filed with the Securities and Exchange Commission by FMR LLC on February 10, 2021, which reflects beneficial ownership as of December 31, 2020. FMR LLC reported that, in its capacity as a parent holding company, it had sole voting power with respect to 2,685,341 shares of our common stock, sole dispositive power with respect to 18,204,505 shares of our common stock, and shared voting and dispositive power with respect to none of our shares. The Schedule 13G/A includes shares beneficially owned by subsidiaries controlled by or through FMR LLC, Abigail P. Johnson, Director, Chairman and Chief Executive Officer of FMR LLC, and/or members of the family of Abigail P. Johnson, and Fidelity Low-Priced Stock Fund. |
(3)
| This information is based on the Schedule 13G/A filed with the Securities and Exchange Commission by BlackRock, Inc. on February 1, 2021, which reflects beneficial ownership as of December 31, 2020.(1)This information is based on the Schedule 13G filed with the Securities and Exchange Commission by BlackRock, Inc. on January 24, 2023, which reflects beneficial ownership as of December 31, 2022. BlackRock, Inc. reported that, in its capacity as the parent holding company or control person of the subsidiaries listed therein, it had sole voting power with respect to 14,690,549 shares of our common stock, sole dispositive power with respect to 16,167,499 shares of our common stock, and shared voting and dispositive power with respect to none of our shares. |
Delinquent Section 16(a) ReportsUnder Section 16(a) of the Securities Exchange Act of 1934, our directors, executive officers, and beneficial holders of more than 10%subsidiaries listed therein, it had sole voting power with respect to 23,723,887 shares of our common stock, are requiredsole dispositive power with respect to file24,773,115 shares of our common stock, and shared voting and dispositive power with respect to none of our shares.
(2)This information is based on the U.S.Schedule 13G/A filed with the Securities and Exchange Commission (SEC) certain forms reporting theirby The Vanguard Group, Inc. on February 9, 2023, which reflects beneficial ownership as of and transactionsDecember 30, 2022. The Vanguard Group, Inc. reported that, in its capacity as investment adviser, it had sole voting power with respect to none of our shares of our common stock. Duestock, shared voting power with respect to an administrative error105,679 shares of our common stock, sole dispositive power with respect to 19,134,683 shares of our common stock, and shared dispositive power with respect to 297,262 shares of our common stock. (3)This information is based on the Schedule 13G/A filed with the Securities and Exchange Commission by theFMR LLC on February 9, 2023, which reflects beneficial ownership as of December 30, 2022. FMR LLC reported that, in its capacity as a parent holding company, one Form 4 (containing one transaction relatingit had sole voting power with respect to the grant17,735,282 shares of our common stock, options under the U.K.sole dispositive power with respect to 17,801,879 shares of our common stock, purchase plan on March 8, 2019) was not timely filed on behalfand shared voting and dispositive power with respect to none of Peter G. O’Donnellour shares. The Schedule 13G/A includes shares beneficially owned by subsidiaries controlled by or through FMR LLC, and was subsequently filed on March 9, 2021. With the exceptionAbigail P. Johnson, Director, Chairman and Chief Executive Officer of this late report, based solely upon a reviewFMR LLC, and/or members of the reports (and amendments thereto)family of Abigail P. Johnson. (4)This information is based on the Schedule 13G/A filed electronically with the SECSecurities and written representations from the reporting personsExchange Commission by Norges Bank on February 14, 2023, which reflects beneficial ownership as of December 31, 2022. Norges Bank reported that no other reports were required, we believe eachit had sole voting power with respect to 10,393,936 shares of our directorscommon stock, sole dispositive power with respect to 10,393,936 shares of our common stock, and executive officersshared voting and 10% beneficial owners filed all required reports on a timely basis during the last fiscal year.dispositive power with respect to none of our shares.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 104 |
ITEMS TO BE VOTED ON
ITEMS TO BE VOTED ONItems to be Voted OnElection of Directors (Item 1 on the Proxy Card) Our Board of Directors currently has 12 members. One current member, Francis J. Shammo, will not stand for re-election at the 2023 Annual Meeting. Accordingly, the Board has reduced the number of Board members to 11 members.effective as of the 2023 Annual Meeting. All nominees will stand for election to one-year terms of office. Upon the recommendation of the Governance Committee, the Board of Directors has nominated Theodore H. Bunting, Jr., Susan L. Cross, Susan D. DeVore, Joseph J. Echevarria, Cynthia L. Egan, Kevin T. Kabat, Timothy F. Keaney, Gale V. King, Gloria C. Larson, Richard P. McKenney and Ronald P. O’Hanley and Francis J. Shammo for election to one-year terms expiring at the 20222024 Annual Meeting. Information concerning the nominees is provided under the section titled "Director Nominees" beginning on page 23. Each nominee currently serves on the Board and has been previously elected to the Board by shareholders. Each nominee has agreed to continue to serve if elected, and the Board has no reason to believe that any nominee will be unable to serve if elected. However, if any nominee becomes unable or unwilling to serve before the 20202023 Annual Meeting, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors. Information concerning these nominees is provided under the section titled “Director Nominees” beginning on page 23. The Board of Directors unanimously recommends that you vote FOR the election of each of the nominees for director: Theodore H. Bunting, Jr., Susan L. Cross, Susan D. DeVore, Joseph J. Echevarria, Cynthia L. Egan, Kevin T. Kabat, Timothy F. Keaney, Gale V. King, Gloria C. Larson, Richard P. McKenney and Ronald P. O’Hanley and Francis J. Shammo.O’Hanley. Advisory Vote to Approve Executive Compensation (“Say-on-Pay”) (Item 2 on the Proxy Card) As required by Section 14A of the Securities Exchange Act, of 1934 (“Exchange Act”), we are asking you to approve an advisory resolution on the compensation of our named executive officers as described in this proxy statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives you the opportunity to endorse or not endorse our 20202022 executive compensation programs and policies for the named executive officers through the following resolution: RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K in the company’s proxy statement for the 20212023 Annual Meeting of Shareholders, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion. For additional detail concerning the compensation of our named executive officers, please refer to the “Compensation Discussion and Analysis” beginning onon page 5153 andand the compensation tables that follow. We currently hold a Say-on-Pay vote every year. Although your vote is not binding on the Board of Directors or the Human Capital Committee, the Human Capital Committee will review the voting results and seek to understand thekey factors that influenced the vote. As it did last year, the Human Capital Committee will consider constructive feedback obtained through this process in making future decisions about our executive compensation programs and policies. ShareholdersIt is expected that shareholders will next have an opportunity to cast a Say-on-Pay vote at the 20222024 Annual Meeting, unless the Board of Directors determines otherwise after considering the outcome of the shareholder vote in Item 3 below. The Board's decision on the frequency of future Say-on-Pay votes will be disclosed on Form 8-K, or an amendment thereto, following the 2023 Annual Meeting. The Board unanimously recommends that you vote FOR approval of named executive officer compensation, as provided in the resolution above.
106 2021 PROXY STATEMENT | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 105 |
ITEMS TO BE VOTED ON
Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive Compensation ("Say-on-Frequency") (Item 3 on the Proxy Card) As required under Section 14A of the Exchange Act, we are providing shareholders with a Say-on-Frequency vote to determine how often shareholders believe we should hold future advisory votes to approve executive compensation. The frequency options are to hold the advisory vote to approve executive compensation every one year, every two years, or every three years. When the Say-on-Frequency vote was last held in 2017, shareholders indicated a preference to hold the advisory vote to approve executive compensation every year and the Board implemented that standard. The proxy card provides shareholders with four choices on this voting item (1 Year, 2 Years, 3 Years, or Abstain). Shareholders are not voting to approve or disapprove the Board's recommendation. You should vote based on your preference as to the frequency with which future advisory votes to approve executive compensation should be held. If you have no preference, you may abstain. We currently hold advisory votes to approve executive compensation every one year. Based upon the recommendation of the Human Capital Committee, the Board of Directors continues to believe that holding an annual shareholder advisory vote to approve executive compensation is appropriate and therefore recommends that you vote in favor of "1 Year" for the frequency of future advisory votes to approve executive compensation. This Say-on-Frequency vote is not binding on the company. However, the Board of Directors and the Human Capital Committee value shareholder input and will carefully consider the results of the vote when making decisions regarding the frequency of future advisory votes to approve executive compensation. The Board's decision on the frequency of holding future advisory votes to approve executive compensation will be disclosed on Form 8-K, or an amendment thereto, following the 2023 Annual Meeting. The Board unanimously recommends that you vote in favor of 1 YEAR for the frequency in which to hold advisory votes to approve executive compensation. Ratification of Appointment of Independent Registered Public Accounting Firm (Item 34 on the Proxy Card) The Audit Committee of the Board of Directors is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm (independent auditor) retained to audit our financial statements. The Audit Committee has appointed Ernst & Young LLP as our independent auditor for 2021.2023. The members of the Audit Committee and the Board believe that the continued retention of Ernst & Young LLP to serve as our independent auditor is in the best interests of the company and its shareholders. The Board is seeking shareholder ratification of the appointment even though it is not legally required, as a matter of good corporate governance. If the appointment is not ratified, the Audit Committee will consider the shareholders’ views in the future selection of the company’s independent auditor. Representatives of Ernst & Young LLP are expected to attend the 20212023 Annual Meeting. They will have the opportunity to make a statement if they so desire and are expected to be available to respond to appropriate questions. The Board unanimously recommends that you vote FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2021.2023.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 106 |
Independent Auditor Fees The Audit Committee is responsible for the audit fee negotiations associated with the company’s retention of Ernst & Young LLP. Aggregate fees billed for audit and other services rendered by Ernst & Young LLP for our fiscal years ended December 31, 20202022 and 20192021 are presented in the table below. INDEPENDENT AUDITOR FEES | | | | | | | | | | INDEPENDENT AUDITOR FEES | | | | Types of Fees | 2022 | 2021 | Audit Fees(1) | $11,407,632 | $10,151,811 | Audit-Related Fees(2) | 440,405 | | 415,642 | | Tax Fees(3) | 137,325 | | 203,972 | | | All Other Fees | — | | — | | | Total | $11,985,362 | $10,771,425 |
(1)The year-over-year increase in Audit Fees was primarily due to increased efforts related to the company’s ongoing adoption of ASC 944 accounting and disclosure requirements for long-duration insurance contracts. | | Audit Fees(1) | | | $9,617,800 | | | $8,316,250 | | | | Audit-Related Fees | | | 412,500 | | | 421,500 | | | | Tax Fees | | | 587,000 | | | 608,950 | | | | All Other Fees | | | — | | | — | | | | Total | | | $10,617,600 | | | $9,346,700 | |
(1)
| The year-over-year increase in Audit Fees was primarily due to increased efforts related to the company’s ongoing adoption of ASC 944 accounting and disclosure requirements for long-duration insurance contracts and the company’s Closed Block individual disability reinsurance transaction. |
(2)The year-over-year increase in Audit-Related Fees was primarily due to increased efforts related to the company's SSAE 18 (Service Organization Control) Reports in 2022. (3)The year-over-year decrease in Tax Fees was primarily due to tax compliance work performed in 2021.
Audit Fees. This category includes fees associated with the audit of our annual financial statements, the review of financial statements included in our Quarterly Reports on Form 10-Q, the audit of internal control over financial reporting, and services provided in connection with statutory and regulatory filings. Audit-Related Fees.This category consists of fees for assurance and related services that are reasonably related to the performance of the audit or review of financial statements or internal control over financial reporting. These services principally include accounting consultations, control reviews, and audit-related services for our employee benefit plans. Tax Fees.This category consists of fees for tax compliance and advisory services. All Other Fees. This category consists of fees for services not included in any of the above categories. TABLE OF CONTENTS
Policy for Pre-Approval of Audit and Non-Audit Services The Audit Committee has a policy requiring advance approval of all audit and permissible non-audit services performed by the independent auditor. Under this policy, the Audit Committee sets pre- approvedpre-approved limits for specifically defined audit and non-audit services. The Committee considers whether such services are consistent with SEC rules on auditor independence. Specific approval by the Committee is required if fees for any particular service or aggregate fees for services of a similar nature exceed the pre-approved limits. The Committee has delegated to its chair the authority to approve permitted services, and the chair must report any such decisions to the Committee at its next scheduled meeting. All of the fees described above were approved by the Audit Committee under its policy.
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 107 |
ABOUT THE 20212023 ANNUAL MEETING
ABOUT THE 2021 ANNUAL MEETINGAbout the 2023 Annual MeetingIn light of the continuing COVID-19 pandemic, theThe Board of Directors has determined that the 20212023 Annual Meeting will be conducted as a virtual-only meeting via live webcastin order to facilitate shareholder attendance and participation by enabling shareholders to participate from any location and at no cost. This process will also enable engagement with our shareholders, regardless of size, resources or physical location, while safeguarding the health and wellbeing of our shareholders, employees, and members of the Board and management.
The 20212023 Annual Meeting live webcast will begin promptly at 10:009:30 a.m. Eastern Daylight Time on May 27, 2021. 25, 2023. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. This includes access to the live webcast, voting your shares electronically, and submitting questions online. You will need a 16-digit control number to participate.participate. Further details are provided below under “Attending"Attending the 20212023 Annual Meeting.”" Proxy materials The Board of Directors is providing these proxy materials to you in connection with its solicitation of proxies to be voted at the 20212023 Annual Meeting and at any later meeting to which it may be adjourned or postponed. All shareholders who held shares of the company's common stock as of the close of business on March 29, 202127, 2023 are entitled to attend the 20212023 Annual Meeting and to vote on the items of business described in this proxy statement. Whether or not you choose to attend or participate in the 20212023 Annual Meeting, you may vote your shares via the Internet, by telephone, or by mail. Because we are soliciting your proxy, we are required to send you either our proxy materials or a Notice Regarding the Internet Availability of Proxy Materials (described in the next section). Our proxy materials include this proxy statement and our annual report to shareholders, which contains audited consolidated financial statements for our fiscal year ended December 31, 2020.2022. If you received a printed copy of these documents, the proxy materials also include a proxy card or voting instruction form for the 20212023 Annual Meeting. Internet availability of proxy materials In accordance with rules adopted by the SEC, commonly referred to as “Notice"Notice and Access,”" we may furnish proxy materials by providing access to the documents on the Internet, rather than mailing printed copies. This process allows us to expedite our shareholders’ receipt of proxy materials, lower the costs of printing and mailing the proxy materials, and reduce the environmental impact of the 20212023 Annual Meeting. As a result, most shareholders will not receive printed copies of the proxy materials unless they request them. Instead, a Notice Regarding the Internet Availability of Proxy Materials (“Notice”("Notice") was mailed on or about April 15, 202113, 2023 to shareholders of record as of the March 29, 2021 who27, 2023 record date, unless they have not previously requested to receive printed or emailed materials on an ongoing basis. The Notice provides instructions on how to access the proxy materials for the 20212023 Annual Meeting, how to request a printed set of proxy materials, and how to vote your shares.shares. Our proxy materials may also be viewed on our investor relations website under the “SEC Filings”"Proxy Materials" heading at www.investors.unum.com. You may elect to receive proxy materials in printed form by mail or electronically by email on an ongoing basis by following the instructions in the Notice. Choosing to receive your future proxy materials by email will save us the cost of printing and mailing documents to you and will reduce the environmental impact TABLE OF CONTENTS
ABOUT THE 2021 ANNUAL MEETING
of our annual meetings.Annual Meetings. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.
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ABOUT THE 2023 ANNUAL MEETING Attending the 20212023 Annual Meeting The 20212023 Annual Meeting will be a virtual meeting conducted exclusively via live webcast on the Internet. Shareholders will not be able to attend the meeting in person. • | Shareholder participation. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the 2021 Annual Meeting online, vote your shares electronically, and submit questions during the meeting electronically.
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• | Accessing the meeting online. You may attend and participate in the 2021 Annual Meeting via the Internet at www.virtualshareholdermeeting.com/UNM2021. You will need the 16-digit control number included on your Notice, proxy card, or voting instruction form to log-in. If your shares are held through a bank, brokerage firm, or other custodian and your voting instruction form or Notice indicates that you may vote those shares through the www.proxyvote.com website, then you may access, participate in, and vote at the meeting with the 16-digit control number indicated on that voting instruction form or Notice. Otherwise, shareholders who hold their shares in street name should contact their bank, broker, or other nominee (preferably at least five days before the 2021 Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the meeting. The meeting webcast will begin promptly at 10:00 a.m. Eastern Daylight Time on May 27, 2021. We encourage you to access the meeting prior to the start time. Online check-in will begin approximately 15 minutes prior to the start time, and you should allow ample time for the check-in procedures. We will post a replay of the meeting as soon as it is available on our investor relations website at www.investors.unum.com under the “Proxy Materials” heading.
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• | Technical Assistance. If you encounter any difficulties accessing the virtual meeting during the check-in or during the meeting, please call the technical support number that will be posted on the virtual meeting log-in page.
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• | Submitting questions. An online portal will be available at www.proxyvote.com on or about April 15, 2021. By accessing this portal, shareholders will be able to submit questions and vote in advance of the 2021 Annual Meeting. Shareholders may also submit questions and vote on the day of, or during, the 2021 Annual Meeting at www.virtualshareholdermeeting.com/UNM2021. We will try to answer as many shareholder-submitted questions as time permits that comply with the meeting rules of conduct. However, we reserve the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to meeting matters or the company’s business, or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. Answers to questions not addressed during the meeting will be posted on our investor relations website at www.investors.unum.com under the “Proxy Materials” heading.
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•Shareholder participation. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the 2023 Annual Meeting online, vote your shares electronically, and submit questions during the meeting electronically. •Accessing the meeting online. You may attend and participate in the 2023 Annual Meeting via the Internet at www.virtualshareholdermeeting.com/UNM2023. You will need the 16-digit control number included on your Notice, proxy card, or voting instruction form to log-in. If your shares are held through a bank, brokerage firm, or other custodian and your voting instruction form or Notice indicates that you may vote those shares through the www.proxyvote.com website, then you may access, participate in, and vote at the meeting with the 16-digit control number indicated on that voting instruction form or Notice. Otherwise, shareholders who hold their shares in street name should contact their bank, broker, or other nominee (preferably at least five days before the 2023 Annual Meeting) and obtain a "legal proxy" in order to be able to attend, participate in or vote at the meeting. The meeting webcast will begin promptly at 9:30 a.m. Eastern Daylight Time on May 25, 2023. We encourage you to access the meeting prior to the start time. Online check-in will begin approximately 15 minutes prior to the start time, and you should allow ample time for the check-in procedures. A replay of the meeting will also be available at www.virtualshareholdermeeting.com/UNM2023. 110 2021 PROXY STATEMENT
•Submitting questions. An online portal will be available at www.proxyvote.com starting on April 13, 2023. By accessing this portal, shareholders will be able to submit questions and vote in advance of the 2023 Annual Meeting. Shareholders may also submit questions and vote on the day of, or during, the 2023 Annual Meeting at www.virtualshareholdermeeting.com/UNM2023. We will try to answer as many shareholder-submitted questions as time permits that comply with the meeting rules of conduct. However, we reserve the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to meeting matters or the company's business, or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. Answers to any questions not addressed during the meeting will be posted on our investor relations website at www.investors.unum.com under the "Proxy Materials" heading.TABLE OF CONTENTS
ABOUT THE 2021 ANNUAL MEETING
Differences between shareholders of record and beneficial owners Most of our shareholders hold their shares as a beneficial owner through a broker or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially. •Shareholder of record. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, the shareholder of record, and the Notice was sent directly to you. As the shareholder of record, you have the right to grant your voting proxy directly to the company or to vote at the 2023 Annual Meeting. If you requested to receive printed proxy materials, we have enclosed a proxy card for you to use. You may also vote on the Internet, or by telephone. You are also invited to attend the 2023 Annual Meeting via the Internet.
• | Shareholder of record. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, the shareholder of record, and the Notice was sent directly to you. As the shareholder of record, you have the right to grant your voting proxy directly to the company or to vote at the 2021 Annual Meeting. If you requested to receive printed proxy materials, we have enclosed a proxy card for you to use. You may also vote on the Internet, or by telephone. You are also invited to attend the 2021 Annual Meeting via the Internet.
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• | Beneficial owner. If your shares are held in an account in the name of a brokerage firm, bank, broker-dealer, trust or other similar organization (i.e., in street name), like the vast majority of our shareholders, you are considered the beneficial owner of shares held in street name. As the beneficial owner, you must instruct the broker or other nominee about how to vote your shares. Under the rules of the New York Stock Exchange (NYSE), if you do not provide such instructions, the firm that holds your shares will have discretionary authority to vote your shares only with respect to “routine” matters, as described in “Voting your shares” below. You are also invited to attend the 2021
ABOUT THE 2023 ANNUAL MEETING •Beneficial owner. If your shares are held in an account in the name of a brokerage firm, bank, broker-dealer, trust or other similar organization (i.e., in street name), like the vast majority of our shareholders, you are considered the beneficial owner of shares held in street name. As the beneficial owner, you must instruct the broker or other nominee about how to vote your shares. Brokers are not permitted to vote on certain items presented for a vote, and may elect not vote on any of the items, unless you provide voting instructions. Voting your shares will help to ensure that your interests are represented at the meeting. Therefore, to ensure that your shares are voted, you are encouraged to provide voting instructions for your shares via the Internet or by telephone, or by returning the voting instruction form that you received. You are also invited to attend the 2023 Annual Meeting via the Internet. |
Persons entitled to vote at the 20212023 Annual Meeting Shareholders of recordowning company stock as of the close of business on March 29, 2021,27, 2023, the record date, are entitled to vote their shares at the 20212023 Annual Meeting. There were approximately 204,188,556 sharesapproximately 197,580,143 shares of our common stock outstanding on the record date. Each of those shares is entitled to one vote on each item of business to be voted on at the 20212023 Annual Meeting. We will make available a list of shareholders of record as of the record date for inspection by shareholders for any purpose germane to the 20212023 Annual Meeting during normal business hours at our corporate headquarters in Chattanooga, Tennessee.Tennessee, and as provided for under our bylaws. Please contact our Corporate Secretary to schedule an appointment. The list will also be available during the 2021 Annual Meeting at www.virtualshareholdermeeting.com/UNM2021. Voting items and Board recommendations; Vote required; Abstentions and broker non-votes You may either vote for, against or abstain on each of the voting items to be acted on at the 20212023 Annual Meeting.Meeting, except that for Item 3 you may choose whether we should hold an advisory vote to approve executive compensation every one year, every two years, or every three years, or abstain from voting. The table below summarizes, for each voting item, the voting recommendation of the Board of Directors, the vote threshold required for approval, and the effect of abstentions and broker non-votes. Abstentions and broker non-votes (i.e., shares heldare discussed in street name that cannot be voted on certain matters by the shareholder of record if the beneficial owner has not provided voting instructions). TABLE OF CONTENTS
ABOUT THE 2021 ANNUAL MEETING
VOTING ITEMS
| | | | | | | | | | | | | | | | VOTING ITEMS | | | | | Items to be Voted onOn | | | Board Voting
Recommendation | | | Vote Required
for Approval | | | Effect of
Abstention | | | Effect of Broker
Non-Vote | | | Item 1: Election of the 11 directors for terms expiring in 2022 2024 | | | FOR each nominee | | | Majority of votes cast with respect to the nominee | | | No effect because
not counted as
vote cast | | | No effect because
not counted as
vote cast | | | Item 2: Advisory vote to approve executive compensation | | | FOR | | | Majority of shares represented and entitled to vote | | | Same effect as AGAINST because is entitled to vote | No effect because not entitled to vote | | Item 3: Advisory vote to approve the frequency of future advisory votes on executive compensation | 1 YEAR | Majority of shares
represented and
entitled to vote | Counted as entitled to vote, but not in favor of any alternative | No effect because not entitled to vote | | | Item 3:4: Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2021 2023 | FOR | | FOR
| | | Majority of shares
represented and
entitled to vote | | | Same effect as
AGAINST because
is entitled to vote | | | Not applicable; may be discretionarily voted by broker | |
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ABOUT THE 2023 ANNUAL MEETING Voting your shares You may vote your shares using any of the following methods: • | By Internet. Before the meeting, you may vote via the Internet by going to www.proxyvote.com and following the instructions on the screen. You will need the control number found on your Notice, proxy card (for shareholders of record) or voting instruction form (for beneficial owners) when you access the web page. Voting by Internet before the 2021 Annual Meeting is available until 11:59 p.m. Eastern Daylight Time on May 26, 2021.
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•By Internet. Before the meeting, you may vote via the Internet by going to www.proxyvote.com or to the internet address indicated on the voting instruction form or Notice that was provided to you and following the instructions on the screen. You will need the control number found on your Notice, proxy card (for shareholders of record) or voting instruction form (for beneficial owners) when you access the web page. Voting by Internet before the 2023 Annual Meeting is available until 11:59 p.m. Eastern Daylight Time on May 24, 2023. During the 20212023 Annual Meeting, you may vote online by following the instructions at www.virtualshareholdermeeting.com/UNM2021UNM2023. You will need the control number found on your Notice, proxy card, voting instruction form or legal proxy when you access the virtual meeting web page. •By telephone. You may vote by telephone by calling the applicable toll-free telephone number, 1-800-690-6903 (for shareholders of record) or 1-800-454-8683 or the number indicated on the voting instruction form or Notice that was provided to you (for beneficial owners), which is available 24 hours a day, and following the pre-recorded instructions. You will need the control number found on your Notice, proxy card, or voting instruction form when you accesscall. You may vote by telephone until 11:59 p.m. Eastern Daylight Time on May 24, 2023. •By mail. If you received a paper copy of your proxy materials, you may vote by mail by completing the virtual meeting web page.enclosed proxy card or voting instruction form, dating and signing it, and returning it in the postage-paid envelope provided. Your proxy card or voting instruction form, as applicable, must be received by May 24, 2023. • | By telephone. You may vote by telephone by calling the applicable toll-free telephone number, 1-800-690-6903 (for shareholders of record) or 1-800-454-8683 (for beneficial owners), which is available 24 hours a day, and following the pre-recorded instructions. You will need the control number found on your Notice, proxy card, or voting instruction form when you call. You may vote by telephone until 11:59 p.m. Eastern Daylight Time on May 26, 2021.
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• | By mail. If you received a paper copy of your proxy materials, you may vote by mail by completing the enclosed proxy card or voting instruction form, dating and signing it, and returning it in the postage-paid envelope provided or returning it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your proxy card or voting instruction form, as applicable, must be received by May 26, 2021.
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The Board of Directors has appointed certain individuals named on the proxy card (“proxies”("proxies") to vote shares at the 20212023 Annual Meeting in accordance with the instructions of our shareholders. If you authorize the proxies to vote your shares with respect to any matter to be acted upon, the shares will be voted in accordance with your instructions. If you are a shareholder of record and you authorize the proxies to vote your shares but do not specify how your shares should be voted on one or more matters, the proxies will vote your shares on those matters as the Board of Directors recommends. If any other matter properly comes before the 20212023 Annual Meeting, the proxies will vote on that matter in their discretion. If you are a beneficial owner of shares held in street name and do not provide your broker or other nominee instructions on how to vote your shares, a “broker non-vote” occurs. Under the rules of the NYSE, the organization that holds your shares (i.e., your broker or other nominee) may generallyis not permitted to vote on
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ABOUT THE 2021 ANNUAL MEETING
routine certain matters, at its discretion but cannot vote on “non-routine” matters. The only itemincluding the election of business at the 2021 Annual Meeting for which your broker or other nominee has discretiondirectors, and may determine not to vote your shares without yourat all, unless you provide voting instructions is the ratification of the appointment of our independent registered public accounting firm (Item 3). Unless it receives your voting instructions, your broker or other nominee will not have discretion to vote your shares (resulting in a broker non-vote) on any other item of business at the 2021 Annual Meeting (Items 1 and 2), including the election of directors.instructions. To ensure that your vote will be counted on all matters, we encourage you to provide instructions to your broker or other nominee on how to vote your shares. If you are a beneficial owner of shares held in street name and do not provide your broker or other nominee instructions on how to vote your shares, and the broker elects to vote your shares on some but not all matters, it will result in a “broker non-vote” for the matters on which the broker does not vote. Abstentions occur when you provide voting instructions but instruct the broker to abstain from voting on a particular matter.
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ABOUT THE 2023 ANNUAL MEETING Changing your vote and revoking your proxy You may revoke any proxy that you previously granted or change your vote by: •Submitting a subsequent vote via the Internet, by telephone, or by mailing a new proxy card or voting instruction form that is received before the closing of those facilities at 11:59 p.m. Eastern Daylight Time on May 26, 2021;25, 2023; •Requesting a “legal proxy”"legal proxy" or attending the virtual 20212023 Annual Meeting and voting online, as indicated above under “Voting"Voting your shares”shares"; or •If you are a shareholder of record, giving written notice of revocation to the Corporate Secretary, Unum Group, 1 Fountain Square, Chattanooga, TN 37402, so that it is received by 4:00 p.m. Eastern Daylight Time on May 26, 2021.24, 2023. Your new vote or revocation in advance of the meeting must be submitted in accordance with the time frames above under “Voting"Voting your shares.”" Quorum A quorum is required to transact business at the 20212023 Annual Meeting. A quorum exists if the holders of a majority of the shares issued and outstanding and entitled to vote generally in the election of directors are present online at the virtual 20212023 Annual Meeting or represented by proxies. Abstentions and broker non-votesShares that have been voted to abstain or that are voted in a broker’s discretion will be counted as present for purposes of determining whether a quorum is present at the 20212023 Annual Meeting, but neither will be counted as votes cast.Meeting. Inspectors of election Representatives of Broadridge Financial Solutions, Inc. (“Broadridge”("Broadridge") will tabulate the votes and act as inspectors of the election. Voting results We will report the final voting results of the 20212023 Annual Meeting on a Form 8-K to be filed with the SEC within four business days after the meeting. The Form 8-K will be available on our investor relations website under the “SEC Filings”"SEC Filings" heading at www.investors.unum.com or on the SEC’s website at www.sec.gov. In addition, we will announce the Board's decision on the frequency of future advisory votes to approve executive compensation on a Form 8-K that we will file with the SEC within 150 days after the 2023 Annual Meeting.
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ADDITIONAL INFORMATION
ADDITIONAL INFORMATIONAdditional InformationCost of proxy solicitation We pay the cost of soliciting proxies from our shareholders. Proxies are solicited by mail, and may also be solicited personally, electronically or by telephone by our directors, officers or employees, though none will receive additional compensation for doing this. We have retained Innisfree M&A Incorporated to assist in the solicitation of proxies for the 20212023 Annual Meeting. We will pay Innisfree a fee of $20,000 $25,000 and reasonable out-of-pocket expenses for its services. We also reimburse brokers, banks and other nominees for their expenses in sending proxy materials to their customers who are beneficial owners and obtaining their voting instructions. Shareholder proposals and nominations for our 20222024 Annual Meeting If you intend to submit a proposal for inclusion in the proxy statement for our 20222024 Annual Meeting pursuant to SEC Rule 14a-8, it must be received by the Corporate Secretary at our principal executive offices (at the address provided below) no later than the close of business onon December 16, 2021.15, 2023. Submitting a shareholder proposal does not guarantee that we will include it in our proxy statement if thethe proposal does not satisfy the requirements of SEC Rule 14a-8. Our bylaws include a proxy access right, permitting a shareholder, or a group of up to 20 shareholders, who has maintained continuous qualifying ownership of at least 3% of our outstanding shares of capital stock entitled to vote in the election of directors for at least three years to nominate and include in our proxy materials director nominees constituting up to the greater of 20% of the Board or two directors, provided that the shareholder(s) and the nominee(s) satisfy the requirements in our bylaws. Notice of proxy access director nominees must be received by the CorporateCorporate Secretary at our principal executive offices (at the address provided below) no earlier than November 16, 202115, 2023 and no later than the close of business on December 16, 2021.15, 2023. However, in the event that that the 20222024 Annual Meeting is to be held on a date that is more than 30 days before or after May 27, 202225, 2024 (the anniversary date of the 20212023 Annual Meeting), then such notice must be receivedreceived no later than the close of business on the 180th day prior to the date of the 20222024 Annual Meeting or the 10th day following the day on which public announcement of the date of the 20222024 Annual Meeting is first made. Our bylaws also establish advance notice procedures with respect to proposals and director nominations submitted by a shareholder for presentation directly at an Annual Meeting, rather than for inclusion in our proxy statement. To be properly brought before our 20222024 Annual Meeting, a notice of the proposal the shareholder wishes to present at the meeting other than pursuant to SEC Rule 14a-8, or nomination the shareholder wishes to present at the meeting, other than pursuant to our proxy access bylaw, must be received by the Corporate Secretary at our principal executive offices (at the address provided below) no earlier than the close of business on January 27, 202226, 2024 and no later than the close of business on February 26, 2022.25, 2024. However, in the event that that the 20222024 Annual Meeting is to be held on a date that is more than 30 days before or more than 70 days after May 27, 202225, 2024 (the anniversary date of the 20212023 Annual Meeting), then such notice must be received no earlier than the close of business on the 120th day prior to the date of the 20222024 Annual Meeting and no later than the close of business on the later of the 90th day prior to the date of the 20222024 Annual Meeting or the 10th day following the day on which public announcement of the date of the 20222024 Annual Meeting is first made. In addition to satisfying the foregoing notice procedures under our bylaws, to comply with SEC Rule 14a-19, the SEC’s universal proxy rule, a shareholder must provide the notice required under Rule 14a-19 to the Corporate Secretary of the shareholder’s intent to solicit proxies in support of candidates submitted under the advance notice procedures in our bylaws on or before March 26, 2024. However, in the event that the 2024 Annual Meeting is to be held on a date that is more than 30 days before or after May 25, 2024 (the anniversary date of the 2023 Annual Meeting), then such notice must be provided by the later of 60 days prior to the date of the
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 113 |
ADDITIONAL INFORMATION
2024 Annual Meeting or 10 days following the day on which public announcement of the date of the 2024 Annual Meeting is first made. All such proposals and director nominations must satisfy the requirements set forth in our bylaws, a copy of which is available on our investor relations website under the “Corporate Governance”"Governance" heading at www.investors.unum.com and may also be obtained at no cost from the Office of the Corporate Secretary. The chairman of the meeting may refuse to acknowledge or introduce any shareholder proposal or nomination if notice thereof is not received within the applicable deadlines or does not comply with the bylaws. If a shareholder fails to meet these deadlines, the persons named as proxies will be allowed to use their discretionary voting authority to vote on any such proposal or nomination as they determine appropriate if the matter is presented and introduced at the Annual Meeting. Communications with the Board of Directors Shareholders and interested parties may communicate with our Chairman of the Board, or any other director, by contacting the Office of the Corporate Secretary as described below. In accordance with a process approved by our Board of Directors, the Corporate Secretary reviews all correspondence received by the company and addressed to non-management directors. A log and copies of the correspondence are provided to the Chairman, who determines whether further distribution is appropriate and to whom it should be sent. Any director may at any time review this log and request copies of correspondence. Concerns relating to accounting, internal controls or auditing matters are promptly brought to the attention of our internal auditors and handled in accordance with procedures established by the Audit Committee. Copies of correspondence relating to corporate governance matters are also provided to the chair of the Governance Committee. The Board has instructed that certain items unrelated to the duties and responsibilities of the Board be excluded from the process, including mass mailings, resumes and other forms of job inquiries, surveys, business solicitations or advertisements, and matters related to claims or employment. Eliminating duplicate proxy materials Under SEC rules, individual Notices, and, to the extent we mail printed proxy materials or an annual report in accordance with the procedures described herein, a single proxy statement and annual report to shareholders, along with individual proxy cards or individual Notices, will be delivered in one envelope to multiple shareholders having the same last name and address and to shareholders with multiple accounts registered at our transfer agent with the same address, unless contrary instructions have been received from an affected shareholder. This is known as “householding”"householding" and it enables us to reduce the costs and environmental impact of the 20212023 Annual Meeting. We will deliver promptly upon written or oral request a separate copy of the proxy statement, annual report to shareholders or Notice to any shareholder residing at a shared address to which only one copy was delivered. If you would like to receive separate copies of our proxy materials, whether for this year or future years, please contact Broadridge toll-free at 1-866-540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. The same phone number and address may be used to request delivery of a single copy of our proxy materials if you share an address with another shareholder and are receiving multiple copies.
2021 PROXY STATEMENT 115 | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 114 |
ADDITIONAL INFORMATION
Contacting the Office of the Corporate Secretary You may contact the Office of the Corporate Secretary by calling toll-free 800-718-8824 or by writing to: Office of the Corporate Secretary
Unum Group
1 Fountain Square
Chattanooga, Tennessee 37402 Principal executive offices Our principal executive offices are located at 1 Fountain Square, Chattanooga, Tennessee 37402. Our main telephone number is 423-294-1011. Annual Report on Form 10-K Upon request, we will provide to you by mail a free copy of our Annual Report on Form 10-K (including financial statements and financial statement schedules) for the fiscal year ended December 31, 2020.2022. Please direct your request to the Office of the Corporate Secretary at the address provided above. The Annual Report on Form 10-K may also be accessed on our investor relations website under the “SEC Filings”"SEC Filings" heading at www.investors.unum.com or on the SEC’s website at www.sec.gov.www.sec.gov. Incorporation by reference To the extent that this proxy statement has been or will be specifically incorporated by reference into any of our other filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, the sections of this proxy statement entitled “Report"Report of the Audit Committee”Committee" (to the extent permitted by the rules of the SEC) and “Compensation"Compensation Committee Report”Report" shall not be deemed to be so incorporated, unless specifically provided otherwise in such filing.
116 2021 PROXY STATEMENT | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 115 |
TABLE OF CONTENTS Appendix A Reconciliation of Non-GAAP Financial Measures The following is a reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures as presented in this proxy statement. | | Year Ended December 31, 2020
| | | | | | | | | | | | | Unum US | | | $651.4 | | | $4,458.2 | | | 14.6% | | | | Unum International | | | 51.9 | | | 797.7 | | | 6.5% | | | | Colonial Life | | | 264.5 | | | 1,584.1 | | | 16.7% | | | | Core Operating Segments | | | 967.8 | | | 6,840.0 | | | 14.1% | | | | Closed Block | | | 183.8 | | | 3,979.2 | | | | | | | Corporate | | | (146.2) | | | (1,395.2) | | | | | | | Total | | | $ 1,005.4 | | | $ 9,424.0 | | | 10.7% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | 2021 | | 2020 | | | (in millions) | | per share * | | (in millions) | | per share * | | (in millions) | | per share * | | Net Income | | $ | 1,314.2 | | | $ | 6.50 | | | $ | 824.2 | | | $ | 4.02 | | | $ | 793.0 | | | $ | 3.89 | | | Excluding: | | | | | | | | | | | | | | Net Investment Gains and Losses | | | | | | | | | | | | | | Net Realized Investment Gain Related to Reinsurance Transaction (net of tax expense of $—; $14.2; $273.5) | | — | | | — | | | 53.4 | | | 0.26 | | | 1,028.8 | | | 5.05 | | | Net Investment Gain (Loss), Other (net of tax expense (benefit) of $(3.5); $1.9; $(20.9)) | | (12.2) | | | (0.07) | | | 7.2 | | | 0.03 | | | (82.3) | | | (0.40) | | | Total Net Investment Gain (Loss) | | (12.2) | | | (0.07) | | | 60.6 | | | 0.29 | | | 946.5 | | | 4.65 | | | Items Related to Closed Block Individual Disability Reinsurance Transaction | | | | | | | | | | | | | | Change in Benefit Reserves and Transaction Costs (net of tax benefit of $—; $29.2; $274.2) | | — | | | — | | | (110.1) | | | (0.53) | | | (1,031.3) | | | (5.06) | | | Amortization of the Cost of Reinsurance (net of tax benefit of $13.4; $16.8; $0.6) | | (50.4) | | | (0.25) | | | (62.3) | | | (0.31) | | | (2.0) | | | (0.01) | | | Net Tax Benefits of Reinsurance Transaction | | — | | | — | | | — | | | — | | | 36.5 | | | 0.18 | | | Total Items Related to Closed Block Individual Disability Reinsurance Transaction | | (50.4) | | | (0.25) | | | (172.4) | | | (0.84) | | | (996.8) | | | (4.89) | | | Net Reserve Change Related to Reserve Assumption Updates (net of tax expense (benefit) of $32.5; $38.1; $(35.5)) | | 122.5 | | | 0.61 | | | 143.3 | | | 0.70 | | | (133.5) | | | (0.66) | | | Impairment Loss on Internal-Use Software (net of tax benefit of $—; $2.5; $—) | | — | | | — | | | (9.6) | | | (0.05) | | | — | | | — | | | Costs Related to Early Retirement of Debt (net of tax benefit of $—; $14.1; $—) | | — | | | — | | | (53.2) | | | (0.26) | | | — | | | — | | | Impairment Loss on ROU Asset (net of tax benefit of $—; $2.9; $2.7) | | — | | | — | | | (11.0) | | | (0.05) | | | (10.0) | | | (0.05) | | | Impact of U.K. Tax Rate Increase | | — | | | — | | | (24.2) | | | (0.12) | | | — | | | — | | | Costs Related to Organizational Design Update (net of tax benefit of $—; $—; $4.7) | | — | | | — | | | — | | | — | | | (18.6) | | | (0.09) | | | After-tax Adjusted Operating Income | | $ | 1,254.3 | | | $ | 6.21 | | | $ | 890.7 | | | $ | 4.35 | | | $ | 1,005.4 | | | $ | 4.93 | | | | | | | | | | | | | | |
*Assuming Dilution
(1)
| Excludes unrealized gain (loss) on securities and net gain on hedges and is calculated using the stockholders' equity balances presented below. Due to the implementation of a Financial Accounting Standards Board update for which the beginning balance of 2020, 2019, and 2018 for certain stockholders' equity line items were adjusted, we are computing the average equity for 2020, 2019, and 2018 using internally allocated equity that reflects the adjusted beginning balance at January 1, 2020 , January 1, 2019, and January 1, 2018. As a result, average equity for the year ended December 31, 2020, December 31, 2019, and December 31, 2018 for certain of our segments will not compute using the historical allocated equity at December 31, 2019, 2018, and 2017, respectively. |
| | Total Stockholders' Equity | | | $ 10,871.0 | | | $ 9,965.0 | | | | Excluding: | | | | | | | | | | | | | | | | Net Unrealized Gain (Loss) on Securities | | | 1,067.7 | | | 615.9 | | | | Net Gain on Hedges | | | 97.8 | | | 187.8 | | | | Total Adjusted Stockholders' Equity | | | $ 9,705.5 | | | $ 9,161.3 | | | | | | | |
| | | | 12/31/2020
| | | | | | | | | | | | Average Adjusted Stockholders' Equity
| | | $ 9,667.3
| | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 116 |
APPENDIX A
| | | | | | | | | | | | | | | | After-Tax Adjusted Operating Income (Loss) | | Average Allocated Equity(1) | Adjusted Operating Return on Equity | | | | Year Ended December 31, 2022 | | | | | | Unum US | $ | 767.2 | | | $ | 4,706.9 | | 16.3 | % | | Unum International | 156.7 | | | 772.7 | | 20.3 | % | | Colonial Life | 295.7 | | | 1,549.1 | | 19.1 | % | | Core Operating Segments | 1,219.6 | | | 7,028.7 | | 17.4 | % | | Closed Block | 190.9 | | | 4,762.6 | | | | Corporate | (156.2) | | | (979.6) | | | | Total | $ | 1,254.3 | | | $ | 10,811.7 | | 11.6 | % | | | | | | | Year Ended December 31, 2021 | | | | | | Unum US | $ | 367.8 | | | $ | 4,500.0 | | 8.2 | % | | Unum International | 84.1 | | | 806.1 | | 10.4 | % | | Colonial Life | 259.9 | | | 1,580.3 | | 16.4 | % | | Core Operating Segments | 711.8 | | | 6,886.4 | | 10.3 | % | | Closed Block | 248.6 | | | 4,208.6 | | | | Corporate | (69.7) | | | (1,046.0) | | | | Total | $ | 890.7 | | | $ | 10,049.0 | | 8.9 | % | | | | | | | Year Ended December 31, 2020 | | | | | | Unum US | $ | 651.4 | | | $ | 4,458.2 | | 14.6 | % | | Unum International | 51.9 | | | 797.7 | | 6.5 | % | | Colonial Life | 264.5 | | | 1,584.1 | | 16.7 | % | | Core Operating Segments | 967.8 | | | 6,840.0 | | 14.1 | % | | Closed Block | 183.8 | | | 3,979.2 | | | | Corporate | (146.2) | | | (1,395.2) | | | | Total | $ | 1,005.4 | | | $ | 9,424.0 | | 10.7 | % |
| | Net Income
| | | $793.0 | | | $3.89 | | | | Excluding:
| | | | | | | | | | Net Realized Investment Gains and Losses | | | | | | | | | | Net Realized Investment Gain Related to Reinsurance Transaction (net of tax expense of$273.5) | | | 1,028.8 | | | 5.05 | | | | Net Realized Investment Loss, Other (net of tax benefit of $20.9) | | | (82.3) | | | (0.40) | | | | Total Net Realized Investment Gain | | | 946.5 | | | 4.65 | | | | Items Related to Closed Block Individual Disability Reinsurance Transaction | | | | | | | | | | Change in Benefit Reserves and Transaction Costs (net of tax benefit of $274.2) | | | (1,031.3) | | | (5.06) | | | | Amortization of the Cost of Reinsurance (net of tax benefit of $0.6) | | | (2.0) | | | (0.01) | | | | Net Tax Benefits of Reinsurance Transaction | | | 36.5 | | | 0.18 | | | | Total Items Related to Closed Block Individual Disability Reinsurance Transaction | | | (996.8) | | | (4.89) | | | | Long-term Care Reserve Increase (net of tax benefit of $31.8) | | | (119.7) | | | (0.59) | | | | Group Pension Reserve Increase (net of tax benefit of $3.7) | | | (13.8) | | | (0.07) | | | | Costs Related to Organizational Design Updated (net of tax benefit of $4.7) | | | (18.6) | | | (0.09) | | | | Impairment Loss on ROU Asset (net of tax benefit of $2.7) | | | (10.0) | | | (0.05) | | | | After-tax Adjusted Operating Income | | | $1,005.4 | | | $4.93 | |
*Assuming Dilution
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 117 |
APPENDIX A
| | | | | | | | | | | | | | | | | | | | | | | | | 12/31/2022 | | 12/31/2021 | | 12/31/2020 | | 12/31/2019 | | Total Stockholders' Equity | $ | 9,197.5 | | | $ | 11,416.4 | | | $ | 10,871.0 | | | $ | 9,965.0 | | | Excluding: | | | | | | | | | Net Unrealized Gain (Loss) on Securities | (2,023.8) | | | 962.2 | | | 1,067.7 | | | 615.9 | | | Net Gain (Loss) on Hedges | (9.6) | | | 61.8 | | | 97.8 | | | 187.8 | | | Total Adjusted Stockholders' Equity | $ | 11,230.9 | | | $ | 10,392.4 | | | $ | 9,705.5 | | | $ | 9,161.3 | | | | | | | | | | | Twelve Months Ended | | | | 12/31/2022 | | 12/31/2021 | | 12/31/2020 | | | | Average Adjusted Stockholders' Equity | $ | 10,811.7 | | | $ | 10,049.0 | | | $ | 9,424.0 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | 12/31/2022 | | 12/31/2021 | | (in millions) | | per share | | (in millions) | | per share | | Total Stockholders' Equity (Book Value) | $ | 9,197.5 | | | $ | 46.51 | | | $ | 11,416.4 | | | $ | 56.37 | | | Excluding: | | | | | | | | | Net Unrealized Gain (Loss) on Securities | (2,023.8) | | | (10.23) | | | 962.2 | | | 4.75 | | | Net Gain (Loss) on Hedges | (9.6) | | | (0.05) | | | 61.8 | | | 0.30 | | | Subtotal | 11,230.9 | | | 56.79 | | | 10,392.4 | | | 51.32 | | | Excluding: | | | | | | | | | Foreign Currency Translation Adjustment | (389.1) | | | (1.97) | | | (273.9) | | | (1.35) | | | Subtotal | 11,620.0 | | | 58.76 | | | 10,666.3 | | | 52.67 | | | Excluding: | | | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | (334.1) | | | (1.69) | | | (396.0) | | | (1.96) | | | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | $ | 11,954.1 | | | $ | 60.45 | | | $ | 11,062.3 | | | $ | 54.63 | |
Net Income | | | $ 1,100.3 | | | $ 5.24 | | | $ 523.4 | | | $ 2.38 | | | $ 994.2 | | | $ 4.37 | Excluding: | | | | | | | | | | | | | | | | | | | Net Realized Investment Gain (Loss)(net of tax expense (benefit) of $(4.5); $(11.0); $15.0) | | | (18.7) | | | (0.09) | | | (28.5) | | | (0.12) | | | 25.3 | | | 0.11 | Cost Related to Early Retirement of Debt (net of tax benefit $5.7; $-; $-) | | | (21.6) | | | (0.11) | | | — | | | — | | | — | | | — | Long-term Care Reserve Increase (net of tax benefit of $-; $157.7; $-) | | | — | | | — | | | (593.1) | | | (2.70) | | | — | | | — | Loss from Guaranty Fund Assessment (net of tax benefit of $-; $-; $7.2;) | | | — | | | — | | | — | | | — | | | (13.4) | | | (0.06) | Unclaimed Death Benefits Reserve Increase (net of tax benefit $-; $-; $13.6) | | | — | | | — | | | — | | | — | | | (25.4) | | | (0.11) | Net Tax Benefit from Impacts of TCJA | | | — | | | — | | | — | | | — | | | 31.5 | | | 0.14 | After-tax Adjusted Operating Income | | | $1,140.6 | | | $5.44 | | | $1,145.0 | | | $5.20 | | | $976.2 | | | $4.29 |
Net Income | | | $ 931.4 | | | $ 3.95 | | | $ 867.1 | | | $ 3.50 | | | $ 402.1 | | | $ 1.57 | Excluding: | | | | | | | | | | | | | | | | | | | Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $8.4;$(17.7); $3.3) | | | 15.8 | | | 0.07 | | | (26.1) | | | (0.11) | | | 12.8 | | | 0.05 | Costs Related to Early Retirement of Debt (net of tax benefit of $-; $-;$2.8) | | | — | | | — | | | — | | | — | | | (10.4) | | | (0.04) | Reserve Charge for Closed Block (net of tax benefit of $-; $-; $244.4) | | | — | | | — | | | — | | | — | | | (453.8) | | | (1.77) | Pension Settlement Loss (net of tax benefit of $-; $-; $22.5) | | | — | | | — | | | — | | | — | | | (41.9) | | | (0.16) | After-tax Adjusted Operating Income | | | $915.6 | | | $3.88 | | | $893.2 | | | $3.61 | | | $895.4 | | | $3.49 |
*Assuming Dilution | | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 118 |
APPENDIX A
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12/31/2020 | | 12/31/2019 | | | | (in millions) | | per share | | (in millions) | | per share | | | | | | Total Stockholders' Equity (Book Value) | $ | 10,871.0 | | | $ | 53.37 | | | $ | 9,965.0 | | | $ | 49.10 | | | | | | | Excluding: | | | | | | | | | | | | | Net Unrealized Gain on Securities | 1,067.7 | | | 5.24 | | | 615.9 | | | 3.03 | | | | | | | Net Gain on Hedges | 97.8 | | | 0.48 | | | 187.8 | | | 0.93 | | | | | | | Subtotal | 9,705.5 | | | 47.65 | | | 9,161.3 | | | 45.14 | | | | | | | Excluding: | | | | | | | | | | | | | Foreign Currency Translation Adjustment | (261.3) | | | (1.28) | | | (281.6) | | | (1.39) | | | | | | | Subtotal | 9,966.8 | | | 48.93 | | | 9,442.9 | | | 46.53 | | | | | | | Excluding: | | | | | | | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | (530.0) | | | (2.61) | | | (484.8) | | | (2.39) | | | | | | | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | $ | 10,496.8 | | | $ | 51.54 | | | $ | 9,927.7 | | | $ | 48.92 | | | | | |
Net Income | | | $ 847.0 | | | $ 3.19 | | | $ 888.1 | | | $ 3.15 | | | $ 283.6 | | | $ 0.94 | Excluding:
| | | | | | | | | | | | | | | | | | | Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $2.9; $19.1; $(1.3)) | | | 3.9 | | | 0.02 | | | 37.1 | | | 0.13 | | | (3.6) | | | (0.01) | Reserve Charge for Closed Block (net of tax benefit of $-; $-; $265.0) | | | — | | | — | | | — | | | — | | | (492.1) | | | (1.62) | Unclaimed Death Benefits Reserve Increase (net of tax benefit of $33.4; $-; $-) | | | (62.1) | | | (0.24) | | | — | | | — | | | — | | | — | Deferred Acquisition Costs for Closed Block (net of tax benefit of $-; $-; $68.5) | | | — | | | — | | | — | | | — | | | (127.5) | | | (0.42) | Group Life Waiver of Premium Benefit Reserve Reduction (net of tax expenses of $29.8; $-; $-) | | | 55.2 | | | 0.21 | | | — | | | — | | | — | | | — | Special Tax Items | | | — | | | — | | | — | | | — | | | 22.7 | | | 0.08 | After-tax Adjusted Operating Income | | | $850.0 | | | $3.20 | | | $851.0 | | | $3.02 | | | $884.1 | | | $2.91 |
Net Income | | | $ 877.6 | | | $ 2.69 | | | $ 847.3 | | | $ 2.55 | | | $ 553.4 | | | $ 1.62 | Excluding: | | | | | | | | | | | | | | | | | | | Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $9.0; $11,5; $(161.8)) | | | 15.7 | | | 0.05 | | | 0.2 | | | — | | | (304.1) | | | (0.89) | Special Tax Items | | | (10.2) | | | (0.03) | | | — | | | — | | | — | | | — | After-tax Adjusted Operating Income | | | $872.1 | | | $2.67 | | | $847.1 | | | $2.55 | | | $857.5 | | | $2.51 |
*Assuming Dilution
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12/31/2018 | | 12/31/2017 | | 12/31/2016 | | (in millions) | | per share | | (in millions) | | per share | | (in millions) | | per share | | Total Stockholders' Equity (Book Value) | $ | 8,621.8 | | | $ | 40.19 | | | $ | 9,574.9 | | | $ | 43.02 | | | $ | 8,968.0 | | | $ | 39.02 | | | Excluding: | | | | | | | | | | | | | Net Unrealized Gain (Loss) on Securities | (312.4) | | | (1.46) | | | 607.8 | | | 2.73 | | | 440.6 | | | 1.92 | | | Net Gain on Hedges | 250.6 | | | 1.17 | | | 282.3 | | | 1.27 | | | 327.5 | | | 1.42 | | | Subtotal | 8,683.6 | | | 40.48 | | | 8,684.8 | | | 39.02 | | | 8,199.9 | | | 35.68 | | | Excluding: | | | | | | | | | | | | | Foreign Currency Translation Adjustment | (305.2) | | | (1.42) | | | (254.5) | | | (1.15) | | | (354.0) | | | (1.54) | | | Subtotal | 8,988.8 | | | 41.90 | | | 8,939.3 | | | 40.17 | | | 8,553.9 | | | 37.22 | | | Excluding: | | | | | | | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | (447.2) | | | (2.08) | | | (508.1) | | | (2.28) | | | (465.1) | | | (2.02) | | | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | $ | 9,436.0 | | | $ | 43.98 | | | $ | 9,447.4 | | | $ | 42.45 | | | $ | 9,019.0 | | | $ | 39.24 | |
| | | | | | | | | | 2023 UNUM GROUP PROXY STATEMENT | 119 |
120 2021 PROXY STATEMENT
Net Income | | | $ 679.3 | | | $ 1.91 | | | $ 411.0 | | | $ 1.23 | | | $ 513.6 | | | $ 1.64 | Excluding: | | | | | | | | | | | | | | | | | | | Income from Discontinued Operations | | | 6.9 | | | 0.02 | | | 7.4 | | ��� | 0.02 | | | 9.6 | | | 0.03 | Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $(22.0); $0.7; $(2.4)) | | | (43.2) | | | (0.12) | | | 1.5 | | | 0.01 | | | (4.3) | | | (0.02) | Regulatory Reassessment Charges (net of tax benefit of $31.3; $129.0; $1.1) | | | (34.5) | | | (0.10) | | | (267.4) | | | (0.79) | | | (51.6) | | | (0.16) | Debt Extinguishment Costs (net of tax benefit of $20.5; $8.9; $-) | | | (38.3) | | | (0.11) | | | (16.9) | | | (0.05) | | | — | | | — | Other (net of tax expense (benefit) of $-; $(5.8); $1.7) | | | — | | | — | | | (12.7) | | | (0.04) | | | 4.0 | | | 0.01 | Special Tax Items | | | 2.2 | | | 0.01 | | | 95.8 | | | 0.28 | | | 42.8 | | | 0.14 | After-tax Adjusted Operating Income | | | $786.2 | | | $2.21 | | | $603.3 | | | $1.80 | | | $513.1 | | | $1.64 |
*Assuming Dilution.
**Does not reflect the impact of ASU 2010-26.
Total Stockholders' Equity (Book Value) | | | $ 10,871.0 | | | $ 53.37 | Excluding: | | | | | | | Net Unrealized Gain on Securities | | | 1,067.7 | | | 5.24 | Net Gain on Hedges | | | 97.8 | | | 0.48 | Subtotal | | | 9,705.5 | | | 47.65 | Excluding: | | | | | | | Foreign Currency Translation Adjustment | | | (261.3) | | | (1.28) | Subtotal | | | 9,966.8 | | | 48.93 | Excluding: | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | | | (530.0) | | | (2.61) | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | | | $10,496.8 | | | $51.54 |
 TABLE OF CONTENTS
Total Stockholders' Equity (Book Value) | | | $ 9,965.0 | | | $ 49.10 | | | $ 8,621.8 | | | $ 40.19 | | | $ 9,574.9 | | | $ 43.02 | Excluding: | | | | | | | | | | | | | | | | | | | Net Unrealized Gain (Loss) on Securities | | | 615.9 | | | 3.03 | | | (312.4) | | | (1.46) | | | 607.8 | | | 2.73 | Net Gain on Hedges | | | 187.8 | | | 0.93 | | | 250.6 | | | 1.17 | | | 282.3 | | | 1.27 | Subtotal | | | 9,161.3 | | | 45.14 | | | 8,683.6 | | | 40.48 | | | 8,684.8 | | | 39.02 | Excluding: | | | | | | | | | | | | | | | | | | | Foreign Currency Translation Adjustment | | | (281.6) | | | (1.39) | | | (305.2) | | | (1.42) | | | (254.5) | | | (1.15) | Subtotal | | | 9,442.9 | | | 46.53 | | | 8,988.8 | | | 41.90 | | | 8,939.3 | | | 40.17 | Excluding: | | | | | | | | | | | | | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | | | (484.8) | | | (2.39) | | | (447.2) | | | (2.08) | | | (508.1) | | | (2.28) | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income (Loss) | | | $9,927.7 | | | $48.92 | | | $9,436.0 | | | $43.98 | | | $9,447.4 | | | $42.45 |
Total Stockholders' Equity (Book Value) | | | $ 8,968.0 | | | $ 39.02 | | | $ 8,663.9 | | | $ 35.96 | | | $ 8,521.9 | | | $ 33.78 | Excluding: | | | | | | | | | | | | | | | | | | | Net Unrealized Gain on Securities | | | 440.6 | | | 1.92 | | | 204.3 | | | 0.84 | | | 290.3 | | | 1.15 | Net Gain on Hedges | | | 327.5 | | | 1.42 | | | 378.0 | | | 1.57 | | | 391.0 | | | 1.55 | Subtotal | | | 8,199.9 | | | 35.68 | | | 8,081.6 | | | 33.55 | | | 7,840.6 | | | 31.08 | Excluding: | | | | | | | | | | | | | | | | | | | Foreign Currency Translation Adjustment | | | (354.0) | | | (1.54) | | | (173.6) | | | (0.72) | | | (113.4) | | | (0.45) | Subtotal | | | 8,553.9 | | | 37.22 | | | 8,255.2 | | | 34.27 | | | 7,954.0 | | | 31.53 | Excluding: | | | | | | | | | | | | | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | | | (465.1) | | | (2.02) | | | (392.6) | | | (1.63) | | | (401.5) | | | (1.59) | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | | | $9,019.0 | | | $39.24 | | | $8,647.8 | | | $35.90 | | | $8,355.5 | | | $33.12 |
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Total Stockholders' Equity (Book Value) | | | $ 8,639.9 | | | $ 33.23 | | | $ 8,604.6 | | | $ 31.84 | | | $ 8,168.0 | | | $ 27.91 | Excluding: | | | | | | | | | | | | | | | | | | | Net Unrealized Gain on Securities | | | 135.7 | | | 0.52 | | | 873.5 | | | 3.23 | | | 614.8 | | | 2.11 | Net Gain on Hedges | | | 396.3 | | | 1.52 | | | 401.6 | | | 1.48 | | | 408.7 | | | 1.39 | Subtotal | | | 8,107.9 | | | 31.19 | | | 7,329.5 | | | 27.13 | | | 7,144.5 | | | 24.41 | Excluding: | | | | | | | | | | | | | | | | | | | Foreign Currency Translation Adjustment | | | (47.1) | | | (0.18) | | | (72.6) | | | (0.26) | | | (117.6) | | | (0.41) | Subtotal | | | 8,155.0 | | | 31.37 | | | 7,402.1 | | | 27.39 | | | 7,262.1 | | | 24.82 | Excluding: | | | | | | | | | | | | | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | | | (229.9) | | | (0.88) | | | (574.5) | | | (2.13) | | | (444.1) | | | (1.51) | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | | | $8,384.9 | | | $32.25 | | | $7,976.6 | | | $29.52 | | | $7,706.2 | | | $26.33 |
Total Stockholders' Equity (Book Value) | | | $ 8,483.9 | | | $ 26.80 | | | $ 8,045.0 | | | $ 24.25 | | | $��� 5,941.5 | | | $ 17.94 | Excluding: | | | | | | | | | | | | | | | | | | | Net Unrealized Gain (Loss) on Securities | | | 416.1 | | | 1.31 | | | 382.7 | | | 1.16 | | | $(837.4) | | | $(2.53) | Net Gain on Hedges | | | 361.0 | | | 1.14 | | | 370.8 | | | 1.12 | | | 458.5 | | | 1.38 | Subtotal | | | 7,706.8 | | | 24.35 | | | 7,291.5 | | | 21.97 | | | 6,320.4 | | | 19.09 | Excluding: | | | | | | | | | | | | | | | | | | | Foreign Currency Translation Adjustment | | | (107.1) | | | (0.34) | | | (75.3) | | | (0.23) | | | (172.8) | | | (0.52) | Subtotal | | | 7,813.9 | | | 24.69 | | | 7,366.8 | | | 22.20 | | | 6,493.2 | | | 19.61 | Excluding: | | | | | | | | | | | | | | | | | | | Unrecognized Pension and Postretirement Benefit Costs | | | (318.6) | | | (1.00) | | | (330.7) | | | (1.00) | | | (406.5) | | | (1.23) | Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income (Loss) | | | $8,132.5 | | | $25.69 | | | $7,697.5 | | | $23.20 | | | $6,899.7 | | | $20.84 |
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