TABLE OF CONTENTS
We are furnishing proxy materials, including this proxy statement, in connection with the solicitation of proxies on behalf of the Board of Directors, to be voted at the 20212024 Annual Meeting of Shareholders of Unum Group and at any adjournment or postponement thereof. Our proxy materials are first being mailed and made available electronically to shareholders on or about April 15, 2021.11, 2024.
| 2024 UNUM GROUP PROXY STATEMENT | ||
PRELIMINARY PROXY STATEMENT
- SUBJECT TO COMPLETION
- SUBJECT TO COMPLETION
Our Purpose
Helping the working world thrive throughout life’s moments.®
A Business for Good
In today’s unpredictable environment, financial protection benefits are more important than ever. As a Fortune 500 company and leading provider of employee benefits, Unum helps millions of people gain access to essential disability, life, accident, critical illness, dental and vision benefits, and leave services, through the workplace. Employers of all sizes depend on us for the comprehensive benefits solutions they need to attract and retain the talent that keeps their businesses growing. And their employees know they can count on us to be there during some of life’s most challenging times.
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 | A market leader in group and individual disability benefits, and one of the largest providers of group life and voluntary workplace benefits in the U.S. | | A leading provider of voluntary worksite benefits, including disability, life, accident, critical illness, cancer, hospitalization, dental and vision coverage in the U.S. | |||||||||||
 | A leading provider of group income protection critical illness, life and dental coverages in the U.K. | |||||||||||||
 | A leading provider of group and individual life insurance in Poland. | |||||||||||||
Our Strategy
We appreciate that the market dynamics of workplace benefits are continuously evolving, and we remain diligent in engaging with our constituent groups to understand both current and future needs. Our strategy is to:
•Remain a market leader in employee benefits and workplace solutions for our customers.
•Be a destination for highly engaged employees.
•Make a positive impact in the communities where we live and work.
Through strong execution of these priorities, while managing both risk and operating expenses, we expect to deliver leading shareholder return and win in the market.
We believe our disciplined approach to providing financial protection products at the workplace is the best way to reach workers in the U.S. and international markets we serve, and puts us in a position of strength. The products and services we provide have never been more important to employers, employees, and their families. Our strategy remains centered on growing our core businesses through investing and transforming our operations and technology to anticipate and respond to the changing needs of the marketplace, driving enhanced customer experiences and expanding into new adjacent markets through meaningful partnerships and effective deployment of our capital across our portfolio.
Success will also require us to show stable and predictable results in our Closed Block, particularly the long-term care business. We expect to achieve this through active and careful management with a sustained focus on creating value and increasing the predictability of outcomes. In turn, we can reduce overall risk and capital demands while serving the varied needs of our customers with care and compassion.
2024 UNUM GROUP PROXY STATEMENT
A LETTER FROM OUR BOARD OF DIRECTORS
April 15, 202111, 2024
Dear Fellow Shareholder:
At Unum Group, we’re grounded in our purpose is to helpof helping the working world thrive throughout life's moments, a calling that is particularly relevant today aslife’s moments. It guides the efforts of our company faces the ongoing challenges of the COVID-19 global pandemic. More than 38 million employees, and their families turn to Unum for their financial protection,leaders, and the $7.6 billionBoard, and it’s a call to action that resonates now more than ever. Nearly 45 million people count on us to be there in benefits paid last year helped safeguard millionstimes of people during someneed, and 174,000 employers choose us as a partner to support the wellbeing of their workers. We are proud to stand with them through the most difficultchallenging moments of their lives. Unum also partners with more than 180,000 companieslife and business.
In 2023, we made significant progress to protectaccelerate our growth and retain their employees and navigate today's complex leave laws.
Through strong and consistent execution, we delivered meaningful value to our investors. Total shareholder return (TSR) for the year was nearly 14%, ahead of our industry benchmark and peer group. Over the last three years, our TSR has outperformed every peer company and relevant benchmark indices, and we remain an attractive long-term investment built on a robuststrong franchise.
Our consistent performance has its roots in actions we took years ago. Beginning in 2019, we accelerated investments in new capabilities and our people, and remained steadfast in our approach throughout the economic uncertainty of the pandemic. This has clearly paid off as we now set the standard for excellence and innovation in the marketplace. Recent actions we've taken in our Closed Block of legacy policies we service and support, but no longer actively market, provide greater predictability and enhanced performance of our long-term care business. This includes having fully recognized the long-term care statutory reserves required by the Maine Bureau of Insurance ahead of schedule. Those actions have provided a strong capital position behind the business, continuity planning process, allowed Unum to quickly adjustwhich has mitigated the need for future contributions under current assumptions.
As we look to the changing dynamicsfuture, we will remain disciplined stewards of Unum’s capital and franchise value as we focus on enhancing our operations and continuing to innovate in ways that resonate with our customers and the outbreak. The operational agilitymarket. Services like Unum Total Leave™ and resiliency demonstrated by the companyrecently launched Unum Care Hub are digital-first services that address some of today’s most challenging workplace issues – employee leave management and itswellbeing. Platforms like Unum HR Connect® provide unique back-office capabilities that better integrate our offerings with our customers. Digital portals such as Colonial Life's Gathr™ make enrolling and managing benefits modern and intuitive. These and other solutions are being well received in the market and play an important role in driving greater efficiency and financial flexibility that further position us on a sustainable growth path.
Strong leadership and engaged employees are critical to durable success, and we as a Board have long prioritized making investments in our talent. That remained a focus in 2023 as we nurtured our already-deep leadership bench strength, invested to keep Unum competitive in the talent marketplace and supported actions that enabled our people ensuredto realize their full potential. Thanks to ongoing efforts to embed inclusion and diversity of thought into our ability to continue delivering on commitmentsoperations, our strong work culture is becoming even more resilient and strengthening the service and expertise provided to customers.
(1) Non-GAAP financial protection coverage. Over the last few years, investments to expand the product offerings and geographic footprint of Unum have produced important competitive advantages. In the U.S., dental and vision expansion is deepening relationships with existing clients and opening doors with new customers. In Europe, growth is driven by the company's new consumer-focused Benni platform, which connects valuable health resources with customers through our Help@Hand initiative, and by expanding into the Polish market. Unum continues to make investments in digital capabilities and people to enhance the experiencemeasure, see Appendix A for customers.reconciliation.
2024 UNUM GROUP PROXY STATEMENT
A LETTER FROM OUR BOARD OF DIRECTORS
Together, all of us at Unum recognize the obligations we have to all stakeholders to deliver on our commitments. We’re proud to have been recognized for the fourth year in a row as one of the World’s Most Ethical Companies by Ethisphere®, a global leader in defining and advancing corporate ethical standards. This and other third-party recognitions speak to our focus on proactively managingdoing the Closed Block segmentright thing and living up to our We Are Unum set of core values and our Code of Conduct. These principles guide our every action to not only serve our customers well but also advocate for access to essential financial protection benefits for all workers in the markets where we operate. They speak to the commitment we have to support our local communities and reduce the impact we have on the environment. Our values instill an unwavering customer focus and the importance of personal responsibility. Collectively, they represent a history of strong performance in core business operations, we're confident that the market will recognize the significant value of Unum as an investment over the long term.pledge to operate with integrity and compassion.
On behalf of the more than 10,000our nearly 11,000 employees, and entire leadership team at Unum, thank you for your continued support of Unum. We all share a commitment to deliver the company.benefits and services people and companies count on every day, and we’re well-positioned for sustained success.
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2024 UNUM GROUP PROXY STATEMENT
T
NOTICE OF 20212024 ANNUAL MEETING OF SHAREHOLDERS
DATE:Thursday, May 27, 202123, 2024
TIME: 10:2:00 a.m.p.m. Eastern Daylight Time
VIRTUAL MEETING SITE:SITE
The 20212024 Annual Meeting of Shareholders of Unum Group (the “company”("Unum" or the "company") will be a virtual meeting conducted exclusively via live webcast at www.virtualshareholdermeeting.com/UNM2021.UNM2024.
The Board of Directors (the "Board") has determined to hold a virtual-only annual meetingAnnual Meeting to facilitate shareholder attendance and participation by enabling shareholders to participate from any location and at no cost. We believe this is the right choice for the company at this time, as it enables engagement with our shareholders, regardless of size, resources or physical location, while safeguarding the health and wellbeing of our shareholders, employees, members of the Board and management. We are committed to ensuring 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 meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/UNM2021.UNM2024.
To attend the virtual meeting, you will need the 16-digit control number included on your Notice Regarding the Internet Availability of Proxy Materials (“Notice”("Notice"), proxy card, or voting instruction form, or legal proxy. The meeting webcast will begin promptly at 10:2:00 a.m.p.m. Eastern Daylight Time on May 27, 2021.23, 2024. 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- incheck-in procedures. 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.
For further details, see “About"About the 20212024 Annual Meeting”Meeting" beginning on page 109115.
WHO CAN VOTE:VOTE
Shareholders of record of the company’s common stock (NYSE: UNM) at the close of business on March 29, 2021,25, 2024, are entitled to vote at the meeting and any adjournment or postponement of the meeting.
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In addition to the voting items listed above, shareholders will transact any other business that may properly come before the meeting or any adjournment or postponement thereof. There will also be a report on the company's business.
| VOTING ITEMS | Pg. # | ||||||||||||||||
 | Election of the 12 Directors Named in this Proxy Statement | ||||||||||||||||
 | Advisory Vote to Approve Executive Compensation | ||||||||||||||||
 | Ratification of Appointment of Independent Public Accounting Firm | ||||||||||||||||
 | Approval of Amendment to Amended and Restated Certificate of Incorporation to Reflect Recent Amendments to Delaware Law Regarding Officer Exculpation | ||||||||||||||||
The Board unanimously recommends a vote "FOR" each of the director nominees in item 1, and "FOR" items 2, 3, and 4.
HOW TO VOTE:VOTE
Your vote is important. We encourage you to vote your shares as soon as possible, even if you plan to attend the meeting online. Many of our shareholders may vote by following the instructions below to vote via the internet, by telephone, or, if you have received a printed version of these proxy materials, by mail.
INTERNET
www.proxyvote.com(if in advance of meeting)
Deadline: 11:59 p.m. Eastern Daylight Time, May 22, 2024
You will needmay also vote your shares during the 16-digit controlmeeting at www.virtualshareholdermeeting.com/UNM2024.
TELEPHONE
1-800-690-6903 or the telephone number included on your Notice, proxy card, or voting instruction form.form
Deadline: 11:59 p.m. Eastern Daylight Time, May 22, 2024 MAIL Vote Processing c/o Broadridge 51 Mercedes Way, Edgewood, NY 11717 Receipt due by close of business day on May 22, 2024 | |||
If the proxy materials you received do not have a 16-digit control number, you mymay vote by following the instructions on the Notice or voting instruction form that you received.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 27, 2021:23, 2024: The proxy statement and annual report to shareholders are available at www.proxyvote.com.
| 2024 UNUM GROUP PROXY STATEMENT | 1 | |||||||||||||
TABLE OF CONTENTS
A NOTE ABOUT NON-GAAP FINANCIAL MEASURES
In this proxy statement, we present certain measures of our performance that are not calculated in accordance with generally accepted accounting principles in the United States of America (GAAP), which we use for purposes of setting executive compensation and evaluating our performance. Non-GAAP financial measures exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP, which are set forth below:
| | | | Year Ended December 31 | | |||||||
| | | | 2020 | | | 2019 | | | 2018 | | |
| | Net Income | | | $793.0 | | | $1,100.3 | | | $523.4 | |
| | Net Income per share* | | | $3.89 | | | $5.24 | | | $2.38 | |
| | Total Stockholders' Equity (book value) | | | $10,871.0 | | | $9,965.0 | | | $8,621.8 | |
| | Total Stockholders' Equity (book value) per share | | | $53.37 | | | $49.10 | | | $40.19 | |
| | Return on Equity | | | 7.6% | | | 11.8% | | | 5.8% | |
| OPERATING RESULTS ($ in millions, except per share data) — GAAP FINANCIAL MEASURES | |||||||||||||||||
| Year Ended December 31 | |||||||||||||||||
| 2023 | 2022(1) | 2021(1) | |||||||||||||||
| Net Income | $1,283.8 | $1,407.2 | $981.0 | ||||||||||||||
| Net Income per share* | $6.50 | $6.96 | $4.79 | ||||||||||||||
| Total Stockholders' Equity (book value) | $9,651.4 | $8,735.0 | $6,033.9 | ||||||||||||||
| Total Stockholders' Equity (book value) per share | $49.91 | $44.17 | $29.79 | ||||||||||||||
| Return on Equity | 14.0 | % | 19.1 | % | 19.2 | % | |||||||||||
| *Assuming dilution | |||||||||||||||||
This proxy statement refers to the following non-GAAP financial measures, which we believe are helpful performance measures and indicators of revenue, profitability and underlying trends in our business:
| ADJUSTED OPERATING RESULTS ($ in millions, except per share data) — NON-GAAP FINANCIAL MEASURES | |||||||||||||||||
| Year Ended December 31 | |||||||||||||||||
| 2023 | 2022(1) | 2021(1) | |||||||||||||||
After-Tax Adjusted Operating Income (2) | $1,513.6 | $1,294.2 | $917.9 | ||||||||||||||
| After-Tax Adjusted Operating Income per share* | $7.66 | $6.40 | $4.48 | ||||||||||||||
Book value, excluding AOCI (3) | $12,959.4 | $12,183.3 | $11,198.5 | ||||||||||||||
| Book value, excluding AOCI, per share | $67.02 | $61.61 | $55.30 | ||||||||||||||
Adjusted Operating Return on Equity (4) | 12.7 | % | 11.8 | % | 9.1 | % | |||||||||||
| Adjusted Operating Return on Equity (in core operations) | 21.2 | % | 17.7 | % | 10.4 | % | |||||||||||
| *Assuming dilution | |||||||||||||||||
(1)Prior financial information has been adjusted to reflect our modified retrospective adoption, effective January 1, 2023, of the Accounting Standards Update (ASU) 2018-12, related to targeted improvements to the accounting for long-duration contracts. Changes from this ASU were applied as of January 1, 2021, also referred to as the transition date.
(2)After-tax adjusted operating income is defined as net income adjusted to exclude after-tax investment gains or losses, amortization of the cost of reinsurance, non-contemporaneous reinsurance, and reserve assumption updates, as well as certain other items specified in millions, except per share data) — NON-GAAP FINANCIAL MEASURESthe reconciliation of non-GAAP financial measures in Appendix A of this proxy statement. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives.
(3)We sometimes refer to book value, excluding accumulated other comprehensive income (AOCI), as "adjusted book value."
| | | | Year Ended December 31 | | |||||||
| | | | 2020 | | | 2019 | | | 2018 | | |
| | After-Tax Adjusted Operating Income(1) | | | $1,005.4 | | | $1,140.6 | | | $1,145.0 | |
| | After-Tax Adjusted Operating Income per share | | | $4.93 | | | $5.44 | | | $5.20 | |
| | Book value, excluding AOCI(2) | | | $10,496.8 | | | $9,927.7 | | | $9,436.0 | |
| | Book value, excluding AOCI, per share | | | $51.54 | | | $48.92 | | | $43.98 | |
| | Adjusted Operating Return on Equity(3) | | | 10.7% | | | 12.8% | | | 13.2% | |
| | Adjusted Operating Return on Equity (in core operations) | | | 14.1% | | | 17.2% | | | 17.8% | |
(4)Adjusted operating return on equity is calculated using after-tax adjusted operating income or loss and excludes from equity the unrealized gain or loss on securities, the effect of change in discount rate assumptions on the liability for future policy benefits, and net gain or loss on hedges.
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Book value per common share excluding AOCI provides a more comparable and consistent view of our results, as AOCI tends to fluctuate depending on market conditions and general economic trends.
Cash flow assumptions used to calculate our liability for future policy benefits are reviewed at least annually and updated, as needed, with the resulting impact reflected in December 2020,net income. While the effects of these assumption updates are recorded in the reporting period in which the review is completed, these updates reflect experience emergence and changes to expectations spanning multiple periods. We believe that by excluding the impact of reserve assumption updates we are providing a more comparable and consistent view of our quarterly results.
We have exited a substantial portion of our Closed Block individual disability productsproduct line through a seriesthe two phases of the reinsurance agreements.transaction that were executed in December 2020 and March 2021, respectively. As a result, we exclude the amortization of the cost of reinsurance that was recognized upon the exit of the business related to the ceded reserves for the cohort of policies on claim status.status as well as the impact of non-contemporaneous reinsurance that resulted from the adoption of ASU 2018-12. Due to the execution of the second phase of the reinsurance transaction occurring after January 1, 2021, the transition date of ASU 2018-12, in accordance with the provisions of the ASU related to non-contemporaneous reinsurance, we were required to establish the ceded reserves using an upper-medium grade fixed-income instrument as of the reinsurance transaction date in March 2021, which resulted in higher ceded reserves compared to that which was reported historically. However, the direct reserves for the block reinsured in the second phase were calculated using the original discount rate utilized as of the transition date. Both the direct and ceded reserves are then remeasured at each reporting period using a current discount rate reflective of an upper-medium grade fixed-income instrument, with the changes recognized in other comprehensive income (loss). While the total equity impact is neutral, the different original discount rates utilized for direct and ceded reserves result in disproportionate earnings impacts. The impact of non-contemporaneous reinsurance will fluctuate depending on the magnitude of reserve changes during the period. We believe that the exclusion of the amortization of the cost of reinsurancethese items provides a better view of our results from our ongoing businesses. Book value per common share excluding AOCI, certain components of which tend to fluctuate depending on market conditions and general economic trends, is an important measure.
We may at other times exclude certain other items from our discussion of financial ratios and metrics in order to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur and does not replace the comparable GAAP financial measures in the determination of overall profitability.
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.
| 2024 UNUM GROUP PROXY STATEMENT | 3 | |||||||||||||
FORWARD-LOOKING STATEMENTS AND WEBSITE REFERENCES
Forward-Looking Statements and Website References
Certain information contained in this proxy statement may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, goals (including environmental, human capital, and sustainability goals) or other developments. Forward-looking statements speak only as of the date made. Such statements involve risks and uncertainties and we can give no assurance that they will prove to be correct or that any plan, initiative, projection, goal, commitment, or expectation can or will be achieved. We undertake no obligation to update these statements, even if made available on our website or otherwise. Actual results or outcomes could differ materially from those included in the forward-looking statements. Factors that could cause actual results to differ materially from those included in the forward-looking statements are discussed in our annual report on Form 10-K for the year ended December 31, 2023 and subsequent Securities and Exchange Commission ("SEC") filings.
Website references throughout this proxy statement are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this proxy statement. In addition, historical, current, and forward-looking sustainability, environmental, social, governance and other-related statements may be based on standards of measurement and performance that are still developing or may change or be refined, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
| 4 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
This summary is intended to highlight certain key information contained in this proxy statement that we believe will assist your review of the four business items to be voted on at the 20212024 Annual Meeting of Shareholders of Unum Group (the “2021"2024 Annual Meeting”Meeting"). As it is only a summary, we encourage you to review the full proxy statement, as well as our annual report on Form 10-K for the year ended December 31, 20202023 (the “2020"2023 Form 10-K”10-K"), for more complete information about these topics.
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| | | | 1 Year | | | 3 Year | | | 5 Year | | |
| | Unum | | | (16.32)% | | | (52.98)% | | | (19.19)% | |
| | Proxy Peer Group | | | (6.27) | | | (8.86) | | | 40.31 | |
| | S&P 500 | | | 18.40 | | | 48.85 | | | 103.04 | |
| | S&P Life & Health Index | | | (9.48) | | | (11.65) | | | 28.43 | |
Component | | | 2019 | | | 2020 | |
Base Salary | | | $1,000,000 | | | $1,050,000 | |
Annual Incentive Payout | | | 1,710,000 | | | 1,812,462 | |
Approved LTI Grant | | | 6,370,000 | | | 7,500,000 | |
Annual Compensation | | | $9,080,000 | | | $10,362,462 | |
| | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | Executive | | | 2018 Grant Date Fair Value(1) | | | Shares Eligible to Vest(2) | | | | | Operating Performance Factor(3) | | | | | Adjusted Shares | | | | | TSR Modifier | | | | | Earned Shares | | | Value of Earned Shares(4) | | ||||
| | CEO | | | $3,300,000 | | | 75,836 | | | x | | | 91.8% | | | = | | | 69,580 | | | x | | | 80% | | | = | | | 55,664 | | | $1,482,332 | |
Item 1: Election of the 12 Directors Named in this Proxy Statement | FOR each nominee | ||||||||||||||||||||||||||||||
| Director Since | ||||||||||||||||||||||||||||||
Theodore H. Bunting, Jr. | | Regulatory Compliance (Chair) | ||||||||||||||||||||||||||||
Susan L. Cross | | Risk and Finance | ||||||||||||||||||||||||||||
Susan D. DeVore | | |||||||||||||||||||||||||||||
Joseph J. Echevarria | | Risk and Finance (Chair) | ||||||||||||||||||||||||||||
Cynthia L. Egan | | Human Capital (Chair) | Regulatory Compliance | |||||||||||||||||||||||||||
Kevin T. Kabat, Board Chairman | | |||||||||||||||||||||||||||||
Timothy F. Keaney | | Audit (Chair) | Risk and Finance | |||||||||||||||||||||||||||
| 2022 | Human Capital | |||||||||||||||||||||||||||||
| Gloria C. Larson | | Governance (Chair) | Regulatory Compliance | |||||||||||||||||||||||||||
| 2023 | Risk and Finance | |||||||||||||||||||||||||||||
Richard P. McKenney, President and CEO | ||||||||||||||||||||||||||||||
Ronald P. O'Hanley | | Human Capital | ||||||||||||||||||||||||||||
| 2024 UNUM GROUP PROXY STATEMENT | 5 | |||||||||||||
PROXY SUMMARY
| Board's Recommendation | Page Reference | ||||||||||||||||||||||||
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Item 2: Advisory Vote to Approve Executive Compensation | ||||||||||||||||||||||||||||
We are seeking a non-binding advisory vote to approve the compensation of our named executive officers. We describe our compensation programs in the Compensation Discussion and Analysis section of this proxy statement. The Human Capital Committee believes these programs reward performance and align the long-term interests of management and shareholders. Although non-binding, the Human Capital Committee will take into account the outcome of the advisory vote and shareholder feedback when making future compensation decisions. | ||||||||||||||||||||||||||||
Item 3: Ratification of Appointment of Independent Registered Public Accounting Firm | |||||||||||||||||||||||||||
The Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm for | |||||||||||||||||||||||||||
| FOR | |||||||||||||||||||||||||||
We are asking shareholders to approve an amendment to our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to reflect recent amendments to Delaware law regarding officer exculpation (the “Proposed Amendment”). The Proposed Amendment provides for the elimination of monetary liability of certain officers of the company in certain limited circumstances. The Proposed Amendment also simplifies the existing exculpation provision related to directors of the company set forth in Article EIGHTH of the Certificate of Incorporation by referring to the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (the “DGCL”) instead of specifying each instance where exculpation for directors is currently not available under the DGCL. | |||||||||||||||||||||||||||
| 6 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
PROXY SUMMARY
Key Corporate Governance and Executive Compensation Items
2023 Say-on-Pay Vote and Shareholder Outreach
| Our 2023 proposal to approve executive compensation received 94% support. In 2023, as in prior years, we invited our top shareholders, representing approximately 67% of outstanding shares and 82% of shares held by institutions, to engage with us on business, governance, and compensation matters. Five shareholders, representing approximately 34% of our outstanding institutional shares, accepted our invitation for engagement, and we met with each of them. Our independent Human Capital Committee Chair joined three of the meetings. Another six shareholders, representing approximately 8% of our outstanding institutional shares, responded that a meeting was not necessary. |  | ||||
During the 2023 outreach, we received specific feedback as follows:
•Positive commentary on the compensation disclosure in our proxy statement;
•Complimentary feedback for having a strong corporate governance profile, specifically Board diversity, independence, and public company board experience; and
•Recognition for the robust enterprise risk management framework the company has in place (see page 55).
We also extended an invitation for engagement with two proxy advisory firms. Both firms declined a meeting indicating that they had no questions or overriding concerns with our corporate governance and executive compensation practices.
Overall, shareholders appreciated the opportunity to engage in these discussions. They also appreciated the company’s willingness to consider their input on both executive compensation and governance practices. We are committed to continuing our shareholder engagement efforts in the future.
Corporate Governance and Executive Compensation Practices
| Executive Compensation Practices | ||||||||||||||
| ü | A pay-for-performance philosophy | ü | Double-trigger provisions for severance and accelerated vesting of equity awards | |||||||||||
| ü | Annual say-on-pay votes | |||||||||||||
| ü | Clawback policies that meet NYSE requirements and that allow recoupment of time- and performance-based incentives in the event of misconduct outside the context of a financial restatement | |||||||||||||
| ü | Programs that mitigate undue risk taking in compensation | |||||||||||||
| ü | Independent compensation consultant to the Human Capital Committee | |||||||||||||
| ü | A balance of short- and long-term incentives | |||||||||||||
| ü | No golden parachute excise tax gross-ups | ü | Robust stock ownership and retention requirements | |||||||||||
| ü | Limited perquisites | ü | Relevant peer groups for benchmarking compensation | |||||||||||
| ü | No NEO employment agreements | ü | In-depth performance assessments of executives | |||||||||||
| 2024 UNUM GROUP PROXY STATEMENT | 7 | |||||||||||||
PROXY SUMMARY
| Board Practices | ||||||||||||||
| ü | All directors other than the CEO are independent, including the Board Chairman | ü | High Board and committee meeting attendance by directors (100% attendance in 2023) | |||||||||||
| ü | All Board committees fully independent | ü | Limits on outside board and audit committee service | |||||||||||
| ü | Commitment to diversity at the Board level and within the enterprise | |||||||||||||
| Governance Practices | ||||||||||||||
| ü | Annual election of all directors | ü | No supermajority vote requirements | |||||||||||
| ü | Independent Board chair | ü | Anti-pledging and anti-hedging policies applicable to executives and directors | |||||||||||
| ü | Majority vote requirement for directors (in uncontested elections) | |||||||||||||
| ü | Annual Board, committee, and individual director evaluations | |||||||||||||
| ü | Proxy access rights | |||||||||||||
| ü | Regular executive sessions of independent directors | |||||||||||||
| ü | Shareholder right to call special meetings | |||||||||||||
| ü | No poison pill | |||||||||||||
| ü | Annual, proactive shareholder engagement | |||||||||||||
| ü | Board-level oversight of ESG | |||||||||||||
| 8 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
PROXY SUMMARY
Performance Highlights
Unum’s purpose of helping the working world thrive throughout life’s moments is a north star that guides our actions every day. As a leading provider of financial protection insurance benefits in the U.S., U.K. and Poland, we protect nearly 45 million individuals and their families during the financial hardships that can occur in the event of illness, injury or loss of life. We also partner with 174,000 employer clients that manage workplace wellbeing and regulatory challenges in today’s quickly evolving workplace.
In 2023, Unum continued to deliver strong earnings and growth. After-tax adjusted operating earnings were $1.5 billion as the company saw a double-digit increase in sales and strong earned premium growth, both compared with 2022 results. Demand for our products and services remained robust as new digital capabilities enhanced the customer experience and streamlined administration for employer clients. Claims experience continued to largely return to historic levels in most of our product lines. The company also benefited from strong employment, wage inflation and favorable interest rates as these macro-economic trends largely continued from 2022.
These results, along with our ability to steadily generate strong cash flow, help us accelerate growth by funding ongoing reinvestment in our business and supporting our ability to take advantage of strategic opportunities that may arise — all while returning capital to shareholders.
Below are key financial performance measures from 2023. Additional measures, including those we use for annual and long-term incentive decisions, can be found beginning on page 66.
(1)After-tax adjusted operating results and book value per share, excluding AOCI, are non-GAAP financial measures. 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.
(2)Assuming dilution.
(3)Prior financial information has been adjusted to reflect our modified retrospective adoption, effective January 1, 2023, of the ASU 2018-12, related to targeted improvements to the accounting for long-duration contracts. Changes from this ASU were applied as of January 1, 2021, also referred to as the transition date.
| 2024 UNUM GROUP PROXY STATEMENT | 9 | |||||||||||||
PROXY SUMMARY
Operating Highlights
By living our purpose, we are laser-focused on meeting the needs of our customers. In 2023, Unum paid $7.9 billion in benefits to people facing illness, injury or loss of life. Satisfaction metrics measuring our engagement with customers and partners increased throughout the year as we implemented new service and support capabilities across the enterprise.
We have transformed our business over the last several years through significant investments in our digital capabilities. By investing in technologies that anticipate and deliver on evolving customer expectations, we have continued to separate ourselves from the competition and seize opportunities in the marketplace. These technologies create new digital experiences for customers, automate and modernize business processes, track key metrics, deliver new products and services to market faster, and improve customer satisfaction. Through our efforts to continuously improve, we strive to enrich the experience for our customers and enhance the effectiveness of our people.
Our well-diversified portfolio delivers consistent investment income. Due to the nature of our business, we invest in long-term securities focusing on asset liability management and sound risk management. In 2023, our portfolio performed well in a volatile interest rate environment.
Long-Term Care Performance
The same discipline that allows our core franchise to be successful also benefits our long-term care (LTC) business. LTC is part of our Closed Block that consists of policies that we continue to service and support, but no longer actively market. We manage this block with a combination of rate increases, risk management, tailored investment strategy and ongoing monitoring of emerging experience to inform updates to our reserve liability assumptions and appropriate capital levels.
Following an examination of one of our Maine-domiciled insurers, in 2020 the Maine Bureau of Insurance required us to establish additional LTC statutory reserves, permitting this to be done over a period of seven years. We completed the recognition of these additional required reserves at the end of 2023, ahead of schedule, and view this action as further increasing margin over our best estimate assumptions. Our actions have provided a strong capital position behind the business, which has mitigated the need for future contributions under current assumptions.
We continue to take actions, such as those described above, to provide for the long-term stability of this block and promote transparency for our shareholders and customers.
Impact and Sustainability
We provide a critical financial safety net for millions of people, a fact that drives us to deliver for those who count on us. This focus on doing the right thing guides our approach to sustainability and social responsibility. Unum has a long tradition of engaging with shareholders, customers, employees, suppliers and communities on these matters.
The Governance Committee of the Board provides oversight and guides the company's sustainability strategy and initiatives. Over the last few years, we have continued to strengthen and mature our management and disclosure of environmental, social and governance (ESG) matters, and to evaluate and address emerging risks to our business, including climate change and increased regulatory focus on key issues. We also continue to evolve our inclusion and diversity strategy and refine our approach to integrating ESG factors into our investment decisions. In addition to these targeted efforts, we remained focused on providing meaningful opportunities for engagement with our key stakeholders on these matters.
| 10 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
PROXY SUMMARY
In 2023, Unum made a number of advances in our impact and sustainability-related efforts:
•We were awarded the Compliance Leader Verification designation by Ethisphere® following the assessment of our Compliance and Ethics program. In 2024, Ethisphere also recognized Unum for the fourth consecutive year as one of the World’s Most Ethical Companies.
•Through our investment portfolio, we hold nearly $3 billion of investments that have a societal or environmental impact in areas such as education, infrastructure, healthcare, affordable housing, and renewable energy projects.
•We conducted scenario modeling and testing on key issues and potential risks to the company.
•We provided $14.7 million to support the communities where we operate.
Our corporate sustainability strategic framework helps create long-term value for stakeholders by implementing business strategies that focus on social, environmental, governance, and economic dimensions of doing business. Our strategic framework focuses on three areas where we believe Unum can add both societal and business value:
•Inclusive products and services — We strive to ensure that the financial security provided by our products and practices contributes to more inclusive communities.
•Responsible investments — Being in the business of insurance, we recognize that one of our greatest opportunities to influence the world around us is through our investment portfolio. Making responsible investments is key to our long-term strategy, which includes consideration of environmental, social and governance factors.
•Reducing environmental impact — We recognize the impact that environmental issues, such as climate change, could have on our business. We aim to reduce our environmental impact and prepare for environmental issues.
A more comprehensive discussion of our efforts and progress is published annually in our Impact and Sustainability Report, which is available at www.unumgroup.com/esg. See page 48 for more information about Impact and Sustainability.
Capital Generation for Shareholders
Because of our strong financial performance, we generated premium growth and strengthened our capital position in 2023, allowing us the opportunity to deploy capital in a number of ways.
•We invested in our people, products and technology to drive growth.
•We paid out more than $277 million in dividends, or $1.39 per share.
•We purchased $252 million worth of our shares.
Our credit ratings are reflective of a strong balance sheet, favorable operating results, and a highly respected brand in the employee benefits market. In 2023, we received upgrades to our financial strength and debt ratings from two key credit agencies, a noteworthy validation of our capital management and growth plans.
| 2024 UNUM GROUP PROXY STATEMENT | 11 | |||||||||||||
PROXY SUMMARY
Total Shareholder Return
Unum delivered robust value to shareholders in 2023 as we continued to outpace the performance of many peers. The company accelerated growth through increased demand for its products and services, highlighted by double-digit sales growth, healthy increases in premium income and strong persistency in our core operations. Record after-tax adjusted operating earnings per share illustrated Unum’s disciplined approach to pricing and balanced expense management, while our ability to generate substantial excess capital provided financial flexibility to invest in growth initiatives, fund long-term needs in our Closed Block segment and increase the level of capital returned to shareholders.
Based on our strong operational and financial results over the last few years, we believe Unum is an attractive investment for shareholders. Total shareholder return for the year was ahead of our industry benchmark and proxy peer group at nearly 14% (see below). Over the longer term, Unum has continued to excel in returning value to shareholders, in part through steady growth in book value per share (excluding AOCI) and premium income over the last several years, and increasing dividend payments and share repurchase activity. Macro-economic factors, such as strong employment, wage inflation and high interest rates, are beneficial for our business, and we believe will continue to drive greater recognition of our value to investors.
In addition to our core operations, our Closed Block segment primarily consists of long-term care (LTC) policies and older individual disability policies that Unum continues to service and support. After agreeing to increase LTC statutory reserves over a multi-year period starting in 2020, we accelerated these planned contributions and completed the recognition of these additional required reserves at the end of 2023. Through these and other steps, we have provided a strong capital position behind the business, which has mitigated the need for future capital contributions under current assumptions.
We believe this, combined with our market-leading positions, history of consistent execution, strong demand for our products and services, favorable business environment, capital strength, and strategy of prioritizing funding of growth initiatives, makes Unum an excellent long-term investment.
| TOTAL SHAREHOLDER RETURN | CORE OPERATIONS PREMIUM GROWTH (Billions) | BOOK VALUE PER SHARE (Excl AOCI)(1) | ||||||||||||||||||
| 1 Year | 3 Year | 5 Year |  |  | ||||||||||||||||
| Unum | 13.7% | 120.7% | 89.5% | |||||||||||||||||
| Proxy Peer Group | 9.1% | 46.1% | 79.5% | |||||||||||||||||
S&P Life & Health Index(3) | 4.6% | 57.8% | 76.0% | |||||||||||||||||
| S&P 500 | 26.3% | 33.1% | 107.2% | |||||||||||||||||
(1) Non-GAAP financial measure, see Appendix A for reconciliation.
(2) Prior financial information has been adjusted to reflect our modified retrospective adoption, effective January 1, 2023, of the ASU 2018-12, related to targeted improvements to the accounting for long-duration contracts. Changes from this ASU were applied as of January 1, 2021, also referred to as the transition date.
(3) S&P 500 Life & Health Insurance Sub Industry Index.
| 12 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
PROXY SUMMARY
2023 CEO Compensation Summary
Our approach to CEO compensation aligns directly with our overall executive compensation philosophy and structure as detailed in the Compensation Discussion and Analysis ("CD&A") section under Compensation Program Structure. Richard P. McKenney serves as President and CEO of the company. Mr. McKenney's targeted total direct compensation consists of base pay plus short- and long-term incentives that are tied directly to performance goals. This structure is designed to support the long-term successes of the company and the interests of our shareholders.
Mr. McKenney is subject to robust stock ownership requirements, including a requirement to own six times his annual base salary in stock. This helps to ensure that the long-term value of his compensation directly aligns with shareholders.
At the beginning of 2023 following discussion with Mr. McKenney, the Board approved his performance goals for the year, which included:
•Business and financial objectives;
•Strategic objectives;
•Talent management initiatives;
•Enhancing our culture of inclusion and diversity; and
•Operational effectiveness and efficiency targets.
In addition to carefully reviewing a self-assessment prepared by Mr. McKenney, the Human Capital Committee (as used in this 2023 CEO Compensation Summary, the "Committee") and Board conducted a thorough evaluation of his performance against all objectives as well as a review of a number of professional and leadership characteristics and behaviors (see the "Individual Performance Evaluations" section of the CD&A).
As outlined above, Unum delivered record after-tax adjusted operating earnings of $1.5 billion as the company saw double-digit sales growth, healthy increases in premium income and strong persistency in our core operations. Demand for our products and services continued to be strong as new digital capabilities enhanced the experience for our customers.
In evaluating Mr. McKenney's performance during 2023, the Committee and the Board specifically highlighted his leadership in:
•Guiding the company to another record year of profitability, exceeding plan for nearly all operational and financial metrics;
•Further strengthening the company's capital position to maximize financial flexibility while deploying capital to address key needs;
•Driving ongoing accountability and commitment to Unum's purpose of helping the working world thrive throughout life's moments;
•Deepening the company's commitment to sustainability and social responsibility through a variety of environmental, social, and governance programs that reflect the goals of the company, investors and other key stakeholders; and
•Cultivating a high-performance culture to deliver on Unum's commitments to customers, shareholders and communities.
The Board has full confidence in Mr. McKenney as CEO and believes the company is well-positioned for long-term success under his continued leadership.
| 2024 UNUM GROUP PROXY STATEMENT | 13 | |||||||||||||
PROXY SUMMARY
2023 Compensation Decisions
The CEO Compensation Summary below depicts how the Committee views its decisions concerning Mr. McKenney’s compensation for 2023, compared to his 2022 compensation. It differs from the information presented in the Summary Compensation Table (the "SCT") required by the Securities and Exchange Commission as follows:
•The CEO Compensation Summary table treats long-term incentive (LTI) awards similar to how annual incentive awards are treated in the SCT (which are based on the performance year to which the award relates). Therefore, the value of the LTI award granted in March 2024 based on performance in 2023 is shown as 2023 compensation. In contrast, the SCT reflects the value of Mr. McKenney's restricted stock units (RSUs) in the year in which the RSUs are granted and performance-based cash incentive units (CIUs) in the year in which the CIUs vest;
•The table below excludes the 2020 Success Incentive Plan grant, a portion of which vested in 2023, since this was a one-time award and not viewed as part of annual compensation; and
•The SCT includes amounts reported in the "Change in Pension Value & Non-Qualified Deferred Compensation Earnings" and "All Other Compensation" columns. Although regularly monitored by the Committee, these amounts were not considered when it made annual performance-based compensation determinations for 2023 and are therefore not shown in the presentation below.
The CEO Compensation Summary table is not intended as a substitute for the SCT, which is on page 89.
| CEO COMPENSATION SUMMARY | ||||||||||||||
| Performance Year | ||||||||||||||
| Component | 2022 | 2023 | ||||||||||||
| Base Salary | $1,090,385 | $1,100,000 | ||||||||||||
| Annual Incentive Payout | 3,761,828 | 4,331,251 | ||||||||||||
Approved LTI Grant (1) | 9,000,000 | 10,687,500 | ||||||||||||
| Annual Compensation | $13,852,213 | $16,118,751 | ||||||||||||
| (1) The approved LTI grant is divided evenly between RSUs (50%) and CIUs (50%). | ||||||||||||||
ANNUAL INCENTIVE
Mr. McKenney's 2023 annual incentive payout of $4,331,251 was calculated by applying the company performance achievement factor of 140% and a strategic objectives modifier of 112.5% to his target award (see "Annual Incentive Results" in the CD&A section). The strategic objectives modifier percentage was determined by the Committee based on its evaluation of Mr. McKenney's performance as highlighted above and on page 75. Mr. McKenney's 2023 annual incentive award is an increase of $569,423 from his 2022 payout.
LONG-TERM INCENTIVE
After consideration of Mr. McKenney's strategic leadership and performance during 2023, as outlined above, the Committee applied a strategic objectives modifier of 112.5% to his 2023 LTI target, resulting in an LTI grant of $10,687,500. This award, which was granted in March 2024, is an increase of $1,687,500 over his award granted last year. Mr. McKenney's LTI awards were delivered through time-based restricted stock units (RSUs) and performance-based cash incentive units (CIUs). The value of the RSUs is based on the company’s stock price while the value of CIUs is based on growth in adjusted book value and dividends, further modified by relative total shareholder return (TSR).
Our LTI program is designed to align the interests of management and long-term shareholders. This impact can be seen in the CIUs granted in 2021 ("2021 CIUs"). Shareholder return measures of adjusted book value and
| 14 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
PROXY SUMMARY
dividend yield were achieved at 160.8% over the three-year performance period, with relative TSR at the 100th percentile of the comparator group, resulting in a 20% increase for a final payout of 193% of target. Additional details, including regarding the performance impact on 2021 CIUs, can be found within the Annual and Long-Term Incentive Programs section beginning on page 66.
CASH SUCCESS UNIT AND STOCK SUCCESS UNIT VESTING
In February 2024, the Committee reviewed and certified that the performance hurdles were met for the performance period January 2021-December 2023 for the 2020 Success Incentive Plan (SIP) grant. Therefore, the second one-third of cash success units (CSUs) and stock success units (SSUs) vested and were distributed. Mr. McKenney had a total of 61,502 SSUs and related cash dividends as well as $1,617,000 CSUs that vested. Details about the vesting of these awards can be found on page 73.
2024 Compensation
In February 2024, the Committee, together with its consultant, Pay Governance LLC, reviewed Mr. McKenney's total targeted compensation relative to proxy peers. After considering his experience, his leadership in the CEO role, and his disciplined approach in executing the company's strategic framework, the Committee decided to increase his long-term incentive target opportunity for 2024 from $9.5 million to $10.5 million. These decisions reflect Mr. McKenney's strong leadership and strategic positioning of the company.
| 2024 UNUM GROUP PROXY STATEMENT | 15 | |||||||||||||
Board Overview
The Board of Directors is elected by shareholders to oversee management and promotetheir interests in the long-term interestshealth and overall success of shareholders.the company's business and financial strength. In addition, the Board has responsibility to the company's policyholders, employees, and business partners and to the communities in which the company operates, all of which are essential to the company's success. The Board oversees the CEO and other senior management, who are responsible for carrying out the company's day-to-day operations in a responsible and ethical manner. The Board and its committees meet regularly to review and discuss the company's strategy, business, performance, ethics, risk tolerance, human capital engagement, and culture, as well as important issues that it faces. These discussions take place with management and, as appropriate, with outside advisers who provide independent expertise, perspectives and insights. In addition, the independent members of the Board and its committees hold regular executive sessions to discuss matters free of the presence or influence of management.without management present. Board members are also kept apprised of significant developments that arisein ongoing communication with each other and with management between meetings.
Board Composition and Refreshment
The Board believes a critical component of its effectiveness in serving the long-term interests of shareholders is to ensure its membership remains diverse, possessing a variety of backgrounds, experiences and skill sets from which to draw. Fresh views and ideas help the Board to maintain a broad perspective and forward-looking vision capable of anticipating and adapting to the rapid pace of change, just as experience and continuity provide necessary context and stability for important decisions. With that in mind, the Governance Committee reviews the composition of the Board to ensurewith the goal of maintaining an appropriate balance of experiences, skills, tenure and diversity. This is an ongoing, year-round evaluation process. Most recently, Mojgan Lefebvre joined the Board in 2023 as a result of the Board's commitment to this ongoing process.
The Board is committed to effective boardBoard succession planning and refreshment, including having honest and difficult conversations with individual directors when necessary. These conversations may arise in connection with the Board evaluation process, succession planning or consideration of the annual slate of Board nominees. As a result of these processes, directors may decide (for personal or professional reasons) or be asked (for reasons such as evolving needs for Board composition or directors' availability to make sufficient contributions to the Board) not to stand for re-election at the next Annual Meeting. It is expected these refreshment practices will continue in the future.
On-Boarding and Continuing Education
Shortly after a new director has been elected to the Board, the director participates in an orientation program that includes meetings with the Board Chair, other directors, and senior management concerning the company's business, strategic plans and risk profile, the operations of significant business segments, significant financial, accounting and risk management issues, compliance and ethics programs, and Code of Conduct. In addition, when directors are appointed to a particular committee for the first time, the director participates in orientation sessions specific to the committee's responsibilities. On an ongoing basis, directors also receive presentations on a variety of topics related to their work on the Board and within the insurance and financial services industries, both from senior management and from experts outside of the company. Directors participate in continuing education sessions designed to assist them in discharging their duties.
| 16 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
Board Qualifications
The Board strives to maintain independence of thought and diverse professional experience among its membership. The Board and the Governance Committee look for directors who have qualifications and attributes in key areas relevant to Unum, and that align with both our short- and long-term business strategies. These qualifications and attributes are evaluated on an annual basis and adjusted as needed so that they continue to serve the best interests of the company. The table below summarizes the qualifications and attributes that are important to Unum and addresses how the composition of our Board, as a whole, meets these needs. In addition to the qualifications and attributes described below, financial literacy is expected of all Board members.
| Qualifications and Attributes | Relevance to Unum | Board Composition | ||||||||||||
We operate in a complex financial and regulatory environment with disclosure requirements, detailed business processes and internal controls. |   | |||||||||||||
Business Operations | We have significant operations focused on customer service, claims management, sales, marketing and various back-house functions. |   | ||||||||||||
Capital Management | We allocate capital in various ways to run our operations, grow our core businesses and return value to shareholders. |  | ||||||||||||
| Experience leading a large, widely-held organization provides practical insights on need for transparency, accountability, and integrity. |  | |||||||||||||
| Corporate Governance/ESG | As a public company and responsible corporate citizen, we expect effective oversight and transparency, and our stakeholders demand it. |  | ||||||||||||
Insurance/Financial | | |||||||||||||
 | ||||||||||||||
Industry Experience | Experience in the insurance and financial services industry provides a relevant understanding of our business, strategy, and marketplace dynamics. | | ||||||||||||
With global operations in several countries and prospects for further expansion, international experience helps us understand opportunities and challenges. |   | |||||||||||||
Investment Markets | We manage a large and long-term investment portfolio to uphold our promises to pay the future claims of our policyholders. |   | ||||||||||||
Recent Public Board Experience | We value individuals who understand public company reporting responsibilities and have experience with the issues commonly faced by public companies. |  | ||||||||||||
| ||||||||||||||
Regulatory/Risk Management | A complex regulatory and risk environment requires us to develop policies and procedures that effectively manage compliance and risk. | | ||||||||||||
Technology/Digital Transformation | We rely on technology to manage customer data, deliver products and services to the market, pay claims, and enhance the customer experience. |  | ||||||||||||
| 2024 UNUM GROUP PROXY STATEMENT | 17 | |||||||||||||
Directors with varied tenure contribute to a range of perspectives and allow us to transition knowledge and experience from longer-serving members to those newer to our Board. We have a mix of new and long-standing directors, with our 1112 director nomineesnominees averaging 7.49 years of service on the Board as of the 20212024 Annual Meeting.
Board Diversity
Our Board is comprised of members with a range of backgrounds and overall experience. More than halfSince the beginning of 2018, four new directors have joined the Board, allowing us to achieve gender parity among our directors. This achievement reflects our deep commitment to bringing diverse voices to our discussions and decisions. Additionally, one-third of our Board members are womenracially or represent a minority group.ethnically diverse.
Although the Board does not have a specificspecific diversity policy, it recognizes diverse representation on the Board with respect to gender, race, ethnicity, and age, including in positions of leadership, serves to improve dialogue, decision-making, and culture in the boardroom. Our Governance Committee focuses on advancing continued diversity on the Board during refreshment activities by requiring that candidate pools include diverse individuals including women, who meet the recruitment criteria. From the candidate pools, our Governance Committee selects director candidates based on their qualifications and attributes most essential to the Board's future success, as addressed below.discussed in more detail below. Our director nominees range from 5255 to 7174 years of age, with the average age being 62.264.9 years, as of the 20212024 Annual Meeting.
* Tenure and age for director nominees is calculated as of the 2024 Annual Meeting. Tenure is rounded to the nearest year and calculated from date of first election.
| 18 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
A healthy and vigorous Board evaluation process is an essential part of good corporate governance. A thorough evaluation process helps us achieve the right balance of perspectives, experiences and skill sets needed for prudent oversight of the company, including execution on corporate strategy, while also considering the best interests of our shareholders. At Unum, this evaluation process includes annual evaluations of the Board, each committee, and individual directors.
The Governance Committee establishes and oversees the evaluation process, which focuses on identifying areas where Board, committee and director performance is most effective, as well as opportunities for further development or enhancement. Each year, the Governance Committee reviews the format and effectiveness of the evaluation process in identifying actionable feedback, recommending changes in process as appropriate. Determining whether to engage a third-party facilitator is also part of the review.
The evaluation process is conducted in two phases. The first phase focuses on the evaluation of the effectiveness of each committee and the Board as a whole. Directors complete questionnaires evaluating the Board and thethe committees on which they serve across a variety of topics, including culture, composition, structure and engagement. In recent years, Board members have provided feedback regarding corporate strategy, business resiliencyrisk management programs, Board composition and structure, succession plans, future agenda items, meeting materials and director education. The second phase involves interviewing individual directors to collect feedback on peer directors' performance. This phase is led by the Governance Committee Chair in advance and in anticipation of the nomination process, with key messages delivered to each director. This two-phased approach has generated robust discussions at all levels of the Board, and resulted in changes that have improved Board efficiency and effectiveness.effectiveness. For example, in recent years, these discussions have led to enhancements to Board diversity, meeting materials, director on-boarding, executive sessions, and Board member engagement.
| 2024 UNUM GROUP PROXY STATEMENT | 19 | |||||||||||||
Director Independence
Our corporate governance guidelines provide that a majority of the Board will be independent. For a director to be considered independent, the Board must determine the director has no material relationship with our company, and the director must meet the requirements for independence under the listing standards of the New York Stock Exchange (NYSE). The Board has also determined certain categories of relationships are not considered to be material relationships that would impair a director’s independence. These independence standards are listed in our corporate governance guidelines, which are available on our investor relations website under the "Governance" heading at www.investors.unum.com.
The Governance Committee reviews information about the directors’ relationships and affiliations that are germane to an assessment of their independence and makes recommendations to the Board as to the independence of the directors. In making independence determinations, the Board considers all relevant facts and circumstances. In this regard, the Board considered that each of the non-employee directors, or one of their immediate family members, is or was during the last three fiscal years a director, trustee, advisor, or executive or served in a similar position at another business that had dealings with our company during those years. In each case, these have been ordinary course dealings (e.g., where the other business obtains insurance policies from us or we acquire, dispose or receive interest on security investments or make payments for trustee, depository and commercial banking business relationships) involving amounts less than 1% of both our and the other business’ consolidated gross revenues for such fiscal year or in which the director's interest arose only from his or her position as a director of the other business. None of our non-employee directors, or any of their immediate family members, is or was during the last three fiscal years, a director, executive, or employee of a charitable organization or university that received contributions from us (other than non-discretionary matching contributions) in excess of $120,000 in any one fiscal year.
Based on a review of the findings and recommendations of the Governance Committee and applying the standards described above, the Board has determined Mr. Bunting, Ms. Cross, Ms. DeVore, Mr. Echevarria, Ms. Egan, Mr. Kabat, Mr. Keaney, Ms. King, Ms. Larson, Ms. Lefebvre, and Mr. O’Hanley are independent directors. Francis J. Shammo did not stand for re-election to the Board at the 2023 Annual Meeting of Shareholders. The Board previously determined that Mr. Shammo was independent during the time he served on the Board during 2023.
Mr. McKenney, our President and CEO, is not an independent director.
Process for Selecting and Nominating Directors
Director Nominee and Selection
The Governance Committee is responsible for identifying and evaluating director candidates and recommending to the Board a slate of nominees for election at each Annual Meeting. The Governance Committee periodically engages a third-party search firm to assist with recruitment efforts.efforts. During these times, the firm has been asked to identify candidates who meet the criteria of our search, provide requested background and other relevant information regarding candidates, and coordinate arrangements for interviews as necessary. Nominees may also be suggested by directors, management, or shareholders. Ms. Lefebvre, who was elected to the Board in July 2023, was recommended to the Governance Committee by a third party search firm.
| 20 | 2024 UNUM GROUP PROXY STATEMENT | ||||||||||
CORPORATE GOVERNANCE
Shareholders may recommend director candidates for consideration by the GovernanceGovernance Committee by providing the same information that would be required to nominate a director candidate, as described on page 114page 120 in the the section titled “Shareholder"Shareholder proposals and nominations for our 20222025 Annual Meeting”Meeting". Submissions must be made in writing to the Corporate Secretary at Unum Group, 1 Fountain Square, Chattanooga, Tennessee 37402. The Governance Committee’s policy is to consider candidates recommended by shareholders in the same manner as other candidates.
Our corporate governance guidelines specify the following criteria to be used in evaluating the candidacy of a prospective nominee:
•Reputation for high ethical conduct, integrity, sound judgment, and accountability;
•Current knowledge and experience in one or more key areas identified inthat will enable the corporate governance guidelines;Board as a whole to possess the core qualifications and attributes needed on the Board;
•Collegial effectiveness; and
•Diversity, whether in viewpoints, gender, race, ethnicity, age, professional experience or other demographics.
The core qualifications and attributes sought in any particular candidate depend on the current and future needs of the Board based on an assessment of the composition of the Board and the mix of qualifications and attributes currently represented. In addition, the Governance Committee considers other specific qualifications that may be desired or required of nominees, including their independence and ability to satisfy specific requirements for committees. As part of the director selection and nomination process, the Governance Committee assesses the effectiveness of its Board membership criteria.
In determining whether to recommend a director for re-election, the Governance Committee also considers the director’s interest in continuingability to serve;commit the time and attention appropriate for effective Board service; past attendance at meetings; contributions to the Board and committees on which the director serves; the skills, experience and background that the director brings to the Board relative to the Board’s needs and existing composition; and the results of the most recent Board, committee and individual director evaluations.
Annual Election of Directors
Directors are elected each year at the Annual Meeting for a one-year term expiring at the next Annual Meeting. Directors hold office until their successors are elected, or until their earlier death, resignation, disqualification, or removal from office. Other than requiring retirement from the Board at the next Annual Meeting after a director reaches age 75, (which was increased from age 72 this year), there are no term limits. However, the Governance Committee evaluates the qualifications and performance of each incumbent director before recommending the nomination of that director for an additional term.
Majority Voting Standard
Our bylaws provide that, in an election of directors where the number of nominees does not exceed the number of directors to be elected (an “uncontested election”"uncontested election"), each nominee must receive a majority of the votes cast with respect to that nominee to be elected as a director (i.e., the number of shares voted “for”"for" a nominee must exceed the number voted “against”"against" that nominee). If an incumbent director is not re-elected under this majority voting standard, the directorBoard must submit an irrevocable letterdecide whether to accept or reject the director's offer of resignation which was previously delivered to the Board, which will become effective upon acceptance bycompany pursuant to the Board.Board's advance contingent director resignation policy. The Governance Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. If the director submitting the resignation is a member of the Governance Committee, that director will not participate in the Governance Committee’s recommendation to the Board. The Board will act on the Governance Committee’s recommendation and publicly disclose its decision and rationale within 90 days from the date of the certification of the election results. The director in question will not participate in the Board's decision.
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CORPORATE GOVERNANCE
Limits on Board and Audit Committee Service
While we recognize that Board members benefit from service on the boards of other companies and such service is encouraged, the Board believes it is critical that directors be able to dedicate sufficient time to their service on our Board. To that end, except for our CEO, no director may serve on more than three public company boards in addition to our Board, or on more than two audit committees of public companies in addition to our Audit Committee. The company's CEO may not serve on more than one public company board in addition to our Board. All directors are in compliance with these outside service limits at this time. Further, as noted above, in determining whether to recommend a director for re-election, the Governance Committee considers the director's ability to commit the time and attention appropriate for effective Board service.
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Below are brief biographies for each of our current directors and descriptions of the directors’ key qualifications, skills, and experiences that contribute to the Board’s effectiveness as a whole.
Director Nominees
  Director since 2013 at Annual Meeting INDEPENDENT DIRECTOR COMMITTEES Audit Regulatory Compliance (Chair) | Theodore H. Bunting, Jr. | |||||||
Mr. Bunting retired as the Group President, Utility Operations of Entergy Corporation, an integrated energy company, where he previously served as Senior Vice President and Chief Accounting Officer. He has extensive financial, accounting and operational experience as a senior executive with a public company in a regulated industry. Mr. Bunting has experience as a director at other publicly traded companies, | ||||||||
CAREER EXPERIENCE | ||||||||
Entergy Corporation Group President, Utility Operations (2012–2017) Sr. Vice President and Chief Accounting Officer (2007–2012) Numerous other executive roles (joined Entergy in 1983) | PUBLIC COMPANY BOARD EXPERIENCE | |||||||
The Hanover Insurance Group, Inc., since 2020 NiSource Inc., since 2018 | Prior board service: Infrastructure and Energy Alternatives, Inc. (2021-2022) | QUALIFICATIONS •Accounting/Auditing •Business Operations •Capital Management •Other Recent Public Company Board Experience •Regulatory/Risk Management | ||||||
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INFORMATION ABOUT THE BOARD OF DIRECTORS
  Director since 2019 at Annual Meeting INDEPENDENT DIRECTOR COMMITTEES Audit Risk and Finance | Susan L. Cross | |||||||
Ms. Cross is the former Executive Vice President and Global Chief Actuary of XL Group Ltd (now AXA XL), a global insurance and reinsurance company. She previously held various chief actuarial positions for the operational segments of | ||||||||
CAREER EXPERIENCE | ||||||||
XL Group Ltd. Executive Vice President and Global Chief Actuary (2008–2018) Senior Vice President and Chief Actuary XL Group (2006–2008) XL Reinsurance (2000–2006) XL America (1999–2000) Significant consulting experience with Willis Towers Watson in the U.S. and Bermuda | PUBLIC COMPANY BOARD EXPERIENCE Enstar Group Limited, since 2020 QUALIFICATIONS •Accounting/Auditing •Business Operations •Capital Management •Insurance/Financial Industry Experience •International •Other Recent Public Company Board Experience •Regulatory/Risk Management | |||||||
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  Director since 2018 at Annual Meeting INDEPENDENT DIRECTOR COMMITTEES Governance | Susan D. DeVore | |||||||
Ms. DeVore | ||||||||
CAREER EXPERIENCE | ||||||||
Premier, Inc. CEO (2013–May 2021) President Premier Healthcare Solutions, Inc. President and CEO (2009–2013) COO (2006–2009) Significant consulting experience with Ernst & Young LLP, including service as a Partner, Executive Committee member and Senior Healthcare Industry Management Practice Leader | PUBLIC COMPANY BOARD EXPERIENCE Elevance Health, Inc., since 2021 Prior board service: Premier, Inc. (2013–2021) QUALIFICATIONS •Accounting/Auditing •Business Operations •Capital Management •CEO or CFO Experience •Corporate Governance/ESG Leadership •Other Recent Public Company Board Experience •Regulatory/Risk Management •Technology/Digital Transformation | |||||||
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INFORMATION ABOUT THE BOARD OF DIRECTORS
  Director since 2016 at Annual Meeting INDEPENDENT DIRECTOR COMMITTEES Governance Risk and Finance (Chair) | Joseph J. Echevarria | ||||||
Mr. Echevarria retired as the Chief Executive Officer of Deloitte LLP, a global provider of professional services, where he previously held increasingly senior leadership positions. He is currently | |||||||
CAREER EXPERIENCE | University of Miami | ||||||
Deloitte LLP CEO (2011–2014) Various executive positions during his 36 years with Deloitte | PUBLIC COMPANY BOARD EXPERIENCE | ||||||
The Bank of New York Mellon Corporation, | |||||||
since 2015 (Non-Executive Chair since September 2019) Pfizer Inc., since 2015 Prior board service: Xerox Holdings Corporation | QUALIFICATIONS | •Accounting/Auditing •Business Operations •Capital Management •CEO or CFO Experience •Corporate Governance/ESG Leadership •Insurance/Financial Industry Experience •International •Other Recent Public Company Board Experience •Regulatory/Risk Management | |||||
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  Director since 2014 at Annual Meeting INDEPENDENT DIRECTOR COMMITTEES Human Capital (Chair) Regulatory Compliance | Cynthia L. Egan | |||||||
Ms. Egan retired as the President of T. Rowe Price Retirement Plan Services, Inc., a subsidiary of the global investment management firm T. Rowe Price Group, Inc. Prior to that, she held various executive positions at Fidelity Investments. She has significant operational experience in delivering complex financial products and services on a large scale, as well as experience in using technology to lead businesses through growth and operational transitions. Ms. Egan is and has been a director at other publicly traded companies. | ||||||||
CAREER EXPERIENCE | ||||||||
U.S. Department of the Treasury Senior Advisor on the development of a (2014–2015) T. Rowe Price Retirement Plan Services, Inc. President (2007–2012) Fidelity Investments Various leadership and executive positions, including President of the Fidelity Charitable Gift Fund | (1989–2007) PUBLIC COMPANY BOARD EXPERIENCE | |||||||
BlackRock Fixed Income Fund Complex, The Hanover Insurance Group, Inc., since 2015 Huntsman Corporation, | QUALIFICATIONS •Business Operations •Corporate Governance/ESG Leadership •Insurance/Financial Industry Experience •Investment Markets •Other Recent Public Company Board Experience •Regulatory/Risk Management •Technology/Digital Transformation | |||||||
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INFORMATION ABOUT THE BOARD OF DIRECTORS
  Director since 2008 at Annual Meeting INDEPENDENT DIRECTOR Chairman of the Board of Directors | Kevin T. Kabat | |||||||
Mr. Kabat is Chairman of Unum’s Board of Directors, and the retired Chief Executive Officer and Vice Chairman of Fifth Third Bancorp, a diversified financial services company. He also served in numerous executive positions with Fifth Third. He has executive leadership experience, extensive financial, operating and strategic planning expertise and understands the importance of risk management and the challenges of managing a business in a highly regulated industry. Mr. Kabat also has experience serving on boards of publicly traded companies. | ||||||||
CAREER EXPERIENCE | ||||||||
Fifth Third Bancorp CEO (2007–2015) President (2006–2012) Other executive roles, including with predecessor companies | PUBLIC COMPANY BOARD EXPERIENCE Crown Castle Inc., since 2023 | |||||||
NiSource Inc., since 2015 (Chair since May 2019) Prior board Executive Chairman from Vice Chairman from | QUALIFICATIONS •Accounting/Auditing •Business Operations •Capital Management •CEO or CFO Experience •Corporate Governance/ESG Leadership •Insurance/Financial Industry Experience •Other Recent Public Company Board Experience •Regulatory/Risk Management | |||||||
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