UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 |
PartnerRe Ltd.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. |
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
¨ | Fee paid previously with preliminary materials. |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
PROXY STATEMENT
Wellesley House South
90 Pitts Bay Road
Pembroke HM 08, Bermuda
April 2, 2010
5, 2013
ANNUAL GENERAL MEETING—MEETING–May 12, 201017, 2013
To the Shareholders of PartnerRe Ltd.
You are cordially invited to attend the Annual General Meeting of your company, PartnerRe Ltd., to be held at 8:00 a.m. local time on Wednesday, Friday,May 12, 2010,17, 2013, at 5thFloor, Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda. My fellow directors and the executivesexecutive officers will be in attendance and I will present a report on the current affairs of your company.Company. You will have an opportunity for any questions and comments.
On or about April 5, 2013, we will begin mailing to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our Proxy Statement and Annual Report and how to vote. The Notice will also include details about the Annual General Meeting and instructions on how to request a paper copy of the proxy materials.
If you plan to attend the Annual General Meeting, I would ask that you vote in advance of the Annual General Meeting by following the voting instructions set forth in the Notice and as outlined in this Proxy Statement. Voting in advance will not prevent you from changing your mind at a subsequent date and you can revoke your voted proxy as described herein.
I would also ask that you vote as soon as possible. Prompt voting will eliminate the need for any follow-up work together with any associated costs.
We are grateful for your assistance and express our appreciation in advance.
Yours sincerely,
John A. RollwagenJean-Paul L. Montupet
Chairman of the Board of Directors
IMPORTANT: | PLEASE VOTE PROMPTLY IN ACCORDANCE WITH THE INFORMATION CONTAINED IN THIS PROXY STATEMENT. THE ANNUAL GENERAL MEETING DATE IS MAY |
Wellesley House South
90 Pitts Bay Road
Pembroke HM 08, Bermuda
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held on May 12, 201017, 2013
NOTICE IS HEREBY GIVEN that the Annual General Meeting of shareholders of PartnerRe Ltd. will be held at 5thFloor, Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda, on Wednesday,Friday,May 12, 201017, 2013, at 8:00 a.m. local time, for the following purposes:
1. | To elect |
2. | To re-appoint Deloitte & Touche Ltd., the independent registered public accounting firm, as our independent auditors, to serve until the |
3. | To approve the Executive Compensation disclosed pursuant to Item 402 of Regulation S-K (non-binding advisory vote). |
The Board of Directors has fixed the close of business on March 15, 2010,20, 2013, as the record date for determining shareholders entitled to notice of, and to vote at, the Annual General Meeting.
All shareholders are cordially invited to attend the Annual General Meeting.
By order of the Board of Directors
Christine Patton
Secretary and Corporate Counsel to the Board
Pembroke, Bermuda
April 2, 20105, 2013
Page | |||||
2 | |||||
6 | |||||
7 | |||||
13 | |||||
13 | |||||
13 | |||||
14 | |||||
14 | |||||
14 | |||||
17 | |||||
17 | |||||
17 | |||||
Directors Independence and Certain Relationships and Related Transactions | 17 | ||||
18 | |||||
18 | |||||
22 | |||||
23 | |||||
24 | |||||
24 | |||||
24 | |||||
25 | |||||
| |||||
25 | |||||
26 | |||||
| |||||
| |||||
27 | |||||
29 | |||||
29 | |||||
42 | |||||
42 | |||||
43 | |||||
44 | |||||
45 | |||||
46 | |||||
46 | |||||
48 | |||||
54 | |||||
55 | |||||
56 | |||||
57 | |||||
59 | |||||
61 |
PROXY STATEMENT
PARTNERRE LTD.
Annual General Meeting of Shareholders
May 12, 2010
GENERAL INFORMATION ABOUT THE 2010
ANNUAL GENERAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (“(the “Board of Directors” or “Board””) of PartnerRe Ltd. (“PartnerRe”PartnerRe” or the “Company”) of proxies from holders of PartnerRe common shares (the “PartnerRe common shares” or the “common shares”), referred to as shareholders throughout this Proxy Statement. The proxies will be voted at the Annual General Meeting of shareholders, which will be held at 8:00 a.m. local time onMay 12, 2010,17, 2013, at 5th Floor, Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda, and at any adjournment thereof.
Our primary mailing address is Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda (telephone 1-441-292-0888). Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”“SEC”), we have elected to provide access to our proxy materials over the Internet. PartnerRe expects to provide noticeNotice and electronic delivery of this Proxy Statement and the enclosed proxy card to shareholders on or about April 2, 2010.5, 2013. As further detailed in the Notice Regarding the Availability of Proxy Materials (“Notice”) (whichwhich will be mailed to shareholders on or about April 2, 2010),5, 2013, shareholders may access the proxy materials on the Internet, request a printed set of the proxy materials, or both.
GENERAL INFORMATION ABOUT THE MEETING
Frequently Asked Questions
WHY AM I RECEIVING THESE MATERIALS?
You are receiving these materials as you were a shareholder of PartnerRe as of March 20, 2013 (the “Record Date”), which entitles you to attend and vote at or prior to the Annual General Meeting to be held at Wellesley House South, 90 Pitts Bay Road, Pembroke HM08, Bermuda on Friday, May 17, 2013, at 8:00 a.m. local time.
WHAT IS INCLUDED IN THESE MATERIALS?
1. | This Proxy Statement for the Annual General Meeting; and |
FREQUENTLY ASKED QUESTIONS
2. | PartnerRe’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the SEC on February 26, 2013. |
WHY DID I RECEIVE A NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS?
Pursuant to rules adopted by the SEC and applicable Bermuda law, PartnerRe has elected to provide access to its proxy materials via the Internet. On or about April 5, 2013, PartnerRe will send to shareholders as of the Record Date the Notice on or about April 5, 2013. All shareholders will have the ability to access the proxy materials via the Internet or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy are detailed in the Notice, together with instructions on how to receive future proxy materials electronically. PartnerRe encourages shareholders to take advantage of the availability of the proxy materials on the Internet to help to reduce the environmental impact of our Annual General Meeting as well as improve the efficiency of delivery.
WHAT AM I VOTING ON?
You will be asked:
1. | To elect two (2) directors to hold office until the 2016 annual general meeting of shareholders or until their respective successors have been duly elected (Proposal 1); |
2. | To re-appoint Deloitte & Touche Ltd., the independent registered public accounting firm, as our independent auditors, to serve until the 2014 annual general meeting, and to refer decisions about the auditors’ compensation to the Board of Directors (Proposal 2); and |
3. | To approve the Executive Compensation disclosed pursuant to Item 402 of Regulation S-K (non-binding advisory vote) (Proposal 3). |
For more information about these Proposals, see pages 55-58.
WHAT ARE THE BOARD’S VOTING RECOMMENDATIONS?
The Board recommends that you voteFOR all the Proposals.
WHO IS ENTITLED TO VOTE?
You may vote if you ownedheld common shares as of the close of business on March 15, 2010 (the “Record Date”).the Record Date. Each common share held at the Record Date entitles you to one vote on each matter to be voted on. As of the Record Date, PartnerRe had an aggregate of 81,035,87758,188,630 common shares issued and outstanding, net of treasury shares. If you constructively or beneficially, directly or indirectly, own more than 9.9% of the outstanding common shares, your voting rights will be limited pursuant to a formula specified in our Bye-Laws.
WHAT AM I VOTING ON?
You will be asked to:
For more information about these proposals, see pages 62-63.
WHAT DOES SOLICITATION OF PROXIES MEAN?
If you are unable to attend the Annual General Meeting, you can request that another individual vote on your behalf in accordance with your instructions (the person who votes is referred to as a proxy). In a solicitation of proxies, one party (in this case, the Board) encourages shareholders to appoint one or more particular individuals (in this case, John A. Rollwagen, the Chairman, and Patrick A. Thiele, the President and Chief Executive Officer) to vote on their behalf (i.e., to vote as their proxy in accordance with their instructions).
HOW DOES THE BOARD SOLICIT PROXIES?
Proxies will be solicited initially by mail. Directors, officers and our employees may make further solicitation personally, by telephone, or otherwise; these individuals will not be specifically compensated for
such activities. Georgeson, Inc. (“Georgeson”), a U.S. and European proxy solicitation firm, has been retained by PartnerRe to assist, if required, in the solicitation of proxies, using the means discussed above. In the event that we utilize the services of Georgeson, they will receive a fee for their services and reimbursement for out-of-pocket expenses.
Shareholders who hold common shares through an account with a bank or broker will be asked to forward the proxy materials to the bank or broker. That entity will be reimbursed for its reasonable expenses incurred in connection with distributing and collecting proxy materials.
WHO PAYS FOR THE SOLICITATION OF PROXIES?
PartnerRe will bear all of the costs of soliciting proxies for use at the Annual General Meeting. If you vote via the Internet, by mail, or by telephone from outside the United States and Canada, you may incur costs associated with their use. These costs are your responsibility.
HOW DO I APPOINT A PROXY AND INSTRUCT THAT INDIVIDUAL HOW TO VOTE ON MY BEHALF?
You can appoint the proxies recommended by the Board (John A. Rollwagen and Patrick A. Thiele) to vote on your behalf, and give those individuals voting instructions by following the directions on the proxy card.
CAN I CHOOSE MY OWN PROXY?
If you are a registered shareholder, meaning that you hold common shares in certificate form or through an account with our transfer agent, Computershare Trust Company, N.A., (“Computershare”) you may appoint another individual to represent you at the Annual General Meeting by notifying Computershare in writing before the Annual General Meeting begins. You must also inform the individual you appoint. Your appointed proxy must provide valid picture identification to be admitted to the Annual General Meeting.
If you hold common shares through an account with a bank or broker, please contact the bank or broker if you intend to appoint a proxy that is different from those recommended by the Board.
WILL MY COMMON SHARES BE VOTED IF I DO NOT APPOINT A PROXY?
If you are a registered shareholder and you do not appoint a proxy or vote by telephone or over the Internet, your shares will not be voted unless you personally attend the Annual General Meeting.
If you hold common shares through an account with a bank or broker, those shares may be voted even if you do not provide voting instructions. Brokerage firms have the authority to vote their customers’ shares on certain routine matters even if the customers do not provide instructions. The ratification of independent auditors is considered a routine matter; however the election of directors is not considered a routine matter.
HOW CAN I VOTE BEFORE THE ANNUAL GENERAL MEETING?
If you are a registered shareholder, you can vote:
If you hold common shares through an account with a bank or broker, you may be unable to vote by telephone or over the Internet. Please follow the instructions that your bank or broker provides.
CAN I CHANGE MY MIND AFTER I VOTE?
You may change your vote by:
If you intend to change your vote at the Annual General Meeting, you must provide our Secretary oral or written notice either at or prior to the meeting. We will not assume that you wish to change or revote a previous vote simply because you attend the Annual General Meeting.
CAN I ATTEND THE ANNUAL GENERAL MEETING?
The Annual General Meeting is open to all holders of outstanding common shares as of the Record Date to attend and vote your common shares (or change your vote). If you hold common shares through an account with a bank or broker, you also need to obtain a legal proxy from that entity. The legal proxy obtained from your bank or broker will serve as an admission ticket and authorize you to vote your common shares (or change your vote) at the Annual General Meeting. SHAREHOLDERS WHO DO NOT HAVE VALID PICTURE IDENTIFICATION AND A LEGAL PROXY (IF REQUIRED) MAY NOT BE ADMITTED TO THE ANNUAL GENERAL MEETING.
We encourage all shareholders, even those who plan to attend the Annual General Meeting, to vote in advance. If you intend to vote at the Annual General Meeting, you must provide our Secretary oral or written notice either at or prior to the meeting.
HOW MANY VOTES MUST BE PRESENT OR REPRESENTED BY PROXY TO HOLD THE ANNUAL GENERAL MEETING?
In order for us to transact business at the Annual General Meeting, the holders of not less than 25% of the outstanding common shares as of the Record Date must have voted prior to the meeting or be present, in person or by proxy. This is referred to as a quorum. Common shares will be counted toward a quorum if a shareholder:
HOW MANY VOTES ARE NEEDED TO APPROVE EACH PROPOSAL?
All matters to be voted on at the Annual General Meeting will be decided by a simple majority of votes cast. If common shares are held by a broker for a shareholder that does not indicate how to vote on a non-routine matter, or if a shareholder abstains from voting on a particular matter, thesuch common shares will not be treated as not entitled to vote on that mattercounted for purposes of determining how many votes are required for approval. Electionapproval on that matter. All matters except the ratification of auditors are considered non-routine.
WHAT IS THE DIFFERENCE BETWEEN A SHAREHOLDER OF RECORD AND A BENEFICIAL OWNER OF COMMON SHARES HELD IN STREET NAME?
You are a shareholder of record if your common shares are registered directly in your name with PartnerRe’s transfer agent, Computershare Trust Company, N.A. (“Computershare”).
You are a beneficial owner of common shares held in street name if your common shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization.
HOW DO I VOTE IF I AM A SHAREHOLDER OF RECORD?
You can vote in person at the Annual General Meeting, or prior to the Annual General Meeting:
1. | over the Internet by following the instructions provided in the Notice; |
2. | by telephone using the telephone number shown on the proxy card; or |
3. | by filling out the proxy card and mailing it to the address shown on the proxy card. |
HOW DO I VOTE IF I AM A BENEFICIAL OWNER?
You can vote in person at the Annual General Meeting if you have obtained a legal proxy from the organization that holds your common shares. Please follow the instructions that your bank or broker provides.
You can vote prior to the Annual General Meeting by following the instructions provided by your bank or broker.
HOW CAN I ATTEND THE ANNUAL GENERAL MEETING?
The Annual General Meeting is open to all shareholders that hold common shares as of the Record Date.
If you are a shareholder of record, you will have to present valid picture identification.
If you are a beneficial owner, you will need to obtain a legal proxy from your bank or broker. This legal proxy will serve as an admission ticket and authorize you to vote your common shares (or change your vote) at the Annual General Meeting. You will also be required to present valid picture identification.
Shareholders who do not have valid picture identification and a legal proxy (if required) may not be admitted to the Annual General Meeting.
We encourage all shareholders, even those who plan to attend the Annual General Meeting, to vote in advance. If you intend to vote at the Annual General Meeting, you must provide our Secretary oral or written notice either at or prior to the meeting.
WHAT IS A PROXY? HOW DO I APPOINT A PROXY AND INSTRUCT THAT INDIVIDUAL HOW TO VOTE ON MY BEHALF?
A proxy is your legal designation of another person to vote the common shares you hold on your behalf.
You can appoint the proxies recommended by the Board (i.e. Jean-Paul L. Montupet and Costas Miranthis; see below “What does solicitation of proxies means?”) to vote on your behalf, and give those individuals voting instructions by following the directions on the proxy card.
If you are a shareholder of record, you may also appoint another individual to represent you at the Annual General Meeting by notifying Computershare in writing before the Annual General Meeting begins. Your appointed proxy must provide valid picture identification to be admitted to the Annual General Meeting.
If you are a beneficial owner, please contact the bank or broker that holds your common shares if you intend to appoint a proxy that is different from those recommended by the Board.
WHAT DOES SOLICITATION OF PROXIES MEAN?
In a solicitation of proxies, one party (in this case, the Board) encourages shareholders to appoint one or more particular individuals (in this case, Jean-Paul L. Montupet, the Chairman, and Costas Miranthis, the President and Chief Executive Officer) to vote on their behalf (i.e., to vote as their proxy in accordance with their instructions).
Proxies will be solicited initially over the Internet pursuant to the instructions set out in the Notice. As provided in the Notice, you may also request printed materials by mail. Our directors, officers and employees may make further solicitation personally, by telephone or otherwise; these individuals will not be specifically compensated for such activities. Georgeson, Inc., (“Georgeson”) a U.S. and European proxy solicitation firm, has been retained by PartnerRe to assist, if necessary, in the solicitation of proxies, using the means discussed above. In the event that we utilize the services of Georgeson, they will receive a fee for their services and reimbursement for out-of-pocket expenses.
Beneficial owners will be asked to forward the proxy materials to the bank or broker that holds their common shares. That entity will be reimbursed for its reasonable expenses incurred in connection with distributing and collecting proxy materials.
WHO PAYS FOR THE SOLICITATION OF PROXIES?
PartnerRe will bear all of the costs of soliciting proxies for use at the Annual General Meeting. If you vote via the Internet, by mail or by telephone from outside the United States and Canada, you may incur costs associated with their use. These costs are your responsibility.
WILL MY COMMON SHARES BE VOTED IF I DO NOT APPOINT A PROXY?
If you are a shareholder of record and you do not appoint a proxy or vote by telephone or over the Internet, your common shares will not be voted and therefore will have no effect on the voting results unless you personally attend the Annual General Meeting.
If you are a beneficial owner, your brokerage firm has the authority to vote common shares on certain routine matters even if you do not provide instructions. Only the ratification of auditors is considered a non-routine matter.routine matter for these purposes. Without your instructions, your common shares will not be voted for any other Proposal at the Annual General Meeting.
CAN I CHANGE MY MIND AFTER I VOTE?
You may change your vote or revoke your proxy at any time before your proxy is voted at the Annual General Meeting by:
1. | voting again by telephone or over the Internet prior to 11:59 p.m. Eastern Time on May 16, 2013; or |
2. | attending and voting at the Annual General Meeting, if you are a shareholder of record (valid picture identification required); or |
3. | following the instructions of your bank or broker, if you are a beneficial owner. |
If you intend to change your vote at the Annual General Meeting, you must provide our Secretary oral or written notice either at or prior to the meeting. We will not assume that you wish to change your vote simply because you attend the Annual General Meeting.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE FORM OF PROXY?
Multiple proxies may indicate that your common shares are held in more than one account. To ensure that all common shares are voted, please either vote each account by telephone, or over the Internet, or sign and return all forms of proxy by mail. We encourage you to register all of your accounts in the same name and address. To minimize costs, if you hold common shares throughare a bank or broker,beneficial owner, you should contact the bank or broker and request consolidation.
WHAT IF I SHARE AN ADDRESS WITH ANOTHER SHAREHOLDER, AND WE RECEIVED ONLY ONE PAPER COPY OF THE PROXY MATERIALS? HOW MAY I OBTAIN AN ADDITIONAL COPY OF THE PROXY MATERIALS?
We have adopted a procedure called “householding”. Under this procedure, we deliver a single copy of the Notice and, if applicable, the proxy materials and our annual report to multiple shareholders who share the same address unless we receivedreceive contrary instructions from one or more of the shareholders. This procedure reduces our postage and printing costs. Shareholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written request, we will deliver promptly a separate copy of the Notice and, if applicable, the proxy materials and our annual report to any shareholder at a shared address to which we delivered a single copy of any of these documents.instructions. Shareholders wishing to discontinue or begin householding, or any shareholder residing at a householded address wanting to request delivery of a copy of the Notice and, if applicable, these proxy materials, or our annual report, may contact:address their request:
1) | BY INTERNET: www.proxyvote.com |
2) | BY TELEPHONE: 1-800-579-1639 |
3) | BY E-MAIL: sendmaterial@proxyvote.com |
4) | IN WRITING: Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717, USA. |
There is no charge for requesting a copy. If requesting materials by e-mail, please send a blankan e-mail with the 12-Digit Control Number (located on the Notice) in the subject line. Please make the request as instructed above on or before April 29, 2010May 3, 2013, to facilitate timely delivery.
Shareholders who hold their shares through a bank or brokerBeneficial owners who wish to either discontinue or begin householding should contact their bank or broker.
This procedure reduces the environmental impact of our Annual General Meeting as well as our postage and printing costs.
HOW DO I MAKE A PROPOSAL FOR INCLUSION IN THE PROXY STATEMENT FOR THE 20112014 ANNUAL GENERAL MEETING?
YouShareholders may propose any matter for a vote by our shareholders at the 20112014 Annual General Meeting by sending yourtheir proposal marked for the attention of the Secretary, PartnerRe Ltd., Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda. We may omit the proposal from next year’s proxy statement if it is not received by the Secretary at the address noted above at least 120 days prior to the first anniversary of this Proxy Statement. We also may omit yourshareholder’s proposal if it does not comply with applicable requirements of the SEC.
CAN I MAKE AN ADDITIONAL PROPOSAL AT THE 20112014 ANNUAL GENERAL MEETING?
If a shareholder proposal is introduced at the 20112014 Annual General Meeting without having been discussed in our proxy statement,Proxy Statement, and the proposing shareholder does not notify us 60 to 90 days prior to the first anniversary of the 20102013 Annual General Meeting of the shareholder’stheir intent to raise such proposal at the 20112014 Annual General Meeting (subject to adjustment if the 20112014 Annual General Meeting date is changed, as described in the Bye-Laws), then all proxies received by us for the 20112014 Annual General Meeting will be voted by the persons named as proxies in their discretion with respect to such proposal. Notice of such proposal is to be sent to the address listed in the response to the question above.
GENERAL INFORMATION ABOUT THE PROXY STATEMENT
We refer to corporate documentation throughout the Proxy Statement.We will furnish,provide, without charge, the following corporate documents to any shareholder who makes a request:
Annual Report on Form 10-K for the year endingended December 31, 2009
Audit Committee Charter
Compensation Committee Charter
Human Resources Committee Charter
Nominating & Governance Committee Charter
Risk & Finance Committee Charter2012, as filed on February 26, 2013;
Corporate Governance Principles and Application GuidelinesGuidelines;
Audit Committee Charter;
Compensation & Management Development Committee Charter;
Nominating & Governance Committee Charter;
Risk & Finance Committee Charter; and
Code of Business Conduct and EthicsEthics.
The documentation listed above is available on our website atwww.partnerre.com. To obtain a hard copy please write to the Secretary, PartnerRe Ltd., Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda, or call 1-441-292-0888. We will also furnish,provide, upon payment of a reasonable fee to cover reproduction and mailing expenses, a copy of all exhibits to our Annual Report on Form 10-K.
Information contained on our website is not incorporated by reference into this Proxy Statement or any other report filed with the SEC.
Exchange Rates and Currency
Exchange rates from United States dollarsDollars to Swiss francsFrancs and the Euroeuro are used throughout this Proxy Statement. Unless otherwise indicated, we have applied the following exchange rates:
Exchange Rates* | ||
United States dollar-US$ | Swiss francs-CHF | |
1 | 1.04 | |
0.96 | 1 | |
United States dollar-US$ | European Union-Euro | |
1 | 0.70 | |
1.43 | 1 |
Exchange Rates* | ||
United States Dollar-US$ | Swiss Francs-CHF | |
1 | 0.91 | |
1.10 | 1 | |
United States Dollar-US$ | Euro | |
1 | 0.76 | |
1.32 | 1 |
* | These exchange rates were calculated by taking an average of the bid/ask price of the applicable currency on December 31, |
Unless otherwise indicated, all amounts mentioned throughout this Proxy Statement are denominated in United States Dollars.
The Board currently consists of twelve directors divided into three classes: Class I, Class II and Class III. EachIII of four directors each. Messrs. Baumgartner and Rollwagen, who are Class has four directors.II directors, will be retiring when their terms expire at the conclusion of the Annual General Meeting. The directors in each Class serve a three-year term. The terms of each Class expire at successive annual general meetings so that the shareholders elect one Class of directors each year. This section details the name, age, nationality, class, qualifications and committee memberships of our directors as of March 15, 2010.the Record Date.
NOMINEE DIRECTORS STANDING FOR ELECTION AT THE 2013 ANNUAL GENERAL MEETING
Class II Directors
Jean-Paul L. Montupet, Chairman of the Board
Current Directorships Lexmark International, Inc. Wabco Holdings Inc. Assurant, Inc. IHS | Former Directorships (previous 5 years) Leroy Somer (2012) National Electrical Manufacturers Association (2008) | |||||
Committees Nominating & Governance–Chairman | ||||||
Risk & Finance | ||||||
Age: Nationality: Director Since: | 65 American February 2002 | Mr. Montupet retired as Executive Vice President of Emerson Electric Co. in July 2012 a position he had held since 1990. He also retired as President of Emerson Europe in December 2012 and as advisory director of Emerson Electric Co. in February 2013. Mr. Montupet’s qualifications to sit on our Board include his years of experience in international business including his previous experience as an executive for a major public company. |
Continuing Lucio Stanca
Current Directorships Aspen Institute Italia Committees Audit Nominating & Governance | Former Directorships (previous 5 years) None | |||||
Age: Nationality: Director Since: (formerly served from May 1998 to January 2005) | 71 Italian September 2006 | Mr. Stanca was Executive Chairman of IBM Europe, Middle East and Africa until his retirement in 2001. Mr. Stanca was President and Chief Executive Officer of Expo 2015 Spa from 2009 to 2010. Mr. Stanca was a director of Bocconi University in Milan from 1994 to 2006. Mr. Stanca is a former Minister of Innovation and Technology for the Italian Government and was an elected Senator of the Italian Government. He was a Deputy of the Italian Parliament from 2008 to March 2013. Mr. Stanca’s qualifications to sit on our Board include his years of experience in international business. | ||||
DIRECTORS NOT STANDING FOR ELECTION AT THE 2013 ANNUAL GENERAL MEETING
Class III Directors (terms expiring at the 2014 Annual General Meeting)
Judith Hanratty, CVO, OBE
Current Directorships England Golf Union Limited Committees Audit Nominating & Governance | Former Directorships (previous 5 years) Charles Taylor Consulting plc (2012) Gas & Electricity Markets Authority (2010) | |||||
Age: Nationality: Director Since: | 69 British/New Zealander January 2005 | Ms. Hanratty is Chairman of the Commonwealth Education Trust and retired from serving as Chairman of the Commonwealth Institute (Australia) Limited which was dissolved in 2012. Ms. Hanratty was an Executive for British Petroleum plc until her retirement in 2004 and was a director of Partnerships UK plc until 2005 and British Standards Group until 2006. She was also a member of the Council of Lloyds of London until 2007. Ms. Hanratty is a Commander of the Royal Victorian Order and was awarded the Order of the British Empire. Ms. Hanratty’s qualifications to sit on our Board include her years of experience in international finance and the (re)insurance industries including her previous experience as an executive for a major public company and her legal and governance background. |
Costas Miranthis, President and Chief Executive Officer
Current Directorships None Committees Risk & Finance | Former Directorships (previous 5 years) None | |||||
Age: Nationality: Director Since: | 49 British February 2011 | Mr. Miranthis joined PartnerRe in 2002 as Chief Actuary with responsibility for PartnerRe’s Actuarial and IT functions. Mr. Miranthis became a member of PartnerRe’s Executive Committee in 2007 when he was appointed Deputy Chief Executive Officer, PartnerRe Global. Mr. Miranthis was appointed as Chief Executive Officer, PartnerRe Global and Partner Reinsurance Europe Limited in July 2008. In May 2010, Mr. Miranthis was appointed as President and Chief Operating Officer of PartnerRe. Mr. Miranthis became PartnerRe’s Chief Executive Officer in January 2011. Prior to joining PartnerRe, Mr. Miranthis was with Tillinghast Towers Perrin in London, U.K. and was a member of Tillinghast Worldwide Non-Life Management Committee. Mr. Miranthis is a Fellow of the Institute of Actuaries and a Member of the American Academy of Actuaries. Mr. Miranthis’ qualifications to sit on our Board include his experience in the (re)insurance industries, serving in various executive roles at PartnerRe, and being the current President and Chief Executive Officer. |
Rémy Sautter
Current Directorships Métropole Télévision (M6) SA Pages Jaunes SA RTL Radio France Technicolor Multimedia PLC Committees Nominating & Governance Risk & Finance | Former Directorships (previous 5 years) Channel 5, UK (2010) Taylor Nelson Sofres plc (2008) | |||||
Age: Nationality: Director Since: | 67 French November 2001 | Mr. Sautter is Chairman of the supervisory board of RTL Radio France, non-executive chairman of the Board of Technicolor Multimedia PLC and Operating Partner of Duke Street Capital. Mr. Sautter was Chief Executive Officer of CLT-UFA (today RTL Group) from 1996 to 2000. Mr. Sautter’s qualifications to sit on our Board include his years of experience as an executive and board member in major European companies. |
Egbert Willam
Current Directorships CICSA Reaseguros S.A. Humanitas AG BDB Insurance S.A. Insurance Brokers Investments Ltd. Committees Audit Nominating & Governance | Former Directorships (previous 5 years) Rhein-Main Wohnungsbau Ltd. (2009) | |||||
Age: Nationality: Director Since: | 64 German June 2012 | Dr. Willam is the founder and Chairman of KEN Investments K.K., a private equity firm operating in Japan. Dr. Willam held a senior position in Munich Re and was a member of the executive board of Cologne Re where he led the transition of the group into General Cologne Re now known as Gen Re. Dr. Willam’s qualifications to sit on our board include his years in the (re)insurance industry as well as his broad international experience in the financial services industry. |
Class I Directors with terms(terms expiring at the 20122015 Annual Meeting:General Meeting)
Jan H. Holsboer
ING Group N.V. TD Bank N.V. YAFA S.p.A Yam Invest N.V. Stichting Imtech Committees Audit | Former Directorships (previous 5 years) Atradius N.V/Atradius Credit Insurance N.V. (2012) Stichting Vie d’Or (2012) Stichting Corporate Express (2012) Delta Lloyd Group N.V. (2011) Onderlinge’s Gravenhage/Neerlandia van 1880 (2008) | |||||
Age: | 66 | Compensation & Management Development | ||||
Nationality: | ||||||
Director Since: | May 2000 | |||||
| ||||||
| Mr. Holsboer was the Chief Executive Officer of Netherlands Reinsurance Group N.V. until 1989 and was an | |||||
Mr. Holsboer’s qualifications to sit on our |
Kevin M. Twomey
| ||||
|
|
Roberto Mendoza
Western Union, Inc. Manpower Group Atlas Advisors LLC Rocco Forte & Family Limited Committees Compensation & Management Development Risk & Finance |
| PARIS RE Holdings Limited (2009) Trinsum Group Inc1 (2008) | ||||||
Age: Nationality: Director Since: | 67 American October 2009 | |||||||
| ||||||||
| Mr. Mendoza is a Senior Managing Director of Atlas Advisors LLC. Mr. Mendoza was Vice Chairman of the Board of J.P. Morgan & Co from 1990 to Mr. Mendoza’s qualifications to sit on our Board include his years of experience in the international financial and (re)insurance industries as well as his previous experience as a director on the boards of U.S. listed companies including (re)insurance companies. | |||||||
1 Trinsum Group |
Kevin M. Twomey
Current Directorships Acxiom Corporation Prime Property Fund LLC The Club at Las Campanas Committees Risk & Finance–Chairman Nominating & Governance | Former Directorships (previous 5 years) Doral Financial Corporation (2009) | |||||
Age: Nationality: Director Since: | 66 American May 2003 | Mr. Mr. Twomey’s qualifications to sit on our |
David Zwiener
None Committees Audit–Chairman |
| |||||||
| ||||||||
Compensation & Management Development | ||||||||
Age:
Director Since: | 58 American July 2009 | Mr. Zwiener is a Principal in Dowling Capital Partners. Mr. Zwiener was President and Chief Operating Officer of the property and casualty operations at Hartford Financial Services Group |
Nominees for election as the Class II Directors with terms expiring at the 2013 Annual Meeting (see Proposal 1 on page 62):
John A. Rollwagen, Chairman of the Board
| ||||||
| ||||||
Mr. | ||||||
| ||||||
| ||||||
|
|
Jean-Paul L. Montupet
| ||||
|
|
Lucio Stanca
| ||||
| ||||
|
|
Continuing Class III Directors with terms expiring at the 2011 Annual Meeting:
Judith Hanratty, CVO, OBE
| ||||
|
| |||
| ||||
| ||||
|
|
Patrick A. Thiele, President and Chief Executive Officer
| ||||
|
|
RETIRING DIRECTORS
Messrs. Baumgartner and Rollwagen, whose biographies are detailed below, are Class II directors. As they will both reach the mandatory retirement age of 73 (for further details please refer to “Mandatory Retirement Age” in the Corporate Governance section on page 24) they will retire as members of the Board when their terms expire at the conclusion of the 2013 Annual General Meeting.
Vito H. Baumgartner
Current Directorships None | Former Directorships (previous 5 years) Northern Trust Global Services Ltd. (UK) (2012) AB SKF Inc. (2009) | |||||
Committees Compensation & Management Development–Chairman Risk & Finance | ||||||
Age: Nationality: Director Since: | 72 Swiss November 2003 | Mr. Baumgartner was a Group President and Executive Officer of Caterpillar Inc. from 2000 to 2004. |
John A. Rollwagen
Current Directorships Algos Corp | Former Directorships (previous 5 years) SiCortex Inc. (2009) Cassatt Corp (2009) | |||||
Committees Compensation & Management Development Risk & Finance | ||||||
Age: Nationality: Director Since: | 72 American May 2001 | Mr. Rollwagen was Chairman and Chief Executive Officer of Cray Research, Inc. until his retirement in 1993 and a principal of Quatris Fund from 2000 to 2005. Mr. Rollwagen was Chairman of PartnerRe’s Board for eight years. |
The directors’ compensation guidelines align the interests of directors and shareholders by promoting share ownership while maintaining competitive compensation levels. Compensation for PartnerRe directors reflects both the significant amount of time and the specialized skills required for the directors to fulfill their duties.
The total compensation package for director service consists of cash, share options and restricted share units (“RSUs”).
The following table outlines how director compensation was allocated among these three components in 2012:
Component | Director Annual Amount ($) | Board Chairman Annual Amount ($) | ||||||
Cash | 50,000 | 180,000 | ||||||
Share options | 80,000 | 100,000 | ||||||
RSUs | 100,000 | 120,000 | ||||||
Dividend equivalents, paid on RSUs |
| Per actual dividend rate declared by the Board |
| | Per actual dividend rate declared by the Board | |
With the exception of the spousal program (described below under “Executive Director’s Fees and Directors’ Expenses”), no perquisites are provided to the directors.
Equity Components (Share Options and RSUs)
Prior to May 16, 2012, share option awards were immediately vested options to purchase PartnerRe common shares. Effective May 16, 2012, share option awards have a three-year ratable vesting schedule. Share option awards are granted each year on June 15 or the nearest business day thereafter. The number of share options granted is determined by dividing the applicable annual U.S. dollar amount by the fair value per share option determined by the Black-Scholes valuation model as of the grant date.
RSUs are awarded on an annual basis and have a five-year cliff vest with no delivery restrictions. RSUs are granted each year on June 15 or the nearest business day thereafter. All unvested RSUs will be forfeited upon the director’s termination of service, except if the termination is due to a change in control of PartnerRe, death, permanent disability, mandatory retirement from the Board, voluntary termination due to the acceptance of a public service position that would either preclude continued Board service or make such continued service impractical or failure to be re-elected by shareholders to the Board (each regarded as a “permissible reason for departure”). In the event of a permissible reason for departure, RSUs will fully vest upon termination. Dividend equivalents relating to RSU awards are paid each year in one lump sum on June 15 or the nearest business day thereafter. Prior to grant, directors can elect to receive the settlement of their RSUs, at the time of vesting, 100% in shares or 60% in shares and 40% in cash.
All equity awards for the directors are granted under the Amended and Restated Non-Employee Directors Share Plan, effective May 16, 2012. Currently, this plan provides for the issuance of up to 1,200,000 PartnerRe common shares, and prescribes a maximum annual limit for awards pursuant to the plan. Any amendment or termination for which shareholder approval is required will not be effective until such approval has been obtained. Unless terminated earlier, the plan will expire on May 16, 2022.
To further align director and shareholder interests, the compensation guidelines allow directors to elect each year to defer 50% or 100% of their cash compensation. To encourage increased share ownership, deferred cash compensation is paid out in RSUs with a PartnerRe match of 25% on the value of the deferred cash compensation. The PartnerRe match is in RSU awards, which have the same terms and conditions as the other RSU grants.
Each director is required to own a minimum number of PartnerRe common shares with an aggregate value equal to four times the director’s annual cash compensation entitlement. For these purposes, RSUs and shares held outright are included in each director’s holdings. Other than Egbert Willam who was appointed in 2012, all of the directors meet the ownership guidelines. Directors who do not meet the ownership guidelines are required to receive at least 50% of their cash compensation in the form of RSUs until the ownership guidelines are met. As with the elective equity incentive, mandatory deferrals receive a PartnerRe match of 25%. The PartnerRe match is paid out in RSU awards, which have the same terms and conditions as the other RSU grants.
Executive Director’s Fees and Directors’ Expenses
Mr. Miranthis is not paid any fees or additional compensation for services as a director or as a member of the Risk & Finance Committee. All directors, including Mr. Miranthis, are reimbursed for travel and other related expenses personally incurred while attending Board or committee meetings. All directors, including Mr. Miranthis, are reimbursed for attending education sessions that will help them fulfill their obligations as directors or committee members. Every other year, the partners/spouses of the directors and executive officers are invited to participate in an optional spousal program at the time of a Board meeting. Such a program took place in 2012 during the August Board meeting in Rome. The total cost of the program was $27,315 (see the “All Other Compensation” table on page 16 for details on the non executive directors related costs). Other than the spousal program, we do not provide perquisites to our directors in lieu of compensation or otherwise.
The table below summarizes the compensation paid to non-executive directors for the fiscal year ended December 31, 2012.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($)* | Total ($) | |||||||||||||||
Jean-Paul L. Montupet, Chairman(3) | 180,000 | 120,000 | 100,000 | 15,802 | 415,802 | |||||||||||||||
Vito H. Baumgartner(4) | 0 | 162,500 | 80,000 | 22,688 | 265,188 | |||||||||||||||
Judith Hanratty(5) | 50,000 | 100,000 | 80,000 | 14,671 | 244,671 | |||||||||||||||
Jan H. Holsboer(6) | 0 | 162,500 | 80,000 | 22,554 | 265,054 | |||||||||||||||
Roberto Mendoza(7) | 50,000 | 100,000 | 80,000 | 8,577 | 238,577 | |||||||||||||||
John A. Rollwagen(8) | 50,000 | 100,000 | 80,000 | 25,680 | 255,680 | |||||||||||||||
Rémy Sautter(9) | 50,000 | 100,000 | 80,000 | 15,909 | 245,909 | |||||||||||||||
Lucio Stanca(10) | 25,000 | 131,250 | 80,000 | 19,640 | 255,890 | |||||||||||||||
Kevin M. Twomey(11) | 50,000 | 100,000 | 80,000 | 15,595 | 245,595 | |||||||||||||||
Egbert Willam (12) | 14,583 | 76,563 | 46,667 | 3,364 | 141,177 | |||||||||||||||
Jürgen Zech(13) | 22,917 | 0 | 0 | 7,110 | 30,027 | |||||||||||||||
David Zwiener(14) | 50,000 | 100,000 | 80,000 | 9,949 | 239,949 |
* | Details noted in the |
In accordance with the SEC proxy disclosure rules, Stock Awards (1) and Option Awards (2) in the above table reflect the amount of RSUs and share options granted during the fiscal year by using the aggregate grant date fair value of awards, determined in accordance with U.S. GAAP. For details of the assumptions and methodologies used to value the stock and option awards, please see Note 15 “Share-Based Compensation” to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2012.
Jürgen Zech
(1) | The grant date fair market value for RSU awards granted in 2012 was $71.12 which was the closing price of PartnerRe common shares on June 15, 2012. The directors received the following awards: |
| |||||
|
|
This section details the age, position, and business experience for each of our executive officers. Mr. Thiele is described in further detail under the heading “Our Directors” on page 11.
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
Rémy Sautter | 1,407 | |||||
Lucio Stanca | 1,846 | |||||
Kevin M. Twomey | 1,407 | |||||
Egbert Willam | 1,077 | |||||
Jürgen Zech | 0 | |||||
David Zwiener | 1,407 |
(2) |
(3) | Mr. |
(4) | Mr. |
(5) |
Retiring Executives
Scott Moore joined PartnerRe at its inception in 1993 as the Chief Financial Officer. Mr. Moore held the position of Chief Financial Officer until 1998 when he accepted the role of President and Chief Executive Officer of PartnerRe U.S. Mr. Moore became the Executive Vice President and Deputy Chairman of PartnerRe U.S. on January 1, 2009 and retired effective March 31, 2009.
Mr. Meyenhofer joined PartnerRe in 1998 following PartnerRe’s acquisition of the reinsurance business of Winterthur. In February 2002 he was appointed as the Chief Executive Officer, PartnerRe Global. Effective as of July 1, 2008, Mr. Meyenhofer relinquished his role as Chief Executive Officer and accepted the position of Chairman of PartnerRe Global. Mr. Meyenhofer remained with PartnerRe until the effective date of his retirement on March 31, 2010. Until such time, Mr. Meyenhofer continued to be a member of the Executive Committee and held the position of Chairman of PartnerRe Global.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
The following table sets forth information, as of March 22, 2010 with respect to the beneficial ownership of all directors and executive officers. As defined by the SEC, an individual is deemed to be the “beneficial owner” of any shares that the person could acquire through the exercise of any currently exercisable options. The common shares owned by all directors and executive officers as a group constitute approximately 1.91% of the issued and outstanding common shares, net of treasury shares.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Outstanding Common Shares | |||
Patrick A. Thiele | 556,078 | (1) | * | ||
Albert A. Benchimol | 359,210 | (2) | * | ||
Bruno Meyenhofer** | 278,691 | (3) | * | ||
Costas Miranthis | 106,120 | (4) | * | ||
Theodore C. Walker | 64,009 | (5) | * | ||
Scott D. Moore*** | 160,153 | (6) | * | ||
John A. Rollwagen | 75,905 | (7) | * | ||
Vito H. Baumgartner | 57,660 | (8) | * | ||
Robert M. Baylis**** | 48,886 | (9) | * | ||
Judith Hanratty | 35,072 | (10) | * | ||
Jan H. Holsboer | 86,601 | (11) | * | ||
Roberto Mendoza | 2,194 | (12) | * | ||
Jean-Paul L. Montupet | 53,473 | (13) | * | ||
Rémy Sautter | 39,273 | (14) | * | ||
Lucio Stanca | 17,369 | (15) | * | ||
Kevin M. Twomey | 36,422 | (16) | * | ||
Jürgen Zech | 57,775 | (17) | * | ||
David Zwiener | 3,587 | (18) | * | ||
All directors and executive officers (15 total) | 1,550,748 | 1.91 |
(6) | Mr. |
(7) | Mr. |
(8) | Mr. |
(9) | Mr. |
(10) |
(11) | Mr. |
(12) |
(13) |
(14) | Mr. |
* All Other Beneficial OwnersCompensation includes the following:
The following table provides information regarding each person (including each corporate group) that owned, of record or beneficially, more than 5% of our outstanding common shares as of December 31, 2009. The information contained in the table is based solely on reports on Schedules 13G and 13D filed with the SEC; we have not independently verified the data. As defined by the SEC, a person is deemed to “beneficially own” shares if such person directly or indirectly (i) has or shares the power to vote or dispose of such shares, regardless of whether such person has any pecuniary interest in the shares, or (ii) has the right to acquire the power to vote or dispose of such shares within 60 days, including through the exercise of any option, warrant, or right. The shares detailed in the table are not necessarily owned by the entities named but may be owned by accounts over which they exercise discretionary investment authority.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent Of Class | ||||
Blackrock Inc. 40 East 52nd Street New York, NY 10022, U.S.A. | 7,501,391 | (1) | 9.4 | % | ||
Stone Point Capital LLC 20 Horseneck Lane Greenwich CT 06830, U.S.A. | 4,877,895 | (2) | 6.2 | % |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons that beneficially own more than 10% of a registered class of our equity securities to file initial reports of ownership and reports of changes in beneficial ownership with the SEC and the New York Stock Exchange. We assist directors and executive officers by monitoring transactions and completing and filing Section 16 reports on their behalf.
Based solely on a review of the reports filed by individuals subject to Section 16(a) during 2009, no director or executive officer failed to file his or her required reports on a timely basis.
Name | Spousal ($) | Dividend Equivalents ($) | Total ($) | |||||||||
Jean-Paul L. Montupet | 2,163 | 13,639 | 15,802 | |||||||||
Vito H. Baumgartner | 2,163 | 20,525 | 22,688 | |||||||||
Judith Hanratty | 0 | 14,671 | 14,671 | |||||||||
Jan H. Holsboer | 2,029 | 20,525 | 22,554 | |||||||||
Roberto Mendoza | 0 | 8,577 | 8,577 | |||||||||
John A. Rollwagen | 0 | 25,680 | 25,680 | |||||||||
Rémy Sautter | 2,029 | 13,880 | 15,909 | |||||||||
Lucio Stanca | 2,163 | 17,477 | 19,640 | |||||||||
Kevin M. Twomey | 2,163 | 13,432 | 15,595 | |||||||||
Egbert Willam | 2,029 | 1,335 | 3,364 | |||||||||
Jürgen Zech | 134 | 6,976 | 7,110 | |||||||||
David Zwiener | 2,163 | 7,786 | 9,949 |
Corporate Governance Framework
The Board considers that good corporate governance is critical to achieving business success and aligning the interests of management and shareholders. PartnerRe believes that it has established a comprehensive corporate governance framework, key components of which are set forth in the following documents:
Our Bye-Laws;
Our Corporate Governance Principles and Application Guidelines (which defines how the Board operates and reflects PartnerRe’s global business practices);
Our Code of Business Conduct and Ethics;
Our Audit Committee Charter;
Our Compensation & Management Development Committee Charter;
Our Nominating & Governance Committee Charter; and
Our Risk & Finance Committee Charter.
Code of Business Conduct and Ethics
The Board has adopted the Code of Business Conduct and Ethics, which applies to all directors, officers and employees. Any specific waiver of its provisions requires the approval of the Board or a Committee of the Board, and any such waiver must be disclosed to shareholders promptly. There were no waivers of the Code of Business Conduct and Ethics in 2012. Any reported violation to the Code of Business Conduct and Ethics will be investigated and may result in disciplinary action, as appropriate.
Directors Independence and Certain Relationships and Related Transactions
Directors Independence Determination
Pursuant to our Corporate Governance Principles and Application Guidelines, a majority of our directors must be independent. The Nominating & Governance Committee has determined that all directors are independent with the exception of Mr. Miranthis who is an executive of PartnerRe. In making its determination, the Nominating & Governance Committee considered the New York Stock Exchange listing standards for independence and reviewed a comprehensive list of board memberships and charitable associations for each director. The Nominating & Governance Committee also considered certain other arrangements described in Note 19 “Agreements with Related Parties” of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2012, which addresses business relationships with other companies in which a director of PartnerRe is a board member and determined that no director other than Mr. Miranthis, as an executive of PartnerRe, had a direct or indirect material relationship with PartnerRe. In addition, there are no interlocking directorships and none of our independent directors, nor any of their immediate family members received any consulting, advisory, legal, or other non-director fees from PartnerRe. If any such relationship were to arise, all relevant material fees would be disclosed and the Nominating & Governance Committee would make a new determination as to independence.
In the normal course of our operations, PartnerRe may purchase or hold securities of companies for which some of our directors also serve as members of the board or non-executive directors. All transactions entered into as part of the investment portfolio are completed on market terms.
Certain Relationships and Related Transactions
The Board has adopted a written Related Person Transaction Policy to codify the practice of identifying, approving and reporting related-person transactions. The Nominating & Governance Committee is responsible for applying and enforcing this policy. Annually, each of our directors and executive officers completes a questionnaire identifying his or her board relationships outside of PartnerRe. The results of the questionnaire are
used to compile a list of parties which is subsequently distributed to all relevant business unit heads and support staff personnel. PartnerRe then identifies and quantifies any transaction that may have been consummated with any party on the list. In addition, the questionnaire solicits information about whether the director or executive officer or any member of his or her immediate family has a direct or indirect material interest in any transaction involving PartnerRe. The Nominating & Governance Committee determines whether the transaction should be stopped or reported in the proxy statement (or both), or whether the transaction may continue without disclosure in the proxy statement because it falls within permitted exceptions (such as transactions in the ordinary course of business not exceeding $120,000, transactions in which the director’s or executive officer’s or any member of his or her immediate family’s interest derives solely from his or her (i) service as a director of or (ii) ownership of less than 10% of the equity interest in another corporation or organization that is a party to the transaction, director or executive officer compensation arrangement already approved by the Compensation Committee).
For 2012, the Nominating & Governance Committee determined that there were no transactions involving our directors, executive officers or any of their immediate family members as well as the entities named in the “Other Beneficial Owners” section in the table on page 25 that needed to be reported in this Proxy Statement.
Board ClassificationLeadership Structure
As described above underSince its inception in 1993 PartnerRe has always separated the heading “Our Directors,”role of the Chief Executive Officer from that of the Chairman of the Board. The role of Chairman is filled by an independent, non-executive director and as a result, we have not appointed a lead director. The separation of these two roles is an important component of our corporate governance structure. The Chairman provides leadership to the Board, is divided into three Classes with terms expiring at successive annual meetings. Class II, whose term expirespresides at the upcoming Annual General Meeting, comprises John A. Rollwagen, Vito H. Baumgartner, Jean-Paul L. MontupetBoard meetings which are scheduled at least four times a year and Lucio Stanca. Each directorcalls additional meetings of the directors as he deems appropriate. The Chairman advises the Nominating & Governance Committee on the selection of committee chairmen, leads the performance evaluation of the Chief Executive Officer, advises on and determines, with the input from the Chief Executive Officer and the Board, the agenda for Board meetings. With input from the Chief Executive Officer, the Chairman determines the nature and extent of information that should be provided to the Board in Class II is standing for reelection,advance of Board meetings, acts as a liaison between shareholders and if elected, will continue to serve until the new term expiresBoard where appropriate and performs such other functions as the Board may direct. The Chairman also presides at all executive sessions of the 2013 Annual General Meeting.
Board which are held each time a physical Board meeting occurs.
Meetings and Committees of the Board
Working through its five standing committees, the Board exercises oversight over strategic decisions throughout the organization (for further details, see “Committees of the Board of Directors” on page 20 and “Our Directors” on pages 6-11). The Board held ninefour meetings in 2009. Every2012. Each director attended at least 75% of the meetings held by the Board and by the committees on which he or she serves. Every directorPartnerRe does not have a policy with regard to directors’ attendance at annual general meetings of shareholders but directors are encouraged to attend. All of the directors attended the 20092012 Annual General Meeting.
The Board has established four standing committees: the Audit Committee, the Compensation & Management Development Committee (the “Compensation Committee”), the Nominating & Governance Committee and the Risk & Finance Committee. Members of the Audit, Compensation and Nominating & Governance Committees are independent in accordance with the definition of the New York Stock Exchange rules. The committee memberships are as follows:
Compensation & Management Nominating & Governance Risk & Finance Jean-Paul L. Montupet Vito H. Baumgartner Judith Hanratty Jan H. Holsboer Roberto Mendoza Costas Miranthis* John A. Rollwagen Rémy Sautter Lucio Stanca Kevin M. Twomey Egbert Willam David Zwiener Number of MeetingsDirector Audit
Development CHAIR — CHAIR — — — — — — — — — — — — — — — CHAIR — — CHAIR — 9 4 5 4
* | Non-Independent Director |
Each committee has a charter that, among other things, reflects current best practices in corporate governance. Below is a brief description of the role of each committee:
Pursuant to its charter, the Audit Committee’s primary responsibilities are to assist Board oversight of:
the integrity of PartnerRe’s financial statements;
PartnerRe’s compliance with legal and regulatory requirements, including the receipt of reports arising in respect of the Code of Business Conduct and Ethics;
the independent auditor’s qualifications and independence; and
the performance of PartnerRe’s internal audit function and independent auditors.
The primary underwriterAudit Committee regularly meets with management, the Chief Audit Officer and our independent registered public accounting firm to review matters relating to the quality of financial reporting and internal accounting controls, including the nature, extent and results of their audits. In addition, the Audit Committee discusses PartnerRe’s policies with respect to risk assessment and risk management processes.
Mr. Zwiener was appointed as Chairman of the Audit Committee effective May 16, 2012, in replacement of Mr. Twomey. Mr. Zwiener meets the definition of an “audit committee financial expert” as adopted by the SEC, and he has agreed to be designated as such. Mr. Zwiener does not serve on the audit committee of any other public company. Further information about Mr. Zwiener can be found on page 11.
The other members of the Audit Committee meet the financial literacy requirements of the New York Stock Exchange. They each have a broad range of experience in senior executive positions in their respective industries. The Board has determined that each member of the Audit Committee has appropriate accounting and financial management expertise. Further details relating to the experience of the Audit Committee members can be found in their respective biographies on pages 7-12
The following report was approved at a meeting of the Audit Committee on February 28, 2013.
Audit Committee Report
The Audit Committee has discussed with the independent registered public accounting firm, Deloitte & Touche Ltd. (“Deloitte”), the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards Vol.1.AU section 380) (Communication with Audit Committees) and Regulation S-X Rule 2-07.
The Audit Committee and Deloitte have discussed Deloitte’s independence and whether Deloitte can provide non-audit related services and maintain independence from management and PartnerRe. The Audit Committee has received from Deloitte the written disclosures and the letter required by PCAOB Rule 3526 (Communication with Audit Committees, Concerning Independence) including written materials addressing Deloitte’s internal quality control procedures.
During fiscal year 2012, the Audit Committee had nine meetings, including informational calls, to discuss (among other things) PartnerRe’s quarterly results. The meetings were conducted to encourage communication among the members of the Audit Committee, management, the internal auditors and Deloitte. The Audit Committee also discussed with Deloitte the overall scope and plans for PartnerRe’s directorDeloitte’s audits and officer insurance is Hartford Fire Insurance Company.the results of such audits. The policy period runsAudit Committee met with representatives from May 15, 2009 to May 15, 2010. Deloitte, both with and without management present.
The cost of this coverageAudit Committee has reviewed and discussed the audited financial statements for the one-year period ending May 15, 2010, was $1,835,826. Effective October 2, 2009, Paris Re directorsyear ended December 31, 2012 with management and officers were covered by this policywith Deloitte. Based on the above-mentioned reviews and as a resultdiscussions, the premium increased to $2,020,408. As a condition of the Paris Re acquisition a separate policy was purchased for former Paris Re directors and officers at a cost of €492,091 for a six year run off effective December 7, 2009.
Any shareholder or other interested party who wishes to communicate with our directors may writeAudit Committee has recommended to the Board at Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda, markedthat the audited financial statements be included in PartnerRe’s Annual Report on Form 10-K for the attentionyear ended December 31, 2012.
Audit Committee
David Zwiener, Chairman
Judith Hanratty
Jan H. Holsboer
Lucio Stanca
Egbert Willam
Compensation Committee
Pursuant to its charter, the Compensation Committee has been established mainly to discharge the Board’s responsibilities relating to the Company’s compensation and benefits policies for its Chief Executive Officer and all other executive officers and to oversee plans for management development and succession.
The Compensation Committee can delegate authority to its chairman or a sub-committee as it deems appropriate or as necessary to carry out responsibilities of the Compensation Committee.
Compensation of Executive Officers and Directors: Roles and Responsibilities
The Compensation Committee is responsible for the review and final approval of the compensation elements for each executive officer including the Chief Executive Officer.
In so reviewing and approving executive officers’ compensation, the Compensation Committee:
in consultation with the Board in executive session, establishes and approves goals and objectives relevant to the compensation of the Chief Executive Officer and evaluates the performance of the Chief Executive Officer in light of such established goals and objectives; and
in consultation with the Chief Executive Officer, establishes and approves goals and objectives relevant to the compensation of all other executive officers and evaluates their performance in light of such established goals and objectives.
For more information on the responsibilities and activities of the Compensation Committee, including the Committee’s processes for determining Named Executive Officers’ compensation, see our “Compensation and Discussion Analysis” section on pages 29-41.
The Compensation Committee is not involved in the consideration and determination of the directors’ compensation.
Compensation Committee Consulting Services
The Compensation Committee has the authority to hire, manage and terminate external compensation consulting services.
The Chairman of the Compensation Committee requests information, analysis and proposals from time to time from Frederic W. Cook & Co., Inc. As discussed below, examples of the services provided include reviewing executive retention plans, proposing alternative approaches in the design of long-term incentive plans, suggesting the composition of our competitive peer group and performing competitive pay analyses based on the peer group.
Separate to the consultants used by the Compensation Committee, management obtains consulting services from other compensation consultants on an as-needed basis throughout the year. Fees for these consulting services are set on a project-by-project basis. An annual retainer is not paid to any executive compensation consulting firm.
Compensation Consultant
Frederic W. Cook & Co., Inc., an external consulting firm, provides information and guidance to the Compensation Committee as requested. Each year at the Compensation Committee’s November meeting, a report is presented suggesting which companies constitute an appropriate competitive peer group. Further details about the peer group can be found under “Competitive Peer Group and Pay Analysis,” on page 30. Based on the approved competitive peer group, the consultant prepares a competitive analysis of total compensation for our executive officers against compensation for comparable executives at each peer group company. This analysis is presented to the Compensation Committee at its February meeting. The Compensation Committee makes a determination with respect to the compensation of the Chief Executive Officer based on peer group analysis. In 2012, Frederic W. Cook & Co., Inc. conducted an analysis of PartnerRe’s executive compensation programs and provided advice to the Compensation Committee as needed on items such as ISS corporate governance guidelines. The Compensation Committee has direct access to all external advisors without management involvement.
Frederic W. Cook & Co., Inc. has not provided any services or received any payment from PartnerRe in an amount in excess of $120,000 during the year ended December 31, 2012 and did not perform consulting work for the management team. The following factors set forth in the SEC rules regarding compensation advisor independence were reviewed in order to determine if any conflict of interest issues were raised by the use of the consulting firm:
Whether the compensation consulting company employing the compensation advisor is providing any other services to PartnerRe.
How much the compensation consulting company who employs the compensation advisor has received in fees from PartnerRe, as a percentage of that person’s total revenue.
What policies and procedures have been adopted by the compensation consulting company employing the compensation advisor to prevent conflicts of interest.
Whether the compensation advisor has any business or personal relationship with a member of the compensation committee.
Whether the compensation advisor owns any stock of PartnerRe.
Whether the compensation advisor or the person employing the advisor has any business or personal relationship with an executive officer of PartnerRe.
Based on consideration of these and any other relevant factors, the Compensation Committee concluded there was no conflict of interest between PartnerRe and any compensation advisor.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee in 2012 was an officer or employee of PartnerRe or any of its subsidiaries. There are no Compensation Committee interlocks.
Nominating & Governance Committee
Under the terms of its charter, the Nominating & Governance Committee is responsible for overseeing all aspects of corporate and board governance. The Nominating & Governance Committee identifies individuals qualified to become directors, often with the assistance of a particular director or the Secretarythird-party search firm, and recommends appropriate nominees to the Board. The Secretary’s office opens all such correspondenceIn addition, the Nominating & Governance Committee recommends directors for committee membership, prescribes committee structure, evaluates Board and forwards itcommittee performance, oversees and sets director compensation, develops and recommends to the relevantBoard the Corporate Governance Principles and Application Guidelines and oversees compliance with such guidelines. The Nominating & Governance Committee Chairman oversees individual assessments of those directors who are standing for re-election.
The Nominating & Governance Committee may, at its discretion, consider director exceptcandidates suggested by shareholders.
The Nominating & Governance Committee identifies, reviews, assesses and recommends candidates to fill vacancies on the Board that occur for items unrelatedany reason. The Nominating & Governance Committee does not have a formal diversity policy; however, it has established and rigorously follows criteria when evaluating the candidacy of any individual for membership to the functionsBoard and any committee. Members of the Nominating & Governance Committee review prospective candidates’ qualifications and geographic location; determine whether prospective candidates are independent and regularly consider whether the composition of the Board and its committees is diverse and appropriate in light of the current business solicitations or advertisements.challenges and needs. In particular, the Nominating & Governance Committee considers each director’s individual skills, judgment, age, background and experience. The Nominating & Governance Committee may engage external consultants to assist with director searches and has secured the services of Spencer Stuart to assist in identifying candidates to fill the vacancies which will be created by the retirement of Messrs. Baumgartner and Rollwagen in May 2013.
Risk & Finance Committee
Under the terms of its charter, the Risk & Finance Committee oversees PartnerRe’s risk management framework policies and practices as well as its capital management policies and processes. The Risk & Finance Committee has oversight responsibility for PartnerRe policies and activities mainly related to:
overall management of PartnerRe’s risks pursuant to the business strategy and risk guidelines established by the Board; and
capital management including issuance, retirement and internal capital movements.
The Board’s Role in Risk Oversight
As a reinsurance company PartnerRe must assume risk in order to achieve its strategic objectives and return targets; however, it is necessary that risk be assumed within an integrated management framework in accordance with an established risk appetite. The Board sets both the risk appetite and return goals by considering the following:
establishment of a minimum capital level expressed as a fixed percentile of a modeled financial loss exceedance curve plus a margin;
setting loss tolerances expressed as a percentage of the minimum capital level for the eight largest risks that PartnerRe assumes, which are considered to be natural catastrophe risk, casualty reserving risk, equity and equity-like investment risk, longevity risk, pandemic risk, standard fixed income credit risk, trade credit risk and agriculture risk; and
approving key risk management principles and policies utilized by PartnerRe to drive individual decision making throughout the organization.
In addition the Board also:
allocates responsibilities for risk oversight among the Board and its committees;
facilitates open communication between management and directors about the risks which PartnerRe assumes; and
fosters an appropriate culture of integrity and risk awareness.
While the Board oversees risk management, it is the responsibility of management to manage risk. PartnerRe has robust internal policies and procedures as well as a strong internal control environment to identify and manage risks which ensures communication with the Board and its committees. PartnerRe’s integrated risk management framework includes policies and procedures, an enterprise risk management committee chaired by the Chief Executive Officer, regular internal management disclosure committee meetings, a comprehensive internal and external audit process and the Code of Business Conduct and Ethics. At least annually, the Board and the Audit Committee monitor the effectiveness of the internal controls and the Board and the Risk & Finance Committee oversee the risk management framework. Management communicates routinely with the Board and its committees on the significant risks identified and how they are being managed and mitigated. Much of the work is delegated to Board committees, which meet regularly and report back to the Board.
For instance:
The Risk & Finance Committee approves and monitors limits for the key risks listed above. PartnerRe assumes and oversees risks relating to reserving, underwriting limits, investments, currency risk and hedging programs, mergers and acquisitions, and capital projects.
The Audit Committee oversees and focuses on risks related to PartnerRe’s financial statements, the financial reporting process, accounting and legal matters. The Audit Committee oversees the internal audit function and PartnerRe’s ethics programs, including the Code of Business Conduct and Ethics. The Audit Committee members meet separately with PartnerRe’s Chief Audit Officer and representatives of the independent auditing firm.
The Compensation Committee evaluates the risks and rewards associated with PartnerRe’s compensation philosophy and programs. As discussed in more detail in the “Compensation Discussion and Analysis” section on pages 29-41, the Compensation Committee reviews and approves compensation programs with features that mitigate risk without diminishing the positive incentives of the compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate potential risks in compensation.
Executive SessionSessions
AtFollowing every physical boardBoard meeting there is an executive session where Mr. Thiele,in 2012, the Chief Executive Officer is excused. In 2009, there were four physical board meetings.recused himself from the meeting to allow the Board to meet in executive sessions. The non-management board membersindependent directors are at liberty to raise whatever issues they wish.
wish during these sessions. The Chairman presides over the executive sessions.
Audit CommitteeAdvance MaterialsInformation and data important to the directors’ understanding of the business or matters to be considered at a Board or committee meeting are, to the extent practical, distributed sufficiently in advance of the meeting to allow careful review. The directors set an annual agenda in advance, which is circulated with the materials. In addition, the Chairman of the Board and each committee sets a quarterly agenda in advance of all Board and committee meetings.Access to ManagementDirectors have full and unrestricted access to management. In addition, key members of management attend Board meetings from time to time to present information about the results, plans and operations of the business within their areas of responsibility.
Access to Outside Advisers
The Board and its committees may retain external counsel or consultants on their own initiative. For example, the Audit Committee has the authority to retain and terminate the independent auditor, the Nominating & Governance Committee may retain search firms to help identify director candidates, and the Compensation Committee and the Chairman of the Compensation Committee may retain and terminate the services of compensation consultants for advice on executive compensation matters.
Director and Officer Questionnaire
Every year, each director and executive officer completes a Director and Officer Questionnaire that requires disclosure of detailed information, including whether the director or executive officer, or any member of his or her immediate family, has a direct or indirect material interest in any transaction involving PartnerRe.
Board Independence and Expertise
The Nominating & Governance Committee has determined that all directors are independent with the exception of Mr. Thiele, who is the only management director. In making this determination, the Nominating & Governance Committee considers the New York Stock Exchange listing standards for independence and reviews a comprehensive list of board memberships and charitable associations for each director. In addition, the Nominating & Governance Committee considered certain other arrangements described under the heading “Agreements with Related Parties” in our filing on Form 10-K for the year ended December 31, 2009. Based on this review, the Nominating & Governance Committee determined that no director other than Mr. Thiele had a direct or indirect material relationship with PartnerRe. In addition, there are no interlocking directorships and none of our independent directors, or any of their immediate family members receive any consulting, advisory, legal, or other non-director fees from PartnerRe. If any such relationship were to arise, all relevant material fees would be disclosed and the Nominating & Governance Committee would make a new determination as to independence.
In the normal course of our operations, PartnerRe has bought or held securities of companies for which some of our board members serve as directors or non-executive directors. All transactions entered into as part of the investment portfolio were completed on market terms.
Since its inception in 1993 PartnerRe has always separated the role of the Chief Executive Officer from that of the Chairman of the Board and therefore obviates the need to appoint a lead director. The role of Chairman of the Board is filled by an independent, non-executive director and this separation of duties is an important factor of our corporate governance mandate. The Chairman leads the Board meetings which are scheduled at least four times a year, calls additional meetings of the directors as he deems appropriate, advises the Nominating & Governance Committee on the selection of committee Chairs, leads the evaluation of the performance of the Chief Executive Officer, advises on and determines with the concurrence of the Chief Executive Officer the agenda for Board meetings, determines with the Chief Executive Officer the nature and extent of information that should be provided to the Board in advance of Board meetings, provides leadership to the Board, acts as a liaison between shareholders and the Board where appropriate and performs such other functions as the Board may direct. The Chairman also leads all executive sessions of the Board which are held each time a physical board meeting occurs.
The Nominating & Governance Committee identifies, reviews, assesses and recommends candidates to fill vacancies on the Board that occur for any reason. The Nominating & Governance Committee follows established criteria when evaluating the candidacy of any individual as a director. (Further information about these criteria can be found under the heading “Nominating & Governance Committee” on pages 23-24 and in each director’s biography on pages 6-11.) The Board retained the firm of Spencer Stuart to assist it in recruiting Mr. ZwienerPursuant to its Board. The Nominating & Governance Committee also interviewed, assessed and recommended a Paris Re nominee candidate tocharter, the Board for its approval as a condition of the Paris Re acquisition.
The Board’s Role in Risk Oversight
Both the Board and management recognize that it is neither possible nor desirable to eliminate all risk. As a reinsurance entity PartnerRe must assume risk in order to achieve its strategic objectives and return goals; however it is necessary that risk be assumed in accordance with an established risk appetite and within an integrated risk management framework. The Board sets both the risk appetite and return goals by consideration of the following:
establishment of a minimum capital level expressed as a fixed percentile of a modeled financial loss exceedance curve plus a margin;
setting loss tolerances expressed as a percentage of the minimum capital level for the three largest risks facing PartnerRe; these are considered to be natural catastrophe risk, casualty reserving risk and equity investment risk; and
approving key risk management principles and policies utilized by PartnerRe to drive individual decision making throughout the organization.
In addition the Board also:
allocates responsibilities for risk oversight among the Board and its committees;
facilitates open communication between management and directors about the risks facing PartnerRe; and
fosters an appropriate culture of integrity and risk awareness.
While the Board oversees risk management, it is the responsibility of management to manage risk. PartnerRe has robust internal policies and procedures and a strong internal control environment to identify and manage risks and to communicate with the Board. These policies and procedures include an integrated risk management framework, an enterprise risk management committee chaired by the Chief Executive Officer, regular internal management disclosure committee meetings, the Code of Business Conduct and Ethics and a comprehensive internal and external audit process. The Board and the Audit Committee monitor the effectiveness of the internal controls and the risk management program at least annually. Management communicates routinely with the Board and its committees on the significant risks identified and how they are being managed and mitigated. (The Board implements its risk oversight function both as a whole and through its committees.) Much of the work is delegated to committees, which meet regularly and report back to the Board. All committees play significant roles in carrying out the risk oversight function.
In particular:
The Audit Committee oversees and focuses on risks related to the Company’s financial statements, the financial reporting process, accounting and legal matters. The Audit Committee oversees the internal audit function and PartnerRe’s ethics programs, including the Code of Business Conduct & Ethics. The Audit Committee members meet separately with PartnerRe’s Chief Audit Executive and representatives of the independent auditing firm.
The Compensation Committee evaluates the risks and rewards associated with PartnerRe’s compensation philosophy and programs. As discussed in more detail in the Compensation Discussion and Analysis on pages 45-47, the Compensation Committee reviews and approves compensation programs with features that mitigate risk without diminishing the positive incentives of the compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate potential risks in compensation.
The Risk & Finance Committee oversees risks relating to reserving, underwriting limits, investments, currency risk and hedging programs, mergers and acquisitions, and capital projects.
Code of Business Conduct and Ethics
The Board has adopted the Code of Business Conduct and Ethics, which applies to all directors, officers and employees. Any specific waiver of its provisions requires approval of the Board or the Audit Committee, and any
waivers must be disclosed to shareholders promptly. There were no waivers of the Code of Business Conduct and Ethics in 2009. Any director, officer or employee who violates the Code of Business Conduct and Ethics will be subject to disciplinary action.
Corporate Governance Principles and Application Guidelines
The Board believes that good corporate governance is critical to achieving business success and aligning the interests of management and shareholders. To that end, the Board adopted the Corporate Governance Principles and Application Guidelines to define how the Board will operate and to reflect PartnerRe’s global business practices. The Corporate Governance Principles and Application Guidelines specifically note that our Bye-Laws require majority voting for resolutions relating to the election of directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has established five standing committees: the Audit Committee, the Compensation Committee, the Human Resources Committee, the Nominating & Governance Committee and the Risk & Finance Committee. Members of the Audit, Compensation, and Nominating & Governance Committees are independent of PartnerRe and management as defined by New York Stock Exchange rules. The committee memberships are as follows:
|
|
| ||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
Each committee has a charter that, among other things, reflects current best practices in corporate governance. The following section describes the role of each committee.
The Audit Committee’s primary responsibilities are to assist Board oversight of:
the integrity of PartnerRe’s financial statements;
PartnerRe’s compliance with legal and regulatory requirements, including the receipt of reports arising in respect of the Code of Business Conduct and Ethics;
the independent auditor’s qualifications and independence; and
the performance of PartnerRe’s internal audit function and independent auditors.
To that end, theThe Audit Committee regularly meets with management, the Chief Audit Executive,Officer and our independent registered public accounting firm to review matters relating to the quality of financial reporting and internal accounting controls, including the nature, extent and results of their audits. In addition, the Audit Committee discusses PartnerRe’s policies with respect to risk assessment and risk management processes, and reviews controls relating to management of risk exposures and management steps to mitigate, monitor, control and report on risk. The Audit Committee met eight times during the year ended December 31, 2009.processes.
TheMr. Zwiener was appointed as Chairman of the Audit Committee effective May 16, 2012, in replacement of Mr. Twomey,Twomey. Mr. Zwiener meets the definition of an “audit committee financial expert” as adopted by the SEC, and he has agreed to be designated as such. Mr. Twomey servesZwiener does not serve on the Audit Committee for oneaudit committee of any other public company. Further information about Mr. TwomeyZwiener can be found on page 6.
11.
The other members of the Audit Committee meet the financial literacy requirements of the New York Stock Exchange. They each have a broad range of experience in senior executive positions in their respective industries. The Board has determined that each member of the Audit Committee has appropriate accounting and financial management expertise. Further details relating to the experience of the Audit Committee members can be found in their respective biographies on pages 6-11.
7-12
The following report was approved at a meeting of the Audit Committee on February 25, 2010.
28, 2013.
The Audit Committee has discussed with the independent registered public accounting firm, Deloitte & Touche Ltd. (“Deloitte”Deloitte”), the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards Vol.1.AU section 380) (Communication with Audit Committees) and Regulation S-X Rule 2-07.
The Audit Committee and Deloitte have discussed Deloitte’s independence and whether Deloitte can provide non-audit related services and maintain independence from management and PartnerRe. The Audit Committee has received from Deloitte the written disclosures and the letter required by PCAOB Rule 3526 (Communication with Audit Committees, Concerning Independence) including written materials addressing Deloitte’s internal quality control procedures.
During fiscal year 2009,2012, the Audit Committee had eightnine meetings, including telephonic meetings,informational calls, to discuss (among other things) PartnerRe’s quarterly results. The meetings were conducted to encourage communication among the members of the Audit Committee, management, the internal auditors and Deloitte. The Audit Committee also discussed with Deloitte the overall scope and plans for Deloitte’s audits and the results of such audits. The Audit Committee met with representatives from Deloitte, both with and without management present.
The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 20092012 with management and with Deloitte. Based on the above-mentioned reviews and discussions, the Audit Committee has recommended to the Board that the audited financial statements be included in PartnerRe’s Annual Report on Form 10-K for the year ended December 31, 2009.2012.
Audit Committee
David Zwiener, Chairman
Judith Hanratty
Jan H. Holsboer
Lucio Stanca
Egbert Willam
Compensation Committee
Pursuant to its charter, the Compensation Committee has been established mainly to discharge the Board’s responsibilities relating to the Company’s compensation and benefits policies for its Chief Executive Officer and all other executive officers and to oversee plans for management development and succession.
The Compensation Committee can delegate authority to its chairman or a sub-committee as it deems appropriate or as necessary to carry out responsibilities of the Compensation Committee.
Compensation of Executive Officers and Directors: Roles and Responsibilities
The Compensation Committee is responsible for the review and final approval of the compensation elements for each executive officer including the Chief Executive Officer.
In so reviewing and approving executive officers’ compensation, the Compensation Committee:
in consultation with the Board in executive session, establishes and approves goals and objectives relevant to the compensation of the Chief Executive Officer and evaluates the performance of the Chief Executive Officer in light of such established goals and objectives; and
in consultation with the Chief Executive Officer, establishes and approves goals and objectives relevant to the compensation of all other executive officers and evaluates their performance in light of such established goals and objectives.
For more information on the responsibilities and activities of the Compensation Committee, including the Committee’s processes for determining Named Executive Officers’ compensation, see our “Compensation and Discussion Analysis” section on pages 29-41.
The Compensation Committee is not involved in the consideration and determination of the directors’ compensation.
Compensation Committee Consulting Services
The Compensation Committee has the authority to hire, manage and terminate external compensation consulting services.
The Chairman of the Compensation Committee requests information, analysis and proposals from time to time from Frederic W. Cook & Co., Inc. As discussed below, examples of the services provided include reviewing executive retention plans, proposing alternative approaches in the design of long-term incentive plans, suggesting the composition of our competitive peer group and performing competitive pay analyses based on the peer group.
Separate to the consultants used by the Compensation Committee, management obtains consulting services from other compensation consultants on an as-needed basis throughout the year. Fees for these consulting services are set on a project-by-project basis. An annual retainer is not paid to any executive compensation consulting firm.
Compensation Consultant
Frederic W. Cook & Co., Inc., an external consulting firm, provides information and guidance to the Compensation Committee as requested. Each year at the Compensation Committee’s November meeting, a report is presented suggesting which companies constitute an appropriate competitive peer group. Further details about the peer group can be found under “Competitive Peer Group and Pay Analysis,” on page 30. Based on the approved competitive peer group, the consultant prepares a competitive analysis of total compensation for our executive officers against compensation for comparable executives at each peer group company. This analysis is presented to the Compensation Committee at its February meeting. The Compensation Committee makes a determination with respect to the compensation of the Chief Executive Officer based on peer group analysis. In 2012, Frederic W. Cook & Co., Inc. conducted an analysis of PartnerRe’s executive compensation programs and provided advice to the Compensation Committee as needed on items such as ISS corporate governance guidelines. The Compensation Committee has direct access to all external advisors without management involvement.
Frederic W. Cook & Co., Inc. has not provided any services or received any payment from PartnerRe in an amount in excess of $120,000 during the year ended December 31, 2012 and did not perform consulting work for the management team. The following factors set forth in the SEC rules regarding compensation advisor independence were reviewed in order to determine if any conflict of interest issues were raised by the use of the consulting firm:
Whether the compensation consulting company employing the compensation advisor is providing any other services to PartnerRe.
How much the compensation consulting company who employs the compensation advisor has received in fees from PartnerRe, as a percentage of that person’s total revenue.
What policies and procedures have been adopted by the compensation consulting company employing the compensation advisor to prevent conflicts of interest.
Whether the compensation advisor has any business or personal relationship with a member of the compensation committee.
Whether the compensation advisor owns any stock of PartnerRe.
Whether the compensation advisor or the person employing the advisor has any business or personal relationship with an executive officer of PartnerRe.
Based on consideration of these and any other relevant factors, the Compensation Committee concluded there was no conflict of interest between PartnerRe and any compensation advisor.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee in 2012 was an officer or employee of PartnerRe or any of its subsidiaries. There are no Compensation Committee interlocks.
Nominating & Governance Committee
Under the terms of its charter, the Nominating & Governance Committee is responsible for overseeing all aspects of corporate and board governance. The Nominating & Governance Committee identifies individuals qualified to become directors, often with the assistance of a third-party search firm, and recommends appropriate nominees to the Board. In addition, the Nominating & Governance Committee recommends directors for committee membership, prescribes committee structure, evaluates Board and committee performance, oversees and sets director compensation, develops and recommends to the Board the Corporate Governance Principles and Application Guidelines and oversees compliance with such guidelines. The Nominating & Governance Committee Chairman oversees individual assessments of those directors who are standing for re-election.
The Nominating & Governance Committee may, at its discretion, consider director candidates suggested by shareholders.
The Nominating & Governance Committee identifies, reviews, assesses and recommends candidates to fill vacancies on the Board that occur for any reason. The Nominating & Governance Committee does not have a formal diversity policy; however, it has established and rigorously follows criteria when evaluating the candidacy of any individual for membership to the Board and any committee. Members of the Nominating & Governance Committee review prospective candidates’ qualifications and geographic location; determine whether prospective candidates are independent and regularly consider whether the composition of the Board and its committees is diverse and appropriate in light of the current business challenges and needs. In particular, the Nominating & Governance Committee considers each director’s individual skills, judgment, age, background and experience. The Nominating & Governance Committee may engage external consultants to assist with director searches and has secured the services of Spencer Stuart to assist in identifying candidates to fill the vacancies which will be created by the retirement of Messrs. Baumgartner and Rollwagen in May 2013.
Risk & Finance Committee
Under the terms of its charter, the Risk & Finance Committee oversees PartnerRe’s risk management framework policies and practices as well as its capital management policies and processes. The Risk & Finance Committee has oversight responsibility for PartnerRe policies and activities mainly related to:
overall management of PartnerRe’s risks pursuant to the business strategy and risk guidelines established by the Board; and
capital management including issuance, retirement and internal capital movements.
The Board’s Role in Risk Oversight
As a reinsurance company PartnerRe must assume risk in order to achieve its strategic objectives and return targets; however, it is necessary that risk be assumed within an integrated management framework in accordance with an established risk appetite. The Board sets both the risk appetite and return goals by considering the following:
establishment of a minimum capital level expressed as a fixed percentile of a modeled financial loss exceedance curve plus a margin;
setting loss tolerances expressed as a percentage of the minimum capital level for the eight largest risks that PartnerRe assumes, which are considered to be natural catastrophe risk, casualty reserving risk, equity and equity-like investment risk, longevity risk, pandemic risk, standard fixed income credit risk, trade credit risk and agriculture risk; and
approving key risk management principles and policies utilized by PartnerRe to drive individual decision making throughout the organization.
In addition the Board also:
allocates responsibilities for risk oversight among the Board and its committees;
facilitates open communication between management and directors about the risks which PartnerRe assumes; and
fosters an appropriate culture of integrity and risk awareness.
While the Board oversees risk management, it is the responsibility of management to manage risk. PartnerRe has robust internal policies and procedures as well as a strong internal control environment to identify and manage risks which ensures communication with the Board and its committees. PartnerRe’s integrated risk management framework includes policies and procedures, an enterprise risk management committee chaired by the Chief Executive Officer, regular internal management disclosure committee meetings, a comprehensive internal and external audit process and the Code of Business Conduct and Ethics. At least annually, the Board and the Audit Committee monitor the effectiveness of the internal controls and the Board and the Risk & Finance Committee oversee the risk management framework. Management communicates routinely with the Board and its committees on the significant risks identified and how they are being managed and mitigated. Much of the work is delegated to Board committees, which meet regularly and report back to the Board.
For instance:
The Risk & Finance Committee approves and monitors limits for the key risks listed above. PartnerRe assumes and oversees risks relating to reserving, underwriting limits, investments, currency risk and hedging programs, mergers and acquisitions, and capital projects.
The Audit Committee oversees and focuses on risks related to PartnerRe’s financial statements, the financial reporting process, accounting and legal matters. The Audit Committee oversees the internal audit function and PartnerRe’s ethics programs, including the Code of Business Conduct and Ethics. The Audit Committee members meet separately with PartnerRe’s Chief Audit Officer and representatives of the independent auditing firm.
The Compensation Committee evaluates the risks and rewards associated with PartnerRe’s compensation philosophy and programs. As discussed in more detail in the “Compensation Discussion and Analysis” section on pages 29-41, the Compensation Committee reviews and approves compensation programs with features that mitigate risk without diminishing the positive incentives of the compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate potential risks in compensation.
Executive Sessions
Following every physical Board meeting in 2012, the Chief Executive Officer recused himself from the meeting to allow the Board to meet in executive sessions. The independent directors are at liberty to raise whatever issues they wish during these sessions. The Chairman presides over the executive sessions.
Audit Committee Pursuant to its charter, the Audit Committee’s primary responsibilities are to assist Board oversight of: the integrity of PartnerRe’s financial statements; PartnerRe’s compliance with legal and regulatory requirements, including the receipt of reports arising in respect of the Code of Business Conduct and Ethics; the independent auditor’s qualifications and independence; and the performance of PartnerRe’s internal audit function and independent auditors. The Audit Committee regularly meets with management, the Chief Audit Officer and our independent registered public accounting firm to review matters relating to the quality of financial reporting and internal accounting controls, including the nature, extent and results of their audits. In addition, the Audit Committee discusses PartnerRe’s policies with respect to risk assessment and risk management processes. Mr. Zwiener was appointed as Chairman of the Audit Committee effective May 16, 2012, in replacement of Mr. Twomey. Mr. Zwiener meets the definition of an “audit committee financial expert” as adopted by the SEC, and he has agreed to be designated as such. Mr. Zwiener does not serve on the audit committee of any other public company. Further information about Mr. Zwiener can be found on page 11. The other members of the Audit Committee meet the financial literacy requirements of the New York Stock Exchange. They each have a broad range of experience in senior executive positions in their respective industries. The Board has determined that each member of the Audit Committee has appropriate accounting and financial management expertise. Further details relating to the experience of the Audit Committee members can be found in their respective biographies on pages 7-12 The following report was approved at a meeting of the Audit Committee on February 28, 2013.Kevin M. Twomey, ChairmanAudit Committee ReportJan H. Holsboer, Vice ChairmanThe Audit Committee has discussed with the independent registered public accounting firm, Deloitte & Touche Ltd. (“Deloitte”), the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards Vol.1.AU section 380) (Communication with Audit Committees) and Regulation S-X Rule 2-07.
The Audit Committee and Deloitte have discussed Deloitte’s independence and whether Deloitte can provide non-audit related services and maintain independence from management and PartnerRe. The Audit Committee has received from Deloitte the written disclosures and the letter required by PCAOB Rule 3526 (Communication with Audit Committees, Concerning Independence) including written materials addressing Deloitte’s internal quality control procedures.
During fiscal year 2012, the Audit Committee had nine meetings, including informational calls, to discuss (among other things) PartnerRe’s quarterly results. The meetings were conducted to encourage communication among the members of the Audit Committee, management, the internal auditors and Deloitte. The Audit Committee also discussed with Deloitte the overall scope and plans for Deloitte’s audits and the results of such audits. The Audit Committee met with representatives from Deloitte, both with and without management present.
The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2012 with management and with Deloitte. Based on the above-mentioned reviews and discussions, the Audit Committee has recommended to the Board that the audited financial statements be included in PartnerRe’s Annual Report on Form 10-K for the year ended December 31, 2012.
Audit Committee
Vito H. BaumgartnerDavid Zwiener, Chairman
Judith Hanratty
David ZwienerJan H. Holsboer
Lucio Stanca
Compensation Committee
ThePursuant to its charter, the Compensation Committee’s primaryCommittee has been established mainly to discharge the Board’s responsibilities are:
Reviewing and recommendingrelating to the Board the adoption of plans providingCompany’s compensation and benefits policies for the issuance of shares, incentive-compensation plans and other equity based plans;
Determining the terms of any awards under such plans to theits Chief Executive Officer and theall other executive officers subjectand to Section 16 of the Exchange Act of 1934 (the “Exchange Act”)oversee plans for management development and recommending them to the Board;succession.
Establishing goals and objectives relevant to the Chief Executive Officer’s compensation;
Evaluating the performance of the Chief Executive Officer in light of established goals and objectives relevant to the Chief Executive Officer’s Compensation;
Determining and recommending to the executive session of the Board the compensation and benefits of the Chief Executive Officer;
Determining and recommending to the Board any employment or other agreements with the officers subject to Section 16 of the Exchange Act providing for severance or change in control benefits;
With input from the Human Resources Committee, determining the compensation of the officers subject to Section 16 of the Exchange Act (other than the Chief Executive Officer) and making recommendations to the Board;
Producing any external report required by statute or regulation relating to compensation or the Compensation Committee’s responsibilities;
Reviewing and discussing the Compensation Discussion and Analysis with management and providing a recommendation to the Board regarding its inclusion in PartnerRe’s annual proxy statement and Annual Report on Form 10-K; and
In conjunction with the Human Resources Committee, reviewing and recommending to the Board appointments to the Executive Committee.
The Compensation Committee can delegate authority to individual Compensation Committee membersits chairman or a sub-committee as it deems appropriate or as necessary to carry out responsibilities of the Compensation Committee.
Compensation of Executive Officers and Directors: Roles and Responsibilities
The Compensation Committee is responsible for the review and final approval of the compensation elements for each executive officer including the Chief Executive Officer.
In addition,so reviewing and approving executive officers’ compensation, the Compensation Committee:
in consultation with the Board in executive session, establishes and approves goals and objectives relevant to the compensation of the Chief Executive Officer and evaluates the performance of the Chief Executive Officer in light of such established goals and objectives; and
in consultation with the Chief Executive Officer, establishes and approves goals and objectives relevant to the compensation of all other executive officers and evaluates their performance in light of such established goals and objectives.
For more information on the responsibilities and activities of the Compensation Committee, may delegate to one or more officers of PartnerRe its authority underincluding the terms of any incentive-compensation or other equity-based plan to make grantsCommittee’s processes for determining Named Executive Officers’ compensation, see our “Compensation and awards under such plans as theDiscussion Analysis” section on pages 29-41.
The Compensation Committee deems appropriateis not involved in the consideration and in accordance withdetermination of the terms of such plans.
directors’ compensation.
Compensation Committee Consulting Services
The Compensation Committee has the authority to hire, manage and terminate outsideexternal compensation consulting services.
The Chairman of the Compensation Committee Mr. Baumgartner, requests information, analysis and proposals from PricewaterhouseCoopers, Watson Wyatt ortime to time from Frederic W. Cook firms that provide consulting services from time to time.& Co., Inc. As discussed below, examples of thesethe services provided include reviewing executive retention plans, proposing alternative approaches in the design of long-term incentive plans, suggesting the composition of our comparativecompetitive peer group and makingperforming competitive pay analyses based on the peer group.
ManagementSeparate to the consultants used by the Compensation Committee, management obtains consulting services from other independent compensation consultants on an as-needed basis throughout the year. Typical projects include market pay studies, industry benchmarking and input on current trends and developments in executive compensation. Fees for these consulting services are set on a project-by-project basis. An annual retainer is not paid to any executive compensation consulting firm.
Compensation of Named Executive Officers: Roles and Responsibilities
Human Resources Committee
The Human Resources Committee currently comprises the Chief Executive Officer and the members of the Compensation Committee. The Human Resources Committee oversees human resources philosophy, strategy, policy and administration for the employees of PartnerRe, including the Section 16 officers (excluding the Chief Executive Officer).
Chief Executive Officer
The Chief Executive Officer is not a member of the Compensation Committee and did not attend any Compensation Committee meetings in 2009. As a member of the Human Resources Committee, the Chief Executive Officer assists the Compensation Committee by:
Explaining business context, the market environment and PartnerRe’s strategic direction;
Proposing financial performance measures and organizational performance objectives for Named Executive Officers (as defined below) other than himself, for the next annual performance period; and
Making compensation recommendations for Named Executive Officers other than himself, based on PartnerRe’s financial results and his personal qualitative assessment of the contributions of each executive toward those results and other organizational objectives.
Human Resources Management
In February 2009, Human Resources management provided the Compensation Committee with its analysis on internal pay equity, compensation mix, executive share ownership and competitive market comparisons.
Two Human Resources officers attend meetings of the Compensation Committee in a support capacity, but are not members:
The Chief Human Resources Officer presents information and proposals and coordinates technical and administrative support for the Compensation Committee. Once compensation packages are approved, the Chief Human Resources Officer is responsible for implementing any base salary adjustments, annual incentive payments and equity award grants.
The Director of Group Compensation and Benefits is a resource on technical issues and serves as secretary to both the Human Resources Committee and the Compensation Committee.
Compensation Consultant
An independentFrederic W. Cook & Co., Inc., an external consulting firm, provides information and guidance to the Compensation Committee as requested. Each year at the Compensation Committee’s November meeting, a report is presented suggesting which companies constitute an appropriate competitive peer group. Further details about the peer group can be found under “External“Competitive Peer Group and Pay Equity—Competitive Peer Group,Analysis,” on page 36. When30. Based on the Compensation Committee approves theapproved competitive peer group, the consultant prepares a competitive analysis of total compensation for the Named Executive Officersour executive officers against compensation for comparable executives at each peer group company. This analysis is presented to the Compensation Committee at a meeting the following February.its February meeting. The consultant, together with the Chief Human Resources Officer, also presents the Compensation Committee makes a determination with options forrespect to the compensation of the Chief Executive Officer based on peer group analysis.
In 2012, Frederic W. Cook & Co., Inc. conducted an analysis of PartnerRe’s executive compensation programs and provided advice to the Compensation Committee
as needed on items such as ISS corporate governance guidelines. The Compensation Committee reviewshas direct access to all external advisors without management involvement.
Frederic W. Cook & Co., Inc. has not provided any services or received any payment from PartnerRe in an amount in excess of $120,000 during the year ended December 31, 2012 and did not perform consulting work for the management team. The following factors set forth in the SEC rules regarding compensation advisor independence were reviewed in order to determine if any conflict of interest issues were raised by the use of the analysisconsulting firm:
Whether the compensation consulting company employing the compensation advisor is providing any other services to PartnerRe.
How much the compensation consulting company who employs the compensation advisor has received in fees from PartnerRe, as a percentage of that person’s total revenue.
What policies and information it receivesprocedures have been adopted by the compensation consulting company employing the compensation advisor to prevent conflicts of interest.
Whether the compensation advisor has any business or personal relationship with a member of the compensation committee.
Whether the compensation advisor owns any stock of PartnerRe.
Whether the compensation advisor or the person employing the advisor has any business or personal relationship with an executive officer of PartnerRe.
Based on consideration of these and formulates the final compensation recommendations to the Board for the Named Executive Officers. Further information aboutany other relevant factors, the Compensation Committee can be found under “Committeesconcluded there was no conflict of the Board of Directors—Compensation Committee,” which begins on page 21.
interest between PartnerRe and any compensation advisor.
Board of Directors
The Board is responsible for the final approval of compensation elements for each Named Executive Officer, excluding the Chief Executive Officer. All compensation elements for the Chief Executive Officer are discussed and approved during a Board executive session convened by independent directors. The Compensation Committee met six times during 2009.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee in 20092012 was an officer or employee of PartnerRe or any of its subsidiaries. There are no Compensation Committee interlocks.
The Human Resources Committee is responsible for our compensation philosophy, all forms of deferred compensation (other than for the Named Executive Officers), and the defined contribution pension plans. The Human Resources Committee also reviews, analyzes, discusses and, if appropriate, validates management’s recommendations regarding human resource philosophies, policies and programs. In conjunction with the Compensation Committee, the Human Resources Committee reviews and recommends to the Board appointments to the Executive Committee. The Human Resources Committee focuses primarily on evaluating the performance of the officers subject to Section 16 of the Exchange Act (other than the Chief Executive Officer) (including making compensation recommendations to the Compensation Committee), employee benefits, equity programs and executive succession planning and development. The Human Resources Committee met five times during 2009.
Nominating & Governance Committee
TheUnder the terms of its charter, the Nominating & Governance Committee is responsible for overseeing all aspects of corporate and board governance. The Nominating & Governance Committee identifies individuals qualified to become Board members,directors, often with the assistance of a third-party search firm, and recommends appropriate nominees to the Board. In addition, the Nominating & Governance Committee recommends directors for Board committee membership, prescribes committee structure, evaluates Board and committee performance, oversees and sets Boarddirector compensation, and develops and recommends to the Board the Corporate Governance Principles and Application Guidelines and oversees compliance with such guidelines. The Nominating & Governance Committee Chairman conductsoversees individual assessments of those directors who are standing for re-election.
Because of the unique and diversified nature of the reinsurance industry, only the Nominating & Governance Committee may nominate directors, but theThe Nominating & Governance Committee may, at its discretion, consider director candidates suggested by shareholders.
The Nominating & Governance Committee identifies, reviews, assesses and recommends candidates to fill vacancies on the Board that occur for any reason. The Nominating & Governance Committee does not have a formal diversity policy. However,policy; however, it has established and rigorously follows criteria when evaluating the candidacy of any individual for membership to the Board and any committee. Members of the Nominating & Governance Committee review prospective candidates’ qualifications and geographic location; determine whether prospective candidates are independent and regularly consider whether the composition of the Board and its Committeescommittees is diverse and appropriate in light of the current business challenges and needs. In particular, the Nominating & Governance Committee considers each director’s individual skills, judgment, age, background and experience.
PricewaterhouseCoopers LLP was retained to assist the Nominating & Governance Committee in revising the compensation program for the Board and the aggregate cost in providing this service was $37,000. In February 2010, the Nominating & Governance Committee approved a revised compensation program for members of the Board. This is in keeping with its policy of reviewing the Board compensation program every two years. The total compensation amount remains the same for the directors and the Chairman of the Board. The cash component will also remain unchanged for the directors and the Chairman of the Board. PricewaterhouseCoopers LLP and affiliates have also provided additional services to PartnerRe and its affiliates, such services include tax, actuarial and accounting related services. The decisions to engage PricewaterhouseCoopers LLP for the performance of these individual services were made by management and were not subject to Board or Board committee approval. The aggregate fees for such additional services totaled $2.6 million.
The restricted share unit award for the directors, other than the Chairman of the Board, will now be $100,000, granted annually rather than quarterly, and the share option award for directors, other than the Chairman of the Board, will be $80,000, granted annually. The restricted share unit award for the Chairman will now be $120,000 and the share option award for the Chairman will be $100,000, both granted annually. The main change to the program is that rather than vesting immediately upon grant, the restricted share units will now have a cliff vesting schedule of five years, with specified events triggering acceleration of vesting. All payments and grants will be paid and made on June 15 of each year, commencing on June 15, 2010.
The Nominating & Governance Committee met six times during 2009.
may engage external consultants to assist with director searches and has secured the services of Spencer Stuart to assist in identifying candidates to fill the vacancies which will be created by the retirement of Messrs. Baumgartner and Rollwagen in May 2013.
TheUnder the terms of its charter, the Risk & Finance Committee oversees PartnerRe’s risk management framework policies and practices as well as its corporatecapital management policies and processes. The Risk & Finance Committee has oversight responsibility for PartnerRe policies and activities mainly related to:
overall management of PartnerRe’s risks pursuant to the business strategy and risk guidelines established by the Board; and
capital management including issuance, retirement and internal capital movements.
The Board’s Role in Risk Oversight
As a reinsurance company PartnerRe must assume risk in order to achieve its strategic objectives and return targets; however, it is necessary that risk be assumed within an integrated management framework in accordance with an established risk appetite. The Board sets both the risk appetite and return goals by considering the following:
establishment of a minimum capital level expressed as a fixed percentile of a modeled financial management. loss exceedance curve plus a margin;
setting loss tolerances expressed as a percentage of the minimum capital level for the eight largest risks that PartnerRe assumes, which are considered to be natural catastrophe risk, casualty reserving risk, equity and equity-like investment risk, longevity risk, pandemic risk, standard fixed income credit risk, trade credit risk and agriculture risk; and
approving key risk management principles and policies utilized by PartnerRe to drive individual decision making throughout the organization.
In particular,addition the Board also:
allocates responsibilities for risk oversight among the Board and its committees;
facilitates open communication between management and directors about the risks which PartnerRe assumes; and
fosters an appropriate culture of integrity and risk awareness.
While the Board oversees risk management, it is the responsibility of management to manage risk. PartnerRe has robust internal policies and procedures as well as a strong internal control environment to identify and manage risks which ensures communication with the Board and its committees. PartnerRe’s integrated risk management framework includes policies and procedures, an enterprise risk management committee chaired by the Chief Executive Officer, regular internal management disclosure committee meetings, a comprehensive internal and external audit process and the Code of Business Conduct and Ethics. At least annually, the Board and the Audit Committee monitor the effectiveness of the internal controls and the Board and the Risk & Finance Committee approve policy for,oversee the risk management framework. Management communicates routinely with the Board and monitorits committees on the managementsignificant risks identified and how they are being managed and mitigated. Much of PartnerRe’s risksthe work is delegated to Board committees, which meet regularly and capital, including:report back to the Board.
For instance:
Approving and monitoring dollar limits for the various risks PartnerRe assumes;
Monitoring the “Capital at Risk” methodology;
Reviewing and recommending to the Board for approval material changes to PartnerRe’s reserving policy and philosophy;
Reviewing and recommending to the Board for approval material changes to PartnerRe’s asset valuation policy and philosophy;
Monitoring the diversification polices of the capital markets and reinsurance units;
Monitoring the retrocession and hedging policies of PartnerRe;
Monitoring PartnerRe’s Integrated Risk Management process and methodology;
Approving and recommending to the Board any new equity or debt issuances or share repurchase programs or declaration of dividends;
Approving capital expenditures, including acquisitions and strategic investments, in accordance with prescribed thresholds; and
Monitoring capital adequacy of the Group and approving movement of capital between subsidiaries in accordance with prescribed thresholds.
The Risk & Finance Committee met four timesapproves and monitors limits for the key risks listed above. PartnerRe assumes and oversees risks relating to reserving, underwriting limits, investments, currency risk and hedging programs, mergers and acquisitions, and capital projects.
The Audit Committee oversees and focuses on risks related to PartnerRe’s financial statements, the financial reporting process, accounting and legal matters. The Audit Committee oversees the internal audit function and PartnerRe’s ethics programs, including the Code of Business Conduct and Ethics. The Audit Committee members meet separately with PartnerRe’s Chief Audit Officer and representatives of the independent auditing firm.
The Compensation Committee evaluates the risks and rewards associated with PartnerRe’s compensation philosophy and programs. As discussed in more detail in the “Compensation Discussion and Analysis” section on pages 29-41, the Compensation Committee reviews and approves compensation programs with features that mitigate risk without diminishing the positive incentives of the compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate potential risks in compensation.
Executive Sessions
Following every physical Board meeting in 2012, the Chief Executive Officer recused himself from the meeting to allow the Board to meet in executive sessions. The independent directors are at liberty to raise whatever issues they wish during 2009.these sessions. The Chairman presides over the executive sessions.
Advance Materials
Information and data important to the directors’ understanding of the business or matters to be considered at a Board or committee meeting are, to the extent practical, distributed sufficiently in advance of the meeting to allow careful review. The Chairman, in conjunction with the Chief Executive Officer, establishes on an annual basis an agenda of topics for consideration and review by the Board during the following year. This annual schedule of topics is then provided to the full Board for review and comment and is adjusted, as appropriate, during the year. In addition, the Chairman and each committee sets a quarterly agenda in advance of all Board and committee meetings.
Access to Management
Directors have full and unrestricted access to management. In addition, key members of management attend Board meetings to present information about the results, plans and operations of the business within their areas of responsibility.
Access to Outside Advisers
The Board and its committees may retain external counsel or consultants on their own initiative. For example, the Audit Committee has the authority to retain and terminate the independent auditor, the Nominating & Governance Committee may retain search firms to help identify director candidates, and the Compensation Committee may retain and terminate the services of compensation consultants for advice on executive compensation matters.
Mandatory Retirement Age
The current mandatory retirement age for directors, as determined by the Board, is 73. A director must resign from the Company in May of the year that he or she turns 73, unless the Board waives the mandatory retirement age for a specific director in exceptional circumstances. Such waiver must be renewed annually and disclosed in the Proxy Statement filed by the Company.
As described on page 12, Messrs. Baumgartner and Rollwagen will retire from their position as directors of the Board when their current terms expire at the conclusion of the 2013 Annual General Meeting as they will reach the mandatory retirement age and no waiver has been granted by the Board. In accordance with its charter, the Nominating & Governance Committee will recommend individuals to the Board to fill the vacancies created by Messrs. Baumgartner’s and Rollwagen’s retirement.
Any shareholder or other interested party who wishes to communicate with our directors may write to the Board at Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda, marked for the attention of a particular director or the Secretary to the Board. The Secretary’s office opens all such correspondence and forwards it to the relevant director, except for items unrelated to the functions of the Board, including business solicitations or advertisements.
Anti-Hedging and Anti-Pledging Policy
Prohibition against hedging or pledging of PartnerRe common shares are embedded within our Trading Policy. This prohibits PartnerRe directors, officers and employees from (i) entering into hedging or monetization transactions related to PartnerRe common shares, including through the use of financial instruments, such as prepaid forwards, equity swaps, collars and exchange funds and (ii) holding PartnerRe common shares in a margin account or otherwise pledging PartnerRe common shares as collateral for a loan.
The primary underwriter for PartnerRe’s director and officer insurance is Hartford Fire Insurance Company. The policy period runs from May 15, 2012 to May 15, 2013. The cost of this coverage for the one-year period ending May 15, 2013, was $1,642,785.
DIRECTOR COMPENSATIONOUR PRINCIPAL SHAREHOLDERS
Security Ownership of Certain Beneficial Owners, Management and Directors
The directors’ compensation guidelines align the interests of directors and shareholders by promoting share ownership while maintaining competitive compensation levels. Compensation for PartnerRe directors reflects both the significant amount of time and the specialized skills required for directors to fulfill their duties.
The total compensation package for director service consists of three components:
cash compensation;
share options; and
restricted share units.
The following table shows how director compensation was allocated among these three components in 2009.
Component | Director Annual Amount | Board Chairman Annual Amount | ||||||
Cash | $ | 50,000 | $ | 180,000 | ||||
Share options | $ | 100,000 | $ | 120,000 | ||||
Restricted share units | $ | 80,000 | $ | 100,000 | ||||
Dividend equivalents | | Per actual dividend rate declared by the Board | | | Per actual dividend rate declared by the Board | |
With the exceptionsets forth information as of the spousal program (described below under “Management Director’s Fees and Directors’ Expenses”), no perquisites are providedRecord Date with respect to the directors.
The following section describesbeneficial ownership of outstanding common shares by (i) our Chief Executive Officer, our Chief Financial Officer, and each of the 2009 director compensation structure. The Nominating & Governance Committee approvedthree remaining most highly compensated executive officers during the 2012 fiscal year (collectively, the “Named Executive Officers” or “NEOs”); (ii) each of our directors; (iii) all of our executive officers and directors as a new plan for 2010, whichgroup; and (iv) each person known by us to beneficially own 5% or more of the outstanding common shares. As defined by the SEC, a person is outlineddeemed to “beneficially own” shares if such person directly or indirectly (i) has or shares the power to vote or dispose of such shares, regardless of whether such person has any pecuniary interest in the “Nominating & Governance Committee”shares; or (ii) has the right to acquire the power to vote or dispose of such shares within 60 days, including through the exercise of any option, warrant, or right. Pursuant to Rule 13d-4 under the “CommitteesSecurities Exchange Act of 1934, as amended, the Board of Directors—Nominating & Governance Committee” on pages 23-24.
The share option awards are immediately vested options to purchase PartnerRe common shares. These are granted each year on the date of the annual general meeting. The number of share options granted is determined using Black-Scholes methodology. Once the director ownership guidelines have been metstatements concerning voting and maintained and the director has served two full three year terms, the director can elect to take the cash value instead of the option grant. As a result of the revised board compensation program effective February 25, 2010, directors will no longer be able to take the cash value of the option grant.
The restricted share units are awarded on a quarterly basis and vest immediately. Each restricted share unit award has a share delivery date restriction of one year from the date of grant. If a director’s service terminates for any reason other than death, the delivery deferral will be lifted and the shares will be delivered six months following termination. In the case of termination due to death, the shares will be delivered immediately to the director’s designated beneficiary or estate. Dividend equivalents on cumulative restricted share unit awards are paid out quarterly in cash. As a result of the revised board compensation program effective February 25, 2010, restricted share units will be awarded on an annual basis and will have a five year cliff vest with no delivery restrictions. Upon delivery, directors can elect to receive 100% RSUs or 60% RSUs and 40% cash.
All equity awards for the directors are made from the 2003 Non-Employee Director Share Plan. This plan currently provides for the issuance of up to 800,000 common shares, and prescribes a maximum annual limit for awards from the plan. PartnerRe may amend or terminate this plan at any time, in whole or in part. However, any amendment for which shareholder approval is required will not be effective until such approval has been obtained. Unless terminated earlier, the plan will expire on May 22, 2013.
In order to further align director and shareholder interests, the compensation guidelines allow directors to elect each year to defer 50% or 100% of their cash compensation. Deferred cash compensation is paid out in
equity, with a PartnerRe match of 25% on the value of deferred cash compensation, to encourage increased share ownership. The PartnerRe match is paid out in restricted share unit awards, which are made under the same terms and conditions as the other restricted share unit grants.
Deferred Compensation Subject to Internal Revenue Code Sections 409A and 457A
For directors who are U.S. taxpayers, changes have been made to the Non-Employee Directors Compensation Plans so that it is compliant with Internal Revenue Code Sections 409A and 457A.
Board of Directors Ownership Guidelines
Each director is required to own, at a minimum, a number ofdispositive power concerning PartnerRe common shares with an aggregate value equal to four times the director’s annual cash compensation entitlement. For these purposes, restricted share units and shares held outright are included in each director’s holdings. the footnotes to this table shall not be construed as confirmation that such persons are the beneficial owners of such common shares.
As of December 2009 only one board member, who joined in October 2009, has not met the ownership guidelines. Directors who do not meetRecord Date, the ownership guidelines are required to receive at least 50%common shares owned by all directors and executive officers as a group constitute approximately 2.1% of their cash compensationthe issued and outstanding common shares, net of treasury shares. The shares detailed in the formtable below are not necessarily owned by the entity named but may be owned by accounts over which it exercises discretionary investment authority.
Name of Beneficial Owner | Common Shares | Exercisable Options/SSARs | RSUs (1) | Amount of Beneficial Ownership | Percentage of Outstanding Common Shares | |||||||||||||||
Costas Miranthis | 32,948 | 243,808 | 0 | 276,756 | * | |||||||||||||||
William Babcock | 3,298 | 40,088 | 0 | 43,386 | * | |||||||||||||||
Emmanuel Clarke | 8,792 | 81,586 | 0 | 90,378 | * | |||||||||||||||
Marvin Pestcoe | 14,738 | 80,618 | 0 | 95,356 | * | |||||||||||||||
Theodore C. Walker | 7,207 | 183,674 | 0 | 190,881 | * | |||||||||||||||
Jean-Paul L. Montupet | 9,309 | 41,714 | 2,545 | 53,568 | * | |||||||||||||||
Vito H. Baumgartner | 10,203 | 66,504 | 3,810 | 80,517 | * | |||||||||||||||
Judith Hanratty | 1,849 | 25,814 | 2,597 | 30,260 | * | |||||||||||||||
Jan H. Holsboer | 17,639 | 68,379 | 3,810 | 89,828 | * | |||||||||||||||
Roberto Mendoza | 2,194 | 16,487 | 1,407 | 20,088 | * | |||||||||||||||
John A. Rollwagen | 13,116 | 38,716 | 3,474 | 55,306 | (2) | * | ||||||||||||||
Rémy Sautter | 9,959 | 24,761 | 2,597 | 37,317 | * | |||||||||||||||
Lucio Stanca | 6,610 | 30,141 | 3,036 | 39,787 | * | |||||||||||||||
Kevin M. Twomey | 3,817 | 36,582 | 2,264 | 42,663 | * | |||||||||||||||
Egbert Willam | 0 | 0 | 1,077 | 1,077 | * | |||||||||||||||
David Zwiener | 5,587 | 18,938 | 1,407 | 25,932 | * | |||||||||||||||
All directors and executive officers (17 total) | 1,231,971 | 2.1 | % | |||||||||||||||||
Other Beneficial Owners(3) | ||||||||||||||||||||
Hellman & Friedman LLC One Maritime Plaza, 12th Floor San Francisco, CA 94111 | 4,130,357 | 0 | 0 | 4,130,357 | (4) | 7.1 | % | |||||||||||||
BlackRock Inc. 40 East 52nd Street New York, NY 10022 | 3,210,519 | 0 | 0 | 3,210,519 | (5) | 5.5 | % |
* | Denotes beneficial ownership of less than 1%. |
(1) | Includes vested but undelivered RSUs but does not include unvested RSUs. |
(2) | Except for the purpose of determining beneficial ownership under Section 13(d) of the Securities Exchange Act of 1934, as amended, Mr. Rollwagen disclaims beneficial ownership of 51,306 securities which are held in his family’s irrevocable trust account. |
(3) | The information contained in Other Beneficial Owners is based solely on reports on Schedules 13D filed with the SEC; PartnerRe has not independently verified the data. |
(4) | As of October 2, 2009, based on a joint report on Schedule 13D filed on October 13, 2009, Hellman & Friedman Investors V (Cayman), L.P Hellman & Friedman Capital Partners V (Cayman), L.P., Hellman & Friedman Capital Partners V (Cayman Parallel), L.P. and Hellman & Friedman Capital Associates V (Cayman), L.P. (collectively “Hellman”) were together deemed to be the beneficial owners of 4,130,357 common shares over which Hellman & Friedman Investors V (Cayman), Ltd. had been granted sole voting power. Hellman has not made a further filing and the ownership percentage is based on the assumption that Hellman continues to own the number of common shares reflected in the table above as of the Record Date. |
(5) | As of December 31, 2012, based on a report on Schedule 13G filed on January 30, 2013, BlackRock Inc. beneficially owns and has sole dispositive power over 3,210,519 common shares. The ownership percentage is based on the assumption that BlackRock Inc. continues to own the number of common shares reflected in the table above as of the Record Date. |
There are no arrangements, known to PartnerRe, including any pledge by any person of restricted share units untilsecurities of PartnerRe, the operation of which may at a subsequent date result in a change in control of PartnerRe.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons that beneficially own more than 10% of a registered class of our equity securities to file initial reports of ownership guidelines are met. Asand reports of changes in beneficial ownership with the elective equity incentive, mandatory deferrals receiveSEC. PartnerRe assists its directors and executive officers by monitoring transactions and completing and filing Section 16 reports on their behalf.
Based solely on a PartnerRe match equivalentreview of the reports filed by individuals subject to 25%. The matchSection 16(a) during 2012, no director or executive officer failed to file his or her required reports on a timely basis.
This section details the age, nationality, position, and business experience for each of our executive officers as of April 1, 2013. Mr. Miranthis is paid outdescribed in restricted share unit awards, which are madedetail under the same terms and conditions as the other restricted share unit grants.
Compensation for the Chairman of the Board
For services as Chairman in 2009, Mr. Rollwagen elected to receive his share option award in cash ($120,000) and 1,454 restricted share units. Mr. Rollwagen elected not to defer his 2009 cash compensation.heading “Our Directors” on page 8.
46 | Position | |||||||
Nationality: | American | Executive Vice President and Chief Financial Officer | ||||||
Executive Officer Since: | October 2010 | |||||||
Mr. Babcock joined PartnerRe in 2008 as Group Finance Director. Effective October 1, 2010, Mr. Babcock was appointed as Executive Vice President and Chief Financial Officer of PartnerRe Ltd. Prior to joining PartnerRe, Mr. Babcock held the position of Chief Accounting Officer and Director of Financial Operations at Endurance Specialty Ltd. | ||||||||
Emmanuel Clarke | ||||||||
43 | Position | |||||||
Nationality: | French | Chief Executive Officer, PartnerRe Global | ||||||
Executive Officer Since: | September 2010 | |||||||
Mr. Clarke joined PartnerRe in 1997 and was appointed as Head of Credit & Surety PartnerRe Global in 2002 and Head of Property and Casualty, PartnerRe Global in 2006. In 2008 Mr. Clarke was appointed as Head of Specialty Lines, PartnerRe Global and Deputy Chief Executive Officer, PartnerRe Global. Effective September 1, 2010, Mr. Clarke was appointed as Chief Executive Officer of PartnerRe Global. | ||||||||
Laurie Desmet | ||||||||
50 | Position | |||||||
Nationality: Executive Officer Since: | American April 2013 | Executive Vice President and Chief Operations Officer, Group | ||||||
Ms. Desmet joined PartnerRe in 2004 as Chief Accounting Officer, Group and was appointed Chief Operations Officer of PartnerRe’s Global operations in 2010. Effective April 1, 2013, Ms. Desmet was appointed Executive Vice President and Chief Operations Officer, Group. Prior to joining PartnerRe, Ms. Desmet was employed by Converium as Chief Accounting Officer and by Ernst & Young as a Senior Manager. | ||||||||
Marvin Pestcoe | ||||||||
52 | Position | |||||||
Nationality: Executive Officer Since: | American October 2010 | Chief Executive Officer, Life & Health, Investments Group | ||||||
Mr. Pestcoe joined PartnerRe in | ||||||||
|
Management Director’s Fees and Directors’ Expenses
Mr. Thiele is not paid any fees or additional compensation for services as a director or as a member of any committee. All directors, including Mr. Thiele, are reimbursed for travel and other related expenses incurred in attending meetings of the Board or its Committees. All directors, including Mr. Thiele, are reimbursed for attending education sessions that will help them fulfill their obligations as directors or committee members. Every other year, the partners/spouses of the directors and Named Executive Officers are invited to a board meeting and provided with an extra optional spousal program. No such program took place in 2009.
The table below summarizes the compensation paid to non-employee directors for the fiscal year ended December 31, 2009.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Nonqualified Deferred Compensation Earnings and Principal ($) | All Other Compensation ($)* | Total ($) | ||||||||||||||||
John A. Rollwagen(3) | 180,000 | 100,124 | 120,000 | — | 42,709 | 442,833 | ||||||||||||||||
Vito H. Baumgartner(4) | 0 | 142,623 | 100,000 | — | 29,873 | 272,496 | ||||||||||||||||
Robert M. Baylis(5) | 25,000 | 40,038 | 0 | 95,721 | 19,548 | 180,307 | ||||||||||||||||
Judith Hanratty(6) | 25,000 | 111,429 | 100,000 | — | 19,032 | 255,461 | ||||||||||||||||
Jan H. Holsboer(7) | 0 | 142,623 | 100,000 | — | 31,278 | 273,901 | ||||||||||||||||
Roberto Mendoza(8) | 12,500 | 20,077 | 0 | — | 0 | 32,577 | ||||||||||||||||
Jean-Paul L. Montupet(9) | 50,000 | 80,168 | 100,000 | — | 11,463 | 241,631 | ||||||||||||||||
Rémy Sautter(10) | 50,000 | 80,168 | 100,000 | — | 15,570 | 245,738 | ||||||||||||||||
Lucio Stanca(11) | 50,000 | 80,168 | 100,000 | — | 9,493 | 239,661 | ||||||||||||||||
Kevin M. Twomey(12) | 50,000 | 80,168 | 100,000 | — | 15,929 | 246,097 | ||||||||||||||||
Jürgen Zech(13) | 0 | 142,623 | 100,000 | — | 32,194 | 274,817 | ||||||||||||||||
David Zwiener(14) | 25,000 | 40,130 | 0 | — | 129 | 65,259 |
2-Mar-09 | 1-Jun-09 | 1-Sep-09 | 1-Dec-09 | |||||
John Rollwagen | 407 | 380 | 343 | 324 | ||||
Vito. H. Baumgartner | 579 | 541 | 489 | 462 | ||||
Robert M. Baylis | 325 | 304 | 0 | 0 | ||||
Judith Hanratty | 452 | 423 | 382 | 361 | ||||
Jan H. Holsboer | 579 | 541 | 489 | 462 | ||||
Roberto Mendoza | 0 | 0 | 0 | 260 | ||||
Jean-Paul L. Montupet | 325 | 304 | 275 | 260 | ||||
Rémy Sautter | 325 | 304 | 275 | 260 | ||||
Lucio Stanca | 325 | 304 | 275 | 260 | ||||
Kevin M. Twomey | 325 | 304 | 275 | 260 | ||||
Jürgen Zech | 579 | 541 | 489 | 462 | ||||
David Zwiener | 0 | 0 | 275 | 260 |
|
|
Name | Dividend Equivalents ($) | Company Match on Cash Deferral ($)(a) | Total ($) | ||||||||||
John A. Rollwagen | 42,709 | 0 | 42,709 | ||||||||||
Vito H. Baumgartner | 17,373 | 12,500 | 29,873 | ||||||||||
Robert M. Baylis | 19,548 | 0 | 19,548 | ||||||||||
Judith Hanratty | 12,782 | 6,250 | 19,032 | ||||||||||
Jan H. Holsboer | 18,778 | 12,500 | 31,278 | ||||||||||
Roberto Mendoza | 0 | 0 | 0 | ||||||||||
Jean-Paul L. Montupet | 11,463 | 0 | 11,463 | ||||||||||
Rémy Sautter | 15,570 | 0 | 15,570 | ||||||||||
Lucio Stanca | 9,493 | 0 | 9,493 | ||||||||||
Kevin M. Twomey | 15,929 | 0 | 15,929 | ||||||||||
Jürgen Zech | 19,694 | 12,500 | 32,194 | ||||||||||
David Zwiener | 129 | 0 | 129 |
Age: | 52 | Position | ||||
Nationality: | American | Chief Executive Officer, PartnerRe North America | ||||
Executive Officer Since: | January 2009 | |||||
Mr. Walker joined PartnerRe in 2002 as Head of |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Nominating & Governance Committee considers various relationships when determining whether a director is independent. These relationships are more fully described in “Board Independence and Expertise” on page 17.
The Nominating & Governance Committee considered the Agreements with Related Parties as disclosed in Note 11 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ending December 31, 2009 which discusses business relationships where a PartnerRe Board member is a director and determined that there were no related-party transactions involving our directors, executive officers, or any of their immediate family members or any of the entities named in the “Other Beneficial Owners” on page 15.
In November 2007, the Board adopted a written Related Person Transaction policy, which was amended by the Board in February 2010, to codify the practice of identifying, approving and reporting related-party transactions. The Nominating & Governance Committee is responsible for applying and enforcing this policy. Annually, each director and executive officer completes a questionnaire identifying his or her board relationships outside of PartnerRe. The results of the questionnaire are used to compile a list of parties which is subsequently distributed to all relevant business unit heads and support staff personnel. PartnerRe then identifies and quantifies any transaction that may have been consummated with any party on the list and the individual will indentify to the best of their knowledge any transaction that may have been consummated with any party on the list. In addition, the questionnaire solicits information about whether the director or executive officer or any member of his or her immediate family has a direct or indirect material interest in any transaction involving PartnerRe. The Nominating & Governance Committee determines whether the transaction should be stopped or reported in the proxy statement (or both), or whether the transaction may continue without disclosure in the proxy statement because it falls within certain permitted exceptions.
Compensation Discussion and Analysis
Executive Summary
Introduction
Since the purposeThis Compensation Discussion and Analysis provides an overview of how our business is to assume risk, shareholder value is only created whenNEOs were compensated in 2012, as well as how this compensation furthers our executivesestablished compensation philosophy and employees have the skills to assess, value and manage risk.
Three principles drive our behavior and form the basis for our compensation policies. We are committed to:
Selling a product of value to selected insurance and capital markets clients while maintaining the financial ability to meet our commitments;
Delivering an adequate return on shareholders’ capital within predetermined risk levels to compensate you for the risk we assume on your behalf; and
Following sound management and governance practices while providing a challenging work environment where employees can develop their careers and be rewarded appropriately for their performance.
Named Executive Officers in the Proxy
The following table identifies the Named Executive Officers by title.
| ||
| ||
| ||
| ||
|
Compensation Programs and Risk Management
Our philosophy on compensation defines the mix of pay, between fixed and variable, balancing attraction, retention and motivation. PartnerRe offers competitive fixed pay and employee benefits while emphasizing performance based compensation. We create an opportunity for substantial total rewards, in a well managed company, in return for superior financial results. The guiding principles of our total rewards program are:
competitive with appropriate market
performance based variable compensation
promotes positive ownership behaviours and provides equity ownership opportunities for all employees
operates within common global principles and implementation reflects local market conditions
has governance and controls at appropriate levels
Our approach to risk management involves three key factors:
A sound governance structure with a clear set of principles and policies that apply across the organization;
A sound technical framework promoting consistent decision-making and execution across all business units; and
Skilled people and an appropriate culture.
The purpose of our business is to assume risk. Both our reinsurance and investment risk is managed within a disciplined risk framework and a consistent risk culture across the organization. Our compensation programs are designed to align the interests of management, employees and shareholders so that excessive risk taking is not encouraged and shareholders and employees equally share in the upside and downside of appropriate risk.
Some of the risk mitigation features embedded in the design of our incentive pay and equity plans, which apply equally to Named Executive Officers and the broad employee population, are discussed in detail on pages 45-47.
Executive Total Compensation Program
objectives.
PartnerRe’s Executive Total Compensation Program isPrograms are based on the basisCompany-wide compensation philosophy to attract and retain top talent, link remuneration to value creation, incent positive behaviors, motivate employees and pay for performance while discouraging excessive risk-taking. Supporting this philosophy, PartnerRe uses a mix of compensation elements—base salary, annual cash incentives, long-term equity awards and benefits that, we believe, will motivate our executives and reward them for optimalbenefits. PartnerRe provides a clear link between financial and non-financial performance and compensation to encourage employees to help PartnerRe achieve long-term financial goals.
In May 2012, our shareholders voted on executive compensation for the 2011 performance year. In this non-binding advisory say-on-pay vote, shareholders representing 95% of the common shares that voted were in favor of PartnerRe’s compensation philosophy and practices. PartnerRe will continue to focus on the philosophy which guides the compensation decisions that were so strongly supported by our shareholders, based on the results of the 2012 say-on-pay vote. If future voting results are unsatisfactory, the Compensation Committee intends to consider those future outcomes in making executive compensation decisions. In 2011, the Board determined that contributea non-binding advisory vote of shareholders on NEOs’ compensation will be included in the Company’s proxy materials every year until the next advisory vote of our shareholders on the frequency of such non-binding advisory vote on NEOs’ compensation, which will occur no later than during the 2017 Annual General Meeting of shareholders.
The Compensation Committee is charged with the corporate governance of executive compensation with respect to our NEOs. All members of the Compensation Committee are non-executive directors and are considered independent pursuant to the long-term successNYSE Rule 303A.05. The Compensation Committee is authorized to retain independent consultants to give advice on compensation matters. The role of PartnerRe. All Named Executive Officers participatethe Compensation Committee and its approval process is described in further detail on pages 20-21.
Financial Results Summary
For 2012, PartnerRe’s primary financial metric, Adjusted Return On Equity (“AROE” as described under “Group Adjusted Return on Equity” on page 34), result was 15%. This performance exceeded the Executive Total Compensation Program.
As showntarget of 10%-13% in a difficult economic and operating environment. In 2012, the following table,Company was presented with challenges in terms of loss activity, trends in demand for products and generally a tough economic and investment environment. The Company’s diversified platform and performance culture allowed the Executive Total Compensation Program has several componentsCompany to meet strategic objectives set by the Board. We discuss each component in this Compensation Discussion & Analysis.
| ||
| ||
| ||
| ||
|
|
2009 Changes to the Executive Total Compensation Programs
New Equity Program
The Compensation Committee undertook a comprehensive review of the long term incentive design in 2012 and approved a new Equity Program for all eligible employees (including the NEOs) on February 28, 2012.
The new program was implemented for the 2012 performance year and was designed to;
Frederic W. Cook were retainedlink pay to the long-term performance of the Company;
align key decision makers with shareholder interests;
link value creation with those who create it;
reflect market competitive awards and align with best practice; and
act as a powerful tool to attract, motivate and retain key employees.
The key features of the new Equity Program are that:
Eligible employees will have an annual equity target dollar value based on benchmarking with other companies in the peer group and market conditions.
At grant, the annual equity target dollar value may be adjusted based on Company performance in the preceding year. Company performance will be measured using the same scale as the annual cash incentive scale (see scale on page 34).
In addition to RSUs and SSARs, the Company will grant Performance Share Units (PSUs) that will have a three-year cliff vest; PSUs earned will be based on the three-year prospective performance results.
Prior to the start of the performance year, NEOs can customize their award and convert up to 25% of their PSU and RSU awards into Share-Settled Share Appreciation Rights (SSARs).
Change in Methodology for Setting the AROE Scale
For the 2012 performance year, the Compensation Committee moved from a fixed scale to a flexible scale which can be adjusted by the Compensation Committee to conduct a reviewreflect the interest rate environment and market outlook. The scale is set annually by the Compensation Committee prior to the start of PartnerRe’s Executive Total Compensation Program.the performance year. The Compensation Committee approvedwill make an annual assessment which amongst other factors will include the following three amendmentsfollowing:
Reinsurance market conditions, including capitalization of the market, reinsurance capacity, reinsurance buying by primary insurers, competition in the market, level of ceding commissions and the loss environment.
Interest rate environment including risk-free rate and increasing or decreasing rates of interest.
The rationale for this change is that in hard markets the Company will target higher profitability thresholds, and vice versa in soft markets. The scale will be adjusted so that realistic and motivational goals are set in line with PartnerRe’s philosophy of linking performance to compensation.
Increased Weight on Financial Performance in Determining Annual Incentive
The Compensation Committee determined and placed greater emphasis on quantitative performance measures (i.e. Group AROE and Business Unit Financial Performance combined) in 2012 than in the Executive Total Compensation Program basedprevious year in recognition of the time NEOs have held their positions and that their decisions will have a greater impact on the recommendations of the Frederic W. Cook:
Other 2009 Compensation Committee Approvals
The target Annual Incentive for Albert Benchimol was increased from 100% to 125%. This change sought to achieve a better alignment with bonus practices within the Capital Markets sector. The change also recognizes that Mr. Benchimol has dual responsibilities as the Chief Financial Officerweight of PartnerRe Ltd. and, Chief Executive Officer for the Capital Markets Group.
A new financial metric related to the calculation of Annual Incentives for Named Executive Officers was implemented to better capture the performance of the Capital Markets Group withinNEOs from a range of 57.5% - 65% in 2011 to a range of 72.5% - 75% in 2012. This decreased the total group performance metric. The new metric is the Adjusted Return on Equity which is Calendar Year Return on Equity availableweight of qualitative objectives from a range of 35% - 42.5% in 2011 to common shareholders (net income or loss, excluding net after-tax realized gains or losses on investments, net after-tax interest in earnings or lossesa range of equity investments, and preferred share dividends) modified for capital assets realized/unrealized gains/losses with that total divided by beginning common shareholder’s, equity. Capital assets includes equities, principal finance, insurance linked securities, strategic investments and non-investment grade corporate bonds.
A change was made to the definition of the annual equity pool. For the 2010 equity grants, the pool was defined in restricted share units instead of option equivalents. As the majority of eligible employees receive restricted share units and not options or SSARs, the change also provides a more accurate reflection of the share dilution factor as the number of restricted share units awarded is much lower than the equivalent number of share options or SSARs.
An amendment to the Change in Control policy was approved in May 2009. The amendment removed the U.S. excise tax gross-up benefit for Named Executive Officers which applied under the prior policy.
The Nominating & Governance Committee, in conjunction with25% - 27.5% thereby reaching the Compensation Committee approved an increase from 40 hours per yeartarget weighting of 25% - 30%. These changes underscore the Compensation Committee’s commitment to a maximumenhancing the link between financial performance and compensation.
Competitive Peer Group and Pay Analysis
The goal of 60 hours per year of personal use of a leased aircraft for the Group Chief Executive Officer and his immediate family members. This increase was due to the increased volume of travel undertaken by the Chief Executive Officer who resides in Bermuda, but whose family members live in the United States. The Group Chief Executive Officer is required to reimburse the company for each of the 60 hours traveled for personal use by applying the cost of a first class ticket for each person traveling on the aircraft.
At the Compensation Committee meeting held on December 16, 2009 a refinementis to ensure that the total compensation of the NEOs is competitive to the 2010 Performance Measure, Weightsmedian of total compensation paid to executives of companies within the (re)insurance industry that compete with us for executive talent. The Compensation Committee achieves this by conducting a competitive peer group analysis and Scalescomparing both total compensation and each individual element of compensation to the peer group median.
The Compensation Committee considered and approved the composition of the competitive peer group based on input from its external consultant, Frederic W. Cook & Co. In recommending the competitive peer group, the following were considered: size (revenues, assets and market capitalization), corporate strategy, number of employees and business mix. Our 2012 competitive peer group (determined at the end of 2011) is comprised of: ACE Ltd.; Arch Capital Group Ltd.; Axis Capital Holdings Limited; Everest Re Group Ltd.; Munich Re; Reinsurance Group of America, Incorporated; RenaissanceRe Holdings Ltd; SCOR SA; Transatlantic Holdings Inc.; Validus Holdings; and XL Group plc. Validus Holdings was approved. This new Group metric, referredadded to the peer group for 2012 as it has a similar business mix to PartnerRe and the Premium Volume Metricaddition of more companies to the peer group ensures that there is sufficient data for benchmarking our NEOs. Transatlantic Holdings Inc. was acquired in March 2012 and will be removed from the 2010 year only and reflectspeer group for 2013.
In August 2012, the importanceCompensation Committee reviewed an analysis prepared by Frederic W. Cook & Co. comparing compensation within the peer group. The Compensation Committee used this analysis when comparing compensation of business retention in the transition year followingNEOs with that of executives with comparable responsibilities within the acquisition of Paris Re.
peer group.
Elements of Total Compensation
The three principal types of compensation availablepaid to Named Executive Officers are base salary, annual incentive,the NEOs (each of which is described in more detail below) are:
1. | Base Salary |
2. | Annual Cash Incentive |
3. | Annual Equity Awards |
When analyzing the mix of compensation to be paid to the NEOs with respect to the performance year and annual equity awards. When setting amounts for each of these components, the Compensation Committee is guided by the philosophy outlined in the Executive Total Compensation Program: “Compensation should be competitiveProgram. To allocate the three principal forms of compensation optimally, the Compensation Committee focuses on:
clearly linking pay to performance;
achieving a balance between fixed compensation (base salary) and variable compensation (annual cash incentive and equity awards). Variable compensation supports a pay-for-performance approach and links predetermined objectives, including Company performance, with variable compensation, but is also capped to ensure that NEOs are not inappropriately motivated to maximize their variable earnings;
ensuring that long-term incentive awards in the form of equity are designed to align the NEOs interests with shareholders’ interests by emphasizing long-term business performance and overall PartnerRe success;
promoting retention of NEOs by providing long-term incentives; and
providing flexibility in form and structure of compensation to meet individual goals and time horizons.
Balance of Fixed and Variable Compensation
For the 2012 performance year, on average 80% of total compensation (base salary, annual cash incentive and equity awards) for the NEOs was variable compensation (33% comprised of annual cash incentive and 47% comprised of equity awards with the balance of their total compensation, 20%, being base salary). The breakdown of the NEOs’ individual compensation mix is as follows:
(1) | Base salary at December 31, 2012. |
(2) | Actual annual cash incentive award for the 2012 performance year, paid in March 2013. |
(3) | Annual equity target dollar value for the 2012 performance year, granted on March 1, 2013. |
Linking Pay for Performance
The Company’s financial results were above target and this was reflected in the above target payment of the annual cash incentive component of variable compensation to the medianNEOs for the 2012 performance year, demonstrating a strong link between pay and performance. Mr. Miranthis’ annual cash incentive was paid out at 156% of target, in part reflecting the Company’s strong financial performance in 2012. Long term incentives, which comprise the greatest proportion of total compensation, for all NEOs were paid at target performance as determined by peer group analysis withinbased on the global market environment.” With that goal in mind,adjustment criteria described on page 37.
Base Salary
Base salary is the Compensation Committee compares both aggregatefixed component of the total compensation package and each element of compensation to the peer group median (See “Analysis of Total Compensation—External Pay Equity—Competitive Peer Group” on page 36).
A Summary of the 2009 elements of compensation appears below:-
2009 Base Salary | 2009 Cash Annual | 2009 Equity Award | 2009 Total Comp. | ||||||||||||
Patrick Thiele | $ | 1,000,000 | $ | 2,500,000 | $ | 3,608,323 | $ | 7,108,323 | |||||||
Albert Benchimol | $ | 582,000 | $ | 1,360,425 | $ | 1,806,829 | $ | 3,749,254 | |||||||
Bruno Meyenhofer | CHF | 793,000 | CHF | 1,570,140 | CHF | 1,879,102 | CHF | 4,242,242 | |||||||
Costas Miranthis | CHF | 670,000 | CHF | 1,299,800 | CHF | 1,879,102 | CHF | 3,848,902 | |||||||
Theodore C. Walker | $ | 525,000 | $ | 813,750 | $ | 1,806,829 | $ | 3,145,579 | |||||||
Scott Moore | $ | 565,000 | ** | $ | 565,000 | $ | 0 | $ | 1,130,000 |
Base Salary
Salary is intended to compensatereflect the Named Executive Officers for their extensive yearsexpertise, level of experience and industry-specific expertise. scope of responsibilities. Base salary targets market median based on market competitive data (as noted in “Competitive Peer Group and Pay Analysis” on page 30) and is the base component of overall compensation. In line with company philosophy and as shown in the graph above, base salary is the smallest component of total compensation for the NEOs. Mr. Miranthis’ base salary has not changed since he was appointed to the role of Chief Executive Officer on January 1, 2011.
The base salary for each Named Executive Officer wasNEO is reviewed at the first Compensation Committee meeting of the calendar year and fixed and effective as of April 1 2009.
Base salaries for the Named Executive Officers for the past two years were as follows:of each year.
Annual Salary Rate as of April 2008 | Annual Salary Rate as of April 2009 | Percentage Increase | |||||||||
Patrick A. Thiele* | $ | 1,000,000 | $ | 1,000,000 | 0.0 | % | |||||
Albert Benchimol | $ | 565,000 | $ | 582,000 | 3.0 | % | |||||
Bruno Meyenhofer | CHF | 793,000 | CHF | 793,000 | 0.0 | % | |||||
Costas Miranthis | CHF | 654,000 | CHF | 670,000 | 2.4 | % | |||||
Theodore C. Walker** | $ | 425,000 | $ | 525,000 | 23.5 | % | |||||
Scott D. Moore | $ | 565,000 | $ | N/A | N/A |
Costas Miranthis | William Babcock | Emmanuel Clarke | Marvin Pestcoe | Theodore C. Walker | ||||||
2012 Base Salary(1) | $1,000,000 | $562,071 | CHF619,956 | $562,071 | $590,121 |
Annual Cash Incentive
Annual cash incentive is an “at risk” performance based component of compensation. Annual cash incentive is designed to align NEO and shareholder interests through the attainment of predetermined metrics and objectives.
All PartnerRe employees, including the Named Executive Officers, are eligible for anPursuant to PartnerRe’s annual cash incentive if PartnerRe achieves pre-determined performance goals. The PartnerRe Group Annual Incentive Guidelines provide a framework for the structure and payout of annual incentives, including guidance on performance metrics and weights as well as process and governance. For further details about how the annual incentive is determined and whatprogram, each Named Executive Officer was awarded in respect of 2009 business performance, see “Annual Incentive Awards” on pages 36-39.
Under the Annual Incentive Guidelines:
Each employee has a target annual cash incentive that is expressed as a percentage of base salary.
The target annual incentive is set to the median range of the competitive market.
The annual cash incentive payout ranges from 0% to 200% of the target, payout baseddepending upon actual performance results.compared with predetermined performance metrics.
Costas Miranthis | William Babcock | Emmanuel Clarke | Marvin Pestcoe | Theodore C. Walker | ||||||
Target Annual Cash Incentive (% of salary) | 125% | 100% | 100% | 100% | 100% | |||||
Target Annual Cash Incentive (Value)(1) | $1,250,000 | $562,071 | CHF619,956 | $562,071 | $590,121 | |||||
Actual Annual Cash Incentive(1) | $1,953,125 | $871,210 | CHF1,041,526 | $908,307 | $655,034 |
The target annual incentives and 2009 payout ranges
(1) | Amounts are for the 2012 performance year. The actual annual cash incentive was paid in March 2013. |
For the Named Executive Officers wereNEOs, the performance measures predetermined by the Compensation Committee are as follows:
Target Annual Incentive | Current Base Salary | Minimum Annual Incentive Payout | Target Annual (100% of target) | Maximum Annual Incentive Payout (200% of target) | ||||||||||||||
Patrick A. Thiele | 125 | % | $ | 1,000,000 | 0 | $ | 1,250,000 | $ | 2,500,000 | |||||||||
Albert Benchimol | 125 | % | $ | 582,000 | 0 | $ | 727,500 | $ | 1,455,000 | |||||||||
Bruno Meyenhofer | 100 | % | CHF | 793,000 | 0 | CHF | 793,000 | CHF | 1,586,000 | |||||||||
Costas Miranthis | 100 | % | CHF | 670,000 | 0 | CHF | 670,000 | CHF | 1,340,000 | |||||||||
Theodore C. Walker | 100 | % | $ | 525,000 | 0 | $ | 525,000 | $ | 1,050,000 | |||||||||
Scott D. Moore | 100 | % | $ | 565,000 | 0 | $ | 565,000 | $ | 1,130,000 |
1. | Total Group Performance (Group AROE + Group Organizational Objectives) |
2. | Business Unit Financial Performance |
Information regarding
3. | Business Unit/Personal Objectives |
The AROE metric is PartnerRe’s primary financial metric because it focuses on the value provided to shareholders and is a reliable indicator of Company performance and profitability. The inclusion of qualitative objectives provides the ability to assess performance that may not be quantifiable but impacts the overall performance of the Company.
The Compensation Committee approved the metrics used to calculate incentive awards,within the Total Group Performance measure and the actual awardsweighting of each measure for each Named Executive Officer in respect of the 2009 business performance, are shown under the heading “Annual Incentive Awards,” which begins on page 36.
Equity Awards
Under our Employee Equity Plan, each Named Executive Officer may receive an annual award in the form of equity if PartnerRe achieves a pre-determined financial goal. Equity awards are typically delivered in a mix of restricted share units and either share options or SSARs.
As discussed below, Named Executive Officers who reach prescribed target ownership levels may customize the form of their equity grants (i.e. the mix of restricted share units and SSARs). For more information about how the annual equity awards are determined and what each Named Executive Officer was awardedNEO for the 20092012 performance year, see “Annual Equity Awards,” which begins on page 39.
Analysisyear. Each measure is weighted to reflect the contributions of Total Compensation
Mix of Compensation
In February 2010,each NEO toward our strategy, the current business environment, as well as the behaviors that the Compensation Committee analyzedwishes to encourage and reviewedreward. The following table details the mix2012 weightings and measures for each NEO:
Costas Miranthis | William Babcock | Emmanuel Clarke | Marvin Pestcoe | Theodore C. Walker | ||||||
Group AROE | 75% | 72.5% | 42.5% | 42.5% | 42.5% | |||||
Group Organizational Objectives | 25% | 7.5% | 7.5% | 7.5% | 7.5% | |||||
Total Group Performance | 100% | 80% | 50% | 50% | 50% | |||||
Business Unit Financial Performance | — | — | 30% | 30% | 30% | |||||
Business Unit/Personal Objectives | — | 20% | 20% | 20% | 20% |
Total Group Performance
The Total Group Performance measure applied to all NEOs in 2012 and, for each NEO, it was the most heavily-weighted measure among all the measures that applied (starting at 100% for Mr. Miranthis, 80% for Mr. Babcock and 50% for Messrs. Clarke, Pestcoe and Walker). The Total Group Performance measure is comprised of compensation forGroup AROE and Group Organizational Objectives, with Group AROE being the Named Executive Officers with respect to the 2009 performance year. To allocate the various forms of compensation optimally,primary metric. As further detailed under “Increased Weight on Financial Performance in Determining Annual Incentive” on page 30, the Compensation Committee focused on:placed greater emphasis on quantitative performance measures for 2012, reaching the target weighting of qualitative objectives of 25%-30%.
The actual 2012 Total Group Performance results and resulting payout for each NEO, based on the weightings shown in the above table, are shown below:
Achieving a balance between fixed and variable compensation that supports a pay-for-performance approach; and
Ensuring that the equity component is sufficient to align the Named Executive Officers’ interests with shareholders’ interests.
The following table shows the total target (not actual) compensation for 2009 allocated to salary, annual incentive and equity awards.
Target Base Salary | Target Cash Annual Incentive | Target Equity Award Value | |||||||
Patrick A. Thiele | 21 | % | 26 | % | 53 | % | |||
Albert Benchimol | 23 | % | 28 | % | 49 | % | |||
Bruno Meyenhofer | 28 | % | 27 | % | 45 | % | |||
Costas Miranthis | 26 | % | 25 | % | 49 | % | |||
Theodore C. Walker | 23 | % | 23 | % | 54 | % | |||
Scott D. Moore | 24 | % | 24 | % | 52 | % |
The table below shows how the actual compensation for 2009 was allocated.
Actual Base Salary | Actual Cash Annual Incentive | Actual Equity Award Value* | |||||||
Patrick A. Thiele | 14 | % | 35 | % | 51 | % | |||
Albert Benchimol | 16 | % | 36 | % | 48 | % | |||
Bruno Meyenhofer | 19 | % | 37 | % | 44 | % | |||
Costas Miranthis | 17 | % | 34 | % | 49 | % | |||
Theodore C. Walker | 17 | % | �� | 26 | % | 57 | % | ||
Scott D. Moore | 20 | %** | 80 | % | 0 | % |
Payout | ||||||||||||||||
Performance | Scale Payout | CEO* | CFO | Other NEOs** | ||||||||||||
Group AROE | 15% | 150% | 112.5 | % | 108.75 | % | 63.75 | % | ||||||||
Group Objectives | 150% | 150% | 43.75 | % | 11.25 | % | 11.25 | % |
* | The |
** |
The numbers in the two tables differ because actual compensation depends upon PartnerRe’s financial performance. In 2009, PartnerRe achieved excellent results, with Group return on equity of 23.9%, increasing to 30.4% on the Adjusted Return on Equity basis as defined on page 32. The Group return on equity and Adjusted Return on Equity do not include Paris Re results.
Equity grants are determined by reference to our four year compound annual growth in economic value per share as defined on pages 39-40. With our 2009 result of 17.5% (does not include Paris Re results), this allowed the equity pool to be funded at the maximum level, derived from the predetermined allocation scale. See “Annual Equity Awards”, which begins on page 39.
Hence the pay mix shown in the tables reflects the higher percentages associated with these variable pay and equity components.
External Pay Equity—Competitive Peer Group
Our competitive peer group is defined as companies in the insurance or reinsurance industry that compete with us for executive talent. Frederic W. Cook, acting as compensation consultants for the Compensation Committee, recommended the companies constituting the peer group based on their size (revenues and market capitalization), corporate strategy and business mix. The Compensation Committee considered and approved the composition of the peer group.
The 2009 peer group is as follows:
| ||
| ||
| ||
| ||
| ||
|
There were no changes to the peer group as compared to 2008.
In February 2009, the Compensation Committee reviewed an analysis prepared by Frederic W. Cook comparing compensation within the peer group. The analysis indicated that the total compensation of PartnerRe’s Named Executive Officers was broadly at market median relative to executive officers with comparable responsibilities at peer group companies.
Internal Pay Equity
In February 2009, management prepared an internal pay equity analysis for the Compensation Committee. This analysis compares the levels of each principal element of compensation, as well as total compensation, for all of the Named Executive Officers relative to our competitive peer group. Due to the cyclical nature of the reinsurance industry, this analysis typically covers a three-year period to ensure that decisions are not skewed by results from aberrational years.
The Compensation Committee determined that the Chief Executive Officer’s compensation, compared to the compensation of the other Named Executive Officers, is appropriate and reflects the differences in their respective responsibilities. The Compensation Committee also determined that compensation levels for the other Named Executive Officers are appropriately positioned between the Chief Executive Officer and the next level of management.
Based on the aggregate of salary, annual incentive and equity value averaged over the last five years, the Chief Executive Officer’s annual compensation was 26 times the average annual compensation paid to our employees.
Annual Incentive Awards
Performance Weightings, Metrics and Scales
The annual incentive paid to the Named Executive Officers varies based on pre-determined measures designed to motivate and reward performance. In November 2008, the Compensation Committee approved the performance goals for each Named Executive Officer for the 2009 calendar year. We use metrics to measure both financial and non-financial (organizational) results against pre-determined objectives. Each such metric is weighted taking into consideration our strategy, the current business environment and the behaviors the Compensation Committee wants to encourage and reward.
For 2009 the primary financial metric used to calculate annual incentives is Adjusted Return on Equity; in 2008 the metric used was operating return on equity. We believe that return on equity is the broadest and best measure of operating performance of a reinsurance company as it measures profit achieved relative to the shareholders investment.
The payout scale, which has not changed in seven years, is as follows:
| ||
The scale reflects PartnerRe’s compensation philosophy in three respects:
The annual incentive target (i.e. payout at 100%) is awarded for a 12 to 14% return on equity performance, which is consistent with our long-term goal of a 13% return on equity over the reinsurance cycle.
The scale starts at 8% because we believe that shareholders are not adequately compensated for the risk associated with an investment in PartnerRe if the adjusted return on equity is less than that. An independent study of the Dow Jones U.S. Total Stock Market Property & Casualty Index (which covers a broad range of insurance companies in the property and casualty industry) conducted by the Research Data Group showed that the average return on equity for the industry sector over the period 1998 to 2008 was 8.8%.
The annual incentive payout is capped at 18% because an uncapped payout could encourage behavior that is not in the best interests of PartnerRe shareholders.
As discussed, shown on page 39, return on equity has reached a low of 12.3% and a high of 30.4% over the past four years.
The Compensation Committee sets other organizational goals to supplement our return on equity objectives. The specific group, organizational business unit performance metrics for 2009 were as follows:
|
| |||||||
|
| |||||||
|
2009 Annual Incentive Weightings for the Named Executive Officers
The following table details the 2009 targets for each Named Executive Officer.
|
|
|
|
|
| |||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
|
The table below shows the annual incentive weightings applied to each performance measure described above. Since the Compensation Committee regards Group Performance as the principal indicator of annual success, adjusted return on equity carries significant weight. The measures for the Chief Executive Officer of the Capital Markets group were revised in 2009 to more closely align our business strategy for that business unit. The 2008 growth measure was replaced with three measures, Group Asset Allocation Decisions, Fixed Income Investment Income and Return on Capital on Risk Assets.
Performance Metrics | Chief Executive Officer | Chief Financial Officer/Chief Executive Officer Capital Markets Group | Other Named Executive Officers* | ||||||
Group Adjusted Return on Equity | 80 | % | 40 | % | 40 | % | |||
Organizational Goals | 20 | % | 10 | % | 10 | % | |||
Business Unit Underwriting Profitability | 30 | % | |||||||
Group Asset Allocation Decisions | 20 | % | |||||||
Fixed Income Investment Income | 10 | % | |||||||
Return on Capital on Risk Assets | 10 | % | |||||||
Organizational Objectives | 10 | % | 20 | % | |||||
Total | 100 | % | 100 | % | 100 | % |
Annual Incentive Payouts
PartnerRe’s returnGroup Adjusted Return on equity for the past four years was as follows:
|
| |
|
| |
|
| |
|
|
The following table shows, as a percentage of salary, PartnerRe’s annual incentive payout for each Named Executive Officer for the past four years. In addition, the table shows the dollar amount paid to each Named Executive Officer in 2009 and the increase in the payout from 2008 to 2009.
2006 % salary | 2007 % salary | 2008 % salary | 2009 % salary | Incentive Payout for 2009 | Difference 2009 vs. 2008 | |||||||||||||
Patrick A. Thiele | 186 | % | 200 | % | 112 | % | 250 | % | $ | 2,500,000 | 138 | % | ||||||
Albert Benchimol | 173 | % | 141 | % | 135 | % | 234 | % | $ | 1,360,425 | 99 | % | ||||||
Bruno Meyenhofer | 165 | % | 197 | % | 150 | % | 198 | % | CHF | 1,570,140 | 48 | % | ||||||
Costas Miranthis | n/a | 167 | % | 147 | % | 194 | % | CHF | 1,299,800 | 47 | % | |||||||
Theodore C. Walker | n/a | n/a | 56 | % | 155 | % | $ | 813,750 | 99 | % | ||||||||
Scott D. Moore | 185 | % | 197 | % | 92 | % | 100 | % | $ | 565,000 | 8 | % |
Annual Equity Awards
The Compensation Committee strivesassessed the materiality of all the metrics used for determining our NEOs’ 2012 performance year annual cash incentives. As the foregoing tables show and as discussed above, Group AROE was the most predominant component used to aligndetermine Total Group Performance and consequently the long-term interests2012 performance year annual cash incentive payouts.
Return on Equity (“ROE”) is based on operating earnings or loss (see footnote (2) on page 56 in our Annual Report on Form 10-K for the year ended December 31, 2012, for a definition). ROE excludes realized and unrealized gains or losses on the Company’s Risk Assets. Group AROE includes the realized and unrealized gains and losses of employees and shareholders by encouraging employees to own PartnerRe common shares. One way we pursue this objective is by making annual grants of equity awards.
Total Equity Pool
Since equity awardsthe Company’s Risk Assets. Risk Assets are a grantportion of ownershipthe Company’s investment portfolio and include equities, asset-backed securities, insurance linked securities and other specific investments. This measure is not a financial measure calculated in PartnerRe,accordance with U.S. GAAP. See Appendix II to this Proxy Statement for a reconciliation of this non-GAAP financial measure to the Compensation Committee has determined that the number of shares available to allocate to employees each year should fluctuate with the value employees have created for shareholders.
most directly comparable GAAP financial measure.
The size of the total equity pool varies each year based on the four year compound annual growth rate in economic value per share. The Compensation Committee chose this metric because, unlike operating return on equity, the calculation of Economic Value Per Share captures economic value creation thatpayout scale is not reflected in the U.S. GAAP financial statements of PartnerRe. Thisas follows and is unique for the reinsurance industry as the reinsurance activities of past and current periods create economic value which is not recognized until a future period. The economic value per share adjustments are madesubject to reflect these values in current economic value terms. To calculate Economic Value Per Share PartnerRe makes four adjustments to GAAP Shareholders Equity;
In addition, this measure is better aligned with the objectives of a long-term incentive award. Using a longer performance period enables us to reward employees for sustained success, and also helps to ensure that unusually good or bad years do not have an unwarranted impact on the size of equity grants.
The Compensation Committee has approved the following scale for converting the compound annual growth rate in Economic Value Per Share into an equity pool for distribution to employees.interpolation.
as a Percentage of
| ||
> | ||
ô | ||
10-13% | ||
ô | ||
<5% |
The scale reflects PartnerRe’s compensation philosophy in the following respects:
• | |||
The annual cash incentive target (i.e., payout at 100%) is awarded for a target Group AROE performance, which is established prior to the start of the performance year. |
The annual cash incentive payout is capped at 200% because an uncapped payout could encourage risk-taking activities that are not in the best interests of our shareholders.
The growth ratescale is calculated on economic value per share afterdesigned to ensure that our shareholders receive a minimum return, currently at least 5% Group AROE, before employees receive an allocation toward their annual cash incentive.
The scale is set to create challenging but realistic goals to motivate employees and provide the payment of dividends, so it is broadly consistent with our 13% Adjusted Return on Equity target.opportunity to pay for performance.
On a pre-acquisition basis, PartnerRe achieved a compound annual growth in economic value per share of 17.5% in 2009. Fully diluted outstanding shares at December 31, 2009 were 84.3 million. ThisThe Group AROE for 2012 was an increase of 25.6 million shares from 2008. The increase in shares15% and consequently the payout award for this component for the 2012 performance year was due to the acquisition of Paris Re. As the additional 25.6 million shares were outstanding for less than three months following the acquisition and including them would have resulted in a benefit to equity eligible employees, the Compensation Committee elected to use the outstanding shares prior to the Paris Re acquisition of 58.7 million as the basis for determining the 2010 equity pool. Accordingly, the Compensation Committee approved a pool of 340,274 restricted share units (0.58% of 58.7 million fully diluted common shares outstanding as of December 2009) for annual equity awards to employees. As referred to under “Other 2009 Compensation Committee Approvals” on pages 32-33, the equity pool definition was changed from option equivalents to restricted share unit equivalents.
150%.
Form of EquityGroup Organizational Objectives
Named Executive Officers’ equity awards consist of a mix of SSARs and restricted share units. Awards typically consist of 60% in SSARs and 40% in restricted share units, but Named Executive Officers who meet required share ownership targets may adjust this mix. For more information, see “Executive Share Ownership and Retention” on pages 41-42 and “Compensation Customization” on page 43.
The Compensation Committee has determined that the restricted share units, which vest all at once (known as “cliff vesting”) three years after the grant date, will encourage Named Executive Officers to remain with PartnerRe. Similarly, SSARs, which vest ratably over a period of three years, will encourage Named Executive Officers to continue efforts to achieve growth in value and share price. Peer group analysis shows that the three-year vesting schedule is consistent with market practice.
Equity Pool Allocation
The Compensation Committee recommends how the equity pool should be allocated amongNon-financial objectives are recommended annually by the Chief Executive Officer and approved by the other Named Executive OfficersCompensation Committee and other employees based upon peer group analysis. the Board. For 2012, the Group Organizational Objectives were:
Improve operational efficiencies;
Analyze strategic business lines opportunities;
Review risk management strategy;
Develop assumed risk framework; and
Foster performance management culture.
The allocation of shares availableGroup Organizational Objectives vary from year to year and the Compensation Committee does not assign a specific weighting to any one individual component and no one Group Organizational Objective was significant enough to make a meaningful impact on the maximum potential annual cash incentive payout for equity awards are shownthe 2012 performance year. As each qualitative objective was not individually material and was subjective in nature (i.e., not susceptible to quantitative measurement), the Compensation Committee reviewed the overall performance in the tables below:aggregate and determined that PartnerRe successfully achieved the Group Organizational Objectives, resulting in a payout of 150% of target.
Business Unit Financial Performance
Mr. Miranthis’ and Mr. Babcock’s annual cash incentive do not include a Business Unit Performance measure. For Mr. Clarke and Mr. Walker, a Business Unit ROE metric accounted for 100% of the Business Unit Performance measure. Mr. Pestcoe’s Business Unit Performance measure is made up of four metrics that pertain only to the Capital Markets Group (CMG) now known as Investments Group.
The following table shows the Business Unit ROE metric used for the Business Unit Performance measure, weight of the Business Unit Performance measure (among all measures), target and actual 2012 performance for the NEOs that had a Business Unit Performance measure:
NEO | Metric used for Business Unit Performance Measure | Relative Weight of Business Unit Performance measure (among all measures) | Target | Actual 2012 Performance(1) | Scale Payout | |||||||
Emmanuel Clarke | PartnerRe Global ROE | 30% | 10-13% | 22% | 200% | |||||||
Marvin Pestcoe | CMG Metric | 30% | See note (2) | 182% | ||||||||
Theodore C. Walker | North America ROE | 30% | 10-13% | 6% | 20% |
(1) | The targets and payout scales for PartnerRe Global and North America ROE are the same as those for Group AROE, as illustrated by the payout scale table on page 34. |
Metric Description Relative Weight measure (among Scale Payout(2) Metric used for CMG
Business Unit Performance
Measure
of Business Unit
Performance
all measures) Target Actual 2012
Performance CMG Total Return One Year Total Return 12% 110 basis points (bps) above risk free return (RFR) 490 bps above RFR 200% Standard Fixed Income* One Year Performance Relative to Benchmarks 6% 0 bps above benchmark 67 bps above benchmark 200% Risk Assets ROE One Year Total Return on Attributed Capital 6% 12-14% 34% 200% Asset Allocation One Year Performance Relative to Neutral 6% 0 bps 6 bps 110%
* | The standard fixed income metric was introduced for 2012. This metric corresponds to the main metric used to evaluate the performance of our portfolio managers. |
Business Unit/Personal Objectives
Other than the Chief Executive Officer, each of our NEOs has numerous predetermined qualitative objectives that vary from year to year. Qualitative/non-financial objectives are recommended annually by the Chief Executive Officer and approved by the Compensation Committee and the Board. As further detailed under “Increased Weight on Financial Performance in Determining Annual Incentive” on page 30, the weight on qualitative objectives was reduced in 2012 to align with the Compensation Committee’s goal of 25%-30% weight on qualitative objectives placing greater emphasis on quantitative performance measures. In 2012, the Compensation Committee considered numerous qualitative personal objectives, none of which covered all of our NEOs. For each NEO, the Compensation Committee considered all of the objectives that specifically applied to the NEO and reached a subjective view as to how well the NEO had achieved his personal objectives. Personal objectives cover many areas, including operational efficiency, effective capital management, maintaining good relationships with clients and success of significant projects. The Compensation Committee determined that each NEO successfully achieved his personal objectives for the 2012 performance year, resulting in a payout of between 150% and 175% of target for the Business Unit/Personal Objectives metric for each NEO.
Equity Awards
Equity awards provide “at risk” compensation which has a long-term focus and are subject to both performance and time-based vesting mechanisms. Equity award objectives are to align the long-term interests of NEOs and shareholders, reflect long-term performance goals and act as a talent retention vehicle.
Form of Equity
The NEOs’ blend of equity is 60% performance-based awards (PSUs and SSARs) and 40% time-based awards (RSUs). Performance-based equity has greater motivational impacts while time-based equity has a greater retentive impact. The standard annual equity award distribution for the NEOs is as follows:
Blend of Equity | ||||||||||||||||
Equity Award Level | Annual Equity Target Dollar Value ($) | RSUs(1) ($) | PSUs(1) ($) | SSARs(1) ($) | ||||||||||||
CEO | 3,000,000 | 1,200,000 | 1,200,000 | 600,000 | ||||||||||||
Other NEOs | 1,250,000 | 500,000 | 500,000 | 250,000 |
(1) | RSUs three-year cliff vest; PSUs three-year cliff vest and subject to performance measure; SSARs three-year ratable vest. |
At grant, the target dollar value may be adjusted (90%-110%) based on the prior year’s AROE result:
Results within scale (5-17%) – no adjustment
Results below scale (<5%) – 90% of target dollar value
• | Results above scale (>17%) – 110% of target dollar value |
The 15% AROE result for 2012 is within the scale, therefore there is no adjustment to the 2013 equity target dollar values.
For the 20092012 performance year these percentages translatedgrant, upon settlement, PSU awards can be adjusted upward or downward based on the average three-year growth in Tangible Book Value Per Share (TBVPS) + nonlife reserve discount + life unrecognized value + dividends paid from grant date. This performance metric was selected by the Company as the financial metric with the highest correlation to shareholder value. The following table shows the following numbers:payout scale on settlement, based on performance and is subject to straight-line interpolation:
| ||||
|
| |||
|
| 150% | ||
Target | 700bps | 100% | ||
ô | ô | |||
|
| 50% |
(1) | Based on a reference portfolio of risk-free securities with three-year duration. |
SpecificEquity Allocation
The following table shows the NEO’s equity award grants toawards granted on March 1, 2013 for the individual Named Executive Officers for 2009 were as follows:2012 performance year:
Allocation as % of Total | SSARs (3-year ratable vest) | Restricted Share Units (3-year cliff vest) | Cash | ||||||||||
Patrick A. Thiele | 13.33 | % | — | 45,325 | — | ||||||||
Albert Benchimol | 6.67 | % | 68,089 | 9,079 | — | ||||||||
Bruno Meyenhofer* | 6.67 | % | — | — | CHF | 1,879,102 | |||||||
Costas Miranthis | 6.67 | % | 68,089 | 9,079 | — | ||||||||
Theodore C. Walker | 6.67 | % | 68,089 | 9,079 | — | ||||||||
Scott D. Moore** | 0 | % | 0 | 0 | — |
Name | RSUs(1) | PSUs(1) | SSARs(2) | |||
Costas Miranthis | 13,453 | 13,453 | 47,085 | |||
William Babcock | 5,605 | 5,605 | 19,619 | |||
Emmanuel Clarke | 5,605 | 5,605 | 19,619 | |||
Marvin Pestcoe | 5,605 | 5,605 | 19,619 | |||
Theodore C. Walker | 5,605 | 5,605 | 19,619 |
The closing price on March 1, 2013 was $89.20. |
At the February 28, 2013 meeting, the Compensation Committee approved the conversion ratio of one RSU to seven SSARs in order to bring it in line with financial accounting valuations. |
Total Compensation Payout
The following graph shows the average compensation (average base salary, annual cash incentive award and equity award) of NEOs for the past three performance years. The table below provides a three-year history of the Company performance.
Together the graph and the table show the link between company performance and executive compensation at PartnerRe, which is reflected in the high level of support shown by our shareholders when they voted on the 2011 executive compensation in May 2012.
2010 | 2011 | 2012 | ||||||||||
Group AROE | 9.4% | (11.4%) | 15.0% | |||||||||
Group AROE Scale Payout | 40% | 0% | 150% | |||||||||
Total Group Performance | 73% | 44% | 150% |
(1) |
(2) | Actual annual cash incentive award for |
(3) | Equity awards shown in this graph are based on the performance year with a grant date in the following year. Equity values in the Summary Compensation Table vary based on the calculation described in note (2) under the 2012 Summary Compensation Table. |
The historical values of equity awards to the Named Executive Officers for each of the last four years were as follows:
2006 (in 000’s) | 2007 (in 000’s) | 2008 (in 000’s) | 2009 (in 000’s) | Percentage Increase 2009 vs. 2008 | |||||||||||||||
Patrick Thiele | $ | 3,293 | $ | 2,664 | $ | 759 | $ | 3,608 | 376 | % | |||||||||
Albert Benchimol | $ | 2,195 | $ | 1,771 | $ | 380 | $ | 1,807 | 376 | % | |||||||||
Bruno Meyenhofer | $ | 2,195 | $ | 1,771 | $ | 380 | $ | 1,807 | 376 | % | |||||||||
Costas Miranthis | n/a | $ | 1,063 | $ | 380 | $ | 1,807 | 376 | % | ||||||||||
Theodore C. Walker | n/a | n/a | n/a | $ | 1,807 | n/a | |||||||||||||
Scott Moore | $ | 2,195 | $ | 1,771 | $ | 380 | $ | 0 | n/a |
Executive Share Ownership and Retention
To promote the goal of aligning the interests of Named Executive Officersthe NEOs with the interests of shareholders, the Executive Total Compensation Program prescribes share ownership guidelines, holding restrictions and incentives to encourage Named Executive Officersthe NEOs to hold a stake in the future value of PartnerRe.
Share Ownership Guidelines
NamedThe Executive Officers are required to meet and maintain two types ofTotal Compensation Program prescribes net share ownership targets:
Total shares/equivalents, meaning shares owned outright, restricted shares, restricted or deferred share units and shares held in qualified plans; and
|
The targets are expressed as a percentage of total shares outstanding at December 31, 2009 and were derived from a study of senior executives’ share ownership within our competitive peer group. The first table below shows the ownership targets. The second table shows each Named Executive Officer’s actual share ownership as of December 31, 2009.
Total Shares/Equivalents as Outstanding—Target | Total Shareholdings as a Percentage of Shares Outstanding—Target | |||||
Chief Executive Officer | 0.20 | 1.00 | ||||
Other Named Executive Officers | 0.05 | 0.25 |
Total Shares/Equivalents as a Percentage of Shares | Total Shareholdings as a Percentage of Shares Outstanding—Actual | |||||
Patrick A. Thiele** | 0.21 | 0.74 | ||||
Albert Benchimol | 0.06 | 0.51 | ||||
Bruno Meyenhofer | 0.06 | 0.37 | ||||
Costas Miranthis | 0.02 | 0.18 | ||||
Theodore C. Walker | 0.01 | 0.10 | ||||
Scott D. Moore | 0.05 | 0.21 |
A penalty is not imposed on Named Executive Officers who have yet to reach the ownership targets. However, executives who have not met their targets may not sell any of the net shares that they have been granted, and they are not eligibleretention guidelines for our compensation customization program.all equity grants. For this purpose, “net shares” are the common shares remaining from a transaction (i.e., the exercise of an option or the vesting of restricted shares) after the Named Executive OfficerNEO sells enough common shares to pay the applicable exercise price and any related tax or social security liabilities.
Net Share Retention Guidelines
The Executive Total Compensation Program prescribes net share retention guidelines for all equity grants. Underinclude the guidelines:following:
Named Executive OfficersNEOs who have not satisfied the applicable total shares/equivalentsshare ownership target must retain 100% of the net shares they acquire until they reach the target.
Named Executive OfficersNEOs who have met the total shares/equivalentsshare ownership target must retain, for at least three years, 50% of the net shares they acquire or have acquired. This holding period is reduced to one year for Named Executive Officers whounless they are 55 or older.older, in which case the retention period for the net shares will be one year.
If a Named Executive Officeran NEO has met boththe share ownership targets,target, but theirthe holdings subsequently drop below the target amounts (because PartnerRe has issued shares oramount for any reason (for example, a new share issuance), the executive has sold shareswill have a one-year grace period to cover taxesonce again meet the target.
|
Elective Company MatchThe net share retention guidelines do not apply to grants made prior to becoming an NEO.
The Compensation Committee further encourageshas the discretion to make adjustments to these guidelines.
The ownership target is expressed as a percentage of PartnerRe’s fully diluted common shares outstanding (“CSO”) at the end of each calendar year and includes all common shares and equivalents held by the NEO. The number of fully diluted CSO at December 31, 2012, was 59,893,366. The table below shows the ownership targets, common share ownership, by offeringand ownership expressed as a company match on elective deferralspercentage of cash annual incentives to any Named Executive Officer who has not reached the prescribed share ownership targets. Named Executive Officers may defer all or a portion of their cash annual incentive by converting it to immediately vested restricted deferred share units. These restricted deferred share units have a minimum delivery date restriction of five years from the date of grant, but Named Executive Officers may choose to defer their delivery datesCSO for 10 years or until retirement or other termination. The company match, which is applicable if the ownership levels have not been met, will consist of restricted share units valued at 25% of the deferred cash incentive value. These restricted share units will vest all at once after three years and have delivery date restrictions that match the restrictions of the related deferred share units.
Compensation Customization
The Compensation Committee recognizes that Named Executive Officers may prefer different forms of compensation based upon their respective personal financial portfolios, risk appetite, retirement goals and ages. To ensure that our compensation program optimally motivates, rewards and retains key executives, and at the same time keeps executives’ interests aligned with shareholders’ interests, the Executive Total Compensation Program permits Named Executive Officers who have met the two share ownership targets described above to customize their compensation. Aseach NEO as of December 31, 2009, Mr. Thiele, Mr. Benchimol and Mr. Meyenhofer all are eligible to customize2012. All of the NEOs have reached their annual equity compensation. Mr. Moore was eligible until he retired.share ownership targets.
The compensation customization guidelines permit eligible executives to choose the form in which they will receive the value of their annual equity awards. The standard form of annual equity awards is 60% in SSARs and 40% in restricted share units.
Share Options/SSARs** | Restricted Shares/Restricted Share Units ** | |||
Alternative 1* | 60% | 40% | ||
Alternative 2 | 25% | 75% | ||
Alternative 3 | 75% | 25% | ||
Alternative 4 | 0% | 100% | ||
Alternative 5 | 100% | 0% |
Name | Ownership Target— Common shares/equivalents as a percentage of fully diluted CSO | Common Share Ownership* | Common Shares/equivalents as a percentage of fully diluted CSO | |||||||||
Costas Miranthis | 0.07 | % | 117,474 | 0.20 | % | |||||||
William Babcock | 0.03 | % | 28,570 | 0.05 | % | |||||||
Emmanuel Clarke | 0.03 | % | 41,107 | 0.07 | % | |||||||
Marvin Pestcoe | 0.03 | % | 45,241 | 0.08 | % | |||||||
Theodore C. Walker | 0.03 | % | 68,565 | 0.11 | % |
* |
For this purpose, the Compensation Committee has determined that the conversion ratio will be five SSARs to one restricted share unit. This conversion ratio is influenced by the underlying Black-Scholes option pricing model. The 5:1 ratio represents a Black-Scholes value equal to 20% of the fair market value of the shares. The actual Black-Scholes value is monitored to determine whether the 5:1 ratio needs to be adjusted should Black-Scholes values go over 20%. A table under the heading “Annual Equity Awards—Equity Pool Allocation” on page 41 shows how the Named Executive Officers received their awards for 2009.
If the Named Executive Officer elected to receive a long-term cash award rather than SSARs, it would vest according to the standard vesting schedule at the time of grant earning interest equal to the three-month Treasury bill rate, which is compounded quarterly. The vested cash portion along with the full-year interest is paid annually in February. This customization election was removed by the Compensation Committee in September 2009.
Retirement Benefits and Conditions
The Compensation Committee determined that Named Executive Officers who have dedicated themselves to PartnerRe for many years and who have participated at the highest level of management in shaping and guiding the future value of the company should share in the rewards of their contributions. In addition, the Compensation Committee encourages Named Executive Officers to focus on PartnerRe’s long-term value, even beyond their proposed retirement dates, by enabling them to realize the full value of their long-term incentive awards. To accomplish both of these objectives, the Executive Total Compensation Program outlines special post-retirement treatment of equity compensation awarded to Named Executive Officers who meet prescribed age and service requirements and who agree to certain conditions.
Executive Retirement Definition and Status
Named Executive Officers are eligible for the treatment of equity compensation upon retirement once they meet one of these age and service requirements:
60 years old with 10 years of service; or
65 years old.
The table below shows when each Named Executive Officer will satisfy one of these criteria.
| ||
| ||
| ||
| ||
| ||
|
Special Treatment of Equity Compensation on Retirement
Under the Executive Total Compensation Program, any unvested awards held at retirement by an eligible Named Executive Officer will continue to vest under the original vesting provisions. Similarly, any options or SSARs (including those that vest post-retirement) will remain exercisable for the remainder of their original term.
Post-retirement Conditions
In order to retain the beneficial treatment of long-term equity compensation awards, a Named Executive Officer must agree to refrain from any of the following activities for 36 months following retirement:
Competing in the reinsurance business in the locations where PartnerRe does business;
Soliciting employees or customers to a company that competes in the reinsurance business in the locations where PartnerRe does business; or
Disclosing PartnerRe confidential information, unless legally required to do so.
Chief Executive Officer Retention
The Compensation Committee and the Board have full confidence in the expertise, integrity and leadership of Patrick A. Thiele as our Chief Executive Officer. The Compensation Committee wants PartnerRe to provide every incentive and motivation to Mr. Thiele to remain committed in his position despite the economic conditions that affect the insurance and reinsurance markets.
In November 2004, we entered into retention award arrangements with Mr. Thiele, which were designed based on recommendations from PricewaterhouseCoopers. The arrangements provide for a deferred cash award in the amount of $2,500,000 and a separate award of 42,582 restricted share units, each of which represents the right to future delivery of one common share. These awards were subject to two conditions:
Mr. Thiele was required to remain a PartnerRe employee until December 31, 2009; and
PartnerRe’s book value per share was required to equal or exceed $65.00 per diluted share on December 31, 2009, as presented in our 2009 audited financial statements.
The conditions of the retention agreement were met and as a result Mr. Thiele received the cash retention bonus (on December 11, 2009) and the vested restricted share units on December 31, 2009. Mr. Thiele continues as Chief Executive Officer without the benefit of a further retention agreement.
Other Compensation & Benefits
Mr. Thiele is based at the corporate headquarters in Bermuda. There is competition for talent among the international companies in Bermuda, and the cost of living is significantly higher than in many other locations. In keeping with our compensation philosophy, policies at corporate headquarters reflect local market practices. For example, all Bermuda employees receive a housing allowance and reimbursement of the local payroll tax. In addition, Named Executive Officers in Bermuda are entitled to reimbursement of car expenses; club fees and tax filing assistance, if applicable (see “2009 Summary Compensation Table” on page 48 for further details).
Mr. Miranthis, who resides in Europe, receives various benefits associated with an expatriate package, such as housing, education subsidies, tax equalization and family health care.
Other items included in the “All Other Compensation” column of the 2009 Summary Compensation Table reflect each Named Executive Officer’s participation in broad-based plans that are the same for all employees. These include competitive employer contributions to defined-contribution retirement plans, company-paid life insurance premiums, and cash dividend equivalent payments on unvested, undelivered restricted share units.
Severance
To assist in recruiting and to ensure that we arePartnerRe is competitive withwithin the market, we providethe Company provides for severance payments to the Named Executive OfficersNEOs under several different scenarios. Severance triggers restrictive conditions, and compensation payments are governed by executiveNEO employment agreements and our Change in Control Policy. For more information, see “Potential Payments Upon Termination or Change of Control” on page 55.
pages 48-53.
Potential ConflictsBenefits & Perquisites Review
To meet competitive market conditions, benefits and perquisites are provided to NEOs. Towers Watson reviewed PartnerRe’s benefits and perquisites in February 2011 as compared with our Bermuda-based competitive peer group. The review concluded that the Company is aligned with the peer group in both types of Interestsbenefits and perquisites provided as well as the aggregate cost of these benefits and perquisites. In line with what our peers offer, PartnerRe provides additional perquisites for Bermuda-based executives who relocate from their
home countries to the corporate headquarters. Perquisites provided by PartnerRe include personal use of corporate aircraft (for the Chief Executive Officer only, capped at 30 hours), housing, club membership, car and travel allowances. The Company does not offer tax gross-ups to NEOs.
Governance Features of our Executive Compensation ConsultantsProgram
Frederic W. Cook is the consulting firm retained for the sole purpose of advising on executive compensation. Frederic W. Cook are retained by the Compensation Committee to undertake consulting services as directed by the committee throughout the year. They do not do consulting work for the management team and therefore no conflict of interest arises. Similarly, executive compensation consulting projects are not awarded to external advisors who undertake ongoing consulting work for management in areas such as finance, tax, audit, corporate restructuring or legal services.
Compensation Programs and Risk Management
OurThe purpose of our business is to assume risk. As described above, our compensation programs contain a number of design features whichthat proactively discourage excessive risk taking and inappropriate behavior. We do not incentivize our employees to make overly aggressive risk related decisions for the company. Some examples of the risk mitigation features embedded in our compensation programs are as follows:
Mix of base and variable pay
Base salaries are positioned at the market median for the reinsurance industry. Target annual incentives for each level of employee reflect the market norms for bonus payments in the respective country, job family or skill
profile. Our market positioning is validated each year by the use of survey data from external consultants and peer group analysis for executive positions. The mix of fixed and variable pay is balanced so that the variable portion does not give an inappropriate focus on maximizing bonus earnings. Typical management target bonuses fall in the range of 30 – 50% of base salary. Annual incentives for Named Executive Officers are 100 – 125% of base salary, reflecting typical market practice for the reinsurance industry.
Annual incentives
Without exception, annual incentives (expressed as a percent of base salary) are capped at 200% of the target incentive. Therefore there is no inducement to take the type of unchecked risk often associated with uncapped bonuses. Similarly, we do not operate incentive plans that could be described as sales incentives, profit sharing, co-investment or “carry” plans where a percentage of the investment gain is paid to an employee. For the reinsurance side of the business, our underwriters write business consistent with our risk appetite, pricing strategy and portfolio balance. Their bonuses do not depend on the volume of business written.
Performance objectives are established annually for each employee. Objectives are divided into two parts: financial and non-financial. Financial objectives are based on targets rather than annual plan goals. Non-Financial objectives are recommended annually by the Chief Executive Officer and approved by the Board. Financial objectives are designed to ensure the shareholder receives a minimum return before Target Annual Incentive Awards are paid to employees. Operating return on equity must reach at least 8% in order for Annual Incentives to be paid. Both financial and non-financial performance objectives are designed to align efforts, but not be overly aggressive which could incent the wrong behaviors and excessive risk taking.
Annual incentives are structured so that a minimum of 55% of the total incentive, for every employee, is based on achieving financial goals which include a 50% weight on annual Group Performance. This design feature ensures that decisions are made that support our group goals, rather than an individual business unit. So even if one business unit performs exceptionally poorly, the cost of these results are distributed to all other business units via the Group Performance dimension.
Employee Equity Grants
Our philosophy on granting equity to our employees is to encourage share ownership. We want employees to own a part of the company and ultimately to benefit from the wealth creation opportunity. We do not regard equity solely as compensation. We communicate the size of grant in terms of the number of shares, rather than the market value of the shares at grant.
The financial metric used to determine the size of the equity pool available for distribution each yearrisk-taking. It is the four year compound annual growth rate in economic value per share (see “Annual Equity Awards—Total Equity Pool” on pages 39-40). This measure ensures that the pool reflects a longer term measure in preference to an annual business result. An additional risk management feature in the equity plan design is that the total equity pool is expressed as a percent of total common shares outstanding, which ensures that shareholder dilution and burn rates are effectively managed.
Our equity plans for senior managers use a mix of SSARs and restricted share units. The Compensation Committee considers that SSARs alone may potentially provide executives and employees with incentives to take excessive risks for the purpose of increasing share price in the short term and that those risks may not be in the company’s best long term interests.
A grant of SSARs has a proportionally higher future value than restricted share units because of the five to one conversion of restricted share units to SSARs. This conversion ratio is influenced by the underlying Black-Scholes option pricing model. The 5:1 ratio represents a Black-Scholes value equal to 20% of the fair market value of the shares. The actual Black-Scholes value is monitored to determine whether the 5:1 ratio needs to be adjusted should Black-Scholes values go over 20%. We therefore maintain a balance between the benefits of share price growth and excessive risk taking by offering a mix of SSARs and restricted share units for our senior managers.
The standard equity mix for Named Executive Officers and senior operating management is 60% SSARs and 40% restricted share units. Employees below senior operating management receive a 100% in restricted share units.
The Board’s Role in Risk Management
The Compensation Committee, which meets a minimum of four times a year, is the primary committee charged with the corporate governance of executive compensation. The roleview of the Compensation Committee that PartnerRe’s compensation policies and their approval remit is detailedprocedures do not create risks that are reasonably likely to have a material adverse effect on pages 21-23.
The Risk & Finance Committee overseePartnerRe. These policies and procedures are reviewed as part of the Company’s risk management policiesframework.
Clawback Provisions
NEOs may be required to repay some or all of any cash or equity incentive received from a grant if: (i) PartnerRe is required to restate our financial statements due to material non-compliance with financial reporting requirements; (ii) the restated financial statements would have resulted in a lower incentive award; and practices. They met four times in 2009(iii) PartnerRe has determined that the material non-compliance causing the restatement was the result of the award recipient’s willful misconduct. The requirement to discuss risks relatedrepay applies to any amounts granted, vested, obtained as the result of exercise or otherwise paid out during the 12 months following the date the financial statements subject to the company’s business strategy. Further information aboutrestatement were filed with the Risk & Finance Committee can be foundSEC. Under the policy, the Board may also cancel the award recipient’s unvested equity or other unpaid bonus or incentive compensation and may cancel his or her vested but unexercised SSARs and options. These clawback features are in addition to the clawback provisions required under “Committeesthe Sarbanes-Oxley Act of 2002, which remain in effect. PartnerRe intends to further adjust our clawback policy in light of the BoardDodd-Frank Wall Street Reform and Consumer Protection Act of Directors—Risk & Finance Committee”2010 once the SEC adopts final rules implementing those requirements.
Equity Practices
Long-term incentives comprise the greatest portion of the NEO’s target compensation, encouraging executives to perform in a manner consistent with long term shareholder value. As described on page 24.39, the Executive Total Compensation Program prescribes share ownership guidelines, holding restrictions and incentives to encourage the NEOs to hold a stake in the future value of PartnerRe. PartnerRe does not backdate, reprice or grant equity awards retroactively. Repricing of awards would require shareholder approval under our shareholder-approved long-term incentives plan.
Annual Incentive Practices
As described on page 35, the annual cash incentive award is capped at a maximum payout of 200% of target so that excess risk taking is not encouraged. Scales are reviewed and set annually prior to the start of the performance year to create challenging but realistic targets so that risk-taking behaviors are not undertaken to achieve unrealistic goals of both quantitative and qualitative objectives.
Impact of Regulatory and Accounting Requirements
The Compensation Committee is mindful of how regulatory requirements, particularly those described below, affect its decisions.
Internal Revenue Code Section 162(m)162(m)
Section 162(m) precludes a public company (with certain exceptions) from taking an incomea tax deduction for compensation in excess of $1 million paid to specified executive officers. We believeNEOs. The Company believes that the corporate income tax deductibility of compensation is an important factor, but should not be the sole factor, in setting executive compensation policy. Accordingly, although wethe Company generally intendintends to avoid losing a tax deduction due to Section 162(m), we reservethe Company reserves the right to pay amounts that are not deductible in appropriate circumstances. In 2009,
Accounting Standards
The Compensation Committee considers the accounting treatment of compensation elements in determining types and levels of Mr. Moore, who was an employee of PartnerRe U.S. until March, was subject to the corporate income tax deductibility rules of Section 162(m). (No other Named Executive Officer’s compensation was subject to these rules). We have determined that all of Mr. Moore’s 2009 compensation will be a deductible expense under Section 162(m).
Accounting Standards
for our NEOs. In determining SSARs and restricted shareequity awards in 2009,2012, the Compensation Committee considered the potential expensedilution impact of those programs and the impact on earnings per share.Employee Equity Plan. The Compensation Committee concluded that the associated expense and earnings per sharedilutive impact werewas appropriate, given the objectives of our Executive Total Compensation Program, competitive compensation practices in the reinsurance industry, our performance, and the value of the awards as tools to motivate and retain employees.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation & Management Development Committee
Vito H. Baumgartner, Chairman
Kevin Twomey, Vice-ChairmanJan Holsboer
Roberto Mendoza
John A. Rollwagen
Jürgen Zech
David Zwiener
20092012 Summary Compensation Table
The table below summarizes the total compensation paid to or earned by each of the Named Executive OfficersNEOs for the fiscal years ended December 31, 2007, 20082012, 2011 and 2009.2010. The amounts disclosed in column (e) include restricted share unit awardsRSUs and the amounts disclosed in column (f) include share-settled share appreciation rights.SSARs. The amounts related to 2012 disclosed in column (g) were determined by the Compensation Committee at its February 25, 201028, 2013 meeting and were paid out shortly thereafter. The amounts disclosed in column (h) are further detailed in the table under the header “All Other Compensation.”Compensation” on page 43.
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | |||||||||||||||||||||||||
Name and Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(2) | Total ($) | |||||||||||||||||||||||||
Patrick Thiele, President and Chief Executive Officer, PartnerRe Ltd. | 2009 | 1,000,000 | 1,911,544 | 0 | 0 | 5,000,000 | (6) | 1,197,295 | 9,108,839 | ||||||||||||||||||||||||
2008 | 1,000,000 | 682,954 | 1,255,291 | 0 | 1,400,000 | 1,112,691 | 5,450,936 | ||||||||||||||||||||||||||
2007 | 991,500 | 204,000 | 1,855,885 | 0 | 2,500,000 | 758,680 | 6,310,065 | ||||||||||||||||||||||||||
Albert Benchimol, Executive Vice President and Chief Financial Officer, PartnerRe Group and Chief Executive Officer, Capital Markets | 2009 | 577,750 | 0 | 152,026 | 154,544 | 1,360,425 | 362,934 | 2,607,679 | |||||||||||||||||||||||||
2008 | 559,560 | 0 | 834,523 | 1,106,516 | 762,750 | 913,048 | 4,176,397 | ||||||||||||||||||||||||||
2007 | 538,800 | 0 | 1,237,280 | 957,917 | 763,477 | 474,854 | 3,972,328 | ||||||||||||||||||||||||||
Bruno Meyenhofer, Chairman, PartnerRe Global(4) | 2009 | 761,288 | 711,083 | 0 | 0 | 1,507,334 | 109,910 | 3,089,615 | |||||||||||||||||||||||||
2008 | 755,767 | 0 | 834,523 | 0 | 1,141,920 | 121,782 | 2,853,992 | ||||||||||||||||||||||||||
2007 | 735,365 | 0 | 1,237,280 | 957,917 | 1,452,528 | 107,042 | 4,490,132 | ||||||||||||||||||||||||||
Costas Miranthis, Chief Executive Officer, PartnerRe Global(5) | 2009 | 639,366 | 0 | 152,026 | 154,544 | 1,247,808 | 1,333,791 | 3,527,535 | |||||||||||||||||||||||||
2008 | 623,232 | 0 | 500,714 | 708,642 | 922,925 | 1,107,859 | 3,863,372 | ||||||||||||||||||||||||||
2007 | 515,363 | 0 | 187,294 | 145,005 | 1,019,710 | 536,927 | 2,404,299 | ||||||||||||||||||||||||||
Theodore C. Walker Chief Executive Officer, PartnerRe U.S. | 2009 | 525,000 | 0 | 19,808 | 103,136 | 813,750 | 77,931 | 1,539,625 | |||||||||||||||||||||||||
Scott D. Moore, Executive Vice President and Deputy Chairman, PartnerRe U.S. | 2009 | 141,250 | 1,113,562 | 0 | 0 | 565,000 | 87,135 | 1,906,947 | |||||||||||||||||||||||||
2008 | 559,600 | 746,671 | 834,523 | 0 | 519,800 | 159,199 | 2,819,793 | ||||||||||||||||||||||||||
2007 | 538,800 | 427,365 | 1,237,280 | 0 | 1,067,781 | 140,359 | 3,411,585 |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||||||||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||
Costas Miranthis, President and Chief Executive Officer, PartnerRe Ltd.(4) | 2012 | 1,000,000 | 0 | 482,144 | 405,270 | 1,953,125 | 478,349 | 4,318,888 | ||||||||||||||||||||||||||||||||||||||||
2011 | 1,000,000 | 0 | 754,913 | 731,067 | 546,875 | 469,984 | 3,502,839 | |||||||||||||||||||||||||||||||||||||||||
2010 | 816,086 | 0 | 722,779 | 1,235,829 | 789,544 | 1,520,029 | 5,084,267 | |||||||||||||||||||||||||||||||||||||||||
William Babcock Executive Vice President and Chief Financial Officer, PartnerRe Ltd. | 2012 | 557,978 | 0 | 241,072 | 202,635 | 871,210 | 391,895 | 2,264,790 | ||||||||||||||||||||||||||||||||||||||||
2011 | 543,025 | 0 | 448,212 | 152,299 | 309,003 | 370,907 | 1,823,446 | |||||||||||||||||||||||||||||||||||||||||
2010 | 467,534 | 0 | 108,270 | 218,357 | 381,820 | 225,025 | 1,401,006 | |||||||||||||||||||||||||||||||||||||||||
Emmanuel Clarke Chief Executive Officer, PartnerRe Global(5) | 2012 | 676,985 | 0 | 241,072 | 202,635 | 1,145,679 | 293,667 | 2,560,038 | ||||||||||||||||||||||||||||||||||||||||
2011 | 659,640 | 0 | 503,275 | 203,073 | 320,284 | 316,446 | 2,002,718 | |||||||||||||||||||||||||||||||||||||||||
2010 | 510,872 | 0 | 127,376 | 232,420 | 439,584 | 287,081 | 1,597,333 | |||||||||||||||||||||||||||||||||||||||||
Marvin Pestcoe Chief Executive Officer, PartnerRe Capital Markets Group(6) | 2012 | 557,978 | 0 | 241,072 | 202,635 | 908,307 | 93,510 | 2,003,502 | ||||||||||||||||||||||||||||||||||||||||
2011 | 543,025 | 0 | 448,212 | 152,299 | 304,255 | 83,386 | 1,531,177 | |||||||||||||||||||||||||||||||||||||||||
2010 | 516,250 | 0 | 108,270 | 218,357 | 856,423 | 68,071 | 1,767,371 | |||||||||||||||||||||||||||||||||||||||||
Theodore C. Walker President and Chief Executive Officer, PartnerRe North America | 2012 | 587,941 | 0 | 241,072 | 202,635 | 655,034 | 130,656 | 1,817,338 | ||||||||||||||||||||||||||||||||||||||||
2011 | 578,550 | 0 | 754,913 | 731,067 | 281,252 | 117,325 | 2,463,107 | |||||||||||||||||||||||||||||||||||||||||
2010 | 550,419 | 0 | 722,779 | 725,829 | 527,250 | 90,429 | 2,616,706 |
(1) | The figures reflect the total salary received by |
(2) |
In accordance with the |
(3) | The figures reflect the non-equity incentive compensation paid in 2013 for the 2012 performance year. For more details see page 33. |
(4) |
(5) | Mr. |
(6) |
Patrick ($) | Albert Benchimol ($) | Bruno Meyenhofer ($) | Costas ($) | Theodore C. ($) | Scott Moore ($) | |||||||||||||||||||
Housing(1) | 240,000 | 0 | 0 | 219,849 | 0 | 0 | ||||||||||||||||||
Tax equalization | 111,332 | 92,762 | 0 | 891,004 | 0 | 0 | ||||||||||||||||||
Bermuda payroll tax reimbursement(2) | 16,511 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Bermuda government social insurance | 1,581 | 263 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Car expenses(3) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Club fees | 8,300 | 7,350 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Tax filing assistance | 41,580 | 77,045 | 0 | 9,516 | 5,600 | 4,900 | ||||||||||||||||||
Personal use of corporate apartment(4) | 1,859 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Personal use of corporate jet(5) | 341,526 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Company contributions to defined contribution plans and non-qualified plan | 0 | 63,553 | 45,720 | 92,936 | 57,750 | 15,537 | ||||||||||||||||||
Retirement Allowance(6)(7) | 150,000 | 56,568 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Life insurance premiums | 1,944 | 3,828 | 0 | 4,986 | 3,828 | 957 | ||||||||||||||||||
Dividend equivalents | 197,947 | 58,549 | 59,696 | 21,764 | 9,602 | 55,086 | ||||||||||||||||||
Interest from equity customization | 16,809 | 0 | 4,494 | 0 | 0 | 10,655 | ||||||||||||||||||
Executive health benefit-company paid portion | 44,140 | 715 | 0 | 0 | 682 | 0 | ||||||||||||||||||
Executive health benefit-gross up | 23,766 | 2,301 | 0 | 0 | 469 | 0 | ||||||||||||||||||
Health coverage premium | 0 | 0 | 0 | 13,235 | 0 | 0 | ||||||||||||||||||
Relocation/shipping expenses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Children’s education costs | 0 | 0 | 0 | 80,501 | 0 | 0 | ||||||||||||||||||
Director & Named Executive Officer Spousal Program | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total | 1,197,295 | 362,934 | 109,910 | 1,333,791 | 77,931 | 87,135 |
Costas ($) | William Babcock ($) | Emmanuel ($) | Marvin Pestcoe ($) | Theodore C. Walker ($) | ||||||||||||||||
Bermuda government social insurance | 1,617 | 0 | 0 | 0 | 0 | |||||||||||||||
Bermuda payroll tax reimbursement(1) | 39,375 | 7,560 | 0 | 0 | 0 | |||||||||||||||
Car allowance/expense(2) | 1,583 | 15,000 | 0 | 0 | 0 | |||||||||||||||
Club allowance/fees | 8,895 | 20,000 | 0 | 0 | 0 | |||||||||||||||
Corporate memberships | 3,500 | 0 | 0 | 0 | 0 | |||||||||||||||
Defined contribution and non-qualified plans | 150,000 | 61,378 | 66,749 | 61,378 | 64,673 | |||||||||||||||
Director & executive officer spousal program | 2,163 | 2,029 | 2,029 | 2,029 | 2,029 | |||||||||||||||
Dividend equivalents | 61,023 | 24,235 | 27,627 | 24,235 | 52,631 | |||||||||||||||
Executive health benefit | 5,768 | 9,865 | 0 | 0 | 2,395 | |||||||||||||||
Housing | 192,000 | 204,000 | 101,297 | 0 | 0 | |||||||||||||||
Life insurance premiums | 10,836 | 3,828 | 0 | 3,828 | 3,828 | |||||||||||||||
Personal use of corporate aircraft(3) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
School allowance | 0 | 0 | 85,485 | 0 | 0 | |||||||||||||||
Tax filing assistance | 1,589 | 14,000 | 10,480 | 2,040 | 5,100 | |||||||||||||||
Travel allowance | 0 | 30,000 | 0 | 0 | 0 | |||||||||||||||
Total | 478,349 | 391,895 | 293,667 | 93,510 | 130,656 |
(1) |
The Bermuda government imposes a payroll tax of |
(2) | Under |
The Chief Executive Officer has access to |
|
20092012 Grants of Plan-Based Awards
This table discloses the target and maximum cash-based non-equity incentive plan awards paid in February 2009payouts in respect of 2008,the 2012 performance year, and equity awards granted in 2009. It does not include any cash award that resulted from an executive officer’s equity customization.2012.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(4) | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | All Other Option Awards: Number of Securities Underlying Option (#)(2) | Exercise or Base Price of Option Awards ($)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | ||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||
Patrick A. Thiele | 0 | 1,250,000 | 2,500,000 | — | — | — | — | |||||||||
Albert Benchimol | 2/27/2009 | — | — | — | 2,456 | — | 61.90 | 152,026 | ||||||||
2/27/2009 | — | — | — | — | 18,420 | 61.90 | 154,544 | |||||||||
0 | 727,500 | 1,455,000 | — | — | — | — | ||||||||||
Bruno Meyenhofer(5) | 0 | 761,280 | 1,522,560 | — | — | — | — | |||||||||
Costas Miranthis(6) | 2/27/2009 | — | — | — | 2,456 | — | 61.90 | 152,026 | ||||||||
2/27/2009 | — | — | — | — | 18,420 | 61.90 | 154,544 | |||||||||
0 | 643,200 | 1,286,400 | — | — | — | — | ||||||||||
Theodore C. Walker | 2/27/2009 | — | — | — | 320 | — | 61.90 | 19,808 | ||||||||
2/27/2009 | — | — | — | — | 2,400 | 61.90 | 20,136 | |||||||||
1/2/2009 | — | — | — | — | 10,000 | 70.07 | 83,000 | |||||||||
0 | 525,000 | 1,050,000 | — | — | — | — | ||||||||||
Scott D. Moore | 0 | 565,000 | 1,130,000 | — | — | — | — |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | All Other Option Awards: Number of Securities Underlying Option (#)(3) | Exercise or Base Price of Option Awards ($)(3) | Grant Date Fair Value of Stock and Option Awards ($)(4) | ||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||
Costas Miranthis | 2/29/2012 | 0 | 0 | 0 | 7,600 | 0 | 63.44 | 482,144 | ||||||||||||||
2/29/2012 | 0 | 0 | 0 | 0 | 57,000 | 0 | 405,270 | |||||||||||||||
— | 0 | 1,250,000 | 2,500,000 | 0 | 0 | 0 | 0 | |||||||||||||||
William Babcock | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||
2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||
— | 0 | 562,071 | 1,124,142 | 0 | 0 | 0 | 0 | |||||||||||||||
Emmanuel Clarke(5) | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||
2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||
— | 0 | 681,952 | 1,363,903 | 0 | 0 | 0 | 0 | |||||||||||||||
Marvin Pestcoe | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||
2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||
— | 0 | 562,071 | 1,124,142 | 0 | 0 | 0 | 0 | |||||||||||||||
Theodore C. Walker | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||
2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||
— | 0 | 590,121 | 1,180,242 | 0 | 0 | 0 | 0 |
(1) | As described in further detail under “Annual Cash Incentive” on page 33, all employees of PartnerRe are eligible for an annual cash incentive if predetermined performance goals are achieved. Each employee has a target annual cash incentive that is set as a percentage of base salary. For all employees other than the Chief Executive Officer, the annual cash incentive payout range is 0% to 200%. For the Chief Executive Officer, the range is 0% to 250%. |
(2) | All |
(4) | The value of SSARs on February |
(5) | Mr. |
The Compensation Committee reviews, adjusts and recommends to the final totalBoard the non-equity and equity pool and the annual equityincentive awards for the individual Named Executive Officers.NEOs. The grant date of the annual equity awards is the date of the February Board meeting, when awards are approved. SSARs for eligible employees are granted with an exercise price equal to the fair market value of PartnerRe’s common shares. The fair market value is the closing price of thePartnerRe common shares on the grant date.
20092012 Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding equity grants as of December 31, 2012.
Option Awards(1) | Stock Awards(2) | |||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||
Patrick Thiele | 2/27/2008 | — | — | — | — | 16,110 | 1,202,773 | 0 | — | |||||||||||
2/23/2007 | — | — | — | — | 26,011 | 1,941,981 | 0 | — | ||||||||||||
2/24/2006 | — | — | — | — | — | — | 0 | — | ||||||||||||
2/10/2005 | 50,143 | — | 62.91 | 2/10/2015 | — | — | 0 | — | ||||||||||||
2/24/2004 | 150,000 | — | 55.63 | 2/24/2014 | — | — | 0 | — | ||||||||||||
2/25/2003 | 112,613 | (3) | — | 49.68 | 2/25/2013 | — | — | 0 | — | |||||||||||
2/26/2002 | 68,914 | (3) | — | 53.80 | 2/26/2012 | — | — | 0 | — | |||||||||||
12/4/2000 | 70,000 | — | 53.67 | 12/4/2010 | — | — | 0 | — | ||||||||||||
Albert Benchimol | 2/27/2009 | — | 18,420 | * | 61.90 | 2/27/2019 | 2,456 | 183,365 | 0 | — | ||||||||||
5/23/2008 | 4,950 | * | 10,050 | * | 73.66 | 5/23/2018 | — | — | 0 | — | ||||||||||
2/27/2008 | 26,506 | * | 53,817 | * | 77.92 | 2/27/2018 | 10,710 | 799,609 | 0 | — | ||||||||||
2/23/2007 | 45,780 | * | 23,584 | * | 71.35 | 2/23/2017 | 17,341 | 1,294,679 | 0 | — | ||||||||||
2/24/2006 | 21,385 | * | — | 61.20 | 2/24/2016 | — | — | 0 | — | |||||||||||
2/10/2005 | 42,800 | — | 62.91 | 2/10/2015 | — | — | 0 | — | ||||||||||||
2/24/2004 | 68,000 | — | 55.63 | 2/24/2014 | — | — | 0 | — | ||||||||||||
2/25/2003 | 42,500 | — | 49.68 | 2/25/2013 | — | — | 0 | — | ||||||||||||
2/26/2002 | 21,750 | — | 53.80 | 2/26/2012 | — | — | 0 | — | ||||||||||||
Bruno Meyenhofer | 2/27/2008 | — | — | — | — | 10,710 | 799,609 | 0 | — | |||||||||||
2/23/2007 | 45,780 | * | 23,584 | * | 71.35 | 2/23/2017 | 17,341 | 1,294,679 | 0 | — | ||||||||||
2/24/2006 | 21,385 | * | — | 61.20 | 2/24/2016 | — | — | 0 | — | |||||||||||
2/10/2005 | 42,800 | — | 62.91 | 2/10/2015 | — | — | 0 | — | ||||||||||||
2/24/2004 | 68,000 | — | 55.63 | 2/24/2014 | — | — | 0 | — | ||||||||||||
2/25/2003 | 42,500 | — | 49.68 | 2/25/2013 | — | — | 0 | — | ||||||||||||
2/26/2002 | 21,750 | — | 53.80 | 2/26/2012 | — | — | 0 | — | ||||||||||||
2/27/2001 | 50,000 | ** | — | 51.39 | 2/27/2011 | — | — | 0 | — | |||||||||||
Costas Miranthis | 2/27/2009 | — | 18,420 | * | 61.90 | 2/27/2019 | 2,456 | 183,365 | 0 | — | ||||||||||
9/5/2008 | 4,950 | * | 10,050 | * | 68.30 | 9/5/2018 | — | — | 0 | — | ||||||||||
2/27/2008 | 15,904 | * | 32,290 | * | 77.92 | 2/27/2018 | 6,426 | 479,765 | 0 | — | ||||||||||
2/23/2007 | 6,930 | * | 3,570 | * | 71.35 | 2/23/2017 | 2,625 | 195,983 | 0 | — | ||||||||||
2/24/2006 | 7,500 | * | — | 61.20 | 2/24/2016 | — | — | 0 | — | |||||||||||
2/24/2005 | 14,000 | — | 62.70 | 2/24/2015 | — | — | 0 | — | ||||||||||||
2/24/2004 | 11,000 | — | 55.63 | 2/24/2014 | — | — | 0 | — | ||||||||||||
2/25/2003 | 5,000 | — | 49.68 | 2/25/2013 | — | — | 0 | — | ||||||||||||
5/27/2002 | 9,200 | — | 51.17 | 5/27/2012 | — | — | 0 | — | ||||||||||||
Theodore C. Walker | 2/27/2009 | — | 2,400 | * | 61.90 | 2/27/2019 | 320 | 23,891 | 0 | — | ||||||||||
1/2/2009 | — | 10,000 | * | 70.07 | 1/2/2019 | — | — | 0 | — | |||||||||||
2/27/2008 | 3,960 | * | 8,040 | * | 77.92 | 2/27/2018 | 1,850 | 138,121 | 0 | — | ||||||||||
7/5/2007 | 6,600 | * | 3,400 | * | 78.24 | 7/5/2017 | 2,625 | 195,983 | 0 | — | ||||||||||
2/23/2007 | 6,930 | * | 3,570 | * | 71.35 | 2/23/2017 | — | — | 0 | — | ||||||||||
2/24/2006 | 2,500 | * | — | 61.20 | 2/24/2016 | — | — | 0 | — | |||||||||||
2/24/2005 | 4,175 | — | 62.70 | 2/24/2015 | — | — | 0 | — | ||||||||||||
2/24/2004 | 9,000 | — | 55.63 | 2/24/2014 | — | — | 0 | — | ||||||||||||
2/25/2003 | 7,000 | — | 49.68 | 2/25/2013 | — | — | 0 | — | ||||||||||||
7/1/2002 | 7,500 | — | 48.43 | 7/1/2012 | — | — | 0 | — | ||||||||||||
Scott Moore | 2/27/2008 | — | — | — | — | 10,710 | 799,609 | 0 | — | |||||||||||
2/23/2007 | — | — | — | — | 17,341 | 1,294,679 | 0 | — | ||||||||||||
2/24/2006 | — | — | — | — | — | — | 0 | — | ||||||||||||
2/24/2004 | 68,000 | — | 55.63 | 2/24/2014 | — | — | 0 | — | ||||||||||||
2/25/2003 | 42,500 | — | 49.68 | 2/25/2013 | — | — | 0 | — | ||||||||||||
2/26/2002 | 21,750 | — | 53.80 | 2/26/2012 | — | — | 0 | — |
Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | |||||||||||||||||||||
Costas Miranthis | 02/29/2012 | 0 | 57,000 | * | 63.44 | 02/28/2022 | 7,600 | 611,724 | ||||||||||||||||||||
02/17/2011 | 22,802 | * | 46,297 | * | 81.94 | 02/17/2021 | 9,213 | 741,554 | ||||||||||||||||||||
05/12/2010 | 33,000 | * | 17,000 | * | 75.54 | 05/12/2020 | 0 | 0 | ||||||||||||||||||||
02/26/2010 | 44,938 | * | 23,151 | * | 79.61 | 02/26/2020 | 9,079 | 730,769 | ||||||||||||||||||||
02/27/2009 | 18,420 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | |||||||||||||||||||||
09/05/2008 | 15,000 | * | 0 | 68.30 | 09/05/2018 | 0 | 0 | |||||||||||||||||||||
02/27/2008 | 48,194 | * | 0 | 77.92 | 02/27/2018 | 0 | 0 | |||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | |||||||||||||||||||||
02/24/2006 | 7,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | |||||||||||||||||||||
02/24/2005 | 14,000 | 0 | 62.70 | 02/24/2015 | 0 | 0 | ||||||||||||||||||||||
02/24/2004 | 11,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | ||||||||||||||||||||||
William Babcock | 02/29/2012 | 0 | 28,500 | * | 63.44 | 02/28/2022 | 3,800 | 305,862 | ||||||||||||||||||||
02/17/2011 | 4,750 | * | 9,645 | * | 81.94 | 02/17/2021 | 5,470 | 440,280 | ||||||||||||||||||||
10/01/2010 | 8,250 | * | 4,250 | * | 80.45 | 10/01/2020 | 0 | 0 | ||||||||||||||||||||
02/26/2010 | 6,732 | * | 3,468 | * | 79.61 | 02/26/2020 | 1,360 | 109,464 | ||||||||||||||||||||
02/27/2009 | 2,763 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | |||||||||||||||||||||
08/04/2008 | 9,375 | * | 0 | 69.50 | 08/04/2018 | 0 | 0 | |||||||||||||||||||||
Emmanuel Clarke | 02/29/2012 | 0 | 28,500 | * | 63.44 | 02/28/2022 | 3,800 | 305,862 | ||||||||||||||||||||
02/17/2011 | 6,334 | * | 12,860 | * | 81.94 | 02/17/2021 | 6,142 | 494,370 | ||||||||||||||||||||
09/01/2010 | 8,250 | * | 4,250 | * | 75.80 | 09/01/2020 | 0 | 0 | ||||||||||||||||||||
02/26/2010 | 7,920 | * | 4,080 | * | 79.61 | 02/26/2020 | 1,600 | 128,784 | ||||||||||||||||||||
02/27/2009 | 2,763 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | |||||||||||||||||||||
03/31/2008 | 12,000 | 0 | 75.85 | 03/31/2018 | 0 | 0 | ||||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | |||||||||||||||||||||
02/24/2006 | 7,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | |||||||||||||||||||||
09/30/2005 | 2,000 | 0 | 63.96 | 09/30/2015 | 0 | 0 | ||||||||||||||||||||||
02/24/2005 | 2,500 | 0 | 62.70 | 02/24/2015 | 0 | 0 | ||||||||||||||||||||||
02/24/2004 | 2,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | ||||||||||||||||||||||
Marvin Pestcoe | 02/29/2012 | 0 | 28,500 | * | 63.44 | 02/28/2022 | 3,800 | 305,862 | ||||||||||||||||||||
02/17/2011 | 4,750 | * | 9,645 | * | 81.94 | 02/17/2021 | 5,470 | 440,280 | ||||||||||||||||||||
10/01/2010 | 8,250 | * | 4,250 | * | 80.45 | 10/01/2020 | 0 | 0 | ||||||||||||||||||||
02/26/2010 | 6,732 | * | 3,468 | * | 79.61 | 02/26/2020 | 1,360 | 109,466 | ||||||||||||||||||||
02/27/2009 | 2,763 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | |||||||||||||||||||||
02/27/2008 | 12,000 | * | 0 | 77.92 | 02/27/2018 | 0 | 0 | |||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | |||||||||||||||||||||
02/24/2006 | 3,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | |||||||||||||||||||||
02/24/2005 | 11,500 | 0 | 62.70 | 02/24/2015 | 0 | 0 | ||||||||||||||||||||||
Theodore C. Walker | 02/29/2012 | 0 | 28,500 | * | 63.44 | 02/28/2022 | 3,800 | 305,862 | ||||||||||||||||||||
02/17/2011 | 22,802 | * | 46,297 | * | 81.94 | 02/17/2021 | 9,213 | 741,554 | ||||||||||||||||||||
02/26/2010 | 44,938 | * | 23,151 | * | 79.61 | 02/26/2020 | 9,079 | 730,769 | ||||||||||||||||||||
02/27/2009 | 2,400 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | |||||||||||||||||||||
01/02/2009 | 10,000 | * | 0 | 70.07 | 01/02/2019 | 0 | 0 | |||||||||||||||||||||
02/27/2008 | 12,000 | * | 0 | 77.92 | 02/27/2018 | 0 | 0 | |||||||||||||||||||||
07/05/2007 | 10,000 | * | 0 | 78.24 | 07/05/2017 | 0 | 0 | |||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | |||||||||||||||||||||
02/24/2006 | 2,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | |||||||||||||||||||||
02/24/2005 | 4,175 | 0 | 62.70 | 02/24/2015 | 0 | 0 | ||||||||||||||||||||||
02/24/2004 | 9,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 |
* | SSARs |
(1) | All grants of options and SSARs vest 33% on the first anniversary of the grant date, 33% on the second anniversary and 34% on the third anniversary. |
(2) | The market value of |
20092012 Option Exercises and Shares Vested
The following table shows all options exercised and RSUs that vested in 2012.
Option Awards | Stock Awards | |||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
Patrick A. Thiele | 0 | 0 | 52,582 | 3,826,272 | (1) | |||||
Albert Benchimol | 0 | 0 | 5,000 | 323,550 | (2) | |||||
Bruno Meyenhofer | 4,800 | 156,900 | (3) | 5,000 | 323,550 | (2) | ||||
Costas Miranthis | 0 | 0 | 1,250 | 80,888 | (2) | |||||
Theodore C. Walker | 0 | 0 | 1,250 | 80,888 | (2) | |||||
Scott Moore | 50,000 | 916,734 | (4) | 5,000 | 323,550 | (2) |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||
Costas Miranthis(2) | 14,200 | 274,663 | 2,456 | 159,591 | (1) | |||||||||||
William Babcock | 0 | 0 | 368 | 23,913 | (1) | |||||||||||
Emmanuel Clarke(3) | 8,000 | 171,190 | 700 | 45,486 | (1) | |||||||||||
Marvin Pestcoe(4) | 14,500 | 293,380 | 368 | 23,913 | (1) | |||||||||||
Theodore C. Walker(5) | 14,500 | 356,566 | 320 | 20,794 | (1) |
(1) | The |
(2) |
(3) | Mr. |
(4) | Mr. |
(5) | Mr. Walker’s aggregate exercise price was $710,985. |
2009 Nonqualified2012 Non-Qualified Deferred Compensation
The following table shows the details of the NEOs’ non-qualified deferred compensation plans during 2012. It excludes contributions into 401K plans.
Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(1) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions | Aggregate Balance at ($)(2) | |||||
Patrick A. Thiele | 0 | 0 | 235,925 | 0 | 1,711,310 | |||||
Albert Benchimol | 13,310 | 36,603 | 145,949 | 0 | 894,610 | |||||
Bruno Meyenhofer(3)(4) | 22,860 | 45,720 | 75,489 | 0 | 3,918,513 | |||||
Costas Miranthis(3)(4) | 20,422 | 92,936 | 85,749 | 0 | 652,348 | |||||
Theodore C. Walker | 11,200 | 30,800 | 135,414 | 0 | 699,773 | |||||
Scott Moore | 0 | 0 | 13,387 | 0 | 0 |
Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(1) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions | Aggregate Balance at ($)(2) | |||||||||||||||
Costas Miranthis | 0 | 150,000 | 76,125 | 0 | 1,116,540 | |||||||||||||||
William Babcock | 12,319 | 33,878 | 14,450 | 0 | 168,261 | |||||||||||||||
Emmanuel Clarke(3) | 22,250 | 44,499 | 14,354 | 0 | 509,520 | |||||||||||||||
Marvin Pestcoe | 12,319 | 33,878 | 78,621 | 0 | 1,121,695 | |||||||||||||||
Theodore C. Walker | 13,518 | 37,173 | 129,975 | 0 | 1,025,248 |
(1) | The |
(2) | Of this amount, the following was disclosed in the Summary Compensation Table of the |
2011 ($) | 2010 ($) | 2009 ($) | ||||
Costas Miranthis | 150,000 | 125,260* | 113,358** | |||
William Babcock | 44,704 | 33,380 | 0 | |||
Emmanuel Clarke | 63,338* | 54,527* | 0 | |||
Marvin Pestcoe | 44,704 | 40,688 | 0 | |||
Theodore C. Walker | 50,033 | 45,813 | 42,000 |
* |
(3) | The contributions made by and on behalf of Mr. |
Francs. The applicable |
We have three defined contribution plans in Bermuda:Mr. Miranthis is eligible for benefits under the Bermuda Non-Registered Pension Plan, the Registered Pension Plan and the Deferred Compensation Plan. The three plans were established to address the varying needs
of our employee population. The Registered Pension Plan applies only to Bermudians, spouses of Bermudians and permanent residents of Bermuda. Due to Section 457A of the Internal Revenue Code, as of January 1, 2009 PartnerRe in Bermuda was no longer able to defer compensation for U.S. taxpayer employees without adverse consequences to U.S. taxpayer employees. All of our U.S. taxpayer employees have opted out of the Deferred Compensation Plan as of January 1, 2009 and are now participating in our Retirement Allowance Plan. The Retirement Allowance Plan pays 15% of monthly base salary toUnder this plan, members each month via the local payroll. The vesting schedule is still aligned with our defined contribution plans.
Investment options are the same for the two defined contribution plans, while employer contributions and vesting schedules are the same for all three plans. PartnerRe contributes 15% of annual base salary each year. Employees are vested 50% after one year of service
and 100% at the end of two years.
Both Mr. Thiele and Mr. Benchimol are eligible for benefits under the Bermuda Deferred Compensation Plan, based on the contributions made prior to January 1, 2009. Payouts and withdrawals may be made only upon the employee’s separation from service. Payout will commence six monthsimmediately after the employee ceases to work for PartnerRe, and may be in the form of a lump sum or installments, as determined by prior election.
payment.
Mr. Miranthis was promoted to the position of Deputy Chief Executive Officer, Global and joinedClarke is enrolled in the Swiss Employee Plan (described below) as of September 1, 2007. SinceNon-Qualified Defined Contribution Plan. Under this date, we have continued to makeplan, employer contributions equal to 10% of the employee’s insured salary and employee contributions equal to 5% of his base salary into the Non-Registered Pension Plan to coveremployee’s insured salary. As required under Swiss law, the shortfall between the Swiss Plan and his Bermuda benefit.
Under the laws of Switzerland, our employee pension fund is required to have a guaranteed rate of return for the compulsory part. We have a non-qualified defined contribution plan for retirementpart and a non-qualified defined benefit arrangement for disability and death, combined into one plan. For the retirement part, the plan requires an employer contribution equal to 10% of the employee’s insured salary and an employee contribution equal to 5% of the employee’s insured salary. As required under Swiss law, all contributions to this plan vest immediately. The plan is governed internally by a pension committee comprising both employer representatives (designated by us)PartnerRe) and employee representatives. The committee selects
Messrs. Babcock, Pestcoe and manages the plan administrator, makes investment decisions, decides hardship withdrawals and communicates with employees about plan-related matters. Mr. Miranthis is enrolledWalker participate in the Swiss EmployeeU.S. Non-Qualified Defined Contribution Plan. As of April 1, 2010 Mr. Meyenhofer is no longer eligible for the Swiss Employee Plan.
In addition to our qualified defined contribution plan for all U.S.-based employees, we have a non-qualified defined contribution plan for U.S.-based senior management. Under the non-qualifiedthis plan, eligible participants receive an employer based contribution equal to 3% of base salary as well as an employer match equal to 200% of the first 4% of base salary upon exceeding the 20092012 Internal Revenue Code compensation maximum of $245,000.$250,000. All contributions to the non-qualified plan are vested immediately. Salary and annual incentive deferral elections, as well as distribution payments, are intended to comply with Section 409A of the Internal Revenue Code. Mr. Benchimol and Mr. Walker are enrolled in the U.S. plans. As of March 31, 2009, Mr. Moore was no longer eligible for the U.S. plans.
While employed in Bermuda, Mr. Benchimol received a pension benefit equivalent to 15% of base salary. Under the terms of his U.S. employment agreement, to maintain this level of pension contribution while he is employed in the U.S., Mr. Benchimol receives a retirement allowance which supplements his U.S. pension contribution on an equivalent after-tax basis. The retirement allowance is adjusted to reflect annual base salary increases approved for Mr. Benchimol.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
General
Each NEO employment agreement (i) sets forth termination scenarios for death, disability, retirement, termination by us for or without cause and termination by the NEO with or without good reason (in accordance with Swiss law, Mr. Clarke’s employment agreement contemplates immediate termination for valid reason), and provides the detail of what each NEO would receive upon each termination scenario; (ii) contains confidentiality provisions as well as non-competition and non-solicitation covenants which are in effect during and after employment; and (iii) incorporates our Change in Control Policy (the “Policy”).
Termination Provisions
This section describes for our NEOs the consequences of a termination of employment for retirement, death, disability, NEO voluntary termination without good reason or a termination by PartnerRe for cause, NEO termination for good reason or a Company termination without cause.
Each NEO employment agreement (other than for Mr. Clarke due to Swiss specifications) provides, in lieu of the twelve-month notice period applicable if the NEO’s employment is voluntarily terminated by the NEO without good reason or by the Company without cause, that PartnerRe may terminate the NEO’s employment immediately or upon such date as it determines appropriate provided that it pays the NEO his base salary, benefits and a prorated bonus based on the Average Incentive (as defined below) (together, the “Payments in lieu of notice”). The descriptions under “Voluntary Termination by the NEO without good reason or termination for cause by PartnerRe”and “Termination by the NEO for good reason or by PartnerRe without cause” do not include the Payments in lieu of notice.
TheAverage Incentive is the greater of the target annual cash incentive for the current year and the average of the annual cash incentive received by the NEO for the three fiscal years prior to termination date.
Executive Employment AgreementsTermination for retirement
Each NEO employment agreement provides where the NEO’s employment terminates as a result of his retirement on or after attaining the retirement age (as defined by the legislation in force in the NEO’s country of employment in the year of retirement), that the NEO is entitled to an amount equal to the Average Incentive prorated based on the number of days elapsed in the current fiscal year of the date of termination (the “Pro Rata Average Incentive”). The Board may at its sole discretion approve the granting of any other payments or benefits. Subject to the application of Section 409A of the Internal Revenue Code of 1986, as amended, such payments shall be made in lump sum within 30 days after the date on which the employment terminates as a result of the retirement.
Pursuant to his employment agreement, if Mr. Thiele,Walker’s employment agreement terminates as a result of his retirement before attaining age 65, but subject to having already attained age 55, Mr. Benchimol,Walker is eligible to certain medical and dental coverage paid for by the Company.
Under the PartnerRe’s Executive Stock Option Agreement, Executive Restricted Share Unit Award Agreement and Executive Share-Settled Share Appreciation Right Agreement (together the “PartnerRe Equity Agreements”), any unvested equity awards held by an NEO as of his retirement date will continue to vest under the original vesting provisions for up to 36 months following the date of retirement. Any vested equity awards (including those that vest post-retirement) will remain exercisable for the remainder of their original term. The continuation of the vesting and exercise periods following retirement is subject to compliance with post retirement covenants (non-competition, non-solicitation of employees, and non-disclosure of confidential information for 36 months after the retirement).
Termination for death
Pursuant to their employment agreements, upon an NEO’s death, his dependents are entitled to receive within 30 days of the date of termination, in aggregate:
Six months base salary;
50% of the target annual cash incentive;
A Pro Rata Average Incentive; and
Immediate vesting of all equity awards, with all vested equity awards remaining exercisable for 12 months following the date of termination of employment.
Other benefits:
For Mr. Miranthis’ and Mr. Babcock’s dependents: housing and car continuation for up to six months; and
For Mr. Clarke’s dependents: housing and school allowance for up to six months.
Termination for disability
Pursuant to their employment agreements, each NEO whose employment is terminated for disability is entitled to:
The amount of any difference between the level of long-term disability benefits required to be maintained under PartnerRe’s benefit plans and the amount actually paid in satisfaction of such benefits by insurance or any governmental authority for so long as the NEO remains entitled to such benefits pursuant to PartnerRe’s benefit plans; Such payment shall be made not less frequently than monthly;
A Pro Rata Average Incentive in lump sum;
Immediate vesting of all equity awards, with all vested equity awards remaining exercisable for 12 months following the date of termination of employment; and
Health and welfare benefit continuation for so long as the NEO remains entitled to such benefits pursuant to PartnerRe’s benefit plans.
Other benefits:
Effective February 2013, in case of long term disability and subject to conditions, Mr. Miranthis would receive on a monthly basis the difference between 70% of his monthly base salary and the level of long-term disability benefits required to be maintained under PartnerRe’s benefit plans for five years at which time a lump sum of $5 million would be paid. The Company has subscribed to an insurance policy to cover such payments. The premium for 2013 is $35,000;
For Mr. Miranthis and Mr. Walker all have executive employment agreements. Under these agreements, “termination” is defined as death, disability,Babcock: housing and terminationcar continuation for up to six months; and
For Mr. Clarke: housing and school allowance for up to six months.
Voluntary Termination by usthe NEO without good reason or termination for cause or by PartnerRe (or valid reason with respect to Mr. Clarke’s employment agreement)
The NEO will only receive a lump sum corresponding to accrued base salary, benefits and annual cash incentive earned in respect of prior completed fiscal year but not paid (the “Accrued Benefits”). All unvested equity awards will be forfeited and vested equity awards will remain exercisable for three months following the executive for good reason. The agreements set forth compensation for each defined typedate of termination as well as for termination for any other reason. The termination compensation was compared to competitive benchmarks and recommended by PricewaterhouseCoopers.
Severance benefits under the executive employment agreements are subject to post-termination restrictions. These restrictions prevent the executive from soliciting business or PartnerRe employees for the benefit of competitors (for further details, see “Post-retirement Conditions” on page 44).
Mr. Moore’s executive employment agreement entitled him to post-retirement benefits consisting of continued hospital and medical coverage. There are no contractual agreements for post-retirement benefits for any of the other Named Executive Officers.
Mr. Meyenhofer does not have an executive employment agreement and therefore does not have specific rights or responsibilities upon severance.
employment.
Termination by the NEO for good reason or by PartnerRe without cause (without a change in control)
The Chief Executive Officer is immediately entitled to the following payments and benefits, to be paid within a reasonable period as determined by the Board and/or as is administratively practical:
Twelve months base salary;
A Pro Rata Average Incentive; and
An amount equal to the Average Incentive.
Other benefits:
health and welfare benefit continuation for up to twelve months; and
housing for up to six months.
The other NEOs are entitled to:
Twelve months base salary to be paid in part as a lump sum equal to six months’ base salary on the first business day of the seventh month after the date of termination and the remainder in equal installments in accordance with the Company’s normal payroll practices, commencing with the first payroll after the sixth month following the date of termination (or for Mr. Clarke, in accordance with normal payroll practices or within such reasonably practical time period);
An amount equal to the target annual cash incentive prorated based on the number of days elapsed in the current fiscal year as of the date of termination (the “Pro Rata Target Annual Cash Incentive”) to be paid on the first business day of the seventh month after the date of termination (or for Mr. Clarke, in accordance with normal payroll practices or within such reasonably practical time period);
An amount equal to the target annual cash incentive to be paid in part as a lump sum equal to 6/12ths of such target annual cash incentive on the first business day of the seventh month after the date of termination and the remainder in six monthly installments, commencing after the sixth month following the date of termination (or for Mr. Clarke, in accordance with normal payroll practices or within such reasonably practical time period); and
Other benefits: health and welfare benefit continuation for up to 12 months.
Pursuant to PartnerRe Equity Agreements, all unvested equity awards will be forfeited. Vested equity awards will remain exercisable for three months following the date of termination of employment.
Change in Control Policy
The PartnerRe Ltd. Change in Control Policy has two objectives: to motivate management to act in the best interests of shareholders and to protect compensation and benefits in order to retain key executives during a change in control transaction. Each of the Named Executive Officers has an individual change in control agreement governed by this policy.
The policy’s definition of a change in control is consistent with the definition in the shareholder-approved 2005 Employee Equity Plan as amended and restated.
Certain senior employees, including the Named Executive Officers,NEOs, are eligible for severance in the form of cash compensation and benefits if two thingsevents occur:
1. | There has been a change in control event, as defined in the |
2. | The employee is terminated by PartnerRe for reasons other than death, disability or for cause, or the employee terminates with good |
The Compensation Committee recognizes that even if key executives are not terminated as a resultUpon the occurrence of a change in control event, they may want to leaveand a qualifying termination described above, the new organization for other reasons. However, the loss of key employees during the initial integration phase of a change in control may be detrimental to the new organization. Moreover, the acquiring company is likely to pay more if its management is confident of our assistance during the transition. Therefore, the change in control policy provides an incentive to key executives to remain with the new organization during the critical first year. Specifically, if a NamedChief Executive Officer or other key executive remains in his or her position during the first 12 months following a change in control, then during a 30-day period following the first anniversary of the change in control, the executive may terminate his or her employment without good reason and still beis entitled to the same severance cash compensationfollowing payments and benefits, thatto be paid within a reasonable period as determined by the Board and/or as is administratively practical:
Three times base salary;
An amount equal to three times the Average Incentive;
A Pro Rata Target Annual Cash Incentive;
Health and welfare benefit continuation for three years;
Housing for up to 18 months; and
Immediate vesting of all equity awards.
The other NEOs are entitled to:
Two times base salary; to be paid in part as a lump sum equal to six months’ base salary on the first business day of the seventh month after the date of termination and the remainder in equal installments in accordance with the Company’s normal payroll practices, commencing with the first payroll after the sixth month following the date of termination (or for Mr. Clarke, in accordance with normal payroll practices or within such reasonably practical time period);
An amount equal to two times the Average Incentive to be paid in part as a lump sum equal to 6/12ths of such target annual cash incentive on the first business day of the seventh month after the date of
termination and the remainder in six monthly installments, commencing after the sixth month following the date of termination (or for Mr. Clarke, in accordance with normal payroll practices or within such reasonably practical time period); |
A Pro Rata Target Annual Cash Incentive to be paid on the first business day of the seventh month after the date of termination (or for Mr. Clarke, in accordance with normal payroll practices or within such reasonably practical time period);
Health and welfare benefit continuation for two years;
For Mr. Clarke: housing and school allowance for up to 12 months;
If an excise tax is triggered under U.S. Federal tax law, either a reduction of any payments and benefits to the extent required to prevent the excise tax or the payments and benefits as is with no reduction, depending on which result would have been paid if PartnerRe had terminatedbe better for the executive’s employment.NEO; this option could apply to Mr. Babcock, Mr. Pestcoe and Mr. Walker; and
Immediate vesting of all equity awards.
Potential Payments upon Termination or Change in Control
The tables below reflectfollowing table reflects the amount of compensation that would be paid to each of our Named Executive OfficerNEOs in the event such executive’sNEO’s employment is terminated under various scenarios, including disability, or death, for cause or without good reason (without a change in control) and in connection with a change of control. The amounts shown assume that a termination was effectivehave been calculated as if the NEO’s employment had been terminated as of December 31, 2009; thus, amounts earned through that date are included.2012, and using the closing market price of our common shares on December 31, 2012, ($80.49). The amounts shown in the tables are only estimates of the amounts that would be paid out to the executivesNEOs upon their termination. The actual amounts to be paid out can only be determined at the time of an executive’s separation.NEO’s termination.
The table does not include the following items:
Payments Made UponAll Accrued Benefits;
The effects of a Changeretirement since none of our NEOs attained retirement age as of December 31, 2012;
Additional payments to the NEOs under the PartnerRe’s benefit plans (plans providing, among other things, disability insurance, death insurance and medical insurance) which do not discriminate in Controlscope, terms or operation in favor of the NEOs and are generally available to all employees;
Patrick A. ThieleThe additional coverage in case of long-term disability in favor of Mr. Miranthis since the Company only subscribed to an insurance policy in February 2013;
The following table shows the potential payments uponeffects of a NEO voluntary termination or a changetermination for cause by PartnerRe since the NEO would only be entitled to Accrued Benefits; and
In connection with the NEO termination without good reason or the termination by PartnerRe without cause, the Payments in control for Patrick Thiele.lieu of notice since it is assumed that PartnerRe has not exercised its option to terminate the employment sooner.
Patrick A. Thiele, President & Chief Executive Officer & Director | Death (1) | Disability (2)(3)(4) | Executive In Control)(5) | Executive Voluntary Termination or Company Termination for Cause(6) | Executive or Company | ||||||||||
Base salary | $ | 500,000 | $ | 2,838,920 | $ | 1,000,000 | $ | 0 | $ | 3,000,000 | |||||
Annual incentive—target | $ | 625,000 | $ | 0 | $ | 1,400,000 | $ | 0 | $ | 6,145,950 | |||||
Annual incentive—pro rata | $ | 1,400,000 | $ | 1,400,000 | $ | 1,400,000 | $ | 0 | $ | 1,250,000 | |||||
Housing continuance | $ | 0 | $ | 60,000 | $ | 60,000 | $ | 0 | $ | 60,000 | |||||
Car continuance(8) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||
Health & welfare benefit continuance | $ | 0 | $ | 209,279 | $ | 0 | $ | 0 | $ | 95,583 | |||||
Equity Awards | |||||||||||||||
Options/Share Appreciation Rights | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||
Restricted shares/Restricted Share Units | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 3,144,754 | |||||
Cash customization of equity award | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,418,149 | |||||
Total | $ | 2,525,000 | $ | 4,508,199 | $ | 3,860,000 | $ | 0 | $ | 15,114,436 |
Death ($) Disability ($) Executive ($) Executive (With Change in Costas Miranthis William Babcock Emmanuel Clarke(4) Marvin PestcoeNEOs Compensation Elements
Termination for
Good Reason or
PartnerRe
Termination
Without Cause
(Without Change
in Control)
Termination for
Good Reason or
PartnerRe
Termination
Without Cause
Control)
($) Base Salary 500,000 0 1,000,000 3,000,000 Cash Incentive Pro Rata Earned(1) 1,250,000 1,250,000 1,250,000 1,250,000 Cash Incentive on Termination(2) 625,000 0 1,250,000 3,750,000 Other Benefits: Housing 96,000 96,000 96,000 288,000 Car 792 792 0 0 Health and Welfare(3) 0 1,308,676 23,488 81,561 Equity Awards: Options/SSARs 1,076,373 1,076,373 0 1,076,373 RSUs 2,084,047 2,084,047 0 2,084,047 Total 5,632,212 5,815,888 3,619,488 11,529,981 Base Salary 281,036 0 562,071 1,124,142 Cash Incentive Pro Rata Earned(1) 562,071 562,071 562,071 562,071 Cash Incentive on Termination(2) 281,036 0 562,071 1,124,142 Other Benefits: Housing 102,000 102,000 0 0 Car 7,500 7,500 0 0 Health and Welfare(3) 0 2,277,743 25,145 54,062 Equity Awards: Options/SSARs 489,147 489,147 0 489,147 RSUs 855,609 855,609 0 855,609 Total 2,578,399 4,294,070 1,711,358 4,209,173 Base Salary 340,976 0 681,952 1,363,903 Cash Incentive Pro Rata Earned(1) 681,952 681,952 681,952 681,952 Cash Incentive on Termination(2) 340,976 0 681,952 1,363,903 Other Benefits: Housing 50,648 50,648 0 101,297 School Allowance 60,500 60,500 0 121,000 Health and Welfare(3) 0 869,619 7,319 15,737 Equity Awards: Options/SSARs 509,448 509,448 0 509,448 RSUs 929,016 929,016 0 929,016 Total 2,913,516 3,101,183 2,053,175 5,086,256 Base Salary 281,036 0 562,071 1,124,142 Cash Incentive Pro Rata Earned(1) 679,278 679,278 562,071 562,071 Cash Incentive on Termination(2) 281,036 0 562,071 1,358,557 Other Benefits: Health and Welfare(3) 0 554,135 15,894 34,172 Equity Awards: Options/SSARs 489,147 489,147 0 489,147 RSUs 855,609 855,609 0 855,609 Total 2,586,106 2,578,169 1,702,107 4,423,698
Death ($) Disability ($) Executive ($) Executive (With Change in Theodore C. WalkerNEOs Compensation Elements
Termination for
Good Reason or
PartnerRe
Termination
Without Cause
(Without Change
in Control)
Termination for
Good Reason or
PartnerRe
Termination
Without Cause
Control)
($) Base Salary 295,061 0 590,121 1,180,242 Cash Incentive Pro Rata Earned(1) 590,121 590,121 590,121 590,121 Cash Incentive on Termination(2) 295,061 0 590,121 1,180,242 Other Benefits: Health and Welfare(3) 0 818,940 25,145 54,062 Equity Awards: Options/SSARs 506,298 506,298 0 506,298 RSUs 1,778,185 1,778,185 0 1,778,185 Total 3,464,726 3,693,544 1,795,508 5,289,150
(1) |
(2) |
(3) |
Mr. Thiele’s monthly base salary | $ | 83,333 | |
Two-thirds of monthly base salary | $ | 55,556 | |
Portion paid by insurance | $ | 15,000 | |
Portion paid by us | $ | 40,556 | |
Number of months to age 65 | 70 | ||
Total paid by us | $ | 2,838,920 |
Annual Incentive Calculation: | |||
2006 Annual Incentive | $ | 2,245,950 | |
2007 Annual Incentive | $ | 2,500,000 | |
2008 Annual Incentive | $ | 1,400,000 | |
Annual Average | $ | 2,048,650 |
Albert Benchimol
The following table shows the potential payments upon termination or a change in control for Albert Benchimol.
Albert Benchimol, Executive Vice President, Chief Financial Officer and Chief Executive | Death (1) | Disability (2)(3) | Executive (4) | Executive (5) | Executive or Company (6) | ||||||||||
Base salary | $ | 291,000 | $ | 0 | $ | 582,000 | $ | 0 | $ | 1,164,000 | |||||
Annual incentive—target | $ | 405,309 | $ | 0 | $ | 810,617 | $ | 0 | $ | 1,621,234 | |||||
Annual incentive—pro rata | $ | 810,617 | $ | 810,617 | $ | 810,617 | $ | 0 | $ | 727,500 | |||||
Health & welfare benefit continuance | $ | 0 | $ | 754,197 | $ | 29,590 | $ | 0 | $ | 59,180 | |||||
Equity Awards | |||||||||||||||
Options/Share Appreciation Rights | $ | 147,709 | $ | 147,709 | $ | 147,709 | $ | 0 | $ | 147,709 | |||||
Restricted shares/Restricted Share Units | $ | 2,277,653 | $ | 2,277,653 | $ | 2,277,653 | $ | 0 | $ | 2,277,653 | |||||
Total | $ | 3,932,288 | $ | 3,990,176 | $ | 4,658,186 | $ | 0 | $ | 5,997,276 |
(4) |
Annual Incentive Calculation: | |||
2006 Annual Incentive | $ | 905,625 | |
2007 Annual Incentive | $ | 763,477 | |
2008 Annual Incentive | $ | 762,750 | |
Annual Average | $ | 810,617 |
Bruno Meyenhofer
Mr. Meyenhofer retired on March 31, 2010. The following table shows the potential payments upon termination or a change in control for Mr. Meyenhofer. Mr. Meyenhofer does not have an executive employment agreement and therefore does not have specific severance arrangements.
Bruno Meyenhofer Chairman, PartnerRe Global | Death (1) | Disability (2) | Retirement (3) | Executive (2) | Executive (2) | Executive (4) | ||||||||||||||||||||||
Base salary | $0 | $0 | $ | 0 | n/a | n/a | $ | 1,522,560 | ||||||||||||||||||||
Annual incentive—target | $0 | $0 | $ | 0 | n/a | n/a | $ | 2,525,856 | ||||||||||||||||||||
Annual incentive—pro rata | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 761,280 | ||||||||||||||||
Car continuance | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Equity Awards | ||||||||||||||||||||||||||||
Options/Share Appreciation Rights | $ | 0 | $ | 0 | $ | 78,063 | $ | 0 | $ | 0 | $ | 78,063 | ||||||||||||||||
Restricted shares/Restricted Share Units | $ | 0 | $ | 0 | $ | 2,094,288 | $ | 0 | $ | 0 | $ | 2,094,288 | ||||||||||||||||
Cash | $ | 0 | $ | 0 | $ | 645,074 | $ | 0 | $ | 0 | $ | 645,074 | ||||||||||||||||
Total | $ | 0 | $ | 0 | $ | 2,817,425 | $ | 0 | $ | 0 | $ | 7,627,121 |
Annual Incentive Calculation: | |||
2006 Annual Incentive | $ | 1,194,336 | |
2007 Annual Incentive | $ | 1,452,528 | |
2008 Annual Incentive | $ | 1,141,920 | |
Annual Average | $ | 1,262,928 |
Mr. Meyenhofer’s target annual incentive in the amount of $761,280 was paid in March 2010; he also received accelerated vesting on the unvested restricted share units on March 31, 2010.
Costas Miranthis
The following table shows the potential payments upon termination or a change in control for Costas Miranthis.
Costas Miranthis Chief Executive Officer, PartnerRe Global | Death (1) | Disability (2) | Executive (3) | Executive (4) | Executive (5) | ||||||||||||||||||
Base salary | $ | 0 | $ | 0 | $ | 321,600 | $ | 0 | $ | 1,286,400 | |||||||||||||
Annual incentive—target | $ | 0 | $ | 0 | $ | 455,772 | $ | 0 | $ | 1,823,086 | |||||||||||||
Annual incentive—pro rata | $ | 0 | $ | 0 | $ | 911,543 | $ | 0 | $ | 643,200 | |||||||||||||
Housing Continuance | $ | 0 | $ | 0 | $ | 54,962 | $ | 0 | $ | 54,962 | |||||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 0 | $ | 12,280 | $ | 0 | $ | 49,121 | |||||||||||||
Equity Awards | |||||||||||||||||||||||
Options/Share Appreciation Rights | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 205,509 | |||||||||||||
Restricted shares/Restricted Share Units | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 859,113 | |||||||||||||
Total | $ | 0 | $ | 0 | $ | 1,756,157 | $ | 0 | $ | 4,921,391 |
Annual Incentive Calculation: | ||||
2006 Annual Incentive | $ | 791,995 | * | |
2007 Annual Incentive | $ | 1,019,710 | ||
2008 Annual Incentive | $ | 922,925 | ||
Annual Average | $ | 911,543 |
Theodore C. Walker
The following table shows the potential payments upon termination or a change in control for Theodore C. Walker.
Theodore C. Walker Chief Executive Officer, PartnerRe U.S. | Death (1) | Disability (2)(3)(4) | Executive (5) | Executive (6) | Executive (7) | ||||||||||||||||||
Base salary | $ | 0 | $ | 0 | $ | 525,000 | $ | 0 | $ | 1,050,000 | |||||||||||||
Annual incentive—target | $ | 0 | $ | 0 | $ | 281,437 | $ | 0 | $ | 562,875 | |||||||||||||
Annual incentive—pro rata | $ | 0 | $ | 0 | $ | 281,437 | $ | 0 | $ | 525,000 | |||||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 1,459,004 | $ | 0 | $ | 0 | $ | 95,583 | |||||||||||||
Equity Awards | |||||||||||||||||||||||
Options/Share Appreciation Rights | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 49,958 | |||||||||||||
Restricted shares/Restricted Share Units | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 357,995 | |||||||||||||
Total | $ | 0 | $ | 1,459,004 | $ | 1,087,874 | $ | 0 | $ | 2,641,411 |
Annual Incentive Calculation: | |||
2006 Annual Incentive | $ | 113,812 | |
2007 Annual Incentive | $ | 552,000 | |
2008 Annual Incentive | $ | 178,500 | |
Annual Average | $ | 281,437 |
Scott Moore
Mr. Moore retired effective March 31, 2009 and his 2009 target annual incentive in the amount of $565,000 was paid in March 2009.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table presents fees for professional services rendered by the external auditors, Deloitte & Touche Ltd., the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the “Deloitte Entities”“Deloitte Entities”) for the fiscal years 20082012 and 2009.2011. All services of the Deloitte Entities were pre-approved by the Audit Committee. The Audit Committee has concluded that the Deloitte Entities remain independent despite providing the non-audit services listed below.
Year Ended December 31 | Year Ended December 31 | |||||||||||||||
2009 | 2008 | 2012 ($) | 2011 ($) | |||||||||||||
Audit Fees(1) | $ | 4,993,260 | $ | 6,494,810 | 5,474,668 | 5,882,280(3) | ||||||||||
Audit Related Fees(2) | $ | 582,740 | $ | 40,500 | ||||||||||||
Audit-Related Fees(2) | 98,600 | 82,050(3) | ||||||||||||||
Tax Fees | $ | 18,000 | $ | — | 0 | 0 | ||||||||||
All Other Fees | $ | — | $ | — | 0 | 25,000(4) | ||||||||||
Total | $ | 5,594,000 | $ | 6,535,310 | 5,573,268 | 5,989,330 |
(1) | These are fees for professional services rendered by the Deloitte Entities for the audit of our annual financial statements, the review of the financial statements included in our quarterly reports on Form 10-Q, audit services provided in connection with statutory and regulatory |
(2) | These are fees for |
(3) | These fees were an estimate at the time of the filing of the Proxy Statement in 2012 and were finalized by the Audit Committee thereafter. |
(4) | These are fees |
PROPOSAL 1 1—TO ELECT FOUR (4)TWO (2) DIRECTORS TO HOLD OFFICE
UNTIL THE ANNUAL GENERAL MEETING OF SHAREHOLDERS IN THE YEAR 20132016
OR UNTIL THEIR RESPECTIVE SUCCESSORS HAVE BEEN DULY ELECTED
(Item 1 on the Form of Proxy)
Mr. Rollwagen, Mr. Baumgartner, Mr.Messrs. Montupet and Mr. Stanca have been nominated to hold office for a three-year term that will expire at the Annual General Meeting in the year 20132016 or, alternatively, when their respective successors have been duly elected. The proxy will be voted in accordance with the directions thereon or, if no directions are indicated, the proxy will be voted for the election of the fourtwo nominees named above. The Board has proposed and recommended that each nominee be re-elected to hold office.
If any nominee shall, prior to the Annual General Meeting, become unavailable for election as a director, the persons named in the accompanying proxy will vote in their discretion for such nominee, if any, as may be recommended by the Board, or the Board may reduce the number of directors to eliminate the vacancy.
The presence, in person or by proxy, of the holders of 25 %25% of the outstanding common shares is required for a quorum for the election of directors at the Annual General Meeting. If a quorum is not present, the Annual General Meeting may be adjourned from time to time until a quorum is obtained. Election of directors at the Annual General Meeting will be decided by a simple majority of votes cast. For further information, see the answers to the questions “How many votes must be present or represented by proxy to hold the Annual General Meeting?” on page 2 and “How many votes are needed to approve each proposal?” on page 3.
Nominees
The ages, business experience, and directorships in other companies of the fourtwo nominees for election are set forth on pages 8-9. Allpage 7. Both of the nominees currently serve as directors of the Company.
THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF THE FOURTWO (2)
DIRECTORS NAMED ABOVE.
PROPOSAL 2 2—TO RE-APPOINT DELOITTE & TOUCHE LTD , THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AS OUR INDEPENDENT AUDITORS TO SERVE UNTIL THE 20112014 ANNUAL GENERAL MEETING, AND TO REFER DECISIONS ABOUT THE AUDITORS’ COMPENSATION TO THE BOARD OF DIRECTORS
(Item 2 on the Form of Proxy)
The Board of Directors proposes and recommends that the shareholders reappoint the firm of Deloitte & Touche Ltd. to serve as our independent registered public accounting firm until the 20112014 Annual General Meeting. Deloitte & Touche Ltd. has served as independent auditors from the inception of PartnerRe in August 1993 to the present. A representative of Deloitte & Touche Ltd. will attend the Annual General Meeting and will have an opportunity to make a statement, if he or she desires to do so, and to respond to appropriate questions. Shareholders at the Annual General Meeting will also will be asked to vote to refer decisions about the auditors’ compensation to the BoardBoard.
If you do not ratify the appointment of Directors.
Deloitte & Touche Ltd., the Audit Committee will reconsider its appointment. Even if you do ratify the appointment, the Audit Committee retains its discretion to reconsider its appointment if it believes necessary in the best interest of PartnerRe and its shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO REAPPOINT DELOITTE & TOUCHE LTD, THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AS OUR INDEPENDENT AUDITORS, TO SERVE UNTIL THE 20112014 ANNUAL GENERAL MEETING AND TO REFER DECISIONS ABOUT THE AUDITORS’ COMPENSATION TO THE BOARD.
PROPOSAL 3—TO APPROVE EXECUTIVE COMPENSATION DISCLOSED PURSUANT TO ITEM 402 OF REGULATION S-K (NON-BINDING ADVISORY VOTE)
(Item 3 on the Form of Proxy)
The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires our shareholders be provided with the opportunity to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers (“NEOs”) as disclosed in this Proxy Statement pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, in accordance with the compensation disclosure rules of the U.S. Securities and Exchange Commission.
As described in detail under the heading “Compensation Discussion and Analysis,” we seek to closely align the interests of NEOs with the interests of shareholders. Our compensation programs are designed to reward our NEOs for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total shareholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.
The Executive Summary in the Compensation Discussion and Analysis, which begins on page 29, describes PartnerRe’s primary business as assuming risk; we increase shareholder value by ensuring that our executives and employees have the skills to assess, value and manage risk appropriately, consistent with the long-term goals of PartnerRe. Our compensation policies emphasize, and are designed to reward these skills.
The following three principles drive our behavior and form the foundation for our compensation policies:
selling a product of value to selected reinsurance and capital markets clients while maintaining the financial ability to meet our commitments;
delivering an adequate return on shareholders’ capital within predetermined risk levels; and
following sound management and governance practices while providing a challenging work environment where employees can develop their careers and earn appropriate rewards for their performance.
PartnerRe’s Executive Total Compensation Program (which begins on page 29) guides the compensation for our Chief Executive Officer and all other NEOs. Our compensation program has many features designed to motivate and reward contributions and behaviors that produce optimal financial and non-financial results and ensure PartnerRe’s long-term success. These features are designed to ensure that the Executive Total Compensation Program:
clearly linking pay to performance;
achieving a balance between fixed compensation (base salary) and variable compensation (annual cash incentive and equity awards). Variable compensation supports a pay-for-performance approach and links predetermined objectives, including Company performance, with variable compensation, but is also capped to ensure that NEOs are not inappropriately motivated to maximize their variable earnings;
ensuring that long-term incentive awards in the form of equity are designed to align the NEOs’ interests with shareholders’ interests by emphasizing long-term business performance and overall PartnerRe success;
promoting retention of NEOs by providing long-term incentives; and
providing flexibility in form and structure of compensation to meet individual goals and time horizons.
Our compensation programs are designed to align the interests of management, employees, and shareholders by dissuading excessive risk-taking and ensuring that shareholders and employees share equally in the upside and downside of appropriate risk exposure.
The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our NEOs, as described in this Proxy Statement in accordance with the compensation disclosure rules of the U.S. Securities and Exchange Commission. The vote is advisory, which means that the vote is not binding on PartnerRe, our Board or the Compensation Committee of the Board. If there
is a significant vote against our NEO compensation as disclosed in this Proxy Statement, the Compensation Committee will evaluate whether any actions are necessary to address the concerns of shareholders.
The affirmative vote of a majority of the common shares present or represented and entitled to vote either in person or by proxy is required to approve this Proposal 3.
Accordingly, we ask our shareholders to vote annually at the Annual General Meeting on the following resolution:
“RESOLVED, that the compensation paid to PartnerRe’s NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF DIRECTORS.THE EXECUTIVE COMPENSATION, AS DISCLOSED IN THIS PROXY STATEMENT.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has adopted policies and procedures for pre-approving all audit and non-audit work performed by the external auditors, Deloitte & Touche Ltd., the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the “Deloitte Entities”). These policies and procedures prohibit the Deloitte Entities from performing any services for PartnerRe or PartnerRe subsidiaries without the prior approval of the Audit Committee. The Audit Committee has pre-approved the use of Deloitte & Touche Ltd. for certain audit-related services, which are as follows:
Annual audit of PartnerRe’s consolidated financial statements, including quarterly reviews, consultation on accounting issues, system control work, reports/reviews (Form 10-K, 10-Q, annual report, etc.), attendance at Audit Committee meetings, preparation of management letter,letters, use of specialists in connection with the foregoing, and other services integral to audits of and expressing opinions on PartnerRe’s financial statements;
Annual audit of PartnerRe’s internal control over financial reporting, including interim procedures on Sections 302 and 404 of Sarbanes Oxley; consultation on internal control issues; system control work; use of specialists in connection with the foregoing; and other services integral to audits of and expressing opinions on PartnerRe’s internal control over financial reporting;
Consultation related to implementation of new accounting standards;
Audits of opening balance sheets of acquired companies and accounting consultations on acquisitions and proposed acquisitions where such services would otherwise be performed in the audit of PartnerRe’s consolidated financial statements;
Services related to procedures used to support the calculation of the gain or loss from dispositions and discontinued operations;
Preparation of compliance letters, agreed upon procedures, reviews, and similar reports related to audited financial statements;
Audits of financial statements and transactions included in consolidated financial statements that are used by lenders or filed with government and regulatory bodies, and similar reports, including affiliate transaction audits;
Services that result from the role of Deloitte Entities as independent auditor, such as reviews of SEC filings (including, but not limited to, registration statements under the Securities Act of 1933), consents, letters to underwriters, and other services related to financings that include audited financial statements;services;
Employee benefit plan audits where fees are paid by PartnerRe;
SAS 70SSAE 16 attestation reports;
Electronic accounting research services;
Foreign statutoryStatutory audits and other regulatory reports, including but not limited to the audit of any Derivative Use Plans as required by the New York Insurance Department;local regulators;
Review of financial statement tax provision and related disclosures; and
Merger and acquisition due diligence services.
Other Permitted Services
Specific approval is required from the Audit Committee before the Deloitte Entities are appointed to provide:
Non-financial information systems/consulting;
Integration consulting services;
Review of third party specialist work related to appraisal and/or valuation services;
AI-1
Actuarial consulting services—non-audit related;
Employee benefits consulting;
Training; and
Tax services—returns, tax planning and consultation.
Prohibited Services
The Deloitte Entities may not provide:
Bookkeeping or other services related to our accounting records or financial statements;
Appraisal or valuation services or fairness opinions;
Management or human resources functions;
Broker-dealer, investment adviser, or investment banking services;
Legal services and expert services unrelated to the audit;
Internal audit outsourcing; and
Financial information systems design and implementation.
Audit Committee Review of Services
At each regularly scheduled Audit Committee meeting, the Audit Committee reviews the following:
A report summarizing the services provided by the Deloitte Entities and the fees paid for those services; and
A listing of newly pre-approved services since its last regularly scheduled meeting.
The Chairman of the Audit Committee is authorized to pre-approve services on behalf of the Audit Committee between meetings should the need arise. Any services and fees approved by the Chairman of the Audit Committee would beare included in the quarterly summary for the Audit Committee.
Reconciliation of Non-GAAP Measures to GAAP Measures
Group adjusted operating return on beginning diluted book value per common share and common share equivalents outstanding (Group AROE):The Compensation Committee uses annualized Group AROE as it believes that AROE is the best measure of operating performance, as it measures profit achieved relative to the shareholders’ investment.
Group AROE adjusts the Company’s Operating Return on Equity measure (Operating ROE–see Key Financial Measures in Item 7 of Part II to our Annual Report on Form 10-K for the year ended December 31, 2012) by capturing the realized and unrealized gains or losses of our Risk Assets. Risk Assets are a part of the portion of the Company’s investment business and includes Equities, Principal Finance, Insurance Linked Securities, Strategic Investments and other specific investments.
The presentation of Group AROE is a non-GAAP financial measure within the meaning of Regulation G and should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP (see Comment on Non-GAAP Measures in Item 7 of Part II to our Annual Report on Form 10-K for the year ended December 31, 2012). The table below provides a reconciliation of Group AROE to the most comparable GAAP financial measure for the year ended December 31, 2012:
AI-2
2012 | ||||
Return on beginning diluted book value per common share calculated with net income per share available to common shareholders (Return on Equity)(1) | 19.9 | % | ||
Less: | ||||
Net realized and unrealized investment gains, net of tax, on beginning diluted book value per common share | 7.3 | |||
Net foreign exchange gains, net of tax, on beginning diluted book value per common share | 0.1 | |||
Net interest in earnings of equity investments, net of tax, on beginning diluted book value per common share | 0.2 | |||
Operating return on beginning diluted book value per common share (Operating ROE)(1) | 12.3 | % | ||
Add: Net realized and unrealized investment gains on risk assets, net of tax, on beginning diluted book value per common share | 2.7 | |||
Group adjusted operating return on beginning diluted book value per common share and common share equivalents outstanding (Group AROE) | 15.0 | % |
(1) | The Company calculates Return on Equity and Operating ROE using net income per share and operating net income per share, respectively, for the period, divided by the beginning diluted book value per common share and common share equivalents outstanding. |
PARTNERRE LTD. 5TH FLOOR, WELLESLEY HOUSE SOUTH 90 PITTS BAY ROAD PEMBROKE HM08 BERMUDA | VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
KEEP THIS PORTION FOR YOUR RECORDS | ||
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
The Board of Directors recommends you vote FOR the following: | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
1. | Election of Directors | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||
Nominees
| ||||||||||||||||||||||||||||||||
01 Jean-Paul L. Montupet 02 Lucio Stanca | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR | For | Against | Abstain | |||||||||||||||||||||||||||||
|
To re-appoint Deloitte & Touche Ltd., the independent registered public accounting firm, as our independent auditors, to serve until the |
¨ |
¨ |
¨ | ||||||||||||||||||||||||||||
3 | To approve the Executive Compensation disclosed pursuant to Item 402 Regulation S-K (non-binding advisory vote). | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | ||||||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Combined Document is/are available atwww.proxyvote.com.
| ||||||||||
PROXY - PartnerRe Ltd. | ||||||||||
| ||||||||||
This Proxy is solicited on behalf of the Board of Directors of PartnerRe Ltd. in connection with our Annual General Meeting of Shareholders to be held on May | ||||||||||
| The undersigned | |||||||||
This Proxy will be voted as directed or, if no direction is indicated, it will be voted FOR the election of director nominees and the approval of the proposal as described on the reverse side.
| ||||||||||
Continued and to be signed on reverse side | ||||||||||
*** Exercise YourRightto Vote ***
IMPORTANT NOTICERegarding the Availability of Proxy Materials
*** Exercise YourRightto Vote *** Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 17, 2013 | ||||||||||||||
Meeting Information | ||||||||||||||
Meeting Type:Annual Meeting | ||||||||||||||
For holders as of:March 20, 2013 | ||||||||||||||
Date: May 17, 2013 | Time:8:00 AM LST | |||||||||||||
Location: 5th Floor | ||||||||||||||
Wellesley House South | ||||||||||||||
90 Pitts Bay Road | ||||||||||||||
Pembroke HM08 | ||||||||||||||
Bermuda | ||||||||||||||
| ||||||||||||||
|
| |||||||||||||
|
| |||||||||||||
| ||||||||||||||
| ||||||||||||||
|
| |||||||||||||
You are receiving this communication because you hold shares in the above named company.
This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online atwww.proxyvote.comor easily request a paper copy (see reverse side).
We encourage you to access and review all of the important information contained in the proxy materials before voting. |
See the reverse side of this notice to obtain proxy materials and voting instructions.
| |||||||||||||
0000051321_1 R2.09.05.010
— Before You Vote —
How to Access the Proxy Materials
| ||||||||||
| ||||||||
| Have the | |||||||
How to Request and Receive a PAPER or E-MAIL Copy: | ||||||||
If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: | ||||||||
1)BY INTERNET: | www.proxyvote.com | |||||||
2)BY TELEPHONE: | 1-800-579-1639 | |||||||
3)BY E-MAIL*: | sendmaterial@proxyvote.com | |||||||
* If requesting materials by e-mail, please send a blank e-mail with the | ||||||||
Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before |
| ||||||||||||
Please Choose One of The
— How To Vote —
Please Choose One of the Following Voting Methods
| ||||||||
0000051321_2 R2.09.05.010
Voting items | ||||||||
The Board of Directors recommends that you vote FOR the following: | ||||||||
1. Election of Directors | ||||||||
Nominees | ||||||||
01 | ||||||||
The Board of Directors recommends you vote FOR the following proposal(s): | ||||||||
2. To re-appoint Deloitte & Touche Ltd., the independent registered public accounting firm, as our independent auditors, to serve until the | ||||||||
3 To approve the Executive Compensation disclosed pursuant to Item 402 Regulation S-K (non-binding advisory vote). | ||||||||
Voting Instructions | ||||||||
0000051321_3 R2.09.05.010