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. |
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(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): |
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¨ | 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. |
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(2) | Form, Schedule or Registration Statement No.: |
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PROXY STATEMENT
Wellesley House South
90 Pitts Bay Road
Pembroke HM 08, Bermuda
April 8, 20115, 2013
ANNUAL GENERAL MEETING—MEETING–May 19, 201117, 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 6:8:00 p.m.a.m. local time on Thursday,Friday,May 19, 201117, 2013, at 5thFloor, Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda. My fellow directors and the executive 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,
Jean-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 19, 201117, 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 Thursday,Friday,May 19, 201117, 2013, at 6:8:00 p.m.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 Board of Directors has fixed the close of business on March 22, 2011,20, 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 8, 20115, 2013
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PROXY STATEMENT
PARTNERRE LTD.
Annual General Meeting of Shareholders
May 19, 2011
GENERAL INFORMATION ABOUT THE 2011
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 6:8:00 p.m.a.m. local time onMay 19, 201117, 2013, at 5thFloor, 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 8, 2011.5, 2013. As further detailed in the Notice Regarding the Availability of Proxy Materials (“Notice”) (whichwhich will be mailed to shareholders on or about April 8, 2011),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 QUESTIONSFrequently 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 |
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 22, 2011 (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 67,443,68358,188,630 common shares issued and outstanding, net of treasury shares. If you constructively or beneficially, directly or indirectly, own more
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 9.9%25% of the outstanding common shares your voting rightsas 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.
HOW MANY VOTES ARE NEEDED TO APPROVE EACH PROPOSAL?
All matters to be voted on at the Annual General Meeting will be limited pursuantdecided 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 formula specified in our Bye-Laws.non-routine matter, or if a shareholder abstains from voting on a particular matter, such common shares will not be counted for purposes of determining how many votes are required for approval on that matter. All matters except the ratification of auditors are considered non-routine.
WHAT AM I VOTING ON?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 will be asked to: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:
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.
For more information about these proposals,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 pages 78-89.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?
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, 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).
HOW DOES THE BOARD SOLICIT PROXIES?
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. Directors,Our 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,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.
Shareholders who hold common shares through an account with a bank or brokerBeneficial owners will be asked to forward the proxy materials to the bank or broker.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.
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 (Jean-Paul L. Montupet and Costas Miranthis) 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 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 hold common shares through an account withare a bank or broker, those shares may be voted even if you do not provide voting instructions. Brokerage firms havebeneficial owner, your brokerage firm has the authority to vote their customers’common shares on certain routine matters even if the customersyou do not provide instructions. All matters exceptOnly the ratification of auditors areis considered non-routine.
HOW CAN I VOTE BEFORE THE ANNUAL GENERAL MEETING?
If you are a registered shareholder, you can vote:
If you holdroutine matter for these purposes. Without your instructions, your common shares through an account with a bank or broker, you maywill not be unable to vote by telephone or overvoted for any other Proposal at the Internet. Please follow the instructions that your bank or broker provides.Annual General Meeting.
CAN I CHANGE MY MIND AFTER I VOTE?
If you are a registered shareholder, youYou may change your vote or revoke your proxy at any time before your proxy is voted at the Annual General Meeting by:
voting again by telephone or over the Internet prior to 11:59 p.m. Eastern Time on May |
attending and voting at the Annual General Meeting, if you are a |
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 previousyour 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 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, the common shares will be treated as not entitled to vote on that matter for purposes of determining how many votes are required for approval. All matters except the ratification of auditors are considered non-routine.
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 May 6, 20113, 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 20122014 ANNUAL GENERAL MEETING?
YouShareholders may propose any matter for a vote by our shareholders at the 20122014 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 20122014 ANNUAL GENERAL MEETING?
If a shareholder proposal is introduced at the 20122014 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 20112013 Annual General Meeting of the shareholder’stheir intent to raise such proposal at the 20122014 Annual General Meeting (subject to adjustment if the 20122014 Annual General Meeting date is changed, as described in the Bye-Laws), then all proxies received by us for the 20122014 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
Corporate Documentation
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, 20102012, as filed on February 26, 2013;
Corporate Governance Principles and Application Guidelines;
Audit Committee CharterCharter;
Compensation & Management Development Committee CharterCharter;
Nominating & Governance Committee CharterCharter;
Risk & Finance Committee Charter
Corporate Governance PrinciplesCharter; and Application Guidelines
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 Dollars to Swiss Francs and the Euroeuro are used throughout this Proxy Statement. Unless otherwise indicated, we have applied the following exchange rates:
Exchange Rates* | Exchange Rates* | Exchange Rates* | ||
United States Dollar-US$ | Swiss Francs-CHF | Swiss Francs-CHF | ||
1 | 0.94 | 0.91 | ||
1.06 | 1 | |||
1.10 | 1 | |||
United States Dollar-US$ | European Union-Euro | Euro | ||
1 | 0.75 | 0.76 | ||
1.33 | 1 | |||
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 22, 2011.the Record Date.
Continuing 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. |
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: | Dutch | |||||
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 |
Roberto MendozaLucio Stanca
Aspen Institute Italia Committees Audit Nominating & Governance | Former Directorships (previous 5 years) None | ||||||
Age: | |||||||
Nationality: | |||||||
Director Since: | |||||||
| |||||||
| 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. | |||||
Kevin M. TwomeyDIRECTORS 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
England Golf Union Limited Committees Audit Nominating & Governance |
| |||||||
Gas & Electricity Markets Authority (2010) | ||||||||
Age: Nationality:
| 69
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 Ms. Hanratty’s qualifications to sit on our |
David ZwienerCostas Miranthis, President and Chief Executive Officer
None Committees Risk & Finance |
| |||||||
| ||||||||
Age:
Director Since: | 49 British February 2011 | Mr. Mr. Miranthis’ qualifications to sit on our Board include his experience in the (re)insurance |
Continuing Class II Directors with terms expiring at the 2013 Annual Meeting
Jean-Paul L. Montupet Chairman of the BoardRémy 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:
Director Since: | 67 French November 2001 |
Mr. Mr. |
Vito H. BaumgartnerEgbert Willam
CICSA Reaseguros S.A. Humanitas AG BDB Insurance S.A. Insurance Brokers Investments Ltd. Committees Audit Nominating & Governance |
| 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 (terms expiring at the 2015 Annual General Meeting)
Jan H. Holsboer
Current Directorships 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: | ||||||
| ||||||
| Mr. |
John A. Rollwagen
| ||||
|
|
Lucio Stanca
Aspen Institute Italia Committees Audit Nominating & Governance | Former Directorships (previous 5 years) None | ||||||
Age: | |||||||
Nationality: | |||||||
Director Since: |
(formerly served from May 1998 | ||||||
| |||||||
| 71 Italian September 2006 | Mr. Stanca was Executive Chairman of IBM Mr. Stanca’s qualifications to sit on our Board include his years of experience | |||||
Nominees for election as the DIRECTORS NOT STANDING FOR ELECTION AT THE 2013 ANNUAL GENERAL MEETING
Class III Directors with terms(terms expiring at the 2014 Annual General Meeting: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:
| 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 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 |
Costas Miranthis, - President and Chief Executive Officer
None Committees Risk & Finance |
| 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. Mr. Miranthis’ qualifications to sit on our Board include his experience in the |
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:
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 |
Jürgen Zech
| ||||
|
|
OUR EXECUTIVE OFFICERSEgbert Willam
This section details the age, position, and business experience for each of our executive officers as of March 22, 2011. Mr. Miranthis is described in further detail under the heading “Our Directors” on page 11.
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 (terms expiring at the 2015 Annual General Meeting)
Jan H. Holsboer
Current Directorships 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: | Dutch | |||||
May 2000 | Mr. Holsboer was the Chief Executive Officer of Netherlands Reinsurance Group N.V. until 1989 and was an Executive Director with ING N.V. until 1999 and with Univar N.V. until 2007. He also served as President of the Geneva Association from 1993 to 1999 of which he is now an honorary member/President. Mr. Holsboer retired as Chairman of Vereniging Pro Senectute (elderly care) in 2012. Mr. Holsboer is Chairman of Panorama Mesdag (museum). | |||||
Mr. Holsboer’s qualifications to sit on our Board include his years of experience in the international financial and (re)insurance industries. |
Roberto Mendoza
Current Directorships Western Union, Inc. Manpower Group Atlas Advisors LLC Rocco Forte & Family Limited Committees Compensation & Management Development Risk & Finance | Former Directorships (previous 5 years) 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 2000 and Managing Director of Goldman Sachs Services Ltd from 2000 to 2001. Mr. Mendoza was Chairman of XL Capital Ltd. until 1993 and a Non-Executive Director of ACE Ltd. from 1999 to 2003. He was also Chairman and a Non-Executive Director of Egg plc until 2006, Non-Executive Director of Prudential plc and Chairman of Integrated Finance Ltd. until 2007. Mr. Mendoza was also a partner in Deming Mendoza & Co. from 2009 to 2010. 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 Inc had an involuntary petition for liquidation under Chapter 7 of the U.S. Bankruptcy Code filed against it in July 2008; subsequently it filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2009. |
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) | |||||||
Nationality: Director Since: | ||||||||
American May 2003 | ||||||||
| ||||||||
| ||||||||
|
Mr. Mr. Twomey’s qualifications to sit on our Board include his years of executive experience in the international financial industry as well as his previous experience as a director on the boards of U.S. listed companies. |
David Zwiener
Current Directorships None Committees Audit–Chairman | Former Directorships (previous 5 years) CNO Financial Group (2011) | |||||
Compensation & Management Development | ||||||
Age: Nationality: 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 Inc. from 1997 to 2007, Managing Director and Co-Head of the financial institutions group of the Carlyle Group from 2007 to 2008 and Chief Financial Officer of Wachovia Corporation in 2009. | ||||
Mr. Zwiener’s qualifications to sit on our Board include his years of experience in the international financial and (re)insurance industries including a leading insurance group. Mr. Zwiener’s experience qualifies him as an “audit committee financial expert”. |
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. AB SKF Inc. (2009) | |||||
Committees Compensation & Management Development–Chairman Risk & Finance | ||||||
Age: Nationality: Director Since: | 72 Swiss November 2003 | Mr. |
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. |
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 “All Other Compensation” table. |
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.
(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: |
June 15, 2012 | ||||
Jean-Paul L. Montupet | 1,688 | |||
Vito. H. Baumgartner | 2,285 | |||
Judith Hanratty | 1,407 | |||
Jan H. Holsboer | 2,285 | |||
Roberto Mendoza | 1,407 | |||
John A. Rollwagen | 1,407 | |||
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) |
Retired Executives
Patrick A. Thiele was appointed as President and Chief Executive Officer of PartnerRe in December 2000 and retired from PartnerRe on December 31, 2010.
Albert A. Benchimol joined PartnerRe as Executive Vice President and Chief Financial Officer in April 2000 and was appointed as Chief Executive Officer of the Capital Markets Group in June 2007. Mr. Benchimol retired from PartnerRe on December 31, 2010. Mr. Benchimol was employed by Reliance Group Holdings, Inc. from 1989 to 2000. In June 2001, Reliance Group Holdings, Inc. filed for protection under Chapter 11 of the U.S. Bankruptcy Code.
Bruno Meyenhofer joined PartnerRe in 1998. In 2002, he was appointed as the Chief Executive Officer, PartnerRe Global. Effective July 1, 2008, Mr. Meyenhofer was appointed as Chairman of PartnerRe Global. Mr. Meyenhofer retired on March 31, 2010.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
The following table sets forth information, as of the Record Date March 22, 2011 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 common shares that the person could acquire through the exercise of any currently exercisable options. As of the Record Date, the common shares owned by all directors and executive officers as a group constitute approximately 1.23% 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** | 190,446 | (1) | * | |||
William Babcock | 7,691 | (2) | * | |||
Albert A. Benchimol** | 477,817 | (3) | * | |||
Costas Miranthis | 117,722 | (4) | * | |||
Emmanuel Clarke | 46,618 | (5) | * | |||
Bruno Meyenhofer** | 313,652 | (6) | * | |||
Marvin Pestcoe | 56,171 | (7) | * | |||
Theodore C. Walker | 69,028 | (8) | * | |||
Jean-Paul L. Montupet | 53,646 | (9) | * | |||
Vito H. Baumgartner | 67,464 | (10) | * | |||
Judith Hanratty | 43,376 | (11) | * | |||
Jan H. Holsboer | 90,384 | (12) | * | |||
Roberto Mendoza | 7,913 | (13) | * | |||
John A. Rollwagen | 73,466 | (14) | * | |||
Rémy Sautter | 37,273 | (15) | * | |||
Lucio Stanca | 27,173 | (16) | * | |||
Kevin M. Twomey | 49,376 | (17) | * | |||
Jürgen Zech | 69,133 | (18) | * | |||
David Zwiener | 11,757 | (19) | * | |||
All directors and executive officers (16 total) | 828,191 | 1.23 |
(6) | Mr. |
(7) | Mr. |
(8) | Mr. |
(9) | Mr. |
(10) | Mr. |
(11) |
(12) |
(13) |
(14) | Mr. |
3,843 unvested RSUs. |
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, 2010. The information contained inCompensation includes 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 entity named but may be owned by accounts over which it exercises discretionary investment authority.following:
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent Of Class | ||||||
Harris Associates L.P. Two North LaSalle Street, Suite 500 Chicago, IL 60603-3790 | 4,354,577 | (1) | 5.85 | % |
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. 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 2010, 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 |
Board ClassificationCorporate Governance Framework
As described on pages 7-12 underThe Board considers that good corporate governance is critical to achieving business success and aligning the heading “Our Directors,”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 is divided into three Classes with terms expiring at successive annual meetings. 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 termBoard 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 directorsBoard 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 Class III2012. Any reported violation to the Code of Business Conduct and Ethics will expire at the upcoming Annual General Meeting. Class III is comprised of Judith Hanratty, Costas Miranthis, Rémy Sautterbe investigated and Jürgen Zech. If elected at the Annual General Meeting, the new term for Class III directors will expire at the 2014 Annual General Meeting. 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, unless the Board provides a waiver,majority of our directors must be independent. The Nominating & Governance Committee has determined that all directors are requiredindependent 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 resignConsolidated 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.
Since its inception in 1993 PartnerRe has always separated the 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, presides at the Board meetings which are scheduled at least four times a year and calls 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 Mayadvance of Board meetings, acts as a liaison between shareholders and the Board where appropriate and performs such other functions as the Board may direct. The Chairman also presides at all executive sessions of the year that he or she turns 73. Consequently, unlessBoard which are held each time a waiver is granted by thephysical Board Dr. Zech will serve until May 2012.meeting occurs.
Meetings and Committees of the Board
Working through its four standing committees, the Board exercises oversight over strategic decisions throughout the organization (for further details on our committees, see “Committees of the Board of Directors” on pages 21-25 and “Our Directors” on pages 7-12). The Board held fivefour meetings in 2010. 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 20102012 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:
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 2011, ouraddition, 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 structurefinancial 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 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 clarify the rolesBoard 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
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 Human Resources CommitteesDirectors: Roles and it was determined thatResponsibilities
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, would assume certainincluding 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 responsibilities of the Human Resourcesdirectors’ compensation.
Compensation Committee and the Human Resources Committee be disbanded. Consulting Services
The Compensation Committee has been renamedthe 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 & Management Development Committee.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.
InsuranceCompensation 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 primary underwriter forCompensation 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 directorexecutive compensation programs and officer insurance is Hartford Fire Insurance Company.provided advice to the Compensation Committee as needed on items such as ISS corporate governance guidelines. The policy period runsCompensation 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 May 15, 2010 to May 14, 2011. The costPartnerRe in an amount in excess of this coverage$120,000 during the year ended December 31, 2012 and did not perform consulting work for the one-year period ending May 15, 2011, was $1,809,451. As a conditionmanagement 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 PARIS RE acquisitionconsulting 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 separate policypercentage 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 purchasedno 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 former PARIS REoverseeing 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 officers at a cost of €492,091recommends appropriate nominees to the Board. In addition, the Nominating & Governance Committee recommends directors for a six year run off commencing December 7, 2009.
Any shareholder or other interested party who wishes to communicate with our directors may writecommittee 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 Wellesley House South, 90 Pitts Bay Road, Pembroke HM 08, Bermuda, markedits 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 attentioncandidacy of a particular director or the Secretaryany individual for membership to the Board. The Secretary’s office opens all such correspondenceBoard and forwards it toany committee. Members of the relevant director, except for items unrelated toNominating & Governance Committee review prospective candidates’ qualifications and geographic location; determine whether prospective candidates are independent and regularly consider whether the functionscomposition 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 was an executive session where Mr. Thiele,in 2012, the Chief Executive Officer during 2010, was excused. In 2010, 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 of the Board presides over the independent director executive sessions.
Audit CommitteeAdvance MaterialsInformation and data importantPursuant 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 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,charter, 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.
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 was a Director during 2010 and currently Mr. Miranthis, who is the only executive 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, 2010. Based on this review, the Nominating & Governance Committee determined that no director other than Mr. Thiele 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, 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. The role of Chairman of the Board is filled by an independent, non-executive director and this obviates the need to appoint a lead director. The separation of these two roles is an important criterion of our corporate governance structure. 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 chairman, leads the evaluation of the performance of the Chief Executive Officer, advises on and determines with the input from the Chief Executive Officer the agenda for Board meetings, determines with the input from 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 page 24 and in each director’s biography on pages 7-12). On occasion, the Nominating & Governance Committee retains the services of Spencer Stuart to assist with director searches within pre-agreed parameters.
The Board’s Role in Risk Oversight
As a reinsurance entity PartnerRe must assume risk in order to achieve its strategic objectives and return targets; 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 four largest risks facing PartnerRe; these are considered to be natural catastrophe risk, casualty reserving risk, equity investment risk and longevity 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. 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 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 on pages 52-54, 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 2010. 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. Our Bye-Laws require majority voting for resolutions relating to the election of directors.
COMMITTEES OF THE BOARD OF DIRECTORS
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 of PartnerRe and management as defined by New York Stock Exchange rules. The committee memberships are as follows:
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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.
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, 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, 2010.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 one other public company. Further information about Mr. Twomey can be found on page 8. Mr. Zwiener, a memberaudit committee of the Audit Committee, also meets the definition of an “audit committee financial expert” as adopted by the SEC. Mr. Zwiener serves on the Audit Committee for oneany other public company. Further information about Mr. Zwiener can be found on page 9.11.
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 7-12.7-12
The following report was approved at a meeting of the Audit Committee on February 16, 2011.28, 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 2010,2012, 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, 20102012 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, 2010.2012.
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. 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 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
Kevin M. Twomey,David Zwiener, Chairman
Jan H. Holsboer, Vice Chairman
Vito H. Baumgartner
Judith Hanratty
David ZwienerJan H. Holsboer
Egbert Willam
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 providing for incentiveCompany’s compensation and equity based award plans;
Determining the terms of any awards under such plans to thebenefits policies for its Chief Executive Officer and the members of the Executive Committee;
Determining the terms of any equity award to anyall other officer subject to Section 16 of the Exchange Act of 1934 (the “Exchange Act;
Approving the grant methodology for equity based awards;
Reviewing and approving annual base salary, annual incentive compensation, long-term incentive compensation, employment, severance and change in control agreements, and any other compensation for the Chief Executive Officer and each member of the Executive Committee;
Establishing, approving and periodically reviewing the composition of a competitive peer group of companies in the insurance and reinsurance industry that compete with PartnerRe for executive talent;
Consulting with the Board in executive session to establish and approve goals and objectives relevant to the compensation of the Chief Executive Officer;
Consulting with the Board in executive session to evaluate the performance of the Chief Executive Officer in light of established corporate goals and objectivesofficers and to setoversee plans for management development and approve the Chief Executive Officer’s compensation based on such evaluation and other factors as the Compensation Committee deems appropriate and in the best interest of PartnerRe;succession.
Consulting with the Chief Executive Officer to establish and approve goals and objectives relevant to the compensation of each member of the Executive Committee;
Consulting with the Chief Executive Officer to evaluate the performance of each member of the Executive Committee in light of established corporate goals and objectives and set each member’s compensation based on an evaluation and other factors as the Compensation Committee deems appropriate and in the best interest of PartnerRe;
Producing any external report required by statute or regulation relating to executive compensation or the Compensation Committee’s responsibilities; and
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.
In accordance with the Bye-Laws of the Company, theThe 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. In addition, the
Compensation Committee may delegate to one or more officers of PartnerRe its authority under the terms of any incentive-compensation or other equity-based plan to make grantsExecutive Officers and awards under such plans as the Compensation Committee deems appropriateDirectors: Roles and in accordance with the terms of such plans.Responsibilities
The Compensation Committee met five times during 2010.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 outsideexternal compensation consulting services.
The Chairman of the Compensation Committee Mr. Baumgartner, requests information, analysis and proposals from PricewaterhouseCoopers LLP, Towers Watson ortime to time from Frederic W. Cook & Co., Inc. firms that provide consulting services from time to time. 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.
Separate 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. 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.
Frederic W. Cook & Co., Inc., an independentexternal 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 “Compensation Review—Competitive“Competitive Peer Group and Pay Analysis,” on page 51.30. 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 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 consultant, Compensation Committee has direct access to all external advisors without management involvement.
Frederic W. Cook & Co., Inc. has not provided additionalany services toor received any payment from PartnerRe in an amount in excess of $120,000 during the year ended December 31, 2010.
Compensation of Executive Officers: Roles2012 and Responsibilities
The Compensation Committee is responsibledid not perform consulting work for the review andmanagement team. The following factors set forth in the final approvalSEC rules regarding compensation advisor independence were reviewed in order to determine if any conflict of compensation elements for each executive officer includinginterest issues were raised by the Chief Executive Officer.
In so reviewing and approving executive officers’ compensationuse of the Compensation Committee:consulting firm:
in consultation with the Board of Directors in executive session, establishes and approves goals and objectives relevant toWhether the compensation ofconsulting company employing the Chief Executive Officer and evaluates the performance of the Chief Executive Officer in light of such established goals and objectives;compensation advisor is providing any other services to PartnerRe.
in consultation with the Chief Executive Officer, establishes and approves goals and objectives relevant toHow 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 officers (excludingofficer of PartnerRe.
Based on consideration of these and any other relevant factors, the Chief Executive Officer)Compensation Committee concluded there was no conflict of interest between PartnerRe and evaluates their performance in light of such established goals and objectives.any compensation advisor.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee in 20102012 was an officer or employee of PartnerRe or any of its subsidiaries. There are no Compensation Committee interlocks.
The Nominating & Governance Committee recommended that certain functions
Under the terms of its charter, the Human Resources Committee be transferred to the Compensation Committee and that the Human Resources Committee be disbanded. With effect from February 2011 the Compensation Committee was renamed the Compensation and Management Development Committee. This change helped to streamline staffing and coordination resources and improved the governance process relating to compensation related decisions.
The Human Resources Committee was responsible for our compensation philosophy, all forms of deferred compensation (other than for the executive officers), and the defined contribution pension plans. The Human Resources Committee met five times during 2010.
Nominating & Governance Committee
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.
The Nominating & Governance Committee met four times during 2010.
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 approves policy for,oversee the risk management framework. Management communicates routinely with the Board and monitorsits 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 company’s limits for the various risks that are assumed by PartnerRe;
Monitoring “Capital at Risk” methodology;
Reviewing and recommending to the Board for approval material changes to the reserving policy and philosophy;
Reviewing and recommending to the Board for approval material changes to the asset valuation policy and philosophy;
Monitoring the diversification policies of the capital markets and reinsurance units;
Monitoring the retrocession and hedging policies;
Monitoring the 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 PartnerRe 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 2010.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
The directors’ compensation guidelines align the interestsSecurity Ownership of directorsCertain Beneficial Owners, Management 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.Directors
The total compensation package for director service consists of three components:
cash;
share options; and
restricted share units.
The following table shows how director compensation was allocated among thesesets forth information as of the Record Date with respect to the beneficial ownership of outstanding common shares by (i) our Chief Executive Officer, our Chief Financial Officer, and each of the three componentsremaining 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 group; 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 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 2010.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. Pursuant to Rule 13d-4 under the Securities Exchange Act of 1934, as amended, the statements concerning voting and dispositive power concerning PartnerRe common shares included in the footnotes to this table shall not be construed as confirmation that such persons are the beneficial owners of such common shares.
As of the Record Date, the common shares owned by all directors and executive officers as a group constitute approximately 2.1% of the issued and outstanding common shares, net of treasury shares. The shares detailed in the table below are not necessarily owned by the entity named but may be owned by accounts over which it exercises discretionary investment authority.
Component | Director Annual Amount | Board Chairman Annual Amount | ||||||
Cash | $ 50,000 | $180,000 | ||||||
Share options* | $100,000 | $120,000 | ||||||
Restricted share units** | $100,000 | $120,000 | ||||||
Dividend equivalents | | Per actual dividend rate declared by the Board | | | Per actual dividend rate declared by the Board | |
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 | % |
* |
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 |
WithThere are no arrangements, known to PartnerRe, including any pledge by any person of securities of PartnerRe, the exceptionoperation of the spousal program (described below under “Management Director’s Fees and Directors’ Expenses”), no perquisites are provided to the directors.
The following section describes the 2010 director compensation structure.
The share option awards are immediately vested options to purchase PartnerRe common shares. These are granted each year on thewhich may at a subsequent date of the annual general meeting. The number of share options granted is determined using Black-Scholes methodology. Prior to June 2010 directors were able to take the cash value of the option grant once they had served two full three year terms and met the director ownership guidelines. Effective June 15, 2010 this cash option is no longer available.
Prior to June 15, 2010, restricted share units were awarded on a quarterly basis and vested immediately. Each restricted share unit award had 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 were paid out quarterlyresult in cash.
Effective June 15, 2010, restricted share units are awarded on an annual basis and have a five year cliff vest with no delivery restrictions. All unvested restricted share units will generally vest upon a change in control of PartnerRePartnerRe.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and will be forfeited upon the director’s termination of service, exceptexecutive officers and persons that 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 acceptancebeneficially own more than 10% of a public service position that would either preclude continued Board serviceregistered class of our equity securities to file initial reports of ownership and reports of changes in beneficial ownership with the SEC. PartnerRe assists its 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 2012, no director or make such continued service impractical,executive officer failed to file his or failure to be re-elected to the Board by shareholders (each regarded asher required reports on a “permissible reason” for departure), then the restricted share units will fully vest upon termination. The dividend equivalents attaching to the restricted share unit awards are now paid in one lump sum on June 15 each year. Prior to grant directors can elect to receive 100% restricted share units or 60% restricted share units and 40% cash at the time of vesting.timely basis.
All equity awards for the directors are made from the 2003 Non-Employee Directors Stock Plan. This plan currently provides for the issuance of up to 800,000 common shares, and prescribes a maximum annual limit for awards pursuant to the plan. The Board may amend or terminate this plan at any time, in whole or in part. However, 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 22, 2013.
Elective Equity IncentiveOUR EXECUTIVE OFFICERS
In order to further align directorThis section details the age, nationality, position, and shareholder interests, the compensation guidelines allow directors to electbusiness experience for each year to defer 50% or 100% of their cash compensation. To encourage increased share ownership, deferred cash compensationour executive officers as of April 1, 2013. Mr. Miranthis is paid outdescribed in restricted share units, with a PartnerRe match of 25% on the value of deferred cash compensation. The PartnerRe match is in restricted share unit awards, which have the same terms and conditions as the other restricted share unit grants.
Deferred Compensation Subject to Internal Revenue Code Sections 409A and 457A
To accommodate directors who are U.S. taxpayers, changes have been made to the Non-Employee Directors Compensation Plans so that they are 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 of 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. Directors who do not meet the ownership guidelines are required to receive at least 50% of their cash compensation in the form of restricted share units until the ownership guidelines are met. As with the elective equity incentive, mandatory deferrals receive a PartnerRe match equivalent to 25%. The match is in restricted share unit awards, which are madedetail under the same terms and conditions as the other restricted share unit grants. As of December 2010, all of the board members have met the ownership guidelines.
Compensation for the Chairman of the Board
Mr. Montupet succeeded Mr. Rollwagen as the Chairman of the Boardheading “Our Directors” on May 12, 2010. The Director Compensation Table shows the total compensation received by each of the board members for the full year.
For services as Chairman from January 1, to May 12, 2010, Mr. Rollwagen elected to receive his share option award in cash ($120,000) and 1,338 restricted share units. Mr. Rollwagen elected not to defer his 2010 cash compensation.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 | |||||||||
Age: | 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 | |||||||||
Age: | 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 | |||||||||
Age: | 52 | Position | |||||||
Nationality: Executive Officer Since: | American October 2010 | Chief Executive Officer, Life & Health, Investments Group | |||||||
Mr. Pestcoe joined PartnerRe in | |||||||||
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For services as Chairman from May 12 to December 31, 2010, Mr. Montupet elected to receive 9,804 share options and 1,389 restricted share units. Mr. Montupet elected not to defer his 2010 cash compensation.
52 | Position | |||||||
Nationality: | American | Chief Executive Officer, PartnerRe North America | ||||||
Executive Officer Since: | January 2009 | |||||||
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Management Director’s Fees and Directors’ Expenses
Mr. Thiele was not, and Mr. Miranthis will not be, paid any fees or additional compensation for services as a director or as a member of any committee. All directors, including Mr. Thiele and Mr. Miranthis, are reimbursed for travel and other related expenses incurred in attending meetings of the Board or its Committees. All directors, including Mr. Thiele and 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 our executive officers are invited to a board meeting and provided with an extra optional spousal program. Such a program took place in 2010 during the September meeting of the Board in Madrid, Spain. The cost of the program was $23,548 at an average of $1,682 per director/executive officer who utilized the spousal program. Other than the spousal program, we do not provide perquisites to our directors in lieu of compensation or otherwise.
The table below summarizes the compensation paid to non-employee directors for the fiscal year ended December 31, 2010.
Name | Fees Earned or paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($)* | Total ($) | |||||||||||||||
Jean-Paul L. Montupet(3) | 125,833 | 103,415 | 100,000 | 7,356 | 336,604 | |||||||||||||||
Vito H. Baumgartner(4) | 0 | 154,279 | 100,000 | 21,850 | 276,129 | |||||||||||||||
Judith Hanratty(5) | 25,000 | 122,941 | 100,000 | 13,811 | 261,752 | |||||||||||||||
Jan H. Holsboer(6) | 0 | 154,279 | 100,000 | 23,846 | 278,125 | |||||||||||||||
Roberto Mendoza(7) | 25,000 | 122,941 | 58,333 | 8,367 | 214,641 | |||||||||||||||
John A. Rollwagen(8) | 104,167 | 100,066 | 120,000 | 21,429 | 345,662 | |||||||||||||||
Rémy Sautter(9) | 50,000 | 91,756 | 100,000 | 9,124 | 250,880 | |||||||||||||||
Lucio Stanca(10) | 25,000 | 122,941 | 100,000 | 12,714 | 260,655 | |||||||||||||||
Kevin M. Twomey(11) | 50,000 | 91,756 | 100,000 | 9,175 | 250,931 | |||||||||||||||
Jürgen Zech(12) | 0 | 154,279 | 100,000 | 24,271 | 278,550 | |||||||||||||||
David Zwiener(13) | 50,000 | 91,756 | 83,333 | 2,343 | 227,432 |
Mr. Walker joined PartnerRe in |
In accordance with the SEC proxy disclosure rules, columns (1) and (2) reflect the amount of restricted share units and share options granted during the fiscal year by using the aggregate grant date fair value of awards.
March 1, 2010* | June 15, 2010* | |||||||
Jean-Paul L. Montupet | 252 | 1,137 | ||||||
Vito. H. Baumgartner | 449 | 1,617 | ||||||
Judith Hanratty | 350 | 1,297 | ||||||
Jan H. Holsboer | 449 | 1,617 | ||||||
Roberto Mendoza | 350 | 1,297 | ||||||
John A. Rollwagen | 315 | 1,023 | ||||||
Rémy Sautter | 252 | 978 | ||||||
Lucio Stanca | 350 | 1,297 | ||||||
Kevin M. Twomey | 252 | 978 | ||||||
Jürgen Zech | 449 | 1,617 | ||||||
David Zwiener | 252 | 978 |
Name | Spousal Program ($) | Dividend Equivalents Paid ($) | Company Match on Cash Deferral ($)(a) | Total ($) | ||||||||||||
Jean-Paul L. Montupet | 1,682 | 5,674 | 0 | 7,356 | ||||||||||||
Vito H. Baumgartner | 0 | 9,350 | 12,500 | 21,850 | ||||||||||||
Judith Hanratty | 0 | 7,561 | 6,250 | 13,811 | ||||||||||||
Jan H. Holsboer | 1,682 | 9,664 | 12,500 | 23,846 | ||||||||||||
Roberto Mendoza | 1,682 | 435 | 6,250 | 8,367 | ||||||||||||
John A. Rollwagen | 1,682 | 19,747 | 0 | 21,429 | ||||||||||||
Rémy Sautter | 1,682 | 7,442 | 0 | 9,124 | ||||||||||||
Lucio Stanca | 1,682 | 4,782 | 6,250 | 12,714 | ||||||||||||
Kevin M. Twomey | 1,682 | 7,493 | 0 | 9,175 | ||||||||||||
Jűrgen Zech | 1,682 | 10,089 | 12,500 | 24,271 | ||||||||||||
David Zwiener | 1,682 | 661 | 0 | 2,343 |
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 18.
The Nominating & Governance Committee considered the Agreements with Related Parties as disclosed in Note 21 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ending December 31, 2010 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 16.
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 identify 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.
In November 2010 the Board approved repurchasing common shares resulting from Patrick A. Thiele’s net-settled exercise of options. For further details, please see 2010 Option Exercises and Shares Vested table on page 61. PartnerRe repurchased 62,251 shares at a price of $77.99, the average of the high and low sales prices of PartnerRe Stock on the New York Stock Exchange on December 20, 2010 for a total cost of $4,854,955.49. Mr. Thiele was Chief Executive Officer and a director of PartnerRe at the time of the repurchase.
In September 2010, PartnerRe’s board approved our donation of $2,000,000 to the University of Wisconsin Business School for the establishment of the Patrick A. Thiele Chair in Finance at the University of Wisconsin Business School in honor of Mr. Thiele’s service to PartnerRe as its Chief Executive Officer and director. Mr. Thiele is on the Dean’s Advisory Board of the University of Wisconsin Business School.
Compensation Discussion and Analysis
Executive Summary
OverviewIntroduction
This Compensation Discussion and Analysis provides an overview of Compensation Policy
PartnerRe’s primary business is to assume risk; we increase shareholder value by ensuring thathow 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.
Three principles drive our behavior and form the foundation for our compensation policies. We are committed to:
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.
Overview of Executive Total Compensation Program
Our Executive Total Compensation Program, which guides the compensation for our Chief Executive Officer and other Executive Committee members, has remained substantially unchanged over the past few years. 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 (see “Executive Total Compensation Program” which begins on page 35 for further detail):
aligns the long-term interests of our executives and our shareholders;
establishes competitive pay levels, both internally and externally;
clearly links pay with performance;
enables executives who meet prescribed criteria to customize the structure and timing of their compensation; and
encourages key executives to remain with PartnerRe.
Overview of Risk Management
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 equally shareNEOs were compensated in the upside and downside of appropriate risk exposure. See “Compensation Programs and Risk Management,” which begins on page 52, for further detail.
Executive Committee
In 2010, our Executive Committee changed significantly. Patrick A. Thiele, Chief Executive Officer, and Albert A. Benchimol, Executive Vice President and Chief Financial Officer (as well as Chief Executive Officer of PartnerRe Capital Markets Group), retired effective December 31, 2010. Bruno Meyenhofer, Chairman, PartnerRe Global, retired March 31, 2010. Costas Miranthis was promoted to President and Chief Operating Officer, PartnerRe Ltd., effective May 12, 2010, and three senior officers—William Babcock, Emmanuel Clarke and Marvin Pestcoe—were promoted and appointed to the Executive Committee in the second half of 2010.
The following table identifies our current executive officers,2012, as well as those who retired during 2010.
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For the purposes ofhow this proxy statement, we have elected to disclose all eight individuals who were members of the Executive Committee in 2010 ascompensation furthers our Named Executive Officers.
Financial Results Summary
In 2010, PartnerRe continued to demonstrate financial strength in a challenging market of low interest rates, decreasing premium rates, stagnant business development,established compensation philosophy and large losses. Although 2010 saw a number of catastrophe and other large loss events, our underlying portfolio continued to perform well. At the same time, we effectively implemented a range of organizational changes in connection with the integration of PARIS RE and a changing Executive Committee.
For the year ended December 31, 2010, net income was $852.6 million, or $10.46 per share. PartnerRe achieved an Adjusted Return on Equity of 9.4%, against a long-term target of 13%, and a GAAP book value per share growth of 11%, against a long-term target of 10%, to close at a new Book Value per Share high for PartnerRe. The five year cumulative Total Shareholder Return for 2010 was 39%, up from the five year cumulative of 37% in 2009.
Adjusted Return on Equity adjusts Return on Equity by capturing the realized and unrealized gains or losses of our Capital Risks. Capital Risks include Equities, Principal Finance, Insurance-linked Securities, Strategic Investments and other specific investments. While Adjusted Return on Equity for 2010 was below target, PartnerRe successfully met the Premium Volume Metric target for 2010. The Premium Volume Metric target, in place for 2010 only, emphasized business retention by generating non-life gross written premiums. This growth target was approved by the Compensation Committee in November 2009 to be put in place for 2010 following the PARIS RE acquisition to set company-wide expectations about the amount of risk-appropriate premium business we endeavored to write in 2010. These financial targets contributed to PartnerRe Group performance and are weighted as seen under “2010 Group Chief Executive Officer Compensation” on page 34.
Pursuant to PartnerRe’s annual incentive program, all PartnerRe employees, including all members of the Executive Committee, are eligible for an annual cash incentive if predetermined performance goals are met. Every employee’s annual incentive comprises a blended mix of predetermined targets. These include financial targets for PartnerRe, as a whole as well as target goals set for business units, departments, and individuals. All the employees have a component of his or her annual incentive comprised of the financial targets for PartnerRe. Further details of PartnerRe’s annual incentive program can be found on page 40.
Financial Performance Metric | Target | Actual | ||||||
Adjusted Return on Equity | 13% | 9.4% | ||||||
Non-Life Gross Written Premiums | $ | 4.1 billion | $ | 4.1 billion | ||||
US Return on Equity | 13% | 12.2% | ||||||
Global Return on Equity | 13% | 10.4% | ||||||
Capital Markets Group Asset Allocation Decision | 0% | 0.2% | ||||||
Capital Markets Group Investment Income | 100% | 100% | ||||||
Capital Markets Group Return on Capital on Risk Assets | 13% | 35.0% |
2010 Group Chief Executive Officer Compensation
The primary elements of compensation are base pay, annual incentive and equity awards.
Mr. Thiele’s compensation is measured against median pay for target performance among our competitive peer group in order to remain competitive. At Mr. Thiele’s request, his base pay has been capped at $1 million since 2007. Patrick A. Thiele’s variable compensation was based on the following objectives for 2010:
Measure | Target | Weight | ||||||||
Profitability | Adjusted Return on Equity | 13% | 65% | |||||||
Growth | Non-Life Gross Written Premiums | $ | 4.1 billion | 20% | ||||||
Organization | • Size capital position to market opportunity • Respond quickly and intelligently to market • Be more active in regulatory/accounting forums • Continue to improve management development and integrated risk management | N/A | 15% |
The chart below shows how Mr. Thiele’s annual incentive has strongly correlated with the Group Profitability target over the past five years; that target accounts for 65% of his annual incentive payout for 2010. All annual incentive awards are capped for risk management purposes. Mr. Thiele’s annual incentive is capped at 200% of target in years when the Adjusted Return on Equity exceeds 18%. PartnerRe has exceeded the 18% Adjusted Return on Equity for three of the past five years.
For additional information on Mr. Thiele’s compensation, please refer to “Analysis of Total Compensation” which begins on page 38.
Executive Total Compensation Programobjectives.
PartnerRe’s Executive Total Compensation Program prescribesPrograms are based on the Company-wide compensation philosophy to attract and benefitsretain 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. 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 we believe,voted were in favor of PartnerRe’s compensation philosophy and practices. PartnerRe will motivatecontinue 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 officers and reward them for contributing to PartnerRe’s long-term success. All executive officers participate or have participatedcompensation decisions. In 2011, the Board determined that a non-binding advisory vote of shareholders on NEOs’ compensation will be included in the Executive TotalCompany’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 Program.
As shown inCommittee is charged with the following table, the Executive Total Compensation Program has several components in placecorporate governance of executive compensation with respect to meet the strategic objectives set by the Board.
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PartnerRe’s implementation of the Executive Total Compensation Program reflects the Board’s commitment to good governance and corporate responsibility. For example:
allour NEOs. All members of the Compensation Committee are independent, non-executive directors and are considered independent pursuant to the NYSE Rule 303A.05;
the303A.05. The Compensation Committee is authorized to retain independent consultants to give advice on compensation matters;
our compensation programs are adjusted as necessary to comply with legal and regulatory requirements in each jurisdiction where our employees reside; and
opportunities for variable compensation and equity awards are capped so employees are not motivated to take undue risk.
2010 Executive Officer and Compensation Changes
Executive Officer Changes
PartnerRe’s executive officers changed significantly in 2010, with three retirements and four promotions.matters. The table below summarizes the promotions within or to the Executive Committee and the corresponding compensation and annual incentive targets that were approved byrole of the Compensation Committee and Board of Directorsits approval process is described in 2010.further detail on pages 20-21.
Executive Officer Promotions | ||||||||||||||||||||
Executive Officers | Title | Base Salary | Annual Incentive Target | Promotional Grant(1) | Additional Payments | Effective Date | ||||||||||||||
Costas Miranthis | President and Chief Operating Officer, PartnerRe Ltd. | $ | 800,000 | 125 | % | 50,000 SARs | 0 | May 12, 2010 | ||||||||||||
Chief Executive Officer, PartnerRe Ltd. | $ | 1,000,000 | 125 | % | 0 | 0 | January 1, 2011 | |||||||||||||
William Babcock | Executive Vice President and Chief Financial Officer, PartnerRe Ltd. | $ | 535,000 | 100 | % | 12,500 SARs | 0 | October 1, 2010 | ||||||||||||
Emmanuel Clarke | Chief Executive Officer, PartnerRe Global | CHF 593,000 | 100 | % | 12,500 SARs | 0 | September 1, 2010 | |||||||||||||
Marvin Pestcoe | Chief Executive Officer, PartnerRe Capital Markets Group | $ | 535,000 | 100 | % | 12,500 SARs | $ | 150,469 | (2) | October 1, 2010 |
In June 2010, the Compensation Committee reviewed and approved a salary increase for Mr. Walker to $570,000 effective July 6, 2010. This increase reflects Mr. Walker’s role, experience and seniority within the Executive Committee.Financial Results Summary
Messrs. Thiele, Benchimol, and Meyenhofer all retired in 2010. Details of compensation related to their retirements can be foundFor 2012, PartnerRe’s primary financial metric, Adjusted Return On Equity (“AROE” as described under “Group Adjusted Return on Equity” on page 49, under “Summary34), result was 15%. This performance exceeded the target of 2010 Retirements”.10%-13% in a difficult economic and operating environment. In 2012, the 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 Company to meet these challenges and be financially stronger as a group.
Changes to the Executive Total Compensation Programs
New Equity Program
The Compensation Committee reviewedundertook 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;
link 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 reflect the interest rate environment and market outlook. The scale is set annually by the Compensation Committee prior to the start of the performance year. The Compensation Committee will make an annual assessment which amongst other factors will include the following:
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 previous year in recognition of the time NEOs have held their positions and that their decisions will have a greater impact on the 2012 financial results. The Compensation Committee increased the weight of financial performance of the NEOs from a range of 57.5% - 65% in 2011 to a range of 72.5% - 75% in 2012. This decreased the weight of qualitative objectives from a range of 35% - 42.5% in 2011 to a range of 25% - 27.5% thereby reaching the Compensation Committee target weighting of 25% - 30%. These changes underscore the Compensation Committee’s commitment to enhancing the link between financial performance and compensation.
Competitive Peer Group and Pay Analysis
The goal of the Compensation Committee is to ensure that the total compensation of the NEOs is competitive to the median 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 comparing 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 changeswere 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 added to PartnerRe’s Executive Total Compensation Programthe peer group for 2012 as it has a similar business mix to PartnerRe and the addition of more companies to the peer group ensures that there is sufficient data for benchmarking our NEOs. Transatlantic Holdings Inc. was acquired in 2010. These changes are part of PartnerRe’s continuing review of compensation to ensure our policiesMarch 2012 and actions are in line with organizational objectives.will be removed from the peer group for 2013.
Change to Share Ownership Requirement Guidelines
Effective May 2010,In August 2012, the Compensation Committee replaced PartnerRe’s dual ownership test for executive officersreviewed an analysis prepared by Frederic W. Cook & Co. comparing compensation within the peer group. The Compensation Committee used this analysis when comparing compensation of the NEOs with a single ownership target. The table below showsthat of executives with comparable responsibilities within the former ownership requirements (under “Former Ownership Target”) and the current ownership requirements, which are stated as a percentage of common shares outstanding. The acquisition of PARIS RE increased the total number of PartnerRe shares in the market by 26.7 million. As a result, the previous share ownership requirements were reviewed by Towers Watson, who indicated that PartnerRe’s requirements were more stringent than the industry norm. The consultant also identified that share ownership guidelines in the market most typically mirror PartnerRe’s requirement for the “total shares/equivalents” rather than “total shareholdings,” resulting in the change from two ownership targets to one.
Former Ownership Target (2009 and Prior) | Current Ownership Target | |||||
Total shares/equivalents(1) as percentage of shares | Total Shareholdings(2) as a percentage of shares | Total shares/equivalents(1) as percentage of shares | ||||
Group Chief Executive Officer | 0.20% | 1.00% | 0.07% | |||
Other Executive Committee members | 0.05% | 0.25% | 0.03% |
Analysis of Total Compensationpeer group.
Elements of Total Compensation
The three principal types of compensation availablepaid to the Executive Committee are base salary, annual incentive,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 competitive to the median of total compensation for target performance as determined by peer group analysis within the global market environment. With that goal in mind, the Compensation Committee compares both aggregate compensation and each individual element of compensation to the peer group median. (See “Compensation Review” which begins on page 51).
Mix of Compensation
In February 2011, the Compensation Committee analyzed the mix of compensation to be paid to the Executive Committee with respect to the 2010 performance year.Program. To allocate the variousthree principal forms of compensation optimally, the Compensation Committee focusedfocuses on:
clearly linking pay to performance;
achieving a balance between fixed compensation (base salary) and variable compensation that(annual cash incentive and equity awards). Variable compensation supports a pay-for-performance approach;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 awards would be sufficientare designed to align the Executive Committee’sNEOs interests with shareholders’ interests.interests by emphasizing long-term business performance and overall PartnerRe success;
The following table shows the distribution
promoting retention of NEOs by providing long-term incentives; and
providing flexibility in form and structure of compensation for 2010 allocated 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.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:
Total Compensation Mix
(1) | Base salary at December 31, |
(2) | Actual annual cash |
(3) |
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 NEOs 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 based on the adjustment criteria described on page 37.
76%Base Salary
Base salary is the fixed component of the total compensation package and is intended to reflect the expertise, level of experience and 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 Executive Committee is variable compensation (annual incentive and equity) linked to predetermined objectives, including company performance. 51% of total compensation consists of long-term incentive awards in the form of equity, which drives long-term business performance and the overall success of PartnerRe.
Total Compensation Payout
The table below summarizes the elements of compensation paidNEOs. Mr. Miranthis’ base salary has not changed since he was appointed to the executive officers for 2010 performance.role of Chief Executive Officer on January 1, 2011.
Current Executive Officers Compensation | ||||||||||||||||
Name | Base Salary(1) | Cash annual incentive(2) | Equity Award(3) | Total Compensation | ||||||||||||
Costas Miranthis | $ | 800,000 | $ | 789,544 | $ | 1,887,324 | $ | 3,476,868 | ||||||||
William Babcock | $ | 535,000 | $ | 381,820 | $ | 684,117 | $ | 1,600,937 | ||||||||
Emmanuel Clarke(4) | CHF 593,000 | CHF 399,622 | CHF 768,772 | CHF 1,761,394 | ||||||||||||
Marvin Pestcoe | $ | 535,000 | $ | 856,423 | $ | 684,117 | $ | 2,075,540 | ||||||||
Theodore C. Walker | $ | 570,000 | $ | 527,250 | $ | 1,887,324 | $ | 2,984,574 | ||||||||
2010 Executive Officers who Retired in 2010 | ||||||||||||||||
Patrick A. Thiele | $ | 1,000,000 | $ | 912,500 | $ | 3,580,450 | $ | 5,492,950 | ||||||||
Albert A. Benchimol | $ | 600,000 | $ | 962,217 | $ | 1,871,431 | $ | 3,433,648 | ||||||||
Bruno Meyenhofer(5)(6) | CHF 793,000 | CHF 793,000 | N/A | CHF 1,586,000 |
Base Salary
Salary is intended to compensate the Executive Committee for their experience and extensive industry-specific expertise. The base salary for each executive officerNEO is reviewed at the first Compensation Committee meeting of the calendar year and fixed as of April 1 of each year. Salaries may be adjusted at other times due to promotions or in other circumstances after approval by the Compensation Committee and the Board.
The Compensation Committee commissions an annual survey to determine how the salaries we pay our Executive Committee compare with the salaries paid by our competitive peer group. For 2010, Frederic W. Cook & Co., Inc. reported PartnerRe’s base salaries for the Executive Committee fall between the 25th and 50th percentile of base salaries of the peer companies identified on page 51.
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 |
Executive Committee base salaries are shown in the table above. Salaries for William Babcock, Marvin Pestcoe and Emmanuel Clarke were set at the same amount ($535,000). Mr. Clarke’s salary was then converted to Swiss Francs (CHF), based on a 3-month average exchange rate up to the date of his promotion, and fixed for payment in his home location. The table does not include a year-on-year comparison of salaries because only two of the current executive officers have been in the same position for two years.
(1) | Base salaries effective April 1, 2012. |
Annual Cash Incentive
All PartnerRe employees, including membersAnnual cash incentive is an “at risk” performance based component of compensation. Annual cash incentive is designed to align NEO and shareholder interests through the Executive Committee, are eligible for anattainment of predetermined metrics and objectives.
Pursuant to PartnerRe’s annual cash incentive if predetermined performance goals are met. 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. This section details the value of the awards for each executive officer in respect of 2010 business performance and explains how the annual incentive is determined.
Under the annual incentive guidelines,program, each employee has a target annual incentive—set to the median range of the competitive market—cash incentive that is expressed as a percentage of base salary. The annual cash incentive payout ranges from 0% to 200% of the target, payout, depending upon actual performance results.
The following table shows the 2010 target annual incentive, the maximum payout, and the actual payout for each executive officer:compared with predetermined performance metrics.
Current Executive Officers | ||||||||||||||||||
Name | Target annual incentive as a | Base Salary (at December 31, 2010) | Target Annual Incentive Payout (100% of Target) | Maximum Annual Incentive Payout (200% of Target) | Actual Annual Incentive Payout | |||||||||||||
Costas Miranthis | 125% | $ | 800,000 | $ | 1,000,000 | $ | 2,000,000 | $ | 789,544 | |||||||||
William Babcock(1) | 100% | $ | 535,000 | $ | 535,000 | $ | 1,070,000 | $ | 381,820 | |||||||||
Emmanuel Clarke(1) | 100% | CHF 593,000 | CHF 593,000 | CHF 1,186,000 | CHF 399,622 | |||||||||||||
Marvin Pestcoe(1) | 100% | $ | 535,000 | $ | 535,000 | $ | 1,070,000 | $ | 856,423 | (4) | ||||||||
Theodore C. Walker | 100% | $ | 570,000 | $ | 570,000 | $ | 1,140,000 | $ | 527,250 | |||||||||
2010 Executive Officers who Retired in 2010 | ||||||||||||||||||
Patrick A. Thiele | 125% | $ | 1,000,000 | $ | 1,250,000 | $ | 2,500,000 | $ | 912,500 | |||||||||
Albert A. Benchimol(2) | 125% | $ | 600,000 | $ | 750,000 | $ | 1,500,000 | $ | 962,217 | |||||||||
Bruno Meyenhofer(3) | 100% | CHF 793,000 | CHF 793,000 | CHF 1,586,000 | CHF 793,000 |
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 |
(1) |
Performance Weightings, Metrics, and Scales
The annual incentive paid toFor the Executive Committee varies based on predeterminedNEOs, the performance measures designedpredetermined by the Compensation Committee are as follows:
1. | Total Group Performance (Group AROE + Group Organizational Objectives) |
2. | Business Unit Financial Performance |
3. | Business Unit/Personal Objectives |
The AROE metric is PartnerRe’s primary financial metric because it focuses on the value provided to both motivateshareholders and reward. In November 2009,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 performance goalsmetrics within the Total Group Performance measure and the weighting of each measure for each executive officerNEO for the 2010 calendar2012 performance year. We use metrics toEach measure both financial and non-financial (organizational) results against these objectives. Each metric is weighted to reflect the contributions of each NEO toward our strategy, the current business environment, andas well as the behaviors that the Compensation Committee wantswishes to encourage and reward. The following table details the 2012 weightings and measures for each NEO:
For
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 past two years,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 Group AROE and Group Organizational Objectives, with Group AROE being the primary financial metric used to calculate annual incentives has beenmetric. As further detailed under “Increased Weight on Financial Performance in Determining Annual Incentive” on page 30, the Compensation Committee 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:
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 Compensation Committee rated Costas Miranthis 175% for the qualitative portion of his annual cash incentive to reflect performance against objectives and additional activities undertaken throughout the year. This rating applies to Mr. Miranthis only. |
** | Emmanuel Clarke, Marvin Pestcoe and Theodore C. Walker. |
Group Adjusted Return on Equity. Adjusted Equity
The Compensation Committee assessed 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 determine Total Group Performance and consequently the 2012 performance year annual cash incentive payouts.
Return on Equity adjusts Return(“ROE”) is based on Equity by capturingoperating 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 our Capital Risks. Capital Risksthe Company’s Risk Assets. Risk Assets are a part of the Capital Markets portion of the business which continuesCompany’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 accordance with U.S. GAAP. See Appendix II to grow. We believe that Adjusted Return on Equity is the broadest and bestthis Proxy Statement for a reconciliation of this non-GAAP financial measure of operating performance, as it measures profit achieved relative to the shareholders’ investment.most directly comparable GAAP financial measure.
The payout scale which has not changed in eight years, is as follows:follows and is subject to interpolation.
Group AROE Performance | Payout of Award as a Percentage of Target Annual Cash Incentive | |
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>17% | ||
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< | 0% |
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 |
The annual cash incentive payout is capped at 18%,200% because an uncapped payout could encourage behaviorrisk-taking activities that isare not in the best interests of PartnerReour shareholders.
PartnerRe’s Adjusted Return on Equity has reached
The scale is designed to ensure that our shareholders receive a low of 9.4%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 a high of 30.4% overprovide the past five years. See “Performance Trend,” which begins on page 42.opportunity to pay for performance.
2010 Annual Incentive WeightingsThe Group AROE for 2012 was 15% and consequently the payout award for this component for the 2012 performance year was 150%.
Group Organizational Objectives
Non-financial objectives are recommended annually by the Chief Executive Officer and approved by the Compensation Committee and 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 Group 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 the 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 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 detailsshows the 2010 weightsBusiness Unit ROE metric used for the Business Unit Performance measure, weight of the Business Unit Performance measure (among all measures), target and measuresactual 2012 performance for each executive officer. The weightings reflect the contributions of each executive officer to the three measures, based on their role.NEOs that had a Business Unit Performance measure:
Current Executive Committee | Retired in 2010 | |||||||||||||||
Measure | Costas Miranthis (1) | William Babcock (1) | Emmanuel (1) | Marvin (1)(3) | Theodore Walker | Patrick A. Thiele | Albert A. (3) | Bruno Meyenhofer | ||||||||
Total Group Performance(2) | 50% | 70% | 50% | 50% | 50% | 85% | 50% | 50% | ||||||||
Business Unit Performance | 20% | 30% | 30% | 30% | 30% | 20% | ||||||||||
Organizational Objectives(4) | 30% | 30% | 20% | 20% | 20% | 15% | 20% | 30% |
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) |
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size capital position to market opportunity;
respond quickly and intelligently to market;
be more active in regulatory/accounting forums; and
continue to improve management development and integrated risk management.
Qualitative goals were also set for the other executive officers based on their position.
Performance Trend
The following chart shows PartnerRe’s performance over the past five years and the corresponding company-wide payout levels as a percentage of target annual incentive.
Company-Wide Adjusted Return on Equity
2006(1) | 2007(1) | 2008(1) | 2009(2) | 2010(2) | ||||||||||||||||
Adjusted Return on Equity | 25.5 | % | 25.2 | % | 12.3 | % | 30.4 | % | 9.4 | % | ||||||||||
Payout Percentage | 200 | % | 200 | % | 100 | % | 200 | % | 40 | % |
(2) | Metric used for CMG Business Unit Performance Measure | Metric Description | Relative Weight measure (among | Target | Actual 2012 Performance | Scale Payout | ||||||
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% |
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 following graph shows PartnerRe’s annual incentiveCompensation 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 executive officer as a percentage of target annual incentive (“Target AI”) over the past five years against the corresponding company performance (either Calendar Year Return on Equity or Adjusted Return on Equity, as appropriate) for those years. Values are only shown for the years in which the executive officers were members of the Executive Committee.NEO.
Executive Officer Annual Incentive (as % of Target AI) and Company Performance
Equity Awards
The Compensation Committee strivesEquity 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 employeesNEOs and shareholders, by encouraging all employees to own PartnerRe common shares. One way PartnerRe pursues this objective is by making annual grants of equity awards.
Under our Employee Equity Plan, all employees may receive an annual award in the form of equity if PartnerRe achieves a predetermined financial goal. Equity awards for the Executive Committee are typically delivered in a mix of restricted share units or share-settled share appreciation rights (“SSARs”).
This section explains how the annual equity awards are determinedreflect long-term performance goals and what each executive officer was awarded for the 2010 performance year. See “Equity Customization,” which begins on page 48 for detail on how executive officers who reach prescribed target ownership levels may customize the form of their equity grants by choosing the mix of restricted share units and SSARs.
Total Equity Pool
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. To that end, the total size of the 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 Adjusted Return on Equity (which is used to determine PartnerRe’s incentive payouts), the measure of economic value per share captures economic value
creation that is not reflected in PartnerRe’s U.S. GAAP financial statements. Specifically, the reinsurance activities of past and current periods create economic value that is not recognized until a future period. In addition, this measure is more consistent with the objectives of a long-term incentive award. Using a four-year 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.
To calculate economic value per share, PartnerRe makes four adjustments to U.S. GAAP shareholders equity:
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.
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This pool allocation scale supports shareholder value, through management of dilution of common stock outstanding, and manages risk through the cap of 0.58% of RSUsact as a percentage of common shares outstanding so that employees are not encouraged to take risks that are normally associated with uncapped awards.
PartnerRe achieved a compound annual growth in economic value per share of 10.8% at December 31, 2010, based on four years of compound annual growth. The total number of fully diluted outstanding shares at December 31, 2010 was 71.3 million. Consequently, the Compensation Committee approved a pool of 328,051 restricted share units (0.46% of fully diluted common shares outstanding as of December 31, 2010) for annual equity awards to employees.talent retention vehicle.
Form of Equity
EquityThe 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 Executive Committee consistNEOs 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 a mix of restricted share units and SSARs. Awards are typically comprised of 60% SSARs and 40% restricted share units, but Executive Committee members who meet a prescribed share ownership target (see “Share Ownership Guidelines”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 2012 performance year grant, upon settlement, PSU awards can be adjusted upward or downward based on pages 46-47) may adjust this mix. For more information, see “Executive Share Ownership and Retention” which begins on page 46.
As prescribed in the Executive Total Compensation Plan, the restricted share units, which vest all at once (known as “cliff vesting”) three years after the grant date, is designed to encourage members of the Executive Committee to remain with PartnerRe. Similarly, SSARs, which vest over a period of three years (known as “ratable vesting”) will encourage the Executive Committee to continue efforts to achieveaverage 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 payout scale on settlement, based on performance and share price. Competitive peer group analysis shows that these vesting schedules are consistent with market practice.
Equity Pool Allocation
The Compensation Committee recommends how the equity pool should be allocated among the Chief Executive Officer, the other Executive Committee members, and other employees. The allocation of shares available for equity awards is shown in the table below. This allocation formula has been consistently used over the past five years.
If the Compensation Committee approves a cash payment in lieu of an equity grant, the grant equivalent will be removed from the pool amount rather than being redistributed among the remaining executives.subject to straight-line interpolation:
PSU Metric Scale (above risk-free return1) | PSU Adjustment % | |||
Maximum | >1,200bps | 150% | ||
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Minimum | ||||
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(1) | Based on a reference portfolio of risk-free securities with three-year duration. |
Equity award grants toAllocation
The following table shows the individual Executive Committee membersNEO’s equity awards granted on March 1, 2013 for 2010 were as follows:the 2012 performance year:
Current Executive Officers | ||||||||||||||
Name | Allocation as % of Total Equity Pool | SSARs (3-year ratable vest)(4) | Restricted Share Units (3-year cliff vest) | Total Equity Award Value(1) | RSUs(1) | PSUs(1) | SSARs(2) | |||||||
Costas Miranthis | 7.02% | 69,099 | 9,213 | $1,887,324 | 13,453 | 13,453 | 47,085 | |||||||
William Babcock | 2.55% | 14,395 | 5,470 | $ 684,117 | 5,605 | 5,605 | 19,619 | |||||||
Emmanuel Clarke | 3.04% | 19,194 | 6,142 | $ 817,843 | 5,605 | 5,605 | 19,619 | |||||||
Marvin Pestcoe | 2.55% | 14,395 | 5,470 | $ 684,117 | 5,605 | 5,605 | 19,619 | |||||||
Theodore C. Walker | 7.02% | 69,099 | 9,213 | $1,887,324 | 5,605 | 5,605 | 19,619 | |||||||
2010 Executive Officers who Retired in 2010 | ||||||||||||||
Patrick A. Thiele(2) | 13.40% | N/A | N/A | $3,580,450 | ||||||||||
Albert A. Benchimol(2) | 7.02% | N/A | N/A | $1,871,431 | ||||||||||
Bruno Meyenhofer(3) | N/A | N/A | N/A | N/A |
(1) | The |
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(2) |
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) | Base salary at December 31 of each year. |
(2) |
(3) |
The historical values of equity awards to the executive officers for each of the last five years were as follows:
Amounts based on the fair market value on grant day multiplied by the number of restricted share unit equivalents.
Name | 2007 | 2008 | 2009 | 2010 | Percentage 2010 vs 2009 | |||||
Costas Miranthis(1) | CHF 1,155,660 | CHF 401,198 | CHF 1,879,102 | $1,887,324 | 4% | |||||
William Babcock | N/A | N/A | N/A | $ 684,117 | N/A | |||||
Emmanuel Clarke(2) | N/A | N/A | N/A | CHF 768,772 | N/A | |||||
Marvin Pestcoe | N/A | N/A | N/A | $ 684,117 | N/A | |||||
Theodore C. Walker | N/A | N/A | $1,806,829 | $1,887,324 | 4% | |||||
Patrick A. Thiele | $2,664,083 | $758,993 | $3,608,323 | $3,580,450 | (1%) | |||||
Albert A. Benchimol | $1,771,089 | $380,066 | $1,806,829 | $1,871,431(4) | 4% | |||||
Bruno Meyenhofer(3) | CHF 1,926,098 | CHF 401,198 | CHF 1,879,102 | N/A | N/A |
N/A shown for years during which an executive officer was not an executive officer.
Executive Share Ownership and Retention
To promote the goal of aligning the interests of the Executive CommitteeNEOs with the interests of shareholders, the Executive Total Compensation Program prescribes share ownership guidelines, holding restrictions and incentives to encourage the Executive CommitteeNEOs to hold a stake in the future value of PartnerRe.
Share Ownership Guidelines
The Executive Committee is required to meet and maintain aTotal Compensation Program prescribes net share ownership targetretention guidelines for “total shareholdings,” which means total shares and equivalents including shares owned outright, restricted shares, restricted share units, shared held in qualified plans, and deferred share units. The target is expressed as a percentage of total shares outstanding at December 31, 2010, and was derived from a study of share ownership among senior executives in our competitive peer group. As noted in the section “2010 Executive Officer and Compensation Changes” on page 37, ownership targets were revised in May 2010.
The table below shows the ownership targets and the actual share ownership for each executive officer as of December 31, 2010.
Current Executive Officers | ||||
Name | Target—Total percentage of shares outstanding | Actual shares/equivalents as a percentage of shares outstanding | ||
Costas Miranthis | 0.03% | 0.03% | ||
William Babcock | 0.03% | 0.01% | ||
Emmanuel Clarke | 0.03% | 0.01% | ||
Marvin Pestcoe | 0.03% | 0.01% | ||
Theodore C. Walker | 0.03% | 0.02% | ||
2010 Executive Officers who Retired in 2010 | ||||
Patrick A. Thiele | 0.07% | 0.32%(1) | ||
Albert A. Benchimol | 0.03% | 0.04%(1) | ||
Bruno Meyenhofer | 0.03% | 0.07%(1) |
We do not expect those recently promoted to the Executive Committee to satisfy the share ownership target for several years, because they have not been members of the Executive Committee long enough to accumulate a sufficient number of shares.
PartnerRe does not impose a penalty on Executive Committee members who have yet to reach their ownership targets. However, executives who have not met their targets may not sell any of the net shares they acquire, and they are not eligible for our compensation customization program.all equity grants. For this purpose, “net shares” are the common shares remaining from a transaction (i.e.(i.e., the exercise of an option or the vesting of restricted shares) after the 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. Specifically:include the following:
Executive Committee membersNEOs who have not satisfied the applicable share ownership target must retain 100% of the net shares they acquire until they reach the target.
Executive Committee membersNEOs who have met the share ownership target must retain, for at least three years, 50% of the net shares they acquire. This holding period is reduced to one year for Executive Committee members whoacquire unless they are 55 or older.older, in which case the retention period for the net shares will be one year.
If an Executive Committee memberNEO has met the share ownership target, but his or herthe holdings subsequently drop below the target amount for any reason (for example, a new share reissuance)issuance), the executive will have a one-year grace period to once again meet the target. During this grace period,
The net share retention guidelines do not apply to grants made prior to becoming an executive can replenish holdings through new awards or purchases, and remains eligible for compensation customization.NEO.
The Compensation Committee has the discretion to make adjustments to these guidelines under special circumstances.guidelines.
Elective Company Match
The Compensation Committee further encourages share ownership by offering any Executive Committee member who has not reached the prescribed share ownership target is expressed as a company match, in the formpercentage of restricted deferred share units, on elective deferrals of cash annual incentives. An executive officer may defer all or a portion of a 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 the Executive Committee may choose to defer their delivery dates for 10 years or until retirement or other termination. The decision to defer the delivery date is irrevocable. The company match will consist of restricted share units valued at 25% of the deferred cash annual incentive. These restricted share units will cliff vest after three years and have delivery date restrictions that match the restrictions of the related deferred share units.
Equity Customization
The Compensation Committee recognizes that Executive Committee members 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, andPartnerRe’s fully diluted common shares outstanding (“CSO”) at the same time keeps executives’ interests aligned with shareholders’ interests,end of each calendar year and includes all common shares and equivalents held by the Executive Total Compensation Program permits Executive Committee members who have met the applicable share ownership target described above to customize their compensation. AsNEO. The number of fully diluted CSO at December 31, 2010, current Executive Committee members were not eligible to customize annual equity compensation. Mr. Thiele, Mr. Benchimol, and Mr. Meyenhofer were all eligible for customization immediately prior to their retirements.
The compensation customization guidelines permit eligible executives to choose the form in which they will receive the value of their annual equity awards. This customization allows PartnerRe executives the flexibility to determine their awards based on their risk profile and demographics, including tax and estate planning. Prior to customization, the standard target distribution of annual equity awards is 60% in SSARs and 40% in restricted share units.2012, was 59,893,366. The table below shows the alternatives available to an executive officer who has met theownership targets, common share ownership, target.and ownership expressed as a percentage of CSO for each NEO as of December 31, 2012. All of the NEOs have reached their share ownership targets.
Share Options/SSARs* | 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 | % |
* | Common Share |
A table under the heading “Equity Awards—Equity Pool Allocation” on page 45 shows how the Executive Committee received their awards for 2010.
Retirement Benefits and Conditions
The Compensation Committee determined that Executive Committee members 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 PartnerRe should share in the rewards of their contributions, even after they retire. In addition, the Compensation Committee encourages members of the Executive Committee to focus on PartnerRe’s long-term value, even beyond their proposed retirement dates, by enabling them to realize the full benefits of their long-term incentive awards. To accomplish both of these objectives, the Executive Total Compensation Program outlines post-retirement treatment of equity compensation awarded to members of the Executive Committee who meet prescribed age and service requirements and who agree to certain conditions.
Executive Retirement Definition and Status
Members of the Executive Committee are eligible to retain the beneficial treatment of long-term equity compensation awards after retirement once they meet one of these age and service requirements:
60 years old with 10 years of service; or
65 years old.
These requirements are more stringent than requirements for other employees in order to encourage the retention of the Group Chief Executive Officer and other key executives.
Treatment of Equity Compensation on Retirement
Under the Executive Total Compensation Program, any unvested awards held at retirement by an eligible executive officer will continue to vest under the original vesting provisions. Similarly, any options or SSARs (including those that vest post-retirement) will continue to be exercisable for the remainder of their original terms. Unvested awards held at retirement by an executive officer who has not met the eligibility criteria will simply expire.
Post-retirement Conditions
In order to retain the beneficial treatment of long-term equity compensation awards, an 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.
Summary of 2010 Retirements
The following retirement benefits were approved by the Compensation Committee.
Patrick A. Thiele, President and Chief Executive Officer, PartnerRe until December 31, 2010:
Payments and Benefits
Housing allowance in lump sum (housing available through May 2011)
Tax filing assistance for 2010 and 2011 to be provided
Post-retirement medical benefits until 65 years
Payout of 2010 performance year annual incentive in February 2011
Lump-sum payment of the Bermuda Deferred Compensation plan in July 2011
Relocation expenses
Executive assistant support through April 2011
Bermuda Social Insurance benefits
Equity
Full vesting of equity as of December 31, 2010
Equity award for the 2008 performance year (paid in cash)
Equity award for the 2010 performance year based on projected performance with adjustment in February 2011 if the actual award grant is higher or lower than equity awarded at retirement. Elected to take 100% cash as permitted under the grandfathered provisions of the Executive Total Compensation Program.
Albert A. Benchimol, Executive Vice President and Chief Financial Officer, PartnerRe Ltd., and Chief Executive Officer, Capital Markets Group until September 30, 2010:
On July 12, 2010, PartnerRe announced that Albert Benchimol would be retiring from his positions with PartnerRe and its subsidiaries. In connection with his retirement, Mr. Benchimol entered into a separation
agreement with PartnerRe, dated as of July 28, 2010 and for purposes of this separation agreement, his retirement was treated as a resignation for “good reason” pursuant to his employment agreement, effective as of December 31, 2010. Under the separation agreement, which contains a customary mutual release of claims, Mr. Benchimol received the following payments and benefits:
Payments and Benefits
Separation payment of $6 million (approximated to be two years’ base salary, target annual incentive and equity awards), in recognition of Mr. Benchimol’s many years of service to PartnerRe and his agreement to assist in the transition of his duties
Annual incentive based on the average of the annual incentives paid out in the previous three years
Eligibility for Mr. Benchimol and his dependents to participate in PartnerRe’s health insurance plans up to April 1, 2011
Reimbursement of up to $25,000 of legal fees incurred in negotiating and executing his separation agreement (the actual amount of legal fees incurred was $20,790)
Equity
Full vesting of all unvested equity, including SSARs, restricted share units and options, upon execution of the separation agreement
Cash equivalent of equity award for the 2010 performance year based on projected performance, with adjustment in February 2011 if the value of the actual award is higher than such cash equivalent
Other
Waiver to seek employment in companies considered competitors in the insurance business in the locations where PartnerRe does business
For the Period October 1, 2010 to December 31, 2010 Mr. Benchimol continued to report to Mr. Thiele, but relinquished his roles as Chief Financial Officer, PartnerRe Ltd. and Chief Executive Officer, Capital Markets Group and ceased to be a member of the Executive Committee.
Bruno Meyenhofer, Chairman, PartnerRe Global until March 31, 2010
Payments and Benefits
2010 annual incentive payment, in respect of the 2009 performance year, based on actual performance.
2011 annual incentive payment, in respect of the 2010 performance year, at target.
Eligible to continue in the executive health care program in 2010.
Equity
2010 equity grant, in respect of the 2009 financial year. Election filed to take 100% cash as permitted under the grandfathered provisions of the Executive Total Compensation Program.
All unvested equity to vest immediately on April 1, 2010.
Other Compensation and Benefits
Mr. Thiele was based at the corporate headquarters in Bermuda until his retirement. His successor, Mr. Miranthis is also based 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. In addition, the Executive Committee in Bermuda is entitled to reimbursement of car expenses, club fees, and tax filing assistance. See “2010 Summary Compensation Table” on page 55 for further details.
Other items included in the “All Other Compensation” column of the 2010 Summary Compensation Table reflect each 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 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 Executive CommitteeNEOs 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 64.
Compensation Review
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 & Co, Inc., 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, number of employees and business mix. The Compensation Committee considered and approved the composition of the peer group.
Our 2010 peer group comprises the following companies:
ACE Ltd.
Arch Capital Group Ltd.
Axis Capital Holdings Limited
Everest Re Group Ltd.
Munich Re
Reinsurance Group of America
RenaissanceRe Holdings
SCOR SA
Transatlantic Holdings Inc.
XL Capital Ltd.
In November 2010, the Compensation Committee reviewed an analysis prepared by Frederic W. Cook & Co, Inc. comparing compensation within the peer group. The analysis indicated that the total compensation of PartnerRe’s Executive Committee is positioned between the 20th and 50th percentile against executive officers with comparable responsibilities at peer group companies.
Pay Analysis
In February 2011, management prepared a pay analysis for the Compensation Committee that makes both internal and external comparisons. The external analysis, which was based on a study conducted by Frederic W. Cook & Co, Inc. in November 2010, compares the levels of each principal element of compensation, as well as total compensation, for the Executive Committee relative to our competitive peer group. Due to the cyclical nature of the reinsurance industry, this analysis covers a three-year period to ensure that decisions are not skewed by results from aberrational years.
After reviewing the analysis, the Compensation Committee determined that the Chief Executive Officer’s compensation, compared to the compensation of the other executive officers, is appropriate and reflects the
differences in their respective responsibilities. The Compensation Committee also determined that compensation for the other executive officers is appropriately positioned between the Chief Executive Officer and the next level of management.pages 48-53.
Benefits & Perquisites Review
InTo meet competitive market conditions, benefits and perquisites are provided to NEOs. Towers Watson reviewed PartnerRe’s benefits and perquisites in February 2011 Towers Watson conducted a review of PartnerRe’s executive perquisitesas compared with our Bermuda-based competitive peer group. This assessment was based on benefits and perquisites provided toThe review concluded that the five highest paid Named Executive Officers, to the extent disclosed. The findings showed that PartnerRe appears to beCompany is aligned with those peersthe peer group in both types of benefits and perquisites provided as well as the aggregate spend oncost of these benefits and perquisites. The most costlyIn 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 included housing,include personal use of corporate jet, tax filing assistanceaircraft (for the Chief Executive Officer only, capped at 30 hours), housing, club membership, car and tax equalization. These four perquisites were found to be among the most prevalent perquisites provided amongst the peers. Many of the most prevalent perquisites provided by the peers reflect those typically seen in the Bermuda market, such as housing, home leave, corporate aircraft,travel allowances. The Company does not offer tax gross-ups and club dues. In 2009, PartnerRe provided total aggregate benefitsto NEOs.
Governance Features of $1.4 million which aligns with the average amount provided by the peer group in Bermuda-based competitive executive benefits and perquisites. The benefits and perquisites provided are dictated by the markets in which PartnerRe competes for talent and to reduce or remove those benefits may produce an attraction or retention concern.our Executive Compensation Program
Compensation Programs and Risk Management
Our approach to risk management involves three key factors:
A responsible 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. However, asAs described below,above, our compensation programs contain a number of design features that proactively discourage excessive risk-taking and inappropriate behavior.risk-taking. It is the view of the Compensation Committee that PartnerRe’s Compensationcompensation policies and procedures do not create risks that are reasonably likely to have a material adverse effect on the Company.
The Board’s Role in Risk Management
The Compensation Committee, which meets a minimum of four times a year, is the primary body charged with the corporate governance of executive compensation. In 2010, the Compensation Committee met five times. The role of the Compensation Committee and their approval process is detailed on pages 22-24.
The Risk & Finance Committee oversees risk managementPartnerRe. These policies and practices. That committee met four times in 2010 to discuss risks related to PartnerRe’s business strategy. Further information about the Risk & Finance Committee can be found under “Committees of the Board of Directors—Risk & Finance Committee” on page 25.
Mix of Base and Variable Pay
Base salariesprocedures 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. We confirm our market positioning each year by referring to survey data from external consultants and peer group analysis for executive positions. The mix of fixed and variable pay is balanced, and,reviewed as explained in the annual incentive section on page 40, the variable portion is capped so that employees are not unduly motivated to maximize bonus earnings. Annual incentive targets for Executive Committee are 100 – 125% of base salary, reflecting typical market practice for the reinsurance industry.
Annual Incentives
Without exception, annual incentives (expressed as a percentage of base salary) are capped at 200% of the target incentive. Therefore, employees are not induced 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.
Performance objectives are established annually for each employee. Objectives are divided into two parts: financial and non-financial. Non-financial objectives are recommended annually by the Chief Executive Officer and approved by the Board. Financial objectives, also approved by the Board, are based on targets that are fixed at Adjusted Return on Equity of 13%; we don’t have annual plan goals that are continuously adjusted. These objectives are designed to ensure that our shareholders receive a minimum return—currently at least 8% Adjusted Return on Equity—before employees can receive annual incentive awards. Annual incentives are structured so that at least 50% of the total incentive for every employee is based on financial metrics.
PartnerRe has a look-back policy in place at the business unit level that rolls up to executives. The policy ensures that short-term annual incentive awards are linked to long-term business performance by reviewing previous awards and business performance on which those awards were based before making annual incentive decisions.
Employee Equity Grants
We want employees to own a part of the companyCompany’s risk management framework.
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 ultimately to benefit from(iii) PartnerRe has determined that the wealth creation opportunity. To that end, we communicatematerial non-compliance causing the size of equity grants in termsrestatement was the result of the numberaward recipient’s willful misconduct. The requirement to repay applies to any amounts granted, vested, obtained as the result of shares, rather thanexercise or otherwise paid out during the market12 months following the date the financial statements subject to the restatement were filed with the SEC. 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 the Sarbanes-Oxley Act of 2002, which remain in effect. PartnerRe intends to further adjust our clawback policy in light of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 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 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 shares.
The financial metric usedannual 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 determine the sizestart of the equity pool available for distribution eachperformance year is the four-year compound annual growth rate in economic value per share (see “Equity Awards—Total Equity Pool” on pages 43 and 44). This measure ensuresto create challenging but realistic targets so that the pool reflects long-term results rather than a single year of our business. An additional risk-management feature in the equity plan design is that the total equity pool is expressed as a percentage of total common shares outstanding, which effectively manages shareholder dilution and burn rates.
Potential Conflicts of Interest of Compensation Consultants
Frederic W. Cook & Co, Inc. is a consulting firm retained by the Compensation Committee for the sole purpose of advising on executive compensation throughout the year. Frederic W. Cook & Co, Inc. does not perform consulting work for the management team, which precludes any conflict of interest. Similarly, executive compensation consulting projectsrisk-taking behaviors are not awardedundertaken to external advisors who undertake ongoing consulting work for management in areas such as finance, tax, audit, corporate restructuring, or legal services.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.
Accounting Standards
The Compensation Committee considers the accounting treatment of compensation elements in determining types and levels of compensation for our NEOs. In determining equity awards in 2010,2012, the Compensation Committee considered the potential dilution impact of the Employee Equity Plan and the impact on dilution.Plan. The Compensation Committee concluded that the associated dilutive impact was 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 M. Twomey, Vice-ChairmanJan Holsboer
Roberto Mendoza
John A. Rollwagen
Jürgen Zech
David Zwiener
20102012 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, 2010, 20092012, 2011 and 2008. For the purposes of this proxy statement, we have elected to treat our current executive officers, as well as those executive officers who retired in 2010, as our Named Executive Officers.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 16, 201128, 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”. on page 43.
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name and Position (1) | Year | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Patrick A. Thiele, President and Chief Executive Officer, PartnerRe Ltd. | 2010 | 1,000,000 | 1,418,148 | 3,608,323 | 0 | 4,492,950 | 6,605,025 | 17,124,446 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 1,000,000 | 1,911,544 | 0 | 0 | 5,000,000 | 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
William Babcock Executive Vice President and Chief Financial Officer, PartnerRe Ltd. | 2010 | 467,534 | 0 | 108,270 | 218,357 | 381,820 | 225,025 | 1,401,006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Albert A. Benchimol, Executive Vice President and Chief Financial Officer, PartnerRe Ltd., and Chief Executive Officer, Capital Markets Group | 2010 | 595,500 | 0 | 722,779 | 725,829 | 2,833,648 | 8,675,235 | 13,552,991 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costas Miranthis, President and Chief Operating Officer, PartnerRe Ltd.(5) | 2010 | 797,996 | 0 | 722,779 | 1,235,829 | 789,544 | 1,283,170 | 4,829,318 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 705,966 | 0 | 152,026 | 154,544 | 1,377,788 | 1,225,176 | 3,615,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 688,152 | 0 | 500,714 | 708,642 | 1,019,063 | 1,206,148 | 4,122,719 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emmanuel Clarke Chief Executive Officer of PartnerRe Global(6) | 2010 | 492,295 | 0 | 127,376 | 232,420 | 423,599 | 276,642 | 1,552,332 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruno Meyenhofer, Chairman, PartnerRe Global(7) | 2010 | 210,147 | 2,351,732 | 0 | 0 | 840,588 | 1,115,571 | 4,518,038 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 840,588 | 785,154 | 0 | 0 | 1,664,348 | 121,359 | 3,411,449 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 834,492 | 0 | 834,523 | 0 | 1,260,870 | 135,827 | 3,065,712 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marvin Pestcoe Chief Executive Officer of PartnerRe Capital Markets Group(8) | 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 | 2010 | 550,419 | 0 | 722,779 | 725,829 | 527,250 | 90,429 | 2,616,706 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 525,000 | 0 | 19,808 | 103,136 | 813,750 | 77,931 | 1,539,625 |
(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 each |
|
|
In accordance with the SEC proxy disclosure rules, columns (e) and (f) reflect the amount of |
The figures reflect the non-equity incentive compensation paid in 2013 for the 2012 performance year. For more details see page 33. |
(4) | Mr. Miranthis’ |
Mr. Pestcoe’s non-equity incentive plan compensation for 2010 |
Patrick A. Thiele ($) | William Babcock ($) | Albert A. Benchimol ($) | Costas Miranthis ($) | Emmanuel ($) | Bruno Meyenhofer ($) | Marvin Pestcoe ($) | Theodore C. Walker ($) | |||||||||||||||||||||||||
Housing(1) | 320,000 | 88,213 | 0 | 272,234 | 97,613 | 0 | 0 | 0 | ||||||||||||||||||||||||
Tax equalization | 153,265 | 55,292 | 0 | 596,246 | 51,517 | 0 | 0 | 0 | ||||||||||||||||||||||||
Bermuda payroll tax reimbursement(2) | 36,500 | 17,396 | 0 | 21,563 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Bermuda government social insurance | 1,581 | 0 | 0 | 527 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Car expenses(3) | 0 | 0 | 0 | 37,419 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Club fees | 8,650 | 0 | 0 | 1,263 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Tax filing assistance(4) | 57,760 | 1,080 | 20,700 | 20,918 | 9,695 | 0 | 0 | 0 | ||||||||||||||||||||||||
Personal use of corporate apartment(5) | 1,676 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Personal use of corporate jet(6) | 531,183 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Company contributions to defined contribution plans and non-qualified plan | 0 | 51,429 | 65,505 | 110,060 | 36,351 | 12,615 | 56,788 | 60,546 | ||||||||||||||||||||||||
Retirement allowance(7)(8) | 150,000 | 0 | 52,659 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Life insurance premiums | 2,016 | 3,828 | 3,828 | 5,253 | 0 | 0 | 3,828 | 3,828 | ||||||||||||||||||||||||
Dividend equivalents | 147,991 | 6,105 | 30,915 | 41,566 | 9,567 | 16,663 | 7,455 | 24,373 | ||||||||||||||||||||||||
Interest from equity customization | 2,341 | 0 | 0 | 0 | 0 | 557 | 0 | 0 | ||||||||||||||||||||||||
Executive health benefit-company paid portion | 26,084 | 0 | 0 | 0 | 0 | 4,399 | 0 | 0 | ||||||||||||||||||||||||
Executive health benefit-gross up | 15,545 | 0 | 0 | 0 | 2,301 | 0 | 0 | |||||||||||||||||||||||||
Health coverage premium | 142,140 | 0 | 6,000 | 15,142 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Relocation/shipping expenses | 40,000 | 0 | 0 | 135,977 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Children’s education costs | 0 | 0 | 0 | 23,320 | 71,899 | 0 | 0 | 0 | ||||||||||||||||||||||||
Director & Executive Officer spousal program(9) | 1,682 | 1,682 | 1,682 | 1,682 | 0 | 0 | 0 | 1,682 | ||||||||||||||||||||||||
Vacation payout | 0 | 0 | 0 | 0 | 0 | 218,487 | 0 | 0 | ||||||||||||||||||||||||
Separation payment | 0 | 0 | 6,000,000 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Accelerated vesting of equity awards(10) | 4,936,302 | 0 | 2,473,156 | 0 | 0 | 860,549 | 0 | 0 | ||||||||||||||||||||||||
Executive assistant support | 30,309 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Legal Fees | 0 | 0 | 20,790 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Total | 6,605,025 | 225,025 | 8,675,235 | 1,283,170 | 276,642 | 1,115,571 | 68,071 | 90,429 |
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 |
(3) | The Chief Executive Officer has access to |
20102012 Grants of Plan-Based Awards
This table discloses the target and maximum cash-based non-equity incentive plan awardspayouts in respect of 2010,the 2012 performance year, and equity awards granted in 2010. 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 ($)(2) | Grant Date Value of Stock Option Awards ($)(3) | 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 ($) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||||||||||||||||||||||||
Patrick A. Thiele | 2/26/2010 | 0 | 0 | 0 | 45,325 | 0 | 79.61 | 3,608,323 | ||||||||||||||||||||||||||||||||||||||||||||
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 | — | 0 | 1,250,000 | 2,500,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
William Babcock | 2/26/2010 | 0 | 0 | 0 | 1,360 | 0 | 79.61 | 108,270 | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||||||||||||||||||||||||
2/26/2010 | 0 | 0 | 0 | 0 | 10,200 | 79.61 | 108,732 | |||||||||||||||||||||||||||||||||||||||||||||
10/1/2010 | 0 | 0 | 0 | 0 | 12,500 | 80.45 | 109,625 | |||||||||||||||||||||||||||||||||||||||||||||
— | 0 | 386,141 | 772,281 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Albert A. Benchimol | 2/26/2010 | 0 | 0 | 0 | 9,079 | 0 | 79.61 | 722,779 | ||||||||||||||||||||||||||||||||||||||||||||
2/26/2010 | 0 | 0 | 0 | 0 | 68,089 | 79.61 | 725,829 | |||||||||||||||||||||||||||||||||||||||||||||
— | 0 | 750,000 | 1,500,000 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Costas Miranthis | 2/26/2010 | 0 | 0 | 0 | 9,079 | 0 | 79.61 | 722,779 | ||||||||||||||||||||||||||||||||||||||||||||
2/26/2010 | 0 | 0 | 0 | 0 | 68,089 | 79.61 | 725,829 | |||||||||||||||||||||||||||||||||||||||||||||
5/12/2010 | 0 | 0 | 0 | 0 | 50,000 | 75.54 | 510,000 | 2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||||||||||||||||||||||||
— | 0 | 896,652 | 1,793,303 | 0 | 0 | 0 | 0 | — | 0 | 562,071 | 1,124,142 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||
Emmanuel Clarke(5) | 2/26/2010 | 0 | 0 | 0 | 1,600 | 0 | 79.61 | 127,376 | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||||||||||||||||||||||||
2/26/2010 | 0 | 0 | 0 | 0 | 12,000 | 79.61 | 127,920 | 2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||||||||||||||||||||||||
9/1/2010 | 0 | 0 | 0 | 0 | 12,500 | 75.80 | 104,500 | — | 0 | 681,952 | 1,363,903 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||
— | 0 | 427,301 | 854,602 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Bruno Meyenhofer(6) | — | 0 | 840,580 | 1,681,160 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||
Marvin Pestcoe | 2/26/2010 | 0 | 0 | 0 | 1,360 | 0 | 79.61 | 108,270 | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||||||||||||||||||||||||
2/26/2010 | 0 | 0 | 0 | 0 | 10,200 | 79.61 | 108,732 | |||||||||||||||||||||||||||||||||||||||||||||
10/1/2010 | 0 | 0 | 0 | 0 | 12,500 | 80.45 | 109,625 | 2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||||||||||||||||||||||||
— | 0 | 558,625 | 1,117,250 | 0 | 0 | 0 | 0 | — | 0 | 562,071 | 1,124,142 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||
Theodore C. Walker | 2/26/2010 | 0 | 0 | 0 | 9,079 | 0 | 79.61 | 722,779 | 2/29/2012 | 0 | 0 | 0 | 3,800 | 0 | 63.44 | 241,072 | ||||||||||||||||||||||||||||||||||||
2/26/2010 | 0 | 0 | 0 | 0 | 68,089 | 79.61 | 725,829 | 2/29/2012 | 0 | 0 | 0 | 0 | 28,500 | 0 | 202,635 | |||||||||||||||||||||||||||||||||||||
— | 0 | 570,000 | 1,140,000 | 0 | 0 | 0 | 0 | — | 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 |
The value of SSARs on February |
(5) | Mr. Clarke’s |
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 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.
20102012 Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding equity grants as of December 31, 2010.2012.
Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | 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 ($) | |||||||||||||||||||||||||||
William Babcock | 10/01/2010 | 0 | 12,500 | * | 80.45 | 10/01/2020 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
02/26/2010 | 0 | 10,200 | * | 79.61 | 02/26/2020 | 1,360 | 109,276 | 0 | 0 | |||||||||||||||||||||||||||
02/27/2009 | 911 | * | 1,852 | * | 61.90 | 02/27/2019 | 368 | 29,569 | 0 | 0 | ||||||||||||||||||||||||||
08/04/2008 | 6,187 | * | 3,188 | * | 69.50 | 08/04/2018 | 1,250 | 100,438 | 0 | 0 | ||||||||||||||||||||||||||
Albert A. Benchimol | 02/26/2010 | 68,089 | * | 0 | 79.61 | 02/26/2020 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
02/27/2009 | 18,420 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
05/23/2008 | 15,000 | * | 0 | 73.66 | 05/23/2018 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
02/27/2008 | 80,323 | * | 0 | 77.92 | 02/27/2018 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
02/23/2007 | 69,364 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
02/24/2006 | 21,385 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
02/10/2005 | 42,800 | 0 | 62.91 | 02/10/2015 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/24/2004 | 68,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/25/2003 | 42,500 | 0 | 49.68 | 02/25/2013 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/26/2002 | 21,750 | 0 | 53.80 | 02/26/2012 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Costas Miranthis | 05/12/2010 | 0 | 50,000 | * | 75.54 | 05/12/2020 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
02/26/2010 | 0 | 68,089 | * | 79.61 | 02/26/2020 | 9,079 | 729,498 | 0 | 0 | |||||||||||||||||||||||||||
02/27/2009 | 6,078 | * | 12,342 | * | 61.90 | 02/27/2019 | 2,456 | 197,340 | 0 | 0 | ||||||||||||||||||||||||||
09/05/2008 | 9,900 | * | 5,100 | * | 68.30 | 09/05/2018 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
02/27/2008 | 31,808 | * | 16,386 | * | 77.92 | 02/27/2018 | 6,426 | 516,329 | 0 | 0 | ||||||||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
02/24/2006 | 7,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
02/24/2005 | 14,000 | 0 | 62.70 | 02/24/2015 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/24/2004 | 11,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/25/2003 | 5,000 | 0 | 49.68 | 02/25/2013 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
05/27/2002 | 9,200 | 0 | 51.17 | 05/27/2012 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Emmanuel Clarke | 09/01/2010 | 0 | 12,500 | * | 75.80 | 09/01/2020 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
02/26/2010 | 0 | 12,000 | * | 79.61 | 02/26/2020 | 1,600 | 128,560 | 0 | 0 | |||||||||||||||||||||||||||
02/27/2009 | 911 | * | 1,852 | * | 61.90 | 02/27/2019 | 700 | 56,245 | 0 | 0 | ||||||||||||||||||||||||||
03/31/2008 | 7,920 | 4,080 | 75.85 | 03/31/2018 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/27/2008 | 0 | 0 | 0 | — | 1,600 | 128,560 | 0 | 0 | ||||||||||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
02/24/2006 | 7,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
09/30/2005 | 2,000 | 0 | 63.96 | 09/30/2015 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/24/2005 | 2,500 | 0 | 62.70 | 02/24/2015 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/24/2004 | 5,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/25/2003 | 3,000 | 0 | 49.68 | 02/25/2013 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
02/26/2002 | 2,000 | 0 | 53.80 | 02/26/2012 | 0 | 0 | 0 | 0 |
Option Awards(1) | Stock Awards(2) | Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option ($) | 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 ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | ||||||||||||||||||||||||||||||||||||||||||||||||
Bruno Meyenhofer | 02/23/2007 | 69,364 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/24/2006 | 21,385 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | 0 | 0 | 02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
02/10/2005 | 42,800 | 0 | 62.91 | 02/10/2015 | 0 | 0 | 0 | 0 | 02/24/2006 | 7,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
02/24/2004 | 68,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | 0 | 0 | 09/30/2005 | 2,000 | 0 | 63.96 | 09/30/2015 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
02/25/2003 | 42,500 | 0 | 49.68 | 02/25/2013 | 0 | 0 | 0 | 0 | 02/24/2005 | 2,500 | 0 | 62.70 | 02/24/2015 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
02/26/2002 | 21,750 | 0 | 53.80 | 02/26/2012 | 0 | 0 | 0 | 0 | 02/24/2004 | 2,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Marvin Pestcoe | 10/01/2010 | 0 | 12,500 | * | 80.45 | 10/01/2020 | 0 | 0 | 0 | 0 | 02/29/2012 | 0 | 28,500 | * | 63.44 | 02/28/2022 | 3,800 | 305,862 | ||||||||||||||||||||||||||||||||||||||||||||||
02/26/2010 | 0 | 10,200 | * | 79.61 | 02/26/2020 | 1,360 | 109,276 | 0 | 0 | 02/17/2011 | 4,750 | * | 9,645 | * | 81.94 | 02/17/2021 | 5,470 | 440,280 | ||||||||||||||||||||||||||||||||||||||||||||||
02/27/2009 | 911 | * | 1,852 | * | 61.90 | 02/27/2019 | 368 | 29,569 | 0 | 0 | 10/01/2010 | 8,250 | * | 4,250 | * | 80.45 | 10/01/2020 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
02/27/2008 | 7,920 | * | 4,080 | * | 77.92 | 02/27/2018 | 1,600 | 128,560 | 0 | 0 | 02/26/2010 | 6,732 | * | 3,468 | * | 79.61 | 02/26/2020 | 1,360 | 109,466 | |||||||||||||||||||||||||||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | 0 | 0 | 02/27/2009 | 2,763 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
02/24/2006 | 3,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | 0 | 0 | 02/27/2008 | 12,000 | * | 0 | 77.92 | 02/27/2018 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
02/24/2005 | 11,500 | 0 | 62.70 | 02/24/2015 | 0 | 0 | 0 | 0 | 02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
02/24/2004 | 7,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | 0 | 0 | 02/24/2006 | 3,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
02/25/2003 | 7,500 | 0 | 49.68 | 02/25/2013 | 0 | 0 | 0 | 0 | 02/24/2005 | 11,500 | 0 | 62.70 | 02/24/2015 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Theodore C. Walker | 02/26/2010 | 0 | 68,089 | * | 79.61 | 02/26/2020 | 9,079 | 729,498 | 0 | 0 | 02/29/2012 | 0 | 28,500 | * | 63.44 | 02/28/2022 | 3,800 | 305,862 | ||||||||||||||||||||||||||||||||||||||||||||||
02/27/2009 | 792 | * | 1,608 | * | 61.90 | 02/27/2019 | 320 | 25,712 | 0 | 0 | 02/17/2011 | 22,802 | * | 46,297 | * | 81.94 | 02/17/2021 | 9,213 | 741,554 | |||||||||||||||||||||||||||||||||||||||||||||
01/02/2009 | 3,300 | * | 6,700 | * | 70.07 | 01/02/2019 | 0 | 0 | 0 | 0 | 02/26/2010 | 44,938 | * | 23,151 | * | 79.61 | 02/26/2020 | 9,079 | 730,769 | |||||||||||||||||||||||||||||||||||||||||||||
02/27/2008 | 7,920 | * | 4,080 | * | 77.92 | 02/27/2018 | 1,850 | 148,648 | 0 | 0 | 02/27/2009 | 2,400 | * | 0 | 61.90 | 02/27/2019 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
07/05/2007 | 10,000 | * | 0 | 78.24 | 07/05/2017 | 0 | 0 | 0 | 0 | 01/02/2009 | 10,000 | * | 0 | 70.07 | 01/02/2019 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | 0 | 0 | 02/27/2008 | 12,000 | * | 0 | 77.92 | 02/27/2018 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
02/24/2006 | 2,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | 0 | 0 | 07/05/2007 | 10,000 | * | 0 | 78.24 | 07/05/2017 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||
02/24/2005 | 4,175 | 0 | 62.70 | 02/24/2015 | 0 | 0 | 0 | 0 | 02/23/2007 | 10,500 | * | 0 | 71.35 | 02/23/2017 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
02/24/2004 | 9,000 | 0 | 55.63 | 02/24/2014 | 0 | 0 | 0 | 0 | 02/24/2006 | 2,500 | * | 0 | 61.20 | 02/24/2016 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
02/25/2003 | 7,000 | 0 | 49.68 | 02/25/2013 | 0 | 0 | 0 | 0 | 02/24/2005 | 4,175 | 0 | 62.70 | 02/24/2015 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
07/01/2002 | 7,500 | 0 | 48.43 | 07/01/2012 | 0 | 0 | 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 |
As of December 31, 2010, Mr. Thiele held no outstanding options. During 2010 Mr. Thiele exercised a total of 451,670 options and a total of 105,534 restricted share units vested in 2010.
20102012 Option Exercises and Shares Vested
The following table shows all options exercised and restricted share unitsRSUs that vested in 2010.2012.
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 ($) | ||||||||||||
Patrick A. Thiele | 332,394 | 10,675,735 | (5) | 105,534 | 8,323,620 | (6) | ||||||||||
William Babcock | 0 | 0 | 0 | 0 | ||||||||||||
Albert A. Benchimol | 0 | 0 | 39,586 | 2,944,400 | (2) | |||||||||||
Costas Miranthis | 0 | 0 | 2,625 | 206,325 | (1) | |||||||||||
Emmanuel Clarke | 2,000 | 46,050 | (3) | 2,625 | 206,325 | (1) | ||||||||||
Bruno Meyenhofer | 0 | 0 | 29,308 | 2,317,012 | (7) | |||||||||||
Marvin Pestcoe | 7,500 | 202,736 | (4) | 2,625 | 206,325 | (1) | ||||||||||
Theodore C. Walker | 0 | 0 | 2,625 | 206,325 | (1) |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||
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 value of the common shares is |
(2) |
(3) | Mr. Clarke’s aggregate exercise price was |
(4) | Mr. Pestcoe’s aggregate exercise price was |
(5) | Mr. |
2010 Non-qualified2012 Non-Qualified Deferred Compensation
The following table shows the details of the executive Officer’NEOs’ non-qualified deferred compensation plans during 2010.2012. 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) | 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 | 60,805 | 0 | 1,772,115 | |||||||||||||||||||||||||||||||||||
Costas Miranthis | 0 | 150,000 | 76,125 | 0 | 1,116,540 | |||||||||||||||||||||||||||||||||||
William Babcock | 8,901 | 24,479 | 5,080 | 0 | 68,087 | 12,319 | 33,878 | 14,450 | 0 | 168,261 | ||||||||||||||||||||||||||||||
Albert A. Benchimol | 14,020 | 38,555 | 41 | 0 | 102,529 | |||||||||||||||||||||||||||||||||||
Costas Miranthis(3) | 15,200 | 110,060 | 27,192 | 0 | 819,766 | |||||||||||||||||||||||||||||||||||
Emmanuel Clarke(3) | 18,176 | 36,351 | 4,697 | 0 | 342,647 | 22,250 | 44,499 | 14,354 | 0 | 509,520 | ||||||||||||||||||||||||||||||
Bruno Meyenhofer(3) | 6,308 | 12,615 | 21,634 | 0 | 4,367,247 | |||||||||||||||||||||||||||||||||||
Marvin Pestcoe | 10,850 | 29,838 | 52,664 | 0 | 847,552 | 12,319 | 33,878 | 78,621 | 0 | 1,121,695 | ||||||||||||||||||||||||||||||
Theodore C. Walker | 12,217 | 33,596 | 112,844 | 0 | 858,430 | 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 |
* |
* | Based on the exchange rate at December 31, 2009 of US$1.00 to CHF1.04 |
(3) | The contributions made by and on behalf of Mr. |
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 them. 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. Effective December 31, 2010, Mr. Thiele and Mr. Benchimol have withdrawn from the plan.payment.
Mr. Miranthis was promoted to the position of Deputy Chief Executive Officer, PartnerRe Global and joinedClarke is enrolled in the Swiss Employee Plan (described below) as of September 1, 2007. Up until August 31, 2010, we continued to makeNon-Qualified Defined Contribution Plan. Under this plan, 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 Employee 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. Clarke is enrolledWalker participate in the Swiss Employee Plan and Mr. Miranthis was enrolled in the Swiss Employee Plan until August 31, 2010. As of April 1, 2010, Mr. Meyenhofer was no longer eligible for the Swiss EmployeeU.S. Non-Qualified Defined Contribution 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 20102012 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, Mr. Babcock, Mr. Pestcoe and Mr. Walker participate in the U.S. plan. Effective December 31, 2010, Mr. Benchimol has withdrawn from the plan.
While employed in Bermuda, Mr. Benchimol received a pension benefit equivalent to 15% of base salary. Under the terms of his employment agreement, to maintain this level of pension contribution while employed in the United States, Mr. Benchimol received a retirement allowance which supplemented his U.S. pension contribution on an equivalent after-tax basis. The retirement allowance was adjusted to reflect annual base salary increases approved for Mr. Benchimol.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
Executive Employment AgreementsGeneral
The following summarizes the material terms of theEach NEO employment agreements that we have entered into with our executive officers, as such terms relate to the compensation reported and described in this Proxy Statement.
Employment Agreement with Mr. Thiele
Under the employment agreement which was effective as of December 1, 2000 (and as amended effective as of February 27, 2001), Mr. Thiele is entitled to: (i) an initial annual base salary of $650,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 125% of his base salary, (iii) an annual option grant with a value up to 370% of his base salary and (iv) equity awards at the sole discretion of the Compensation Committee. He is eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives.
Mr. Thiele retired from PartnerRe on December 31, 2010 and did not enter into a separation agreement in connection with his retirement.
Employment Agreement with Mr. Babcock
Upon Mr. Babcock’s appointment as Executive Vice President and Chief Financial Officer of PartnerRe in 2010, we entered into an employment agreement with Mr. Babcock, effective as of October 1, 2010, under which he is entitled to: (i) an initial annual base salary of $535,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 100% of his base salary, (iii) equity awards at the sole discretion of the Compensation Committee and (iv) a one-time promotional equity grant of 12,500 share appreciation rights. He is eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives.
Mr. Babcock did not have an employment agreement prior to October 1, 2010.
Employment Agreement with Mr. Benchimol
Under the employment agreement which was effective as of January 1, 2009, Mr. Benchimol is entitled to: (i) an initial annual base salary of $565,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 100% of his base salary and (iii) equity awards at the sole discretion of the Compensation Committee. He is eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives.
Mr. Benchimol retired from PartnerRe on December 31, 2010 and in connection with his retirement entered into a separation agreement dated as of July 28, 2010 (see pages 49 and 50 for a description of the payments and benefits he received under the separation agreement).
Employment Agreement with Mr. Miranthis
Under the employment agreement which was effective as of July 1, 2008, Mr. Miranthis is entitled to: (i) an initial annual base salary of CHF 670,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 100% of his base salary and (iii) equity awards at the sole discretion of the Compensation Committee. He is eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives.
Upon his appointment as President and Chief Operating Officer of PartnerRe in 2010, we entered into an arrangement with Mr. Miranthis, effective May 12, 2010, pursuant to which Mr. Miranthis received: (i) an increase of his annual base salary to $800,000, (ii) an increase of his annual incentive target to 125% of his base salary and (iii) a one-time promotional equity grant of 50,000 share appreciation rights.
Upon his appointment as President and Chief Executive Officer of PartnerRe in 2010, we entered a new employment agreement with Mr. Miranthis, effective as of January 1, 2011, under which he is entitled to: (i) an initial annual base salary of $1,000,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 125% of his base salary and (iii) equity awards at the sole discretion of the Compensation Committee. He remains eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives.
Employment Agreement with Mr. Clarke
Upon Mr. Clarke’s appointment as Chief Executive Officer of PartnerRe Global in 2010, we entered into an employment agreement with Mr. Clarke, effective as of September 1, 2010, under which he is entitled to: (i) an initial annual base salary of CHF 593,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 100% of his base salary, (iii) equity awards at the sole discretion of the Compensation Committee and (iv) a one-time promotional equity grant of 12,500 share appreciation rights. He is eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives, as well as benefit plans applicable to our Swiss employees.
Mr. Clarke did not have an employment agreement prior to September 1, 2010.
Employment Agreement with Mr. Meyenhofer
Under the employment agreement which was effective as of January 1, 1999 (and as amended effective as of July 5, 2000), Mr. Meyenhofer is entitled to (i) an initial annual base salary of CHF 420,000 and (ii) option awards under the PartnerRe Option Plan at the discretion of the Board and PartnerRe. He is eligible to participate in our occupational benefits plan.
Mr. Meyenhofer retired from PartnerRe on March 31, 2010 and did not enter into a separation agreement in connection with his retirement.
Employment Agreement with Mr. Pestcoe
Upon Mr. Pestcoe’s appointment as Chief Executive Officer of PartnerRe Capital Markets Group in 2010, we entered into an employment agreement with Mr. Pestcoe, effective as of October 1, 2010, under which he is entitled to: (i) an initial annual base salary of $535,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 100% of his base salary, (iii) equity awards at the sole discretion of the Compensation Committee and (iv) a one-time promotional equity grant of 12,500 share appreciation rights. He is eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives.
Mr. Pestcoe did not have an employment agreement prior to October 1, 2010.
Employment Agreement with Mr. Walker
Under the employment agreement which was effective as of January 6, 2009, Mr. Walker is entitled to: (i) an initial annual base salary of $525,000 that is subject to increase at the discretion of the Compensation Committee, (ii) an annual incentive target of 100% of his base salary and (iii) equity awards at the sole discretion of the Compensation Committee. He is eligible to participate in all of our benefit plans and perquisite programs that are available to our other executives.
General
Except Mr. Meyenhofer’s employment agreement, each employment agreement described above (i) sets forth termination scenarios for death, disability, retirement, termination by us for or without cause and termination by the executive officerNEO with or without good reason (Mr.(in accordance with Swiss law, Mr. Clarke’s employment agreement does not contemplatecontemplates immediate termination for cause or goodvalid reason), and provides the amountdetail of compensation due to the executive officer (if any)what each NEO would receive upon each termination scenario; (ii) contains confidentiality provision and
provisions as well as non-competition and non-solicitation covenants thatwhich are in effect during and after employment; and (iii) incorporates our Change in Control Policy (as described below)(the “Policy”). Mr. Meyenhofer’s
Termination Provisions
This section describes for our NEOs the consequences of a termination of employment agreement provided payments to Mr. Meyenhofer upon his termination for any reason other thanretirement, death, disability, NEO voluntary termination by us for cause or by him 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.
Termination 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. Walker’s employment agreement terminates as a result of his retirement before attaining age 65, but subject to having already attained age 55, Mr. 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 qualifyingmonthly 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. Babcock: housing and car continuation for up to six months; and
For Mr. Clarke: housing and school allowance for up to six months.
Voluntary Termination by the NEO without good reason or termination for cause 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 date of termination of employment.
Termination by the NEO for good reason or by PartnerRe without cause (without a change in control.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 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 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 |
Upon the occurrence of a change in control and a qualifying termination described above, the Chief Executive Officer is 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:
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 tables below reflectother 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 be better for the 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 following table reflects the amount of compensation that would be paid to each of our executive officersNEOs 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, 2010; 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 amounts shown for Mr. Meyenhofer are actual amounts for payments made upon termination.
Payments Made UponAll Accrued Benefits;
The effects of a Change in Control
Patrick A. Thiele
Patrick A. Thiele retired onretirement since none of our NEOs attained retirement age as of December 31, 20102012;
Additional payments to the NEOs under the PartnerRe’s benefit plans (plans providing, among other things, disability insurance, death insurance and receivedmedical insurance) which do not discriminate in scope, terms or operation in favor of the payments shownNEOs and are generally available to all employees;
The additional coverage in case of long-term disability in favor of Mr. Miranthis since the retirement column. All other amounts are shown for illustrative purposes.Company only subscribed to an insurance policy in February 2013;
Patrick A. Thiele, President and Chief Executive Officer, PartnerRe Ltd. | Death (1) | Disability (2)(3)(4) | Retirement (5) | Executive (6) | Executive (7) | Executive (8) | ||||||||||||||||||
Base salary | $ | 500,000 | $ | 2,352,250 | $ | 0 | $ | 1,000,000 | $ | 0 | $ | 3,000,000 | ||||||||||||
Annual incentive—target | $ | 625,000 | $ | 0 | $ | 0 | $ | 2,500,000 | $ | 0 | $ | 6,400,000 | ||||||||||||
Annual incentive—pro rata | $ | 2,500,000 | $ | 2,500,000 | $ | 0 | $ | 2,500,000 | $ | 0 | $ | 1,250,000 | ||||||||||||
Annual incentive—actual | $ | 0 | $ | 0 | $ | 912,500 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Housing continuance | $ | 0 | $ | 60,000 | $ | 80,000 | $ | 60,000 | $ | 0 | $ | 60,000 | ||||||||||||
Tax filing assistance | $ | 0 | $ | 0 | $ | 10,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 142,140 | $ | 142,140 | $ | 0 | $ | 0 | $ | 75,950 | ||||||||||||
Relocation expense | $ | 0 | $ | 0 | $ | 40,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Executive assistant support through April 2011 | $ | 0 | $ | 0 | $ | 30,309 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Equity Awards |
| |||||||||||||||||||||||
Restricted Share Units | $ | 0 | $ | 0 | $ | 4,936,302 | $ | 0 | $ | 0 | $ | 4,936,302 | ||||||||||||
Cash customization of equity award | $ | 0 | $ | 0 | $ | 470,325 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Cash equivalent of 2010 equity award | $ | 0 | $ | 0 | $ | 3,580,450 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Total | $ | 3,625,000 | $ | 5,054,390 | $ | 10,202,026 | $ | 6,060,000 | $ | 0 | $ | 15,722,252 |
The effects of a NEO voluntary termination or a termination 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 lieu of notice since it is assumed that PartnerRe has not exercised its option to terminate the employment sooner.
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 Two-thirds of monthly base salary Portion paid by insurance Portion paid by us Number of months to age 65 Total paid by us $ 83,333 $ 55,556 $ 15,000 $ 40,556 58 $ 2,352,250
Housing allowance in lump sum (housing paid through April 2011)
Tax filing assistance for 2010 and 2011 to be provided
Post-retirement medical benefits until 65 years
Payout of 2010 performance year annual incentive in February 2011
Payment of the Bermuda Deferred Compensation plan in July 2011 and July 2012
Relocation expenses
Executive assistant support through April 2011
Bermuda Social Insurance benefits
The amounts disclosed under this column represent the amounts of payments and benefits received by Mr. Thiele as a result of his retirement.
Annual Incentive Calculation: | ||||
2007 Annual Incentive | $ | 2,500,000 | ||
2008 Annual Incentive | $ | 1,400,000 | ||
2009 Annual Incentive | $ | 2,500,000 | ||
Annual Average | $ | 2,133,333 |
William Babcock
The following table shows the potential payments upon termination or a change in control for William Babcock.
William Babcock Executive Vice President and Chief Financial Officer | Death (1) | Disability (2) | Executive (3) | Executive (4) | Executive (5) | |||||||||||||||
Base salary | $ | 267,500 | $ | 0 | $ | 535,000 | $ | 0 | $ | 1,070,000 | ||||||||||
Annual incentive—target | $ | 267,500 | $ | 0 | $ | 535,000 | $ | 0 | $ | 980,378 | ||||||||||
Annual incentive—pro rata | $ | 535,000 | $ | 535,000 | $ | 535,000 | $ | 0 | $ | 535,000 | ||||||||||
Housing Continuance | $ | 156,000 | $ | 156,000 | $ | 0 | $ | 0 | $ | 78,000 | ||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 3,158,555 | $ | 25,901 | $ | 0 | $ | 55,687 | ||||||||||
Equity Awards |
| |||||||||||||||||||
Options/Share Appreciation Rights | $ | 76,307 | $ | 76,307 | $ | 0 | $ | 0 | $ | 76,307 | ||||||||||
Restricted shares/Restricted Share Units | $ | 239,282 | $ | 239,282 | $ | 0 | $ | 0 | $ | 239,282 | ||||||||||
Total | $ | 1,541,589 | $ | 4,165,144 | $ | 1,630,901 | $ | 0 | $ | 3,034,654 |
Annual Incentive Calculation: | ||||
2008 Annual Incentive | $ | 345,586 | ||
2009 Annual Incentive | $ | 634,792 | ||
Annual Average | $ | 490,189 |
Albert A. Benchimol
Albert A. Benchimol retired on December 31, 2010 and received the payments shown in the retirement column. All other amounts are shown for illustrative purposes.
Albert A. Benchimol, Executive Vice President and Chief Financial Officer, PartnerRe Ltd., and Chief Executive Officer, Capital Markets Group | Death (1) | Disability (2)(3) | Retirement (4) | Executive (5) | Executive (6) | Executive (7) | ||||||||||||||||||
Base salary | $ | 300,000 | $ | 0 | $ | 0 | $ | 600,000 | $ | 0 | $ | 1,200,000 | ||||||||||||
Separation payments | $ | 0 | $ | 0 | $ | 6,000,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Annual incentive—target | $ | 481,109 | $ | 0 | $ | 0 | $ | 962,217 | $ | 0 | $ | 1,924,434 | ||||||||||||
Annual incentive—pro rata | $ | 962,217 | $ | 962,217 | $ | 0 | $ | 962,217 | $ | 0 | $ | 750,000 | ||||||||||||
Annual incentive – actual | $ | 0 | $ | 0 | $ | 962,217 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Tax filing assistance | $ | 0 | $ | 0 | $ | 20,700 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 711,006 | $ | 6,000 | $ | 27,844 | $ | 0 | $ | 55,687 | ||||||||||||
Legal Fees | $ | 0 | $ | 0 | $ | 20,790 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Equity Awards |
| |||||||||||||||||||||||
Share Appreciation Rights | $ | 685,770 | $ | 685,770 | $ | 685,770 | $ | 685,770 | $ | 0 | $ | 685,770 | ||||||||||||
Restricted Share Units | $ | 1,787,386 | $ | 1,787,386 | $ | 1,787,386 | $ | 1,787,386 | $ | 0 | $ | 1,787,386 | ||||||||||||
Cash equivalent of 2010 equity award | $ | 0 | $ | 0 | $ | 1,871,431 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Total | $ | 4,216,482 | $ | 4,146,379 | $ | 11,354,294 | $ | 5,025,434 | $ | 0 | $ | 6,403,277 |
Separation payment of $6 million (approximated to be two years’ base salary, target annual incentive and equity awards), in recognition of Mr. Benchimol’s ten years of service to PartnerRe and his agreement to assist in the transition of his duties
Annual incentive based on the average of the annual incentives paid out in the previous three years
Eligibility for Mr. Benchimol and his dependents to participate in PartnerRe’s health insurance plans up to April 1, 2011
Reimbursement of up to $25,000 of legal fees incurred in negotiating and executing his separation agreement (the actual amount of legal fees incurred was $20,790)
|
|
Annual Incentive Calculation: | ||||
2007 Annual Incentive | $ | 763,477 | ||
2008 Annual Incentive | $ | 762,750 | ||
2009 Annual Incentive | $ | 1,360,425 | ||
Annual Average | $ | 962,217 |
Costas Miranthis
The following table shows the potential payments upon termination or a change in control for Costas Miranthis.
Costas Miranthis President and Chief Operating | Death (1) | Disability (2) | Executive (3) | Executive (4) | Executive (5) | |||||||||||||||
Base salary | $ | 0 | $ | 0 | $ | 400,000 | $ | 0 | $ | 1,600,000 | ||||||||||
Annual incentive—target | $ | 0 | $ | 0 | $ | 587,130 | $ | 0 | $ | 2,348,520 | ||||||||||
Annual incentive—pro rata | $ | 0 | $ | 0 | $ | 1,174,260 | $ | 0 | $ | 1,000,000 | ||||||||||
Housing Continuance | $ | 0 | $ | 0 | $ | 48,000 | $ | 0 | $ | 48,000 | ||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 1,328,753 | $ | 8,761 | $ | 0 | $ | 37,671 | ||||||||||
Equity Awards |
| |||||||||||||||||||
Options/Share Appreciation Rights | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 619,869 | ||||||||||
Restricted shares/Restricted share units | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,443,166 | ||||||||||
Total | $ | 0 | $ | 1,328,753 | $ | 2,218,151 | $ | 0 | $ | 7,097,226 |
|
|
Annual Incentive Calculation: | ||||
2007 Annual Incentive | $ | 1,125,930 | ||
2008 Annual Incentive | $ | 1,019,063 | ||
2009 Annual Incentive | $ | 1,377,788 | ||
Annual Average | $ | 1,174,260 |
Emmanuel Clarke
The following table shows the potential payments upon termination or a change in control for Emmanuel Clarke.
Emmanuel Clarke Chief Executive Officer of PartnerRe Global | Death (1) | Disability (2) | Executive (3) | Executive (4) | Executive (5) | |||||||||||||||
Base salary | $ | 0 | $ | 0 | $ | 628,580 | $ | 0 | $ | 1,257,160 | ||||||||||
Annual incentive—target | $ | 0 | $ | 0 | $ | 628,580 | $ | 0 | $ | 866,704 | ||||||||||
Annual incentive—pro rata | $ | 0 | $ | 0 | $ | 628,580 | $ | 0 | $ | 628,580 | ||||||||||
Housing Continuance | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 24,391 | ||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 0 | $ | 13,780 | $ | 0 | $ | 29,627 | ||||||||||
Equity Awards |
| |||||||||||||||||||
Options/Share Appreciation Rights | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 118,284 | ||||||||||
Restricted shares/Restricted Share Units | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 313,365 | ||||||||||
Total | $ | 0 | $ | 0 | $ | 1,899,520 | $ | 0 | $ | 3,238,111 |
Annual Incentive Calculation: | ||||
2007 Annual Incentive | $ | 264,449 | ||
2008 Annual Incentive | $ | 448,836 | ||
2009 Annual Incentive | $ | 586,773 | ||
Annual Average | $ | 433,352 |
Bruno Meyenhofer
Mr. Meyenhofer retired on March 31, 2010. The following table shows the actual payments received upon retirement for Mr. Meyenhofer.
Bruno Meyenhofer Chairman, PartnerRe Global | Retirement (1) | |||
Annual incentive | $ | 840,588 | ||
Equity Awards |
| |||
Restricted Share Units—accelerated vesting | $ | 860,549 | ||
Cash customization of equity award | $ | 2,352,289 | ||
Total | $ | 4,053,426 |
Mr. Meyenhofer’s 2010 target annual incentive in the amount of CHF793,008 was paid in March 2010. The applicable exchange rate was applied. Mr. Meyenhofer also received accelerated vesting on the unvested restricted share units on March 31, 2010.
Marvin Pestcoe
The following table shows the potential payments upon termination or a change in control for Marvin Pestcoe.
Marvin Pestcoe Chief Executive Officer of PartnerRe | Death (1) | Disability (2) | Executive (3) | Executive (4) | Executive (5) | |||||||||||||||
Base salary | $ | 267,500 | $ | 0 | $ | 535,000 | $ | 0 | $ | 1,070,000 | ||||||||||
Annual incentive—target | $ | 267,500 | $ | 0 | $ | 535,000 | $ | 0 | $ | 1,261,231 | ||||||||||
Annual incentive—pro rata | $ | 630,616 | $ | 630,616 | $ | 535,000 | $ | 0 | $ | 535,000 | ||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 790,023 | $ | 16,371 | $ | 0 | $ | 35,197 | ||||||||||
Equity Awards |
| |||||||||||||||||||
Options/Share Appreciation Rights | $ | 51,632 | $ | 51,632 | $ | 0 | $ | 0 | $ | 51,632 | ||||||||||
Restricted shares/Restricted Share Units | $ | 267,405 | $ | 267,405 | $ | 0 | $ | 0 | $ | 267,405 | ||||||||||
Total | $ | 1,484,652 | $ | 1,739,675 | $ | 1,621,371 | $ | 0 | $ | 3,220,465 |
Annual Incentive Calculation(includes payouts under the Capital Markets Group Long-Term Incentive Program for each pool year): | ||||
2007 Annual Incentive | $ | 466,462 | ||
2008 Annual Incentive | $ | 548,228 | ||
2009 Annual Incentive | $ | 877,157 | ||
Annual Average | $ | 630,616 |
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 North America | Death (1) | Disability (2) | Executive (3) | Executive (4) | Executive (5) | |||||||||||||||
Base salary | $ | 0 | $ | 0 | $ | 570,000 | $ | 0 | $ | 1,140,000 | ||||||||||
Annual incentive—target | $ | 0 | $ | 0 | $ | 570,000 | $ | 0 | $ | 1,029,500 | ||||||||||
Annual incentive—pro rata | $ | 0 | $ | 0 | $ | 514,750 | $ | 0 | $ | 570,000 | ||||||||||
Health & welfare benefit continuance | $ | 0 | $ | 1,171,293 | $ | 25,901 | $ | 0 | $ | 55,687 | ||||||||||
Equity Awards | ||||||||||||||||||||
Options/Share Appreciation Rights | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 158,844 | ||||||||||
Restricted shares/Restricted Share Units | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 903,857 | ||||||||||
Total | $ | 0 | $ | 1,171,293 | $ | 1,680,651 | $ | 0 | $ | 3,857,888 |
Annual Incentive Calculation: | ||||
2007 Annual Incentive | $ | 552,000 | ||
2008 Annual Incentive | $ | 178,500 | ||
2009 Annual Incentive | $ | 813,750 | ||
Annual Average | $ | 514,750 |
EQUITY COMPENSATION PLAN INFORMATION
As part of the Company’s long-term incentive compensation for executives and employees, the Company maintains the PartnerRe Ltd. 2005 Employee Equity Plan as amended and restated. In addition, for directors, the Company maintains the PartnerRe 2003 Non-Employee Directors Share Plan. These two plans enable employees and directors to acquire and maintain share ownership, thereby strengthening their commitment to PartnerRe and promoting a commonality of interest among directors, employees and shareholders. The Company finds that the existence of such plans helps to attract and retain key employees and directors. In connection with the PARIS RE acquisition, the Company assumed PARIS RE’s equity compensation plans (see Note 16 to Consolidated Financial Statements).
The following table sets out details of the Company’s equity compensation plans, both active and expired, as of December 31, 2010. In May 2000, the Company’s shareholders approved the establishment of the Employee Share Purchase Plan (ESPP) and authorized the issuance of up to 500,000 shares under the ESPP. In 2002, the Company established the Swiss Share Purchase Plan (SSPP) to offer a competitive benefit to its employees in Switzerland. Concurrently, the Compensation Committee approved a reduction in the number of shares available for issue under the ESPP to 300,000 in order to make 200,000 shares available for issue under the SSPP. In 2008, the Compensation Committee approved the transfer of 56,178 shares from the SSPP to the ESPP. The ESPP expired in November 2009 and a new plan was approved by shareholders in May 2009 authorizing the issuance of 600,000 shares under the new ESPP. All equity compensation plans, with the exception of the SSPP and PARIS RE’s equity compensation plans, have been approved by shareholders (see Note 16 to Consolidated Financial Statements).
A | B | C | ||||
Plan Category | Number of Securities To be Issued upon Exercise of Outstanding Options, Warrants & Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants & Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A) | |||
Equity compensation plans approved | 3,352,608(1) | $66.59(3) | 1,581,850(5) | |||
Equity compensation plans not approved by shareholders | 831,433(2) | $66.39(4) | 52,315(6) | |||
Total | 4,184,041 | $66.56 | 1,634,165 |
(4) | The |
The following table sets out details of the Company’s equity compensation plans, both active and expired, asapplicable exchange rate at March 22, 2011
A | B | C | ||||
Plan Category | Number of Securities To be Issued upon Exercise of Outstanding Options, Warrants & Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants & Rights | Number of Securities (Excluding Securities Reflected in Column A) | |||
Equity compensation plans approved by shareholders | 3,582,558(1) | $67.87(3) | 1,111,635(5) | |||
Equity compensation plans not approved by shareholders | 807,154(2) | $66.60(4) | 52,315(6) | |||
Total | 4,389,712 | $67.67 | 1,163,950 |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table presents fees for professional services rendered by the external auditors, Deloitte & Touche Ltd., the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the “Deloitte Entities”“Deloitte Entities”) for the fiscal years 20102012 and 2009.2011. All services of the Deloitte Entities were pre-approved by the Audit Committee. The Audit Committee has concluded that the Deloitte Entities remain independent despite providing the non-audit services listed below.
Year Ended December 31 | Year Ended December 31 | |||||||||||||||
2010 | 2009 | 2012 ($) | 2011 ($) | |||||||||||||
Audit Fees(1) | $ | 6,109,244 | $ | 4,993,260 | 5,474,668 | 5,882,280(3) | ||||||||||
Audit-Related Fees(2) | $ | 58,313 | $ | 582,740 | 98,600 | 82,050(3) | ||||||||||
Tax Fees | $ | 0 | $ | 18,000 | 0 | 0 | ||||||||||
All Other Fees | $ | 0 | $ | 0 | 0 | 25,000(4) | ||||||||||
Total | $ | 6,167,557 | $ | 5,594,000 | 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 20142016
OR UNTIL THEIR RESPECTIVE SUCCESSORS HAVE BEEN DULY ELECTED
(Item 1 on the Form of Proxy)
Ms. Hanratty, Mr. Miranthis, Mr. SautterMessrs. Montupet and Dr. ZechStanca have been nominated to hold office for a three-year term that will expire at the Annual General Meeting in the year 20142016 or, alternatively, when their respective successors have been duly elected. Pursuant to our Corporate Governance Principles and Application Guidelines, unless the Board provides a waiver, all directors are required to resign from the Board in May of the year that he or she turns 73. Consequently, unless a waiver is granted by the Board, Dr. Zech will serve until May 2012. 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% 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 pages 3 and 4.page 3.
Nominees
The ages, business experience, and directorships in other companies of the fourtwo nominees for election are set forth on pages 11 and 12. Allpage 7. Both of the nominees currently serve as directors of the Company.
THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF THE FOUR (4)TWO (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 20122014 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 20122014 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 20122014 ANNUAL GENERAL MEETING AND TO REFER DECISIONS ABOUT THE AUDITORS’ COMPENSATION TO THE BOARD OF DIRECTORS.BOARD.
PROPOSAL 3 — TO APPROVE AN INCREASE IN THE NUMBER OF SHARES AVAILABLE
UNDER OUR 2005 EMPLOYEE EQUITY PLAN, AS AMENDED AND RESTATED
(Item 3 on the Form of Proxy)
The PartnerRe Board of Directors (the “Board”) has determined that it would be in the best interests of PartnerRe and its shareholders to amend PartnerRe’s 2005 Employee Equity Plan, as amended and restated (the “2005 Plan”). The 2005 Plan was approved by our shareholders on May 10, 2005, May 22, 2008 and September 24, 2009. Pursuant to the terms of the 2005 Plan, the number of PartnerRe common shares that may be awarded is capped at 3,305,089. The number of PartnerRe common shares that may be awarded as either restricted share units or restricted shares is capped at 1,658,325. The number of PartnerRe common shares that may be awarded was intended to be sufficient to grant awards for the years 2009, 2010 and 2011. To ensure sufficient share availability for awards under the 2005 Plan that will be granted in the years 2011 and beyond, on February 16, 2011, the Compensation Committee of the Board (the “Compensation Committee”) approved an amendment to the 2005 Plan to:
increase the number of PartnerRe common shares that may be awarded under the 2005 Plan by 5,000,000 to 8,305,089; and
of that 5,000,000, increase the number of PartnerRe common shares that may be awarded as restricted share units or restricted shares by 1,700,000 to 3,358,325.
As of March 22, 2011, the total number of PartnerRe common shares remaining available for grant under the 2005 Plan is 383,293, of which the total number that can be issued as restricted share units or restricted shares is 382,545. In order to continue to implement its long-term equity goals, PartnerRe will be required to increase the number of PartnerRe common shares that may be awarded under the 2005 Plan by 5,000,000, and of that 5,000,000, increase the number of PartnerRe common shares that may be awarded as restricted share units or restricted shares by 1,700,000. If this amendment is not approved, PartnerRe will not be able to make further grants once the current cap of 3,305,089 is reached and PartnerRe will not be able to make further grants of restricted share units and restricted shares once the current cap of 1,658,325 is reached, but the 2005 Plan will otherwise remain in effect.
In preparing the proposed amendment to the 2005 Plan, PartnerRe conducted analytical tests that are typically used by shareholder advisory groups. These tests examine whether the recommended plan amendments are deemed reasonable in terms of the plan’s cost and “burn rates” relative to industry norms. “Burn rate” is defined as the number of awards granted in a year divided by the weighted average number of a company’s common shares outstanding for that fiscal year. Burn rates include options, share appreciation rights and “full value” awards (i.e., restricted share units and restricted shares). PartnerRe is satisfied that this proposal satisfies these tests in every aspect, and this has been confirmed with external consultants with expertise in this area.
Description of the 2005 Plan
All employees are eligible to participate in the 2005 Plan at the discretion of the Compensation Committee. Currently, PartnerRe has approximately 1,367 employees.
The following is a summary of the material features of the 2005 Plan, which, as proposed to be amended and restated, is attached to this Proxy Statement as Appendix II. PartnerRe is only seeking to amend the 2005 Plan to increase the number of PartnerRe common shares available for issuance and to increase the number of PartnerRe common shares that may be awarded as restricted share units or restricted shares. The following summary does not purport to be complete and is qualified in its entirety by reference to the terms of the 2005 Plan.
Material Features of the 2005 Plan, as proposed to be amended and restated
Proposed Amendments
The number of PartnerRe common shares that may be awarded under the 2005 Plan is capped at 8,305,089 PartnerRe common shares. This number represents the original cap of 3,305,089 PartnerRe common shares plus the additional amount of 5,000,000 PartnerRe common shares being requested pursuant to this proposal.
The number of PartnerRe common shares that may be awarded under the 2005 Plan as either restricted share units or restricted shares is capped at 3,358,325 PartnerRe common shares. This number represents the original cap of 1,658,325 PartnerRe common shares plus the additional amount of 1,700,000 PartnerRe common shares being requested pursuant to this proposal.
Existing Features
The Compensation Committee (or another committee designated by the Board), which consists solely of independent directors on the Board, administers the 2005 Plan.
Awards under the 2005 Plan may be made in the form of options (non-qualified and incentive share options), restricted share units, restricted shares and share appreciation rights.
No recycling of PartnerRe common shares tendered in payment of the exercise price of an option (including in connection with a cashless or net-settled exercise of an option) for the purposes of determining the shares available under the 2005 Plan.
No recycling of PartnerRe common shares withheld for payment of taxes for the purposes of determining the PartnerRe common shares available under the 2005 Plan.
Restricted share units and restricted shares that vest solely on the passage of time will not have a vesting period that is less than 36 months unless: (i) the vesting is performance based, (ii) they are awarded in lieu of an obligation of PartnerRe to pay cash, (iii) they are issued in connection with the exercise of an option or other award made under the 2005 Plan or (iv) they are substitute awards granted in assumption or substitution for outstanding awards previously granted by a company acquired by PartnerRe or with which PartnerRe combines.
The exercise price of options and share appreciation rights awarded under the 2005 Plan will not be less than the fair market value of a PartnerRe common share at the time of grant. The closing price of a PartnerRe common share as listed on the New York Stock Exchange on March 22, 2011 is $75.11.
Repricing of options and share appreciation rights to reduce their exercise price is prohibited.
Options and share appreciation rights will generally vest ratably over three years on the first, second and third anniversaries of the date of grant and expire ten years from the date of grant.
Accelerated vesting of any grant may only be made at the discretion of the Compensation Committee (or another committee designated by the Board).
Unless specifically provided to the contrary in any award agreement under the 2005 Plan, upon a change in control (as defined in the 2005 Plan), all outstanding awards will become fully exercisable, will vest and will be settled, as applicable, and any restrictions applicable to any award will automatically lapse.
The 2005 Plan will expire on the date of the annual meeting of shareholders in 2015.
Certain awards to certain senior executives will, if the Compensation Committee (or another committee designated by the Board) intends any such award to qualify as “qualified performance based compensation” under Section 162(m) of the Internal Revenue Code, become earned and payable only if pre-established targets relating to one or more of the following performance measures are achieved: (i) earnings per share, (ii) financial year return on common equity, (iii) underwriting year return on equity, (iv) return on net assets, (v) organizational objectives and (vi) premium growth. The individual maximum number of PartnerRe common shares underlying any such share-denominated award granted in any year will be 800,000 PartnerRe common shares, and the individual maximum amount earned with respect to any such non-share denominated award granted in any year will be $5,000,000.
If the Compensation Committee (or another committee designated by the Board) determines that any dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of the common shares or other securities of PartnerRe, issuance of warrants or other rights to purchase the common shares or other securities of PartnerRe, or other similar corporate transaction or event affects PartnerRe’s common shares such that an adjustment is determined by the Compensation Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under
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New Plan Benefits
Any awards under the 2005 Plan, as proposed to be amended and restated, will be at the discretion of the Compensation Committee. Therefore, it is not possible at the present time to determine the amount or form of any award that will be available for grant to any individual during the term of the 2005 Plan.
U.S. Federal Income Taxation
The following discussion is a summary of the material U.S. federal income tax consequences of participation in the 2005 Plan. This summary is required to be included under U.S. federal securities law and will apply only with respect to those participants who are subject to U.S. federal income taxation. This summary is not intended to be exhaustive and, among other things, does not describe state, local or foreign income and other tax consequences. In addition, as PartnerRe is domiciled in Bermuda, certain statements of the summary may not be applicable. This summary is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal laws.
Non–Qualified Share Options. An optionee will not recognize any taxable income upon the grant of a non-qualified share option, and PartnerRe will not be entitled to a tax deduction with respect to the grant of a non-qualified share option. Upon exercise of a non-qualified share option, the excess of the fair market value of the underlying PartnerRe common shares on the exercise date over the option exercise price will be taxable as compensation income to the optionee and will be subject to applicable withholding taxes. PartnerRe will generally be entitled to a tax deduction at such time in the amount of such compensation income. The optionee’s tax basis for the shares received pursuant to the exercise of a non-qualified share option will equal the sum of the compensation income recognized and the exercise price. In the event of a sale of shares received upon the exercise of a non-qualified share option, any appreciation or depreciation after the exercise date generally will be taxed as capital gain or loss and will be long-term capital gain or loss if the holding period for such shares is more than one year.
Incentive Share Options. An optionee will not recognize any taxable income at the time of grant or timely exercise of an incentive share option and PartnerRe will not be entitled to a tax deduction with respect to such grant or exercise. Exercise of an incentive share option may, however, give rise to taxable compensation income subject to applicable withholding taxes, and a tax deduction to PartnerRe, if the incentive share option is not exercised on a timely basis (generally, while the optionee is employed by PartnerRe or within 90 days after termination of employment) or if the optionee subsequently engages in a “disqualifying disposition,” as described below. Also, the excess of the fair market value of the underlying shares on the date of exercise over the exercise price will be an item of income for purposes of the optionee’s alternative minimum tax. A sale or exchange by an optionee of shares acquired upon the exercise of an incentive share option more than one year after the transfer of the shares to such optionee and more than two years after the date of grant of the incentive share option will result in any difference between the net sale proceeds and the exercise price being treated as long-term capital gain (or loss) to the optionee. If such sale or exchange takes place within two years after the date of grant of the incentive share option or within one year from the date of transfer of the incentive share option shares to the optionee, such sale or exchange will generally constitute a “disqualifying disposition” of such shares that will have the following results: any excess of (i) the lesser of (a) the fair market value of the shares at the time of exercise of the incentive share option and (b) the amount realized on such disqualifying disposition of the shares over (ii) the option exercise price of such shares, will be ordinary income to the optionee, subject to applicable withholding taxes, and PartnerRe will be entitled to a tax deduction in the amount of such income. Any further gain or loss after the date of exercise generally will qualify as capital gain or loss and will not result in any deduction by PartnerRe.
Share Appreciation Rights. Generally, a participant who receives a stand-alone share appreciation right will not recognize taxable income at the time it is granted, and PartnerRe will not be entitled to a tax deduction with respect to the grant of a stand-alone share appreciation right. The fair market value of PartnerRe common shares (or amount of cash) received upon exercise of the share appreciation right will be taxed as ordinary income to the participant at the time the shares (or cash) are received, and PartnerRe will be entitled to a deduction equal to the amount of ordinary income the participant is required to recognize as a result of the exercise.
Restricted Share Units. The grant of restricted share units will not result in income for the participant or in a tax deduction for PartnerRe. Upon the settlement of such restricted share units, the participant will recognize ordinary income equal to the then-fair market value of PartnerRe common shares (or amount of cash) received, and the Company generally will be entitled to a tax deduction in the same amount.
Restricted Shares. A participant will not recognize any income upon the receipt of restricted shares unless the participant elects under Section 83(b) of the Internal Revenue Code within 30 days of such receipt to recognize ordinary income in an amount equal to the fair market value of the restricted shares at the time of receipt, less any amount paid for the shares. If the election is made, the participant will not be allowed a deduction for amounts subsequently required to be returned to PartnerRe. If the election is not made, the participant will generally recognize ordinary income on the date that the shares are no longer subject to restrictions, in an amount equal to the fair market value of such shares on such date, less any amount paid for the shares. At the time the participant recognizes ordinary income, PartnerRe generally will be entitled to a deduction in the same amount. Generally, upon a sale or other disposition of PartnerRe common shares or restricted shares with respect to which the participant has recognized ordinary income (i.e., the restrictions were previously removed or a Section 83(b) election was previously made), the participant will recognize capital gain or loss in an amount equal to the difference between the amount realized on such sale or other disposition and the participant’s basis in such shares. Such gain or loss will be long-term capital gain or loss if the holding period for such shares is more than one year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO APPROVE AN INCREASE IN THE NUMBER OF SHARES AVAILABLE GENERALLY, AS WELL AS FOR GRANTS OF RESTRICTED SHARE UNITS OR RESTRICTED SHARES, UNDER OUR 2005 EMPLOYEE EQUITY PLAN, AS AMENDED AND RESTATED.
PROPOSAL 4 — TO APPROVE THE SWISS SHARE PURCHASE PLAN, AS AMENDED AND RESTATED
(Item 4 on the Form of Proxy)
The PartnerRe Board of Directors (the “Board”) has determined that it would be in the best interests of PartnerRe and its shareholders to approve PartnerRe’s Swiss Share Purchase Plan, as amended and restated (the “SSPP”), which was approved by the Board on February 16, 2011. Specifically, shareholders are being asked to approve an increase in the number of shares available under the SSPP of 200,000 to 400,000. As of March 22, 2011, there were 52,315 shares available for sale under the SSPP.
The SSPP is a form of employee share purchase plan for employees based in Switzerland. Employee share purchase plans are intended to provide employees of PartnerRe and its subsidiaries with an opportunity to purchase its shares through accumulated payroll deductions or direct contributions to the plan. PartnerRe believes that share ownership is one of the prime methods of attracting and retaining key personnel responsible for the continued development and growth of its business. Attractive employee share incentives, including employee share purchase plans, are considered by employees to be an important element of an employer’s compensation package and by employers, including PartnerRe, to be a competitive necessity.
The Board is asking shareholders to approve the SSPP, as proposed to be amended and restated.
Description of the SSPP
The following is a summary of the material features of the SSPP, which, as proposed to be amended and restated, is attached to this Proxy Statement as Appendix III. PartnerRe is only seeking to amend the SSPP to increase the number of PartnerRe common shares available for issuance. The following summary does not purport to be complete and is qualified in its entirety by reference to the terms of the SSPP.
Eligibility
Generally, each person who is an employee of PartnerRe Holdings Europe Limited (Zurich Branch) and who is customarily employed by the Branch on an open-ended contract for at least 20 hours per week, is eligible to participate in an Offering Period (as described below).
Currently, approximately 319 employees are eligible to participate in the SSPP.
Shares Available Under the Plan
The number of shares that may be awarded under the SSPP is capped at 400,000 shares.
Administration
The SSPP is administered by the Compensation Committee of the Board (the “Compensation Committee”) (or another committee designated by the Board). This committee has authority to administer the SSPP or delegate certain matters to PartnerRe’s Chief Executive Officer, including without limitation: (a) method of contribution, (b) amount of contribution, (c) annual limitation of contributions, (d) amount of discount, (e) adjustment to time period of restriction on sale or transfer of common shares and (f) cut off time for withdrawal of contributions.
Participation
The SSPP is implemented by consecutive Offering Periods lasting for six months. The Offering Periods commence on or around June 1 and December 1 each year.
A participant can contribute to his or her account an amount of not more than eight percent of his or her eligible compensation during each Offering Period. No participant can contribute more than 5,000 CHF annually.
Once an employee becomes a participant in the SSPP, the employee will automatically participate in each successive Offering Period until such time as the employee withdraws from the SSPP or the employee’s employment with PartnerRe terminates.
At the beginning of each Offering Period, each participant will be granted options to purchase our shares. At the end of each Offering Period, amounts credited to the participant’s account will be used to purchase shares. The purchase price per share will be 60 percent of the fair market value of a share on the last day of the Offering Period.
During an Offering Period, a participant may not increase or decrease the rate of his or her contributions for that Offering Period, but may, during that Offering Period, increase or decrease the rate of his or her contributions for the next Offering Period.
A participant may discontinue his or her participation in the SSPP at any time but not less than 15 days prior to the exercise date (i.e., the last day of the Offering Period). If a participant withdraws from the SSPP during an Offering Period, he or she may not resume participation until the next Offering period. A participant will be deemed to have withdrawn from the SSPP if his or her contributions are not received by PartnerRe ten business days prior to the exercise date.
Transferability
A participant’s rights under the SSPP may not be transferred, assigned, pledged or otherwise disposed of in any way to any other person. After shares have been acquired by the participant pursuant to the SSPP, such shares may not be sold, transferred, pledged or otherwise encumbered or disposed of by the participant during the two-year period beginning on the date of the acquisition of such shares by a participant.
Adjustments; Change in Capitalization
Subject to any required action by our shareholders, the price per share covered by each option under the plan which has not yet been exercised will be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a share split, reverse share split, share dividend, combination or reclassification of the shares, or any other increase or decrease in the number of shares effected without receipt of consideration by PartnerRe;provided, however, that conversion of any of our convertible securities will not be deemed to have been “effected without receipt of consideration.” Such adjustment, if any, will be made by the Board.
Merger or Asset Sale
In the event PartnerRe merges with or into another corporation or there is a sale of substantially all of PartnerRe’s assets, each outstanding option will be assumed or substituted by the successor corporation, unless the Board determines in lieu of such assumption or substitution to shorten the Offering Period then in progress by setting a new exercise date.
Amendment or Termination of the Plan
The Compensation Committee (or another committee designated by the Board) may at any time terminate or amend the SSPP. Any Offering Period may be terminated by the Board on the exercise date of the Offering Period if the Board determines that termination of the SSPP is in the best interests of PartnerRe and its shareholders. The SSPP will terminate on the earlier of (i) the tenth year anniversary of the date on which our shareholders approve the SSPP (i.e., the tenth year anniversary of the date of this Annual General Meeting) or (ii) the Compensation Committee (or another committee designated by the Board) terminates the SSPP.
New Plan Benefits
Because benefits under the SSPP depend on employees’ elections to participate in the plan and the fair market value of our shares at various future dates, it is not possible to determine future benefits that will be received by participants in the plan. Under the terms of the SSPP, an eligible employee who participates in the plan may not contribute more than 5,000 CHF annually to purchase shares under the plan.
U.S. Federal Income Taxation
The following discussion is a summary of the material U.S. federal income tax consequences of participation in the SSPP. This summary is required to be included under U.S. federal securities law and will apply only with respect to those participants who are subject to U.S. federal income taxation. This summary is not intended to be exhaustive and, among other things, does not describe state, local or foreign income and other tax consequences. In addition, as PartnerRe is domiciled in Bermuda, certain statements of the summary may not be applicable. This summary is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal laws.
Under the Internal Revenue Code, a participant subject to U.S. federal income taxation will not realize income at the time an Offering Period commences. When the shares purchased under the SSPP are transferred to him or her, then he or she will be required to include in income, as compensation for the year in which such purchase occurs, an amount equal to the excess of the fair market value of such shares on the date of purchase over the purchase price, and PartnerRe will be entitled to a deduction equal to the amount that the participant is required to include as income as a result of such purchase. The participant’s basis in such shares purchased will be equal to the fair market value of such shares. If the participant disposes of such shares, then any gain or loss computed with reference to such basis will be a capital gain or loss, either short-term or long-term, depending on the holding period for such shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE PROPOSAL TO APPROVE OUR SWISS SHARE PURCHASE PLAN, AS AMENDED AND RESTATED.
PROPOSAL 5 — CONSIDER A NON-BINDING ADVISORY VOTE 3—TO APPROVE EXECUTIVE COMPENSATION DISCLOSED PURSUANT TO ITEM 402 OF REGULATION S-K (NON-BINDING ADVISORY VOTE)
(Item 53 on the Form of Proxy)
The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide our shareholders be provided with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our Named ExecutivesExecutive Officers (“NEOs”) as disclosed in this proxy statementProxy 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 our Named Executive Officersof NEOs with the interests of our shareholders. Our compensation programs are designed to reward our Named Executive OfficersNEOs 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 32,29, 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 (see(which begins on page 35)29) guides the compensation for our Chief Executive Officer and all other Executive Committee members, and has remained substantially unchanged over the past six years.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:
aligns the long-term interests of our executives and our shareholders;
establishes competitiveclearly linking pay levels, both internally and externally;
clearly links pay withto performance;
enables executives who meet prescribed criteriaachieving 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 customizeensure that NEOs are not inappropriately motivated to maximize their variable earnings;
ensuring that long-term incentive awards in the structureform of equity are designed to align the NEOs’ interests with shareholders’ interests by emphasizing long-term business performance and timingoverall PartnerRe success;
promoting retention of their compensation;NEOs by providing long-term incentives; and
encourages key executivesproviding flexibility in form and structure of compensation to remain with PartnerRe.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 Named Executive Officers,NEOs, as described in this proxy statementProxy 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 of Directors or the Compensation Committee of the Board of Directors.Board. If there
is a significant vote against our Named Executive OfficerNEO compensation as disclosed in this proxy statement,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 5.3.
Accordingly, we ask our shareholders to vote annually at the Annual General Meeting on the following resolution at the Annual Meeting:resolution:
“RESOLVED, that the compensation paid to PartnerRe’s Named Executive Officers,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 OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS,COMPENSATION, AS DISCLOSED IN THIS PROXY STATEMENT.
PROPOSAL 6 — CONSIDER A NON-BINDING ADVISORY VOTE TO APPROVE THE FREQUENCY OF A SAY-ON-PAY VOTE
(Item 6 on the Form of Proxy)
The Dodd-Frank Wall Street Reform and Consumer Protection Act also provides that shareholders must be given the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently we should seek future advisory votes on the compensation of our Named Executive Officers as disclosed in accordance with the compensation disclosure rules of the Securities and Exchange Commission, which we refer to as an advisory vote on executive compensation. By voting with respect to this Proposal 6, shareholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation once every one, two, or three years. Shareholders also may, if they wish, abstain from casting a vote on this proposal.
Our Board of Directors has determined that an advisory vote on executive compensation that occurs once every three years is the most appropriate alternative for PartnerRe and therefore our Board recommends that you vote for a three-year interval for the advisory vote on executive compensation. In determining to recommend that shareholders vote for a frequency of once every three years, the Board considered how an advisory vote at this frequency will provide our shareholders with sufficient time to evaluate the effectiveness of our overall compensation philosophy, policies and practices in the context of our long-term business results for the corresponding period, while avoiding over-emphasis on short term variations in compensation and business results. An advisory vote occurring once every three years will also permit our shareholders to observe and evaluate the impact of any changes to our executive compensation policies and practices that have occurred since the last advisory vote on executive compensation, including changes made in response to the outcome of a prior advisory vote on executive compensation. We will continue to engage with our shareholders regarding our executive compensation program during the period between advisory votes on executive compensation. PartnerRe’s compensation programs and policies have remained stable, and analysis consistently shows a clear link between pay and performance. PartnerRe has adopted best practice standards for executive compensation and supports a long-term value creation. A multi-year view of executive compensation will allow shareholders to view a clear picture of the continued long-term link between pay and performance at PartnerRe.
PartnerRe recognizes that the shareholders may have different views as to the best approach for PartnerRe, and therefore we look forward to hearing from our shareholders as to their preferences on the frequency of an advisory vote on executive compensation.
This vote is advisory and not binding on PartnerRe or our Board of Directors. The Board of Directors and the Compensation Committee will take into account the outcome of the vote, however, when considering the frequency of future advisory votes on executive compensation. The Board may decide that it is in the best interests of our shareholders and PartnerRe to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our shareholders.
The proxy card provides shareholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, shareholders will not be voting to approve or disapprove the recommendation of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE OPTION OF ONCE EVERY THREE YEARS AS THE PREFERRED FREQUENCY FOR ADVISORY VOTES ON EXECUTIVE COMPENSATION.
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.
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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;
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.
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PARTNERRE LTD.
AMENDED AND RESTATED EMPLOYEE EQUITY PLAN
Effective May 10, 2005Reconciliation of Non-GAAP Measures to GAAP Measures
Section 1. PURPOSEGroup 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 purposepresentation of Group AROE is a non-GAAP financial measure within the Plan ismeaning of Regulation G and should be considered in addition to, provideand not as a means through whichsubstitute 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 Company and its Subsidiaries may attract able persons to enter and remain in their employ and to provideyear ended December 31, 2012). The table below provides a means whereby those key employees and other persons upon whom the responsibilitiesreconciliation of the successful administration and management of the Company rest, and whose present and potential contributionsGroup AROE to the welfare ofmost comparable GAAP financial measure for the Company are of importance, can acquire and maintain share ownership, thereby strengthening their commitment to the welfare of the Company and promoting an identity of interest between shareholders and these key employees. It is intended that certain options granted under this Plan may qualify as “incentive stock options” under Section 422 of the Code.
Section 2. DEFINITIONSyear ended December 31, 2012:
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Section 3. DURATION
The Plan expires on the date of the annual meeting of shareholders in the year 2015, and no further Awards may be made after the expiration thereof. Notwithstanding the expiration of the Plan, the Plan provisions shall continue to govern outstanding Awards until all matters relating to the payment of Awards and administration of the Plan have been settled.
Section 4. ADMINISTRATION
The Committee shall have authority to administer the Plan, including, without limitation, the authority to:
All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, the shareholders and the Participants.
The Committee may delegate to the Chief Executive Officer of the Company the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify, waive rights
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with respect to, alter, discontinue, suspend or terminate Awards held by, employees who are not officers or directors of the Company for purposes of Section 16 of the Exchange Act;provided,however, that any such delegation shall conform to the requirements of the New York Stock Exchange applicable to the Company, and Bermuda corporate law.
Section 5. ELIGIBILITY.
Section 6. SHARES AVAILABLE FOR AWARDS.
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Section 7. OPTIONS.
Notwithstanding the above, if a Participant ceases employment with the Company by reason of death or disability, (A) any Options (including any Share Appreciation Rights as described below) held by such Participant which are vested on the date of such termination shall remain exercisable for twelve (12) months following the date of such termination, but in no event later than the Expiration Date, and (B) any unvested Options (including any Share Appreciation Rights as described below) held by such Participant shall vest on the date of such termination and shall remain exercisable for twelve (12) months following the date of such termination, but in no event later than the Expiration Date.
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In respect of French Participants only:
If a French Participant ceases employment with the Company by reason of:
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Notwithstanding as defined or as applicable anywhere else in this Plan, for the purposes of this Section 7(c) only, “Fair Market Value” of a Share on a given date means (A) if the Shares are listed on a national securities exchange, the average of the high and low sale prices reported as having occurred on the primary exchange with which the Shares are listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported, or (B) if the Shares are not listed on any national securities exchange but are quoted in the National Market System of the National Association of Securities Dealers Automated Quotation System on a last sale basis, the average of the high and low sale prices reported on such date, or, if there is no such sale on that date then on the last preceding date on which such a sale was reported. If the Common Stock is not listed on an exchange, or representative quotes are not otherwise available, the Fair Market Value shall mean the amount determined by the Committee in good faith to be the fair market value per Share, on a fully diluted basis.
Section 8. RESTRICTED SHARES AND RESTRICTED SHARE UNITS
Notwithstanding the above, if a Participant ceases employment with the Company by reason of death or disability, any Restricted Share Units held by such Participant shall vest on the date of such termination.
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Section 9. PERFORMANCE BASED COMPENSATION
Section 10. GENERAL
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Section 11. EFFECTOF CHANGEIN CONTROL
Section 12. NONEXCLUSIVITYOFTHE PLAN
Neither the adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, arrangements providing for the grant of share options, and such arrangements may be either applicable generally or only in specific cases.
Section 13. AMENDMENTSAND TERMINATION
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Section 14. SECTION 409AOFTHE CODE
With respect to any Awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code, and the provisions of the Plan and any Award Agreement shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. For the avoidance of doubt, nothing in the Plan is intended to guarantee that the Participants will not be subjected to the payment of “additional tax” or interest under Section 409A, and nothing in the Plan permits the Participants to seek or obtain such indemnification from the Company for any such “additional tax” or interest.
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PARTNERRE LTD.
SWISS SHARE PURCHASE PLAN
Effective February 25, 2002
Return on |
% |
Less:
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| 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 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 on May
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS 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 on May
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 | |
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. | |||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following: | ||||||||||||||||||||||||||||||||
1. | Election of Directors | ¨ | ¨ | ¨ |
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Nominees:
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01 Judith Hanratty 02 Costas Miranthis 03 Remy Sautter 04 Jurgen Zech | ||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposals 2, 3, 4 and 5.
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For |
Against |
Abstain | The Board of Directors recommends you vote 3 YEARS on the following proposal: | 1 Year | 2 Years | 3 Years | Abstain | ||||||||||||||||||||||||
2. | To re-appoint Deloitte & Touche Ltd., the independent registered public accounting firm, as our independent auditors, to serve until the 2012 annual general meeting, and to refer decisions about the auditors’ compensation to the Board of Directors; | ¨ | ¨ | ¨ | 6. | Consider a non-binding advisory vote regarding the frequency of a Say-on-Pay vote. |
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NOTE:Such other business as may properly come before the meeting or any adjournment thereof. | ||||||||||||||||||||||||||||||||
3. | To approve an increase in the number of shares available under our 2005 Employee Equity Plan, as amended and restated; | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||
4. | To approve our Swiss Share Purchase Plan, as amended and restated; | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||
5. | Consider a non-binding advisory vote to approve Executive Compensation disclosed pursuant to Item 402 of Regulation S-K; and | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||
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. |
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 proposals 2. and 3. | For | Against | Abstain | |||||||||||||||||||||||||
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; | ¨ | ¨ | ¨ | ||||||||||||||||||||||||
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 | |||||||||||||||||||||||||
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Annual Report, Notice & Proxy Statement, Form 10-KCombined Document is/are available atwww.proxyvote.com.
PROXY - PartnerRe Ltd. | ||||||||||
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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 19, 2011
The undersigned shareholder of PartnerRe Ltd. hereby appoints Jean-Paul L. Montupet and Costas Miranthis, each the true and lawful attorney, agent and proxy of the undersigned, with full power of substitution to vote all of our Common Shares, $1.00 par value per share, which the undersigned may be entitled to vote at the Annual General Meeting of Shareholders to be held May 19, 2011
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 17, 2013
The undersigned shareholder(s) of PartnerRe Ltd. hereby appoint(s) Jean-Paul L. Montupet and Costas Miranthis, or either of them, the true and lawful attorney, agent and proxy of the undersigned, with full power of substitution to vote all of our Common Shares, $1.00 par value per share, which the undersigned may be entitled to vote at the Annual General Meeting of Shareholders to be held May 17, 2013 and at any adjournment or postponement of such meeting with all powers which the undersigned would possess if personally present, for the purposes set forth on the reverse side hereof.
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
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*** Exercise YourRight to Vote ***
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to Be Held on May 19, 2011
Continued and to be signed on reverse side
| *** Exercise YourRightto Vote *** Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting
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Meeting Information | ||||||||||||||||
Meeting Type:Annual Meeting | ||||||||||||||||
For holders as of:March | ||||||||||||||||
Date: May | Time: | |||||||||||||||
Location: | ||||||||||||||||
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.
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— Before You Vote —
How to Access the Proxy Materials
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How to Access the Proxy Materials
1. Notice & Proxy | ||||||||
| How to View Online: | |||||||
Have the information that is printed in the box marked by the arrow | ||||||||
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 | |||||||
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Please Choose One of the Following Voting Methods
Vote In Person: If you choose to vote these shares in person at the meeting, you must request a “legal proxy.” To do so, please follow the instructions atwww.proxyvote.com or request a paper copy of the materials, which will contain the appropriate instructions. Many shareholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance.
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Voting items |
The Board of Directors recommends you vote
FOR the following:
1. | Election of Directors |
Nominees
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01 Jean-Paul L. Montupet 02 |
The Board of Directors recommends you vote FOR proposals 2, 3, 4 and 5.
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2.To re-appoint Deloitte & Touche Ltd., the independent registered public accounting firm, as our independent auditors, to serve until the |
| 3To approve |
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The Board of Directors recommends you vote 3 YEARS on the following proposal:
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NOTE:Such other business as may properly come before the meeting or any adjournment thereof.
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Voting Instructions | ||||||||
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