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

(Amendment No.     )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

CITIZENS, INC.

(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):

April 25, 201920, 2021

Dear Shareholders,

The COVID-19 pandemic has profoundly altered our world. During this unprecedented time, we are focused on the health and safety of our employees, independent consultants, agents, policyholders and shareholders. We are also taking this opportunity to emerge as a stronger company.

On behalf of the entire Board of Directors, it is my privilege to invite you to our 20192021 Annual Meeting of Shareholders to be held on Tuesday, June 4, 20191, 2021 at 10:00 a.m. Central Daylight Time, at our office located at 2900 Esperanza Crossing, 2^nd Floor,11815 Alterra Parkway, Suite 1500, Austin, Texas 78758. We are pleased to send you the 20192021 Proxy Statement.

We appreciate all of our shareholders and look forward to communicating with you regarding our efforts to achieve enduring value for your Company through the right business strategies, prudent risk management and effective corporate governance practices.

We intend to hold our annual meeting in person. However, we are actively monitoring the coronavirus (COVID-19) situation. We are sensitive to the public health and travel concerns that our shareholders may have and the protocols that federal, state and local governments may impose. In the event it is not possible or advisable to hold our annual meeting in person, we will announce alternative meeting arrangements, which may include changing the location of the meeting or holding a virtual meeting solely by means of remote communication online, as promptly as practicable. You are encouraged to monitor our investor relations website at https://www.citizensinc.com/investors-investor-information for updated information about the annual meeting.

Our Board of Directors hopes you can attend the meeting, but if you cannot, it is still very important that we receive your proxy and vote on the proposals detailed in this proxy statement. Regardless of the number of shares you own, PLEASE VOTE THROUGH THE INTERNET, BY TELEPHONE OR BY MAIL according to the instructions provided on the proxy card.

We hope the material contained in this accompanying Proxy Statement demonstrates how seriously we take the trust you place in us through your ownership of Citizens shares, and we ask that you vote in accordance with the Board of Directors’ recommendations as a sign of your support for our continuing efforts.

Sincerely,

Geoffrey M. KolanderSincerely,

President and

Gerald W. Shields

Interim Chief Executive Officer and President

Citizens, Inc.

NOTICE OF 20192021 ANNUAL MEETING OF SHAREHOLDERS

ITEMS OF BUSINESS:

RECORD DATE:

The Board of Directors of Citizens, Inc. (the “Company”) set the close of business on April 10, 201912, 2021 as the record dateRecord Date for determining the shareholders entitled to receive notice of, and to vote at, the 20192021 Annual Meeting of Shareholders (the “Annual Meeting”) or any adjournment or postponement of the Annual Meeting.

HOW TO VOTE:

It is very important that you vote in order to play a part in the future of the Company. Whether or not you plan to attend the Annual Meeting, we encourage you to vote as soon as possible. You may cast your vote via the Internet, by telephone, by mail or in person at the Annual Meeting. Please carefully review the proxy materials for the Annual Meeting and follow the instructions in the Information About the Annual Meeting and Voting section beginning on page 3952 to vote.If your shares are held in street or nominee name, please respond to the communication you receive from the holder of record as soon as possible so your shares can be represented at the Annual Meeting.

Important Notice Regarding Availability of Proxy Materials for Shareholder Meeting to be held June 4, 2019:1, 2021: The Proxy Statement and the 20182020 Annual Report are available at www.edocumentview.com/cia.

TABLE OF CONTENTS

PROXY SUMMARY

ThisAND COMPANY OVERVIEW

PROXY SUMMARY

The summary below highlights selected information that is provided in more detail throughout this Proxy Statement. This summary does not contain all of the information you should consider before voting. Youvoting and you should read the full Proxy Statement before casting your vote.voting. These proxy materials are first being sent to shareholders of Citizens, Inc., a Colorado corporation, commencing on or about April 20, 2021.

VOTING MATTERS AND BOARD RECOMMENDATIONS

Shareholders are being asked to vote on the following matters at the 2019 Annual Meeting of Shareholders:

Following the B Share Transaction (as described below), there are no holders of Class B common stock and thus all of our director nominees will be elected by the Class A shareholders at our Annual Meeting.

The Company’s Amended and Restated Bylaws provide that there will be not less than five nor more than fifteen directors, with the exact number to be fixed by the Board. The size of our board is currently nine members. There are currently seven directors nominees and two vacancies remaining on the Board. The vacancies were created by the resignation of our former CEO, Geoffrey Kolander, and the announced resignation, to be effective on the date of our Annual Meeting, of Constance K. Weaver. The Nominating and Corporate Governance Committee is currently conducting a candidate search to fill these vacancies and is focusing the search on finding qualified women and/or minorities to serve on our Board. Any director elected by the Board shall be appointed to hold office until our 2022 Annual Meeting of Shareholders, or until such director’s earlier resignation, removal, or death.

Proxies cannot be voted for a greater number of persons than the number of nominees named herein.

DIRECTOR NOMINEESABOUT CITIZENS – OUR EVOLUTION

Citizens, Inc. is an insurance holding company incorporated in Colorado in 1977 serving the life insurance needs of individuals in the United States since 1969 and internationally since 1975. Through our insurance subsidiaries, we provide insurance benefits to residents in 31 U.S. states and more than 75 different countries. In 1987, Harold E. Riley became Chairman of the Board and CEO of the Company and in 1988, our Articles of Incorporation were amended to create two classes of stock – the Class A Director Nomineescommon stock and the Class B common stock. The Class A common stock and Class B common stock were equal in all respects except that:

The Company’s Articles of Incorporation have been amended twice since 1988 – in 1993 and in 2004, both times to increase the authorized capital stock. Our current Restated and Amended Articles of Incorporation (the “2004 Articles of Incorporation”) continue to authorize the two classes of common stock with the same dividend and voting features as established in 1988.

Upon the authorization of the Class B common stock in 1988, the Harold E. Riley Trust, a trust controlled by Harold E. Riley (the “Riley Trust”), was issued 100% of the Class B common stock and thus Mr. Riley was deemed to be the “controlling shareholder”, as the Riley Trust had the right to elect a majority of the Company’s Board. Mr. Riley served as CEO of the Company until 2014 and then upon his death, in 2017, the terms of the Riley Trust required that the Class B common stock held by the Riley Trust be transferred to the Harold E. Riley Foundation, a charitable organization established by Mr. Riley under 501(c)(3) of the Internal Revenue Code (the “Foundation”).

Due to insurance holding company laws, the insurance regulators in the jurisdictions in which the Company’s insurance subsidiaries operate – Colorado, Louisiana, Mississippi, Texas and Bermuda – had to approve the transfer of the Class B common stock from the Riley Trust to the Foundation, as such transfer was deemed a change in control. On July 29, 2020, the last of the regulatory approvals was obtained and the Foundation became the owner of 100% of the Company’s outstanding Class B common stock. Because the Articles of Incorporation provide that the holders of the Class B common stock have the exclusive right to elect a simple majority of the members of the Board, as of such date, the Foundation controlled the Company (the “Change in Control”).

Following the Change in Control, several material events occurred in 2020 and early 2021 that transformed the Company:

As a result of the Foundation Settlement Agreement:

On February 6, 2021, pursuant to the Foundation Settlement Agreement, the Company entered into an agreement with the Foundation to purchase all of the Class B common stock for a purchase price of $9,090,463.80 (the “B Share Transaction”). In accordance with such purchase agreement, the purchase price was paid to the Foundation on March 5, 2021. On April 12, 2021, the Company and the Foundation received the last of the regulatory approvals required for the Foundation to divest control of the Company and thus all of the Foundation’s Class B common stock was transferred to the Company as of such date. In accordance with Colorado law, the Class B common stock is now classified as authorized, but unissued shares. On March 9, 2021, the Board passed a resolution stating that as long as the Class B common stock is being held as unissued shares, the Company will not vote, nor permit any other person or entity to exercise any voting rights or other rights, with respect to the Class B common stock. Accordingly, the Class A shareholders will elect all of the directors at the 2021 Annual Meeting.

DIRECTOR NOMINEES

The Board has emphasized the importance of identifying and proposing for shareholder approval director nominees that possess a well-rounded range of skills, qualifications, professional experiences and perspectives. It is the Board’s belief that a Board comprised of individuals with diverse skills and viewpoints will enhance its ability to effectively oversee the Company’s business operations and guide management’s efforts to achieve long-term strategic objectives.

All of our director nominees are current directors standing for re-election. Constance K. Weaver has indicated her intention to retire from the Board at the time of the Annual Meeting and, thus, is not standing for re-election. As mentioned above, the Nominating and Corporate Governance Committee is currently conducting a candidate search to fill the two vacancies and is focusing the search on finding qualified women and/or minorities to serve on our Board.

Class B Director Nominees

PROXY STATEMENT

The Board of Directors (the “Board”) of Citizens, Inc. (the “Company”) is furnishing you this Proxy Statement to solicit proxies on its behalf to be voted at the Annual Meeting of Shareholders to be held at the Company’s executive office at 2900 Esperanza Crossing, 2^nd Floor,11815 Alterra Parkway, Suite 1500, Austin, Texas 78758 on Tuesday, June 4, 2019,1, 2021, at 10:00 a.m. Central Daylight Time (the “Annual Meeting”). The proxies also may be voted at any adjournments or postponements of the Annual Meeting.

The Board is first furnishing the proxy materials to holders of the Company’s Class A common stock and Class B common stock (collectively, “Common Stock”) on April 25, 2019.20, 2021.

All properly executed written proxies and all properly completed proxies submitted by telephone or Internet that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with the directions given in the proxy unless the proxy is revoked prior to completion of voting at the Annual Meeting. Voting by proxy will not limit your right to vote at the Annual Meeting if you later decide to attend in person. Other than the approval of the matters listed above, we do not anticipate that any other matters will be raised at the Annual Meeting.

Only owners of record of shares of Common StockClass A common stock as of the close of business on April 10, 2019,12, 2021, the record date,Record Date, are entitled to notice of, and to vote at, the Annual Meeting or at any adjournments or postponements thereof. Each shareholder of record on the record dateRecord Date is entitled to one vote for each share of Common StockClass A common stock held by such shareholder on all matters coming before the Annual Meeting, regardlessMeeting.

As of class. Additionally,close of business on the voting rights of the Class A and Class B shareholders are equal in all respects, except that Class B shareholders have the exclusive right to elect a simple majority of the Board, and the Class A shareholders have the exclusive right to elect the remaining directors.

On April 10, 2018,Record Date, there were 49,229,25549,559,040 shares of Class A common stock issued and outstanding and entitled to vote at the Annual Meeting, and 1,001,7140 shares of Class B common stock issued and outstanding andor entitled to vote at the Annual Meeting. As previously discussed, as of April 12, 2021, following regulatory approvals of and the consummation of the B Share Transaction, all of the Class B common stock was repurchased by the Company has been classified as authorized, but unissued shares that the Board has resolved will not be voted. For more information about the B Share Transaction, see the section entitled “About Citizens – Our Evolution” beginning on page 2.

We intend to hold our Annual Meeting in person. However, we are actively monitoring the coronavirus (COVID-19) situation. We are sensitive to the public health and travel concerns that our shareholders may have and the protocols that federal, state and local governments may impose. In the event it is not possible or advisable to hold the Annual Meeting in person, we will announce alternative meeting arrangements, which may include changing the location of the meeting or holding a virtual meeting solely by means of remote communication online, as promptly as practicable. You are encouraged to monitor our investor relations website at https://www.citizensinc.com/investors-investor-information for any updated information about the Annual Meeting.

CORPORATE GOVERNANCE

OUR COMMITMENT TO GOOD CORPORATE GOVERNANCE

The Board believes that a commitment to good corporate governance enhances shareholder value. To that end, the Company is committed to employing robust corporate governance practices to promote high standards of responsibility and ethics that define how we operate our business and earn a return for our shareholders.

The Company’s Corporate Governance Guidelines provide a framework for effective governance of the Board and the Company. The guidelines establish policies and practices with respect to Board operations and responsibilities, including board size and composition, director independence, director qualifications, executive and director compensation, succession planning and the roles of Board committees. The Board regularly reviews these guidelines and updates them as needed. A copy of the Corporate Governance Guidelines is available on our website at www.citizensinc.com.

The Board believes that its commitment to good governance is demonstrated by the following corporate governance practices, including:

OUR CULTURE OF RESPONSIBILTYRESPONSIBILITY AND ETHICS

As part of our commitment to strong corporate governance practices, we maintain an active ethics program. Our ethics program is rooted in our seven core values:

Our Board, officers and employees are obligated to adhere to our core values. In that way, we can ensure that we continue to be good stewards of the investments in us by our shareholders, employees, policyholders and independent consultants. Our ethics program also includes periodic training on compliance topics for all employees, such as anti-money laundering training, andone-on-one meetings with our employees where they can communicate any compliance, ethics or compliance concerns (“Compliance Task Force Meetings”). Our Compliance Task Force Meetings take place with our Chief Compliance Officer and a member of our legal team and are generally held on a regular basis with select employees from different functions and groups at the Company. Notes from the Compliance Task Force Meetings are shared with the Chief Legal Officer and Chief Executive Officer and other key executive officers depending on the subject matter of the concern voiced.matter. At each Compliance Task Force Meeting, we also reiterate our commitment to our core values to ensure that each employee is living up to them.

Our Board has adopted a Code of Business Conduct and Ethics (“Code”), which is available on our website at www.citizensinc.com. The Code provides general statements of our expectations regarding ethical standards we expect our directors, officers and employees to adhere to while acting on our behalf. Our Code also contains procedures for our employees to report, anonymously or otherwise, violations of the Code. Any amendment to the Code and any waiver applicable to Company’s directors or executive officers will be posted on our website within the time period required by the Securities and Exchange Commission (the “SEC”) and the NYSE.

DIRECTOR INDEPENDENCE

The Board determines whether a director or director nominee is “independent” in accordance with the NYSE requirements for independent directors. In order to be considered independent, other than in his or her capacity as a member of the Board or any board committee, a director may not accept any consulting, advisory or other compensation fees from the Company, and may not be an affiliated person of the Company or any subsidiary. In addition to compliance with NYSE independence requirements, the Board applies an additional independence standard thatdirectors, which requires an affirmative determination that each independent director has no other material relationship with the Company or its affiliates or any executive officer of the Company or his or her affiliates that in the judgment of the Board would impair their effectiveness or independent judgment as a director. Additionally, the Company has enhanced standards contained in its Corporate Governance Guidelines In addition to compliance with NYSE independence requirements, the Company’s Corporate Governance Guidelines (available on the Company’s website: https://www.citizensinc.com/uploads/01-26-18-citizens-corporate-governance-guidelines.pdf), which prohibits independent directors from receiving any consulting, advisory or other compensatory fees from the Company other than Board Compensation (the “Enhanced Independence Standards”).

The Board has determined that all nine ofcurrent Board members and nominees, other than our directorsInterim Chief Executive Officer and President, Mr. Shields, are independent as set forth under the NYSE independence requirements. Although Ms. Weaver is considered to be independent under the NYSE independence requirements, she is considered to not be independent under the Company’s Enhanced Independence Standards by virtue of the Company’s consulting relationship with Tracker Group LLC, of which Ms. Weaver is a 50% member and served as Chief Executive Officer until July 2020. Beginning in early 2020, the Company paid Tracker Group, LLC $30,000 for shareholder related advisory services for fiscal year 2020. The Company expects to pay a similar amount to Tracker Group, LLC in fiscal year 2021. In addition, the Board determined that Mr. Kolander, as the Chief Executive Officer of the Company, was not independent for the portion of 2020 during which he served on the Board.

There were no other relationships that existed in 20182020 that were considered by the Board as part of the independence determinations.

BOARD MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Company’s business affairs are conducted under the direction of the Board. TheDue to issues surrounding the Change in Control, the Board met 15 times during 2020, and each director attended or participated in 75% or more of the aggregate of (i) the total number of meetings of the Board held three (3)during 2020, and (ii) the total number of meetings during 2018, and all directors were present for 100%held by each committee of the meetings.We encourageBoard on which such director served during 2020. We expect all of our directors to attend eachour annual meeting. All directors serving at the time attended the 2020 annual meeting of shareholdersshareholders.

Select officers and in 2018 allemployees regularly attend Board meetings to present information on our directors attended the annual meeting.business and strategy, and Board members have access to our officers and employees outside of Board meetings. Board members are encouraged to make site visits to meet with our employees, and to accept invitations to attend and speak at internal Company meetings.

To promote open discussion, our independent directors hold regularly scheduled executive sessions without management present. These sessions allow the independent directors to review key decisions and discuss matters in a manner independent of management.

To assist it in carrying out its duties, the Board has delegated certain authority to five separately-designated standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee,the Investment Committee and the Executive Committee. The primary responsibilities of each of the committees are described below, together with the current membership and number of committee meetings held in 2018. Currently,2020. The Board has determined that the Chairs of each committee and all of our five standing board committeescommittee members (except for Ms. Weaver pursuant to the Company’s enhanced independent standards) are composed entirely of independent directors. Eachindependent. Other than the Executive Committee, each of the Board committees described below has a written charter. Copies of these charters are available on our website at www.citizensinc.com, or in print upon request from the Secretary of the Company at Citizens, Inc., P. O. Box 149151, Austin, Texas 78714-9151.

Audit Committee

Current members: Dr. Terry S. Maness (Chairman)(Chair), Gerald W. ShieldsFrancis A. Keating and Dr. Robert B. Sloan, JrJr.

Number of Meetings in 2018:2020: 4

The purpose of the Audit Committee is to assist the Board’s oversight and monitoring of:

Investment Committee

Current members: Christopher W. Claus (Chair), Jerry D. Davis, Jr. and Gerald W. ShieldsConstance K. Weaver

Number of meetings in 2018: 52020: 3

The Investment Committee is responsible for assisting the Board in reviewing and overseeing the investment policies, objectives, strategies, portfolio, transactions and performance of the Company and its subsidiaries.

Executive Committee

Current members: Jerry D. Davis, Jr. (Chairman)(Chair), Christopher W. Claus, Dr. E. Dean Gage and Dr. Robert B. Sloan, Jr.

Under theThe Company’s Third Amended and Restated Bylaws (the “Bylaws”), authorize the Board mayto designate an Executive Committee to consist of a majority of independent directors, with at least three but not more than five directors elected by both classes of Common Stock, one of whom must be the Chairman of the Board. The Executive Committee may exercise all authority of the Board in the management of the business and affairs of the Company, unless restricted by the Colorado Business Corporations Act, the Company’s Restated and Amended Articles of Incorporation (the “Articles of Incorporation”) or Bylaws, or other applicable law. The Executive Committee approves Companygenerally acts to authorize bond trades or approve other actions of the Board in between regularly scheduled Board meetings. The Board then reviews and ratifies the actions of the Executive Committee. In 2020, the Executive Committee took all of its actions by unanimous written consent of the members, and there were fourteen (14) such consents in 2018.members.

probable impact of information security events that could adversely affect the Company’s operations, finances and reputation. The Chief Information Security Officer provides quarterly updates to the Audit Committee and semi-annual updates to the Board on changes to cybersecurity and privacy regulations, top threats facing the Company and key risks and mitigation efforts. The Chair of the Audit Committee also provides quarterly reports to the full Board on any material information security topics presented to the Audit Committee.

While the Board and management personnel set the tone for the Company’s Information Security Program, the Company has a robust information security training and compliance program. All employees receive annual training on Information Security, and our Information Technology department has implemented a security risk awareness program to help the Company’s employees learn how to maintain sound security practices.

Selected Area of Board Oversight in 2020

During 2020, the Board and its Committees reviewed and discussed with management the impact of the COVID-19 pandemic on the Company’s employees, independent consultants, agents, distribution channel and business, and management’s strategies and initiatives to respond to, and mitigate, adverse impacts, including enhanced health and safety measures for the Company’s employees, independent consultants and agents.

BOARD AND COMMITTEE PERFORMANCE SELF-ASSESSMENTS

The Board and each committee conduct an annual self-assessment. This evaluation is intended to assess whether the Board and the committees are functioning effectively. As part of this self-assessment, the directors are asked to consider the Board’s role, relations with management, composition and meetings. Each committee is asked to consider its role and the responsibilities articulated in the committee’s charter, the composition of the committee and the committee meetings. The self-assessment responses and comments are compiled by the Secretary of the Company and presented to the Nominating and Corporate Governance Committee for initial review. The responses and comments are reviewed with each committee and the full Board and are utilized by the Board and each committee to improve their operations and processes.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

A “related person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) during the Company’s last fiscal year in which the Company (including any of its subsidiaries) was, is or will be a participant, in which the amount involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A “related person” means:

All related personsperson transactions must be approved by the Audit Committee in accordance with the Audit Committee charter.

When a related person transaction is proposed, the Audit Committee reviews: (1) the related person’s name and relationship to the Company; (2) the person’s interest in the transaction with the Company, including the related person’s position or relationship with, or ownership in, a firm, corporation, or other entity that is a party to or has an interest in the transaction; and (3) the approximate dollar value of the amount involved in the transaction, the nature and business purpose of the transaction and the related party’s interest in the transaction.

The Company entered into the Chief Executive Officer Separation of Service and Consulting Agreement (the “Separation and Consulting Agreement”) with Geoffrey M. Kolander, our former Chief Executive Officer and President and a member of the Board, effective July 29, 2020. Under the Separation and Consulting Agreement, Mr. Kolander agreed to provide consulting services to the Company as an independent contractor following his resignation as Chief Executive Officer and President effective August 5, 2020. For these services, Mr. Kolander was paid a consulting fee of $14,000 per week. During 2020, the Company paid Mr. Kolander $254,800 in consulting fees. The terms of the Separation and Consulting Agreement are described below in the section entitled “Chief Executive Officer Separation of Service and Consulting Agreement with Mr. Kolander and Termination of Employment” on page 45.

Other than the Separation and Consulting Agreement with Mr. Kolander, the Company is not aware of any transaction, or series of transactions, since January 1, 2018,2020, or any currently proposed transactions to which the Company or any of its subsidiaries is to be a party, in which the amount involved exceeds $120,000 in a single fiscal year and in which any director, nominee for director, executive officer, 5% shareholder or any member of the immediate family of the foregoing persons had, or will have, a direct or indirect material interest.

SUCCESSION PLANNING

The Board’s leadership structure includes an independent non-executive Chairman role. The Board believes our overall corporate governance measures help ensure that strong, independent directors continue to effectively oversee our management and key issues related to strategy, risk and integrity; executive compensation; Chief Executive Officer evaluation; and succession planning.

Our Board oversees management succession planning and executive talent development. At regularly scheduled Board meetings, the Board reviews and discusses with management the Chief Executive Officer succession plan and the succession plans for key positions at the senior officer level across the Company. The Board reviews potential internal candidates for our executive team with our Chief Executive Officer, including the qualifications, experience, and development priorities for these individuals. These discussions are led by the Chief Executive Officer, with periodic assistance from firms with talent assessment expertise. These discussions include critical leadership competencies, talent assessment, short and long-term development potential of executives, the pool of external talent, and diversity. The Board also evaluates succession and development plans in the context of our overall business strategy and culture. Potential leaders are visible to Board members through formal business strategy presentations and informal events to allow the Board to personally assess candidates.

Our Board also establishes steps to address emergency Chief Executive Officer succession planning in extraordinary circumstances. Our emergency Chief Executive Officer succession planning is intended to enable our Company to respond to unexpected emergencies and minimize potential disruption or loss of continuity to our Company’s business and operations.

Geoffrey M. Kolander, our former Chief Executive Officer and President and a member of the Board, resigned from such positions effective August 5, 2020. Gerald W. Shields, our Vice-Chairman of the Board, was appointed Interim Chief Executive Officer and President effective August 5, 2020. The Board is engaged in a search for a permanent Chief Executive Officer.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Each of Grant G. Teaff, (Chairman), Jerry D. Davis, Jr., Francis A. Keating II, Constance K. Weaver, Dr. Robert B. Sloan, Jr. and Steven F. Shelton were membersChristopher W. Claus served as a member of the Compensation Committee during 2018. Mr. Shelton served as a director through June 4, 2018.2020. Dr. Robert B. Sloan, Jr., Christopher W. Claus and Jerry D. Davis, Jr. currently serve on the Compensation Committee. None of the members of the Compensation Committee is or has been an executive officer of the Company, nor did any of them have any relationships requiring disclosure by the Company under Item 404 of SEC RegulationS-K. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, an executive officer of which served as a director of the Company or member of the Compensation Committee during 2018.2020.

COMMUNICATIONS WITH THE BOARD

The Board has established a process to facilitate communication by shareholders and other interested parties with directors. Communications can be addressed to directors in care of the Secretary of the Company at Citizens, Inc., P. O. Box 149151, Austin, TX 78714-9151.

Communications may be distributed to all directors, or to any individual director, as appropriate. At the direction of the Board, all mail received may be opened and screened for security purposes. In addition, items that are unrelated to the duties and responsibilities of the Board shall not be distributed. Such items include but are not limited to: spam; junk mail and mass mailings; product complaints or inquiries; new product suggestions; resumes and other forms of job inquiries; surveys; and business solicitations or advertisements.

In addition, material that is trivial, obscene, unduly hostile, threatening or illegal or similarly unsuitable items will be excluded; however, any communication that is excluded will be made available to any independent,non-employee director upon request.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES

The Company and the Board believe that creating long-term value for our shareholders implicitly requires enacting and executing sustainable business practices and strategies that, while delivering competitive returns, also take into account environmental, social and governance (“ESG”) issues. Addressing ESG issues is a key part of building a great company, and doing so means having strong governance, effective management systems and robust controls. We strive to govern the Company in a sustainable manner that recognizes these concerns alongside our long-term operational goals and strategies. We understand that we have a responsibility to monitor and control our ecological and societal impact and adopt responsible practices on environmental, social and governance issues together with our obligations regarding corporate strategy, risks, opportunities and performance.

Environment

The Company is committed to operating in an environmentally responsible manner and strives to be a good steward of the environment. In November 2020, we moved into our new headquarters in Austin, Texas. The building in which we are leasing space for our headquarters was designed to be highly energy efficient and has achieved LEED Gold Certification. The building is outfitted with LED lighting, with state of the art lighting controls. Our leased space in the building is equipped with motion detecting light sensors in order to reduce unnecessary energy consumption. As a participant in the Austin Energy Green Building Program, the building was designed and built in a manner that reduced the impact of construction on the environment and utilized materials sourced locally. In addition, the landscaping was designed with native grasses and plants to minimize the use of irrigation.

Over the past few years we have undertaken initiatives to reduce our paper consumption. Reducing the amount of paper we use at our office locations is another key focus for us. We continually monitor our office operations for opportunities to reduce or eliminate the use of paper. We also encourage the policyholders of our insurance subsidiaries to interact with us electronically, which serves to extend our paper reduction efforts beyond the borders of our office locations. For example, we have developed an electronic portal for the policyholders of our insurance subsidiaries to access information about their policies. Certain of our insurance subsidiaries also utilize paperless technologies to market and sell their products and deliver policies to our policyholders. Sales agents of certain of our insurance subsidiaries are able to take and complete potential

policyholder applications electronically, thereby avoiding the need for paper copies. Further, policyholders of certain of our insurance subsidiaries, through their agents, are able to apply for our insurance products online, without having to fill out and mail in a paper application. These efforts help us limit our carbon footprint, by reducing the amount of paper required to operate our business.

Social Impact

The Company and our employees regularly contribute to local non-profit organizations that promote health and well-being. We also encourage employee volunteerism, partnering with community service organizations to provide opportunities for employees to donate time and talents to assist neighbors in need.

Corporate Governance

We believe that sound principles of corporate governance are a key element of our business, and we are deeply involved in providing continuing insight and clarity into our governance process. We expect all directors, officers and employees to conduct business in compliance with the various corporate governance documents and policies we have implemented and survey compliance on an annual basis.

As part of our ongoing shareholder engagement efforts, we proactively engage shareholders on specific corporate governance issues on a regular basis and as appropriate. For more information on our shareholder engagement program and efforts, see the section entitled “Executive Compensation – Say on Pay and Shareholder Engagement” below.

Responsible Investing

In addition to financial considerations and prudent diversification, we evaluate ESG criteria when making investment decisions for our investment portfolio. We believe that good governance practices and a commitment to corporate responsibility can enhance investment opportunities and meaningfully affect investment performance. The Company also believes long-term sustainability concerns impact both investors and society and thus should be considered when making investment decisions. The Company made its first investment in a private equity fund focused on global renewal power generation (wind and solar energy) in 2020 and will continue to seek other responsible investing opportunities in the future.

Empowering and Engaging Our People

The Company’s focus continues to be fostering a culture that is inclusive and attractive for all of our employees and independent sales agents. Below are some of the key initiatives that we have undertaken to foster such an environment.

Culture of Engagement. From time to time, we conduct confidential surveys to give our employees the opportunity to provide input about their experience at the Company. Our Human Resources Department also conducts one-on-one meetings with select employees. Through these surveys and one-on-one meetings, we are able to identify opportunities for improvement, and to create action plans based on feedback as appropriate.

Culture of Diversity and Inclusion. The Company continues to prioritize our efforts in creating and sustaining a culture of diversity and inclusion. The Company derives a great deal of strength from our diverse workforce. We have long been committed to cultivating work environments in which all of our employees can discuss diversity and inclusion and ensuring our businesses are representative of the communities we serve.

Culture of Wellness. We are committed to helping our employees have the opportunity to live healthy and active lives. To help ensure the health of our employees, we provide them with a comprehensive benefits package that includes, but is not limited to, the following: on-site flu shots each year, health insurance, dental and vision insurance, fitness center access and wellness programs.

Culture of Learning and Training. At the Company, we believe in continuous learning. We offer industry specific training as well as routine training on information security.

Actions in Response to the COVID-19 Pandemic

As we navigated through the COVID-19 pandemic, our top priority has been the health and safety of our employees, independent consultants, agents and policyholders. We have taken steps to support our employees, independent consultants, agents and policyholders. As an organization, we implemented a wide variety of precautionary health and safety measures for our employees, including remote work protocols, enhanced sanitation and cleaning practices, requiring face coverings, restrictions on non-essential contractors or visitors, restrictions on non-essential travel, adding additional employee training on safety topics concerning hand washing and social distancing and encouraging our employees to follow similar protocols when away from work. Additionally, we also pivoted our independent consultants and agents to virtual sales and collections while maintaining business operations and remaining mindful that the insurance industry is considered an essential business in supporting our policyholders. We believe we were careful and deliberate in all decisions, continuously taking action to protect our employees, independent consultants and agents, and policyholders.

AUDIT MATTERS

AUDIT COMMITTEE AND MEETINGS

The Audit Committee is comprised of all independent directors who meet the financial literacy requirements of the NYSE and additional, heightened independence criteria applicable to members of the Audit Committee under SEC and NYSE rules. The Board has designated Dr. Terry S. Maness (Chairman) as “Audit Committee financial expert” under the SEC rules.

Regular audit committee meetings generally take place immediately before a Board meeting to maximize interaction with the Board. The Audit Committee also meets before the Company issues its quarterly and annual financial results. The meetings typically include the Chief Executive Officer and Chief Financial Officer, along with other members of senior management, and the internal auditors.

At each regular committee meeting, the Audit Committee conducts a review session at which senior management provides briefings on current issues, trends and developments, and is briefed by the Chief Financial Officer on the financial results.results and the Chief Information Security Officer on information security matters. Following a report by the internal auditors, representatives of the Independent Auditor are invited into the meeting to present their findings. The Audit Committee also meets separately with the Independent Auditor representatives and/or the lead audit partner upon request. The Audit Committee reports regularly to the Board.

PRIMARY RESPONSIBILITESRESPONSIBILITIES AND 20182020 ACTIONS

The Audit Committee represents and assists the Board in fulfilling its oversight responsibility relating to the integrity of the Company’s financial statements, the financial reporting process and the system of internal controls, including the internal audit function. The Audit Committee oversees the Company’s compliance with legal, regulatory and public disclosure requirements, and the Independent Auditor’s qualifications, independence and performance. The Audit Committee also generally oversees the Company’s overall enterprise risk management program and approves any related party transactions.

During 2018,2020, among other things, the Audit Committee:

APPOINTMENT AND OVERSIGHT OF INDEPENDENT AUDITOR

In determining each year whether to reappoint the Independent Auditor or engage another firm, the Audit Committee considers, among other things:

Audit CommitteePre-Approval of Services

To help assure independence of the Independent Auditor, our Audit Committee has established a policy whereby all audit, review, attest andnon-audit engagements of the principal accountant or other firms must be approved in advance by the Audit Committee; provided, however, that de minimisnon-audit services may instead be approved in accordance with applicable SEC rules. This policy is set forth in our Audit Committee Charter. Of the fees shown in the table which were billed by our principal accountants in 20182020 and 2017,2019, 100% were approved by the Audit Committee.

AUDIT COMMITTEE

Dr. Terry S. Maness (Chairman)

Gerald W. Shields

Dr. Robert B. Sloan, Jr.

DIRECTORS

DIRECTORS

The Company’s Board consists of a diverse group of leaders in their respective fields. Most of our directors have senior leadership experience at other companies or academic institutions. In these positions, they have gained broad management and industry experience, including strategic planning, branding, investor communications, compliance, risk management, and leadership development. In addition, some of our directors have experience serving as executive officers, or on boards of directors, of public or private companies and academic institutions and one of our directors is the former governor of the state of Oklahoma, and bring unique perspectives to the Board.

The Board and the Nominating and Corporate Governance Committee believe the skills, qualities, attributes, and experience of our directors provide the Company with business acumen and a diverse range of perspectives to engage each other and management to effectively address the Company’s evolving needs and represent the best interests of the Company’s shareholders.

When identifying and evaluating nomineesQualification Standards for election to the Board, ourDirectors

The Nominating and Corporate Governance Committee looks for individualsconsiders director nominees who are highly qualified in terms of business experiencerecommended by its members, by other Board members, by shareholders, and both willing and expressly interested in serving onby management, as well as those identified by third-parties known to the Board. At a minimum, an individual nominated for consideration bymembers or management. In evaluating potential nominees to the Board, should possess personalthe Nominating and professional integrity,Corporate Governance Committee has adopted standards related to the qualifications of directors of the Company (the “Committee Standards”). The Committee Standards include, without limitation, independence, character and core values, ability to exercise sound judgment, diversity, demonstrated leadership, and forthrightness. While ourrelevant skills and experience in the areas of corporate needs of the Company such as insurance regulation, insurance distribution and public company experience.

The Board does not have an express policy with regard to the consideration of diversity in identifying director nominees, the Board has discusseddiscusses and will be promotingpromotes efforts to enhance diversity in its Board composition. composition, including the effort by the Nominating and Corporate Governance Committee to recruit its first female director to the Board in 2018 and current Board refreshment discussions that prioritize diversity in Board candidate recruitment and selection. The Board views diversity in the context of the following factors: age, race, gender and ethnicity, geographic knowledge, industry experience, board tenure and culture. The Nominating and Corporate Governance Committee is committed to actively recruiting highly qualified women and individuals from minority groups to consider as director nominees.

Process for Candidates Recommended by Shareholders

Our Board has a policy to consider properly submitted shareholder recommendations for candidates for a Class A director position, which candidates must satisfy the same criteria as those selected by the Nominating and Corporate Governance Committee.Committee Standards. A shareholder wishing to propose a candidate for the Board’s consideration should follow the procedures in our Bylaws pertaining to shareholder nominations and proposals.

Board Refreshment

The Company is focused on active board refreshment and continually evaluates the composition of the Board to ensure that it has the right balance of skills, experience, perspective, and rigorous oversight through independent judgment. The Board has established strong practices for board refreshment. In 2019, in order to encourage refreshment, facilitate an orderly transition of legacy board members, increase diversity and expertise / experience in areas of need, the the Board adopted a five-year Board Refreshment and Replacement Plan. Pursuant to the plan, one (of four) legacy board member will retire from the Board each year through June 2023. A “legacy” board member is a member of the Board who was elected prior to 2017. The Board believes that this plan will allow the Board to evaluate the depth and diversity of experience of our Board, expand and replace key skills and experiences to develop our business strategies, and maintain a balanced mix of legacy and new Board members, as evidenced by the four of our seven director nominees who were first elected to the Board since the beginning of 2017, each of whom brought significant financial, insurance, technology, legal and marketing experience to the Board. A legacy director will not retire at the 2021 Annual Meeting since Ms. Weaver is stepping down from the Board due to her full-time executive role and there are currently two vacancies on the Board. Mr. Gage is expected to retire pursuant to this plan at the Company’s 2022 Annual Meeting.

NOMINEES FOR ELECTION

The following biographies describe the skills, qualities, attributes, and experience of the nominees that led the Board and the Nominating and Corporate Governance Committee to determine that it is appropriate to nominate these directors. All of the nineseven nominees currently serve on the Board.

Four of the nine nomineesBoard and will be elected by the Class A shareholders and five ofat the nine nominees will be elected by the Class B shareholders. The Company currently has one Class B shareholder, the Harold E. Riley Trust. See the section entitled “Controlling Shareholder” below on page 17 for an additional discussion of our controlling shareholder.

Nominees for Election by Class A ShareholdersAnnual Meeting.

The biographies of each Class A director nominee are listed below and contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years and the experience, qualifications, attributes or skills that caused the Board to determine the person should serve as a director of the Company.

Mr. Davis is a seasoned and proven life insurance executive, having served at the highest levels of executive management and on the board of directors of a respected life insurance company. He brings our Board life insurance expertise. Specifically, his42-year43-year career in the life insurance industry brings our Board experience with state insurance regulators and auditors. Mr. Davis’ industry background further strengthens the Investment Committee’s oversight of the Company’s assets under management.

Dr. E. Dean Gage is a retired Texas A&M University executive. Prior to his retirement in 2009, Dr. Gage held various executive roles at Texas A&M University, including serving as Executive Director and Bridges Endowed Chair at the Center for Executive Leadership from 2001 to 2009, Executive Director of Center for Executive Leadership at Mays School of Business from 1994 to 1996, President from 1993 to 1994, and Executive Vice President and Provost from 1989 to 1993. Dr. Gage also served as President of Men’s Leadership Ministries in Dallas, Texas, from 1996 to 2001. Dr. Gage currently serves on the Executive Committee. Dr. Gage served as the Company’s Vice-Chairman of the Board from June 2016 to February 2020.

Dr. Gage has substantial executive leadership expertise stemming from his executive roles at one of the largest public universities in America. Dr. Gage’s extensive background in education, finance, management and administration provides our Board with leadership and consensus building skills on a variety of matters, including governance, strategic planning and executive decision making.

Francis Anthony Keating II is a Partnerconsultant and investor. Mr. Keating served as a partner at Holland & Knight, a law firm, and has practiced there sincefrom February 2016.2016 to December 2018. He served as President and Chief Executive Officer of the American Bankers Association from 2011 to 2016, and President and Chief Executive Officer of the American Council of Life Insurers, the trade association for the life insurance and retirement security industry, from 2003 to 2011. He served as the Governor of Oklahoma from 1995 to 2003.

Mr. Keating has held significant leadership positions in both the public and private sectors, which make him a valuable addition to our Board. In addition to serving as the Governor of Oklahoma, his impressive career included serving as assistant secretary of the Treasury and associate attorney general under President Ronald Reagan. He was later general counsel and acting deputy secretary for the Department of Housing and Urban Development (“HUD”) under President George H.W. Bush. During his tenure at the Treasury Department and HUD, he worked on significant issues affecting insurance, banking, and the financial services industries. His law enforcement career included serving as the U.S. attorney for the Northern District of Oklahoma and as an FBI agent.

Mr. Keating’s current board service includes BancFirst Corporation, a publicly held financial holding company, since March 2016, Hall Capital Commercial Real Estate, a privately held real estate investment firm, since March 2016, Insurance Care Direct, a privately held Florida-based health and life insurance agency, since June 2019 and Global Holdings, LLC, a privately held Tulsa-based payment processing provider, since December 2018. He also served on the board of Stewart Title Company, a wholly-owned subsidiary of Stewart Information Services Corp., a publicly held title insurance and real estate services company, from 2006 to January 2017, where he chaired the Nominations and Corporate Governance Committee, and Chesapeake Energy Corporation, a publicly held energy company, from 2003 to 2014. Mr. Keating currently serves on the Company’s CompensationAudit Committee and chairs the Nominating and Corporate Governance Committee.

Mr. Keating’s impressive legal and public service career further strengthens our Board’s governance and oversight function. Further, his background as Chief Executive Officer of the American Council of Life Insurers, the preeminent advocacy group for life insurance companies, brings life insurance industry experience and connections to our Board. Mr. Keating’s life insurance industry contacts are critical for our Nominating and Governance Committee of which he is a member, as the Company pursues its board diversity initiative.

Gerald W. Shields, FLMI, is a Director of IT Practice at Robert E. Nolan Company, Inc. and has served in that role since 2011. Mr. Shields recently served as Chief Information Officer at FirstCare Health Plans from July 2015 to October 2018. Previously, Mr. Shields served as Senior Vice President and Chief Information Officer at American Family Life Assurance Company of New York from 2002 to 2011.

author of five books about financial analysis and financial management, and also a contributing author to various publications, such asJournal of Finance,Journal of Banking and Finance,Journal of Financial Education,Journal of Portfolio Management,Journal of Financial and Quantitative Analysis,Journal of Futures Markets,Journal of Cash Management andCorporate Controller.

DIRECTOR COMPENSATION

The following table sets forthshows information regarding the compensation earned or paid during 20182020 to members of the directorsBoard who servedare not Company employees (“non-employee directors”). Mr. Kolander did not earn any compensation for his service on the Board during 2020. Mr. Shields’ 2020 director compensation is reported in 2018:the table entitled “2020 Summary Compensation Table” and the related tables under the section entitled “Executive Compensation.”

Eachnon-employee director (other than Ms. Weaver) received an annual director award of 1,4601,575 RSUs on February 15, 2018.

Unvested RSU awards outstanding asJune 2, 2020, the date of the 2020 Annual Meeting of Shareholders. Each of the RSUs will vest one year from the date of grant, except for Ms. Weaver’s RSUs, which the Board has agreed to accelerate to vest one day earlier, June 1, 2021, the date she will retire from our Board. As of December 31, 2018, for2020, eachnon-employee director were as follows: 1,460 for each of Mr. Claus, Mr. Davis, Dr. Gage, Mr. Keating, Dr. Maness, Mr. Shields, Dr. Sloan and Mr. Teaff; and 0 for Mr. Shelton and Ms. Weaver.held 1,575 RSUs.

Narrative to the Director Compensation Table

Non-employee directors receive compensation for their service on the Board. Mr. Shields, our Interim Chief Executive Officer and President, received compensation for his service on the board prior to his appointment as Interim Chief Executive Officer and President effective August 5, 2020. Mr. Kolander, our former Chief Executive Officer and President, did not receive any compensation for his service on the Board from February to August 2020.

The Compensation Committee annually reviews each element of and the total compensation of ournon-employee directors and each element ofdirector compensation for ournon-employee directors.program. As part of this process, the Compensation Committee evaluates market data provided by itsis authorized to engage a compensation consultant in connection with its review and makes a recommendation to the Board.analysis. The Board determines the form and amount of director compensation after reviewing the Compensation Committee’s recommendation. The Compensation Committee did not make any recommendations to the director compensation program for 2020 and no changes were made for 2020.

In 2018, eachnon-employeeNon-employee director receiveddirectors receive an annual cash retainer of $105,000 (prorated for time served during the year), plus an educational reimbursement allotment not to exceed $5,000 per calendar year. Directors serving as Chairman or Vice Chairman of the Board, and Directors serving as Chairman of the Audit Committee, Compensation Committee,

Nominating and Corporate Governance Committee and Investment Committee receivedreceive an additional $10,000 in compensation to recognize their Board leadership roles and additional responsibilities.responsibilities (prorated for time served during the year). All cash compensation is typically paid semi-monthly. Directors do not receive fees for attending Board or Committee meetings.

In addition based on an assessment ofto the compensation program forcash retainer, each non-employee director receives equity awards. Under the Citizens, Inc. Omnibus Incentive Plan, non-employee directors conducted in early 2018 and following a recommendationare granted RSUs on the date of the Company’s independent compensation consultant, F.W. Cook & Co. (“F.W. Cook”), the Compensation Committee modified thenon-employee director compensation program to include aneach annual retainer in the formmeeting of equity in 2018, which was intended to more closely align the Company’s director’s financial interests with its shareholders.Non-employee directors received a grant of 1,460 restricted stock units (“RSUs”) on February 15, 2018shareholders (each, an “Annual Director Award”) under the Citizens, Inc. Omnibus Incentive Plan. All. Each non-employee director received an Annual Director Award of 1,575 RSUs on June 2, 2020. Such Annual Director Awards vestedvest on February 15, 2019,the anniversary of the grant date, subject to continued service on the Board through the vesting date. The Board has accelerated Ms. Weaver’s grant to vest one day earlier, due to her retirement from the Board effective June 1, 2021. The number of RSUs subject to each Annual Director Award was determined by dividing $10,500$9,450 by

SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

The following table provides information as of April 10, 2019,12, 2021, on the beneficial ownership of the Common Stockour Class A common stock by (1) each of our directors and nominees, (2) each of the named executive officers and (3) all of our directors and executive officers as a group. Except as otherwise noted, the persons listed below have the sole voting and investment power for all shares held by them. The address for each person listed below is Citizens, Inc., 2900 Esperanza Crossing, 2^nd Floor,11815 Alterra Parkway, Suite 1500, Austin, Texas 78758.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Except as otherwise noted, the following table provides information as of April 10, 2019,12, 2021, with respect to the number of shares of our Common StockClass A common stock owned by each person known by the Company to be the beneficial owner of more than 5 percent of our Common Stock.Class A common stock.

EXECUTIVE OFFICERS

The following table sets forth certain biographical information concerning the executive officers of the Company as of the date hereof. The executive officers are elected annually by the Board at the first meeting of the Board following each annual meeting of shareholders.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (CD&A) describes the compensation of our named executive officers (“Named Executive Officers”) for 20182020, and the compensation philosophy and objectives on which it is based. Geoffrey M. Kolander, Kay E. Osbourn, Jeffery P. Conklin, James A. Eliasberg and Robert M. Mauldin III were ourOur Named Executive Officers for 2018.

Compensation Philosophy and Objectives

Our executive compensation program is designed to attract, retain and motivate our high-performing executive officers to achieve operational excellence and long-term business strategies and goals. We2020 are guided by the following philosophy and objectives:identified below:

OurInformation about the Change in Control and executive leadership transitions are described below in the sections entitled “Change in Control and Chief Executive Officer Transition” on page 39.

EXECUTIVE SUMMARY

Four years ago, we endeavored to transform Citizens, setting the course for a sustainable future. We took clear and decisive actions to improve internal controls, remediate weaknesses in our financial and operational structures and redefine our culture. We assessed the strength of our people, products, and operations. Based on clearly defined values and priorities, we made the hard decisions to recruit new talent, replace underperforming team members, exit unprofitable or undesirable markets, realign our distributors, improve the profitability of our product offerings and replace board members—all while navigating complex legal and regulatory challenges.

Through this transformation, we believe we are re-positioning Citizens for long-term profitable growth – even in the face of the COVID-19 pandemic. We are navigating this path to growth with a long-standing knowledge of our current markets and vision of how we will utilize our core strengths. Our executive compensation program has also been also on a transformative path, evolving to remain competitive among our peer companies and to align our executive officers’ financial interests with our shareholders. In recent years,business, leadership and strategy to function as a more customary public company without a dual class stock structure.

Evolution of Our Compensation Program

Throughout most of our history, the Company was led and controlled by our founder Harold E. Riley and his family members. Upon our founder’s death, in 2017, we were controlled by the Harold E. Riley Trust and, following the change in control in July 2020, we were controlled by the Harold E. Riley Foundation, a charitable foundation that was established by our founder under 501(c)(3) of the Internal Revenue Code for the benefit of Baylor University and Southwestern Baptist Seminary (the “Foundation”).

As described on page 2, “Proxy Summary and Company Overview – About Citizens – Our Evolution”, in February 2021, as part of the Foundation Settlement Agreement, the Company entered into an agreement with the Foundation to purchase 100% of the issued and outstanding Class B common stock (the “B Share Transaction”). Because the holder of the Class B common stock has the exclusive right to elect a simple majority of the Board of the Company, upon the closing of the B Share Transaction, we ceased being a “controlled company” for the first time in the Company’s history.

Over the same time period, the Compensation Committee has implemented a comprehensive overhaul oftaken, and continues to take, critical steps to enhance our executive compensation program. Among otherprogram and move towards market best practices, as well as our business and leadership strategy objectives. Key changes weover the last three years have included:

The Role of Shareholders; Say-on-Pay

The Company is committed to delivering increasing shareholder value through sustainable growth. We believe that, as part of this commitment, it is important to maintain ongoing dialogue with shareholders to solicit and respond to feedback about our executive compensation programs. At our 2020 Annual Meeting of Shareholders, approximately 45 percent of the votes cast were in favor of our say on pay proposal. While this vote was a slight improvement over the prior year, the combined outcome of the last two votes underscored that our shareholders continue to have concerns about aspects of our executive compensation and program design.

In our efforts to continually improve our executive compensation program, the Company continued its shareholder outreach effort. Our shareholder outreach involved members of management and, when requested, the Chairman of the Board, in order to understand shareholder views. In 2020, prior to our 2020 Annual Meeting, the Company met with 6 institutional investors representing approximately 18% of the Company’s issued and outstanding Class A common stock as of December 31, 2020. After our 2020 Annual Meeting of Shareholders, the Company solicited feedback from 13 of its largest institutional shareholders who voted against any ballot items (representing more than 14% of the Company’s issued and outstanding Class A common stock as of December 31, 2020), two of whom agreed to provide such feedback.

What We Heard

Through these engagement efforts, we received a range of helpful and insightful responses and feedback.

How We Responded

The Board of Directors and the Compensation Committee.Committee carefully considered this feedback and the results of the say on pay vote at our 2020 Annual Meeting of Shareholders when conducting a comprehensive review of our executive compensation program, designing and implementing our shareholder engagement program and updating the disclosure in this proxy statement for the 2021 Annual Meeting of Shareholders. After this review, the following changes were made as shown below.

Executive Compensation Policies and Practices

We have adopted the following compensation policies and practices to help achieve our compensation philosophy and objectives:

WHAT GUIDES OUR PROGRAM

Our Compensation Philosophy and Objectives

Our executive compensation program is designed to attract, retain and motivate our high-performing executive officers to enhance shareholder value and achieve operational excellence and long-term business strategies and goals. We are guided by the following philosophy and objectives:

Key Elements of Executive Compensation

The key elements of our executive compensation program are annual base salary, annual cash incentive bonus opportunity and long-term equity compensation.

The Compensation Committee’s goal is to create a competitive compensation package for each Named Executive Officer using the Competitive Compensation Data (as described below in the section titled “The Role of Peer Companies”) to help determine each element of our executive pay. We generally give approximate equal weighting to each component in order to achieve each of the three compensation objectives stated above.

The Decision-Making Process

The Role of the Compensation Committee. Our executive compensation program is administered by the Compensation Committee, which is composed entirely of independent directors. The Compensation Committee is responsible for designing our executive compensation program, including each element of the program, and determining and approving total executive compensation. Each year, the Compensation Committee reviews a competitive analysis and assessment of theour executive compensation provided to executive officers and approves executive compensation based on this review. The Compensation Committee’s decisions with respect to our executive officers’ compensation are reviewed and approved by the independent members of the Board as a group. The Compensation Committee may form and delegate authority to subcommittees.

compensation program compares to other companies’ executive compensation programs. Pearl Meyer also provided research, data analyses, appropriate market reference points, and design expertise in further refining the compensation program for our executive officers.

The Role of the Chief Executive Officer. At the Compensation Committee’s request, Geoffrey Kolander, our President andthe Chief Executive Officer provides input regarding the performance and appropriate compensation of the other Named Executive Officers. The Compensation Committee considers Mr. Kolander’sthe Chief Executive Officer’s evaluation and his direct knowledge of each executive officer’s performance and contributions when making compensation decisions. Mr. KolanderThe Chief Executive Officer is not present during voting or deliberations by the Compensation Committee regarding his own compensation.

The Role of Peer Companies. As part of its compensation review, the Compensation Committee assessedassesses the competitiveness of the Company’s executive compensation program using compensation data sources compiled by its compensation consultants onconsultant, Pearl Meyer, and a peer group of comparable public companies (collectively, the “Comparable Groups”“Peer Group”). The Comparable GroupsPeer Group may differ from peer groups used by shareholder advisory firms. The Comparable Groups,Peer Group, which may be modified from time to time, consistconsists of U.S. based publicly traded companies that are generally comparable to the Company in size, financial profile and scope of operations and, in certain cases, against which we may compete for executive talent. The

Specifically, the compensation data used to assemble the Comparable Group used by F.W. Cook (the “F.W. Cook Comparable Group”) in early 2018 was derived from two published compensation survey sources and represented a 50/50 blend of each of Willis Towers Watson General Industry Data, regressed to companies having $250 million in revenues, and Towers Watson Financial Services Data consisting of companies with revenues greater than $300 million. The Comparable Group compiled by Pearl Meyer (the “Pearl Meyer Comparable Group”)is used to assist in November 2018creating a competitive compensation program that is structured to be compatible with our compensation philosophy. The data collected consisted of U.S.-based, publicly traded companies in thedisclosed Peer Group executive officer data and a combination of financial services industry surveys and survey sources which include consumer finance, life and health insurance and specialized finance and consumer finance industries,companies, many with international exposure.exposure (collectively, the “Competitive Compensation Data”). Pearl Meyer targeted companies with assets and revenuetrended the Competitive Compensation Data, using an average annual aging factor of approximately $2 billion3%, which reflects the current compensation trend from the effective date of proxy statement and $350 million, respectively, but included companies in a reasonable range around these targets.compensation surveys. The specificmost recent fiscal year of proxy statement data was analyzed for each of the 12 companies in the Peer Group that remain unchanged from 2019. The named executive officers at each company in the Peer Group were evaluated for suitability as matches to the Company’s executives. Pearl Meyer Comparablesummarized Peer Group were proxy statement data with relevant statistics (i.e., median, 25^th and 75^th percentiles). Where appropriate median assets data existed, tabular survey data was used based on the Company’s approximate total assets of $2 billion. Where applicable, survey data was regressed based on the Company’s annual revenues of approximately $300 million. Pearl Meyer and the Compensation Committee utilized interpolation and regression, which are considered reliable methods for compiling compensation data and are standard methodologies used for analyzing executive pay.

The Compensation Committee reviews and analyzes the Peer Group for reasonableness and alignment with the criteria listed above. Below is a list of the companies in the Peer Group that the Compensation Committee used in early 2020:

In June 2020, in our ongoing efforts to evolve our executive compensation program as described above, the Compensation Committee revised the Peer Group to arrive at a new Peer Group of 13 companies. The following changes were made to the Peer Group (as compared to the Peer Group used in 2019 and early 2020): AMERISAFE, Inc., Primerica, Inc., FedNat Holding Company, HCI Group, Inc., MBIA Inc. were added, and Curo Group Holdings Corp., Elevate Credit, Inc., EZCORP, Inc., FBL Financial Group, Inc., Independence Holding Co, National Western Life Group, Inc., On Deck Capital, Inc., and PRA Group, Inc., Regional Management Corp., Torchmark Corp were removed. Such changes were made to replace the emphasis on consumer financial companies with property and World Acceptance Corporation. The Compensation Committee generally aims to provide total compensation aroundcasualty insurance companies while more closely approximating the median for like positions at Comparable Group companies, considering Citizens’ assets, revenues, market capitalization and relatively unique business model relative to otherCompany’s size characteristics. Below is a list of the companies in the Comparable Groups. However,Peer Group that the Compensation Committee does not setwill now use to assist it in creating a competitive compensation components strictly to meet specific benchmarks compared to peer companies, such as targeting salaries at a specific market percentile.program:

Results of the 2018 Advisory Vote on Executive Compensation.At the 2018 Annual Meeting of Shareholders, approximately 89% of the votes cast were in favor of the advisory vote to approve executive compensation. The Compensation Committee considered these results when considering changes to the Company’s compensation program and the Committee’s decisions regarding executive compensation in 2019. At the 2019 Annual Meeting of Shareholders, we will again hold an advisory vote to approve executive compensation (see page 38) and will continue to consider the results of the advisory vote in the future.

Risk Considerations. In establishing and reviewing the Company’s executive compensation program, the Compensation Committee considers whether the program encourages unnecessary or excessive risk-taking and has concluded that it does not. See the section entitled titled “Risk Oversight” above on page 7 for an additional discussion of risk considerations.

2018 Named Executive OfficerWe review the Competitive Compensation

The elements of Data as a reference point in setting our executive compensation program areofficers’ base salary,salaries, annual incentive bonus opportunityopportunities and long-term equity compensation.incentive opportunities to ensure that we are offering competitive compensation packages to our named executive officers.

2020 EXECUTIVE COMPENSATION DECISIONS IN DETAIL

Total Cash Compensation

Annual Base salary. BaseSalary

Annual base salary is a customary, fixed element of compensation intended to attract and retain executive officers. TheAs discussed above, the annual base salaries of our executive officers are determinedset and modified based on each executive officer’s experience, responsibilities, market demand and consideration of the executive officers’ responsibilities, performance and experience.Competitive Compensation Data. The Compensation Committee also considers market data provided by its independent compensation consultant when setting or adjustingreviews base salaries.salaries annually. The Compensation Committee approved the following base salaries for 2020:

F.W. Cook’s analysis conducted in early 2018 revealed that the amount of

The Compensation Committee increased Mr. Conklin’s base salary to recognize him for his leadership role in improving the Company’s internal controls, remediating weaknesses in our Chieffinancial and operating structures and improving the financial condition of the Company.

The Compensation Committee increased Mr. Mauldin’s base salary to recognize his duties and responsibilities in addition to those of a traditional marketing officer – he has played a significant leadership role in developing new products, aligning the international market with the Company’s core values and executing on the Company’s strategy to bring our international expertise to domestic markets.

Mr. Waite was not a Named Executive Officer was belowin 2019 — he served as an outsourced Interim Chief Actuary (a non-executive officer role) for the median compensation ofCompany. In connection with Mr. Waite’s appointment as Vice President, Chief Actuary effective April 1, 2020, the survey data regarding the companies contained in the F.W. Cook Comparable Group. Mr. Kolander’s 2017 salary of $600,000 was below the median CEO base salaries of the F.W. Cook Comparable Group and well below the salaries of one of our two previous Chief Executive Officers, Harold Riley ($1,000,000). The Compensation Committee approved a base salary increase for Mr. Kolander as Chief Executive Officer to $700,000 effective January 1, 2018. The base salary increase plus the target bonus opportunity and retention awards under Mr. Kolander’s employment agreement brought the amount of total compensation for Mr. Kolander closer$340,000, which corresponded to the median level of the F.W. Cook Comparable Group, which theCompetitive Compensation Committee, after receiving input from its compensation consultant, believed was appropriate. With assistance from F.W. Cook, the Compensation Committee also conducted a similar analysis of the compensation for the other Named Executive Officers. The Compensation Committee adjusted the base salary of Ms. Osbourn from $450,000 to $350,000, effective January 1, 2018, to reflect her change in role from President to Executive Vice President, Chief Financial Officer and Chief Investment Officer on September 12, 2017. Data.

No changes to the compensation of the other Named Executive Officers were made in 2018.to base salaries of Mr. Eliasberg and Mr. Kolander for 2020.

Annual incentive bonus opportunity. The Named Executive OfficersCash Incentive Bonus Opportunity.

Our executive officers are eligible to earn an annual cash incentive bonus, in cash based on a combination of the prior-year performance of the Company, the executive team as a whole and each individual executive. The incentivewhich is designed to place at risk a portion of each Named Executive Officer’ssuch officer’s total direct compensation and pay for performance delivered during the year. Each executive officer is eligible to receive a target annual compensation opportunity. Onincentive bonus based on a percentage of his salary. The Compensation Committee approved the following annual incentive target bonus opportunities for 2020:

The Compensation Committee increased the annual incentive target opportunities for Mr. Conklin and Mr. Mauldin for the same reasons it increased their respective base salaries.

In addition to setting a bonus target opportunity, on an annual basis, the Compensation Committee and members of the Board, with input from certain members of management, establishesestablish milestones and priorities against whichthat reflect a combination of the Company performance, performance of the executive team may beas a whole and performance of each executive officer. Performance of each executive officer and the executive team as a whole is then evaluated and on which bonus payments are based.against achievement of such milestones.

In early 2019,For 2020, the Compensation Committee awarded cash bonusescontinued to move towards pay-for-performance in its executive officers for their 2018 performance in recognition of their achievement ofbonus structure and worked with Mr. Kolander, the Company’s CEO, to establish certain milestones and priorities setstrategic objectives on which to base the evaluation of the executive team’s performance (other than the performance of Mr. Kolander) for achievement of the annual cash incentive bonus (the “2020 Milestones”). The 2020 Milestones were approved by the Board in June 2020

The Compensation Committee tracked performance during the year and reviewed using a formulaic scorecard that applied percentage scores for the executive team’s performance against a variety of specific goals within each 2020 Milestone. Following conclusion of fiscal year 2020, the Compensation Committee assigned the overall performance scores (as a percentage of targets) to each executive officer as reflected in the table below.

The table below describes the 2020 Milestones and the related achievements considered by the Compensation Committee.Committee in assessing performance.

As discussed in detail in our Annual Report on Form 10-K for the year ended December 31, 2020, COVID-19 pandemic-related market disruptions negatively impacted our business operations in 2020. The cash annual incentive bonus earned by each Named Executive Officer above reflects the impacts of the COVID-19 pandemic on our business operations during 2020. As a result of the impact of the COVID-19 pandemic, the Named Executive Officers did not meet the simplified targets relating to annualized premiums and number of new issued policies for the Life Insurance segment in 2020. The failure to meet such targets, along with other “key misses” identified above, were factors which resulted in the Named Executive Officers receiving less than their target annual incentive cash bonus opportunities.

The following table shows the calculation of the cash annual incentive bonus earned by each Named Executive Officer for 2020. The amounts paid to the Named Executive Officers are reported under“Non-equity Incentive Plan Compensation” in the Summary Compensation Table. The milestones and the priorities were established in the first quarter of 2017 and 2018, respectively, and included, but were not limited to: (1) developing strategic initiatives and specific actions in connection with the analysis and refinement of the Company’s international business model; (2) achieving specific improvements in our information technology infrastructure; and (3) addressing certain identified regulatory issues.

Each Named Executive Officer’s target or maximum annual incentive bonus opportunity, as a percentage of salary, is reviewed during our annual compensation process. In 2018, the target annual incentive bonus opportunity for Geoffrey M. Kolander was 70% of base salary and the target annual incentive bonus opportunity for Kay E. Osbourn was 60% of base salary. The maximum annual incentive bonus opportunity, as a percentage of salary, for the other Named Executive Officers was as follows: 10% of base salary for Jeffery P. Conklin, 25% of base salary for Robert M. Mauldin III and 50% for James A. Eliasberg. The cash bonuses awarded to the Named Executive Officers were: $490,000 for Mr. Kolander (representing 70% of base salary), $210,000 for Ms. Osbourn (representing 60% of base salary), $25,000 for Mr. Conklin (representing 10% of base salary), $115,000 for Mr. Eliasberg (representing 50% of base salary and prorated based on 11 months of service at the Company) and $77,000 for Mr. Mauldin (representing 25% of base salary).

The Compensation Committee’s goal is to create a competitive compensation package for each Named Executive Officer using the Competitive Compensation Data (as described below in the section titled “The Role of Peer Companies”) to help determine each element of our executive pay. We generally give approximate equal weighting to each component in order to achieve each of the three compensation objectives stated above.

The Decision-Making Process

The Role of the Compensation Committee. Our executive compensation program is administered by the Compensation Committee, which is composed entirely of independent directors. The Compensation Committee is responsible for designing our executive compensation program, including each element of the program, and determining and approving total executive compensation. Each year, the Compensation Committee reviews a competitive analysis and assessment of our executive compensation and approves executive compensation based on this review. The Compensation Committee’s decisions with respect to our executive officers’ compensation are reviewed and approved by the independent members of the Board as a group.

The Role of the Compensation Consultant. The Compensation Committee selects and retains the services of its own independent compensation consultant and annually reviews the performance of the consultant. As part of the review process, the Compensation Committee considers the independence of the compensation consultant in accordance with SEC rules. During 2020, the Compensation Committee’s independent compensation consultant, Pearl Meyer, provided no services to the Company other than services for the Compensation Committee, and worked with the Company’s Chief Executive Officer, as directed by the Compensation Committee, only on matters for which the Compensation Committee is responsible. The Compensation Committee therefore concluded that no conflict of interest exists that would prevent Pearl Meyer from serving as an independent consultant to the Compensation Committee.

Pearl Meyer provided an independent perspective on the executive compensation program for 2020. Pearl Meyer provided the Compensation Committee with objective guidance on executive compensation and how our executive

compensation program compares to other companies’ executive compensation programs. Pearl Meyer also provided research, data analyses, appropriate market reference points, and design expertise in further refining the compensation program for our executive officers.

The Role of the Chief Executive Officer. At the Compensation Committee’s request, the Chief Executive Officer provides input regarding the performance and appropriate compensation of the other Named Executive Officers. The Compensation Committee considers the Chief Executive Officer’s evaluation and his direct knowledge of each executive officer’s performance and contributions when making compensation decisions. The Chief Executive Officer is not present during voting or deliberations by the Compensation Committee regarding his own compensation.

The Role of Peer Companies. As part of its compensation review, the Compensation Committee assesses the competitiveness of the Company’s executive compensation program using compensation data sources compiled by its compensation consultant, Pearl Meyer, and a peer group of comparable public companies (collectively, the “Peer Group”). The Peer Group may differ from peer groups used by shareholder advisory firms. The Peer Group, which may be modified from time to time, consists of U.S. based publicly traded companies that are generally comparable to the Company in size, financial profile and scope of operations and, in certain cases, against which we may compete for executive talent.

Specifically, the compensation data compiled by Pearl Meyer is used to assist in creating a competitive compensation program that is structured to be compatible with our compensation philosophy. The data collected consisted of publicly disclosed Peer Group executive officer data and a combination of financial services industry surveys and survey sources which include consumer finance, life and health insurance and specialized finance companies, many with international exposure (collectively, the “Competitive Compensation Data”). Pearl Meyer trended the Competitive Compensation Data, using an average annual aging factor of approximately 3%, which reflects the current compensation trend from the effective date of proxy statement and compensation surveys. The most recent fiscal year of proxy statement data was analyzed for each of the 12 companies in the Peer Group that remain unchanged from 2019. The named executive officers at each company in the Peer Group were evaluated for suitability as matches to the Company’s executives. Pearl Meyer summarized Peer Group proxy statement data with relevant statistics (i.e., median, 25^th and 75^th percentiles). Where appropriate median assets data existed, tabular survey data was used based on the Company’s approximate total assets of $2 billion. Where applicable, survey data was regressed based on the Company’s annual revenues of approximately $300 million. Pearl Meyer and the Compensation Committee utilized interpolation and regression, which are considered reliable methods for compiling compensation data and are standard methodologies used for analyzing executive pay.

The Compensation Committee reviews and analyzes the Peer Group for reasonableness and alignment with the criteria listed above. Below is a list of the companies in the Peer Group that the Compensation Committee used in early 2020:

In June 2020, in our ongoing efforts to evolve our executive compensation program as described above, the Compensation Committee revised the Peer Group to arrive at a new Peer Group of 13 companies. The following changes were made to the Peer Group (as compared to the Peer Group used in 2019 and early 2020): AMERISAFE, Inc., Primerica, Inc., FedNat Holding Company, HCI Group, Inc., MBIA Inc. were added, and Curo Group Holdings Corp., Elevate Credit, Inc., EZCORP, Inc. and PRA Group, Inc. were removed. Such changes were made to replace the emphasis on consumer financial companies with property and casualty insurance companies while more closely approximating the Company’s size characteristics. Below is a list of the companies in the Peer Group that the Compensation Committee will now use to assist it in creating a competitive compensation program:

We review the Competitive Compensation Data as a reference point in setting our executive officers’ base salaries, annual incentive bonus opportunities and long-term equity incentive opportunities to ensure that we are offering competitive compensation packages to our named executive officers.

2020 EXECUTIVE COMPENSATION DECISIONS IN DETAIL

Total Cash Compensation

Annual Base Salary

Annual base salary is a customary, fixed element of compensation intended to attract and retain executive officers. As discussed above, the annual base salaries of our executive officers are set and modified based on each executive officer’s experience, responsibilities, market demand and consideration of the Competitive Compensation Data. The Compensation Committee reviews base salaries annually. The Compensation Committee approved the following base salaries for 2020:

The Compensation Committee increased Mr. Conklin’s base salary to recognize him for his leadership role in improving the Company’s internal controls, remediating weaknesses in our financial and operating structures and improving the financial condition of the Company.

The Compensation Committee increased Mr. Mauldin’s base salary to recognize his duties and responsibilities in addition to those of a traditional marketing officer – he has played a significant leadership role in developing new products, aligning the international market with the Company’s core values and executing on the Company’s strategy to bring our international expertise to domestic markets.

Mr. Waite was not a Named Executive Officer in 2019 — he served as an outsourced Interim Chief Actuary (a non-executive officer role) for the Company. In connection with Mr. Waite’s appointment as Vice President, Chief Actuary effective April 1, 2020, the Compensation Committee approved a base salary of $340,000, which corresponded to the median level of the Competitive Compensation Data.

No changes were made to base salaries of Mr. Eliasberg and Mr. Kolander for 2020.

Annual Cash Incentive Bonus Opportunity.

Our executive officers are eligible to earn an annual cash incentive bonus, which is designed to place at risk a portion of each such officer’s total direct compensation and pay for performance delivered during the year. Each executive officer is eligible to receive a target annual incentive bonus based on a percentage of his salary. The Compensation Committee approved the following annual incentive target bonus opportunities for 2020: