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| Proposals Requiring Your Vote - Proposal One | |
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| Robert W. Stein Director: Since October 2011 Age: 74 Board Committees: Audit, Information Technology Other Public Company Boards: None |
Skills & Experience
•Corporate Governance & Sustainability •Finance, Capital and Investments •Industry Experience •Global •Risk Management •Leadership |
Mr. Stein was a Global Managing Partner, Actuarial Services at Ernst & Young LLP and held various leadership roles in the firm’s actuarial and insurance practice from 1976 until his retirement in 2011. He is a Certified Public Accountant, a Fellow of the Society of Actuaries and a Trustee Emeritus of the Actuarial Foundation. He is also member of the AICPA and the American Academy of Actuaries. Mr. Stein serves on the board of Talcott Financial Group, the ultimate parent of Talcott Resolution Life Insurance Company and its subsidiaries and affiliates. Mr. Stein chairs its Audit Committee and is a member of its Risk Committee. Mr. Stein also serves on the board of directors of Worldwide Reinsurance Ltd., currently a wholly owned subsidiary of Digital Ally. Mr. Stein previously served on the boards of Aviva plc and Resolution Life Holdings, Inc.
As a certified public accountant and an actuary, Mr. Stein brings to the Board decades of extensive financial, actuarial, risk management and insurance knowledge and experience. |
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19 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
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| Proposals Requiring Your Vote - Proposal One | |
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| Skills and Experience | Ms. Rosen | Mr. Alves | Mr. Basu | Mr. Carter | Mr. Cento | Mr. Demmings | Ms. Edelman | Ms. Granat | Mr. Jackson | Ms. Perry | Mr. Redzic | Mr. Reilly | Mr. Stein | |
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| Corporate Governance & Sustainability, including DE&I and other sustainable initiatives | | | | | | | | | | | | | | |
| Finance, Capital and Investments, including accounting, financial reporting, financial markets, capital management and investments | | | | | | | | | | | | | | |
| Industry Experience, including insurance, business services, mobile, auto and supply chain | | | | | | | | | | | | | | |
| Global background or experience | | | | | | | | | | | | | | |
| Risk Management, including compliance | | | | | | | | | | | | | | |
| Leadership, including in strategy, operations and talent management | | | | | | | | | | | | | | |
| Consumer Focus | | | | | | | | | | | | | | |
| Technology, including digital or cybersecurity | | | | | | | | | | | | | | |
| Demographic Background | | | | | | | | | | | | | | |
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| Age | 70 | 68 | 64 | 64 | 71 | 50 | 67 | 52 | 69 | 71 | 52 | 66 | 74 | |
| Tenure (Years) | 14 | 4 | 0 | 3 | 17 | 1 | 6 | 1 | 14 | 6 | 4 | 12 | 12 | |
| Gender, Racial or Ethnic Diversity | Gender | | | | | | | | | | | | | | |
| Racial or Ethnic | | | | | | | | | | | | | | |
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20 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
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| Proposals Requiring Your Vote - Proposal One | |
Vote Required; Board Recommendation
Under our by-laws, each director must be elected by the holders of a majority of the votes cast, meaning that the number of votes cast “for” the nominee’s election must exceed the number of votes cast “against” that nominee’s election. The Board expects a director to tender his or her resignation if he or she fails to receive the required number of votes for election. For purposes of determining approval of this proposal, abstentions and broker non-votes will have no effect on this determination because they are not counted as votes cast.
The Board of Directors recommends that stockholders vote FOR each of the nominees named above to serve until the 2024 Annual Meeting or until their respective successors have been elected and qualified.
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21 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
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| Proposals Requiring Your Vote - Proposal Two | |
PROPOSAL TWO - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the Company’s consolidated financial statements as of and for the year ending December 31, 2023 and the internal control over financial reporting as of December 31, 2023. The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements and internal control over financial reporting. The Audit Committee is also responsible for approving the services, fees and terms associated with the Company’s retention of its independent registered public accounting firm. In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be regular rotation of the independent registered public accounting firm. In conjunction with the mandated five-year rotation of the lead engagement partner, the Audit Committee and its chair are involved in the selection of the new lead engagement partner. The most recent new lead engagement partner commenced service following the completion of the audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2020. The Audit Committee believes that the retention of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm is in the best interest of the Company and its stockholders. PricewaterhouseCoopers LLP has acted as our independent registered public accounting firm since 2000.
In accordance with a resolution of the Audit Committee, this appointment is being presented to stockholders for ratification at the Annual Meeting. Whether or not the stockholders ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee may continue to retain the firm or may reconsider its appointment, if the Audit Committee believes it would be in the Company’s best interest. A representative of PricewaterhouseCoopers LLP will be present at the Annual Meeting, will have an opportunity to make a statement if he or she wishes to do so, and will be available to respond to appropriate questions.
Vote Required; Board Recommendation
The affirmative vote of a majority of the Company’s common stock, par value $0.01 per share (“common stock”) held by persons who are present or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required for ratification. For purposes of determining approval of this proposal, abstentions will have the same effect as an “against” vote because they will be treated as representing shares that were present and entitled to vote. In addition, this proposal is considered a “routine” matter under the New York Stock Exchange (“NYSE”) rules, and therefore brokers have discretionary authority to vote.
The Board of Directors recommends that stockholders vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as Assurant’s Independent Registered Public Accounting Firm for the year ending December 31, 2023.
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22 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
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| Proposals Requiring Your Vote - Proposal Three | |
PROPOSAL THREE - ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION FOR 2022 Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the following Company proposal gives stockholders the opportunity to cast a non-binding advisory vote with respect to the 2022 compensation of the Company’s NEOs. This advisory vote is also referred to as the “say-on-pay” advisory vote. Consistent with the results of the 2017 stockholder vote on the frequency of its say-on-pay advisory vote, the Company holds the say-on-pay advisory vote annually. This year, the Company will hold an advisory vote on the frequency of the say-on-pay advisory vote (see Proposal Four).
In considering your vote, we encourage you to review the Compensation Discussion and Analysis (the “CD&A”), beginning on page 40. As described in the CD&A, we believe our current compensation programs and policies directly link executive compensation to Company performance and thereby align the interests of our executive officers with those of our stockholders.
Our Board intends to carefully consider the stockholder vote resulting from this proposal. Please cast a vote either to approve or not approve the following resolution:
“RESOLVED, that the 2022 compensation provided to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K of the U.S. Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
Vote Required; Board Recommendation
The affirmative vote of a majority of the common stock held by persons who are present or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required for approval of this non-binding resolution. For purposes of determining approval of this proposal, abstentions will have the same effect as an “against” vote because they will be treated as representing shares that were present and entitled to vote. In addition, broker non-votes will have no effect on this determination because this proposal is considered a “non-routine” matter under the NYSE rules and therefore brokers do not have discretionary authority to vote.
The Board of Directors recommends that stockholders vote FOR the approval of the 2022 compensation of our NEOs as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.
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23 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
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| Proposals Requiring Your Vote - Proposal Four | |
PROPOSAL FOUR - ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION
As required by Section 14A of the Exchange Act, the following Company proposal gives stockholders the opportunity, at least once every six years, to cast an advisory vote on whether the say-on-pay advisory vote should occur every one, two or three years (commonly referred to as a “say-on-pay frequency” vote).
At the Company’s 2017 Annual Meeting of Stockholders, stockholders were asked whether the say-on-pay advisory vote should be held every one, two or three years. A majority of stockholders voting on the matter indicated a preference for holding such vote every year. Accordingly, the Board decided that the say-on-pay advisory vote will be held every year. The Board continues to believe that an annual say-on-pay advisory vote provides stockholders an opportunity to voice their opinion each year on the important subject of executive compensation. This annual stockholder engagement will allow the Board to be most responsive to stockholders as compared to a vote every second or third year.
Following this year’s say-on-pay frequency vote, it is expected that the next such vote will be at the Company’s 2029 Annual Meeting of Stockholders. Although the vote is non-binding, the Company values continuing and constructive feedback from its stockholders on executive compensation and other important matters. The Board and the Compensation Committee will take into consideration the voting results when determining how often the say-on-pay advisory vote should occur.
Please cast a vote for one of four choices: one year, two years, three years or “abstain.”
Vote Required; Board Recommendation
The affirmative vote of a majority of the stock held by persons who are present or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required for approval of this non-binding resolution. For purposes of determining approval of this proposal, an abstention will have the same effect as an “against” vote.
The Board of Directors recommends that you vote FOR the one year frequency option.
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24 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
Executive Officers
The table below sets forth certain information, as of February 14, 2023, concerning each person deemed to be an Executive Officer of the Company. There are no arrangements or understandings between any Executive Officer and any other person pursuant to which the officer was selected.
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| Name | Age | Position | |
| Keith W. Demmings | 50 | President, Chief Executive Officer and Director | |
| Richard S. Dziadzio | 59 | Executive Vice President, Chief Financial Officer | |
| Michael P. Campbell | 55 | Executive Vice President and President, Global Housing | |
| Robert A. Lonergan | 46 | Executive Vice President, Chief Strategy and Risk Officer | |
| Francesca L. Luthi | 47 | Executive Vice President, Chief Administrative Officer | |
| Keith R. Meier | 53 | Executive Vice President, Chief Operating Officer | |
| Jay E. Rosenblum | 56 | Executive Vice President, Chief Legal Officer | |
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Keith W. Demmings, President, Chief Executive Officer and Director. Mr. Demmings is President and Chief Executive Officer of Assurant, Inc. He was named the Company’s President effective May 18, 2021, and became Chief Executive Officer and director on January 1, 2022. Before assuming his current position, Mr. Demmings served as Executive Vice President and President, Global Lifestyle from July 2016 to May 2021. Mr. Demmings served as Executive Vice President and President, Global Markets beginning in September 2015 and Executive Vice President and President, International beginning in June 2013. Since joining Assurant in 1997, Mr. Demmings has held a number of executive leadership positions, including serving as President and Chief Executive Officer of Assurant Canada.
Richard S. Dziadzio, Executive Vice President, Chief Financial Officer. Mr. Dziadzio was appointed Executive Vice President, Chief Financial Officer effective July 2016 and Interim Chief Accounting Officer and Controller from February through September 2020. Mr. Dziadzio also served as the Company’s Treasurer from July 2016 through November 2018. Before joining Assurant, Mr. Dziadzio served as Chief Financial Officer of QBE North America beginning in August 2013. From April 2012 to July 2013, Mr. Dziadzio was Chief Financial Officer of ANV, a specialty underwriter.
Michael P. Campbell, Executive Vice President and President, Global Housing. Mr. Campbell was appointed Executive Vice President and President, Global Housing effective July 2016. Before assuming his current position, Mr. Campbell served as Executive Vice President and Chief Operating Officer for the Company’s specialty property lines of business beginning in January 2014. Mr. Campbell joined Assurant in 2006 through the acquisition of Safeco’s Financial Institution Solutions subsidiary where he held several executive roles.
Robert A. Lonergan, Executive Vice President, Chief Strategy and Risk Officer. Mr. Lonergan was appointed Executive Vice President, Chief Strategy Officer effective July 2016, and became Chief Strategy and Risk Officer effective January 2020. Mr. Lonergan joined Assurant in 2012 as Vice President, M&A Sourcing. In January 2015, he was promoted to Senior Vice President, Growth and Innovation. Prior to joining Assurant, Mr. Lonergan worked for Bain & Company, Inc.
Francesca L. Luthi, Executive Vice President, Chief Administrative Officer. Ms. Luthi was appointed Executive Vice President, Chief Administrative Officer effective July 2020. Before assuming her current position, Ms. Luthi served as Executive Vice President, Chief Communication and Marketing Officer since September 2015, and prior to that served as Senior Vice President, Investor Relations and Corporate Communications since July 2014. Ms. Luthi joined Assurant in August 2012 as Senior Vice President, Investor Relations.
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25 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
Keith R. Meier, Executive Vice President, Chief Operating Officer. Mr. Meier was appointed Chief Operating Officer effective January 2022. Before assuming his current position, Mr. Meier was Executive Vice President and President, International since June 2016 with responsibility for all product lines outside of the U.S., spanning 20 countries across Asia Pacific, Canada, Europe and Latin America. Prior to that, he served as Senior Vice President, Global Strategy and M&A for Assurant beginning in January 2013. Mr. Meier held a number of executive positions since joining Assurant in 1998.
Jay E. Rosenblum, Executive Vice President, Chief Legal Officer. Mr. Rosenblum was appointed Executive Vice President, Chief Legal Officer effective July 2020. Before assuming his current position, Mr. Rosenblum served as Co-Interim General Counsel since February 2020. Mr. Rosenblum joined Assurant in June 2019 as Senior Vice President, Government Relations and Regulatory Affairs. Prior to joining Assurant, Mr. Rosenblum served as Chief Human Resources Officer at Guardian Life Insurance Company of America after being promoted from his role as Senior Vice President of Government Affairs.
The Management Committee of Assurant (the “Management Committee”) consists of the Company’s President and Chief Executive Officer and its Executive Vice Presidents.
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26 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
Corporate Governance
OVERVIEW The following section provides an overview of Assurant’s corporate governance practices. The Company’s commitment to strong corporate governance that supports the long-term value of the Company is evidenced by the framework the Company currently has in place.
Board of Directors
•Board and Committee Independence and Independent Board Chair. All of our directors are independent, except our CEO, and the Chair of the Board is independent. The members of each of the Board’s committees are also independent.
•Annual Election of Directors, Majority Voting in Director Elections and No Supermajority Voting Provisions. Directors are elected annually. In uncontested elections, directors must be elected by a majority of votes cast. A director is required to tender his or her resignation if he or she fails to receive the required number of votes for election and the Board will then determine whether to accept or reject the resignation. No supermajority voting provisions are required for stockholders to amend the charter or by-laws.
•Annual Board and Committee Self-Evaluations. The Board, in coordination with the Nominating and Corporate Governance Committee, conducts a self-evaluation of the Board as a whole and each of its committees at least annually. Each committee also conducts a self-evaluation. This process helps inform the annual director nomination process and Board refreshment.
•Annual Board Evaluation of CEO. The Chair of the Board leads the evaluation process of the CEO’s performance with the independent directors, including the Nominating and Corporate Governance Committee and the Compensation Committee.
•Limits on Public Company Board and Audit Committee Service. No independent director may serve on more than four public company boards (including the Company’s Board) and directors who are also serving as a chief executive officer, including the Company’s CEO, may not serve on more than two public company boards (including the Company’s Board). No member of the Audit Committee may simultaneously serve on the audit committee of more than three public companies (including the Company’s Audit Committee), unless the Board determines that such service would not impair the effectiveness of their service on the Company’s Audit Committee. A director must seek approval of the Nominating and Corporate Governance Committee in advance of serving on the board of another entity.
•Regular Executive Sessions of Independent Directors. The independent directors hold regular executive sessions, generally at each regularly scheduled meeting of the Board and each committee, at which management, including the CEO, is not present.
Stockholder Rights and Engagement
•Proxy Access. A stockholder, or a group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, has the right to nominate and include in the Company’s proxy materials director nominees constituting the greater of two or 20% of the total number of directors, if the stockholder(s) and nominee(s) meet the requirements in the Company’s by-laws.
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27 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
•Stockholder Engagement. As a part of our ongoing stockholder engagement, we continue to reach out and engage with a wide array of institutional investors. In 2022, we continued our stockholder engagement program. We spoke with holders of nearly 30% of our outstanding common stock across a broad spectrum of matters facing the Company, including corporate governance, executive compensation and ESG practices. Through this outreach, we highlighted our progress under board refreshment, changes to align the 2023 executive compensation plans with the evolution of the Company’s performance metrics, and advancements in our ESG efforts related to talent, products and climate. This included progressing our talent strategy focused on employee engagement, investments in programs to support career development and recognizing and rewarding performance. In addition, we enhanced emissions reporting and set our near-term, science-based carbon emissions reduction target of 40% for Scope 1 and Scope 2 emissions by 2030 from a 2021 base year. We look forward to continuing this important dialogue with our investors in 2023.
•No Stockholder Rights Plan. The Company does not have a stockholder rights agreement, also known as a poison pill.
CORPORATE GOVERNANCE GUIDELINES AND CODE OF ETHICS Corporate Governance Guidelines
The Company and the Board formalize many of our governance practices in our Corporate Governance Guidelines. The Nominating and Corporate Governance Committee reviews our Corporate Governance Guidelines periodically to ensure they reflect current corporate governance standards and the Company’s practices. The Corporate Governance Guidelines can be found under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com, or by writing to our Corporate Secretary at Assurant, Inc., 260 Interstate North Circle SE Atlanta, GA 30339 and via email at corporatesecretary@assurant.com.
Code of Ethics
The Assurant Code of Business Conduct and Ethics (the “Code of Ethics”) is applicable to all of our employees, officers and directors, including the principal executive officer, the principal financial officer and the principal accounting officer. Our Code of Ethics helps to guide our actions and reinforces our commitment to integrity and ethical business conduct. The Code of Ethics highlights our commitment to respecting the human rights and dignity of everyone. The Code of Ethics can be found under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com, or by writing to our Corporate Secretary at Assurant, Inc., 260 Interstate North Circle SE Atlanta, GA 30339 and via email at corporatesecretary@assurant.com. We intend to post any amendments to or waivers from the Code of Ethics that are required to be disclosed under SEC rules at this location on our website.
BOARD AND COMMITTEE LEADERSHIP, COMPOSITION AND REFRESHMENT The Board currently consists of 14 members: Mses. Rosen (Non-Executive Chair), Edelman, Granat and Perry and Messrs. Alves, Basu, Carter, Cento, Demmings, Jackson, Montupet, Redzic, Reilly and Stein. Mr. Montupet will not stand for re-election at the Annual Meeting in accordance with our director retirement policy.
Board Leadership
In line with corporate governance best practices, our Board has been chaired by an independent director since Assurant became a publicly traded company in 2004. The Board generally believes that the Chair
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28 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
should be an independent director. The Board believes that this is currently the best leadership structure for the Company because it permits Mr. Demmings, as the CEO, to focus on the Company’s business strategy, operations and performance, while permitting the Chair of the Board to focus on providing guidance to the CEO and the organization and effectiveness of the Board. The Board also believes that the separation of the CEO and Chair of the Board roles assists the Board in providing robust discussion and in their oversight of strategic goals and objectives. The Board acknowledges that no single leadership model is right for all companies at all times. As such, our Board periodically reviews its leadership structure and may, depending on the circumstances, choose a different leadership structure in the future.
Board of Directors Committee Composition
Our Board has a standing Audit Committee, Compensation Committee, Finance and Risk Committee, Information Technology Committee and Nominating and Corporate Governance Committee (“Nominating Committee”). Each of the Board committees is chaired by an independent director and Mr. Demmings does not serve on any Board committees.
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| Name | Audit | Compensation | Finance and
Risk | Information Technology | Nominating and
Corporate
Governance | |
| Elaine D. Rosen  | | | | | | |
| Paget L. Alves | | | | | | |
| Rajiv Basu | | | | | | |
| J. Braxton Carter | | | | | | |
| Juan N. Cento | | | | | | |
| Sari Granat | | | | | | |
| Harriet Edelman | | | | | | |
| Lawrence V. Jackson | | | | | | |
| Debra J. Perry | | | | | | |
| Ogi Redzic | | | | | | |
| Paul J. Reilly | | | | | | |
| Robert W. Stein | | | | | | |
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| Non-Executive Chair of the Board.  Denotes Committee Chair. |
| This table does not include Jean-Paul Montupet, who will not stand for re-election at the Annual Meeting based on our director retirement policy. |
Board Refreshment, Director Tenure and Retirement Policy
The Board is committed to effective and ongoing refreshment that is reflective of the evolution of the Company’s strategy and provides a balanced mix of tenure and diversity. Since 2019, the Board has added five new independent directors with deep insurance, mobile and auto industry experience, consumer focus, and information technology, cyber, data and digital expertise.
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29 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
The Company does not set specific term limits on director service and believes that a mix of director tenures on the Board can strengthen Board effectiveness and dynamics. Longer tenured directors possess experience and organizational knowledge while newer directors bring fresh insight and perspective. Our current Board reflects this perspective, and the Board is committed to ongoing Board refreshment. As part of the objective of continuously engaging in Board refreshment, no person may serve as a director of the Company if they would be 75 or older on the date of election or re-election.
The Nominating Committee oversees the process for director succession. In its review of Board composition, the Nominating Committee considers succession planning in light of the skills and experiences needed and upcoming retirements or other potential departures.
DIRECTOR RECRUITMENT, NOMINATION AND QUALIFICATIONS Director Recruitment and Nomination
The Nominating Committee establishes criteria for the selection and nomination of directors to serve on the Board and identifies and recommends individuals to serve on the Board. In connection with director recruitment, the Committee has authority to retain and to terminate any search firm to be used to assist it in identifying candidates to serve as directors of the Company.
The Nominating Committee reviews and makes recommendations regarding the composition and size of the Board in order to ensure the Board has the requisite expertise and that its membership consists of persons with sufficiently diverse and independent backgrounds. As part of the nomination process for director candidates, the Nominating Committee considers the criteria described under “Director Qualifications” below and the skills and experience shown in the matrix on page 20.
Director Qualifications
In identifying candidates for membership on the Board, the Nominating Committee looks to the criteria set forth in the Company’s Corporate Governance Guidelines and takes into account all factors it considers appropriate, which may include age, race and ethnicity, gender, geographic location, and meaningful experience, independence, leadership, integrity, accountability, informed judgment, financial literacy, mature confidence, interpersonal skills and high performance standards, and the extent to which the candidate would fill a present need on the Board.
The Nominating Committee actively considers diversity in recruitment and nomination of the Company’s directors and makes recommendations to the Board regarding diversity among director candidates. The Board believes diversity is important because having a variety of points of view improves the quality of dialogue, contributes to a more effective decision-making process and enhances the overall culture in the boardroom. The Nominating Committee strives to achieve diversity in the broadest sense, including candidates diverse in race, ethnicity, gender and experiences. Although the Nominating Committee does not establish specific diversity goals or have a standalone diversity policy, it fully appreciates the value of Board diversity and seeks diverse Board candidate slates. The Nominating Committee is committed to including women and minority candidates in the pool of qualified candidates from which Board nominees are chosen and will continue to review its processes and procedures to ensure that diverse candidates are included.
Stockholder Recommendations for Director Candidates
The Nominating Committee considers candidates recommended by our stockholders for nomination for election to the Board. The Nominating Committee applies the same director qualifications criteria described above for a candidate recommended by a stockholder. A stockholder who wishes to recommend a candidate for nomination to the Board must submit such recommendation in writing to the Corporate
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30 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
Secretary at Assurant, Inc., 260 Interstate North Circle SE Atlanta, GA 30339 and via email to corporatesecretary@assurant.com.
DIRECTOR INDEPENDENCE In compliance with the listing standards applicable to Assurant under the NYSE Listed Company Manual, the Board has adopted categorical standards to assist in evaluating the independence of the Company’s directors. They are included in our Corporate Governance Guidelines available under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
Applying the director independence standards, the Nominating Committee and the Board have affirmatively determined that Mses. Rosen, Granat, Edelman and Perry and Messrs. Alves, Basu, Carter, Cento, Jackson, Redzic, Reilly and Stein are independent of the Company and its management. In addition, they determined that each member of the Audit Committee and the Compensation Committee is independent of the Company and its management under the applicable criteria for those committees.
In conducting its annual director independence determination, the Board considered transactions or relationships that the Company engaged or engages in with companies for which our independent directors serve as officers or directors, or with which these directors have certain other relationships, and determined that there were no such transactions that were material to the Company or in which any such director had a material interest. Specifically, the Board considered the following ordinary course business transactions and relationships:
•The Company owns immaterial amounts of publicly-traded bonds of companies with which Messrs. Alves, Carter and Redzic are affiliated as officers or directors.
•Mses. Edelman, Granat, Perry and Rosen and Messrs. Alves, Basu, Carter, Cento, Jackson and Stein serve, or within the past three years, have served as officers, directors or affiliates of companies with which the Company engaged in ordinary course, arms-length business transactions that were immaterial to the Company and in which such directors had no material direct or indirect interest.
•Matching contributions and grants have been made to non-profit and charitable institutions with which certain directors are affiliated, in accordance with the matching gift policies described on page 76.
BOARD AND COMMITTEE EVALUATIONSThe Nominating Committee oversees the evaluation of the Board and its committees, at least annually. The annual Board and committee self-assessment informs the annual director nomination process. The Nominating Committee uses a third-party to facilitate the self-assessment. Actions taken in response to director feedback received through the annual evaluation include continued Board education on emerging and industry topics, continued enhancement of materials to focus on key areas of strategic significance and continued focus on management succession planning. The Board and each committee discuss the outcome of its own self-assessment during executive sessions. From time to time, individual director performance is assessed by a process conducted by the Board Chair and the Chair of the Nominating Committee, and at times facilitated by a third-party. The Chair of the Nominating Committee solicits and addresses feedback regarding the performance of the Board Chair.
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31 | Notice of 2023 Annual Meeting of Stockholders and Proxy Statement |
DIRECTOR ORIENTATION AND CONTINUING EDUCATION The Nominating Committee develops and oversees (with the assistance of the Chair of the Board and the Corporate Secretary) an orientation program for all newly elected directors and a continuing education program for all directors in order to ensure that the directors are fully informed as to their responsibilities and the means at their disposal to fulfill their responsibilities effectively.
MANAGEMENT SUCCESSION PLANNING The Board and the Nominating Committee annually review the CEO succession plan and succession plans for senior executives, which includes emergency successors for each role. Directors engage with senior management at Board and committee meetings and in less formal settings to allow directors to assess potential candidates for CEO and other senior management roles.
BOARD ROLE IN RISK OVERSIGHT The Board, directly and through its committees as described below and in their charters, oversees the Company’s risk management policies and practices, including its risk appetite, and discusses risk-related issues at least quarterly. The Board reviews management’s assessment of the Company’s key enterprise risks and receives a risk management update from the Chief Strategy and Risk Officer annually and management’s strategy with respect to each risk. The Nominating Committee coordinates Board and committee oversight of the key risks. The Board and its committees receive updates from management on specific risks throughout the year, and each committee chair reports significant risk updates at least quarterly to the full Board so that the Board has the benefit of the committee’s specific areas of risk oversight.
The Audit Committee reviews the Company’s policies with respect to risk assessment and risk management and coordinates with the Finance and Risk Committee with respect to Board oversight of risk management and global risk management activities. The Audit Committee also focuses on risks relating to financial statements, internal control over financial reporting, disclosures (including disclosure of the Company’s material risks), and compliance with legal and regulatory requirements. The Audit Committee receives reports at least quarterly from the Chief Internal Auditor and the Global Ethics and Compliance Officer. The Finance and Risk Committee has primary oversight responsibility of the Global Risk Management function and corresponding risk activities, and receives risk management updates at least quarterly from the Chief Strategy and Risk Officer and the Global Head of Risk that include the identification, assessment, reporting and mitigation of existing and emerging key enterprise risks. The Finance and Risk Committee also focuses on risks relating to investments, capital management and catastrophe reinsurance. The Compensation Committee focuses on risks relating to executive retention and compensation plan design, and the Nominating Committee focuses on risks relating to director and management succession, and has ultimate oversight responsibility for how the Company manages sustainability. The Information Technology Committee is responsible for oversight of information technology risk assessment and risk management. This includes oversight of cybersecurity policies, controls and procedures, such as procedures to identify and assess internal and external cybersecurity risks. The Information Technology Committee receives updates from management, including the Chief Information Security Officer, on internal and external cybersecurity risks at least quarterly. In fulfilling its responsibilities, the Board and each committee has the authority to retain external advisors.
BOARD AND COMMITTEE MEETINGS AND EXECUTIVE SESSIONS Each Board member is expected to dedicate to the Company sufficient time, energy and attention to ensure the diligent performance of the director’s duties. Our Corporate Governance Guidelines provide that, except in exigent circumstances, each member of the Board is expected to attend Board and committee meetings and our Annual Meeting of Stockholders. All directors attended at least 75% of the
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combined total meetings of the full Board and the committees on which he or she served in 2022. All directors then serving on the Board attended the 2022 Annual Meeting of Stockholders.
In 2022, the Board and its committees met as described in the table below. Directors meet in executive sessions consisting exclusively of independent directors generally at each Board meeting. Each committee also holds executive sessions without any members of management present, generally at each meeting.
As the independent Chair of the Board, Ms. Rosen is the presiding director and chairs the executive sessions of the Board.
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| | Board | Audit | Compensation | Finance and Risk | Information Technology | Nominating and
Corporate
Governance | |
| Number of Meetings in 2022 | 6 | 13 | 9 | 6 | 4 | 5 | |
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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE The Nominating Committee’s purpose includes advising and assisting the Board in its oversight of:
•identifying individuals qualified to become directors, consistent with criteria approved by the Board, and selecting, or recommending to the Board select, the candidates for all directorships to be filled by the Board or by the stockholders;
•developing and recommending to the Board a set of corporate governance guidelines applicable to the Company;
•overseeing the evaluation of the Board and management, including evaluating annually the performance of each committee of the Board; and
•otherwise taking a leadership role in shaping the corporate governance of the Company.
The Nominating Committee’s responsibilities also include:
•developing director orientation and continuing education programs to ensure that the directors are fully informed as to their responsibilities;
•overseeing the evaluation of the Board and the CEO and providing input on senior management; and
•overseeing the senior management succession planning process.
The Nominating Committee also oversees ESG, including diversity, equity and inclusion, talent and political activities, and coordinates with other committees of the Board, such as the Compensation Committee, regarding matters within their purview. The Board has determined that all members of the Nominating Committee are independent under both NYSE listing standards and SEC rules. The Charter of the Nominating Committee can be found under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
AUDIT COMMITTEE The Audit Committee’s purpose includes advising and assisting the Board in its oversight of:
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•the integrity of our quarterly and annual financial statements;
•our compliance with legal and regulatory requirements;
•our independent auditor’s qualifications and independence; and
•the performance of our internal audit function and independent auditors.
The Board has determined that all members of the Audit Committee are independent under both NYSE listing standards and SEC rules. The Charter of the Audit Committee can be found under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
Audit Committee Financial Experts
The Board has determined that all members of the Audit Committee are financially literate as that qualification has been interpreted by the Board in its business judgment and that Messrs. Reilly, Basu, Carter and Stein are “audit committee financial experts” under SEC rules.
COMPENSATION COMMITTEE The Compensation Committee’s purpose includes assisting the Board in fulfilling its responsibilities by:
•providing oversight of our compensation programs and practices and compensation of the Company’s executives; and
•producing an annual report for executive compensation for inclusion in the Company’s annual proxy statement.
The Board has determined that all members of the Compensation Committee are independent under both NYSE listing standards and SEC rules. Each member of the Compensation Committee is a “non-employee director” under Section 16 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The Charter of the Compensation Committee can be found under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
Role of Independent Compensation Consultant
The Compensation Committee engaged Semler Brossy through July 2022. Following an extensive, competitive review process, effective August 2022, the Compensation Committee engaged Pearl Meyer to serve as its independent compensation consultant to provide analysis and advice on such items as pay competitiveness, incentive plan design, performance measurement and other relevant market practices and trends with respect to executive and director compensation. For more information on the role of the independent compensation consultant in compensation recommendations and decisions, and the Compensation Committee’s assessment of the independence of the consultant, please see “CD&A — Input from Independent Compensation Consultant” on page 45.
Role of Management
In addition to receiving input from its independent compensation consultant, the Compensation Committee also receives recommendations from the CEO on the compensation of each executive officer other than himself. For more information on the role of management in compensation recommendations and decisions, please see “CD&A — Input from Management” on page 44.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION No member of the Compensation Committee is now, or was during 2022 or any time prior thereto, an officer or employee of the Company. No member of the Compensation Committee had any relationship with the Company or any of its subsidiaries during 2022 pursuant to which disclosure would be required under applicable rules of the SEC pertaining to the disclosure of transactions with related persons. None of the executive officers of the Company currently serves or has served in the past on the board of directors or compensation committee of another company at any time during which an executive officer of such other company served on the Company’s Board or Compensation Committee.
FINANCE AND RISK COMMITTEE The Finance and Risk Committee’s purpose is to assist the Board in fulfilling its responsibilities by:
•reviewing our policies and strategies for achieving finance (capital and liquidity management) objectives and reviewing outcomes;
•reviewing our policies and strategies for achieving investment (investing of the Company’s assets for investment return) objectives and reviewing outcomes; and
•acting as the focus committee of the Board for oversight of the Company’s enterprise risk management activities in conjunction with the Audit Committee and its risk management responsibilities.
The Board has determined that all members of the Finance and Risk Committee are independent. The Charter of the Finance and Risk Committee can be found under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
INFORMATION TECHNOLOGY COMMITTEE The Information Technology Committee’s purpose is to assist the Board in fulfilling its responsibilities by:
•reviewing the effectiveness of our information technology strategy, operations and investments in support of our overall business and operating strategy;
•providing input and perspective on technology advances and innovation and their potential to further our strategy; and
•reviewing the effectiveness of our policies with respect to information technology risk assessment and risk management, including cybersecurity policies, controls and procedures.
The Board has determined that all members of the Information Technology Committee are independent. The Charter of the Information Technology Committee can be found under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
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COMMUNICATING WITH THE INDEPENDENT CHAIR, THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE To contact the Board Chair and the other non-management members of the Board, interested persons may write to the Chair of the Board of Directors, c/o Corporate Secretary, Assurant, Inc., 260 Interstate North Circle SE Atlanta, GA 30339 or submit questions or concerns by email to boardchair@assurant.com. Relevant communications will be distributed to the Board, or to individual director or directors, as appropriate, depending on the facts and circumstances.
Certain items that are unrelated to the duties and responsibilities of the Board will be excluded, such as:
•business solicitations;
•junk mail, mass mailings and spam;
•new product and new services suggestions;
•resumes and other employment inquiries; and
•surveys.
In addition, material that is unduly hostile, threatening or illegal will be excluded. If any such material also raises issues of potential legitimate concern to the Board (including matters of corporate governance, alleged fraud or irregularities, or alleged control deficiencies), they will be brought to the Board’s attention without the offensive material.
To contact the Audit Committee with a complaint regarding accounting, internal accounting controls or auditing matters with respect to the Company, interested persons may write to the Global Ethics & Compliance Officer, c/o Corporate Secretary, Assurant, Inc., 260 Interstate North Circle SE Atlanta, GA 30339 or via email at corporatesecretary@assurant.com. Relevant communications will be distributed to the Chair of the Audit Committee of the Board of Directors.
SUSTAINABILITY Assurant is a purpose-driven company committed to making meaningful progress to integrate our sustainability efforts with our long-term strategy and global business operations. Our Board, Management Committee and employees understand the importance of sustainability to deliver greater value as we operate our business and support Assurant’s long-term strategy.
As we build a more successful and sustainable future, our sustainability strategy helps us make better-informed decisions that consider broader societal issues affecting our clients, customers, investors, communities and employees. We are holding ourselves accountable as we fortify our strengths and enhance the Company’s long-term performance. As the global market, consumer needs, organizational expectations and sustainability standards continue to evolve, Assurant will further integrate sustainability considerations into our products and services, operations, risk management, investments and disclosures.
In addition to our ongoing engagement with key stakeholders, including our stockholders, Assurant has initiated an impact-based ESG prioritization assessment to further inform our sustainability strategy, and to ensure continued focus on our most significant ESG topics. This assessment allows us the opportunity to engage with key stakeholders on priority ESG matters particularly given the ongoing evolution of the business and the rising expectations of all stakeholders since the last assessment. The results of the assessment, expected later in the spring of 2023, will be a critical input used to strategically guide our sustainability efforts, management and reporting.
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Oversight
The Nominating Committee oversees sustainability matters for Assurant, and together with the Compensation Committee, oversees our human capital management programs, including the Company’s efforts and commitment to diversity, equity and inclusion. The Board directly oversees sustainability matters relating to the Company’s strategy and initiatives. Our CEO, together with our Chief Administrative Officer and Senior Vice President, Investor Relations and Sustainability, set the direction of our sustainability strategy in collaboration with the Management Committee as well as other global leaders and subject matter experts.
In 2022, the Company’s ESG Oversight and Action Committee, comprised of select Management Committee members and senior management across key functional areas, was refreshed to: provide input to the Company’s business-aligned sustainability strategy for long-term value creation; establish the Company’s ESG position and view for ESG policy; recommend and approve the Company’s sustainability initiatives; and to support the integration of the Company’s sustainability strategy throughout the organization.
Currently, Assurant has prioritized three ESG areas of strategic focus for 2020-2025: Talent, Products and Climate.
Talent
We aspire to foster a more diverse, equitable and inclusive culture to drive sustainable innovation for the benefit of all stakeholders. We drive innovation and employee belonging by ensuring that our workforce reflects the diversity and inclusivity of our consumers and the communities we serve. The Company and our employees support communities and the greater good through grants, volunteer activation and investment. We promote a strong Company culture and engage employees through our practices and policies, total rewards and learning and development programs that we believe lead to greater innovation and business outperformance. We are committed to the principle of equal pay for equal work and seek to ensure our employees are paid equitably. We will continue to adapt and evolve new ways of working to strengthen our global bench of talent and commitment to fair, equitable pay and benefits. 2022 key highlights include:
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| Reinforced Company Culture | We refreshed the key tenets of our culture, specifically to foster greater understanding of our renewed purpose and why the work we do each day and behaviors we model matter to the stakeholders we serve. | |
| Ongoing Employee Feedback & Listening | We regularly engage with our employees to seek feedback through an array of forums and channels designed to provide opportunities for anonymous, real-time feedback.
Results from our most recent enterprise-wide listening program, which concluded in June 2022, benefited from strong employee participation and highlighted that employees generally feel engaged and aligned with the Company’s priorities.
To ensure our Total Rewards remain competitive, we also conducted employee focus groups that helped validate that recommended plan changes for 2023 met the needs of our diverse workforce particularly around predictability and affordability of health care costs. | |
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| Commitment to Diversity & Inclusion | We launched three employee resource groups (including Women@Assurant, Veterans@Assurant and Mosaic@Assurant) to provide forums for employees to raise topics that are important to underrepresented groups.
We sponsored an inaugural, enterprise-wide diversity and inclusion mentorship program.
We expanded employee participation in targeted development programs for women and underrepresented groups including HACE (Hispanic Alliance for Career Enhancement), ELC (Executive Leadership Council) and LEAP (Leadership Acceleration Program) forums. | |
| Investing in Our People | We continue to invest in our employees’ career growth and provide employees with a wide range of training and development opportunities.
In 2022, we delivered live-virtual training to support the initial rollout of our redefined culture tenets which will continue as we further embed into our talent practices.
We also implemented key initiatives to increase adoption of new technology and processes providing both learning tools and change support, furthering our focus on a digital-first mindset. | |
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Products
We aspire to help people thrive in the connected world. We leverage insights and technology to accelerate the introduction of offerings that add customer value and make a positive impact on society. We will continue to help consumers understand and invest in digital protection products and services to enhance access and ease of use through seamless support. 2022 key highlights include:
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| Electric Vehicle Product | EV-One, our electric vehicle and hybrid protection policy, is available in 12 countries.
EV-One was expanded and enhanced to include comprehensive battery coverage, helping to support the adoption of energy-efficient vehicles. | |
| Repurposing Mobile Devices | Since 2009, Assurant has repurposed more than 135 million mobile devices.
Whether by repairing, reselling or recycling devices through certified partners, we are enabling the reuse of valuable materials and reduction of e-waste from landfills. | |
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Climate
We aspire to operate in ways that minimize our carbon footprint and enhance sustainability. We work to strengthen climate resiliency, extend and enhance product life cycles, and identify vulnerabilities through robust risk management as we measure impact and enhance the products and services we offer. We are improving energy efficiency in our owned facilities and enabling a more hybrid work model to support our business and talent strategy, as larger portion of our employees are working remote and reducing our footprint where appropriate. 2022 key highlights include:
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| Reduce GHG Emissions by 40 Percent by 2030 | In December 2022, the Company announced its science-based aligned target to reduce Scope 1 and Scope 2 GHG emissions by 40% by 2030 from a 2021 base year. The target, which aligns with the Paris Agreement and the Science-based Targets initiative, was set as part of the Company’s ESG guiding principle to ensure its facilities around the world adhere to sustainability practices. | |
| Enhanced and Verified Emissions Reporting | We continue to enhance our emissions reporting. In 2022, we expanded Scope 3 reporting to include our investment portfolio (by industry and asset class) in addition to purchased goods and services, and use of sold products, a category that pertains exclusively to our mobile business. We engaged a third party to conduct an independent verification of all Scope 1, Scope 2, and relevant Scope 3 category, excluding investment portfolio, GHG emissions. | |
| Climate Action Policy | In addition to our Responsible Investing Commitment Policy, in 2022, we implemented our Climate Action Policy, which identifies the steps that we will take to continue to integrate our environmental commitment into our business operations and maintain the appropriate governance and oversight to monitor, manage, and continuously improve our climate action and environmental performance. | |
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Additional information about our sustainability efforts, and our most recent Sustainability Report, can be found on our website at http://www.assurant.com/our-story/sustainability.
POLITICAL ACTIVITIES POLICY STATEMENT
We have a policy governing our political activities to ensure they are conducted in full compliance with applicable law and align with our corporate purpose and values. Among other things, the policy states that Assurant does not use corporate resources for political contributions to political candidates, parties, or committees, even where it is allowed by law. As permitted by federal election law, Assurant sponsors the Assurant Inc. Political Action Committee (“PAC”), a federal political action committee registered with the Federal Election Commission, and funded solely through voluntary employee contributions. As legally permitted, Assurant supports the modest cost of administering the PAC. The Nominating Committee exercises oversight over our political activities, including our public policy priorities, engagement with officials and other stakeholders, and compliance with laws and regulations. Our Political Activities Policy is available under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
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Compensation Discussion and Analysis
EXECUTIVE SUMMARY
Introduction
This Compensation Discussion and Analysis (“CD&A”) provides a detailed review of the compensation principles and strategic objectives governing the compensation of the following individuals, who were our named executive officers (“NEOs”) for 2022:
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| Name | | Title | |
| Keith W. Demmings | | President and Chief Executive Officer | |
| Richard S. Dziadzio | | Executive Vice President, Chief Financial Officer | |
| Robert A. Lonergan | | Executive Vice President, Chief Strategy and Risk Officer | |
| Keith R. Meier | | Executive Vice President, Chief Operating Officer | |
| Francesca L. Luthi | | Executive Vice President, Chief Administrative Officer
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2022 Compensation Highlights
Assurant’s executive compensation decisions in 2022 reflect our strong pay-for-performance philosophy. Our vision is to be the leading global business services company supporting the advancement of the connected world. With our portfolio of businesses with market leading positions, we strive for outperformance through sustained profitable growth and disciplined capital deployment. Our executive compensation programs are aligned with the Company’s strategic and financial objectives and are designed to link the interests of our NEOs with those of our stockholders by directly tying a majority of our NEO compensation with the Company’s stock price performance and financial performance.
In 2022, given the Company’ ongoing shift to more fee-based businesses, Assurant introduced Adjusted EBITDA, excluding reportable catastrophes, and Adjusted earnings, excluding reportable catastrophes, per diluted share, as its performance metrics for the enterprise. During this transition year, we continued to use legacy financial metrics in our compensation plans designed to focus management on driving continued profitable growth. For 2022, the financial metrics for the Executive Short-Term Incentive Plan (“ESTIP”) were 60% net operating income (“NOI”), excluding reportable catastrophes, and 40% net earned premiums, fees and other income, and the financial metrics for the Long-Term Equity Incentive Plan (“ALTEIP”) were 50% TSR relative to the S&P 500 Index and 50% absolute NOI per diluted share (“NOI EPS”), excluding reportable catastrophes.
For 2023, the Company will adjust the metrics of its compensation plans to align with the evolution of its performance metrics. For the ESTIP, we will move to metrics comprised of 50% Adjusted EBITDA, excluding reportable catastrophes, 30% net earned premiums, fees and other income, and 20% a new individual performance factor introduced to better allow the CEO to differentiate total payouts for the NEOs based on their individual contributions and attainment of strategic goals. For the ALTEIP, we will move to 50% Adjusted earnings, excluding reportable catastrophes, per diluted share, with no change to the 50% TSR relative to the S&P 500 Index.
Our executive compensation program has three primary elements: annual base salary, annual cash incentives as part of our ESTIP, and long-term equity incentives as part of our ALTEIP. Each of these pay elements serves a specific purpose in our compensation strategy. Based on our performance and consistent with the design of our program, the Compensation Committee made the following decisions for 2022:
•Annual base salary: The Compensation Committee set the fixed cash compensation for our CEO and reviewed and approved the fixed cash compensation for our other NEOs based on
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| Compensation Discussion and Analysis | |
qualifications, experience, performance, role, career progression, market data and internal pay equity. See “The Compensation Committee’s Decision-Making Process” beginning on page 44 and “Annual Base Salary” beginning on page 46 for details.
•Annual Incentive Plan (“ESTIP”): The Compensation Committee set ESTIP performance goals for 2022 based on NOI and net earned premiums, fees and other income of the consolidated enterprise. These goals were designed to support the Company’s strategic and financial objectives, including continued profitable growth. Based on the Company’s performance against the ESTIP performance goals, our NEOs received annual incentive payments calculated on the basis of net earned premiums, fees and other income (weighted 40%) performing at 89% and NOI (weighted at 60%) performing at a 78% for a total 0.82 performance multiplier. ESTIP metrics and NEO payouts are described in greater detail in “Annual Incentive Compensation” beginning on page 47.
•Long-Term Equity Incentive Plan (“ALTEIP”): For 2022, our NEOs received 75% of their annual ALTEIP awards in the form of PSUs and 25% in the form of RSUs. PSUs are designed to support the Company’s ongoing strategic and financial objectives, including continued profitable growth and sustainable long-term stockholder return, thereby closely aligning the interests of management and stockholders. Payouts under the PSUs are determined at the end of a three-year performance cycle based on the Company’s TSR results relative to the S&P 500 Index and absolute NOI EPS performance, excluding reportable catastrophes. Generally, PSUs vest on the third anniversary of the grant date. For PSUs granted in 2019, based on actual performance results, NEOs received shares of common stock equal to 112% of their target PSUs. ALTEIP metrics and NEO payouts are described in greater detail in “Long-Term Equity Incentive Compensation” beginning on page 48.
2022 Say-on-Pay Vote and Stockholder Engagement
At our 2022 Annual Meeting, stockholders again voted strongly in support of Assurant’s executive compensation program with approximately 96% of votes cast in support of our say-on-pay proposal. Executive compensation was a key topic of discussion during our ongoing stockholder engagement during which we highlighted our proposed changes to the executive compensation plans for 2023 to align with the evolution of the Company’s performance metrics and advancements in our ESG efforts related to talent and DE&I. Our stockholder engagement program is described in further detail in “Stockholder Rights and Engagement” beginning on page 27.
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Strong Executive Compensation Governance Practices and Policies
Our executive compensation programs are informed by strong governance practices that reinforce our pay for performance philosophy, support our culture of accountability, and encourage prudent risk management.
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| What We Do | | What We Don’t Do | |
| ☑ Heavy emphasis on variable compensation | | ☒ No “single trigger” change in control agreements | |
| ☑ Significant portion of annual and long-term incentives are performance based “at risk” | | ☒ No tax gross ups upon change in control | |
| ☑ Robust stock ownership guidelines for directors and executive officers | | ☒ No hedging or pledging of company stock | |
| ☑ Incentive recoupment (clawback) policy | | ☒ No significant perquisites | |
| ☑ Proactive stockholder engagement | | ☒ No dividends paid on unvested PSUs | |
| ☑ Annual risk assessments | | ☒ No employment agreements with executive team | |
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WHAT GUIDES OUR PROGRAM
Our Executive Compensation Principles
Set forth below are our core executive compensation principles, along with key features of our executive compensation program that support these principles:
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Executive compensation programs should align the interests of our executives with those of our stockholders by tying compensation to the Company’s stock price and financial performance. |
•Significant portions of executive compensation are variable and tied to the Company’s stock price and financial performance. 87% of our CEO’s and 77% of our other NEOs’ total target direct compensation is variable. The charts below do not include any one-time equity grants or awards outside of target annual total direct compensation, if any.
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Executive compensation opportunities should be sufficiently competitive to motivate and retain talent while aligning their interests with those of our stockholders. |
•When setting target total direct compensation opportunities (base salary, ESTIP and ALTEIP) for our NEOs, the Compensation Committee considered comparable positions at companies included in a Willis Towers Watson general industry survey and select secondary references. The Compensation Committee also considered the scope of an NEO’s role and his or her individual performance, contributions and experience.
•The Company selects performance metrics that seek to achieve the appropriate balance between annual and long-term incentives that are supportive of the Company’s strategic and financial goals.
•Stock-based compensation outweighs cash-based compensation to further align NEOs with long-term value creation.
•Each NEO’s annual incentive opportunity and PSUs are contingent on the Company’s performance. If the Company does not achieve threshold performance with respect to its ESTIP or PSU metrics, there is no payout under those plans.
•75% of the annual long-term equity incentive award granted to our NEOs in 2022 was delivered in the form of PSUs, with a three-year cumulative performance period, and 25% was delivered in the form of RSUs, with a three-year annual vesting schedule.
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Our incentive-based programs should motivate our executives to deliver strong, sustainable results. |
•We design performance goals under our ESTIP so that above-target compensation will only be paid if the Company delivers above-target performance based on NOI, excluding reportable catastrophes, and net earned premiums, fees and other income.
•Payouts for PSU awards granted in 2022 are based on performance results over a three-year cumulative performance period with respect to TSR relative to the S&P 500 Index and absolute NOI EPS, excluding reportable catastrophes.
•We design performance goals under our ALTEIP such that payouts on the TSR metric reach above-target levels only if our performance exceeds the 50th percentile of the index.
•The maximum payout under the Company’s ESTIP and ALTEIP is capped at 200% of each NEO’s target opportunity.
The Compensation Committee’s Decision-Making Process
The Compensation Committee oversees our executive compensation program and advises the full Board on general aspects of Assurant’s compensation and benefit policies. The Compensation Committee is composed entirely of independent directors, as determined in accordance with its charter, our Corporate Governance Guidelines and applicable New York Stock Exchange (“NYSE”) rules. The Compensation Committee’s charter and our Corporate Governance Guidelines are available under the “Corporate Governance” subsection of the “Investor Relations” section of our website at http://ir.assurant.com.
The following chart outlines the Compensation Committee’s annual process in setting NEO compensation:
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| Step 1 | Step 2 | Step 3 | |
| Committee reviews competitive assessment of current target total direct compensation levels and pay positioning as prepared by an independent compensation consultant. | Committee considers recommendations from CEO on compensation of other NEOs. | Committee establishes total direct compensation opportunities for NEOs. | |
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For 2022, the Compensation Committee evaluated the recommendations of our CEO for the compensation of our other NEOs, together with information and analysis provided by its independent compensation consultant, using data from a general industry survey from Willis Towers Watson, supplemented by several secondary references, as described in “Compensation Peer Group” on page 45. The Compensation Committee exercises its discretion in evaluating, modifying, approving or rejecting the CEO’s recommendations and makes all final decisions with regard to base salary, short-term incentives and long-term incentives for all executive officers, including the NEOs. The Compensation Committee also regularly meets in executive sessions without members of management present to discuss recommendations and make decisions with respect to compensation of the Company’s executive officers.
Input from Management
Our CEO is not involved in the Compensation Committee’s determination of his compensation. Generally, the CEO completes a self-assessment of his own performance against prescribed criteria and each independent director separately assesses the CEO’s performance using the same criteria. In consultation with our Chief Administrative Officer, our CEO annually reviews the performance and compensation of each of our executive officers relative to market pay levels using data from a general industry survey from Willis
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Towers Watson, supplemented by several secondary references, as described in “Compensation Peer Group” on page 45, and makes recommendations regarding their compensation to the Compensation Committee. The CEO also provides input to the Compensation Committee, in consultation with the Chief Administrative Officer, on the ESTIP and ALTEIP performance goals for the Company’s executive officers.
Input from Independent Compensation Consultant
Our Compensation Committee has the authority to engage and retain an independent compensation consultant to provide counsel and advice. From time to time, the Compensation Committee formally conducts an evaluation as to the effectiveness of the independent compensation consultant and periodically runs a request for proposal process to ensure the independent compensation consultant is meeting its needs. Our Compensation Committee engaged Semler Brossy through July 2022 and engaged Pearl Meyer through the remainder of the year. Pearl Meyer was selected as the independent consultant after an extensive review process conducted by the Compensation Committee. The nature and scope of the services provided by the independent compensation consultants in 2022 included participating in Compensation Committee meetings, benchmarking compensation for the executive officers, providing advice and recommendations related to the compensation of executive officers, plan design and director compensation, and providing updates on trends and developments in executive compensation.
The decisions made by the Compensation Committee are the responsibility of the Compensation Committee and may reflect factors other than the recommendations and information provided its independent compensation consultant. The Compensation Committee assessed the independence of both Semler Brossy and Pearl Meyer in 2022, as required under NYSE listing rules. The Compensation Committee has also considered and assessed all relevant factors, including those set forth under the Exchange Act, that could give rise to a potential conflict of interest with respect to the compensation consultant. Based on this review, we are not aware of any conflict of interest raised by the work performed by either Semler Brossy or Pearl Meyer that would prevent either firm from serving as an independent consultant to the Compensation Committee.
Compensation Peer Group
The Compensation Committee periodically considers whether a sufficient number of publicly-traded, U.S.-based competitors exists to develop a custom peer group. Many of the Company’s competitors are private companies or subsidiaries of public companies. Given the limited number of public company competitors, the Compensation Committee determined that for 2022, consistent with recent years, a broad sample of general industry companies regressed to the Company’s revenue size would serve as the most appropriate comparison for evaluating the market competitiveness of pay levels. The Compensation Committee used Willis Towers Watson general industry survey data, which includes a broad representation of companies across a variety of industries, as the primary market reference for evaluating pay positioning when establishing 2022 pay levels. The Compensation Committee supplemented its primary reference with several secondary references, including the Willis Towers Watson financial services survey and data from similar-sized companies in the insurance industry. The Compensation Committee referenced target total direct compensation for each NEO with that provided to executives with similar responsibilities at companies included in the general industry survey data described above. Compensation may vary from the median range as necessary to reflect the skills, experience and performance of the individual or the scope of responsibilities for that role. The Compensation Committee received an assessment from its independent compensation consultant relating to target total direct compensation which concluded that our NEOs were generally appropriately positioned within a competitive range relative to similarly situated executives based on the scope of an NEO’s role and his or her skills, experience and individual performance. The Compensation Committee will continue to periodically evaluate the survey data used to evaluate pay levels
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and whether a custom peer group can be developed to provide meaningful comparison for evaluating compensation levels.
2022 EXECUTIVE COMPENSATION PROGRAM
Elements of Compensation
Our NEOs’ total direct compensation has three elements as set forth in the table below:
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| Compensation Element | Objective/Purpose | |
| Annual base salary | Competitive base salaries support our ability to attract and retain executive talent. | |
| Annual incentive program (ESTIP) | Motivates executives to achieve specific near-term enterprise goals designed to support the Company’s strategic and financial objectives.
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| Long-term equity incentive program (ALTEIP) | Aligns management’s interests with stockholders’ interests. Reinforces a culture of accountability focused on long-term value creation and is a key element of retaining executive talent.
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Annual Base Salary
Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain executive leadership talent. The Compensation Committee did not increase the base salaries of our NEOs in 2022 except in connection with the promotions of Messrs. Demmings and Meier. For more information, please see “Summary Compensation Table” on page 56 below.
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| Name | 2021 Base Salary ($)1 | 2022 Base Salary ($)1 | % Increase | |
| Keith W. Demmings2 | 700,000 | 1,000,000 | 43% | |
| Richard S. Dziadzio | 680,000 | 680,000 | —% | |
| Robert A. Lonergan | 500,000 | 500,000 | —% | |
| Keith R. Meier3 | 510,000 | 610,000 | 20% | |
| Francesca L. Luthi | 525,000 | 525,000 | —% | |
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1 The base salary amounts listed in the table represent each NEO’s base salary rate. Actual base salary paid in the calendar year differs slightly from these amounts due to the payroll calendar.
2 Mr. Demmings’s base salary at the start of 2021 was $545,000. Mr. Demmings’s base salary was increased to $700,000 in May 2021 in connection with his promotion to President. Mr. Demmings’s base salary was increased to $1,000,000 in January 2022 in connection with his promotion to President and Chief Executive Officer.
3 Mr. Meier’s base salary was increased to $610,000 in January 2022 in connection with his promotion to Executive Vice President, Chief Operating Officer.
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Annual Incentive Compensation
The ESTIP provides our NEOs the opportunity to earn a performance-based annual cash incentive award. Actual incentive payouts depend on the achievement of predetermined financial performance objectives and can range from 0% to 200% of target award amounts. Target annual incentive opportunities are expressed as a percentage of base salary. Target award opportunities for 2022 were as follows:
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| Name | 2022 Base Salary ($) | Target Annual Incentive (as a % of Salary) | Target Annual Incentive ($) | |
| Keith W. Demmings1 | 1,000,000 | 150% | 1,500,000 | |
| Richard S. Dziadzio | 680,000 | 100% | 680,000 | |
| Robert A. Lonergan | 500,000 | 100% | 500,000 | |
| Keith R. Meier2 | 610,000 | 100% | 610,000 | |
| Francesca L. Luthi | 525,000 | 100% | 525,000 | |
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1 In 2022 Mr. Demmings’s target annual incentive opportunity increased from 110% to 150% of his applicable annual base salary under the ESTIP, in connection with his promotion to President and Chief Executive Officer.
2 In 2022 Mr. Meier’s target annual incentive opportunity increased from 90% to 100% of his applicable annual base salary under the ESTIP, in connection with his promotion to Executive Vice President, Chief Operating Officer.
Each year the Compensation Committee reviews the annual incentive financial metrics. The Compensation Committee seeks to select metrics that align with the Company’s strategic and financial objectives. For 2022, the Compensation Committee continued to use financial metrics designed to focus management on driving continued profitable growth. The financial metrics for the ESTIP were 60% NOI, excluding reportable catastrophes, and 40% net earned premiums, fees and other income (which represents our revenues excluding net investment income and net realized gains or losses on investments and fair value changes to equity securities). For all NEOs, the performance goals are set at the enterprise level and measured on a consolidated basis. The NOI performance goals exclude reportable catastrophes because they create volatility that is beyond management’s control and the Compensation Committee believes management should be focused on the underlying performance of the business, which is consistent with how the Company reports its results.
For 2023, to better align the incentives to the Company’s strategic and financial objectives, reflecting new performance metrics, the Compensation Committee has approved updated ESTIP metrics comprised of: 50% Adjusted EBITDA, excluding reportable catastrophes, 30% net earned premiums, fees and other income, and 20% a new individual performance factor.
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2022 Results
The following tables set forth the 2022 financial metrics and performance goals, along with the resulting multipliers applied to NEO annual incentive compensation:
2022 Annual Incentive Performance Goals and Results 1 2
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| Weighting | Financial
Metric | — | 0.5 | 0.9 | 1.0 | 1.1 | 1.5 | 2.0 | 2022 Results3 | 2022 Performance
Multiplier | |
| 60% | Enterprise NOI (excluding reportable catastrophes) | $611 | $654 | $705 | $727 | $749 | $800 | $843 | $690 | 0.82 | |
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| 40% | Net earned premiums, fees and other income | $8,808 | $9,437 | $9,962 | $10,486 | $11,010 | $11,535 | $12,164 | $9,947 | |
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1Dollar amounts applicable to performance goals are in millions. The performance goals included in this table are disclosed only to assist investors and other readers in understanding the Company’s executive compensation. They are not intended to provide guidance on the Company’s future performance and should not be relied upon as predictive of the Company’s future performance or the future performance of any of our operating segments.
2Certain measures are non-GAAP. A reconciliation of these non-GAAP measures to their most comparable GAAP measures can be found in Appendix A hereto.
3Results in this column may differ from the Company’s reported results since expenses, revenues and other effects associated with acquisition and disposition activity during the performance year and changes in accounting that do not reflect changes in the underlying business are generally excluded when calculating results for purposes of the ESTIP.
The following table shows target annual incentive compensation, the multipliers applied for each NEO and the resulting annual incentive award payout for 2022:
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| NEO | 2022 Target Annual Incentive 1 | 2022 Multiplier | 2022 Annual Incentive Payment | |
| Keith W. Demmings | $1,500,000 | 0.82 | $1,230,000 | |
| Richard S. Dziadzio | $680,000 | 0.82 | $557,600 | |
| Robert A. Lonergan | $500,000 | 0.82 | $410,000 | |
| Keith R. Meier | $610,000 | 0.82 | $500,200 | |
| Francesca L. Luthi | $525,000 | 0.82 | $430,500 | |
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1The target annual incentive is calculated by multiplying an NEO’s base salary rate by his or her target annual ESTIP opportunity.
Long-Term Equity Incentive Compensation
The 2022 ALTEIP grants awarded to the Company’s NEOs are comprised of a mix of 75% PSUs and 25% RSUs. The target long-term incentive opportunities as a percentage of base salary for each of our NEOs were as follows: 500% for the CEO, 300% for the CFO and between 210% and 230% for each of the other NEOs. Our NEOs received increases to their long-term incentive opportunities in 2022 based on factors including to
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acknowledge strong performance in role, motivate and sustain momentum, and to align with market. The target PSUs and RSUs awarded for fiscal 2022 for each of the NEOs were as follows:
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| Name | 2022 Target Annual Long Term Incentive (as a % of Salary) | 2022 PSUs (75%) | 2022 RSUs (25%) | Total Grant Date Dollar ($) Value | |
| Number (#) of Units | Grant Date Dollar ($) Value1 | Number (#) of Units | Grant Date Dollar ($) Value1 | |
| Keith W. Demmings | 500% | 21,507 | 3,749,961 | 7,169 | 1,249,987 | 4,999,948 | |
| Richard S. Dziadzio | 300% | 8,775 | 1,530,009 | 2,925 | 510,003 | 2,040,012 | |
| Robert A. Lonergan | 210% | 4,517 | 787,584 | 1,506 | 262,586 | 1,050,170 | |
| Keith R. Meier | 230% | 6,035 | 1,052,263 | 2,012 | 350,812 | 1,403,075 | |
| Francesca L. Luthi | 225% | 5,081 | 885,923 | 1,694 | 295,366 | 1,181,289 | |
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1 The actual number of PSUs and RSUs granted was calculated by dividing the dollar value of the award by the closing price of the Company’s stock on the equity award grant date. The closing price of the Company’s stock on March 16, 2022 was $174.36.
In addition to the 2022 ALTEIP awards outlined in the preceding table, on March 14, 2022, the Compensation Committee determined to award Mr. Lonergan 6,500 PSUs, with a grant date value of $1,133,340, in accordance with the terms and conditions of the 2022 form of PSU agreement. This one-time equity award was provided to recognize Mr. Lonergan for outstanding performance during 2021, including impact on mergers, acquisitions and divestitures and enterprise COVID response.
PSUs
PSUs support sustainable long-term stockholder return and closely align the interests of management and stockholders. The maximum payout opportunity for PSUs is capped at 200% of an NEO’s target opportunity. Unless a PSU recipient is retirement eligible, the recipient must be continuously employed by the Company or any of its subsidiaries through the performance determination date following the end of the applicable performance period to achieve payout.
For annual awards granted in 2019-2022, performance is measured with respect to two equally weighted metrics measured over a three-year performance period: absolute NOI EPS, excluding reportable catastrophes and TSR relative to the S&P 500 Index. Additional details concerning the metrics, index and payout requirements for recent ALTEIP awards are described below.
For 2023, the Compensation Committee has approved updated ALTEIP metrics comprised of 50% Adjusted earnings, excluding reportable catastrophes, per diluted share and with no change to the 50% TSR metric relative to the S&P 500 Index.
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Performance-Based Long-Term Equity Plan Design Attributes
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| Metrics and Weighting | For 2019 - 2022 awards: Relative TSR1 - 50% Absolute NOI EPS2 - 50% .
For 2023 awards: Relative TSR1 - 50% Absolute Adjusted EPS2 - 50% | Rationale: The Compensation Committee believes that these metrics should align with the Company’s strategic and financial objectives. | |
| Performance Measured Against an Industry Index | TSR measured against S&P 500 Index | Rationale: The Compensation Committee believes the S&P 500 Index: • represents a well-known and objective benchmark by which the Company’s performance can be measured; and . • provides a robust sample of companies across different industries reflective of the Company’s continued expansion beyond traditional lines of insurance.
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| Payout Considerations | For the relative metric (TSR):
Payout above target if above-median performance is achieved Payouts capped at 200% of target if the percentile is at or above the 90th percentile Minimum threshold for payout is the 25th percentile Payouts for performance between the percentile levels are determined on a straight-line basis using linear interpolation For the absolute metric(s):
Threshold for payout set at pre-determined performance level Payouts capped at 200% of target Payouts for performance levels between the threshold and maximum levels are determined on a straight-line basis using linear interpolation | Rationale:
. The Compensation Committee believes the payout opportunity:
• supports the Company’s pay for performance philosophy; and
• ensures focus on driving stockholder returns over the long term. | |
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1Percentage change on Company stock price plus dividend yield percentage.
2Cumulative three-year NOI EPS, excluding reportable catastrophes.
3Cumulative three-year Adjusted earnings, excluding reportable catastrophes, per diluted share.
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2019-2021 Performance Period
In 2022, the Compensation Committee approved equity payments for PSUs granted in 2019 based on the financial metrics described on the previous page. The Company’s cumulative percentile ranking relative to companies in the S&P 500 Index with regard to TSR over the 2019-2021 performance period was in the 59th percentile, which represents a payout at 118% of target. The Company achieved 2019-2021 cumulative NOI EPS, excluding reportable catastrophes,1 of $31.27, which represents a payout at 106% of target. As a result, each NEO received shares of common stock equal to 112% of their target number of PSUs granted in 2019, which represents the average payouts for TSR and NOI EPS. The performance levels for the 2019-2021 performance cycle are reflected in the charts below.
1 Represents a non-GAAP measure. A reconciliation of this non-GAAP measure to its most comparable GAAP measure can be found in Appendix A hereto.
Performance-Based Long-Term Equity Plan Design — TSR Metric
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| 2019-2021 Performance Period | |
| Performance Level | Ranking v. S&P 500 Index | Payout | |
| Maximum | 90th Percentile | 200% | |
| Stretch | 75th Percentile | 150% | |
| Target | 50th Percentile | 100% | |
| Threshold | 25th Percentile | 50% | |
| Below Threshold | Below 25th Percentile | 0% | |
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Performance-Based Long-Term Equity Plan Design — NOI EPS Metric
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| NOI EPS 2019-2021 Performance Period | |
| Performance Level | Cumulative NOI EPS1 | Payout | |
| Maximum | $35.86 | 200% | |
| Stretch | $34.30 | 125% | |
| Above Target | $32.74 | 110% | |
| Target | $31.18 | 100% | |
| Near Target | $29.62 | 90% | |
| Below Target | $28.06 | 75% | |
| Threshold | $26.50 | 50% | |
| Below Threshold | $26.49 or less | 0% | |
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1Cumulative three-year NOI EPS, excluding reportable catastrophes.
RSUs
RSUs typically vest in equal annual installments over a three-year vesting period and are granted in March of each year. For additional information on PSUs and RSUs granted to our NEOs in 2022, please see columns (h) and (j), respectively, of the “Grants of Plan-Based Awards” table on page 58.
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OUR EXECUTIVE COMPENSATION PRACTICES, POLICIES & GUIDELINES Our executive compensation programs are guided by strong governance practices intended to reinforce our pay for performance philosophy, support our culture of accountability and prudent risk management. Summarized below are the key governance features of our executive compensation programs.
Stock Ownership Guidelines
The Company adopted Stock Ownership Guidelines and holding requirements for its non-employee directors and executive officers. The current Stock Ownership Guidelines are as follows:
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| Position | Minimum Stock Ownership Requirement | |
| Non-Employee Director | Market value of 5 times annual base cash retainer | |
| Chief Executive Officer | Market value of 6 times current base salary | |
| Other Executive Officers | Market value of 3 times current base salary | |
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Covered individuals have five years from their permanent appointment to a specified position to acquire the required holdings. Until a covered individual meets the required ownership level, such individual is generally prohibited from selling or otherwise transferring more than 50% of the net after-tax shares of common stock acquired upon any vesting of RSUs or PSUs. As of December 31, 2022, all of our non-employee directors and NEOs were in compliance with the Company’s Stock Ownership Guidelines, taking into account the five-year transition period noted above.
Executive Compensation Recoupment (Clawback) Policy
Our robust recoupment provisions go beyond currently applicable legal requirements. Effective in 2012, we implemented a policy regarding the recoupment of performance-based incentive compensation awarded to the Company’s key executives, including the NEOs. In the event that the Company is required to prepare a restatement of its financial results due to material noncompliance with any financial reporting requirement under the securities laws, we may recover the excess of any annual cash incentive and long-term cash or equity-based incentive award amounts provided to any of the Company’s current or former NEOs based on the original financial statements (including any deferrals thereof) over the amounts that would have been provided based on the restatement. The recovery period may comprise up to three years preceding the date on which the Company is required to prepare the restatement. This is in addition to the clawback requirements of the Sarbanes-Oxley Act of 2002 applicable to the CEO and CFO. In 2021, we amended the policy to permit recovery in the event that the Company terminates an NEO’s employment due to specified personal misconduct and expanded the clawback in that instance to include any incentive compensation. We are reviewing our policy to comply with the SEC’s adoption of the final clawback rule.
Effective for the 2023 awards, we may additionally require repayment of gains realized under equity awards and cancel equity awards in specified instances of executive misconduct, including misconduct causing a financial statement restatement or a material violation of law that causes material financial harm to us. Unvested PSUs and RSUs, and certain vested PSUs and RSUs, may be forfeited or subject to repayment if an NEO breaches our Code of Ethics, discloses confidential information, commits fraud, gross negligence, or willful misconduct, solicits business or our employees, disparages us, or engages in competitive actions while employed by Company or its subsidiaries or during a set time period after termination of employment according to the terms of the award agreement.
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Prohibition on Hedging and Pledging Transactions
Employees, including the NEOs, and directors are subject to the Company’s Insider Trading Policy, which prohibits them from engaging in hedging or monetizing transactions, such as zero-cost collars and forward sale contracts, with respect to Company securities they own or that are subject to their control. The Company’s Insider Trading Policy also prohibits employees and directors from holding Company securities in a margin account or pledging Company securities as collateral for a loan.
Timing of Equity Grants
The Company does not coordinate the timing of equity awards with the release of material non-public information. Annual equity awards are granted on March 16 of each year.
Change in Control
Assurant is party to a change in control agreement (a “CIC Agreement”) with each of its NEOs. The purpose of these CIC Agreements is to enable our executives to focus solely on maximizing stockholder value in the context of a change in control transaction without regard to personal concerns related to job security.
The CIC Agreements with our NEOs contain a “double trigger” provision, meaning that benefits are generally payable only upon a termination of employment “without cause” by the Company or for “good reason” by the NEO within two years following a change in control. Executives who have CIC Agreements are also subject to non-compete and non-solicitation provisions. These agreements do not contain excise tax gross-up provisions. Additional information regarding the CIC Agreements is provided under “Narrative to Potential Payments Upon Termination or Change in Control — Change in Control Agreements” on page 69.
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OTHER ELEMENTS OF COMPENSATION Our NEOs participate in the same health care, disability, severance, life insurance, pension and 401(k) benefit plans made available generally to the Company’s U.S. employees.
Retirement Plans
Our NEOs participate in both the 401(k) Plan (the “401(k) Plan”) and an Executive 401(k) Plan (the “Executive 401(k) Plan”). These retirement plans are intended to provide our NEOs with competitive levels of income replacement upon retirement to attract and retain talent in key positions. The Executive 401(k) Plan is designed to replace income levels capped under the 401(k) Plan by the Code. Additional information regarding these plans is provided under “Nonqualified Deferred Compensation Plans” table on page 64.
Some of our NEOs participate in an Executive Pension Plan (the “Executive Pension Plan”) and a Pension Plan (the “Pension Plan”). The Executive Pension Plan replaces income levels capped under the Pension Plan by the Code. Both plans were frozen and no additional benefits have accrued since 2016. Additional information regarding these plans is provided under “Pension Benefits” on page 62.
Deferred Compensation Plans
Each of the NEOs is eligible to participate in the Amended and Restated Assurant Deferred Compensation Plan (the “ADC Plan”). The ADC Plan enables key employees to defer a portion of eligible compensation, which is notionally invested in a variety of mutual funds. Additional information regarding the ADC Plan is provided under “Nonqualified Deferred Compensation Plans” table on page 64.
Long-Term Disability Benefits
As part of the Company’s general benefits program, the Company provides Long-Term Disability (“LTD”) coverage for all benefits-eligible employees under a group policy. As an additional benefit, each NEO is eligible for Executive LTD coverage, which provides a maximum monthly benefit of $10,000. The combined maximum LTD (group LTD and Executive LTD) benefit is $25,000 per month. Additional information regarding Executive LTD benefits is provided in footnote 2 to the Summary Compensation Table on page 56.
Severance Policy
The Company’s severance policy provides separation pay upon an involuntary termination of employment as part of a Company-wide policy available to all U.S. employees based on tenure at the Company with a minimum amount of separation pay depending on job grade level.
Tax and Accounting Implications
The Compensation Committee continues to emphasize performance-based compensation to attract, retain and reward strong executives. While the Compensation Committee generally seeks to pay compensation that is tax-deductible, it reserves the right to pay non-deductible compensation to the extent it deems appropriate.
The compensation that we pay to our NEOs is reflected in our consolidated financial statements as required by GAAP. The Compensation Committee considers the financial statement impact, along with other factors, in determining the amount and form of compensation. We account for stock-based compensation under the ALTEIP and all predecessor plans in accordance with the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Stock Compensation.
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