(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrantþ
Filed by a party other than the registranto¨
Check the appropriate box:
¨ | Preliminary proxy statement |
¨ | Confidential, for Use of the Commission Only (as |
permitted by Rule 14a-6(e)(2))
þ | Definitive proxy statement |
¨ | Definitive additional materials |
¨ | Soliciting material pursuant to Rule 14a-12 |
REINSURANCE GROUP OF AMERICA,
INCORPORATED
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
þ | No fee required. | ||
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
¨ | Fee paid previously with preliminary materials. |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
(1) | Amount previously paid: |
(2) | Form, schedule or registration statement no.: |
(3) | Filing party: |
(4) | Date filed: |
of America, Incorporated®
Notice of the Annual Meeting ofTHE SHAREHOLDERSOF
the Shareholders ofREINSURANCE GROUPOF AMERICA, INCORPORATEDReinsurance Group of America, Incorporated
Chesterfield, Missouri
April 7, 2011
TO THE SHAREHOLDERS OF
REINSURANCE GROUP OF AMERICA, INCORPORATED
The Annual Meeting of the Shareholders of Reinsurance Group of America, Incorporated will be held at the Company’s principal executive offices located at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017 on May 18, 2011,16, 2012, commencing at 2:00 p.m., at which meeting only holders of record of the Company’s common stock at the close of business on March 15, 201112, 2012 will be entitled to vote, for the following purposes:
1. | To elect three directors for terms expiring in | ||
2. | |||
To vote to approve the compensation of the Company’s named executive | |||
3. | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent auditor for the fiscal year ending December 31, | ||
4. | To transact such other business as may properly come before the meeting. |
REINSURANCE GROUP OF AMERICA, INCORPORATED | |||||
By | |||||
Chairman of the Board | |||||
William L. Hutton Secretary |
i | ||||
1 | ||||
1 | ||||
2 | ||||
4 | ||||
8 | ||||
10 | ||||
26 | ||||
26 | ||||
27 | ||||
29 | ||||
Option and SARs Exercises and Stock Vested During Fiscal | ||||
32 | ||||
33 | ||||
35 | ||||
39 | ||||
42 | ||||
43 | ||||
Item 3 — Ratification of Appointment of the Independent Auditor | ||||
ii
Even though you may plan to attend the meeting, in person, please mark, date, and execute the enclosed proxy and mail it promptly. A postage-paid return envelope is enclosed for your convenience.
Reinsurance Group
of America, Incorporated®
1370 Timberlake Manor Parkway
Chesterfield, Missouri 63017-6039
for the
Annual Meeting of the Shareholders
To Be Held May 18, 2011
16, 2012
at RGA’sthe Company’s Offices in Chesterfield, Missouri
This Proxy Statement is furnished to the holders of common stock of Reinsurance Group of America, Incorporated (the “Company” or “RGA”) in connection with the solicitation of proxies for use in connection withat the Annual Meeting of the Shareholders (the “Annual Meeting”) to be held at 2:00 p.m. on May 18, 2011,16, 2012, and all adjournments and postponements thereof, for the purposes set forth in the accompanying Notice of the Annual Meeting of the Shareholders. Such holders are hereinafter referred to as the “Shareholders.” The Company is first mailing this Proxy Statement and the enclosed Annual Report to Shareholders for the fiscal year ended December 31, 2010,2011 on or about April 7, 2011.
Whether or not you expect to be present in person atattend the meeting,Annual Meeting, you are requested to complete, sign, date, and return the enclosed form of proxy. If you attend the meeting, you may vote by ballot. If you do not attend the meeting, your shares of common stock can be voted only when represented by a properly executed proxy.
Any person giving such a proxy has the right to revoke it at any time before it is voted by giving written notice of revocation to the Secretary of the Company, by duly executing and delivering a proxy bearing a later date, or by attending the Annual Meeting and voting in person.
The close of business on March 15, 201112, 2012 has been fixed as the record date for the determination of the ShareholdersCompany shareholders entitled to vote at the Annual Meeting of the Shareholders.Meeting. As of the record date, approximately 73,788,59473,711,663 shares of common stock were outstanding and entitled to be voted at such meeting. Shareholders will be entitled to cast one vote on each matter for each share of common stock held of record on the record date.
The Board of Directors of the Company makesis making this proxy solicitation. The solicitation will primarily be by mail and the expense thereof will be paid by the Company. In addition, proxies may be solicited by telephone or telefax by directors, officers, or regular employees of the Company.
Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to be held May 18, 2011:Annual Meeting: This Proxy Statement and our 20102011 Annual Report to Shareholders are available atwww.rgare.com.
1
The first item to be acted upon at the Annual Meeting is the election of John F. Danahy, Arnoud W.A. BootFrederick J. Sievert, Stanley B. Tulin and J. Cliff EasonA. Greig Woodring as directors of the Company for terms expiring at the Annual Meetingannual meeting of the shareholders in 20142015 or until their respective successors have been elected and have qualified. The boardBoard nominates Messrs. Danahy, BootSievert, Tulin and EasonWoodring for election at the 2011 meeting of shareholders.Annual Meeting. Each nominee is currently a director of our company. Proxies cannot be voted for a greater number of persons than the number of nominees named.
Nominees and Continuing Directors
The Board of Directors iscurrently has nine directors who are divided into three classes, each of which contains three directors, with the termsdirectors. The term of office of each class ending in successiveis three years. Currently, the Board has nine directors. Certain information with respect to the nominees for election as directors proposed by the Company and the other directors whose terms of office as directors will continue after the Annual Meeting is set forth below. Each of the directors has served in his or her principal occupation for the last five fiscal years, unless otherwise indicated.
Should any one or more of the nominees be unable or unwilling to serve (which is not expected), the proxies (except proxies marked to the contrary) will be voted for such other person or persons as the Board of Directors of the Company may recommend. All
Appointment of Mr. Tulin and Retirement of Mr. Greenbaum
On January 26, 2012, in accordance with the nominees are currently directorsterms and conditions expressed in the Company’s Articles of Incorporation, the Company. AllBoard unanimously appointed Stanley B. Tulin as a new director. Pursuant to the mandatory retirement provisions of our Corporate Governance Guidelines, Stuart I. Greenbaum retired from the nominees for director have agreed to serve if elected.
Vote Required
If a quorum is present, the vote required to approve this Item 1 is a majority of the common stock represented in person or by proxy at the Annual Meeting. The Company recommends a voteFOR the nominees for election to the Board.
To Be Elected as Directors for Terms Ending in | Director Since | |||||
Frederick J. Sievert, 64 Retired President of New York Life Insurance Company from 2002 through 2007. Mr. Sievert shared responsibility for overall company management in the Office of the Chairman, from 2004 until his retirement in 2007. Mr. Sievert joined New York Life in 1992 as Senior Vice President and Chief Financial Officer. In 1995, Mr. Sievert was promoted to Executive Vice President and was elected to the Board of Directors in 1996. In addition, he was President and a member of the board of New York Life Insurance and Annuity Corporation, served as Chairman of the Board of NYLIFE Insurance Company of Arizona, and served on the Board of Directors for Max New York Life, the company’s joint venture in India, Siam Commercial New York Life, the company’s joint venture in Thailand, and the company’s South Korea operation. Prior to joining New York Life, Mr. Sievert was a senior vice president for Royal Maccabees Life Insurance Company, a subsidiary of the Royal Insurance Group of London, England. Mr. Sievert currently serves as a director of CNO Financial Group, Inc. | 2010 | |||||
Stanley B. Tulin, 62 Retired Vice Chairman and CFO of AXA Financial, Inc. and its principle insurance subsidiary, AXA Equitable Life Insurance Company. Mr. Tulin joined AXA Equitable in 1996 as Senior Executive Vice President and CFO. In 1997, he became | 2012 |
Executive Vice President and CFO of AXA Financial. In 1998, he was named Vice Chairman and a director of AXA Equitable, while remaining CFO of AXA Financial. He served on the AXA Group Executive Committee from 2000 through 2006. In his position at AXA, Mr. Tulin gained extensive experience in acquisitions and divestitures, consolidated risk management and financial communications. Since his retirement in 2006, Mr. Tulin has regularly consulted to AXA Financial, Inc. Prior to joining AXA Equitable, Mr. Tulin served as co-chairman of Coopers & Lybrand’s Insurance Industry Practice group and was part of the actuarial and strategic planning group at Milliman & Robertson, Inc. for 17 years. Mr. Tulin is a fellow of the Society of Actuaries and a member of the American Academy of Actuaries. | ||||||
A. Greig Woodring, 60 President and Chief Executive Officer of the Company since 1993. Mr. Woodring headed the reinsurance business at General American Life Insurance Company from 1986 until the Company’s formation in December 1992. He also serves as a director and officer of a number of Company subsidiaries. | 1993 | |||||
To Continue in Office Until 2014: | Director Since | |||||
Arnoud W.A. Boot, 52 Professor of Corporate Finance and Financial Markets at the University of Amsterdam and director of the Amsterdam Center for Law & Economics since 2002. Mr. Boot is the founder and director of the Amsterdam Center for Corporate Finance. Prior to his current positions, Mr. Boot was a partner in the Finance and Strategy Practice at McKinsey & Company from 2000 through 2001, was the Vice Dean, Faculty of Economics and Econometrics at the University of Amsterdam from 1998 through 2000 and President of the European Finance Association in 2008. Mr. Boot serves as a member of the Dutch Social Economic Council and the Bank Council of the Dutch Central Bank. He is a member of the Advisory Scientific Committee of the European Systemic Risk Board in Frankfurt and he is also a research fellow at the Centre for Economic Policy Research in London and the Davidson Institute of the University of Michigan. | 2009 | |||||
John F. Danahy, | ||||||
65 Retired Chairman and Chief Operating Officer of May Merchandising Company and May Department Stores International, subsidiaries of The May Department Stores Company | 2009 | |||||
2
J. Cliff Eason, | ||||||
64 Retired President and CEO of Southwestern Bell Telephone, SBC Communications, Inc. (“SBC”), a position he held from September 2000 through January 2001. Mr. Eason served as President, Network Services from 1999 through 2000; President, SBC International, | 1993 |
To Continue in Office Until 2013: | Director Since | |||||||
William J. Bartlett, | ||||||||
62 Retired partner, Ernst & Young Australia. Mr. Bartlett was an accountant and consultant with Ernst & Young for over 35 years and advised numerous clients in the global insurance industry. Mr. Bartlett was appointed a partner of Ernst & Young in Sydney, Australia in July 1980, a position he held until his retirement in June 2003. He served as chairman of the firm’s global insurance practice from 1991 to 2000, and was chairman of the Australian insurance practice group from 1989 to 1998. Mr. | 2004 | |||||||
Alan C. Henderson, | ||||||||
66 Retired President and Chief Executive Officer of RehabCare Group, Inc. (“RehabCare”) from June 1998 until June 2003. Prior to becoming President and Chief Executive Officer, Mr. Henderson was Executive Vice President, Chief Financial Officer and Secretary of RehabCare from 1991 through May 1998. Mr. Henderson was a director of RehabCare from June 1998 to December 2003, Angelica Corporation from March 2001 to June 2003, and General American Capital Corp., a registered investment company, from October 1989 to April 2003. | 2002 | |||||||
Rachel Lomax, | ||||||||
66 Former Deputy Governor, Monetary Stability at the Bank of England from 2003 to 2008, where she was responsible for monetary assessment and money market operation. Prior to joining the Bank, Ms. Lomax served as Permanent Secretary for the Department of Transport and held the same position at the Department for Work and Pensions (1999 to 2002) and the Welsh Office (1996 to 1999). She served as Vice President and Chief of Staff to the President of the World Bank from 1995 to 1996, and was Head of the Economic and Domestic Secretariat at the Cabinet Office in 1994. Ms. Lomax is an independent, non-executive director of HSBC Holdings plc, | 2009 |
3
The Board of Directors has adopted Corporate Governance Guidelines (revised February 2009), a revised Audit Committee Charter,and charters for the Audit, Compensation, Committee and Nominating and Corporate Governance Committee and in July 2009, the Board adopted a charter for the Finance, Investment and Risk Management CommitteeCommittees (collectively, the “Governance Documents”). The Codescodes of conduct and Governance
4
Qualifications of Directors
Our Board of Directors is made up of nine individuals, each with a valuable core set of skills, talents and attributes that make them a good fit for our Company’s Board as a whole. When searching for new Board candidates, the Nominating and Corporate Governance Committee considers the evolving needs of the Board and searches for candidates that fill any current or anticipated future gap. As determined by our Board and the Nominating and Corporate Governance Committee, all of our directors possess the following qualifications: financial literacy;literacy, leadership experience;experience, commitment to the Company’s values;values, absence of conflicting commitments;commitments, and knowledge and experience that will complement that of other directors and promote the creation of shareholder value. Other areas of expertise or experience are desirable given our Company’s industryglobal reinsurance business and operations and the current make-up of the Board, such as expertise or experience in: life insurance, information technology, international markets, operations, capital markets, banking, risk management, public company service and actuarial science. The process undertaken by the Nominating and Corporate Governance Committee in recommending qualified director candidates is described under “Shareholder“Additional Information – Shareholder Nominations and Proposals.”
Areas of Experience and Qualifications Relevant to Serving as a Director
All of our directors bring significant executive leadership derived from their careers and professions. When considering whether our current directors had the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Nominating and Corporate Governance Committee and the Board of Directors focused primarily on the information discussed in each of the Directors’directors’ individual biographies described above and summarized below.
William J. Bartlett: public accounting experience in global insurance accounting practice; audit committee experience; financial services and life insurance knowledge; international business, markets and operations
Arnoud W.A. Boot: management and business consulting experience; corporate finance; investments; risk management; international business, markets and operations John F. Danahy: information technology; international business, markets and operations; public company management experience J. Cliff Eason: information technology; international business, markets and operations; public company management experience Alan C. Henderson: audit committee experience; experience as CEO and CFO of a public company; public company accounting and finance Rachel Lomax: international banking, monetary policy, finance and investment; risk management; international business, markets and operations Frederick J. Sievert: experience as an executive officer of a major U.S.-based life insurance company with international operations; life insurance business and market; insurance regulation; financial reporting; investments; risk management; international business, markets and operations |
5
Stanley B. Tulin: experience as an executive officer of a major global financial services company; actuarial consulting experience; audit committee experience; consolidated risk management experience; mergers and acquisitions consulting experience; financial services and life insurance knowledge
Director Independence
In accordance with the Corporate Governance Guidelines, the Board undertook reviews of director independence in February 20102011 and February 2011.2012. During each of these reviews, the Board received a report from RGA Global Legal Servicesthe Company’s General Counsel noting that there were no transactions or relationships between RGAthe Company or its subsidiaries and any of Messrs. Bartlett, Boot, Danahy, Eason, Greenbaum (in 2011), Henderson, Danahy, Boot, Sievert, andTulin (in 2012) or Ms. Lomax nor any member of such director’s immediate family. The purpose of this review was to determine whether any of those directors had a material relationship with us that would preclude such director from being independent under the listing standards of the New York Stock Exchange (“NYSE”) or our Corporate Governance Guidelines.
As a result of this review, the Board affirmatively determined, in its judgment, that each of the current eight directors named above are independent of us and our management under the applicable standards. Mr. Woodring is a non-independent director because he is our Chief Executive Officer.
Board Diversity
Although we do not have a formal written policy with respect to diversity, the Nominating and Corporate Governance CommitteeBoard believes that it is essential that Board membersdirectors represent diverse viewpoints,perspectives, skills and experience. When evaluating the various qualifications, experiences and backgrounds of Board candidates, the CommitteeBoard considers severalmany aspects of diversity such as diversity of gender, race, national origin, education, professional experience, geographic representation and differences in viewpoints and skills.
Board Leadership Structure
In recognition of the differences between the two roles and in order to maximize effective boardBoard leadership, our Company has separated the position of CEOChief Executive Officer and Chairman of the Board since we became public in 1993. The CEO is responsible for setting the strategic direction for the Company and the day to dayday-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the CEO, and sets the agenda for Board meetings and presides over meetings of the full Board.
The Board’s Role in Risk Oversight
The Board has an active and ongoing role, as a whole and also at the committee level, in overseeing management of the Company’s risks. In April 2009, theThe Board of Directors has established a Finance, Investment and Risk Management (“FIRM”) Committee to assist the Board with its oversight responsibilities and strengthen and support efforts to promote best practices in the Company’s enterprise risk management activities. The FIRM Committee reviews, monitors, and when appropriate, approves the Company’s programs, policies and strategies relating to financial and investment risks and overall enterprise risk management. In addition, the Audit Committee oversees management of risks related to accounting and financial reporting and reviews reports on ethics and compliance matters each quarter. The Compensation Committee is responsible for overseeing the management of risks relating to the Company’s employee compensation policies, practices, plans and arrangements, including executive retention. The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board of Directors, leadership development, CEO succession planning, and reviews any potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, Committee meetings are scheduled so the entire Board of Directors (including directors who are not actual committee members) are able to participate in Committee meetings and stay apprised of the risks monitored and discussed by each Committee. In addition, each Committee provides regular committee reports and committee recommendations as required or appropriate.
Risk Considerations in our Compensation Program
The Compensation Committee considers the risks associated with our compensation policies and practices, with respect to both executive compensation and compensation generally. The Compensation Committee continually considers the Company’s long-standing culture which emphasizes incremental continuous improvement and sustained long-term shareholder value creation, and ensures that these factors are reflected in the design of the Company’s compensations plans. Our
6
While a significant portion of our executive compensation plan is performance-based, we do not believe that our program encourages excessive or unnecessary risk-taking. While risk-takingRisk-taking is a fundamental and necessary part of our business, theand our Compensation Committee has focused on aligning the Company’s compensation policies with the Company’s long-term interests and avoiding short-term rewards for management decisions that could pose long-term risks to the Company as follows:
• | Management Incentive Plan.Our Management Incentive Plan (“MIP”) is designed to reinforce our | ||
• | Performance Contingent Stock Grants.Our | ||
• |
| ||
value to management because of the economic tie to shareholder value. Annual grants of SARs (SARs grants replaced stock options in 2011) allow us to reward the achievement of long-term goals and are based on our desire to achieve an appropriate balance between the overall risk and reward for short, intermediate and long-term incentive opportunities.
Share Ownership Guidelines. Our share ownership guidelines require members of senior management to hold a specified value of Company stock which is based on a multiple of their annual salary. This ensures that our senior management will have a significant amount of value tied to long-term holdings in Company stock. See “Executive Stock Ownership Guidelines” for a discussion of changes made to the ownership guidelines in February 2011.
7
The Board of Directors has posted the process whereby interested parties and shareholders can communicate with our directors and the Board on our website at www.rgare.com. Information on our website does not constitute part of this Proxy Statement. Interested parties and shareholders may communicate directly with our presiding director,Chairman of the Board, Mr. Eason, by sending a written communication as follows:
General Counsel
Reinsurance Group of America, Incorporated
1370 Timberlake Manor Parkway
Chesterfield, MO 63017
The process for communicating with the Board provides that the General Counsel will make a record of the receipt of any such communications. All properly addressed communications will be delivered to the specified recipient(s) not less than once each calendar quarter, and will not be directed to or reviewed by management prior to receipt by such persons.
The Board of Directors held a total of seveneight regular meetings and no special meetings during 2010.2011. Each incumbent director attended at least 75% of the meetings of the Board and committees on which he or she served during 2010.2011. We do not have a policy with regard to attendance by Directorsdirectors at the annual meeting of shareholders.Annual Meeting. The Chairman of the Board attended the 20102011 annual meeting of shareholders. The Board of Directors has an Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), a Compensation Committee, a Nominating and Corporate Governance Committee, and a Finance, Investment and Risk Management Committee.
Audit Committee
The Audit Committee met eightnine times in 2010.2011. Since January 1, 2010,2011, the Committee consisted of Messrs. Bartlett (Chairman), Boot, Danahy and Ms. Lomax. Mr. Tulin joined the Committee on January 26, 2012. The Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent auditor. The Committee oversees our accounting and financial reporting processes, the adequacy of our internal controls over financial reporting and disclosure controls and procedures, the integrity of our financial statements, pre-approves all audit and non-audit services to be provided by the independent auditor, reviews reports concerning significant legal and regulatory matters, and reviews the plans and performance of our internal audit function. The Committee also reviews and discusses our filings on Forms 10-K and 10-Q, including the financial information in those filings. The Audit Committee works closely with management as well as our independent auditor and internal auditor. A more detailed description of the role and responsibilities of the Audit Committee is set forth in a written charter, adopted by the Board of Directors, which is available on our website (www.rgare.com). The Audit Committee has established procedures for the receipt, retention, and treatment of complaints regarding financial reporting, internal accounting controls, or auditing matters. Please see the process regarding contacting the Audit Committee on our website (www.rgare.com).
The Board of Directors has determined, in its judgment, that all of the members of the Audit Committee Committee:
are independent within the meaning of Securities and Exchange Commission (“SEC”) regulations applicable to audit committees and the NYSE listing standards. The Board of Directors has determined, in its judgment, that all the members of the Audit Committee standards;
are qualified as audit committee financial experts within the meaning of SEC regulations,regulations; and the Board has determined that each of them has
have accounting and related financial management expertise within the meaning of the NYSE listing standards.
The Audit Committee Charter provides that members of the Audit Committee may not simultaneously serve on the
8
Compensation Committee
The Compensation Committee met six times during 2010.2011. Since January 1, 2010,2011, the Committee consisted of Messrs. Danahy (Chairman), Boot, Eason and Sievert. Mr. Tulin joined the Committee on January 26, 2012 and on that date Mr. Boot moved to the Finance, Investment and Risk Management Committee. The Committee meets as often as necessary to perform its duties and responsibilities, which include establishing and overseeing our general compensation policies, reviewing and approving the performance and compensation of the CEO, other named executive officers and members of our senior management. A more detailed description of the role and responsibilities of the Compensation Committee is set forth in a written charter adopted by the Board of Directors, which is available on our website (www.rgare.com). Information on our website does not constitute part of this Proxy Statement. The Board of Directors has determined, in its judgment, that all of the Committee’s members are independent within the meaning of the NYSE listing standards. For purposes of its independence determination, the Board considered the enhanced independence standards for compensation committees under the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 which are required by the SEC for the listing standards of national securities exchanges.
Compensation Committee Interlocks and Insider Participation
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee met four times in 2010.2011. Since January 1, 2010,2011, the Committee consisted of Messrs. Henderson (Chairman), Eason, Greenbaum and Sievert. Mr. Greenbaum retired from the Committee effective December 31, 2011 and Mr. Sievert became Chairman of the Committee on January 1, 2012. This Committee is responsible for developing and implementing policies and practices relating to corporate governance, including reviewing and monitoring implementation of our Corporate Governance Guidelines. In addition, the Committee identifies individuals qualified to become members of the Board, consistent with the criteria established by the Board; develops and reviews background information on candidates for the Board; and makes recommendations to the Board regarding such candidates. The Committee also will prepareprepares and supervisesupervises the Board’s annual review of director independence and the performance of self-evaluations to be conducted by the Board and Committees. The Committee also oversees the succession planning process for our CEO, which includes reviewing development plans for potential successors, evaluating potential internal and external successors, and developmentdeveloping and periodic review ofperiodically reviewing the Company’s plans for CEO succession in various circumstances. A more detailed description of the role and responsibilities of the Nominating and Corporate Governance Committee is set forth in a written charter adopted by the Board of Directors, which is available on our website (www.rgare.com). The Board of Directors has determined, in its judgment, that all of the Committee’s members are independent
within the meaning of the NYSE listing standards. Shareholders wishing to propose nominees to the Committee for consideration should notify in writing our Secretary in accordance with the process described in “Additional Information — Shareholder Nominations and Proposals.” The Secretary will inform the members of the Committee of such nominees.
Finance, Investment and Risk Management Committee
The Finance, Investment and Risk Management Committee met foureight times in 2010.2011. Since January 1, 2010,2011, the Committee consisted of Messrs. Greenbaum (Chairman), Bartlett, Henderson, Woodring and Ms. Lomax. Mr. Greenbaum retired from the Committee effective December 31, 2011. On January 1, 2012, Mr. Boot became a member of the Committee and Mr. Henderson became Chairman of the Committee. This Committee is responsible for assisting the Board in connection with its oversight responsibilities for the Company’s risk, investment and finance policies, programs, procedures and strategies. In addition, the Committee reviews, monitors, and when appropriate, approves the Company’s programs, policies and strategies relating to financial and investment risks and overall
9
Our executive compensation program is designed to attract and Analysis
A. Greig Woodring – President and Chief Executive Officer
Jack B. Lay – Senior Executive Vice President and Chief Financial Officer
Paul A. Schuster – Senior Executive Vice President, Global Group, Health and Long-Term
Care and Global Financial Solutions
Graham Watson – Senior Executive Vice President and Head of Global Mortality Products
Paul Nitsou – Executive Vice President, Global Major Accounts
Alain Neemeh – President and CEO – RGA Canada
On January 2, 2012, Mr. Watson retired from the Company. In addition, Mr. Nitsou has accepted a new role in the Company and will not be among the members of senior management considered for inclusion as a “named executive officer” for fiscal year 2012. Therefore, disclosures in this CD&A of our compensation information and decisions made for 2012 will be provided only for Messrs. Woodring, Lay, Schuster and Neemeh.
Executive Summary
Company 2010 Performance for 2011
We believe that our compensation philosophy and objectives have resulted in decisions on executive compensation decisions that have appropriately incented the achievement of our business performance targets, goals and objectives. Despite recent challenging economic conditions, ourOur compensation decisions have benefitedare intended to benefit our shareholders and are expected to drive long-term shareholder value. Summarized below are some key highlights of our financial performance for fiscal 2010:2011:
Our net premiums increased $676.0 million, or 10 percent, compared to fiscal 2010.
Our net income for fiscal 2011 increased 4 percent to $599.6 million, or $8.09 per diluted share. Our annualized operating return on equity was 13 percent for fiscal 2011, the sixth consecutive year in which we have reported an operating return of at least 13 percent. Our book value per share increased 22 percent for fiscal 2011, reflecting strong net income and improved market conditions. Say on Pay Feedback from Shareholders A primary focus of our Compensation Committee is whether the Company’s executive compensation program serves the best interests of the Company’s shareholders. As part of its ongoing review of our executive compensation program, the Compensation Committee considered the affirmative shareholder advisory vote on executive compensation (“say on pay”) at the Company’s 2011 annual meeting, where a significant majority (92% of votes cast) of our shareholders approved the compensation program described in the proxy statement for that meeting. The Compensation Committee determined that the Company’s executive compensation philosophy, objectives and elements continue to be appropriate. Accordingly, we did not make material changes to the Company’s executive compensation program. How Our Performance Impacted 2011 Compensation Our emphasis on pay for performance and the alignment of compensation with the creation of long-term shareholder value means that significant portions of the compensation paid to our executives vary based on our corporate performance. Our positive financial results are reflected in our 2011 compensation decisions in the following ways: Based on our operating earnings and revenue growth performance in fiscal 2011, payouts under our annual incentive program (MIP) ranged from 97% to 160% of target for our named executive officers. Operating earnings in fiscal 2011 were $539.2 million. This amount exceeded the target performance goal for our annual incentive program, but did not reach the maximum performance level. Revenue growth in fiscal 2011 was 7%. This amount exceeded the target performance goal for our annual incentive program, but did not reach the maximum performance level. For the intermediate-term incentive award (PCS) cycle from 2009 to 2011, the weighted average of our cumulative three-year revenue and operating return on average equity performance for the period resulted in payouts of 131.3% of target. Our cumulative three-year revenue in fiscal 2011 was $24,158 million. This amount exceeded the target performance goal for our intermediate-term incentive awards but did not reach the maximum performance level. Our three-year operating return on average equity for fiscal years 2009-2011 exceeded the target performance goal for our intermediate-term incentive awards but did not reach the maximum performance level. Our | |||
We have designed our compensation program to drive performance towards achievement of our short-term and long-term goals and to increase long-term shareholder value, while appropriately balancing risk and reward. We regularly review our program to incorporate best practices, such as the following:
We have a pay for performance executive compensation structure that provides an appropriate mix of short, intermediate and long-term performance incentives, with emphasis on long-term performance and shareholder value.
10
The majority of the total compensation opportunity for our senior management group is performance-based and can be earned only upon the achievement of corporate, divisional and individual performance goals. Other than base salary, we do not provide any guaranteed compensation.
The majority of our executive compensation is variable, as opposed to fixed or guaranteed. The following chart shows the fixed and variable pay mix for our Chief Executive Officer, compared to the other named executive officers:
Our incentive compensation programs utilize multiple performance metrics, including revenue, Operating Earnings (as defined below), ROE (as discussed below), Relative ROE (as defined below) and stock price performance, each of which incentivizes performance which the Committee believes will create long-term shareholder value. Performance metrics used in our annual incentive program complement and are aligned with those used in our intermediate and long-term incentive programs.
Incentive compensation is earned over overlapping performance periods to ensure that performance during one period is not maximized to the detriment of performance in other periods.
Our Compensation Committee retains discretion to modify, reduce or eliminate any cash incentive award.
Our Flexible Stock Plan and related agreements do not permit repricing of grants.
Our executive compensation program is generally aligned with the market median in order to retain our current talent and attract new talent.
We do not pay preferential or above market returns on executive deferred compensation.
We do not offer our executives personal-benefit perquisites, such as aircraft, cars, or apartments, and we do not reimburse for personal-benefit perquisites such as club dues or other social memberships.
We do not have any employment or severance agreements for executive officers.
We have limited benefits upon change in control or termination of employment (only accelerated vesting of existing equity awards) and our Flexible Stock Plan includes a double-trigger for the acceleration of such awards upon a change in control. We do not have any golden parachutes or tax gross-ups for severance payments. We have executive stock ownership retention requirements. Our Compensation Committee routinely considers risk when designing our compensation program, establishing performance metrics for our various incentive compensation programs, granting awards and determining payouts. In 2011, as in prior years, the Committee determined that our compensation program does not create risks that are reasonably likely to have a material adverse effect on our Company. For additional information, refer to the section entitled “Risk Considerations in our Compensation Program.” Our Compensation Committee is comprised entirely of independent directors. Our compensation consultant is retained by the Compensation Committee and is independent of management and the Company. Our | |||
The philosophy and objectives of our executive compensation program are to:
Create incentives that will focus executives on, and reward for, increasing shareholder value;
Reinforce our pay for performance culture by making a significant portion of compensation variable and based on Company and business unit performance;
Align the long-term financial interests of our executives with that of our shareholders through equity-based incentives and by building executive ownership in the Company; and
Provide competitive total compensation opportunities that will attract, retain and motivate high-performing executives.
We use financial performance measures that focus on revenues, operating earningsrevenue, Operating Earnings per share and return on equity.ROE. Our annual cash bonus plan and intermediate-term equity incentive awardsincentives are weightedtied to emphasizeperformance measured through operating earnings and return on equity. This approach aligns our compensation plansannual cash bonus plan and intermediate-term equity incentives to our business strategies, reinforces our pay-for-performance culture by using variable compensation based on performance, and aligns the long-term financial interests of our executives with the interests of our shareholders through equity incentives.
“Operating earningsEarnings” is our net income from continuing operations less realized capital gains and losses and certain other non-operating items. We use operating earnings,Operating Earnings, which is a non-GAAP financial measure, as a basis for analyzing and reporting financial results and as a basis for establishing target levels
and awards under our incentive compensation plans. Management believes that operating earnings,Operating Earnings, on a pre-tax and after-tax basis, better measures the ongoing profitability and underlying trends of the company’sCompany’s continuing operations, primarily because that measure excludes the effect of net investment related gains and losses, as well as changes in the fair value of certain embedded derivatives and related deferred acquisition costs. These items can be volatile, primarily due to the credit market and interest rate environment, and are not necessarily indicative of the performance of the company’sCompany’s underlying businesses. Additionally, operating income excludes any net gain or loss from discontinued operations and the cumulative effect of anycertain accounting changes, which management believes are not indicative of the company’sCompany’s ongoing operations. Operating return on average equity (“ROE”) is Operating Earnings divided by average adjusted equity, which is equal to total shareholders’ equity less accumulated other comprehensive income (both as reported on the Company’s most recent financial statement filed with the SEC).
How Compensation Decisions are Determined
The Role of the Compensation Committee
Our executive compensation program is evaluated and approved by the Compensation Committee with the objective of providing incentive-based compensation that aligns with the business goals of the Company and the interests of its shareholders. The Compensation Committee also determines the compensation of the Chief Executive Officer and evaluates and approves the compensation of the other senior management of the Company, including our named executive officers.
Compensation Consultant
In forming its recommendations on our overall compensation program, the Committee has, from time to time, engaged an independent consulting firm to provide advice about competitive compensation practices and determine how our executive compensation compares to that of other comparable companies, including selected publicly held insurance and reinsurance companies. In March 2010, Steven Hall & Partners (“SH&P”) was engaged to serve as independent advisor to the Compensation Committee. The Committee directly engaged SH&P to advise and assist with decisions relating to our executive compensation program, including providing advice regarding incentive plan design, annual comprehensive competitive market studies, competitive compensation data for directors, technical advice on disclosure requirements relating to executive compensation, and to apprise the Compensation Committee of compensation best practices. SH&P provides no other services to the Company.
In 2010, SH&P conducted a comprehensive review of all aspects of our compensation program and related governance provisions, including a review of the elements and structure of our compensation program, analyzing the performance measures used in our incentive compensation programs, an assessment of the competitiveness of our compensation levels and practices. As a result of this review, we made a number of changes to our compensation program in 2011 to better align our programs with market practice. These changes are described in greater detail below.
Management Participation and Involvement in Compensation Decisions
Pursuant to the Compensation Committee charter, the Committee reviews and approves the compensation of our Chief Executive Officer, other named executive officers and senior management. Management plays a significant role in the compensation-setting process for the named executive officers (other than the CEO), senior management and all other employees. No member of management is involved in determinations regarding their own pay. The most significant aspects of management’s role are:
evaluating employee performance;
11
recommending business performance targets, goals and objectives; and
recommending salary levels, cash bonus and equity incentive awards.
Our Chief Executive Officer and Chief Human Resources Officer work with the Compensation Committee chair to establish the agenda for Committee meetings. Management also prepares relevant information and reports for each Compensation Committee meeting. Our Chief Executive Officer also participates in Compensation Committee meetings at the Committee’s request to provide:
background information regarding our strategic objectives;
his evaluation of the performance of the executive officers; and
compensation recommendations as to executive officers (other than himself).
Our executive officers and other members of management are also available to SH&P or any other compensation consultant to provide information regarding position descriptions, compensation history and other information as requested, and to review draft results provided by SH&P.
We use groups of companies from the lists below to evaluate our compensation practices for purposes such as pay levels, pay design and performance comparisons.
• | Pay Level Peer Group –For pay level comparisons we use a group comprised of 15 companies that are similar to us in industry and size and are appropriate comparators for purposes of evaluating the competitiveness of our pay levels. The selected companies are publicly-traded reinsurers (life and property-casualty) and financial services companies, including direct competitors. This group has not changed since it was established in 2009. This consistency creates comparability in year-over-year assessments of compensation data. |
• | Pay Design Peer Group –For comparisons of our pay design, we include an additional five companies that due to size were deemed inappropriate comparators for purposes of evaluating pay levels, but which the Compensation Committee believes are useful sources of competitive intelligence regarding pay design and practices. This group is used to evaluate market practices with respect to types of pay vehicles utilized, incentive compensation program designs, performance metrics and pay mix. |
• | Performance Peer Group –For comparisons of our performance to pay among companies in the life insurance and reinsurance industry, we exclude most companies in the property and casualty business because their return profile is not a good comparator; however, we retain two large, global multi-line (property-casualty and life) competitors because they are among the companies against whom we measure our performance and returns. This group is used for purposes of evaluating RGA’s relative performance for purposes of determining incentive compensation paid. |
In 2011, the three lists of comparator companies were as follows:
Pay Level Peer Group | Pay Design Peer Group | Performance Peer Group | ||
Aflac, Inc. | Aflac, Inc. | Aflac, Inc. | ||
American Financial Group, Inc. | American Financial Group, Inc. | Assurant, Inc. | ||
Assurant, Inc. | Assurant, Inc. | CNO Financial Group, Inc. | ||
CNO Financial Group, Inc. | CNO Financial Group, Inc. | Genworth Financial, Inc. | ||
Everest Re Group Ltd. | Everest Re Group Ltd. | Manulife Financial Corp. | ||
Genworth Financial, Inc. | Genworth Financial, Inc. | Metlife, Inc. | ||
Kemper Corporation | Kemper Corporation | Munich Re | ||
PartnerRe Ltd. | Manulife Financial Corp. | Phoenix Companies, Inc. | ||
Phoenix Companies, Inc. | Metlife, Inc. | Principal Financial Group, Inc. |
Pay Level Peer Group | Pay Design Peer Group | Performance Peer Group | ||
Principal Financial Group, Inc. | Munich Re | Protective Life Corp. | ||
Protective Life Corp. | PartnerRe Ltd. | Prudential Financial, Inc. | ||
StanCorp Financial Group, Inc. | Phoenix Companies, Inc. | StanCorp Financial Group, Inc. | ||
Sun Life Financial, Inc. | Principal Financial Group, Inc. | Sun Life Financial, Inc. | ||
Torchmark Corp. | Protective Life Corp. | Swiss Reinsurance Co. Ltd. | ||
Unum Group | Prudential Financial, Inc. | Torchmark Corp. | ||
StanCorp Financial Group, Inc. | Unum Group | |||
Sun Life Financial, Inc. | ||||
Swiss Reinsurance Co. Ltd. | ||||
Torchmark Corp. | ||||
Unum Group |
We plan to review and update these lists periodically in order to ensure that comparators remain appropriate in light of evolving best practices with respect to peer group determinations, mergers and acquisitions, divestitures, growth in our size and the size of those companies in the comparator groups, and other changes which might affect the appropriateness of a particular comparator.
When making determinations in 2011 relating to base salary, total cash compensation, long-term incentives and total direct compensation for our named executive officers, we used the competitive compensation analysis provided by SH&P as the beginning reference point. This analysis included a review and assessment of publicly disclosed proxy data for companies in our pay level peer group as well as publicly available survey data. While we do not explicitly benchmark our pay levels to particular percentiles, we generally reference the market median when evaluating market practice. In addition to a review of the competitive compensation data provided by SH&P, we also considered individual performance, internal pay equity among positions and levels, and the relative importance of positions. We believe that the compensation strategy we established aligns our compensation with the market median and should allow us to retain our current talent and attract new talent.
Elements of Compensation and 2011 Compensation Actions
Elements of Compensation
Our compensation program consists of base salary, Management Incentive Plan (“MIP”) awards, performance contingent stock (“PCS”), stock options/stock appreciation rights (“SARs”), and retirement and pension benefits. Our base salaries are designed to provide part of a competitive total compensation package that will attract, retain and motivate high-performing executives. The MIP is designed to reinforce our pay-for-performance culture and align incentive compensation with our short-term business strategies by making all or a significant portion of an executive’s compensation variable and based on Company, business unit and/or individual performance. Our PCS and stock options/SARs are designed to reinforce our pay-for-performance culture, align the long-term financial interests of our executives and shareholders, align compensation with our intermediate and long-term business strategies, and provide a significant equity component based on long-term shareholder value creation as part of the total compensation package. Finally, our retirement and pension benefits are designed to provide another part of a competitive total compensation package that permits us to attract and retain key members of our management team.
• | |||
Base salary – Our base salaries are designed to provide part of a competitive total compensation package that will attract, retain and | |||
12
• | Annual incentives – Our Management Incentive Plan (“MIP”) awards are designed to reinforce our | ||
• | Intermediate and long-term incentives – Under our Flexible Stock Plan, as amended (“Flexible Stock Plan”), we award performance contingent stock (“PCS”) and stock options/stock appreciation rights (“SARs”). Our PCS and stock options/SARs are designed to reinforce our pay-for-performance culture, align the long-term financial interests of our executives and shareholders, align compensation with our intermediate and long-term business strategies, and provide a significant equity component based on long-term shareholder value creation as part of the total compensation package. The following graph demonstrates 2011 target compensation pay mix by element for each of our named executive officers: | ||
• | |||
Retirement and pension benefits – Our retirement and pension benefits are designed to provide another part of a competitive total compensation package that permits us to attract and retain key members of our management team. |
13
In determining the base salaries of our named executive officers, the Compensation Committee considers our compensation compared to that of the relevant market,Pay Level Peer Group, as determined by a review of published surveys and compensation data of the peer companies. The Compensation Committee also considers recommendations submitted to it by our chief executive officerChief Executive Officer for the other NEOs, and he provides the Committee with details as tonamed executive performance as compared to Company performance and each executive’s individual and divisional results.
20102011 Salaries. In February 2010,2011, based on our compensation strategy, our goals for and analysis of targeted overall compensation, and Company performance during the previous two years, we increased the 20102011 base salary for Greig Woodring, our chief executive officer,Chief Executive Officer, by approximately 5.6%4.0% to $925,000.$962,000. This amount reflects a level that we concluded was appropriate based on our review of his performance and leadership, and our consideration of factors relating to motivation and retention. Based upon quantitative results and the recommendations of our chief executive officerChief Executive Officer and our subjective evaluation of individual performance, we approved the following base salary increasessalaries for 20102011 for the other named executive officers: Jack Lay Senior Executive Vice President and Chief Financial Officer - $519,120;— $545,000, Paul Schuster
14
20112012 Salaries.In February 2011, we2012, the Compensation Committee established base salaries for 2011 for the named executive officers, as follows: Greig Woodring President and Chief Executive Officer — $962,000;$1,000,000, Jack Lay Senior Executive Vice President and Chief Financial Officer — $545,000;$565,000, Paul Schuster Senior Executive Vice President, Global Financial, Group and Health — $505,000; Graham Watson, Senior Executive Vice President and Head of Global Mortality Products — $600,000; Paul Nitsou, Executive Vice President, Global Major Accounts — $493,885$520,150 and Alain Neemeh President and CEO, RGA Canada, — $417,100$453,377 (CAD $431,928)$447,045).
Annual Management Incentives
Our management and professional level associates are eligible to participate in our MIP, which provides annual cash incentive compensation based on one or more of the following factors: our overall performance, the performance of the participant’s division or business unit, and individual performance during the previous year. Under the MIP, participants may receive a cash bonus each year.
MIP Performance Measures.The MIP award is designed to serve as a annual incentive. The target-level performance goals established by the Compensation Committee are intended to require substantial efforts by our management team toward our strategic goals, but at the same time they are intended to be
within reach if such efforts are made and to provide additional rewards for extraordinary achievement. The Compensation Committee establishes MIP objectives during February of each year, and determinedetermines results and awards the following February. MIP objectives are not tied to our peer group, and are instead tied solely to our financial performance objectives. Our results in 2010
In 2011, MIP objectives were measured 75% on annual operating earnings (net income from continuing operations less realized capital gainsOperating Earnings (as described under “Our Compensation Philosophy and losses and certain other non-operating items)Objectives” above) per share and 25% on annual consolidated revenues. Divisional results are based on each division’s revenues and operating earnings.Operating Earnings. Individual performance results are measured by progress on major projects, productivity, client development, personal development or similar-type goals in which the employee played a major role. While we intend to tie individual performance to clearly articulated and objective measures, it is necessary, and at times prudent, for management to use a certain degree of discretion in evaluating individual results. Based on these criteria, the Compensation Committee approves a schedulelist of senior management participants, which includes individual incentive allocations, a minimum performance level that must be met before any payment to the individual can be made, as well as a target and a maximum. In addition, overall Company performance must meet certain minimum levels, which we refer to as the “trigger,” as determined in advance by the Committee, before any awards (including any portion of an award based solely on individual performance) are made under the MIP. Awards are based on a specified percentage of salary, which varies for each participant.
Targets reflect our annual goals for operating earningsOperating Earnings per share and revenue growth. The allocation of MIP awards between individual, divisional and company-wideCompany-wide performance varies for each participant based on his or her job responsibilities. In general, allocations for divisional and individual performance are weighted more heavily for employees with less company-wideCompany-wide responsibility, and allocations for company-wideCompany-wide performance are weighted more heavily for executives with more company-wideCompany-wide responsibility. The MIP allocations for Messrs. Woodring, Lay, Schuster and Watson arewere based solely on overall companyCompany results with no specific allocation for divisional or individual performance; accordingly, divisional and individual performance do not affect the size or payout of individual awards to these named executive officers. The MIP allocations for Messrs. Nitsou and Neemeh arewere evenly split between overall Company results and their respective divisions’ performance.
We consider divisional and individual performance when evaluating total compensation and may, from time to time, establish a specific MIP allocation for a particular business objective or project. The types of individual performance that may be taken into consideration include contributions toward revenue growth, earnings per share, return on equity capital, expense management, or product or client development, as well as, in certain cases, intangible items such as progress toward achievement of strategic goals, leadership capabilities, development of staff, or progress on major projects in which the officer played a key role.
15
Applicable | ||||||||||||||||||||||||
Actual | Percentage | |||||||||||||||||||||||
Performance Measure | Weight | Minimum | Target | Maximum | Result | Achieved | ||||||||||||||||||
Revenues (dollars in millions) | 25 | % | $ | 7,432 | $ | 7,907 | $ | 8,381 | $ | 8,261 | 175 | % | ||||||||||||
Operating Earnings Per Share | 75 | % | $ | 6.30 | $ | 6.60 | $ | 6.90 | $ | 6.75 | 150 | % | ||||||||||||
Weighted Average | 156 | % |
Performance Measure Revenues (dollars in millions) Operating Earnings Per Share Weighted Average Weight Minimum Target Maximum Actual
Results Applicable
Percentage
Achieved 25 % $ 8,300 $ 8,500 $ 8,900 $ 8,830 182 % 75 % $ 6.83 $ 7.13 $ 7.43 $ 7.28 150 % 158 %
In February 2011,2012, the Compensation Committee approved the MIP awards for our named executive officers for 20102011 performance. The Compensation Committee determined that our operating earningsOperating Earnings in fiscal 20102011 exceeded the amount for target bonus awards but did not reach the amount for maximum bonus awards. Revenue growth also exceeded the target amount but did not reach the amount for maximum bonus awards. For Messrs. Woodring, Lay Schuster and Watson,Schuster, who have MIP allocations based solely on overall companyCompany results, the weighted average of the two MIP measures for 20102011 performance was 156%158%. For Mr. Neemeh, who has a MIP allocation based evenly on results for the Company and RGA Canada, the weighted average for his two MIP measures for 20102011 performance was 165.2%160%. Mr. Neemeh’s MIP measures for RGA Canada include revenue, profit and return on equity. For Mr. Nitsou, who has a MIP allocation based evenly on results for the Company and RGA International, the weighted average for his two MIP measures for 20102011 performance was 153.5%97%. The averageMr. Nitsou’s MIP awardmeasures for 2010 performance as a percentage of salary for our named executive officers was approximately 151.6%.
The following table describes the minimum, target and maximum bonus opportunities for the named executive officers, as a percentage of base salary, as approved by the Compensation Committee in February 2010,2011, and the actual MIP payments for 20102011 performance, as approved by the Committee in February 2011:
Actual MIP | ||||||||||||||||
2010 Bonus at | 2010 Bonus at | 2010 Bonus at | Payment for | |||||||||||||
Name | Minimum | Target | Maximum | 2010 | ||||||||||||
Greig Woodring | 55 | % | 110 | % | 220 | % | $ | 1,400,000 | ||||||||
Jack Lay | 40 | % | 80 | % | 160 | % | $ | 648,703 | ||||||||
Paul Schuster | 40 | % | 80 | % | 160 | % | $ | 602,367 | ||||||||
Graham Watson | 40 | % | 80 | % | 160 | % | $ | 650,000 | ||||||||
Paul Nitsou | 35 | % | 70 | % | 140 | % | $ | 554,479 | ||||||||
Alain Neemeh | 35 | % | 70 | % | 140 | % | $ | 427,647 |
16
Name | 2011 Bonus at Minimum | 2011 Bonus at Target | 2011 Bonus at Maximum | Actual MIP Percentage for 2011 | Actual MIP Payment for 2011 | |||||||||||||||
Greig Woodring | 55 | % | 110 | % | 220 | % | 173.90 | % | $ | 1,672,949 | ||||||||||
Jack Lay | 40 | % | 80 | % | 160 | % | 126.48 | % | $ | 689,289 | ||||||||||
Paul Schuster | 40 | % | 80 | % | 160 | % | 126.48 | % | $ | 638,699 | ||||||||||
Graham Watson | 40 | % | 80 | % | 160 | % | N/A | N/A | ||||||||||||
Paul Nitsou | 35 | % | 70 | % | 140 | % | 67.93 | % | $ | 335,490 | ||||||||||
Alain Neemeh | 35 | % | 70 | % | 140 | % | 112.24 | % | $ | 491,665 |
2011 Bonus at | 2011 Bonus at | |||||||||||
Name | Minimum | 2011 Bonus at Target | Maximum | |||||||||
Greig Woodring | 55 | % | 110 | % | 220 | % | ||||||
Jack Lay | 40 | % | 80 | % | 160 | % | ||||||
Paul Schuster | 40 | % | 80 | % | 160 | % | ||||||
Graham Watson | 40 | % | 80 | % | 160 | % | ||||||
Paul Nitsou | 35 | % | 70 | % | 140 | % | ||||||
Alain Neemeh | 35 | % | 70 | % | 140 | % |
Greig Woodring Jack Lay Paul Schuster Alain NeemehName 2012 Bonus at
Minimum 2012 Bonus at Target 2012 Bonus at
Maximum 60 % 120 % 240 % 45 % 90 % 180 % 40 % 80 % 160 % 40 % 80 % 160 %
Intermediate and Long-Term Incentives
Our Flexible Stock Plan which was established in 1993, provides for the award of various types of long-term equity incentives, including stock options, stock appreciation rights, restricted stock, performance shares, and other stock-based awards, to officers atawards. Starting in 2011, the vice president level and above who have the ability to favorably affect our business and financial performance. The value of each annual equity incentive grant iswas evenly split between PCS and SARs. Prior to 2011, annual grants were split between PCS and stock options. The Compensation Committee believes that a balanced allocation of stock options (which changed toPCS and SARs in 2011) and performance contingent stock (“PCS”). We believe this allocation allows us to rewardrewards participants for the achievement of both intermediate and long-term goals, equally, and was based both on comparisons to the market and our desire to achieveachieves an appropriate balance between the overall risk and reward for incentive opportunities.
The PCS grants are designed to allow us to reward the achievement of specific intermediate-term corporate financial performance goals with equity that is earned on the basis of performance. TheWe implemented the PCS program because we believe it is consistent with our pay-for-performance compensation philosophy and focuses on financial performance. We believe that the PCS grants require management to focus on intermediate-term growth and return on equity, while the stock options and SARs are designed to focus attention on accomplishment of long-term goals that influence the creation of long-term shareholder value rather than focus on specific performance criteria. We implemented the PCS program because we believe it is consistent with our pay-for-performance compensation philosophy and focuses on financial performance. We continue to evaluate the appropriate mix of intermediate and long-term pay elements (i.e., PCS versus stock options/SARs vs. PCS)SARs) in comparison to the market and to best support our strategy. We believe that stock options and SARs provide the most appropriate vehicle for providing long-term value to management because of the tie to long-term shareholder value, while the PCS grants require management to focus on intermediate-term growth and return on equity.
As discussed above under “Benchmarking of Compensation,“Competitive Marketplace Assessment,” the Committee determines a total compensation package for our named executive officers based on an analysis of competitive market conditions and overall companyCompany performance. Accordingly, the Committee does not consider individual performance to a material extent in determining the size of PCS and SARs/stock option awards, however, the named executive officers are expected to maintain an acceptable level of performance to retain award eligibility.
17
Our PCS grants are part of a performance-driven incentive program implemented in January 2004 under our Flexible Stock Plan. We believe this program focuses management on our strategic and intermediate-term financial and operating goals. Incentive awards are intended to reflect management’s involvement in our performance and to encourage their continued contribution to our future. We view incentive awards as an important means of aligning the economic interests of management and shareholders.
The purpose of the PCS grants is to reward participants with equity if we achieve the rate of revenue growth and earnings per share (operating(changed to operating return on average equity starting in 2008, and in 2010 also includingwe added relative return on average equity)equity as a third measure) that is approved each year by the Compensation Committee when it considers annual grants. The PCS grants are ongoing and each year, a new three-year cycle begins, giving us the opportunity to review and update performance measures as appropriate.for new grants. The three-year performance and reward period shifts attentionmanagement focus and effort toward intermediate and longer-term sustained results.
The PCS units are granted at the beginning of the performance period at target. The Compensation Committee also sets award levels with a minimum level of Company performance that must be met before any payment to the individual can be made (referred to as the “trigger”), as well as a target and a maximum.
If we do not meet minimum performance goals, the awards will not be made, and if we exceed those performance goals, the award can be as much as 200% of the targeted award opportunity. PCS grants are not treated as outstanding shares until the performance goals are met and awards are made, as determined and approved by the Compensation Committee. Awards are made in units of fully vested, unrestricted common stock. The awards are also contingent upon the participant’s employment status with us at the end of the three-year performance period.
When we establish the targets for a particular performance period, we may adjust those targets up or down so they are set at amounts or ranges that are generally consistent with our publicly disclosed intermediate-term growth rate goals.
The grants are made pursuant to the terms of the Flexible Stock Plan and award agreements. Upon retirement of a holder of a PCS grant, provided that the holder has attained age 55 and a combination of age and years of service with the Company that equals at least 65, the units will be pro-rated based on the number of months of the holder’s participation during the three-year performance period and the number of shares earned.
2008-20102009-2011 PCS Results.In February 2008,2009, we reviewed the PCS measures and determined that operating return on average equity (operating earnings divided by average adjusted equity) (“ROE”)ROE should replace growth in operating earnings per share as a measure for the 20082009 PCS grants. The performance period for the 2008 PCS grant began on January 1, 2008 and ended on December 31, 2010. The ROE measure includes capital efficiency and is primarily a profit metric (i.e., not combined with growth elements). We established the target and range for revenue and return on equity for the period beginning in 20082009 at levels that were consistent with our intermediate-term goals for those measures. As a result, at the time of grant, we believebelieved that achievement of the target revenue growth and return on equity willwould require a high level of financial and operating performance. We believe the goals and ranges we established for thethese grants of PCS are challenging but achievable.
The performance period for the 2009 PCS grant began on January 1, 2009 and ended on December 31, 2011. In January 2011,2012, we reviewed the results for the 2008-20102009-2011 performance period and determined that our cumulative revenue in fiscal 20102011 exceeded the amount for thresholdtarget bonus awards but did not reach the amount for targetmaximum bonus awards. ROE slightly exceeded the target amount but did not reach the amount for maximum bonus awards. The weighted average of the two measures for the period was 96.4%131.3% of target, and wethe Compensation Committee approved payouts on that basis. Actual results are interpolated to determine the performance level achieved among the threshold, target and maximum goals established by the Compensation Committee. The following table describes the growth goals established in February 20082009 and actual results determined in January 2011:
18
Performance Measure | Weight | Threshold | Target | Maximum | Actual | Applicable Percentage Achieved | ||||||||||||||||||
Revenue Growth | 33 | % | 9 | % | 13 | % | 19 | % | 18.5 | % | 191.5 | % | ||||||||||||
ROE (3 Year) | 67 | % | 11 | % | 13 | % | 17 | % | 13.1 | % | 101.3 | % | ||||||||||||
Weighted Average | 131.3 | % |
Applicable | ||||||||||||||||||||||||
Performance Measure | Weight | Threshold | Target | Maximum | Actual | Percentage Achieved | ||||||||||||||||||
Revenue Growth | 33 | % | 9 | % | 13 | % | 19 | % | 10.5 | % | 68.5 | % | ||||||||||||
ROE (3 Year) | 67 | % | 11 | % | 13 | % | 17 | % | 13.4 | % | 110.3 | % | ||||||||||||
Weighted Average | 96.4 | % |
2010-2012 PCS Awards.In February 2010, we established the targets and ranges for the 2010 PCS grants. We continued the use of revenue growth for the revenue component in the 2010 PCS grants and split the remaining 67% allocation equally between the existing ROE measure and Relative ROE performance against an established peer group. The Relative ROE measure was introduced to provide incentive credit when performance exceeded peers and penalize the incentive results when performance was below the peer group. The performance period for the 2010 PCS grant began on January 1, 2010 and will end on December 31, 2012. We continued the use of revenue growth for the revenue component in the 2010 PCS grants but split the remaining 67% allocation equally between the existing ROE measure and a new measure for relative return on average equity (“Relative ROE”) performance against an established peer group.
Performance Measure | Weight | Threshold | Target | Maximum | ||||||||||||
Revenue Growth | 33 | % | 9 | % | 11 | % | 13 | % | ||||||||
ROE (3 Year) | 33.5 | % | 11 | % | 13 | % | 15 | % | ||||||||
Relative ROE (3Year) | 33.5 | % | 18th Percentile | 51st Percentile | 84th Percentile |
2011-2013 PCS Awards.Awards. In February 2011, we established the targets and ranges for the 2011 PCS grants. We continued the use of revenue growth, ROE and Relative ROE in the same weightings as used in the prior year. The performance period for the 2011 PCS grant began on January 1, 2011 and will end on December 31, 2013.
We established the targets and ranges for revenue growth, ROE and Relative ROE for the period beginning in 2011 at levels that are consistent with our intermediate-term goals for those measures. As a result, we believe that achievement of the targets will require a high level of financial and operating performance.
2011 – 2013 PCS Targets
Performance Measure | Weight | Threshold | Target | Maximum | ||||||||||||
Revenue Growth | 33.0 | % | 7% | 9% | 11% | |||||||||||
ROE (3 Year) | 33.5 | % | 11% | 13% | 15% | |||||||||||
Relative ROE (3Year) | 33.5 | % | 18th Percentile | 51st Percentile | 84th Percentile |
See “Grants of Plan-Based Awards in 2011” for a description of the 2011 PCS grants.
2012-2014 PCS Awards. In February 2012, we established the targets and ranges for the 2012 PCS grants. We established the targets and ranges for revenue growth, ROE and Relative ROE for the period beginning in 2012 at levels that are consistent with our intermediate-term goals for those measures. As a result, we believe that achievement of the targets will require a high level of financial and operating performance. The performance period for the 2012 PCS grant began on January 1, 2012 and will end on December 31, 2014.
We approved the 20112012 PCS grants for the named executive officers, as follows (number of shares represents the target award): Greig Woodring Chief Executive Officer — 15,065 shares;20,300 shares, Jack Lay Senior Executive Vice President and Chief Financial Officer — 5,524 shares;6,090 shares, Paul Schuster Senior Executive Vice President, Global Financial, Group and Health — 5,524 shares; Graham Watson, Senior Executive Vice President and Head of Global Mortality Products — 6,930 shares; Paul Nitsou, Executive Vice President, Global Major Accounts — 4,134 shares;5,931 shares and Alain Neemeh President— 3,972 shares.
SARs and CEO, RGA Canada — 3,683 shares.
In February 2011, in an effort to reduce the dilution associated with the potential issuance of additional shares, the Compensation Committee decided to grant stock appreciation rights (“SARs”) instead of stock options as it had done in prior years for our long-term equity incentive awards. SARs
19
2010 Option Grant.In February 2010, we approved the 2010 stock option grants for our named executive officers. We made these grants because we believe that stock options provide the most appropriate vehicle for providing long-term value to management because of the tie to long-term shareholder value. The options have a strike price of $47.10, which is the closing price of our stock on February 19, 2010, the date the grants were approved. The vesting schedule, expiration and other terms are described above under “Stock Options and SARs.” The grants were made pursuant to the terms of the Flexible Stock Plan and award agreements. See “Grants of Plan-Based Awards in 2010” for a description of the 2010 option grants.
2012 SARs Grant. In February 2012 we approved the 2012 SARs awards for the named executive officers, as follows: Greig Woodring — 53,991 shares, Jack Lay — 16,197 shares, Paul Schuster — 15,775 shares and Alain Neemeh — 10,563 shares. The vesting schedule for the SARs grant is four years (vesting 25% at the end of each of the first four years). We made these grants because we believe that SARs provide the most appropriate vehicle for providing long-term value to management because of the tie to long-term shareholder value. The SARs have a strike price of $56.65, which was the closing price of our stock on February 28, 2012, the date the grants were approved.
Executive Stock Ownership Guidelines
In order to further align the interests of our management and our shareholders, our executive stock ownership guidelines provide that our senior executives should seek to hold a market valuespecified number of our shares which in 2010 was based on a multiple of the executive’s base salary,Company stock as follows: our Chief Executive Officer (four times)(77,000 shares), Senior Executive Vice Presidents (35,000 shares), and Executive Vice Presidents (three times), and Senior Vice Presidents (two times)
(5,000 — 21,000 shares, depending on grade level of position). The market valuenumber of shares includes only those shares of common stock that are directly or beneficially owned by the executive. Executives who are subject to the guidelines must retain the net shares (net of applicable taxes and, for SARs and stock options, the exercise cost) from any stock option exercise or award of PCS or SARs until they satisfy their respectivethe applicable stock ownership requirement.
As of December 31, 2010,2011, all six named executive officers met the stock ownership requirements through holdings of shares of our common stock.
20
We typically release earnings for the fourth quarter in late January of the following year. The Compensation Committee meets in mid-February of each year to approve regular grants of stock options/SARs and PCS awards. Equity grants are effective on and have a grant date of the same day as the Committee meeting, and the exercisestrike price for grants of stock options and SARs is the closing price of our common stock on the NYSE on the day of the Committee meeting in February.meeting. This timing and process is designed to ensure that our fourth-quarter earnings information is fully disseminated to the market by the time the stock option grants and related exerciseSARs strike price areis determined. The PCS awards are measured by financial performance over a three-year period and the market price of our common stock is not a factor in those calculations or measures. Prior to 2006, we made annual equity incentive grants on the date of the board and committee meetings in late January.
Perquisites
We compensate our executive officers in the form of cash, equity, equity-based awards and retirement benefits. Accordingly, we do not provide personal-benefit perquisites to our executive officers or their families, with personal-benefit perquisites such as planes,airplanes, cars, or apartments, and we do not reimburse executive officers or any of our employees for personal-benefit perquisites such as club dues or other social memberships. Executive officers and other employees may seek reimbursement for business-related expenses in accordance with our business expense reimbursement policy.
Compensation Recovery
Under the Sarbanes-Oxley Act, in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our CEOChief Executive Officer and CFO.Chief Financial Officer. In addition, in 2012 we expectplan to implement a claw-back policy in fiscal 2011 in accordance withthat meets and exceeds the requirements of the Dodd-Frank Act and currently await the regulations that will be issued under that Act. We elected to wait until the SEC issues guidance about the proper form of a claw-back policy in order to ensure that we implement a fully compliant policy at one time, rather than implementing a policy that may require amendment after the SEC regulations are released.
Profit SharingSavings Plan
All employees of RGA Reinsurance Company who meet the eligibility requirements participate in the RGA Savings Plan. Effective January 1, 2012, this plan replaces our profit sharing plan. EffectivePursuant to the Savings Plan, the Company will match up to 5% of compensation contributed to an associate’s 401(k) account. Additionally, there is a 2% non-elective Company contribution paid into each associate’s 401(k) account, regardless of their 401(k) participation.
Prior to January 1, 2001,2012, we adopted a safe harbor design for the plan that provides forprovided a match of up to 4% of compensation.compensation, depending upon the amount of the individual’s deferral. All eligible employees arewere also entitled to receive a profit sharing award ranging from 0% to 6% of compensation depending on whether we meetmet or exceedexceeded our minimum performance level and targets, regardless of their 401(k) participation. A minimum Company performance level must be metwas required before the profit sharing award can bewas made. The minimum performance level and targets for each year arewere established at the beginning of the year. To the extent that the participant’s cash compensation iswas less than limits set by the IRS ($245,000 for 2010)2011), a participant maycould elect to defer up to one-half of his profit sharing award to the plan, while the other one-half iswas automatically contributed to the plan.
As described above under “Annual Management Incentives,” in fiscal 20102011 we exceeded the amount for target bonus awards but did not reach the amount for maximum bonus awards. Revenue growth exceeded the target amount but did not reach the amount for maximum bonus awards. Based on these results, in January 2011,2012, the Board of Directors approved a profit sharing award of 4.75% for 2010.
21
Some of our employees, including our executive officers in the U.S., participate in the RGA Performance Pension Plan (or the “Pension Plan”), a qualified defined benefit plan. The Pension Plan is a broad-based retirement plan that is intended to provide a source of income during retirement for full-time and part-time employees in the U.S. Some of ourAdditionally, U.S. employees including certain executive officers, alsoat the vice-president level and above are eligible to participate in the RGA Reinsurance Company Augmented Benefit Plan (or the “RGA Augmented Plan”), a non-qualified plan under which eligible employees are entitled to additional retirement benefits not paid under the Pension Plan and the RGA Reinsurance Company Profit SharingSavings Plan (or the “RGA Profit SharingSavings Plan”) due to Internal Revenue Code (the “Code”) limits on the amount of benefits that may accrue and be paid under the Pension Plan and the RGA Profit SharingSavings Plan. The RGA Augmented Plan provides benefits based on an employee’s annual cash compensation and without regard to certain limitations that apply to broad-based, qualified retirement plans, in order for a participant’s retirement income provided under the plans to be based on his or her total eligible cash compensation. The Augmented Plan is generally only available to the associates at the vice president level and above who earn more than the compensation limits under the qualified plans ($245,000 for 2010)2011).
Additionally, U.S. employees at the vice president level and above are eligible to participate in our Executive Deferred Savings Plan, a non-qualified plan which allows participants to defer income, including bonuses and incentive compensation, and to defer matching contributions without regard to qualified plan limitations. Base pay and regular annual incentive awards, but not long-term compensation, are treated as eligible pay under the terms of our retirement plans. We sponsor tax-qualified pension and savings plans, as
well as non-qualified “parity” pension and savings plans providing benefits to employees whose benefits under the tax-qualified plans are limited by the Code. The Committee periodically reviews our retirement benefits to ensure that the benefits are appropriate and cost effective as part of an overall compensation program intended to provide basic economic security for our highly skilled and qualified workforce and at a level consistent with competitive practices.
Messrs. Woodring, Lay and Schuster participate in the Pension Plan and the RGA Augmented Plan. Messrs. Watson, Nitsou and Neemeh are not eligible to participate in the U.S. pension plans. To provide a similar retirement benefit, Messrs. Nitsou and Watson and Nitsou(prior to his retirement) participate in a supplemental executive retirement plan sponsored by RGA International Corporation, which has the same benefit structure as the related plan for our executives at RGA Canada, our Canadian operating company. Mr. Neemeh participates in a supplemental executive retirement plan sponsored by RGA Canada. For additional details regarding executive participation in our retirement plans, see “Pension Benefits in Fiscal 2010.2011.”
In the second quarter of 2010, we engaged Towers Watson to perform a review of our retirement plans and post-retirement benefits. In 2011, Towers Watson is currently working withrecommended changes to management that were subsequently presented and approved by the Compensation Committee, to provide recommendationsincluding restructuring and amending the Company’s Non-Qualified Defined Contribution Plan. See “Savings Plan” for our 2011 retirementa summary of plan decisions.
No Employment and Severance Agreements
We do not providehave employment, severance or severancechange-in-control agreements towith any of our named executive officers.
Deductibility of Compensation
The goal of the Committee is to comply with the requirements of Code Section 162(m), to the extent deemed practicable, with respect to annual and long-term incentive programs to avoid losing the deduction for non-performance-based compensation in excess of $1,000,000 paid to our chief executive officer, chief financial officer and three other most highly-compensated executive officers (other than the CEOChief Executive Officer and CFO)Chief Financial Officer). We generally structure our performance-based compensation plans with the objective that amounts paid under those plans and arrangements are tax deductible, including having the plans approved by our shareholders.
22
John F. Danahy, ChairmanArnoud W.A. Boot
J. Cliff Eason
Fred J. Sievert
Executive Compensation
Fiscal Years 2011, 2010 and 2009 and 2008 Compensation
Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Non- | Value and | |||||||||||||||||||||||||||||||||||
Equity | Nonqualified | |||||||||||||||||||||||||||||||||||
Incentive | Deferred | All | ||||||||||||||||||||||||||||||||||
Plan | Compen- | Other | ||||||||||||||||||||||||||||||||||
Name and | Stock | Option | Compen- | sation | Compen- | |||||||||||||||||||||||||||||||
Principal Position | Year | Salary1 | Bonus | Awards2 | Awards3 | sation4 | Earnings5 | sation6 | Total | |||||||||||||||||||||||||||
A. Greig Woodring | 2010 | $ | 919,288 | — | $ | 850,014 | $ | 737,633 | $ | 1,405,819 | $ | 515,810 | $ | 94,005 | $ | 4,522,569 | ||||||||||||||||||||
President and CEO | 2009 | $ | 872,558 | — | $ | 671,306 | $ | 450,642 | $ | 924,358 | $ | 580,714 | $ | 46,609 | $ | 3,546,187 | ||||||||||||||||||||
2008 | $ | 844,231 | — | $ | 650,004 | $ | 451,795 | $ | 307,150 | $ | 787,138 | $ | 32,488 | $ | 3,072,806 | |||||||||||||||||||||
Jack B. Lay | 2010 | $ | 512,701 | — | $ | 320,987 | $ | 218,514 | $ | 654,522 | $ | 213,903 | $ | 71,130 | $ | 1,991,757 | ||||||||||||||||||||
Sr. EVP and CFO | 2009 | $ | 461,942 | — | $ | 311,986 | $ | 209,449 | $ | 393,788 | $ | 119,051 | $ | 38,989 | $ | 1,535,205 | ||||||||||||||||||||
2008 | $ | 446,538 | — | $ | 303,010 | $ | 210,608 | $ | 130,750 | $ | 217,882 | $ | 50,085 | $ | 1,358,873 | |||||||||||||||||||||
Paul A. Schuster Sr. EVP — Global Financial, Group and Health | 2010 | $ | 479,901 | — | $ | 320,987 | $ | 218,514 | $ | 608,186 | $ | 202,291 | $ | 57,681 | $ | 1,887,560 | ||||||||||||||||||||
2009 | $ | 461,942 | — | $ | 311,986 | $ | 209,449 | $ | 393,788 | $ | 120,925 | $ | 35,172 | $ | 1,533,262 | |||||||||||||||||||||
2008 | $ | 446,538 | — | $ | 303,010 | $ | 210,608 | $ | 130,750 | $ | 223,412 | $ | 29,591 | $ | 1,343,909 | |||||||||||||||||||||
Graham Watson | 2010 | $ | 560,959 | — | $ | 369,170 | $ | 251,300 | $ | 699,769 | $ | 503,941 | $ | 10,840 | $ | 2,395,979 | ||||||||||||||||||||
Sr. EVP and Head of | 2009 | $ | 522,652 | — | $ | 358,805 | $ | 240,860 | $ | 469,126 | $ | 260,544 | $ | 187,979 | $ | 2,039,966 | ||||||||||||||||||||
Global Mortality Products | 2008 | $ | 505,000 | — | $ | 392,210 | $ | 210,608 | $ | 157,892 | $ | 137,347 | $ | 9,905 | $ | 1,412,962 | ||||||||||||||||||||
Paul Nitsou | 2010 | $ | 437,157 | — | $ | 215,012 | $ | 146,360 | $ | 554,479 | $ | 343,276 | $ | 10,840 | $ | 1,707,124 | ||||||||||||||||||||
Executive Vice President, | 2009 | $ | 394,782 | — | $ | 210,008 | $ | 140,972 | $ | 451,344 | $ | 341,658 | $ | 300,972 | $ | 1,839,736 | ||||||||||||||||||||
Global Major Accounts | 2008 | $ | 365,472 | — | $ | 204,005 | $ | 141,798 | $ | 307,542 | — | $ | 9,905 | $ | 1,028,722 | |||||||||||||||||||||
Alain Neemeh | 2010 | $ | 394,595 | — | $ | 215,012 | $ | 146,360 | $ | 427,647 | $ | 303,159 | $ | 15,743 | $ | 1,502,516 | ||||||||||||||||||||
President and CEO — | 2009 | $ | 336,131 | — | $ | 210,008 | $ | 140,972 | $ | 301,807 | $ | 194,605 | $ | 11,439 | $ | 1,194,962 | ||||||||||||||||||||
Canada | 2008 | $ | 346,732 | — | $ | 204,005 | $ | 141,798 | $ | 242,575 | — | $ | 9,905 | $ | 945,015 | |||||||||||||||||||||
Non- Equity Incentive Plan Compen- sation4 | Change in Pension Value and Nonqualified Deferred Compen- sation Earnings5 | Total | ||||||||||||||||||||||||||||||||||
All Other Compen- sation6 | ||||||||||||||||||||||||||||||||||||
Name and Principal Position | Stock Awards2 | Option Awards3 | ||||||||||||||||||||||||||||||||||
Year | Salary1 | Bonus | ||||||||||||||||||||||||||||||||||
A. Greig Woodring President and CEO | 2011 | $ | 957,731 | — | $ | 899,983 | $ | 774,207 | $ | 1,678,768 | $ | 2,600,800 | $ | 128,450 | $ | 7,039,939 | ||||||||||||||||||||
2010 | $ | 919,288 | — | $ | 850,014 | $ | 737,633 | $ | 1,405,819 | $ | 515,810 | $ | 94,005 | $ | 4,522,569 | |||||||||||||||||||||
2009 | $ | 872,558 | — | $ | 671,306 | $ | 450,642 | $ | 924,358 | $ | 580,714 | $ | 46,609 | $ | 3,546,187 | |||||||||||||||||||||
Jack B. Lay Sr. EVP and CFO | 2011 | $ | 542,014 | — | $ | 330,004 | $ | 283,875 | $ | 695,108 | $ | 511,906 | $ | 95,593 | $ | 2,458,500 | ||||||||||||||||||||
2010 | $ | 512,701 | — | $ | 320,987 | $ | 218,514 | $ | 654,522 | $ | 213,903 | $ | 71,130 | $ | 1,991,757 | |||||||||||||||||||||
2009 | $ | 461,942 | — | $ | 311,986 | $ | 209,449 | $ | 393,788 | $ | 119,051 | $ | 38,989 | $ | 1,535,205 | |||||||||||||||||||||
Paul A. Schuster Sr. EVP — Global Group, Health and Long Term Care and Global Financial Solutions | 2011 | $ | 502,351 | — | $ | 330,004 | $ | 283,875 | $ | 644,518 | $ | 473,339 | $ | 68,932 | $ | 2,303,019 | ||||||||||||||||||||
2010 | $ | 479,901 | — | $ | 320,987 | $ | 218,514 | $ | 608,186 | $ | 202,291 | $ | 57,681 | $ | 1,887,560 | |||||||||||||||||||||
2009 | $ | 461,942 | — | $ | 311,986 | $ | 209,449 | $ | 393,788 | $ | 120,925 | $ | 35,172 | $ | 1,533,262 | |||||||||||||||||||||
Graham Watson Sr. EVP and Head of Global Mortality Products | 2011 | $ | 602,517 | — | $ | 413,998 | $ | 356,134 | — | $ | 567,616 | $ | 5,849 | $ | 1,946,114 | |||||||||||||||||||||
2010 | $ | 560,959 | — | $ | 369,170 | $ | 251,300 | $ | 699,769 | $ | 503,941 | $ | 10,840 | $ | 2,395,979 | |||||||||||||||||||||
2009 | $ | 522,652 | — | $ | 358,805 | $ | 240,860 | $ | 469,126 | $ | 260,544 | $ | 187,979 | $ | 2,039,966 | |||||||||||||||||||||
Paul Nitsou Executive Vice President, Global Major Accounts | 2011 | $ | 560,160 | — | $ | 246,965 | $ | 212,435 | $ | 388,435 | $ | 691,014 | $ | 20,421 | $ | 2,119,430 | ||||||||||||||||||||
2010 | $ | 437,157 | — | $ | 215,012 | $ | 146,360 | $ | 554,479 | $ | 343,276 | $ | 10,840 | $ | 1,707,124 | |||||||||||||||||||||
2009 | $ | 394,782 | — | $ | 210,008 | $ | 140,972 | $ | 451,344 | $ | 341,658 | $ | 300,972 | $ | 1,839,736 | |||||||||||||||||||||
Alain Neemeh President and CEO — Canada | 2011 | $ | 435,731 | — | $ | 220,022 | $ | 189,250 | $ | 491,665 | $ | 592,412 | $ | 18,196 | $ | 1,947,276 | ||||||||||||||||||||
2010 | $ | 394,595 | — | $ | 215,012 | $ | 146,360 | $ | 427,647 | $ | 303,159 | $ | 15,743 | $ | 1,502,516 | |||||||||||||||||||||
2009 | $ | 336,131 | — | $ | 210,008 | $ | 140,972 | $ | 301,807 | $ | 194,605 | $ | 11,439 | $ | 1,194,962 |
1. | For Messrs. Woodring, Lay and Schuster, this column includes any amounts deferred at the election of the executive officers under the RGA Reinsurance Company Executive Deferred Savings Plan. Messrs. Watson, Nitsou and Neemeh are not U.S. citizens and are not eligible to participate in the deferred savings plan. Mr. Neemeh’s salary is paid in Canadian dollars and is converted to U.S. dollars for presentation purposes in this table. |
23
2. | This column represents the grant date fair value of PCS units granted in such year, using probable outcomes of performance conditions, in accordance with Accounting Standards Codification: 718 — Compensation — Stock Compensation (“ASC 718”). For additional information on the valuation assumptions, refer to note | |
3. | This column represents the grant date fair value of stock options or SARs granted in such year, in accordance with ASC 718. For additional information on the valuation assumptions, refer to note | |
4. | Includes, for all named executive officers, cash incentives earned for performance during each fiscal year and paid in March of the following year (including any incentives deferred at the election of the executive officers) under the |
cash incentive portion of the MIP, which we describe in the | ||
The cash incentive payments for 2010 performance were $1,400,000 for Mr. Woodring, $648,703 for Mr. Lay, $602,367 for Mr. Schuster, $650,000 for Mr. Watson, $554,479 for Mr. Nitsou and $427,647 for Mr. Neemeh.
The cash incentive payment for 2009 performance were $920,377 for Mr. Woodring, $389,807 for Mr. Lay, $389,807 for Mr. Schuster, $441,781 for Mr. Watson, $379,336 for Mr. Nitsou and $301,851 for Mr. Neemeh.
Also includes amounts paid in cash or deferred at the officer’s election each year under the RGA Profit Sharing Plan (renamed the RGA Savings Plan effective January 1, 2012) for Messrs. Woodring, Lay, and Schuster, which totaled $5,819 for 2011, $5,819 for 2010, and $3,981 for 2009. Also includes $49,769 paid to Mr. Watson in 2010 and $27,345 in 2009, and $52,945 paid to Mr. Nitsou in 2011 and $31,669 in 2009, in lieu of awards under the RGA Savings Plan (formerly the RGA Profit Sharing Plan), in which they are not eligible to participate. Mr. Watson was not eligible for the 2011 profit sharing award due to his retirement. Also, the 2009 amount for Mr. Nitsou includes a retention bonus of $40,339.
5. | This column represents the sum of the change in pension value in each fiscal year for each of the named executive officers. We do not pay above-market or preferential earnings on any account balances; therefore, this column does not reflect any amounts relating to nonqualified deferred compensation earnings. See the | |
6. | Amount includes contributions for Messrs. Woodring, Lay and Schuster by RGA Reinsurance Company to the officers’ accounts in qualified and non-qualified plans for the |
This table provides the following information about equity and non-equity awards granted to the named executive officers in 2010:2011: (1) the grant date; (2) the estimated future payouts under non-equity incentive plan awards, which consist of potential payouts under the MIP award granted in 20102011 for the 20102011 performance period; (3) estimated future payouts under equity incentive plan awards, which consist of potential payouts under the PCS grants in 20102011 for the 2010-20122011-2013 performance period; (4) all other option awards, which consist of the number of shares underlying stock optionsSARs awards granted to the named executive officers in 2010;2011; (5) the exercisestrike price of the stock optionsSARs granted, which reflects the closing price of RGACompany stock on the date of grant,grant; and (6) the grant date fair value of each equity grant calculated under ASC 718.
24
All Other Stock Awards: Number of | All Other Option Awards: Number of | Exercise of Base | Grant Date Fair Value | |||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Estimated Future Payments Under Non-Equity Incentive Plan Awards1 | Estimated Future Payments Under Equity Incentive Plan Awards (Number of Shares)2 | Shares of Stock or Units | Securities Underlying Options3 | Price of Option Awards4 | of Stock and Option Awards5 | |||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||
$ | 529,100 | $ | 1,058,200 | $ | 2,116,400 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Woodring | 2/22/2011 | — | — | — | 7,533 | 15,065 | 30,130 | — | — | — | $ | 899,983 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 34,061 | $ | 59.74 | $ | 774,207 | |||||||||||||||||||||||||||||||||
$ | 218,000 | $ | 436,000 | $ | 872,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Lay | 2/22/2011 | — | — | — | 2,762 | 5,524 | 11,048 | — | — | — | $ | 330,004 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 12,489 | $ | 59.74 | $ | 283,875 | |||||||||||||||||||||||||||||||||
$ | 202,000 | $ | 404,000 | $ | 808,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Schuster | 2/22/2011 | — | — | — | 2,762 | 5,524 | 11,048 | — | — | — | $ | 330,004 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 12,489 | $ | 59.74 | $ | 283,875 | |||||||||||||||||||||||||||||||||
$ | 240,000 | $ | 480,000 | $ | 960,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Watson | 2/22/2011 | — | — | — | 3,465 | 6,930 | 13,860 | — | — | — | $ | 413,998 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 15,668 | $ | 59.74 | $ | 356,134 | |||||||||||||||||||||||||||||||||
$ | 172,860 | $ | 345,720 | $ | 691,439 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Nitsou | 2/22/2011 | — | — | — | 2,067 | 4,134 | 8,268 | — | — | — | $ | 246,965 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 9,346 | $ | 59.74 | $ | 212,435 | |||||||||||||||||||||||||||||||||
$ | 152,455 | $ | 304,910 | $ | 609,819 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Neemeh | 2/22/2011 | — | — | — | 1,842 | 3,683 | 7,366 | — | — | — | $ | 220,022 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 8,326 | $ | 59.74 | $ | 189,250 |
All Other | All Other | |||||||||||||||||||||||||||||||||||||||||||
Stock | Option | |||||||||||||||||||||||||||||||||||||||||||
Awards: | Awards: | Exercise | Grant Date | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | or Base | Fair Value | |||||||||||||||||||||||||||||||||||||||||
Estimated Future Payments | Estimated Future Payments | Shares | Securities | Price of | of Stock | |||||||||||||||||||||||||||||||||||||||
Grant | Under Non-Equity | Under Equity Incentive Plan | of Stock | Underlying | Option | and Option | ||||||||||||||||||||||||||||||||||||||
Name | Date | Incentive Plan Awards1 | Awards (Number of Shares)2 | or Units | Options3 | Awards4 | Awards5 | |||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||
$ | 508,750 | $ | 1,017,500 | $ | 2,035,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Woodring | 2/19/2010 | — | — | — | 9,024 | 18,047 | 36,094 | — | — | — | $ | 850,014 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 46,392 | $ | 47.10 | $ | 737,633 | |||||||||||||||||||||||||||||||||
$ | 207,648 | $ | 415,296 | $ | 830,592 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Lay | 2/19/2010 | — | — | — | 3,408 | 6,815 | 13,630 | — | — | — | $ | 320,987 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 13,743 | $ | 47.10 | $ | 218,514 | |||||||||||||||||||||||||||||||||
$ | 192,816 | $ | 385,632 | $ | 771,264 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Schuster | 2/19/2010 | — | — | — | 3,408 | 6,815 | 13,630 | — | — | — | $ | 320,987 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 13,743 | $ | 47.10 | $ | 218,514 | |||||||||||||||||||||||||||||||||
$ | 231,132 | $ | 462,264 | $ | 924,528 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Watson | 2/19/2010 | — | — | — | 3,919 | 7,838 | 15,676 | — | — | — | $ | 369,170 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 15,805 | $ | 47.10 | $ | 251,300 | |||||||||||||||||||||||||||||||||
$ | 167,825 | $ | 335,650 | $ | 671,300 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Nitsou | 2/19/2010 | — | — | — | 2,283 | 4,565 | 9,130 | — | — | — | $ | 215,012 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 9,205 | $ | 47.10 | $ | 146,360 | |||||||||||||||||||||||||||||||||
$ | 139,299 | $ | 278,598 | $ | 557,196 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Neemeh | 2/19/2010 | — | — | — | 2,283 | 4,565 | 9,130 | — | — | — | $ | 215,012 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 9,205 | $ | 47.10 | $ | 146,360 |
1. | These columns reflect the potential value of the payment for | |
2. | This column reflects the number of PCS units granted in | |
3. | This column reflects the number of | |
4. | This column reflects the | |
5. | This column reflects the full grant date fair value of PCS units under ASC 718 and the full grant date fair value of |
25
period, with one-third tied to growth in |
revenue and |
Intermediate-Term Incentive Awards
The following table provides information on the 20102011 year-end holdings of SARs, stock options, restricted stock and PCS by our named executive officers. This table includes unexercised and unvested SARs and option awards and unvested PCS grants with performance conditions that have not yet been satisfied. Each equity grant is shown separately for each named executive. The vesting schedule for each grant is described in the footnotes following this table, based on the option or stock award grant date. The market value of the stock awards is based on the closing market price of RGACompany stock as of December 31, 2010,30, 2011, the last business day of the year, which was $53.71.$52.25. The PCS grants are subject to specified performance objectives over the performance period. For additional information about the option awards and stock awards, see the description of equity incentive compensation in the CD&A.
26
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive Plan | ||||||||||||||||||||||||||||||||||||
Awards | ||||||||||||||||||||||||||||||||||||
Market or | ||||||||||||||||||||||||||||||||||||
Equity | Payout | |||||||||||||||||||||||||||||||||||
Incentive Plan | Number of | Value of | ||||||||||||||||||||||||||||||||||
Awards: | Number | Market | Unearned | Unearned | ||||||||||||||||||||||||||||||||
Number of | of Shares | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||||
Securities | or Units | Shares or | Units or | Units or | ||||||||||||||||||||||||||||||||
Number of Securities | Underlying | of Stock | Units or | Other | Other | |||||||||||||||||||||||||||||||
Underlying Unexercised | Unexercised | Option | Option | That | Stock That | Rights That | Rights That | |||||||||||||||||||||||||||||
Grant | Options | Unearned | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Date | Exercisable1 | Unexercisable | Options | Price | Date | Vested | Vested | Vested2 | Vested3 | |||||||||||||||||||||||||||
1/1/2002 | 70,197 | $ | 31.91 | 1/1/2012 | ||||||||||||||||||||||||||||||||
1/29/2003 | 82,081 | $ | 27.29 | 1/29/2013 | ||||||||||||||||||||||||||||||||
1/28/2004 | 34,335 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||||||||
1/27/2005 | 29,492 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
2/21/2006 | 37,911 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||||||||
2/20/2007 | 23,293 | 7,765 | $ | 59.63 | 2/20/2017 | |||||||||||||||||||||||||||||||
2/20/2008 | 16,112 | 16,113 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||||||||
2/18/2009 | 12,531 | 37,596 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||||||||
2/18/2009 | 20,848 | $ | 1,119,746 | |||||||||||||||||||||||||||||||||
2/19/2010 | 46,392 | $ | 47.10 | 2/19/2020 | ||||||||||||||||||||||||||||||||
2/19/2010 | 18,047 | $ | 969,304 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
Grant Date | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units or Stock That Have Not | Number of Unearned Shares, Units or Other Rights That Have Not | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not | ||||||||||||||||||||||
Exercisable ¹ | Unexercisable | Options | Price | Date | Vested | Vested | Vested ² | Vested | ||||||||||||||||||||||
1/29/2003 | 82,081 | $ | 27.29 | 1/29/2013 | ||||||||||||||||||||||||||
1/28/2004 | 34,335 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||
1/27/2005 | 29,492 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||
2/21/2006 | 37,911 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||
2/20/2007 | 31,058 | $ | 59.63 | 2/20/2017 | ||||||||||||||||||||||||||
2/20/2008 | 24,168 | 8,057 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||
2/18/2009 | 25,063 | 25,064 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||
2/19/2010 | 11,598 | 34,794 | $ | 47.10 | 2/19/2020 | |||||||||||||||||||||||||
2/19/2010 | 36,094 | $ | 1,885,912 | |||||||||||||||||||||||||||
2/22/2011 | 8,515 | 25,546 | $ | 59.74 | 2/22/2021 | |||||||||||||||||||||||||
2/22/2011 | 30,130 | $ | 1,574,293 |
Jack B. LaySenior Executive Vice President and CFO
Option Awards | Stock Awards | |||||||||||||||||||||||||||
Equity Incentive Plan | ||||||||||||||||||||||||||||
Awards | ||||||||||||||||||||||||||||
Market or | ||||||||||||||||||||||||||||
Equity | Payout | |||||||||||||||||||||||||||
Incentive Plan | Number of | Value of | ||||||||||||||||||||||||||
Awards: | Number | Market | Unearned | Unearned | ||||||||||||||||||||||||
Number of | of Shares | Value of | Shares, | Shares, | ||||||||||||||||||||||||
Securities | or Units | Shares or | Units or | Units or | ||||||||||||||||||||||||
Number of Securities | Underlying | of Stock | Units or | Other | Other | |||||||||||||||||||||||
Underlying Unexercised | Unexercised | Option | Option | That | Stock That | Rights That | Rights That | |||||||||||||||||||||
Grant | Options | Unearned | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||
Date | Exercisable1 | Unexercisable | Options | Price | Date | Vested | Vested | Vested2 | Vested3 | |||||||||||||||||||
1/29/2003 | 27,025 | $ | 27.29 | 1/29/2013 | ||||||||||||||||||||||||
1/28/2004 | 12,150 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||
1/27/2005 | 10,533 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||
2/21/2006 | 11,321 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||
2/20/2007 | 8,339 | 2,780 | $ | 59.63 | 2/20/2017 | |||||||||||||||||||||||
2/20/2008 | 7,511 | 7,511 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||
2/18/2009 | 5,824 | 17,474 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||
2/18/2009 | 9,689 | $ | 520,396 | |||||||||||||||||||||||||
2/19/2010 | 13,743 | $ | 47.10 | 2/19/2020 | ||||||||||||||||||||||||
2/19/2010 | 6,815 | $ | 366,034 |
27
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
Grant Date | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units or Stock That Have Not | Number of Unearned Shares, Units or Other Rights That Have Not | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not | ||||||||||||||||||||||
Exercisable ¹ | Unexercisable | Options | Price | Date | Vested | Vested | Vested ² | Vested | ||||||||||||||||||||||
1/27/2005 | 10,533 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||
2/21/2006 | 11,321 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||
2/20/2007 | 11,119 | $ | 59.63 | 2/20/2017 | ||||||||||||||||||||||||||
2/20/2008 | 11,266 | 3,756 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||
2/18/2009 | 11,649 | 11,649 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||
2/19/2010 | 3,435 | 10,308 | $ | 47.10 | 2/19/2020 | |||||||||||||||||||||||||
2/19/2010 | 13,630 | $ | 712,168 | |||||||||||||||||||||||||||
2/22/2011 | 3,122 | 9,367 | $ | 59.74 | 2/22/2021 | |||||||||||||||||||||||||
2/22/2011 | 11,048 | $ | 577,258 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive Plan | ||||||||||||||||||||||||||||||||||||
Awards | ||||||||||||||||||||||||||||||||||||
Market or | ||||||||||||||||||||||||||||||||||||
Equity | Payout | |||||||||||||||||||||||||||||||||||
Incentive Plan | Number of | Value of | ||||||||||||||||||||||||||||||||||
Awards: | Number | Market | Unearned | Unearned | ||||||||||||||||||||||||||||||||
Number of | of Shares | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||||
Securities | or Units | Shares or | Units or | Units or | ||||||||||||||||||||||||||||||||
Number of Securities | Underlying | of Stock | Units or | Other | Other | |||||||||||||||||||||||||||||||
Underlying Unexercised | Unexercised | Option | Option | That | Stock That | Rights That | Rights That | |||||||||||||||||||||||||||||
Grant | Options | Unearned | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Date | Exercisable1 | Unexercisable | Options | Price | Date | Vested | Vested | Vested2 | Vested3 | |||||||||||||||||||||||||||
1/29/2003 | 25,192 | $ | 27.29 | 1/29/2013 | ||||||||||||||||||||||||||||||||
1/28/2004 | 12,150 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||||||||
1/27/2005 | 10,533 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
2/21/2006 | 11,321 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||||||||
2/20/2007 | 8,339 | 2,780 | $ | 59.63 | 2/20/2017 | |||||||||||||||||||||||||||||||
2/20/2008 | 7,511 | 7,511 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||||||||
2/18/2009 | 5,824 | 17,474 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||||||||
2/18/2009 | 9,689 | $ | 520,396 | |||||||||||||||||||||||||||||||||
2/19/2010 | 13,743 | $ | 47.10 | 2/19/2020 | ||||||||||||||||||||||||||||||||
2/19/2010 | 6,815 | $ | 366,034 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
Grant Date | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units or Stock That Have Not | Number of Unearned Shares, Units or Other Rights That Have Not | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not | ||||||||||||||||||||||
Exercisable ¹ | Unexercisable | Options | Price | Date | Vested | Vested | Vested ² | Vested | ||||||||||||||||||||||
2/20/2007 | 2,780 | $ | 59.63 | 2/20/2017 | ||||||||||||||||||||||||||
2/20/2008 | 3,755 | 3,756 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||
2/18/2009 | 5,825 | 11,649 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||
2/19/2010 | 3,435 | 10,308 | $ | 47.10 | 2/19/2020 | |||||||||||||||||||||||||
2/19/2010 | 13,630 | $ | 712,168 | |||||||||||||||||||||||||||
2/22/2011 | 3,122 | 9,367 | $ | 59.74 | 2/22/2021 | |||||||||||||||||||||||||
2/22/2011 | 11,048 | $ | 577,258 |
Graham WatsonSenior Executive Vice President andHead of Global Mortality Products
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive Plan | ||||||||||||||||||||||||||||||||||||
Awards | ||||||||||||||||||||||||||||||||||||
Market or | ||||||||||||||||||||||||||||||||||||
Equity | Payout | |||||||||||||||||||||||||||||||||||
Incentive Plan | Number of | Value of | ||||||||||||||||||||||||||||||||||
Awards: | Number | Market | Unearned | Unearned | ||||||||||||||||||||||||||||||||
Number of | of Shares | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||||
Securities | or Units | Shares or | Units or | Units or | ||||||||||||||||||||||||||||||||
Number of Securities | Underlying | of Stock | Units or | Other | Other | |||||||||||||||||||||||||||||||
Underlying Unexercised | Unexercised | Option | Option | That | Stock That | Rights That | Rights That | |||||||||||||||||||||||||||||
Grant | Options | Unearned | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Date | Exercisable1 | Unexercisable | Options | Price | Date | Vested | Vested | Vested2 | Vested3 | |||||||||||||||||||||||||||
1/1/2002 | 17,236 | $ | 31.91 | 1/1/2012 | ||||||||||||||||||||||||||||||||
1/29/2003 | 31,577 | $ | 27.29 | 1/29/2013 | ||||||||||||||||||||||||||||||||
1/28/2004 | 12,150 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||||||||
1/27/2005 | 10,533 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
2/21/2006 | 11,321 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||||||||
2/20/2007 | 8,339 | 2,780 | $ | 59.63 | 2/20/2017 | |||||||||||||||||||||||||||||||
2/20/2008 | 7,511 | 7,511 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||||||||
2/18/2009 | 6,698 | 20,094 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||||||||
2/18/2009 | 11,143 | $ | 598,491 | |||||||||||||||||||||||||||||||||
2/19/2010 | 15,805 | $ | 47.10 | 2/19/2020 | ||||||||||||||||||||||||||||||||
2/19/2010 | 7,838 | $ | 420,979 |
28
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
Grant Date | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units or Stock That Have Not | Number of Unearned Shares, Units or Other Rights That Have Not | Market or Payout Value of Unearned Shares, Units or Other Right That Have Not | ||||||||||||||||||||||
Exercisable ¹ | Unexercisable | Options | Price | Date | Vested | Vested | Vested ² | Vested | ||||||||||||||||||||||
1/29/2003 | 31,577 | $ | 27.29 | 1/29/2013 | ||||||||||||||||||||||||||
1/28/2004 | 12,150 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||
1/27/2005 | 10,533 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||
2/21/2006 | 11,321 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||
2/20/2007 | 11,119 | $ | 59.63 | 2/20/2017 | ||||||||||||||||||||||||||
2/20/2008 | 11,266 | 3,756 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||
2/18/2009 | 13,396 | 13,396 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||
2/19/2010 | 3,951 | 11,854 | $ | 47.10 | 2/19/2020 | |||||||||||||||||||||||||
2/19/2010 | 15,676 | $ | 819,071 | |||||||||||||||||||||||||||
2/22/2011 | 3,917 | 11,751 | $ | 59.74 | 2/22/2021 | |||||||||||||||||||||||||
2/22/2011 | 13,860 | $ | 724,185 | |||||||||||||||||||||||||||
Paul Nitsou | ||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
Grant Date | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units or Stock That Have Not | Number of Unearned Shares, Units or Other Rights That Have Not | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not | ||||||||||||||||||||||
Exercisable ¹ | Unexercisable | Options | Price | Date | Vested | Vested | Vested ² | Vested | ||||||||||||||||||||||
2/20/2007 | 7,987 | $ | 59.63 | 2/20/2017 | ||||||||||||||||||||||||||
2/20/2008 | 7,585 | 2,529 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||
2/18/2009 | 7,840 | 7,841 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||
2/19/2010 | 2,301 | 6,904 | $ | 47.10 | 2/19/2020 | |||||||||||||||||||||||||
2/19/2010 | 9,130 | $ | 477,043 | |||||||||||||||||||||||||||
2/22/2011 | 2,336 | 7,010 | $ | 59.74 | 2/22/2021 | |||||||||||||||||||||||||
2/22/2011 | 8,268 | $ | 432,003 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive Plan | ||||||||||||||||||||||||||||||||||||
Awards | ||||||||||||||||||||||||||||||||||||
Market or | ||||||||||||||||||||||||||||||||||||
Equity | Payout | |||||||||||||||||||||||||||||||||||
Incentive Plan | Number of | Value of | ||||||||||||||||||||||||||||||||||
Awards: | Number | Market | Unearned | Unearned | ||||||||||||||||||||||||||||||||
Number of | of Shares | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||||
Securities | or Units | Shares or | Units or | Units or | ||||||||||||||||||||||||||||||||
Number of Securities | Underlying | of Stock | Units or | Other | Other | |||||||||||||||||||||||||||||||
Underlying Unexercised | Unexercised | Option | Option | That | Stock That | Rights That | Rights That | |||||||||||||||||||||||||||||
Grant | Options | Unearned | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Date | Exercisable1 | Unexercisable | Options | Price | Date | Vested | Vested | Vested2 | Vested3 | |||||||||||||||||||||||||||
1/29/2003 | 12,697 | $ | 27.29 | 1/29/2013 | ||||||||||||||||||||||||||||||||
1/28/2004 | 10,320 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||||||||
1/27/2005 | 8,953 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
2/21/2006 | 9,741 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||||||||
2/20/2007 | 5,990 | 1,997 | $ | 59.63 | 2/20/2017 | |||||||||||||||||||||||||||||||
2/20/2008 | 5,057 | 5,057 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||||||||
2/18/2009 | 3,920 | 11,761 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||||||||
2/18/2009 | 6,522 | $ | 350,297 | |||||||||||||||||||||||||||||||||
2/19/2010 | 9,205 | $ | 47.10 | 2/19/2020 | ||||||||||||||||||||||||||||||||
2/19/2010 | 4,565 | $ | 245,186 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive Plan | ||||||||||||||||||||||||||||||||||||
Awards | ||||||||||||||||||||||||||||||||||||
Market or | ||||||||||||||||||||||||||||||||||||
Equity | Payout | |||||||||||||||||||||||||||||||||||
Incentive Plan | Number of | Value of | ||||||||||||||||||||||||||||||||||
Awards: | Number | Market | Unearned | Unearned | ||||||||||||||||||||||||||||||||
Number of | of Shares | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||||
Securities | or Units | Shares or | Units or | Units or | ||||||||||||||||||||||||||||||||
Number of Securities | Underlying | of Stock | Units or | Other | Other | |||||||||||||||||||||||||||||||
Underlying Unexercised | Unexercised | Option | Option | That | Stock That | Rights That | Rights That | |||||||||||||||||||||||||||||
Grant | Options | Unearned | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Date | Exercisable1 | Unexercisable | Options | Price | Date | Vested | Vested | Vested2 | Vested3 | |||||||||||||||||||||||||||
1/28/2004 | 3,600 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||||||||
1/27/2005 | 3,160 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
2/21/2006 | 4,739 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||||||||
2/20/2007 | 5,990 | 1,997 | $ | 59.63 | 2/20/2017 | |||||||||||||||||||||||||||||||
2/20/2008 | 5,057 | 5,057 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||||||||
2/18/2009 | 3,920 | 11,761 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||||||||
2/18/2009 | 6,522 | $ | 350,297 | |||||||||||||||||||||||||||||||||
2/19/2010 | 9,205 | $ | 47.10 | 2/19/2020 | ||||||||||||||||||||||||||||||||
2/19/2010 | 4,565 | $ | 245,186 |
29
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
Grant Date | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units or Stock That Have Not | Number of Unearned Shares, Units or Other Rights That Have Not | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not | ||||||||||||||||||||||
Exercisable ¹ | Unexercisable | Options | Price | Date | Vested | Vested | Vested ² | Vested | ||||||||||||||||||||||
1/28/2004 | 3,600 | $ | 39.61 | 1/28/2014 | ||||||||||||||||||||||||||
1/27/2005 | 3,160 | $ | 47.47 | 1/27/2015 | ||||||||||||||||||||||||||
2/21/2006 | 4,739 | $ | 47.48 | 2/21/2016 | ||||||||||||||||||||||||||
2/20/2007 | 7,987 | $ | 59.63 | 2/20/2017 | ||||||||||||||||||||||||||
2/20/2008 | 7,585 | 2,529 | $ | 56.03 | 2/20/2018 | |||||||||||||||||||||||||
2/18/2009 | 7,840 | 7,841 | $ | 32.20 | 2/18/2019 | |||||||||||||||||||||||||
2/19/2010 | 2,301 | 6,904 | $ | 47.10 | 2/19/2020 | |||||||||||||||||||||||||
2/19/2010 | 9,130 | $ | 477,043 | |||||||||||||||||||||||||||
2/22/2011 | 2,081 | 6,245 | $ | 59.74 | 2/22/2021 | |||||||||||||||||||||||||
2/22/2011 | 7,366 | $ | 384,874 |
1. | Options with a grant date through 2003 vested and became exercisable in five equal annual installments of 20%, on December 31 of the first, second, third, fourth and fifth years. Options granted in 2004 and subsequent years vest and become exercisable in four equal annual installments of 25%, on December 31 of the second, third, fourth and fifth years. SARs, which were first granted in 2011, vest over four years (25% of which vests at the end of each of the first four years). | |
2. | These columns reflect the number of shares and estimated market value of grants of PCS. On January |
The following table provides information for the named executive officers on (1) stock option and SARs exercises during 2010,2011, including the number of shares acquired upon exercise and the value realized, and (2) the number of shares awarded in settlement of the 20082009-2011 PCS grants (three-year performance period ending December 31, 2010)2011) and the value realized, each before payment of any applicable withholding tax and broker commissions.
Option Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares Acquired | Value Realized | Shares Acquired | Value Realized | |||||||||||||
Name | on Exercise | on Exercise | on Vesting | on Vesting | ||||||||||||
Woodring1 | 67,086 | $ | 1,357,936 | 11,180 | $ | 659,285 | ||||||||||
Lay2 | — | — | 5,214 | $ | 307,470 | |||||||||||
Schuster3 | — | — | 5,214 | $ | 307,470 | |||||||||||
Watson4 | 17,778 | $ | 355,578 | 6,748 | $ | 397,930 | ||||||||||
Nitsou5 | 16,523 | $ | 327,132 | 3,511 | $ | 207,044 | ||||||||||
Neemeh6 | 15,657 | $ | 353,295 | 3,511 | $ | 207,044 |
Name Woodring1 Lay2 Schuster3 Watson4 Nitsou5 Neemeh6 Option and SARs Awards Stock Awards Number of
Shares Acquired
on Exercise Value Realized
on Exercise Number of
Shares Acquired
on Vesting Value Realized
on Vesting 70,197 $1,226,461 27,380 $1,547,518 39,175 $1,233,359 12,725 $ 719,217 80,870 $1,726,868 12,725 $ 719,217 17,236 $ 469,212 14,634 $ 827,114 41,711 $ 888,195 8,565 $ 484,094 — — 8,565 $ 484,094
1. | Mr. Woodring exercised | |
2. | Mr. Lay exercised 39,175 options on April 28, 2011, with an average market value for the shares of $62.59 on such date. He acquired | |
3. | Mr. Schuster exercised 37,342 options on February 18, 2011, with an average market value for the shares of $61.63 on such date. He exercised 38,279 options on May 12, 2011, with an average market value for the shares of $62.90 on such date. He exercised 3,400 options on May 13, 2011, with an average market value for the shares of $62.73 on such date. He exercised 1,100 options on May 18, 2011, with an average market value for the shares of $62.71 on such date. He exercised 749 options on May 19, 2011, with an average market value for the shares of $62.78 on such date. He acquired | |
4. | Mr. Watson exercised | |
5. | Mr. Nitsou exercised | |
6. | Mr. Neemeh |
30
Messrs. Woodring, Lay and Schuster participate in the Pension Plan and the RGA Augmented Plan. The monthly benefit payable for life at age 65 for each individual is the sum of (a) and (b) below:
(a) | The sum of (1) 1.05% of Final Average Monthly Compensation (as defined below), multiplied by the number of years of service earned as of December 31, 1995, plus (2) 0.65% of the excess, if any, of Final Average Monthly Compensation minus one-twelfth of the Social Security Maximum Wage Average (as defined below), multiplied by the number of years of service earned as of December 31, 1995; plus | ||
(b) | The actuarial equivalent of a lump sum benefit equal to the sum of the amounts determined below for each full year of service completed after December 31, 1995: |
Age on January 1 of the | Percentage of Final | |||
Plan Year in Which | Average Annual | Percentage of Excess | ||
the Year of Service is Earned | Compensation Credited | Compensation Credited | ||
Up to 35 | 2% | 1% | ||
35 — 44 | 4% | 2% | ||
45 — 54 | 6% | 3% | ||
55 or over | 8% | 4% |
Age on January 1 of the Plan Year in Which the Year of Service is Earned | Percentage of Final Average Annual Compensation Credited | Percentage of Excess Compensation Credited | ||
Up to 35 | 2% | 1% | ||
35 — 44 | 4% | 2% | ||
45 — 54 | 6% | 3% | ||
55 or over | 8% | 4% |
“Social Security Maximum Wage Average”means the average of the Social Security Wage Base in effect for each calendar year during the 35-year period ending with the calendar year in which a participant attains the Social Security retirement age. “Social Security Wage Base”means the maximum amount of compensation that may be considered wages for FICA tax, or $106,800 for 2010. "2011. “Breakpoint”means 60% of the Social Security Wage Base raised to the next highest $100 increment. "“Excess Compensation”means the excess, if any, of Final Average Annual Compensation minus the Breakpoint. “Final Average Annual Compensation”means the highest average Benefit Salary for the five consecutive years during the preceding ten years. “Benefit Salary”means actual base salary, eligible bonuses and pre-tax salary deferrals made to the profit sharing plan or a cafeteria plan and the CODA portion of the profit sharing award.award, in plan years prior to 2012. Beginning with the 2012 plan year and in accordance with the terms of the RGA Savings Plan, the Company will no longer provide profit sharing awards. “Final Average Monthly Compensation”is one-twelfth of Final Average Annual Compensation.
Payment of the specified retirement benefits is contingent upon continuation of the plans in their present form until the officer retires. RGA International Corporation and RGA Canada maintain Canadian Supplemental Executive Retirement Plans, which are non-qualified defined benefit plans pursuant to which eligible executive officers are entitled to receive additional retirement benefits. Messrs. Watson, Nitsou and Neemeh participate in these plans and are not eligible to participate in the Pension Plan or the RGA Augmented Plan.
Until January 1, 1994, we also maintained an Executive Supplemental Retirement Plan (the “RGA Supplemental Plan”), a non-qualified defined benefit plan pursuant to which eligible executive officers are entitled to receive additional retirement benefits. Benefits under the RGA Supplemental Plan were frozen as of January 1, 1994. The frozen annual benefit payable upon retirement at age 65 is $3,060 for Mr. Woodring. Retirement benefits under the RGA Supplemental Plan are payable at age 65 in the form of a 15-year certain life annuity, with no direct or indirect integration with Social Security benefits.
31
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit1 | Payments During Last Fiscal Year | |||||||||||||
Woodring | Performance Pension Plan | 32 | $ | 934,571 | — | ||||||||||||
Augmented Benefit Plan | 32 | $ | 7,197,870 | — | |||||||||||||
Supplemental Plan | 32 | $ | 385,499 | — | |||||||||||||
Lay | Performance Pension Plan | 20 | $ | 430,437 | — | ||||||||||||
Augmented Benefit Plan | 20 | $ | 1,362,849 | — | |||||||||||||
Schuster | Performance Pension Plan | 20 | $ | 430,883 | — | ||||||||||||
Augmented Benefit Plan | 20 | $ | 1,309,898 | — | |||||||||||||
Watson | RGA International Supplemental Executive Retirement Plan | 15 | $ | 2,942,038 | 2 | — | |||||||||||
Pension Plan for Salaried Employees of RGA Life Reinsurance Company of Canada | 15 | $ | 321,878 | 3 | — | ||||||||||||
Nitsou | RGA International Supplemental Executive Retirement Plan | 15 | $ | 2,144,529 | 4 | — | |||||||||||
Pension Plan for Salaried Employees of RGA Life Reinsurance Company of Canada | 15 | $ | 374,880 | 5 | — | ||||||||||||
Neemeh | RGA Canada Supplemental Executive Retirement Plan | 15 | $ | 1,582,612 | 6 | — | |||||||||||
Pension Plan for Salaried Employees of RGA Life Reinsurance Company of Canada | 15 | $ | 337,069 | 7 | — |
Number of | Payments | |||||||||||
Years | Present Value | During | ||||||||||
Credited | of Accumulated | Last Fiscal | ||||||||||
Name | Plan Name | Service | Benefit1 | Year | ||||||||
Woodring | Performance Pension Plan | 31 | $ | 761,533 | — | |||||||
Augmented Benefit Plan | 31 | $ | 4,572,680 | — | ||||||||
Supplemental Plan | 31 | $ | 302,375 | — | ||||||||
Lay | Performance Pension Plan | 19 | $ | 363,525 | — | |||||||
Augmented Benefit Plan | 19 | $ | 917,855 | — | ||||||||
Schuster | Performance Pension Plan | 19 | $ | 364,378 | — | |||||||
Augmented Benefit Plan | 19 | $ | 903,064 | — | ||||||||
Watson | RGA International Supplemental Executive Retirement Plan | 14 | $2,260,8852 | — | ||||||||
Pension Plan for Salaried Employees of RGA Life Reinsurance Company of Canada | 14 | $297,9093 | — | |||||||||
Nitsou | RGA International Supplemental Executive Retirement Plan | 14 | $1,384,0124 | — | ||||||||
Pension Plan for Salaried Employees of RGA Life Reinsurance Company of Canada | 14 | $340,9635 | — | |||||||||
Neemeh | RGA Canada Supplemental Executive Retirement Plan | 14 | $942,8516 | — | ||||||||
Pension Plan for Salaried Employees of RGA Life Reinsurance Company of Canada | 14 | $311,7147 | — |
1. | The accumulated benefit for the U.S. plans is based on service and compensation (as described above) considered by the plans for the period through December 31, | |
2. | Represents Canadian | |
3. | Represents Canadian | |
4. | Represents Canadian | |
5. | Represents Canadian | |
6. | Represents Canadian | |
7. | Represents Canadian |
The table below provides information on the non-qualified deferred compensation arrangements in which our U.S. named executive officers were eligible to participate during 2010.2011. Messrs. Watson, Nitsou and Neemeh are not U.S. citizens and therefore are not eligible to participate in these deferred compensation arrangements, nor are there any similar arrangements available to our Canadian employees. Employees in the U.S. who hold the office of vice president and above are able to defer up to 50% of their base salary and up to 100% of their cash bonus payments under our Executive Deferred Savings Plan (“EDSP”). With respect to distributions, participants may elect to receive either a lump sum payment or 1 to 15 annual
32
The investment fund alternatives under the RGA Augmented Plan and EDSP are identical to those in the RGA Profit SharingSavings Plan, and we credit the participant’s non-qualified deferred compensation account(s) with the returns he or she would have received in accordance with the investment alternatives selected from time to time by the participant. We do not pay above-market or preferential earnings, compensation or returns under the EDSP or Augmented Plan, or any other plan.
The named executive officers cannot withdraw any amounts from their deferred compensation balances until they either terminate employment or reach the designated distribution date selected by the executive at the time of their deferral election (in the case of benefits held in the executive’s EDSP account).
Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||
Contributions in | Contributions | Earnings in Last | Withdrawals/ | Balance | ||||||||||||||
Name | Last FY1 | in Last FY2 | FY3 | Distributions | at Last FYE4 | |||||||||||||
Woodring | — | $ | 32,828 | $ | 59,864 | — | $ | 434,345 | ||||||||||
Lay | $ | 27,075 | $ | 25,208 | $ | 71,615 | — | $ | 777,523 | |||||||||
Schuster | — | $ | 21,390 | $ | 33,481 | — | $ | 232,718 | ||||||||||
Watson | N/A | N/A | N/A | N/A | N/A | |||||||||||||
Nitsou | N/A | N/A | N/A | N/A | N/A | |||||||||||||
Neemeh | N/A | N/A | N/A | N/A | N/A |
Name | Executive Contributions in Last FY1 | Registrant Contributions in Last FY2 | Aggregate Earnings in Last FY3 | Aggregate Withdrawls/ Distributions | Aggregate Balance at Last FYE4 | |||||
Woodring | — | $78,386 | ($20,310) | — | $492,422 | |||||
Lay | $35,722 | $55,511 | $23,894 | — | $892,650 | |||||
Schuster | — | $42,063 | ($15,193) | — | $259,588 |
1. | The amounts in this column are also included in the Summary Compensation Table in the salary column (i.e., contributions to the EDSP). | |
2. | The amounts in this column reflect | |
3. | Reflects earnings credited to the participant’s account during | |
4. | The aggregate balance at last fiscal year-end column reflects the following amounts that were reported in the Summary Compensation Table in previous years: Woodring, |
As described in the CD&A, our named executive officers do not have employment, severance or change of control agreements with our Company. The information below describes and quantifies certain compensation that may or will become payable under existing plans and agreements if the named executive officer’s employment had terminated on December 31, 2010,2011, due to a change of control, disability or death, given his or herthe executive’s compensation and service levels as of such date and, where applicable, based on our closing stock price on that date. These benefits are in addition to benefits available generally to salaried employees such as distributions under the 401(k) and pension plans, retiree medical benefits, disability benefits and accrued vacation pay.
33
our Flexible Stock Plan and PCS grant agreements provide that upon a change of control, as soon as practicable following the end of the applicable three-year performance period, we must deliver to the named executive officer the number of shares that coincides with the target award for each outstanding grant of PCS.
Disability or Death. If one of the named executive officers were to become disabled or die, any unvested stock options and SARs granted before the date of such event would immediately vest and become exercisable. In addition, he or she would receive a pro rata proportion of the shares of common stock that would have been issued under any award of PCS at the end of the three-year performance period. The pro rata proportion is determined based on the number of calendar months in the performance period during which he or she was employed, divided by 36 months (the total number of months in the three-year performance period).
Retirement. Upon the “retirement” (as defined below) of a named executive officer, unvested stock options and SARs do not accelerate but continue to vest in accordance with the vesting schedule and provisions specified in the respective option grant agreement(s). Upon his or her retirement, the pro rata distribution provisions described above under “Disability or Death” apply to any PCS grants. Due to the number of factors that affect the nature, amount and timing of the vesting and exercise of stock options or SARs, or the actual award following a PCS performance period, the amounts paid to or received by the named executive officer may differ and are undeterminable until actually realized.
The named executive officers may participate in deferred compensation plans that permit deferral of certain compensation. They also participate in our defined contribution and defined benefit retirement plans. The last column of the Nonqualifiedtable under “Nonqualified Deferred Compensation tablein Fiscal 2011” reports each named executive’s aggregate balance at December 31, 2010,2011, under each nonqualified deferred compensation or defined contribution plan. The named executive officers are entitled to receive the amount in their deferred compensation account in the event of termination of employment or retirement. The Pensiontable under “Pension Benefits tablein Fiscal 2011” describes the general terms of each pension plan in which the named executive officers participate, the years of credited service and the present value of each named executive officer’s accumulated pension benefit.
Definitions. “Change of Control” is defined in our Flexible Stock Plan and, for this discussion, means (i) the acquisition, without Board approval, of more than twenty percent (20%) of our outstanding common shares through a tender offer, exchange offer or otherwise, (ii) our liquidation or dissolution following a sale or other disposition of all or substantially all of our assets, (iii) a merger or consolidation involving us which results in us not being the surviving corporation, or (iv) a change in the majority of the members of our Board of Directors during any two-year period not approved by at least two-thirds of the Directorsdirectors who were members at the beginning of the two-year period.
“Retirement” is defined in the respective equity incentive grant agreements and means disability, death or termination of employment due to retirement of a named executive officer who has attained age 55 and a combination of age and years of service with the Company that equals at least 65. Thus, named executive officers who have attained age 55 and have 10 years of service satisfy the definition and are eligible for the benefits described above associated with retirement. At December 31, 2010,2011, the NEO’snamed executive officers who have satisfied this requirement arewere Messrs. Woodring, Lay, Schuster and Watson.
The following table provides the value of equity awards that would accelerate and become exercisable or vested upon the occurrence of a change of control or if the named executive officer had become disabled or died as of December 31, 2010.2011. The value calculations are based upon our stock price as of December 31, 201030, 2011 ($53.71)52.25), the last business day of the year, and in the case of options reflect the payment of the respective option exercise price.
34
Change of Control | Disability or Death | |||||||
Name | Options/SARs | PCS (full award at target) | Options /SARs | PCS (pro rata) | ||||
Woodring | $681,722 | $1,730,102 | $681,722 | $891,539 | ||||
Lay | $286,649 | $ 644,713 | $286,649 | $333,824 | ||||
Schuster | $286,649 | $ 644,713 | $286,649 | $333,824 | ||||
Watson | $329,638 | $ 771,628 | $329,638 | $393,879 | ||||
Nitsou | $192,768 | $ 454,523 | $192,768 | $231,090 | ||||
Neemeh | $192,768 | $ 430,958 | $192,768 | $223,313 |
Change of Control | Disability or Death | |||||||||||||||
PCS | PCS | |||||||||||||||
Name | Options | (full award at target) | Options | (pro rata) | ||||||||||||
Woodring | $ | 1,115,341 | $ | 2,089,050 | $ | 1,115,341 | $ | 1,070,100 | ||||||||
Lay | $ | 466,707 | $ | 886,430 | $ | 466,707 | $ | 469,457 | ||||||||
Schuster | $ | 466,707 | $ | 886,430 | $ | 466,707 | $ | 469,457 | ||||||||
Watson | $ | 536,693 | $ | 1,019,470 | $ | 536,693 | $ | 539,912 | ||||||||
Nitsou | $ | 313,824 | $ | 595,483 | $ | 313,824 | $ | 315,610 | ||||||||
Neemeh | $ | 313,824 | $ | 595,483 | $ | 313,824 | $ | 315,610 |
Director Stock Retention.In October 2010, the Board adopted a director stock retention policy, which providedprovides that, subject to certain exceptions, a non-employee member of the Company’s Board of Directors may not transfer any shares of the Company’s common stock which he or she received as compensation for service on the Board of Directors at any time during his or her service as a Director.
35director.
Change in | ||||||||||||||
Pension | ||||||||||||||
Value and | ||||||||||||||
Nonqualified | ||||||||||||||
Fees Earned | Non-Equity | Deferred | ||||||||||||
or Paid in | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||
Name | Cash1 | Awards2 | Awards3 | Compensation | Earnings | Compensation | Total | |||||||
William J. Bartlett | $124,500 | $56,520 | — | — | — | $84,5654 | $265,585 | |||||||
Arnoud W.A. Boot | $117,000 | $56,520 | — | — | — | — | $173,520 | |||||||
John F. Danahy | $113,500 | $56,520 | — | — | — | — | $170,020 | |||||||
J. Cliff Eason | $140,000 | $75,360 | — | — | — | — | $215,360 | |||||||
Stuart I. Greenbaum | $101,500 | $56,520 | — | — | — | — | $158,020 | |||||||
Alan C. Henderson | $101,500 | $56,520 | — | — | — | — | $158,020 | |||||||
Rachel Lomax | $96,500 | $56,520 | — | — | — | — | $153,020 | |||||||
Fred J. Sievert | $105,000 | $56,520 | — | — | — | — | $161,520 |
Name | Fees Earned or Paid in Cash1 | Stock Awards2 | Option Awards3 | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||
William J. Bartlett | $127,000 | $103,052 | — | — | — | $173,2054 | $403,257 | |||||||
Arnoud W.A. Boot | $110,500 | $103,052 | — | — | — | — | $213,552 | |||||||
John F. Danahy | $115,000 | $103,052 | — | — | — | — | $218,052 | |||||||
J. Cliff Eason | $138,000 | $126,948 | — | — | — | — | $264,948 | |||||||
Stuart I. Greenbaum | $101,500 | $103,052 | — | — | — | — | $204,552 | |||||||
Alan C. Henderson | $110,500 | $103,052 | — | — | — | — | $213,552 | |||||||
Rachel Lomax | $110,000 | $103,052 | — | — | — | — | $213,052 | |||||||
Fred J. Sievert | $104,500 | $103,052 | — | — | — | — | $207,552 |
1. | This column reflects the retainer and fees earned in | |
2. | This column reflects the award of | |
3. | We ceased granting stock options to directors in 2003. The following directors have outstanding vested options at | |
4. | Represents compensation for services as a director of our Australian holding and operating companies. Australian dollars converted to U.S. dollars using an annualized currency exchange rate. |
Securities Ownership of Directors, Management and Certain Beneficial OwnersCompany Shares
The following table sets forth, as of December 31, 2010,2011, certain information with respect to: (1) each person known by us to be the beneficial owner of 5% or more of our outstanding common stock, and (2) the ownership of common stock by (i) each of our directors and nominees, (ii) each of our named executive officers, and (iii) all directors, nominees, and executive officers as a group.
36
Amount and Nature of | Percent of | |||||||
Beneficial Owner2 | Beneficial Ownership1 | Class2 | ||||||
Significant Shareholders: | ||||||||
FMR/Johnson | 7,308,812 | 3 | 9.96 | % | ||||
82 Devonshire Street Boston, MA 02109 | ||||||||
Neuberger Berman | 5,667,448 | 4 | 7.73 | % | ||||
605 Third Avenue New York, NY 10158 | ||||||||
Blackrock, Inc. | 3,927,413 | 5 | 5.35 | % | ||||
40 East 52nd Street New York, NY | ||||||||
Directors, Nominees and Named Executive Officers: | ||||||||
William J. Bartlett, Director | 7,900 | * | ||||||
Arnoud W.A. Boot, Director | 2,400 | * | ||||||
John F. Danahy, Director | 2,400 | * | ||||||
J. Cliff Eason, Director | 13,700 | * | ||||||
Stuart I. Greenbaum, Director | 24,850 | 6 | * | |||||
Alan C. Henderson, Director | 18,396 | 7 | * | |||||
Rachel Lomax, Director | 1,800 | * | ||||||
Fred J. Sievert, Director | 8,200 | * | ||||||
A. Greig Woodring, Director, | 433,698 | 8 | * | |||||
President and Chief Executive Officer | ||||||||
Jack B. Lay | 108,023 | 9 | * | |||||
Senior Executive Vice President and Chief Financial Officer | ||||||||
Paul A. Schuster | 116,612 | 10 | * | |||||
Senior Executive Vice President, Global Financial, Group and Health | ||||||||
Graham Watson | 149,946 | 11 | * | |||||
Senior Executive Vice President and Head of Global Mortality Products | ||||||||
Paul Nitsou | 95,420 | 12 | * | |||||
Executive Vice President, Global Major Accounts | ||||||||
Alain Neemeh | 42,350 | 13 | * | |||||
President and CEO — Canada | ||||||||
All directors and executive officers as a group (16 persons) | 1,139,556 | 14 | 1.55 | % | ||||
Beneficial Owner1 | Amount and Nature of Beneficial Ownership2 | Percent of Class1 | ||||||
Significant Shareholders: | ||||||||
FMR/Johnson 82 Devonshire Street Boston, MA 02109 | 6,321,767 | 3 | 8.62 | % | ||||
Blackrock, Inc. 40 East 52nd Street New York, NY | 5,039,708 | 4 | 6.87 | % | ||||
Directors, Nominees and Named Executive Officers: | ||||||||
Non-Employee Directors | ||||||||
William J. Bartlett | 9,625 | * | ||||||
Arnoud W.A. Boot | 4,125 | * | ||||||
John F. Danahy | 7,125 | * | ||||||
J. Cliff Eason | 13,700 | * | ||||||
Alan C. Henderson | 20,121 | 5 | * | |||||
Rachel Lomax | 1,800 | * | ||||||
Frederick J. Sievert | 11,925 | * | ||||||
Stanley B. Tulin | — | * | ||||||
Named Executive Officers | ||||||||
A. Greig Woodring | 411,967 | 6 | * | |||||
Jack B. Lay | 97,765 | 7 | * | |||||
Paul A. Schuster | 54,659 | 8 | * | |||||
Graham Watson | 156,631 | 9 | * | |||||
Paul Nitsou | 66,791 | 10 | * | |||||
Alain Neemeh | 55,177 | 11 | * | |||||
All directors and executive officers as a group (16 persons) | 985,428 | 12 | 1.33 | % |
* | Less than one percent. | |
1. | ||
For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days. For computing the percentage of the class of securities held by each person or group of persons named above, any shares which such person or persons has the right to acquire within 60 days (as well as the shares of common stock underlying fully vested stock |
37
deemed to be outstanding for the purposes of computing the percentage ownership of such person or group but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person or group. No director, nominee or named executive officer owns more than one percent of our outstanding common stock. |
2. | Unless otherwise indicated, each named person has sole voting and investment power over the shares listed as beneficially owned and none of the shares listed are pledged as security. |
3. | As reported on a Schedule 13G/A filed February 14, | |
4. | As reported on Schedule 13G/A filed February | |
5. | Includes for Mr. | |
6. | Includes for Mr. Woodring |
7. | Includes for Mr. Lay |
8. | Includes for Mr. Schuster |
9. | Includes for Mr. Watson |
10. | Includes for Mr. Nitsou |
11. | Includes for Mr. Neemeh |
12. | Includes a total of |
Directors’ Phantom Shares
Non-employee directors may elect to receive phantom shares by deferring their annual retainer (including the stock portion) and meeting fees. A phantom share is a hypothetical share of our common stock based upon the fair market value of the common stock at the time of the grant. Phantom shares are not distributed until the director ceases to be a directorserve on the Board by reason of retirement as a director, at which time we will issue cash or shares of common stock in an amount equal to the value of the phantom shares. Phantom shares are granted under the Phantom Stock Plan for Directors, which was last amended at the annual meeting of shareholders held May 28, 2003.
Because phantom shares can be distributed in cash instead of stock, they are not included as shares beneficially owned by the directors under the “Ownership of Shares of RGA”Company Shares” table above. However, several directors have elected to participate in the deferral option, and the following table illustrates their accumulated phantom share balance as of December 31, 2010:
38
Name | Phantom Shares | |||||||||
William J. Bartlett | ||||||||||
5,631 | ||||||||||
J. Cliff Eason | 18,508 | |||||||||
Stuart I. Greenbaum | 17,307 | |||||||||
Alan C. Henderson | 1,086 | |||||||||
Rachel Lomax | 1,725 | |||||||||
Total | 44,257 |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who beneficially own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and the NYSE. Directors, executive officers, and greater than 10% shareholders are required by SEC regulation to furnish us with copies of all Forms 3, 4, and 5 they file.
Based solely on our review of the copies of such forms we have received or that were filed with the SEC, or written representations from certain reporting persons, we believe that all our directors, executive officers, and greater than 10% beneficial owners complied with all filing requirements applicable to them with respect to transactions during 2010.
Certain Relationships and Related Person Transactions
Our Board of which are with MetLife, our former majority shareholder. The charges for reinsurance, administrative and corporate services and the license fee are based on arms-length negotiations and pricing that we believe is comparable to the fees that would be charged to our other clients or incurred for services provided by a third party vendor. Any agreements between RGA Reinsurance Company, our primary operating company, or Reinsurance Company of Missouri, Inc., both of which are Missouri insurance companies, and another subsidiary or affiliate of the Company must be filed for review and approval by the Missouri Department of Insurance (“MDOI”). The MDOI requires that the fees be fair, reasonable and less than or equal to the cost for such services from a third party.
any director,
any nominee for director,
39
any holder of more than five percent of our voting securities,
any immediate family member of such a person, as that term is defined in the policy, and
any charitable entity or organization affiliated with such person or any immediate family member of such person.
Transactions covered by the policy include any contract, arrangement, understanding, relationship, transaction, contribution or donation of goods or services, but exclude transactions with any of the following:
40
The Audit Committee has reviewed and discussed our 20102011 audited consolidated financial statements with management. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed as required by auditing standards of the Public Company
Accounting Oversight Board (“PCAOB”), SEC Rule 2-07 of Regulation S-X, Statement of Auditing Standards (“SAS”) No. 114,“The Auditor’s Communication With Those Charged With Governance"Governance”. The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the PCAOB Rule 3526, and has discussed with those accountants their independence. Based on those reviews and discussions, the Audit Committee recommended to our Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010,2011, for filing with the SEC. This report is provided by the following independent directors, who comprise the Committee:
William J. Bartlett, Chairman
Arnoud W.A. Boot
John F. Danahy
Rachel Lomax
The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) enables RGA shareholders to vote, on an advisory or non-binding basis, on how frequently they would like to cast an advisory vote on the compensation of RGA’s named executive officers. The frequency vote must be held at least once every six years. The Dodd-Frank Act requires companies such as RGA to allow shareholders to consider whether they would prefer an advisory vote on named executive officer compensation once every one, two, or three years. After consideration of the frequency alternatives, the Board believes that conducting an advisory vote on executive compensation on anannualbasis is appropriate for RGA and its shareholders.
41
A primary focus of our Compensation Committee is whether the Company’s executive compensation program serves the best interests of the Company’s shareholders. As part of its ongoing review of our executive compensation program, the Compensation Committee considered the affirmative shareholder advisory vote on executive compensation (“say on pay”) at the Company’s 2011 annual meeting, where a significant majority (92% of votes cast) of our shareholders approved the compensation program described in the proxy statement for that meeting. The Compensation Committee determined that the Company’s executive compensation philosophy, objectives and elements continue to be appropriate. Accordingly, we did not make material changes to the Company’s executive compensation program.
We are asking our shareholders to approve the compensation of our named executive officers as disclosed in this proxy statementProxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables and narrative discussion. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this proxy statement.Proxy Statement. This vote is advisory and therefore not binding on the Company, the Compensation Committee, or the Board of Directors. However, the Board and the Compensation Committee value the opinions of RGAour shareholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement,Proxy Statement, we will carefully consider those shareholders’ concerns when making future compensation decisions for our named executive officers and will evaluate whether any actions are necessary to address those concerns.
Vote Required
If a quorum is present, the vote required to approve this Item 32 is a majority of the common stock represented in person or by proxy at the Annual Meeting.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders voteFORthe proposal to approve the compensation of RGA’sour named executive officers, as disclosed in this proxy statementProxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables and narrative discussion.
The fourth item to be acted upon at the Annual Meeting is a proposal to approve amendments to our Flexible Stock Plan (“the Plan”) to increase the number of shares authorized for issuance under the Plan and increase the maximum number of SARs that may be granted to any Participant in any one-year period. The Board of Directors originally adopted the Plan in February 1993 and, on March 31, 1993, our shareholders approved the Plan. The Plan was amended and restated effective July 1, 1998. On May 24, 2000 and May 28, 2003, our shareholders approved amendments to the Plan that increased the number of shares under the Plan for which options, stock appreciation rights, restricted stock, performance shares and other stock based awards are granted. On May 26, 2004, our shareholders approved an amendment to eliminate the “evergreen” provision that provided for an automatic increase of 5% each year in the number of authorized shares available for issuance under the Plan. On May 23, 2007, our shareholders voted to increase the total number of shares authorized for issuance by 3,000,000, for a total of 9,260,077 shares.
42
43
44
45
46
In considering Deloitte’s appointment, the Audit Committee reviewed the firm’s qualifications and competencies, including the following factors:
Deloitte’s status as a registered public accounting firm with the Public Company Accounting Oversight Board (United States) (PCAOB) as required by the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the Rules of the PCAOB;
Deloitte’s independence and its processes for maintaining its independence;
the results of the independent review of the firm’s quality control system;
the key members of the engagement team for the audit of the Company’s financial statements;
Deloitte’s approach to resolving significant accounting and auditing matters including consultation with the firm’s national office; and
Deloitte’s reputation for integrity and competence in the fields of accounting and auditing.
The Audit Committee assures the regular rotation of the audit engagement team partners as required by law. The Audit Committee approves Deloitte’s audit and non-audit services in advance as required under Sarbanes-Oxley and SEC rules. Under procedures adopted by the Audit Committee, the Audit Committee reviews, on an annual basis, a schedule of particular audit services that the Company expects to be performed and an estimated amount of fees for each particular audit service. The Audit Committee also reviews a schedule of audit-related, tax and other permitted non-audit services that the Company may engage the independent auditor to perform and an estimated amount of fees for each of those services.
All audit related services, tax services and other services were pre-approved by the Audit Committee, which concluded that the provision of such services by Deloitte was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee has adopted a Pre-Approval Policy which provides for pre-approval of audit, audit-related and tax services on an annual basis and, in addition, individual engagements anticipated to exceed pre-established thresholds must be separately approved. The policy authorizes the Committee to delegate to one or more of its members pre-approval authority with respect to permitted services.
Representatives of Deloitte will attend the 20112012 Annual Meeting. They will have an opportunity to make a statement if they desire to do so, and they will be available to respond to appropriate questions.
47
Fiscal Year | ||||||||
2010 | 2009 | |||||||
Audit Fees1 | $ | 4,140,825 | $ | 3,697,450 | ||||
Audit Related Fees2 | $ | 91,400 | $ | 219,468 | ||||
Total audit and audit-related fees | $ | 4,232,225 | $ | 3,916,918 | ||||
Tax Fees3 | $ | 120,345 | $ | 200,162 | ||||
All Other Fees4 | — | — | ||||||
Total Fees | $ | 4,352,570 | $ | 4,117,080 | ||||
Fiscal Year | ||||||||
2011 | 2010 | |||||||
Audit Fees1 | $ | 4,407,040 | $ | 4,140,825 | ||||
Audit Related Fees2 | 450,110 | 91,400 | ||||||
|
|
|
| |||||
Total audit and audit-related fees | $ | 4,857,150 | $ | 4,232,225 | ||||
Tax Fees3 | 113,990 | 120,345 | ||||||
|
|
|
| |||||
Total Fees | $ | 4,971,140 | $ | 4,352,570 | ||||
|
|
|
|
1. | Includes fees for the audit of our Company’s and its subsidiaries’ annual financial statements, reviews of our quarterly financial statements, and Sarbanes-Oxley Section 404 attestation. | |
2. | Includes fees for services rendered by Deloitte for matters such as | |
3. | Includes fees for tax services rendered by Deloitte, such as consultation related to tax planning and compliance. | |
Vote Required
If a quorum is present, the vote required to approve this Item 53 is a majority of the common stock represented in person or by proxy at the Annual Meeting.
Recommendation of the Board of Directors
The Board of Directors has approved the proposal regarding the appointment of Deloitte and recommends that shareholders voteFORthe proposal.
48
If a quorum is present, the affirmative vote of the holders of a majority of the shares of our common stock entitled to vote which are present in person or represented by proxy at the 20112012 Annual Meeting is required to approve Items 1, 3, 42 and 5, to vote on Item 23 and to act on any other matters properly brought before the meeting (other than the other specified proposals). Because the vote on the frequency of advisory votes on executive compensation is advisory, there is no standard for determining which frequency has been “adopted” by the shareholders. Voting results will be disclosed in our Current Report on Form 8-K filed with the SEC within four business days following the Annual Meeting. Shares represented by proxies which are marked “withhold authority” with respect to the election of any one or more nominees for election as directors and proxies which are marked “abstain” or which deny discretionary authority on Items 3, 42 and 53 will be counted for the purpose of determining the number of shares represented by proxy at the meeting. Such proxies will thus have the same effect as if the shares represented thereby were voted against such nominee or nominees and against such other matters, respectively. Proxies marked or voted “abstain” on the proposal regarding the frequency of advisory votes on executive compensation will not be counted as a vote for any of the four options, and the Board of Directors shall determine the impact of such votes.
Under the current rules of the New York Stock Exchange, or NYSE, if you do not give instructions to your brokerage firm, it will still be able to vote your shares with respect to certain “discretionary” items, but will not be allowed to vote your shares with respect to certain “non-discretionary” items. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those shares will not be considered as present and entitled to vote with respect to that matter. Please note that previously, brokers were allowed to vote uninstructed shares in uncontested director elections or with regard
to certain executive compensation matters. However, brokers now can no longer vote uninstructed shares on your behalf in director elections or with regard to executive compensation matters. For your vote to be counted, you must submit your voting instruction form to your broker.
We know of no other matters to come before the meeting. If any other matters properly come before the meeting, the proxies solicited hereby will be voted on such matters in accordance with the judgment of the persons voting such proxies.
Shareholder Nominations and Proposals
As described in our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee will consider shareholder nominations for Directorsdirectors that meet the notification, timeliness, consent and information requirements of our Articles of Incorporation. The Committee makes no distinctions in evaluating nominees for positions on the Board based on whether or not a nominee is recommended by a shareholder, provided that the procedures with respect to nominations referred to above are followed. Potential candidates for nomination as Directordirector candidates must provide written information about their qualifications and participate in interviews conducted by individual Board members, including the Chairs of the Audit or Nominating and Governance Committees. Candidates are evaluated using the criteria adopted by the Board to determine their qualifications based on the information supplied by the candidates and information obtained from other sources. The Committee will recommend candidates for election as Director
49
Financial Literacy. Such person should be “financially literate” as such qualification is interpreted by the Board of Directors in its business judgment.
Leadership Experience. Such person should possess significant leadership experience, such as experience in business, finance/accounting, law, education or government, and shall possess qualities reflecting a proven record of accomplishment and ability to work with others.
Commitment to Our Values. Such person shall be committed to promoting our financial success and preserving and enhancing our business and ethical reputation, as embodied in our Codescodes of Conduct.
Absence of Conflicting Commitments. Such person should not have commitments that would conflict with the time commitments of a Director of RGA.
Reputation and Integrity. Such person shall be of high repute and recognized integrity and not have been convicted in a criminal proceeding (excluding traffic violations and other minor offenses). Such person shall not have been found in a civil proceeding to have violated any federal or state securities or commodities law, and shall not be subject to any court or regulatory order or decree limiting his or her business activity, including in connection with the purchase or sale of any security or commodity.
Knowledge and Experience. Such person should possess knowledge and experience that will complement that of other directors and promote the creation of shareholder value.
Other Factors. Such person shall have other characteristics considered appropriate for membership on the Board of Directors, including an understanding of marketing and finance, sound business judgment, significant experience and accomplishments and educational background.
Shareholder proposals submitted under the process prescribed by the SEC (in Rule 14a-8 of the Exchange Act) for presentation at the 20122013 Annual Meeting must be received by us by December 10, 2011,6, 2012, for inclusion in our Proxy Statement and proxy relating to that meeting. Upon receipt of any such proposal, we will determine whether or not to include such proposal in the Proxy Statement and proxy in accordance with regulations governing the solicitation of proxies.
In order for a Shareholdershareholder to nominate a candidate for director, under our Restated Articles of Incorporation, timely notice of the nomination must be given to us in advance of the meeting. Ordinarily, such notice must be given not less than 60 nor more than 90 days before the meeting (but if we give less than 70 days notice of the meeting, or prior public disclosure of the date of the meeting, then the Shareholdershareholder must give such notice within 10 days after notice of the meeting is mailed or other public disclosure of the meeting is made, whichever occurs first). The shareholder filing the notice of nomination must describe various matters as specified in our Amended and Restated Articles of Incorporation, including such information as name, address, occupation, and number of shares held.
In order for a shareholder to bring other business before a Shareholdershareholder meeting, timely notice must be given to us within the time limits described above. Such notice must include a description of the proposed business, the reasons therefore, and other matters specified in our Amended and Restated Articles of Incorporation. The Board or the presiding officer at the Annual Meeting may reject any such proposals that are not made in accordance with these procedures or that are not a proper subject for shareholder action in accordance with applicable law. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority. These requirements are separate from and in addition to the requirements a shareholder must meet to have a proposal included in our Proxy Statement.
In each case, the notice must be given to our Secretary, whose address is 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017-6039. Any Shareholdershareholder desiring a copy of our Restated Articles of Incorporation or Bylaws will be furnished a copy, without charge, upon written request to the Secretary.
50
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or if your household currently receives multiple copies and would like to participate in householding in the future, please notify your broker.
Access to Proxy Materials and Annual Report
This Proxy Statement and our 20102011 Annual Report to Shareholders may be viewed online at www.rgare.com.www.rgare.com. Information on our website does not constitute part of this Proxy Statement. You may request a physical copy of this Proxy Statement, form of proxy card and our Annual Report to Shareholders, without charge, by writing to us at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017-6039, AttentionAttention: Secretary.
51
We encourage you to take advantage of Internet or telephone voting.
Both are available 24 hours a day, 7 days a week.
Internet and telephone voting isare available through 11:59 PM Eastern Time the day prior to the shareholder meeting date.
REINSURANCE GROUP OF AMERICA, INCORPORATED | ||||||||
INTERNET | ||||||||
http://www.proxyvoting.com/rga | ||||||||
Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. | ||||||||
OR | ||||||||
TELEPHONE | ||||||||
1-866-540-5760 | ||||||||
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | ||||||||
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. | ||||||||
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. | ||||||||
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. |
20031 |
6qFOLD AND DETACH HERE6q
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING: | Please mark your votes as | |||
indicated in this example |
x |
Election of Directors | FOR ALL | WITHHOLD FOR ALL | ||||||||||||||||||||||||||
*EXCEPTIONS | ||||||||||||||||||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||||||||||||||||
1. Election of three directors for terms expiring in 2015: 01. Frederick J. Sievert 02. Stanley B. Tulin 03. A. Greig Woodring | ¨ | ¨ | 2. | Advisory vote to approve named executive officer compensation. | ¨ | ¨ | ¨ | |||||||||||||||||||||
3. | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent auditor for the fiscal year ending December 31, 2012. | |||||||||||||||||||||||||||
¨ | ¨ | |||||||||||||||||||||||||||
¨ | ||||||||||||||||||||||||||||
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions” box above and strike through the nominee’s name.) | The undersigned hereby acknowledges receipt of the Notice of the 2012 Annual Meeting of Shareholders and the accompanying Proxy Statement. This proxy will be voted as specified. If no specification is made, this proxy will be voted FOR Items 1, 2 and 3. |
Mark Here for |
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
Signature | ||||||||||
Signature | Date | |||||||||
April 7, 2012
We invite you to attend the 20112012 Annual Meeting of Shareholders of Reinsurance Group of America, Incorporated, to be held on May 18, 201116, 2012 at the Company’s offices at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017 at 2:00 p.m.
It is important that your shares are represented at the meeting. Whether or not you plan to attend the meeting, please review the enclosed proxy materials, complete the proxy form below, detach it, and return it promptly in the envelope provided.
The proxy statement and our 20102011 Annual Report to Shareholders may be viewed online at www.rgare.com.
ChooseMLinkSMfor fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect®atwww.bnymellon.com/shareowner/equityaccess where step-by-step instructions will prompt you through enrollment. |
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders.The Proxy Statement and the 2011 Annual Report to Shareholders are available at:http://www.rgare.com
q FOLD AND DETACH HERE q
REINSURANCE GROUP OF AMERICA, INCORPORATED
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned does hereby appoint Jack B. Lay and William L. Hutton, or either of them, the true and lawful attorneys-in-fact, agents and proxies of the undersigned to represent the undersigned at the Annual Meeting of the Shareholders of REINSURANCE GROUP OF AMERICA, INCORPORATED to be held May 16, 2012, commencing at 2:00 p.m., St. Louis time, at the Company’s offices at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017, and at any and all adjournments and postponements of said meeting, and to vote all the shares of Common Stock of the Company standing on the books of the Company in the name of the undersigned as specified and in their discretion on such other business as may properly come before the meeting.
Address Change/Comments (Mark the corresponding box on the reverse side) | ||||||||||
SHAREOWNER SERVICES P.O. BOX 3550 | ||||||||||
SOUTH HACKENSACK, NJ 07606-9250 |
(Continued and to be marked, dated and signed, on the other side) 20031