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Preliminary Proxy Statement |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
Definitive Proxy Statement |
Definitive Additional Materials |
Soliciting Material Pursuant to § 240.14a-12 |
No fee required. |
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Dear fellow Shareholder: |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT |
Items of business | Shareholders will be asked to consider and vote on the following matters: 1. The election of three nominees to serve as “Group 1” directors, each for a term of three years; 2. The ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2017; 3. The consideration of an advisory resolution to approve the compensation of our named executive officers; 4. The approval of an advisory vote on the frequency of future advisory votes on the compensation of our named executive officers; 5. The approval of an amendment to Article TENTH A of the Amended and Restated Articles of Incorporation of the Company; 6. The approval of an amendment to Article TENTH C of the Amended and Restated Articles of Incorporation of the Company; 7. The approval of an amendment to Article THIRTEENTH of the Amended and Restated Articles of Incorporation of the Company; 8. The adoption of the Triple-S Management Corporation 2017 Incentive Plan; and 9. Any other business that may properly come before the meeting or any adjournment or postponement thereof. | |
Record date | Shareholders of record of the Company at the close of business on February 28, 2017 are entitled to receive notice of, attend, and vote at the meeting. | |
Your vote is important | Please vote as promptly as possible by using the Internet, telephone, or by signing, dating and returning the completed proxy card in accordance with the instructions in the Notice or your proxy card. |
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· | Time and date: | Friday, April 28, 2017 at 9:00 a.m., local time. |
· | Location: | 1441 F.D. Roosevelt Avenue, San Juan, Puerto Rico 00920. |
· | Record Date: | Tuesday, February 28, 2017. |
· | Voting: | All shareholders as of the record date are entitled to attend the meeting and vote. Each share of our common stock owned on the record date entitles the shareholder to one vote on each proposal presented for consideration. |
Voting matters | Board recommendation | Page reference | |
· | Election of three “Group 1” directors. | FOR each nominee | 12 |
· | Ratification of the selection of Deloitte & Touche LLP as the independent registered public accounting firm. | FOR | 16 |
· | An advisory resolution to approve the compensation of our named executive officers. | FOR | 18 |
· | An advisory vote on the frequency of future advisory votes on the compensation of our named executive officers. | 1 YEAR | 20 |
· | Amendment to Article TENTH A of the Amended and Restated Articles of Incorporation of the Company. | FOR | 21 |
· | Amendment to Article TENTH C of the Amended and Restated Articles of Incorporation of the Company. | FOR | 22 |
· | Amendment to Article THIRTHEENTH of the Amended and Restated Articles of Incorporation of the Company. | FOR | 22 |
· | Adoption of the Triple-S Management Corporation 2017 Incentive Plan. | FOR | 24 |
Name | Age | Director since | Experience/Qualification | Committee memberships |
Jorge L. Fuentes Benejam | 68 | 2008 | Public company knowledge; executive leadership | · Corporate Governance and Nominating (Chair) · Investment and Financing · Executive |
Roberto Santa María-Ros | 65 | 2015 | Accounting and Financial | · Audit · Investment and Financing |
Cari M. Dominguez | 67 | 2012 | Government and public policy experience; human resources knowledge; executive leadership | · Corporate Governance and Nominating · Compensation and Talent Development · Executive (Vice Chair) |
· | 7 of our 9 current directors are independent.1 |
· | Separate chair of the Board and chief executive officer positions. |
· | Lead Independent Director. |
· | Annual Board, committee, and individual director self-evaluations. |
· | Stock ownership guidelines for directors. |
· | Guidelines for annual continuing education of directors. |
Visit www.proxyvote.com and follow the instructions in the Notice. | |
Scan the QR Code in the Notice, with your mobile phone and vote following the instructions in the Notice. | |
Call the telephone number in the Notice. | |
Send your completed and signed proxy card to Triple-S Management Corporation c/o Broadridge Financial Solutions, Inc. at 51 Mercedes Way, Edgewood, New York 11717. | |
Cast your vote in person if you are the registered shareholder or by obtaining a “legal proxy” if your shares are held in “street name” by completing and signing your proxy card at the meeting. |
· | Deadline for shareholders proposal for inclusion in the 2018 proxy statement: | November 16, 2017 |
· | Period for submitting proposals and nominations for directors to be considered at the 2018 Annual Meeting: | November 29, 2017 to December 29, 2017 |
Type of Fees | 2016 | 2015 | ||||||
Audit Fees | $ | 2,902,600 | $ | 2,707,600 | ||||
Audit-Related Fees | $ | 431,860 | $ | 340,250 | ||||
Tax Fees | $ | 0 | $ | 0 | ||||
All Other Fees | $ | 300,888 | $ | 0 | ||||
Total | $ | 3,635,348 | $ | 3,047,850 |
PROXY SUMMARY |
Component | Description | ||
Fixed | Base salary | ·Cash compensation to recognize individual contribution to the Company, taking into consideration the executive’s experience, knowledge and scope of responsibilities. ·Reviewed annually based on individual performance, market-level relative salary, the Company’s financial performance, and ability to pay. ·Adjusted if and when appropriate. | |
Variable | Short-term cash incentive | ·Motivates individual to attain annual objectives and reinforces the optimization of operating results and corporate goals. ·May range from zero to 150% of the target opportunity. ·Company’s financial results account for 70% of each executive’s evaluation, and individual performance accounts for the remaining 30%. | |
Equity compensation | ·Promotes long-term success, the retention of talented individuals, and mitigation of excessive risk taking. ·75% as performance shares; payout range from zero to 150% from target opportunity over a 3-year performance period. ·25% as restricted shares vesting in equal installments over a 3-year period. | ||
Variable | Benefits and perquisites including retirement programs, non-qualified deferred compensation plan, health and life insurance, and vehicle allowance, among others. |
· | Have an equity grant policy with pre-scheduled grant dates to avoid backdating of equity awards. |
· | Deliver 75% of annual long-term incentive in the form of performance shares. |
· | Have an incentive compensation recoupment policy to ensure compensation is paid on accurate financial data. |
· | Require executive officers, directors and other individuals to request pre-clearance to transact with our stock. |
· | Engage an independent compensation consultant selected by, and that reports directly to, the Compensation and Talent Development Committee. |
· | Have stock ownership guidelines requiring executive and other participants of equity compensation to own and retain Company stock. |
· | No hedging on our Company stock. |
· | No unusual or excessive perquisites. |
· | No option awards. Grant of stock options was discontinued in 2010. |
· | No cash severance payment upon change in control. Chief executive officer may only receive cash severance payment upon a change in control with termination of employment (“Double trigger”). |
PROXY SUMMARY |
Name and Position | Salary | Bonus | Stock Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non- Qualified Deferred Compensation | All Other Compensation | Total | |||||||||||||||||||||
Roberto García-Rodríguez President and CEO | $ | 744,385 | $ | 600 | $ | 1,874,972 | $ | 215,769 | $ | 0 | $ | 37,728 | $ | 2,873,454 | ||||||||||||||
Juan J. Roman-Jimenez Executive Vice President and CFO | $ | 471,154 | $ | 600 | $ | 749,981 | $ | 102,747 | $ | 45,000 | $ | 12,800 | $ | 1,382,282 | ||||||||||||||
Madeline Hernandez-Urquiza | $ | 514,135 | $ | 600 | $ | 524,998 | $ | 150,186 | $ | 10,000 | $ | 33,683 | $ | 1,233,602 | ||||||||||||||
President of Triple-S Salud & Triple-S Advantage, Inc. | ||||||||||||||||||||||||||||
Eva G. Salgado-Micheo | $ | 391,516 | $ | 600 | $ | 374,979 | $ | 187,995 | $ | 180,000 | $ | 28,200 | $ | 1,163,290 | ||||||||||||||
President of Triple-S Propiedad, Inc. | �� | |||||||||||||||||||||||||||
Arturo L. Carrion-Crespo | $ | 324,700 | $ | 600 | $ | 249,978 | $ | 153,760 | $ | 0 | $ | 44,000 | $ | 773,038 | ||||||||||||||
President of Triple-S Vida, Inc. |
Why am I receiving these materials? | Our Board is providing these materials to you to solicit proxies on its behalf to be voted at the meeting on April 28, 2017 at 9:00 a.m., local time, at the offices of Triple-S Management Corporation, 1441 F.D. Roosevelt Avenue, San Juan, Puerto Rico 00920. | |||
Why did I receive a one-page notice in the mail instead of a full set of proxy materials? | We have elected to deliver our proxy materials over the Internet to all our shareholders under the “notice and access” rules of the SEC. If you are a shareholder of record, we sent you a Notice by mail. You will not receive a printed copy of the proxy materials unless you request one. We encourage you to help us reduce the environmental impact of the meeting, and reduce the cost associated with printing and mailing of proxy materials by accessing the proxy materials over the Internet. | |||
How can I request a printed copy of the proxy materials? | You may request a printed copy of the proxy materials by calling 1-800-579-1639; or accessing www.proxyvote.com over the Internet; or by sending an email to sendmaterial@proxyvote.com. Please make the request on or before April 14, 2017 to facilitate timely delivery. | |||
What should I do if I receive more than one Notice? | You may receive more than one Notice. For example, you may receive a separate Notice if: (i) you hold Class A and Class B shares, or (ii) you hold Class B shares in more than one brokerage account. Please vote all your shares over the Internet, by telephone, or by signing and mailing all proxy cards or voting instruction forms that you receive. | |||
Who can vote? | To be able to vote, you must have been a holder of record of our common stock at the close of business on February 28, 2017. This date is the “record date” for the 2017 Annual Meeting. Shareholders of record on the record date are entitled to receive notice of, attend, and vote on each proposal at the meeting or on any postponement or adjournment of the meeting. | |||
How many votes do I have? | You are entitled to one vote per each share of our common stock that you owned on the record date on each matter that is presented for consideration. All shares of our Class A and Class B common stock will vote together as a single class on all matters brought before the meeting. | |||
Who may be present at the meeting? | Only shareholders of record and beneficial owners with a legal proxy issued in their name by their respective organization holding their shares may be present at the meeting. No other person, including persons accompanying a shareholder, will be allowed at the meeting. Please bring a valid form of photo identification, such as a driver’s license or passport, to corroborate your identity as one of our shareholders. No video or audio recording will be allowed during the meeting. We encourage you to vote your shares in advance even if you plan to attend the meeting. | |||
What constitutes a quorum for the meeting? | At least one-third (1/3) of the shares entitled to vote must be present at the meeting, in person or by proxy, to constitute a quorum. As of the record date, shares of common stock were issued and outstanding. Shares of common stock represented in person or by proxy, “broker non-votes,” as discussed below, and shares that abstain or do not vote with respect to a particular proposal, will be treated as shares that are present to determine if there is a quorum. If a quorum is not present, we may propose to adjourn the meeting to solicit additional proxies. |
What is the difference between a shareholder of record and a beneficial owner of shares held in street name? | Shareholder of record. If your shares of common stock are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, and not through a brokerage firm, bank, broker-dealer or other similar organization, you are considered the “shareholder of record” with respect to those shares. We have sent the Notice directly to you. Beneficial owner of shares held in street name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the “beneficial owner” of shares held in “street name,” and a Notice should be sent to you by that organization. You have the right to instruct that organization how to vote your shares. | |||
How do I vote if I am the shareholder of record of my shares? | If you are the shareholder of record, you may vote in one of the following four ways: ·Through the Internet. Vote by following the instructions on the Notice or going to the Internet address stated on your proxy card. ·By telephone. Call the telephone number provided on your proxy card. ·By mail. If you requested and received a printed copy of the proxy materials or downloaded the proxy materials over the Internet, you can complete and sign your proxy card and mail it to the following address: Triple-S Management Corporation c/o Broadridge Financial Solutions, Inc. 51 Mercedes Way Edgewood, New York 11717 ·In person. Attend the meeting and vote in person or by submitting your proxy card at the meeting. Completing and sending the proxy card. Provide your full title when signing a proxy as attorney-in-fact, executor, administrator, trustee, guardian, authorized officer of a corporation, or on behalf of a minor to ensure your proxy card is voted according to your instructions and to avoid delays in ballot taking and counting. If shares are registered in the name of more than one record holder, all record holders must sign the proxy card. If you vote via the Internet or by phone, do not return the proxy card. Closing of voting facilities. The Internet and telephone voting facilities will close at 11:59 p.m., Eastern time, on April 27, 2017. If you plan to vote by mail, your proxy card must be received no later than 12:00 p.m., Eastern Time, on April 27, 2017. | |||
How do I vote if I am a “beneficial owner”? | If you are a beneficial owner you will receive the Notice from the organization that holds your shares with instructions on how to vote your shares. That organization will allow you to deliver your voting instructions via the Internet and may also permit you to submit your voting instructions by telephone. In addition, you may request paper copies of our proxy statement and proxy card by following the instructions on the Notice provided by the organization. You can vote in person at the meeting, but you must bring at the meeting a “legal proxy” issued in your name by the organization that holds your shares. The legal proxy authorizes you to vote your shares held in street name at the meeting. Contact the organization that holds your shares for instructions on how to obtain a legal proxy. You must bring a copy of the legal proxy to the meeting and ask for a ballot in order to cast your vote in person. In order for your vote to be counted, you must hand the copy of the legal proxy with your completed ballot when you cast your vote. |
Can I change or revoke my vote after I have voted? | Yes. You can change your vote or revoke your proxy at any time before the taking of votes at the meeting by delivering a written notice of revocation to our Secretary at or before the meeting; or by submitting another proxy by mail, telephone or the Internet prior to the applicable cutoff time; or by presenting to our Secretary, before or at the meeting before polls close, a later dated proxy executed by the person who executed the prior proxy; or by voting in person at the meeting. If you elect to revoke your vote by delivering a written notice of revocation or by submitting another proxy by mail to our Secretary, deliver it to the following address: Triple-S Management Corporation c/o Carlos L. Rodríguez-Ramos, Secretary 1441 F.D. Roosevelt Avenue, 6th Floor San Juan, Puerto Rico 00920 If you provide more than one proxy, the properly signed proxy having the latest date will revoke any earlier proxy. Attending the meeting will not automatically revoke a proxy unless you properly vote at the meeting or specifically request that your prior proxy be revoked. If you are a beneficial owner, you must contact the organization that holds your shares to change your vote or, if you intend to be present and vote at the meeting, bring the legal proxy issued in your name by such organization to the meeting. | |||
What happens if I do not give specific voting instructions? | If you are a shareholder of record and you indicated when voting on the Internet or by telephone that you wish to vote as recommended by the Board, or you signed and returned a proxy card without giving specific voting instructions, then the persons named as proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this proxy statement and, as proxy holders, may determine in their discretion with respect to any other matters properly presented for a vote at the meeting and at any postponement or adjournment thereof. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.” In order to minimize the number of broker non-votes, the Company encourages you to vote or provide voting instructions with respect to each proposal to the organization that holds your shares by carefully following the instructions provided in the Notice or voting instruction form. | |||
Who will count the votes? | A representative of Broadridge Financial Solutions, Inc., an independent third party, will act as the inspector of the election and tabulate the votes cast by proxy or in person at the meeting. | |||
Which proposals are considered routine or non-routine? | The election of directors (Proposal 1), the advisory resolution to approve the compensation of our NEOs (Proposal 3), the advisory vote on the frequency of the advisory vote on the compensation of our NEOs (Proposal 4), the approval of the amendments to the Amended and Restated Articles of Incorporation of the Company (Proposal 5, Proposal 6, Proposal 7), and the approval of the Triple-S Management 2017 Incentive Plan (Proposal 8) are considered non-routine matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore broker non-votes may exist in connection with Proposals 1 and Proposal 3 through 8. The ratification of the selection of D&T as our independent registered public accounting firm for 2017 (Proposal 2) is considered a routine matter under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore it is likely that no broker non-votes will exist in connection with Proposal 2. |
What is the required vote to approve each proposal? | Election of directors (Proposal 1). A nominee must be elected to our Board by the affirmative vote of a majority of votes cast with respect to such nominee by the shares of common stock entitled to vote and present at the meeting or represented by proxy. If shareholders do not elect a nominee who is already serving as a director, Puerto Rico corporation law provides that the director will continue to serve on our Board as a “holdover” director until a successor is elected. An “affirmative vote of a majority of votes cast” on a proposal means that the votes cast “for” the proposal exceed the votes cast “against” such proposal. Abstentions and broker non-votes will not count as a vote “for” or “against” the proposal and thus will have no effect in determining whether the proposal has received the affirmative vote of a majority of the votes cast at the meeting. Ratification of the selection of the independent registered public accounting firm (Proposal 2). The approval of this proposal requires the affirmative vote of the holders of a majority of the shares of common stock entitled to vote and present at the meeting or represented by proxy. Abstentions will have the same effect as votes “against” this proposal and broker non-votes will have no effect on the proposal. Approval of the compensation of our named executive officers (Proposal 3). The approval, on an advisory basis, of this proposal requires the affirmative vote of the holders of a majority of the shares of common stock entitled to vote and present at the meeting or represented by proxy. Abstentions will have the same effect as votes “against” this proposal and broker non-votes will have no effect on this proposal. Advisory vote on the frequency of future advisory votes on the compensation of our named executive officers (Proposal 4). The approval of this proposal requires the affirmative vote of the holders of a majority of the shares of common stock entitled to vote and present at the meeting or represented by proxy. Abstentions will have the same effect as votes “against” this proposal and broker non-votes will have no effect on this proposal. With respect to this proposal, if none of the frequency alternatives receive a majority vote, we will consider the frequency that receives the highest number of votes by shareholders to be the frequency that has been selected by shareholders. However, because this vote is advisory and not binding on us or our Board in any way, our Board may decide that it is in our and our shareholders’ best interests to hold an advisory vote on executive compensation more or less frequently than the alternative approved by our shareholders. Approval of the Amendments to the Amended and Restated Articles of Incorporation of the Company (Proposal 5, Proposal 6 and Proposal 7). The approval of these proposals require the affirmative vote of a majority of the issued and outstanding shares of common stock, entitled to vote, as of the record date. Abstentions and broker non-votes will have the same effect as votes “against” these proposals. Additionally, the failure to vote will have the same effect as a vote “against” these proposals. Adoption of the Triple-S Management 2017 Incentive Plan (Proposal 8). The approval of this proposal requires the affirmative vote of the holders of a majority of the shares of common stock entitled to vote and present at the meeting or represented by proxy. Abstentions will have the same effect as votes “against” this proposal and broker non-votes will have no effect on this proposal. |
How does the Board recommend to vote on the proposals? | The Board recommends shareholders to vote as set forth below. Election of Directors (Proposal 1). FOR each of the three nominees. Ratification of the selection of the independent registered public accounting firm (Proposal 2). FOR the ratification of D&T as our independent registered public accounting firm for 2017. Approval of the compensation of our named executive officers (Proposal 3). FOR the approval, on an advisory basis, of the compensation of our named executive officers. Advisory vote on the frequency of future advisory votes on the compensation of our named executive officers (Proposal 4). 1 YEAR on the frequency of future advisory votes on the compensation of the Company’s named executive officers. Amendment to Article TENTH A of the Amended and Restated Articles of Incorporation of the Company (Proposal 5). FOR the approval of the amendment to Article TENTH A the Amended and Restated Articles of Incorporation of the Company. Amendment to Article TENTH C of the Amended and Restated Articles of Incorporation of the Company (Proposal 6). FOR the approval of the amendment to Article TENTH C the Amended and Restated Articles of Incorporation of the Company. Amendment to Article THIRTEENTH of the Amended and Restated Articles of Incorporation of the Company (Proposal 7). FOR the approval of the amendment to Article THIRTEENTH of the Amended and Restated Articles of Incorporation of the Company. Adoption of the Triple-S Management 2017 Incentive Plan (Proposal 8). FOR the adoption of the Triple-S Management 2017 Incentive Plan. | |||
Will any other business be conducted on at this meeting? | We do not know of any other business that may come before the meeting other than as described in the Notice. The chair of the meeting will declare out of order and disregard the conduct of any business not properly presented. However, if any new matter requiring the vote of our shareholders is properly presented before the meeting, proxies may be voted with respect thereto at the discretion of the proxy holders. The affirmative vote of the holders of a majority of the shares of common stock entitled to vote and present at the meeting or represented by proxy with respect to any other item properly presented at the meeting will be required for approval of such item, unless a greater percentage is required by law, our articles of incorporation or our bylaws. | |||
Where can I find the voting results of the meeting? | We will announce preliminary voting results at the meeting and publish voting results in a Current Report on Form 8-K, which will be filed with the SEC within four business days following the meeting. | |||
What is the cost and method of soliciting proxies? | We will bear the costs of soliciting proxies. We will also reimburse banks, brokers or other custodians, nominees and fiduciaries representing beneficial owners for their reasonable out-of-pocket expenses incurred in distributing proxy materials to shareholders and obtaining their votes. In addition, our directors, officers and employees may solicit proxies on the Company’s behalf in person, by telephone, or email without additional compensation. | |||
What happens if the meeting is postponed or adjourned? | Your proxy will still be valid and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy at any time before it is voted. |
How and when may I submit a shareholder proposal, including a shareholder nomination for director, for the 2018 annual meeting of shareholders? | If you are interested in submitting a proposal for inclusion in the proxy statement for the 2018 annual meeting of shareholders, you need to follow the procedures outlined in Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). To be eligible for inclusion, we must receive the shareholder’s proposal for our proxy statement for the 2018 annual meeting of shareholders at our principal corporate offices in San Juan, Puerto Rico, at the address below no later than November 16, 2017. In addition, our bylaws require that we be given advance written notice of director nominations for election to our Board and other matters that shareholders wish to present for action at an annual meeting, other than those to be included in our proxy statement under Rule 14a-8 of the Exchange Act. The Secretary must receive such notice from a shareholder of record at the address noted below not less than 120 days or more than 150 days before the first anniversary of the preceding year’s annual meeting. However, if the date of our annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from the anniversary date, then we must receive such notice at the address noted below not later than the close of business on the tenth day after the day on which public disclosure of the meeting was made. Assuming that the 2018 annual meeting is not advanced by more than 30 days nor delayed by more than 60 days from the anniversary date of the meeting, you would need to give us appropriate notice of the proposal at the address noted below no earlier than the close of business on November 29, 2017, and no later than the close of business on December 29, 2017. If a shareholder of record does not provide timely notice of a nomination or other matters to be presented at the 2018 annual meeting, it will not appear in the notice of meeting. If you are a beneficial owner, you can contact the organization that holds your shares for information about how to register your shares directly in your name as a shareholder of record. Our bylaws also specify requirements relating to the content of the notice that shareholders of record must provide to our Secretary for any matter, including a shareholder proposal or nomination for director, to be properly presented at a shareholder meeting. A copy of the full text of our bylaws is on file with the SEC and available on our website at www.triplesmanagement.com. Any proposals, nominations or notices should be sent to: Triple-S Management Corporation c/o Carlos L. Rodríguez-Ramos, Secretary 1441 F.D. Roosevelt Avenue, 6th Floor San Juan, Puerto Rico 00920 |
Nominees for Group 1, each for a three-year term | ||
Jorge L. Fuentes-Benejam, PE Director since 2008 Independent Age: 68 | Professional background: Mr. Fuentes-Benejam was chair, president and chief executive officer from 1986 until 2010, and is currently chair of Gabriel Fuentes Jr. Construction Co. Inc., a heavy and marine construction business, and of Fuentes Concrete Pile Co. Inc., a precast concrete pile manufacturing business, and related entities. Currently, Mr. Fuentes-Benejam is a member of the board of trustees of Interamerican University of Puerto Rico, Puerto Rico’s largest private university. Mr. Fuentes-Benejam is a NACD Board Leadership Fellow. Qualifications: Mr. Fuentes-Benejam’s broad understanding of Puerto Rico’s business environment, particularly the construction industry—one of the key industries we serve—as well as his considerable management and board experience, which includes his past service on the board of Puerto Rico Cement Company, a former publicly-traded company, provides a wealth of knowledge to us as a public company. Board and Committee positions: Chair of the Corporate Governance and Nominating Committee; member of the Investment and Financing Committee and the Executive Committee. | |
Roberto Santa María-Ros Director since 2015 Independent Age: 65 | Professional background: Mr. Santa María-Ros was managing partner of the San Juan, Puerto Rico office of Pricewaterhouse Coppers, LLC (PwC), until his retirement in 2012. He joined PwC in 1973 and was admitted to the partnership in 1988. In 2004, he was appointed partner-in-charge of PwC’s audit practice division as well as managing partner of the San Juan Office. Previously, he served solely as managing partner of the San Juan Office from 2008 to 2012. He currently serves as member of the boards of the Ángel Ramos Foundation and of the Puerto Rico chapter of United Way Worldwide. Qualifications: Mr. Santa María-Ros’ vast experience with a major accounting firm and his understanding of accounting and finance principles are strong attributes for our Board. Board and Committee positions: Member of the Audit Committee and the Investment and Financing Committee. | |
Cari M. Dominguez, PhD Director since 2012 Independent Age: 67 | Professional background: Mrs. Dominguez is president of Dominguez & Associates, a management consulting firm, since 2007. Prior to that, Mrs. Dominguez held several leadership positions in the public and private sectors, including chair of the United States Equal Employment Opportunity Commission from 2001 to 2006, Partner of Heidrick & Struggles, a consulting firm, from 1995 to 1998, Director of Spencer Stuart, a consulting firm, from 1993 to 1995 and Assistant Secretary for Employment Standards, and Director of the Office of Federal Contract Compliance Programs of U.S. Department of Labor, from 1989 to 1993. She also held a series of executive positions with Bank of America from 1984 to 1989. Mrs. Dominguez serves as a director of Manpower Group, Inc., a global workforce solutions provider, since 2007, and is a member of its compensation and human resources committee. She also serves as a trustee of Calvert SAGE Funds since 2008, and a director, faculty member, and Board Leadership Fellow of the NACD. Qualifications: Mrs. Dominguez has extensive experience in government relations and labor markets from her various governmental positions. She also brings executive, international, and operational experience in the human resources industry. Her expertise in workforce preparedness, human resources management, corporate governance, social responsibility, and public policy are of increasing importance to our company. Board and Committee positions: Vice Chair and Lead Independent Director of the Board and Member of the Corporate Governance and Nominating Committee and the Compensation and Talent Development Committee. |
Group 2 Directors (terms expire at the 2018 annual meeting) | ||
Luis A. Clavell-Rodríguez, MD Director since 2006 Not independent Age: 65 | Professional background: Dr. Clavell-Rodriguez is the chief executive officer of the Comprehensive Cancer Center of the University of Puerto Rico since 2015 and chief medical officer and president of the Professional Board at San Jorge Children’s Hospital in San Juan, Puerto Rico since 1994. He is the principal investigator for the Children’s Oncology Group, a clinical trial organization, and the Puerto Rico National Cancer Institute Oncology Community Research Program, organizations sponsored by the National Cancer Institute. He is also a professor of pediatrics and cancer medicine at the University of Puerto Rico’s School of Medicine. He has particular expertise in translational research, and health delivery research and policy. He is a NACD Board Leadership Fellow. Qualifications: Dr. Clavell-Rodriguez’ profound understanding of the managed care business and his more than thirty years of professional experience in the medical field, including the administration of medical facilities and related entities, provide valuable insight for our Board. Board and Committee positions: Chair of the Board and the Executive Committee and member of the Investment and Financing Committee. | |
Joseph A. Frick Director since 2013 Independent Age: 64 | Professional background: Mr. Frick is currently a senior advisor to Diversified Search, a national executive search firm. From May 2011 to October 2016, he served as executive vice chair of the firm. He is also a board and executive committee member of Independence Blue Cross, a health insurance company, where he previously served as president and chief executive officer from 2005 to 2010 and as senior vice president of human resources and administration from 1993 to 2005. He is member of the board of directors of BioTelemetry, Inc., a publicly-traded company, since October 2013. Before serving in Independence Blue Cross, he worked in various management positions within the publishing and the electronics industries. He also served on the boards of directors of BCBSA and America’s Health Insurance Plans, among others. He is a NACD Board Leadership Fellow. Qualifications: Mr. Frick’s significant experience as an executive and a director in several companies with similar businesses as ours and in a publicly-traded company provides an invaluable perspective to our Board. Committee positions: Member of the Corporate Governance and Nominating Committee and the Compensation and Talent Development Committee. |
Group 3 Directors (terms expire at the 2019 annual meeting) | ||
David H. Chafey, Jr. Director since 2013 Independent Age: 62 | Professional background: Mr. Chafey is a member of the administrative board of the Puerto Rico Dairy Industry Development Fund and director of Industria Lechera de Puerto Rico, Inc. (Indulac) since July 2016. Mr. Chafey was the chair of the board of directors of the Government Development Bank for Puerto Rico from January 2013 to June 2015. Previously, he served as president and chief operating officer of Popular, Inc., a publicly traded financial holding company, from 2009 to 2010, and president of Banco Popular de Puerto Rico, a subsidiary of Popular, Inc., from 2004 to 2010. He also served in various senior executive positions within Popular, Inc., including chief financial officer and executive vice president. Mr. Chafey also served in several boards of directors, including Popular, Inc., VISA Latin American and Caribbean, and VISA International. He is a NACD Board Leadership Fellow. Qualifications: Mr. Chafey’s governmental experience, operational management skills in the banking and financial industry, financial acumen, and executive leadership in a publicly traded company provide critical insight into business and financial matters to our Board. Committee positions: Chair of the Investment and Financing Committee, member of the Audit Committee and the Executive Committee. |
Manuel Figueroa-Collazo, PE, PhD Director since 2004 Independent Age: 65 | Professional background: Mr. Figueroa-Collazo is the president of VERNET, Inc., an educational software development company, since 1999. He has over thirty years of experience in senior management positions in the computer, information and telecommunications industries. He was chief executive officer for Lucent Technologies, Mexico and a department head at AT&T Bell Laboratories. He is a NACD Board Leadership Fellow. Qualifications: Mr. Figueroa-Collazo brings to our Board considerable experience in information technology, international markets, and executive management insight, which is critical to our business. Committee positions: Chair of the Compensation and Talent Development Committee; member of the Corporate Governance and Nominating Committee and the Executive Committee. | |
Antonio F. Faría-Soto Director since 2007 Independent Age: 68 | Professional background: Mr. Faría-Soto held several senior positions within the commercial and investment banking industry until his retirement in 2006 and prominent positions in the government of Puerto Rico until 2004. He served as chair of the board of directors and chief executive officer of Doral Bank, from 2005 to 2006, and as president of the Government Development Bank for Puerto Rico from 2003 to 2004. He also served as president of the Economic Development Bank for Puerto Rico from 2002 to 2003, and before that, as Commissioner of Financial Institutions of Puerto Rico. He is a NACD Board Leadership Fellow. Qualifications: Mr. Faría-Soto’s broad understanding of the banking and financial industry, government regulation and public affairs, as well as his proven executive leadership provides a valuable perspective to our Board. Board and Committee positions: Chair of the Audit Committee; member of the Investment and Financing Committee and the Executive Committee |
Roberto García-Rodríguez Director since 2016 Management Age: 53 | Professional background: Mr. García-Rodríguez has served as the Company’s president and chief executive officer since January 2016. He served as the Company’s chief operating officer from December 2013 to December 2015 and as the Company’s vice president of legal affairs and general counsel from May 2008 to December 2013. Mr. García-Rodríguez is a NACD Board Leadership Fellow. Qualifications: Mr. García-Rodríguez brings executive leadership, operational expertise and legal acumen to our Board. |
Recommendation: | Vote FOR the proposal. |
Recommendation: | Vote FOR the proposal. |
· | Competitive pay within best practices. Compensation aims to reflect best practices. Total executive compensation is regularly compared by our Compensation and Talent Development Committee with total compensation levels for equivalent positions at companies of similar size and complexity. |
· | Balanced compensation mix. Total compensation—which includes base salary, short and long-term variable pay opportunities, benefits and perquisites—is generally between the 25th and 50th percentile of the comparable group of companies. A significant percentage of total compensation is delivered in the form of incentive compensation. |
· | Appropriate reward of short-term performance. Cash incentive focuses on the achievement of various financial, management and individual objectives. Maximum payment of NEOs’ cash incentive is limited to 150% of their respective target opportunity, based on their base salary. |
· | Equity compensation focused on long-term performance. 75% of the equity award value is granted in the form of performance shares and the remaining 25% in the form of time-based restricted stock. Performance shares vest at the end of a three-year performance period and restricted shares vest in equal proportions over a three-year period. |
· | Annual review of chief executive officer and other executive officers performance. The Compensation and Talent Development Committee has direct responsibility to oversee the performance of the chief executive officer. The committee also discusses with the chief executive officer the performance of those executives and other personnel under his direct report as part of the committee determinations on executive compensation. |
· | Commitment to good governance. The Compensation and Talent Development Committee has retained an independent compensation consultant and includes compensation analytical tools as part of its annual executive compensation review. The committee also oversees the compliance of compensation-related policies and practices, including our claw-back provisions, stock ownership guidelines, an equity award grant policy, and insider trading, among others. Additionally, the committee reviews on an annual basis all compensation-related risks. |
Recommendation: | Vote for “1 YEAR” as the frequency for an advisory vote on executive compensation. |
A. | The business affairs of the Corporation shall be managed under the direction of a Board of Directors consisting of not less than |
Recommendation: | Vote FOR the proposal. |
C. |
Recommendation: | Vote FOR the proposal. |
Recommendation: | Vote FOR the proposal. |
Recommendation: | Vote FOR the proposal. |
· | Effective Date of the Plan. The Plan will become effective on April 28, 2017, subject to its approval by the shareholders of the Company. |
· | Plan Term. The Plan will have a 10-year term, subject to earlier termination by our Board. |
· | Authorized Shares. Subject to adjustment, up to 1,700,000 of the shares of our authorized Class B shares will be available for awards to be granted under the Plan, plus the number of shares that were subject to any awards under the 2007 Plan as of the Effective Date that are thereafter forfeited, cancelled, expire, terminate or otherwise lapse, in whole or in part, without the delivery of shares. All shares remaining available for issuance under the 2007 Plan will be cancelled upon the adoption of the Plan by the shareholders of the Company. No participant in the Plan may receive stock options and stock appreciation rights in any calendar year that relate to more than 600,000 shares of our class B shares, restricted stock and restricted stock units that relate to more than 300,000 shares, performance awards or other stock-based awards that relate to more than 300,000 shares, and the maximum amount that may be paid in a calendar year for an award denominated in cash or value other than shares is $3,000,000. No director in the Plan may receive stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards or other stock-based awards with fair market value as of the grant date in excess of $300,000 or cash retainers or other cash awards in excess of $300,000. Shares of common stock to be issued under the Plan may be made available from authorized but unissued Class B shares or Class B shares that we acquire. Shares that the Company acquires on the open market shall not be added to the shares available for issuance under the plan. |
· | Administration. The Compensation Committee will administer the Plan and will have authority to select individuals to whom awards are granted, determine the types of awards and number of shares covered, and determine the terms and conditions of awards, including the applicable vesting schedule, performance conditions, and whether the award will be settled in cash, shares or a combination of the two. |
· | Types of Awards. The Plan will provide for grants of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, deferred shares, performance awards, including cash bonus awards, and other stock-based awards. |
o | Stock options. An option is the right to purchase shares of Class B common stock at a future date at a specified exercise price. The per share exercise price of options will be determined by the Compensation Committee but may not be less than the closing price of a share of our Class B common stock on the date of grant (other than a substitute award). The Compensation Committee determines the date after which options may be exercised in whole or in part, and the expiration date of each option. However, no option award will be exercisable after the expiration of 10 years from the date the option is granted. No grant of options may be accompanied by a tandem award of dividend equivalents or provide for dividends or dividend equivalents to be paid on such options. |
o | Stock appreciation rights. A stock appreciation right is a contractual right granted to the participant to receive, in cash or shares, an amount equal to the appreciation of one share of Class B common stock from the date of grant. Stock appreciation rights may be granted either alone (“freestanding”) or in addition to other awards granted under the Plan (“tandem”) and may, but need not, relate to a specific option granted under the Plan. Any stock appreciation rights will be granted subject to the same terms and conditions applicable to options, as described above. |
o | Restricted stock/restricted stock units. Shares of restricted stock are shares of our Class B common stock subject to restrictions on transfer and a substantial risk of forfeiture. A restricted stock unit consists of a contractual right denominated in shares of our Class B common stock which represents the right to receive the value of a share of Class B common stock at a future date, subject to certain vesting and other restrictions. Restricted stock and restricted stock units will be subject to restrictions and such other terms and conditions as the Compensation Committee may determine, which restrictions and such other terms and conditions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Compensation Committee may deem appropriate. |
o | Performance Awards. The Plan will provide that grants of performance awards, including cash-denominated awards and (if determined by the Compensation Committee) restricted stock, restricted stock units or other stock-based awards, will be made based upon, and subject to achieving, certain “performance objectives.” Performance objectives with respect to those awards that are intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code are limited to revenue growth, operating income growth, premiums earned; net sales; revenue or product revenue growth; operating income (before or after taxes); pre- or after-tax income (before or after allocation of corporate overhead and bonus); net earnings; earnings per share, earnings per share growth; net income (before or after taxes); return on equity; total shareholder return; return on assets or net assets; appreciation in and/or maintenance of share price; market share; gross profits; earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization); comparisons with various stock market indices; reductions in costs; cash flow or cash flow per share (before or after dividends); return on capital (including return on total capital or return on invested capital); cash flow return on investment; improvement in or attainment of expense levels or working capital levels; operating margins, gross margins or cash margin; year-end cash; debt reductions; shareholder equity; regulatory achievements; and implementation, completion or attainment of measurable objectives with respect to research, development, products or projects and recruiting and maintaining personnel, each as determined in accordance with generally accepted accounting principles, where applicable, as consistently applied by the Company. The maximum number of shares of our Class B common stock subject to a performance award in any fiscal year is 300,000 shares and the maximum amount of a long term incentive award denominated in cash shall be $1.5 million multiplied by the number of years included in any applicable performance period relating to such award. |
o | Deferred shares. An award of deferred shares entitles the participant to receive shares of our Class B common stock upon the expiration of a specified deferral period. In addition, deferred shares may be subject to restrictions on transferability, forfeiture and other restrictions as determined by the Compensation Committee. |
o | Other awards. The Compensation Committee is authorized to grant other stock-based awards, either alone or in addition to other awards granted under the Plan. Other awards may be settled in shares, cash, awards granted under the Plan or any other form of property as the Compensation Committee determines. |
· | Eligibility. All our employees and members of our Board will be eligible to participate in the Plan. From time to time, our Board will determine who will be granted awards, the number of shares or performance units subject to such grants, and the terms of awards. Under the Plan, awards may be granted to our employees, our directors and other individuals providing services to us, including but not limited to consultants, advisors and independent contractors. As of December 31, 2016, there were about 3,400 persons who would have been eligible to receive awards under the Plan. |
· | Adjustments. The Compensation Committee shall adjust the terms of any outstanding awards and the number of shares of Class B common stock issuable under the Plan for any change in shares of our common stock resulting from a stock split, reverse stock split, stock dividend, spin-off, combination or reclassification of our Class B common stock, an issuance of shares pursuant to the anti-dilution provisions of the Class B common stock or any other event that affects our capitalization if the Compensation Committee determines an adjustment is equitable or appropriate. |
· | Termination of Service and Change in Control. The Compensation Committee will determine the effect of a termination of employment or service on awards granted under the Plan. Upon a change control (as defined in the Plan), the Compensation Committee will determine whether outstanding options shall be assumed, continued or substituted. Awards assumed, continued or substituted by the acquirer in connection with a change of control will become fully vested if the participant employment is terminated without cause at any time during the 12 month period following the change of control (double trigger). Only to the extent awards will not be assumed, continued or substituted, the Compensation Committee may provide that such awards will become fully vested upon such change in control. |
· | Plan Benefits. Future benefits under the Plan are not currently determinable. However, current benefits granted to our directors, named executive officers and all our other employees would not have been increased if they had been made under the Plan. Grants of performance stock, restricted stock and stock options to our named executive officers are shown in the Grant of Plan-Based Awards table in the proxy statement. |
· | Amendment, Modification and Termination. The Compensation Committee may from time to time suspend, discontinue, revise or amend the Plan and may amend the terms of any award in any respect, provided that no such action will adversely impair or affect the rights of a holder of an outstanding award under the Plan without the holder’s consent, and no such action will be taken without shareholder approval, if required by the rules of the stock exchange on which our shares are traded. |
· | Clawback of Awards. Awards granted under the Plan shall be subject to any clawback or recoupment arrangements or policies the Company has in place from time to time. |
Board composition and structure | ·Our Board has currently fixed the number of directors at 10, comprised of three groups. With the passing of Ms. Soto-Martínez on March 28, 2016, the Board currently consists of 9 members. Ms. Soto-Martínez’ seat on the Board remains vacant while the Board considers a candidate for director. ·Positions of chair of the board and chief executive officer are separated. | ||
Board independence | ·7 out of 9 of our current directors are independent. ·Our president and chief executive officer is the only management director. ·The Chair of the Board is not independent. ·The Vice Chair of the Board is our lead independent director and leads in executive sessions with independent directors. | ||
Board Committees | ·Five committees: Audit, Corporate Governance and Nominating, Compensation and Talent Development, Investment and Financing, and Executive. ·Except for the Investment and Financing, and the Executive committees, in which the Chair of the Board is a member, all other committees are composed entirely of independent directors. ·The president and chief executive officer is not appointed as a member of any committee. ·Our Board and its committees have the authority to retain independent advisors. |
Membership criteria and qualifications | ·Directors must notify the Board before accepting invitations to serve on another public company board. ·Directors must submit an offer to resign in the event of a substantial change in their principal occupation. ·Annual performance self-assessment of the Board, committees, and directors. ·The Corporate Governance and Nominating Committee regularly reviews the Board’s competency mix and recommends candidates in light of Board and Company strategy. ·Directors are strongly encouraged to complete a minimum level of director training annually. |
Director | Audit | Compensation and Talent Development | Corporate Governance and Nominating | Investment and Financing | Executive |
Luis A. Clavell-Rodríguez, Chair* | Member | Chair | |||
David H. Chafey, Jr. | Member# | Chair | Member | ||
Cari M. Domínguez | Member | Member | Vice Chair | ||
Antonio F. Faría-Soto | Chair | Member | Member | ||
Manuel Figueroa-Collazo | Chair | Member | Member | ||
Joseph A. Frick | Member | Member | |||
Jorge L. Fuentes-Benejam | Chair | Member | Member | ||
Roberto Santa María-Ros | Member# | Member | |||
Roberto García-Rodríguez, ex-officio* | |||||
*Not independent #Audit Committee financial expert |
Audit Committee | ||||
Members: Messrs. Faría-Soto (chair), Chafey, and Santa María-Ros | The committee assists the Board, among other things, in fulfilling its oversight responsibilities relating to: ·Integrity of the Company’s financial statements; ·Effectiveness of the Company’s internal control over financial reporting; ·Selection of the independent registered public account firm; ·Performance of the Company’s internal audit function and independent registered accounting firm; and ·Company compliance with laws and regulations. |
Compensation and Talent Development Committee | ||||
Members: Messrs. Figueroa-Collazo (chair), and Frick, and Mrs. Dominguez | The committee is responsible, among other things, for the following matters: ·Reviewing the compensation plan of our non-employee directors and making recommendations to the Board with respect to such compensation; ·Evaluating the policies, program design and structure of, and reviewing and approving annual performance objectives relevant to, the compensation of the executive officers of the Company; ·Overseeing the administration of and compliance with the Company’s incentive compensation plans, and making recommendations to the Board with respect to awards under such plans; and ·Overseeing the Board’s annual review of succession planning with respect to our chief executive officer and other senior executives. |
Corporate Governance and Nominating Committee | ||||
Members: Messrs. Fuentes-Benejam (chair), Figueroa-Collazo, Frick, and Mrs. Dominguez | The committee is responsible, among other things, for the following matters: ·Recommending to the Board the criteria for the selection of individuals qualified to serve as directors; ·Identifying individuals qualified to serve on the Board consistent with criteria approved by the Board; ·Recommending the Board nominees for election as directors at any meeting of shareholders; ·Developing and recommending to the Board a set of corporate governance principles; ·Reviewing our corporate governance guidelines, our Code of Ethics, committee charters and other corporate documents and recommending changes to the Board, consistent with best practices; ·Overseeing compliance with our corporate governance guidelines and practices, compliance with our Code of Ethics and director’s independence requirements; and ·Overseeing of the enterprise risk management program. |
Investment and Financing Committee | |||
Members: Mr. Chafey (chair) Messrs. Faría-Soto, Clavell-Rodríguez, Fuentes-Benejam, and Santa María-Ros | The committee is responsible, among other things, for the following matters: ·Recommending to the Board the Company’s investment policy and guidelines, and financing policies, procedures and activities in accordance with best practices, good corporate governance, and compliance with applicable laws and regulation; ·Overseeing the Company’s investment portfolio and activities, including investment performance, risk management exposure, and our capital structure; and ·Reviewing and providing advice to the Board with respect to financial and investment development and transactions. |
Executive Committee | |||
Members: Mr. Clavell-Rodríguez (chair), Mrs. Dominguez (vice chair), Messrs. Chafey, Faría-Soto, Figueroa-Collazo, and Fuentes-Benejam. | The committee is responsible, among other things, for the following matters: ·Reviewing material policy, strategic and emerging issues of the Company; ·Transacting administrative matters on behalf of the Board; and ·Assisting the Board in discharging its duties between meetings of the Board, especially when timing is critical. |
Personal attributes | Competencies | Other considerations | |||
· | Integrity and good reputation | · | Public company service | · | Independence |
· | Independent judgment | · | Accounting and finance | · | Conflict of interest |
· | Analytical thinking | · | Industry knowledge | · | Acceptance of the Company’s ethical norms and responsibilities |
· | Educational background | · | Technology | · | Compliance with legal and regulatory requirements |
· | Professional experience | · | International markets | · | Other commitments |
· | Business acumen | · | Government and public policy | · | Peer-review and evaluation process |
· | Commitment | · | Human resources | ||
· | Diligence | · | Legal | ||
· | Ability to serve | · | Executive leadership |
By Internet | Email us at investorrelations@ssspr.com (investor relations) or crodrig@ssspr.com (secretary) | ||
By mail | Triple-S Management Corporation c/o Secretary P.O. Box 363628 San Juan, Puerto Rico 00936-3628 |
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership(2) | Percent of Class(3) | ||||||
FMR LLC(4) | 2,245,900 | 9.63 | % | |||||
Abigail P. Johnson Fidelity Low-Priced Stock Fund 245 Summer Street Boston, Massachusetts 02210 | ||||||||
Pzena Investment Management, LLC(5) | 2,096,324 | 8.99 | % | |||||
320 Park Avenue, 8th Floor New York, NY 10022 | ||||||||
Dimensional Fund Advisors LP(6) | 2,032,121 | 8.71 | % | |||||
Building One 6300 Bee Cave Road Austin, Texas 78746 | ||||||||
BlackRock, Inc.(7) | 1,652,612 | 7.1 | % | |||||
55 East 52nd Street | ||||||||
New York, NY 10055 |
(1) | For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act. |
(2) | For each person, the “Amount and Nature of Beneficial Ownership” column may include shares of a class of common stock attributable to the person because of that person’s voting or dispositive power or other relationship. The inclusion in the table of any shares, however, does not constitute an admission of beneficial ownership of those shares by the named shareholder. |
(3) | Based on 23,321,163 Class B shares outstanding as of the December 31, 2016. Under our license with BCBSA, no institutional shareholder may own more than 10% of all of our common stock. |
(4) | Based solely on a Schedule 13G/A filed by FMR LLC on February 13, 2017 reporting the above stock ownership as of December 31, 2016. FMR LLC reports that it has sole voting power with respect to 272,800 Class B shares and sole dispositive power with respect to 2,245,900, or 9.63% of the outstanding Class B shares. Abigail P. Johnson reports that she has sole voting power with respect to zero Class B shares and sole power to dispose of 2,245,900 Class B shares. FMR LLC reports that the interest of Fidelity Low-Priced Stock Fund amounted to 1,973,100 shares, or 8.46% of Class B shares. |
(5) | Based solely on a Schedule 13G/A filed by Pzena Investment Management, LLC (“Pzena”) on February 3, 2017 reporting the above stock ownership as of December 31, 2016. Pzena reports it has sole voting power with respect to 1,896,071 Class B shares and sole dispositive power with respect to 2,096,324 Class B shares. |
(6) | Based solely on a Schedule 13G/A filed by Dimensional Fund Advisors LP (“Dimensional”) on February 9, 2017 reporting the above stock ownership as of December 31, 2016. Dimensional reports that it has sole voting power with respect to 1,963,600 Class B shares and sole dispositive power with respect to 2,032,121 Class B shares. These securities are owned by certain funds that Dimensional serves as investment advisor, sub-adviser and/or manager. For purposes of the reporting requirements of the Exchange Act, Dimensional is deemed to be a beneficial owner of such securities; however, Dimensional expressly disclaims that it is, in fact, the beneficial owner of such securities. |
(7) | Based solely on a Schedule 13G/A filed by BlackRock, Inc. on January 26, 2017 reporting the above stock ownership as of December 31, 2016. BlackRock, Inc. reports that it has sole voting power with respect to 1,591,956 Class B shares and sole dispositive power with respect to 1,652,612 Class B shares. |
Class A Shares | Class B Shares | |||||||||||||||||||||||
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership | % of Class | Amount and Nature of Beneficial Ownership(2) | Shares Acquirable Within 60 Days(3) | Total Shares Beneficially Owned | % of Class(3) | ||||||||||||||||||
Directors and Nominees: | ||||||||||||||||||||||||
Luis A. Clavell-Rodríguez | 0 | 0 | 45,701 | 0 | 45,701 | * | ||||||||||||||||||
David H. Chafey, Jr. | 0 | 0 | 16,986 | 0 | 16,986 | * | ||||||||||||||||||
Cari M. Domínguez | 0 | 0 | 14,481 | 0 | 14,481 | * | ||||||||||||||||||
Antonio F. Faría-Soto | 0 | 0 | 24,148 | 0 | 24,148 | * | ||||||||||||||||||
Manuel Figueroa-Collazo | 0 | 0 | 27,614 | 0 | 27,614 | * | ||||||||||||||||||
Joseph A. Frick | 0 | 0 | 11,986 | 0 | 11,986 | * | ||||||||||||||||||
Jorge L. Fuentes-Benejam | 0 | 0 | 20,814 | 0 | 20,814 | * | ||||||||||||||||||
Roberto Santa María-Ros | 0 | 0 | 5,095 | 0 | 5,095 | * | ||||||||||||||||||
Named Executive Officers: | ||||||||||||||||||||||||
Roberto García-Rodríguez (4) | 0 | 0 | 46,405 | 0 | 46,405 | * | ||||||||||||||||||
Juan J. Román-Jimenez | 0 | 0 | 8,071 | 0 | 8,071 | * | ||||||||||||||||||
Madeline Hernández-Urquiza | 0 | 0 | 19,685 | 0 | 19,685 | * | ||||||||||||||||||
Eva G. Salgado-Micheo | 0 | 0 | 53,024 | 0 | 53,024 | * | ||||||||||||||||||
Arturo L. Carrión-Crespo | 0 | 0 | 42,285 | 0 | 42,285 | * | ||||||||||||||||||
All our directors, nominees and executive officers as a group (18 persons) | 0 | 0 | 355,075 | 0 | 355,075 | 1.52 | % |
(1) | For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, a person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days of the record date upon the exercise of options or warrants or upon the vesting of deferred stock awards. |
(2) | For each person, the “Amount and Nature of Beneficial Ownership” column may include shares of a class of common stock attributable to the person because of that person’s voting or dispositive power or other relationship. Unless otherwise indicated, each person in the table has sole voting and investment power over the shares listed. |
(3) | Each beneficial owner’s percentage ownership is determined based on 950,968 Class A shares and 23,321,013 Class B shares outstanding as of the February 23, 2017. |
(4) | Mr. Garcia Rodriguez is the president and chief executive of the Company. Pursuant to our current articles of incorporation and our bylaws, the president and chief executive officer of the Company is a member of our Board while acting in such capacity. |
Name | Position(s) with the Company | Age |
Juan J. Román-Jiménez | Executive Vice | 51 |
Madeline Hernández-Urquiza | President of Triple-S Salud, Inc., and President of Triple-S Advantage, Inc. | 53 |
Eva G. Salgado-Micheo* | President of Triple-S Propiedad, Inc. | 60 |
Arturo L. Carrión-Crespo | President of Triple-S Vida, Inc. | 59 |
José E. Novoa-Loyola | Chief Medical Officer | 52 |
Juan J. Díaz-Goitía | Chief Information Officer | 53 |
Hernando Ruiz-Jiménez | Chief Marketing and Communications Officer | 50 |
Iraida T. Ojeda-Castro | Chief Human Resources Officer | 62 |
Carlos L. Rodríguez-Ramos | Vice President of Legal Affairs, Chief Legal Counsel and Secretary | 38 |
Professional background of executive officers |
Juan J. Román-Jiménez, Executive Vice President and Chief Financial Officer, rejoined our Company and assumed his current position in January 2016. Previously, he served as Executive Vice President of EVERTEC, INC., a full-service transaction processing company in Latin America and a NYSE listed company, from April 2012 to August 2015, and as Executive Vice President and Chief Financial Officer of EVERTEC Group, LLC from 2011 to 2012. |
Madeline Hernández-Urquiza has been the President of our managed care subsidiaries Triple-S Salud, Inc. and Triple-S Advantage, Inc., since January 2016 and January 2015, respectively. She rejoined our Company in 2010 and assumed various positions in Triple-S Salud, including Vice President of Risk Management and Chief Risk Officer before assuming her current roles. |
Eva G. Salgado-Micheo is the President of Triple-S Propiedad, Inc., our property and casualty insurance subsidiary, since July 2003. Mrs. Salgado-Micheo retired from the Company on February 28, 2017. On March 1, 2017, Jose Del Amo Mojica was appointed President of Triple-S Propiedad, Inc. Previously, he served as Senior Vice President of Underwriting and Claims of Triple-S Propiedad, Inc. from 2014 to February 2017. |
Arturo L. Carrión-Crespo is the President of Triple-S Vida, Inc., our life insurance subsidiary, since 1998. |
José E. Novoa-Loyola, Chief Medical Officer, joined our company and assumed his position in July 2015. Previously, he served at the Cardiovascular Center of Puerto Rico and the Caribbean from 2002 to 2015 in various positions, including Medical Director, Chief of the Cardiology Department and member of the Pharmacy and Therapeutics Committee. |
Juan J. Díaz-Goitía has been our Chief Information Officer since October 2012. He also has served as President of Interactive Systems, Inc., our technology service subsidiary since 2012. Previously, he served as Executive Vice President of Triple-S Vida, Inc., from 2010 to 2012. |
Hernando Ruiz-Jiménez, Chief Marketing and Communications Officer, joined our Company and assumed his position in October 2015. Before joining the Company, he served as Executive Vice President of Impremedia, an important media group oriented to Hispanic markets in the United States from 2013 to 2014, Partner and Executive Vice President of Wireless Idea, a digital media company with business in the United States and Latin America, from 2007 to 2012, and Vice President of Marketing for Diageo, plc. from 2003 to 2007. Before that, Mr. Ruiz-Jiménez held diverse positions in PepsiCo from 1992 to 2003. |
Iraida T. Ojeda-Castro has been our Chief Human Resources Officer since 2004. |
Carlos L. Rodríguez-Ramos, Vice President of Legal Affairs, Chief Legal Counsel and Secretary, joined our Company in 2013 and assumed his current position in January 2016. Mr. Rodríguez-Ramos previous positions include Associate General Counsel, Acting General Counsel and Assistant Secretary. Before joining our Company he served as Adjunct Professor at the School of Law of the University of Puerto Rico from 2010 to 2014 and as Deputy Chief of Staff of Programmatic Affairs for the Governor of Puerto Rico from 2011 to 2012. |
Name | Position (as of December 31, 2016) |
Roberto Garcia-Rodriguez | President and chief executive officer |
Juan J. Román-Jimenez | Executive Vice President and chief financial officer |
Madeline Hernández-Urquiza | President of Triple-S Salud, Inc. |
Eva G. Salgado-Micheo | President of Triple-S Propiedad, Inc., our property and casualty insurance subsidiary |
Arturo L. Carrion-Crespo | President of Triple-S Vida, Inc. our life insurance subsidiary |
Compensation component | Description of component | 2016 highlights | ||||
Base salary | ·Designed to recognize individual contribution to the organization based on experience, knowledge and responsibilities. ·Aimed to provide competitive compensation, appropriate incentives and financial stability to the NEOs for assuming a significant level of responsibility. ·Targeted to be between the 25th and 50th percentile of comparable group. · Considers market-level salary, individual performance, and the Company’s overall financial results. | ·During 2016, our NEOs received salary increases based on the Company’s 2015 financial results. |
Annual short-term cash incentive | ·Focuses executives on achieving annual financial, operating, and individual objectives. ·Supports long-term objective of creating shareholder value. ·Provides, together with base salary, | ·During 2016 and 2017, NEOs received annual short-term compensation for 2015 and 2016, respectively, as described in the Summary Compensation Table. | ||||
Long-term equity incentive | ·Aligns management and shareholder interests. ·Provides a variable portion of total compensation tied to our long-term market and financial performance. ·Holds management responsible for their long-term decisions. ·Supports the retention of a talented management team over time. ·Emphasizes long-term performance by delivering 75% of the annual award value in performance equity grants that may be earned only if specific measures of operating performance are attained over a three-year period, with cliff vesting at the end of the third year. Remaining 25% of the equity award value is delivered in restricted stock, which vests over three years in increments of one third per year. | ·For the three-year plan beginning in 2016, the Compensation and Talent Development Committee established three levels of goal attainment based on three-year cumulative premiums earned, operating income and earnings per share (“EPS”), and determined the corresponding award size for each performance level for each NEO. These goals were set based on what the committee believes to be minimally acceptable, challenging yet attainable, and exceptional performance in the context of our stated objectives for premiums earned, operating income and EPS. ·Long-term incentives were granted to NEOs in 2016 as described in the Summary Compensation Table. |
Overarching principles ·Reinforce our values by combining our efforts to deliver superior business results with good governance, socially responsible business practices, and high ethical standards. ·Promote a high performance culture with clear emphasis on accountability and variable pay that is tied to both short and long-term results. ·Ensure compensation is paid based on accurate financial data. ·Attract, motivate and retain top talent in a cost-effective way by offering competitive compensation. ·Require share ownership that increases with executives’ scope of responsibilities. ·Emphasize uniformity of design features to reinforce collaboration, limit program complexity, and increase the effectiveness of the entire executive team. ·Align executive and shareholder interests through long-term equity based plans. ·Maintain a clear and understandable framework for evaluating the effectiveness of the program’s design. ·Prohibit any activity that hedge employee’s economic risk of owning Company stock. ·Provide a balanced total compensation to ensure that management is not encouraged to take unnecessary and excessive risks that may harm the Company. | Targeted pay posture ·Provide a total compensation opportunity targeted around average levels within comparable group. ·High performers, successors to key positions, and individuals in critical assignments may be targeted at a higher level to ensure engagement, motivation, and retention. ·Newly promoted or inexperienced executives may be paid at a lower level of target pay until they become fully-seasoned contributors. | ||
Peer group ·We compare our compensation against companies with whom we compete for talent, capital, and customers using peer references used for competitive pay comparisons, and general industry surveys for which compensation peer group data is not available. ·The Compensation and Talent Development Committee, and management, as applicable, will use judgment when making adjustments to compensation and review executive pay from a holistic perspective, including reference to compensation peer group pay practices, importance of the position to the Company, level of responsibility of the position, individual performance and growth in position, our financial performance and ability to pay, and internal equity considerations. |
Level | Value of Stock as a Multiple of Base Salary |
CEO | 5x |
CFO and subsidiary presidents | 3x |
Corporate and subsidiary executives | 2x |
Other selected employees | 1x |
Alleghany Corporation | FirstBank Corp. | Popular, Inc. | ||
Argo Group International Holdings, LTD. | Infinity Property & Casualty Corp. | Selective Insurance Group, Inc. | ||
Aspen Insurance Holdings, Ltd | Magellan Health, Inc. | State Auto Financial Corporation | ||
Erie Indemnity Company | Molina Healthcare, Inc. | United Fire | ||
EVERTEC, Inc. | OFG Bancorp | Universal American Corp. |
Executive | Target Bonus Percent | |
Roberto Garcia-Rodriguez | 70% | |
Juan J. Román-Jimenez | 50% | |
Madeline Hernández-Urquiza | 70% | |
Eva G. Salgado-Micheo | 70% | |
Arturo L. Carrion-Crespo | 70% |
Metrics | Purpose |
External stakeholders | Drives behavior to be externally focused, market backed, customer centric, and aligned with our providers. |
Innovation | Drives excellence in execution, and efficient and effective ways of doing business. |
Collaboration and teaming | Drives agility, accountability and effective working relationships across businesses and functional areas. |
People development | Develops a talented, motivated and ownership-minded work force. |
Corporate Executives | Performance Measure and Weighting | ||||||||||
(dollar amounts in millions) Performance | 30% Consolidated Premiums Earned | 40% Consolidated Adjusted Net Income | 30% Individual | ||||||||
Roberto García-Rodríguez and Juan J. Román-Jimenez | |||||||||||
Maximum | $ | 3,659.0 | $ | 52.6 | According | ||||||
Target | $ | 3,049.2 | $ | 43.8 | to individual | ||||||
Minimum | $ | 2,439.4 | $ | 35.0 | metrics |
Business Unit Executives | Performance Measure and Weighting | ||||||||||||||||||
Consolidated Results | Business Unit | ||||||||||||||||||
15% | 25% | 15% | 15% | 30% | |||||||||||||||
(dollar amounts in millions) Performance | Premiums Earned | Adjusted Net Income | Premiums Earned | Net Income | Individual | ||||||||||||||
Madeline Hernández Urquiza –Managed Care Segment | |||||||||||||||||||
Maximum | $ | 3,659.0 | $ | 52.6 | $ | 3,360.8 | $ | 34.4 | According | ||||||||||
Target | $ | 3,049.2 | $ | 43.8 | $ | 2,800.7 | $ | 28.7 | to individual | ||||||||||
Minimum | $ | 2,439.4 | $ | 35.0 | $ | 2,240.6 | $ | 23.0 | metrics | ||||||||||
Eva G. Salgado Micheo – Property and Casualty Insurance Segment | |||||||||||||||||||
Maximum | $ | 3,659.0 | $ | 52.6 | $ | 115.3 | $ | 10.2 | According | ||||||||||
Target | $ | 3,049.0 | $ | 43.8 | $ | 96.1 | $ | 8.5 | to individual | ||||||||||
Minimum | $ | 2,439.4 | $ | 35.0 | $ | 76.9 | $ | 6.8 | metrics | ||||||||||
Arturo L. Carrión-Crespo – Life Insurance Segment | |||||||||||||||||||
Maximum | $ | 3,411.6 | $ | 28.4 | $ | 185.6 | $ | 19.6 | According | ||||||||||
Target | $ | 2,843.0 | $ | 23.7 | $ | 154.7 | $ | 16.3 | to individual | ||||||||||
Minimum | $ | 2,274.4 | $ | 19.0 | $ | 123.8 | $ | 13.0 | metrics |
Performance metric | Weighting | Rationale |
3-Year Cumulative Premiums Earned, Net | 20% | Premiums earned, net improvement is critical to the continued growth and health of our business. Premiums earned, net is a key contributor to EPS and shareholder value creation. |
3-Year Cumulative Operating Income | 35% | Operating income improvement emphasizes cost control and is important as we continue to grow our top line. Operating income is also a key contributor to EPS and shareholder value creation. |
3-Year Cumulative EPS | 45% | EPS sets the expectation of the Company’s success for our shareholders. We use EPS as the key accounting measure and evaluation of how the Company is performing. |
· | Company financial and operating results. |
· | The corporate budget, meaning our overall budget for base salaries. The corporate budget was established based on planned performance for 2016. The objective of the budget is to allow salary increases to retain and motivate successful performers while maintaining affordability within our business plan. |
· | The relative pay differences for different job levels. |
· | Evaluation of peer group data specific to each executive position, where applicable. |
NEO | Previous base salary | 2016 Base salary | Percentage | |||||||||
Roberto García-Rodríguez(1) | $ | 587,800 | $ | 750,000 | 27.5 | % | ||||||
Madeline Hernández-Urquiza(2) | $ | 475,000 | $ | 525,000 | 10.5 | % | ||||||
Juan J. Román-Jimenez(3) | - | $ | 500,000 | - | ||||||||
Eva Salgado-Micheo | $ | 384,100 | $ | 391,782 | 2 | % | ||||||
Arturo L. Carrion-Crespo | $ | 324,700 | $ | 324,700 | 0 | % |
(1) | On January 1, 2016, Mr. Garcia-Rodriguez received a salary increase in connection with his appointment as president and chief executive officer of the Company. |
(2) | On January 11, 2016, Mrs. Hernandez-Urquiza received a salary increase in connection with her appointment as president of Triple-S Salud, Inc., our managed care subsidiary. |
(3) | On January 11, 2016, Mr. Roman-Jimenez rejoined the Company and was appointed executive vice president and chief financial officer of the Company. |
Name and Principal Position | Year | Salary(1) | Bonus(2) | Stock Awards(3) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(4) | All Other Compensation(5) | Total | |||||||||||||||||||||||||
Roberto García-Rodríguez President & CEO, Triple-S Management Corporation | 2016 | $ | 744,385 | $ | 600 | $ | 1,874,972 | $ | 0 | $ | 215,769 | $ | 0 | $ | 37,728 | $ | 2,873,454 | |||||||||||||||||
2015 | $ | 585,093 | $ | 0 | $ | 649,972 | $ | 0 | $ | 487,256 | $ | 0 | $ | 15,658 | $ | 1,737,979 | ||||||||||||||||||
2014 | $ | 493,987 | $ | 209,983 | $ | 449,983 | $ | 0 | $ | 0 | $ | 0 | $ | 11,976 | $ | 1,165,929 | ||||||||||||||||||
Juan J. Román-Jimenez Executive Vice President & CFO, Triple-S Management Corporation | 2016 | $ | 471,154 | $ | 600 | $ | 749,981 | $ | 0 | $ | 102,747 | $ | 45,000 | $ | 12,800 | $ | 1,382,282 | |||||||||||||||||
2015 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||
2014 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||
Madeline Hernandez-Urquiza President of Triple-S Salud, Inc. and Triple-S Advantage, Inc. | 2016 | $ | 514,135 | $ | 600 | $ | 524,998 | $ | 0 | $ | 150,186 | $ | 10,000 | $ | 33,638 | $ | 1,233,602 | |||||||||||||||||
2015 | $ | 474,630 | $ | 0 | $ | 399,989 | $ | 0 | $ | 293,192 | (6 | ) | $ | 50,668 | $ | 1,218,479 | ||||||||||||||||||
2014 | $ | 247,901 | $ | 115,226 | $ | 124,981 | $ | 0 | $ | 0 | $ | 20,000 | $ | 20,662 | $ | 528,770 | ||||||||||||||||||
Eva G. Salgado-Micheo President of Triple-S Propiedad, Inc. | 2016 | $ | 391,516 | $ | 600 | $ | 374,979 | $ | 0 | $ | 187,995 | $ | 180,000 | $ | 28,200 | $ | 1,163,290 | |||||||||||||||||
2015 | $ | 383,868 | $ | 0 | $ | 374,985 | $ | 0 | $ | 320,283 | $ | 0 | $ | 28,200 | $ | 1,107,336 | ||||||||||||||||||
2014 | $ | 379,734 | $ | 0 | $ | 249,994 | $ | 0 | $ | 213,800 | $ | 345,000 | $ | 28,200 | $ | 1,216,728 | ||||||||||||||||||
Arturo L. Carrión-Crespo President of Triple-S Vida, Inc. | 2016 | $ | 324,700 | $ | 600 | $ | 249,978 | $ | 0 | $ | 153,760 | $ | 0 | $ | 44,000 | $ | 773,038 | |||||||||||||||||
2015 | $ | 336,415 | $ | 0 | $ | 249,984 | $ | 0 | $ | 194,825 | $ | 0 | $ | 44,450 | $ | 825,674 | ||||||||||||||||||
2014 | $ | 311,664 | $ | 0 | $ | 214,984 | $ | 0 | $ | 142,300 | $ | 0 | $ | 40,950 | $ | 709,898 | ||||||||||||||||||
(1) | Amounts represent base salary. Some of the NEOs deferred a portion of their salary under the non-qualified deferred compensation plan. The deferred amounts have been included in the Non-Qualified Deferred Compensation Table below. |
(2) | Payments made for 2014 represents discretionary payments made under the non-equity incentive compensation plan. See “Compensation discussion and analysis—Components of Executive Compensation—Short-term annual cash incentive” for a detailed explanation. Payments made for 2016 represent the minimum amount required under Puerto Rico law. See “Compensation discussion and analysis—Components of executive compensation—“Annual non-performance cash bonus” for a detailed explanation. |
(3) | The amounts shown reflect the grant date fair value of the stock awards determined in accordance with the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. See footnote 20 of the Company’s audited consolidated financial statements. |
(4) | The amounts represent the actuarial increase in the present value of the NEOs benefits under our pension plan and the Supplemental Benefit Plan, described below under “Non-contributory defined benefit pension plan.” The increase was calculated using the interest rate, discount rate and form of payment assumptions consistent with those used in our financial statements. The calculation assumes benefit commencement at normal retirement age (65), and was calculated without respect to pre-retirement death, termination or disability. Earnings on deferred compensation are not reflected in this column because we do not provide guaranteed returns on non-qualified deferred compensation. |
(5) | Other annual compensation consists of the following: |
Vehicles Allowance | Sick Leave & Vacation Paid(a) | Contributions to Defined Contributions Plan | Total | |||||||||||||
Roberto García-Rodríguez | $ | 30,000 | $ | 0 | $ | 7,728 | $ | 37,728 | ||||||||
Juan J. Román-Jimenez | $ | 0 | $ | 0 | $ | 12,800 | $ | 12,800 | ||||||||
Madeline Hernández-Urquiza | $ | 28,200 | $ | 0 | $ | 5,483 | $ | 33,683 | ||||||||
Eva G. Salgado-Micheo | $ | 28,200 | $ | 0 | $ | 0 | $ | 28,200 | ||||||||
Arturo L. Carrión-Crespo | $ | 28,200 | $ | 0 | $ | 15,800 | $ | 44,000 |
(6) | Change in pension value for Ms. Hernández-Urquiza during 2015 was -$5,000. |
Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of | All Other Option Awards: Number of Securities | Exercise Price of | Grant Date Fair Value of Stock and | |||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold | Target | Maximum | Threshold (#) | Target (#) | Maximum (#) | Stock (#)(3) | Underlying Options (#) | Option Awards | Option Awards(4) | |||||||||||||||||||||||||||||||||
Roberto García-Rodríguez | — | $ | 262,500 | $ | 525,000 | $ | 787,500 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
2/22/2016 | — | — | — | 34,708 | 54,232 | 81,348 | 18,077 | — | — | $ | 1,874,972 | |||||||||||||||||||||||||||||||||
Juan J. Román-Jiménez | — | $ | 125,000 | $ | 250,000 | $ | 375,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
5/10/2016 | — | — | — | 15,497 | 24,214 | 36,321 | 8,071 | — | — | $ | 499,967 | |||||||||||||||||||||||||||||||||
Madeline Hernández-Urquiza | — | $ | 183,750 | $ | 367,500 | $ | 551,250 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
5/10/2016 | — | — | — | 10,848 | 16,950 | 25,425 | 5,650 | — | — | $ | 524,998 | |||||||||||||||||||||||||||||||||
Eva G. Salgado-Micheo | — | $ | 137,124 | $ | 274,247 | $ | 411,371 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
5/10/2016 | — | — | — | 7,748 | 12,107 | 18,161 | 4,035 | — | — | $ | 374,979 | |||||||||||||||||||||||||||||||||
Arturo L. Carrión-Crespo | — | $ | 113,645 | $ | 227,290 | $ | 340,935 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
5/10/2016 | — | — | — | 5,165 | 8,071 | 12,107 | 2,690 | — | — | $ | 249,978 |
(1) | The Compensation and Talent Development Committee established the performance measures for purposes of determining the amounts payable for the year ended December 31, 2016. The amounts shown under the Threshold column assume the lowest performance level is achieved by the Company or business unit. The amount of the annual non-equity incentive bonus can be zero if the lowest level is not achieved. Awards under this plan, if any, are payable in the first quarter of the following year. Amounts approved with respect to 2016 results are reflected in the “Summary compensation table — Non-Equity Incentive Plan Compensation” column. |
(2) | Performance awards vest at the end of a three-year period following their grant date, subject to the achievement of performance measures. The minimum threshold payout is determined at 64% when 80% of the target is met and the maximum payout is determined at 150% when 120% of the target is met. |
(3) | Represents the number of restricted shares awarded on each grant date. Restricted stocks are considered issued and outstanding as of December 31, 2016; however, they have a three year vesting period, and vest in equal installments on each anniversary date. Owners of restricted share have the same right as any other shareholder to receive any dividend declared by the Company on its Class B shares. |
(4) | The grant date fair value of these awards was determined in accordance with the provisions of FASB Accounting Standards Codification Topic 718. See footnote 20 of the Company’s audited consolidated financial statements. There is no assurance that the value realized by NEOs, if any, will be at or near the amounts shown in this column. |
(#) | Represents a non-monetary value. |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested (1) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested (1) | ||||||||||||||||||||||||||||||
Roberto García-Rodríguez | (2 | ) | — | — | — | — | — | 2,278 | $ | 47,155 | 20,504 | $ | 424,433 | ||||||||||||||||||||||||||
(3 | ) | — | — | — | — | — | 5,762 | $ | 119,273 | 25,930 | $ | 536,751 | |||||||||||||||||||||||||||
(4 | ) | — | — | — | — | — | 18,077 | $ | 374,194 | 54,232 | $ | 1,122,602 | |||||||||||||||||||||||||||
Juan J. Román-Jimenez | (5 | ) | — | — | — | — | — | 8,071 | $ | 167,070 | 24,241 | $ | 501,230 | ||||||||||||||||||||||||||
Madeline Hernández-Urquiza | (2 | ) | — | — | — | — | — | 632 | $ | 13,082 | 5,695 | $ | 117,887 | ||||||||||||||||||||||||||
(3 | ) | — | — | — | — | — | 3,546 | $ | 73,402 | 15,957 | $ | 330,310 | |||||||||||||||||||||||||||
(5 | ) | — | — | — | — | — | 5,650 | $ | 116,955 | 16,950 | $ | 350,865 | |||||||||||||||||||||||||||
Eva G. Salgado-Micheo | (2 | ) | — | — | — | — | — | 1,265 | $ | 26,186 | 11,391 | $ | 235,794 | ||||||||||||||||||||||||||
(3 | ) | — | — | — | — | — | 3,324 | $ | 68,807 | 14,960 | $ | 309,672 | |||||||||||||||||||||||||||
(5 | ) | — | — | — | — | — | 4,035 | $ | 83,525 | 12,107 | $ | 250,615 | |||||||||||||||||||||||||||
Arturo L. Carrión-Crespo | (2 | ) | — | — | — | — | — | 1,089 | $ | 22,542 | 9,796 | $ | 202,777 | ||||||||||||||||||||||||||
(3 | ) | — | — | — | — | — | 2,216 | $ | 45,871 | 9,973 | $ | 206,441 | |||||||||||||||||||||||||||
(5 | ) | — | — | — | — | — | 2,690 | $ | 55,683 | 8,071 | $ | 167,070 |
(1) | The market value of restricted stock and performance awards that have not vested was calculated by multiplying the closing price of our Class B shares on December 31, 2016 ($20.70) by the applicable number of shares. |
(2) | Stock awards granted on May 8, 2014 vest yearly in three equal installments. Performance awards vested at the end of a three-year period on December 31, 2016, subject to achievement of performance measures. |
(3) | Stock awards granted on March 3, 2015 vest yearly in three equal installments. Performance awards will vest at the end of a three-year period on December 31, 2017, subject to the achievement of performance measures. |
(4) | Stock awards granted on February 22, 2016 vest yearly in three equal installments. Performance awards will vest at the end of a three-year period on December 31, 2018, subject to the achievement of performance measures. |
(5) | Stock awards granted on May 10, 2016 vest yearly in three equal installments. Performance awards will vest at the end of a three-year period on December 31, 2018, subject to the achievement of performance measures. |
(#) | Represents a non-monetary value. |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting | ||||||||||||
Roberto García-Rodríguez | 4,440 | $ | 54,568 | 9,698 | $ | 232,197 | ||||||||||
Juan J. Román-Jimenez | — | — | — | — | ||||||||||||
Madeline Hernández-Urquiza | — | — | 5,433 | $ | 131,788 | |||||||||||
Eva G. Salgado Micheo | — | — | 9,738 | $ | 233,688 | |||||||||||
Arturo L. Carrión Crespo | — | — | 8,551 | $ | 204,737 | |||||||||||
(#) Represent a non-monetary value. |
Name | Plan Name | Number of Years of Credited Service(1) | Present Value of Accumulated Benefit(2) | Payments During Last Fiscal Year | |||||||||
Roberto García-Rodríguez | Non-Contributory Retirement | — | — | — | |||||||||
Supplemental Retirement | — | — | |||||||||||
Juan J. Román-Jimenez | Non-Contributory Retirement | 15.55 | $ | 510,000 | $ | 0 | |||||||
Supplemental Retirement | $ | 380,000 | $ | 0 | |||||||||
Madeline Hernandez-Urquiza | Non-Contributory Retirement | 10.19 | $ | 85,000 | $ | 0 | |||||||
Supplemental Retirement | — | — | |||||||||||
Eva G. Salgado Micheo(3) | Non-Contributory Retirement | 20.9 | $ | 1,020,000 | $ | 0 | |||||||
Supplemental Retirement | $ | 535,000 | $ | 0 | |||||||||
Arturo L. Carrión Crespo | Non-Contributory Retirement | — | — | — | |||||||||
Supplemental Retirement | — | — |
(1) | The actual number of years of credited service with the Company of Mrs. Salgado-Micheo is the same as the years of her credited service under both plans. Mr. Román-Jimenez rejoined the Company in 2016 and the number of years of his credited service under the non-contributory define-benefit and supplemental pension plans is fixed to the years of actual service prior to 2016. Ms. Hernández-Urquiza’s rejoined the Company in 2010 and the number of years of her credited service under the non-contributory defined-benefit pension plan is fixed to the years of actual service prior to 2010. |
(2) | For additional information on the material assumptions applied in determining the present value of accumulated benefits, see note 15 (“Pension Plans”) to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. |
(3) | Participant is eligible for early retirement under both plans. Mrs. Salgado-Micheo retired from the Company effective February 28, 2017 and elected to postpone benefit commencement until eligible for normal retirement benefits. Additional details on early retirement payments and benefit formula and eligibility standards can be found in the sections titled “Non-Contributory Defined Benefit Pension Plan” and “Supplemental Retirement Plan” above. |
Name | Balance | Executive Contribution Last Fiscal Year(1) | Registrant Contribution in Last Fiscal Year | Aggregate Earnings in Last Fiscal Year | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year | ||||||||||||||||||
Roberto García-Rodríguez | — | — | — | — | — | — | ||||||||||||||||||
Juan J. Román-Jimenez | — | — | — | — | — | — | ||||||||||||||||||
Madeline Hernández Urquiza | — | — | — | — | — | — | ||||||||||||||||||
Eva G. Salgado-Micheo | $ | 33,523 | $ | 25,960 | — | $ | 1,673 | — | $ | 61,156 | ||||||||||||||
Arturo L. Carrión-Crespo | — | — | — | — | — |
(1) | Amounts reported in this column for 2016 are reported as salary in the Summary Compensation Table. |
Termination for cause | In the event the agreement with our chief executive officer terminates for “cause,” or as a result of his death or resignation, he will receive the base salary earned until the date of death or resignation, the liquidation of any applicable fringe benefits and the payment of amounts due under our deferred compensation plan and any vested rights under our incentive plan and pension plan. For “cause” means: · a material breach by the chief executive officer of his obligations and duties as specified in the contract; · a conviction or allegation of nolo contendere of any felony or the conviction or allegation of nolo contendere of a misdemeanor involving fraud, dishonest or disreputable conduct or moral torpitud; · insubordination; · material non-compliance of the contract or the rules, regulations, guidelines, policies or code of ethics of the Company · improper or disorderly conduct; or · the existence of a conflict of interest not previously disclosed to the Board. | |||
Termination without cause | In the event of termination of the agreement without “cause” (other than for death or disability), we would provide the following severance benefits: · the payment of the base salary up to the normal expiration of the contract, or the base salary of one year, whichever is greater. · the continuation of long term disability insurance, life insurance and health and medical benefits for the chief executive officer and his dependents until the later of one year or the remainder of the term of the contract; · the payment of any amounts due under our deferred compensation plan and/or related to vested rights under our pension plan; and · the accelerated vesting of equity grants, provided that the chief executive officer releases the Company from liability with the execution of a general release. | |||
Expiration of employment term | In the event the employment contract terminates as a result of the expiration of the employment term (other than through the chief executive officer’s request and regardless of whether there is any period of at-will employment following the employment term), we would provide the following severance: ·an amount equal to one year’s base salary payable in monthly installments; and ·the continuation of long-term disability insurance, life insurance and health benefits for the chief executive officer and his dependents for a 12-month period following termination. | |||
Termination upon change in control | If upon the event of a change in control, the Company terminates the chief executive officer without cause or he resigns for good reason (“double trigger”), the chief executive officer is entitled to receive the following payment: · an amount equal to twice (1) the highest base salary received by the chief executive officer in any of the three years prior to the date of the change in control and (2) the average annual cash bonus received by the chief executive officer during the prior three years; and · the continuation of long-term disability insurance, life insurance and health and medical benefits for the chief executive officer and his dependents for 24 months or until the chief executive officer obtains employment with comparable benefits. |
· | the acquisition by any party of ownership of 25% or more of the total votes required for the election of our directors, or of such amount which, based on the cumulative vote, if this were allowed by the articles of incorporation and bylaws, would permit such party to elect 25% or more of our directors; |
· | as a result of a tender offer or exchange offer of the Company’s stock, a consolidation, merger or other business combination, sale of assets or any combination thereof, the persons who were our directors prior to such transaction fail to constitute a majority of the Board; |
· | a change of at least 30% of our directors as a result of a “proxy fight,” as such term is defined in Regulation 14A of the Exchange Act; or |
· | a sale or transfer of substantially all of the assets of the Company to a non-affiliated corporation. |
· | a change in the nature or scope of the chief executive officer’s duties or functions from those performed on the date immediately preceding the change in control; |
· | a reduction in base salary from that received on the date immediately preceding the change in control; |
· | a reduction in the ability to participate in the compensation plans, such as bonus, stock options, incentives or other compensation plans, in which the chief executive officer participated on the date immediately preceding the change in control; |
· | a change in the location of the chief executive officer’s principal place of employment of more than twenty-five miles from the place maintained as work office on the date immediately preceding the change in control; or |
· | the reasonable determination by the Board to the effect that, as a result of the change in control and a change in the circumstances thereafter affecting the employment position, the chief executive officer is unable to exercise the authority, powers, functions or duties assigned to his position on the date immediately preceding the change in control. |
Expiration of Employment Agreement(1) | Termination Without Cause(2) | Termination With Cause or Upon Resignation or Death | Change of Control – Resignation for Cause or Termination Without Cause(3) | |||||||||||||
Roberto García-Rodríguez* | ||||||||||||||||
Base salary | Up to | $750,000 | Up to | $1,375,000 | ― | $1,500,000 | ||||||||||
Annual short-term bonus | ― | ― | ― | $1,575,000 | ||||||||||||
Fringe benefits | Up to | $55,459 | Up to | $101,675 | ― | Up to | $110,918 | |||||||||
Total | $805,459 | $1,476,675 | ― | $3,185,918 |
* | Based on base compensation currently paid to Mr. García-Rodríguez under his contract as chief executive officer. |
(1) | Base Salary and Fringe Benefits are payable in 12 equal monthly installments, provided the chief executive officer did not end negotiations or notify his desire not to renew. |
(2) | Base Salary and Fringe Benefits payable are equal to the greater of the amount due at the expiration of the agreement or one year. For purposes of this table, we are estimating potential payment for a 22-month period, commencing on March 1, 2016 until December 31, 2018. |
(3) | Base Salary and Annual Short Term Bonus payable is equal to twice the highest Base Salary paid in any of the prior three fiscal years and twice the average Annual Short Term Bonus for the prior three fiscal years. For purposes of this table we calculated the annual short-term bonus with the maximum payout allowed under the Non-equity Incentive Plan. The obligations to pay Fringe Benefits expires on the earlier of 24 months after the termination of employment or the date employment with comparable benefits is obtained. |
Compensation components for non-management directors | Amount | |||
Annual cash retainer | $ | 80,000 | ||
Annual equity retainer | $ | 80,000 | ||
Additional annual cash retainer | ||||
Chair of the Board | $ | 150,000 | ||
Vice Chair/ Lead Independent Director | $ | 10,000 | ||
Audit Committee Chair | $ | 18,000 | ||
Compensation and Talent Development Committee Chair | $ | 13,000 | ||
Corporate Governance and Nominating Committee Chair | $ | 10,000 | ||
Investment and Financing Committee Chair | $ | 10,000 |
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | |||||||||
Adamina Soto-Martínez(3) | $ | 20,000 | $ | 0 | $ | 20,000 | ||||||
Antonio F. Faría-Soto | $ | 98,000 | $ | 80,000 | $ | 178,000 | ||||||
Cari M. Dominguez | $ | 81,186 | $ | 80,000 | $ | 161,186 | ||||||
David H. Chafey, Jr. | $ | 90,449 | $ | 80,000 | $ | 170,449 | ||||||
Jorge L. Fuentes-Benejam | $ | 91,052 | $ | 80,000 | $ | 171,052 | ||||||
Joseph A. Frick | $ | 82,122 | $ | 80,000 | $ | 162,122 | ||||||
Luis A. Clavell-Rodríguez | $ | 230,000 | $ | 80,000 | $ | 310,000 | ||||||
Manuel Figueroa-Collazo | $ | 94,640 | $ | 80,000 | $ | 174,640 | ||||||
Roberto Santa María-Ros(4) | $ | 81,000 | $ | 120,000 | $ | 201,000 |
(1) | The Board holds an annual off-site meeting to discuss our strategic direction and comply with continuing education requirements, among other purposes. Some of the activities at this meeting could be considered non-work related; however, due to the difficulty in allocating the specific cost to each member and since total cost is estimated at less than $3,500 per person, such amount was not included in the above table. |
(2) | In accordance with Section 229.402(k)(2)(iii) of Regulation S-K, this item considers the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the grant given on May 27, 2016 (3,376 shares at $23.69). |
(3) | Ms. Soto-Martinez passed away on March 28, 2016. |
(4) | On May 26, 2016, Mr. Santa Maria-Ros received an additional grant of 1,719 shares at $23.26 corresponding to the period on which he served as a director from his appointment on December 1, 2015 through the 2016 annual meeting. |
Mr. Clavell-Rodríguez, Chair of the Board · Member of the board of San Jorge Children’s Hospital and San Jorge Children’s Medical Specialties, which paid insurance premiums totaling $1,952,681.20 and received insurance payments totaling $467,938.66. |
Mrs. Dominguez, Director · Member of the board of Manpower Group, Inc., which paid insurance premiums totaling $434,212.95. |
Mr. Figueroa-Collazo, Director · Chief executive officer of VERNET, Inc., which paid insurance premiums totaling $156,093.31 and received insurance payments totaling $390.50 |
Mrs. Eva G. Salgado-Micheo, President of Triple-S Propiedad, Inc. until February 28, 2017. · Her brother, Mr. Victor J. Salgado-Micheo and her sister, Mrs. Ana M. Salgado-Micheo are President and Vice President, respectively, of Victor Salgado & Associates which paid insurance premiums totaling $380,688.89. · Her brother, Mr. Victor J. Salgado-Micheo and her sister, Mrs. Ana M. Salgado-Micheo are President and Vice President, respectively, of Integrand Assurance, which paid insurance premiums totaling $22,469.14 and received insurance payments totaling $183,525.07. |
Mr. Fuentes-Benejam, Director · Member of the board of trustees of Interamerican University of Puerto Rico, which paid premiums totaling $11,306,736.28, and received a donation totaling $15,000. |
LUIS A. CLAVELL-RODRÍGUEZ, MD | CARLOS L. RODRÍGUEZ-RAMOS |
Chair of the Board | Secretary |
March , 2017 |
1- | If a will exists and an executor or judicial administrator has been designated: |
Þ | Copy of the will or document designating the judicial administrator, if one has been designated, |
Þ | Certificate from the Registry of Wills as to the effectiveness of the will, and |
Þ | Testamentary Letters issued by the appropriate court certifying the executor. |
2- | If a will exists but an executor has not been designated or the executor is not authorized to participate at the Annual Meeting as a representative of the estate: |
Þ | Copy of the will, |
Þ | Copy of the declaration of heirs (if the will does not distribute the entire estate among the heirs), |
Þ | Certificate from the Registry of Wills as to the effectiveness of the will, and |
Þ | A letter signed by all heirs to the deceased shareholder included in the will or the declaration of heirs, as the case may be, designating and authorizing the person to participate at the Annual Meeting and to vote therein as set forth in such letter. |
3- | If a will does not exist: |
Þ | Copy of the declaration of heirs, and |
Þ | A letter signed by all heirs to the deceased shareholder included in the declaration of heirs, designating and authorizing the person to participate at the Annual Meeting and to vote therein as set forth in such letter. |
Sincerely, | |
Carlos L. Rodríguez-Ramos, Esq. | |
Secretary |