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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement | |
☐ | CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE14A-6(E)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to§240.14a-12 |
Humana Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. | |||
☐ | Fee computed on table below per Exchange Act Rules14a-6(i)(4) and0-11. | |||
(1) | Title of each class of securities to which transaction applies:
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(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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☐ | Fee paid previously with preliminary materials. | |||
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
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(4) | Date Filed:
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Humana Inc. 500 West Main Street Louisville, Kentucky 40202 |
500 West Main Street
Louisville, Kentucky 40202
March 7, 2018
Dear Fellow Stockholders:
We would like to invite you to attend the Annual Meeting of Stockholders of Humana Inc., to be held on Thursday, April 19, 2018, at 9:30 a.m., Eastern Time, at the Company’s headquarters, located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky. The meeting will also be webcast via the Internet at the Investor Relations section of the Company’s website,www.humana.com. This proxy statement contains information about our Company and the three proposals to be voted upon by stockholders at the meeting. Please give this information your careful attention.
This year, we will once again be taking advantage of U.S. Securities and Exchange Commission rules that allow us to furnish proxy materials to our stockholders on the Internet. These materials will be available on the Internet on or about March 7, 2018. We continue to believe that Internet delivery of our proxy materials allows us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting.
We hope you can attend the meeting. However, even if you are unable to join us, we urge you to still exercise your right as a stockholder and vote by telephone, mail or using the Internet. The vote of every stockholder is important.
This proxy statement is being mailed or transmitted on or about March 7, 2018, to our stockholders of record as of February 26, 2018.
(Top Photo: Kurt Hilzinger; Bottom Photo: Bruce Broussard) | Dear Fellow Stockholders: We would like to invite you to attend the Annual Meeting of Stockholders of Humana Inc., to be held on Thursday, April 21, 2022, beginning at 9:30 a.m., Eastern Time at the Company’s headquarters, located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky. The meeting will also be available through an audio-only webcast via the Internet on the Investor Relations section of the Company’s website, www.humana.com. For further information on how to participate in the meeting, please refer to the “Frequently Asked Questions” section within this Proxy Statement. This proxy statement contains information about our Company and the three proposals to be voted upon by stockholders at the meeting. Please give this information your careful attention. This year, we will once again be taking advantage of U.S. Securities and Exchange Commission (SEC) rules that allow us to furnish proxy materials to our stockholders on the Internet. These materials will be available on the Internet on or about March 9, 2022. We continue to believe that Internet delivery of our proxy materials allows us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting. We hope you can attend the meeting. However, even if you are unable to join us, we urge you to still exercise your right as a stockholder and vote by telephone, mail or using the Internet. The vote of every stockholder is important. This proxy statement is being mailed or transmitted on or about March 9, 2022, to our stockholders of record as of February 28, 2022. |
2021 Reflections For our Company and our stakeholders, 2021 was a year of transition as we continued to navigate the ongoing health, social and economic challenges caused by the global pandemic. We faced these challenges head on, actively responding to issues at every turn, to ensure the holistic needs of our members were met and that our Company remained a leader in the Medicare Advantage industry. Throughout the year, our Company’s core operations remained strong and we continued to advance our strategy to become an innovative integrated healthcare Company that has the power to help the millions of individuals we serve achieve their best health. We are creating significant value by driving growth in our top-tier Medicare Advantage business while also organically expanding our Medicaid footprint, increasing the contribution from our Healthcare Services businesses, and delivering ongoing cost efficiencies and productivity improvements across the Company. We are operating from a position of strength and are confident in our enterprise strategy, the fundamentals of the Medicare Advantage industry, and our ability to deliver significant and sustainable long-term value for our customers and stockholders. We’ve seensuccess among our core businesses – Medicare Advantage, Medicaid, Pharmacy, Primary Care and Home Solutions – through strategic initiatives and technological advancements that have enhanced customer experiences and contributed to improved health outcomes. These successes are empowering us to pursue continued innovations with confidence as we maintain our effort to shift from an insurance company with elements of health to a health company with elements of insurance. We are incredibly proud that Humana is the second largest Medicare Advantage health plan provider, supporting over 5 million beneficiaries with products that offer the highest quality among our public peers, as recognized by our Medicare Advantage plan Star ratings, and continued investment and growth in our Medicare Advantage business remains a key priority. We also continue to advance our consumer segmentation efforts, developing plans that are tailored to the unique needs of specific member populations, such as growing our dual eligible special needs plan (D-SNP) membership. Expansion of our Medicaid business remains a strategic priority as we’re able to offer states an individualized approach to care that considers the physical and mental well-being of beneficiaries, as well as the critical social determinants that impact the population. Our Healthcare Services businesses are an important component of our strategy and will contribute considerably to our long-term growth. Combining our leading Medicare Advantage platform with our growing Pharmacy, Primary Care and Home Solutions businesses increases our total addressable market and creates the opportunity for improved clinical outcomes, lower cost of care and increased enterprise margin from our health plan members. Looking ahead, we are encouraged and energized by opportunities for our Company to continue leading the way in addressing health, wellness, social and economic needs of all our stakeholders. By leveraging core fundamentals of our business and maintaining strategic investments within our enterprise, we are confident in our ability to remain a leader in the Medicare Advantage industry, driving improved membership growth in 2023, while continuing to deliver on our long-term adjusted earnings growth target. We extend our sincere appreciation to our associates, members and patients, clinician partners, government partners and our stockholders for your continued support, trust, contribution and belief in the success of our Company. | ||||||
Kurt J. Hilzinger Chairman of the Board and Stockholder | ||||||
March 9, 2022 | ||||||
Bruce D. Broussard Director, President and Chief Executive Officer and Stockholder March 9, 2022 |
Notice of 20182022 Annual Meeting of Stockholders
Time and Date: | 9:30 a.m., Eastern Time, on Thursday, April | |
Location: | Humana Inc. headquarters, located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky | |
Agenda: | 1. Elect the
2. Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for
3. Non-binding advisory vote to approve the compensation of the Company’s Named Executive Officers.
4. Consider any other business properly brought before the meeting. | |
Record Date: | February | |
Proxy Voting: | Your vote is important so that as many Shares as possible will be represented. Please vote by one of the following methods: • BY INTERNET • BY TELEPHONE • BY RETURNING YOUR PROXY CARD (if you elected to receive printed materials) • BY VOTING DURING THE ANNUAL MEETING (for in person attendance only) See instructions on your proxy card or at the voting site |
By Order of the Board of Directors,
Joseph C. VenturaM. Ruschell
SeniorAssociate Vice President, AssociateAssistant General Counsel &
Corporate Secretary
March 7, 20189, 2022
General Information
| 2022 Annual Meeting of Stockholders | Place: | Humana Inc. Headquarters | |||
Date: | Thursday, April 21, 2022 | 500 West Main Street | ||||
Time: | 9:30 a.m., Eastern Time | 25th Floor Auditorium | ||||
Record Date: | February 28, 2022 | Louisville, KY 40202 |
How to Vote Your Shares
You may vote if you were a stockholder as of the close of business on February 28, 2022.
Online www.proxyvote.com | By Mail Complete, sign, date, and return your proxy card in the envelope provided | |||||
By Phone Call the phone number located on the top of your proxy card | During the Meeting Attend our annual meeting and cast your vote in person |
Voting Overview
Items of Business | Board Recommendation | Page Reference | ||||
1.
| Elect the thirteen (13) director nominees named in the proxy statement.
| FOR
| 30
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2. | Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022.
| FOR | 82 | |||
3. | Non-binding advisory vote to approve the compensation of the Company’s Named Executive Officers.
| FOR | 83 | |||
4.
| Consider any other business properly brought before the meeting.
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Board of Directors Nominees
| Position | Age | First Elected Director | |||
Kurt J. Hilzinger | Chairman of the Board, Independent Director | 61 | 07/2003 | |||
Bruce D. Broussard | Director, President and Chief Executive Officer | 59 | 01/2013 | |||
Raquel C. Bono, M.D. | Independent Director | 65 | 09/2020 | |||
Frank A. D’Amelio | Independent Director | 64 | 09/2003 | |||
David T. Feinberg, M.D. | Independent Director | 59 | 03/2022 | |||
Wayne A.I. Frederick, M.D. | Independent Director | 50 | 02/2020 | |||
John W. Garratt | Independent Director | 53 | 02/2020 | |||
David A. Jones, Jr. | Independent Director | 64 | 05/1993 | |||
Karen W. Katz | Independent Director | 65 | 09/2019 | |||
Marcy S. Klevorn | Independent Director | 62 | 02/2021 | |||
William J. McDonald | Independent Director | 65 | 10/2007 | |||
Jorge S. Mesquita | Independent Director | 60 | 02/2021 | |||
James J. O’Brien | Independent Director | 67 | 04/2006 |
i | Humana | 2022 Proxy Statement •Proxy Summary |
FREQUENTLY ASKED QUESTIONSFrequently Asked Questions
Why am I receiving this Proxy Statement?
You are receiving a proxy statement because you owned shares of Humana Inc. common stock, which we refer to as Shares, as of Monday, February 26, 2018,28, 2022, which we refer to as the Record Date, and that entitles you to vote at the Annual Meeting. Our Board of Directors has made these materials available to you on the Internet or, upon your request, has delivered printed versions of these materials to you by mail, in connection with the Board’s solicitation of proxies on behalf of the Company for use at our 20182022 Annual Meeting of Stockholders. Your proxy will authorize specified people (proxies) to vote on your behalf at the Annual Meeting. By use of a proxy, you can vote, whether or not you attend the meeting.
This proxy statement describes the matters on which the Company would like you to vote, provides information on those matters, and provides information about the Company that we must disclose when we solicit your proxy.
Why did I receive aone-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
Pursuant to rules adopted by the U.S. Securities and Exchange Commission, or the SEC, we have elected to provide access to our proxy materials over the Internet. We believe that Internet delivery of our proxy materials allows us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials, which we refer to as the Notice, to our stockholders and beneficial owners as of the Record Date. All stockholders will have the ability to access the proxy materials on a website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found on the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically bye-mail on an ongoing basis by calling Broadridge Financial Solutions, Inc., or Broadridge, at1-800-579-1639.
How can I get electronic access to the proxy materials?
The Notice provides you with instructions regarding how to:
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View our proxy materials for the Annual Meeting on the Internet; and
Instruct us to send our future proxy materials to you electronically by e-mail.
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Choosing to receive your future proxy materials bye-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meetings on the environment. If you choose to receive future proxy materials bye-mail, you will receive ane-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials bye-mail will remain in effect until you terminate it.
When and where is the Annual Meeting?
The Annual Meeting will be held on Thursday, April 19, 2018,21, 2022, at 9:30 a.m., Eastern Time, at the Company’s headquarters, located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky.
Who is entitled to vote?
Anyone who owns Humana Inc. common stock, which we refer to as Shares, as of the close of business on February 26, 2018,28, 2022, the Record Date, is entitled to vote at the Annual Meeting or at any later meeting should the scheduled Annual Meeting be adjourned or postponed for any reason. As of the Record Date, 138,087,197126,743,282 Shares were outstanding and entitled to vote. Each Share is entitled to one vote on each of the matters to be considered at the Annual Meeting.
Frequently Asked Questions• 2022 Proxy Statement | Humana | 1 |
What will I be voting on?
Election of the thirteen (13) director nominees named in this proxy statement to serve on the Board of Directors of the Company;
Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022; and
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A non-binding, advisory vote to approve the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement.
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The Board of Directors is not aware of any other matters to be presented for action at the Annual Meeting. However, if other matters are properly presented for a vote, the proxies will be voted for these matters in accordance with the judgment of the persons acting under the proxies.
How does the Board recommend I vote on each proposal?
The Board recommends that you vote your Shares as follows:
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FOR the election of each of the thirteen (13) director nominees named in this proxy statement;
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FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022; and
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FOR the approval of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement.
All Shares that are represented at the Annual Meeting by properly executed proxies received before or at the Annual Meeting and not revoked will be voted at the Annual Meeting in accordance with the instructions indicated in the proxies.
How do I participate in the Annual Meeting?
This year’s Annual Meeting will be held in-person at the Company’s headquarters located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky. The Company will also provide a live audio-only webcast of the Annual Meeting via the Internet on the Investor Relations section of the Company’s website (www.humana.com). You are entitled to participate in the Annual Meeting if you were a stockholder as of the close of business on the Record Date, or hold a valid proxy for the meeting. If you decide to attend the Annual Meeting by webcast, you will be able to listen to the Annual Meeting but will not have the ability to vote your shares or ask questions during the Annual Meeting. Conversely, if you are attending in-person, you will have the ability to ask questions and vote your Shares during the Annual Meeting. The Company will provide Rules of Conduct for the Annual Meeting which can be obtained at www.proxyvote.com after logging in with your unique 16-digit control number provided on your Notice of Internet Availability of Proxy Materials, your proxy card or your voting instruction form that accompanied your proxy materials (your “Control Number”). The Rules of Conduct will be strictly adhered to during the Annual Meeting.
If you are a beneficial stockholder, you may contact the bank, broker or other institution where you hold your account if you have questions about obtaining your Control Number. Non-stockholders are welcome to attend the Annual Meeting, however guests will not be allowed to participate during the Annual Meeting except as listeners.
A question and answer (Q&A) session will be available to stockholders during the Annual Meeting and will include questions submitted in advance of, and questions asked in person during, the Annual Meeting. You may submit a question in advance of the meeting at www.proxyvote.com after logging in with your Control Number. Questions may be submitted in person during the Q&A session of the Annual Meeting. The Company’s Corporate Secretary will review all questions submitted in advance to ensure that those presented for response are in accordance with the Rules of Conduct.
How do I vote?
There are four ways that you can vote your Shares. Voting by any of these methods will supersede any prior vote you made regardless of how that vote was made. PLEASE CHOOSE ONLY ONE OF THE FOLLOWING:
1) | By Internet. The website for voting is www.proxyvote.com. In order to vote on the Internet, you need the Control Number on your proxy card. Each stockholder has a unique control number so we can ensure all voting instructions are genuine and prevent duplicate voting. The Internet voting system is available 24 hours a day, seven days a week, until 11:59 p.m., Eastern Time, on |
2 | Humana | 2022 Proxy Statement •Frequently Asked Questions |
Wednesday, April 20, 2022, the day before the Annual Meeting. Once you are logged on the Internet voting system, you can record and confirm (or change) your voting instructions. If you use the Internet voting system, you do not need to return your proxy card. |
2) | By Telephone. If you are a registered holder in the United States or Canada, you may call 1-800-690-6903. The telephone voting system is available 24 hours a day, seven days a week, until 11:59 p.m., Eastern Time, on Wednesday, April 20, 2022, the day before the Annual Meeting. In order to vote by telephone, you need the Control Number on your proxy card. Each stockholder has a unique Control Number so we can ensure all voting instructions are genuine and prevent duplicate voting. Once you are logged on the telephone voting system, a series of prompts will tell you how to record and confirm (or change) your voting instructions. If you use the telephone voting system, you do not need to return your proxy card. |
3) | By Mail. Mark your voting instructions, sign and date the proxy card and then return it in the postage-paid envelope provided. If you mail your proxy card, we must receive it before 12:00 p.m., Eastern Time, on Friday, April 15, 2022. If you are returning your proxy card to Broadridge, they must receive it before 10:00 a.m., Eastern Time, on Wednesday, April 20, 2022, the day before the Annual Meeting. |
4) | In person. Attend the Annual Meeting. Mark your voting instructions and deliver the proxy card to the Inspectors of Election. Be aware that you can vote by methods 1, 2 or 3 above prior to the meeting and still attend the Annual Meeting. In all cases, a vote at the Annual Meeting will revoke any prior votes. Please note that if your Shares are held through a bank, broker or other nominee, you will need to obtain your Control Number in order to vote. |
How will my Shares be voted if I do not specify how they should be voted?
If you sign and return your proxy card without indicating how you want your Shares to be voted, the persons acting under the proxies will vote your Shares as follows:
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FOR the election of each of the thirteen (13) director nominees named in this proxy statement;
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FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022; and
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FOR the approval of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement.
What if my Shares are not registered in my name?
If you own your Shares in “street name,” meaning that your bank, broker or other nominee is actually the record owner, you should receive the Notice and voting instruction card from your bank, broker or other nominee. In addition, stockholders may request, by calling Broadridge at1-800-579-1639, to receive proxy materials in printed form, by mail or electronically bye-mail, on an ongoing basis. When you own your Shares in street name, you are deemed a beneficial owner or holder for voting purposes.purposes and you may not vote your Shares at the Annual Meeting unless you receive a valid proxy from your brokerage, firm, bank, broker-dealer or other nominee holder.
If you hold Shares through an account with a bank, broker or other nominee and you do not provide voting instructions on your instructionsinstruction form, your Shares may not be voted by the nominee with respect to certain proposals, including:
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the election of directors;
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the approval of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement; and
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the frequency with which future non-binding advisory stockholder votes on the compensation of the Company’s Named Executive Officers will be held.
Banks, brokers and other nominees have the authority under the regulations of the New York Stock Exchange, or the NYSE, to vote sharesShares for which their customers do not provide voting instructions only on certain “routine” matters, including the ratification of the appointment of the Company’s independent registered public accounting firm. However, the proposals listed above are not considered “routine” matters for this purpose, and therefore your Shares will not be voted with respect to such proposals if you do not provide voting instructions on your instruction form.
Frequently Asked Questions• 2022 Proxy Statement | Humana | 3 |
How many votes are required to approve each proposal, what are the effects of abstentions and unmarked proxy cards, and is broker discretionary voting allowed?
Proposal |
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Abstentions | Broker Discretionary Voting | Unmarked/Signed Proxy Cards | |||||
Election of directors | The number of votes exceeds the number | No effect | No | Voted “For” All Directors | ||||||
Ratification of the independent registered public accounting firm | Majority of shares present and entitled to vote | Counted as “Against” | Yes | Voted “For” | ||||||
to approve executive compensation | Majority of shares present and entitled to vote | Counted as “Against” | No | Voted “For” |
(1) | Under the Company’s Majority Vote Policy, |
which he or she facesre-election, and (b) acceptance of the resignation by the Board of Directors following that election. The Board of Directors has 90 days after a director fails to achieve the requisite stockholder votes to determine whether or not to accept the director’s resignation and to report this information to our stockholders. |
(2) | If you are a beneficial owner whose |
What is a “brokernon-vote”?
A broker“non-vote”non-vote occurs when a broker or other NYSE member organization holding Shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner, but does have discretionary voting power over other items and submits votes for those matters. As discussed above, if you hold Shares through a broker or other NYSE member organization and do not provide voting instructions to your broker or other NYSE member organization, your Shares may not be voted with respect to certain proposals, including the proposals listed above that are not considered routine.
What is a “quorum”?
A “quorum” is a majority of the issued and outstanding Shares.Shares entitled to vote at the Annual Meeting. Shares may be voted at the Annual Meeting by a signed proxy card, by telephone instruction, or electronically on the Internet. There must be a quorum for the Annual Meeting to be held. Abstentions and broker“non-votes”non-votes are counted as present and entitled to vote for purposes of determining whether a quorum exists.
How do I vote?
There are four ways that you can vote your Shares. Voting by any of these methods will supersede any prior vote you made regardless of how that vote was made.PLEASE CHOOSE ONLY ONE OF THE FOLLOWING:
Humana | 2022 Proxy Statement •Frequently Asked Questions |
How do I vote the share equivalent units held in the Humana Common Stock Fund of the Humana Retirement Savings Plan or the Humana Puerto Rico Retirement Savings Plan?
If you have an interest in the Humana Common Stock Fund of the Humana Retirement Savings Plan or the Humana Puerto Rico Retirement Savings Plan on the Record Date, you may vote. Under the Humana Retirement Savings Plan and the Humana Puerto Rico Retirement Savings Plan, your voting rights are based on your interest, or the amount of money you and the Company have invested in your Humana Common Stock Fund.
You may exercise these voting rights in almost the same way that stockholders may vote their Shares, but you have an earlier deadline, and you should provide your voting instructions to Broadridge. Broadridge will aggregate the votes of all participants and provide voting information to the Trustee for the applicable plan. If your voting instructions are received by 11:59 p.m., Eastern Time, on Wednesday, April 11, 2018,13, 2022, the Trustee will submit a proxy that reflects your instructions. If you do not give voting instructions (or give them later than that time), the Trustee will vote your interest in the Humana Common Stock Fund in the same proportion as the Shares attributed to the Humana Retirement Savings Plan, or the Humana Puerto Rico Retirement Savings Plan, as applicable, are actually voted by the other participants in the applicable plan.
You must provide your instructions to Broadridge by using the Internet, registered holder telephone number(1-800-690-6903) or mail methods described above.Please note that you cannot vote in person atduring the Annual Meeting. Your voting instructions will be kept confidential under the terms of the Humana Retirement Savings Plan or the Humana Puerto Rico Retirement Savings Plan, as applicable.
Who will count the votes?
Broadridge will tabulate the votes cast by proxy, whether by proxy card, Internet or telephone. Additionally, the Company’s Inspectors of Election will tabulate the votes cast at the Annual Meeting together with the votes cast by proxy.
How do I change my vote or revoke my proxy?
You have the right to change your vote or revoke your proxy at any time before the Annual Meeting.
Your method of doing so will depend upon how you originally voted (a later vote will supersede any prior vote you made regardless of how that vote was made):
1) | In Person — simply vote in person at the Annual Meeting; |
2) | By Internet — simply log in and resubmit your vote — Broadridge will only count the last instructions; |
By Telephone — simply sign in and resubmit your vote — Broadridge will only count the last instructions; |
By Mail — you must give written notice of revocation to Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or by fax at1-515-254-7733, submit another properly signed proxy with a more recent |
What is the due date for stockholder proposals, including stockholder nominees for director, for inclusion in the Company’s proxy materials for the 20192023 Annual Meeting?
Stockholder proposals, or stockholder nominees for director at the 20192023 Annual Meeting, as permitted by SEC regulations for inclusion in our proxy materials relating to the 20192023 Annual Meeting, must be submitted to the Corporate Secretary in writing no later than November 7, 2018.9, 2022. Proposals should be submitted to Joseph C. Ventura, Senior Vice President, Associate General Counsel &the attention of the Corporate Secretary, Humana Inc., 500 West Main Street, 21st21st Floor, Louisville, Kentucky 40202. Further, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than February 20, 2023.
Frequently Asked Questions• 2022 Proxy Statement | Humana | 5 |
May a stockholder present a proposal not included in our Proxy Statement at the April 19, 2018,21, 2022, Annual Meeting?
A stockholder can present a proposal at the Annual Meeting (aso-called “floor resolution”) only if certain notice requirements are met. The SEC does not directly regulate meeting conduct. State law imposes only limited requirements, so meetings are governed by procedures set forth in our Bylaws.Amended and Restated Bylaws (the “Bylaws”). Humana’s Bylaws require that a stockholder provide written notice of intent to bring a proposal no less than 60 days or more than 90 days prior to the scheduled date of the Annual Meeting of stockholders. If less than 70 days’ notice of the Annual Meeting is given, written notice by a stockholder would be deemed timely if made no later than the 10th day following such notice of the Annual Meeting. A proposal must also meet other requirements as to form and content set forth in our Bylaws. Stockholder proposals should be sent to Joseph C. Ventura, Senior Vice President, Associate General Counsel &the attention of the Corporate Secretary, Humana Inc., 500 West Main Street, 21st Floor, Louisville, Kentucky 40202. A copy of our Bylaws is available on our website. From thewww.humana.comwebsite, click on “Investor Relations,” and then click on “Corporate Governance,”Governance” subcategory and then click on the link entitled, “Bylaws.”
How will Humana solicit votes and who pays for the solicitation?
We have engaged D. F. King & Co., Inc. to assist in the distribution of proxy materials and solicitation of votes for approximately $12,000$13,000 plus expenses. We have also engaged Broadridge to assist in the distribution of proxy materials and the accumulation of votes through the Internet, telephone and coordination of mail votes for approximately $155,000$321,350 plus expenses. We will reimburse banks, brokers and other nominees for their reasonableout-of-pocket expenses for forwarding proxy and solicitation material to our stockholders.
How can I obtain additional information about the Company?
Included with this proxy statement (either in printed form or on the Internet) is a copy of our Annual Report on Form10-K for the year ended December 31, 2017,2021, which also contains the information required in our Annual Report to Stockholders. Our Annual Report on Form10-K and all our other filings with the SEC also may be accessed via the Investor Relations section on our website atwww.humana.com. We encourage you to visit our website. From thewww.humana.comwebsite, click on “Investor Relations,” and then click on the report you wish to review under the “SEC Filings &and Financial Reports,” then click on the “Annual Reports” subcategory.
Where can I find voting results for this Annual Meeting?
The voting results will be published in a current report on Form8-K which will be filed with the SEC no later than four business days after the Annual Meeting. The Form8-K will also be available on our website atwebsite. From the www.humana.com. website, click on “Investor Relations,” then click on “SEC Filings and Financial Reports,” and then click on “SEC Filings” subcategory.
What is “householding”?
“Householding” occurs when a single copy of our Annual Report, proxy statement and Notice is sent to any household at which two or more stockholders reside if they appear to be members of the same family. Although we do not “household” for registered stockholders, a number of brokerage firms have instituted householding for Shares held in street name. This procedure reduces our printing and mailing costs and fees. Stockholders who participate in householding will continue to receive separate proxy cards, and householding will not affect the mailing of account statements or special notices in any way. If you wish to receive separate copies of our Annual Report, proxy statement or Notice in the future, please contact the bank, broker or other nominee through which you hold your Shares.
6 | Humana | 2022 Proxy Statement •Frequently Asked Questions |
COMPANY OVERVIEWCompany Overview
Headquartered in Louisville, Kentucky, Humana Inc. is a leading (Fortune rank #53)(2021 Fortune #41 ranking) health and well-being company focused on making it easy for people to achieve their best health with clinical excellence through coordinated care. Our strategy integrates care delivery, the member experience, and clinical and consumer insights to encourage engagement, behavior change, proactive clinical outreach and wellness for the millions of people we serve across the country. As of December 31, 2017,2021, we had approximately 14.017.1 million members in our medical benefit plans, as well as approximately 7.05.3 million members in our specialty products.
Our Strategy
We are committed to helpingaddressing the most important health needs of our millions of medical and specialty insurance members achieve their bestand health care services customers to simplify achieving better health and give our customers more healthy days. We offer insurance and non-insurance products to consumers through our various subsidiaries. Our medical and specialty insurance products allow members to access health care services primarily through our networks of health care providers with whom we have contracted. In addition, we offer pharmacy solutions, provider services, home solutions services and other services and capabilities to promote wellness and advance population health.
Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care delivery system with the power to improveaddress our customers’ most significant needs that impede simpler health care and well-beingbetter health by (i) making care more predictable, understandable, and lower costs.affordable, (ii) addressing medical, behavioral, and social needs, and (iii) delivering care whenever and wherever our customers need it. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large. To accomplish that, we support physicians and other health care professionals as they work to deliver the right care in the right place for their patients, our members. Our range of clinical capabilities, resources and tools – such asin-home care, behavioral health, pharmacy services, data analytics and wellness solutions – combine to produce a simplified experience that makes health care easier to navigate and more effective.
Humana’s innovative strategy continues to capitalize on industry changes which continueby positioning ourselves as a partner in health and aging to progress toward our goals of making benefits more affordable while improving the overall cost of care and consumer experience — through our integrated care delivery model.consumers. We understand that healthcarehealth care is complicated, and dealing with multiple physicians and other healthcarehealth care professionals can be a confusing and daunting task. That is one of the principal reasons why Humana continues to enhance its integrated care delivery strategy in key areas to enable a better and more seamless locally delivered health care experience for our members.
OneWe are focusing on the unmet needs that matter the most to our customers, aligning our actions and behaviors to go above and beyond to solve those needs and deliver on a “more human” experience, so people get more than they expect, ultimately helping members achieve their best health. We call this delivering “human care.” Human care separates Humana from other traditional insurance companies, demonstrating that our approach is more caring, personalized, and easier. We do this by (i) listening to our customers, (ii) establishing strong partnerships with trusted individuals who are involved in their care, such as providers and caregivers, (iii) developing technologies and other solutions that offer convenient and easy ways for them to engage with their health, and (iv) leveraging data analytics to improve how they engage and interact with us by personalizing the experience for how they want to interact with Humana.
Our ecosystem of value-based care delivery capabilities engages our customers clinically by focusing on the physical, mental, and preventative aspects of their health, and delivering better health outcomes. We activate a network of proprietary and partnered solutions, focusing specifically on the highest influence touchpoints of the areashealth care delivery system, including primary care, home health, pharmacy, behavioral health, and social determinants of health. We support the integration of these touchpoints through robust data, analytics, and digital health capabilities that help us engage our customers in which we strivetheir health and get them the right care, in the right place, at the right time. This approach allows us to improve isdeliver better quality and health outcomes while making the health of seniors living with chronic conditions. Our integrated care delivery model brings simplicity and connectivity to the healthcare experience of our senior members. We thrive in this area by (i) partnering with providers to evolve incentives from treating health episodically to managing health holistically; (ii) integrating clinical programs that intersect healthcare and lifestyle- helping people at key moments of need; and (iii) by simplifying processes through leveraging technology, consumer segmentation and analytics.
We offer insurance andnon-insurance products to consumers through our various subsidiaries. Our medical and specialty insurance products allow members to access health care services primarily through our networks of health care providers with whom we have contracted. In addition, we offer services to our health plan members as well as to third parties that promote health and wellness, including pharmacy solutions, provider, home based, and clinical programs, as well as services and capabilities to advance population health. At the core of our strategy is our integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Three core elements of the model are to improve the consumer experience by simplifying the interaction with us, engaging members in clinical programs, and offering assistance to providers in transitioning from afee-for-service to a value-based arrangement. Our approach to primary, physician-directed caresimpler for our members aimsand patients.
Our Continued COVID-19 Response
Throughout 2021, the COVID-19 pandemic continued to providepresent unique challenges that highlighted our commitment to quality, carethe strengths of the Medicare Advantage (MA) program, and the value that is consistent, integrated, cost-effective,this enduring public-private partnership brings to our nation’s seniors, the disabled and member-focused. The model is designed to improve health outcomes and affordability for individuals and for the healthhealthcare system as a whole, while offeringwhole. Early in the year, we activated our teams to support our members a simple, seamless healthcare experience.in getting vaccinated, leveraging our data, analytics and clinical capabilities to engage in proactive outreach to help our members schedule appointments, partnering with retail organizations, providers and the communities we serve in setting up vaccine clinics, and ensuring that underserved populations had equal opportunities to access the vaccines. As the year progressed, we continued to adapt to address our members’ needs, providing resources regarding the safety and efficacy of the vaccines, reducing financial barriers to care, further improving access to telephonic and in-home care and screening capabilities, supporting our members in receiving in-person care, and addressing social determinants of health needs that were exacerbated by the pandemic.
These efforts and our performance in 2021 were made possible by the ongoing, tireless efforts of our associates, who continued to put our members and patients at the front of everything we do while continuing to balance the daily challenges presented by the pandemic.
Company Overview• 2022 Proxy Statement | Humana | 7 |
Our Performance
With significant progress made on our strategic initiatives, 2017 was an extremely successful year during which we returnedOur 2021 financial results reflect strong financialcore performance:
We reported diluted earnings per common share (EPS) of |
We returned approximately $354 million to our stockholders in the form of dividends, representing an increase of $31 million over fiscal year 2020;
Over 97% of our Medicare Advantage members in 2021 were in a plan with a 4-Star rating or higher for 2022 and we’ve increased the number of contracts that received a 5-Star rating from 1 contract in 2021 to 4 contracts in 2022 - the most in our history;
We grew our Individual Medicare Advantage membership by 446,400 members, or 11.3%, in 2021, from 3,962,700 members as of December 31, 2020, to 4,409,100 members as of December 31, 2021, with enrollment in our dual eligible special needs plans (D-SNP) growing by more than 40% in 2021, and enrollment in our Humana Honor plan designed for Veterans, that is also available to all Medicare eligibles, growing by 80% in 2021;
We accelerated the growth of our senior-focused, value-based primary care organization, the largest in the nation, ending 2021 with more than 200 centers serving approximately 350,000 patients across 24 markets in 9 states;
We saw continued growth in our pharmacy business, with our Pharmacy Benefit Manager (PBM), the fourth largest in the country, processing 515 million 30-day equivalent scripts in 2021, an 8 percent increase year over year; and
We became the largest home health and hospice organization in the nation through the completion of our acquisition of Kindred at Home, and made substantial progress towards our goal of scaling and maturing a risk-bearing, value-based model that manages the provision of home health, durable medical equipment (DME) and home infusion services.
* | Please refer to section entitled “Organization & Compensation Committee Report” in this proxy statement for a reconciliation of non-GAAP to GAAP financial measures. We encourage each stockholder to read the full financial analysis for year ended December 31, 2021 contained in our |
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Corporate Governance• 2022 Proxy Statement | Humana |
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BOARD OF DIRECTORS Oversees Management of Major Risks | ||||||||||||||||
• Regulatory & Public Policy • Financial |
• Strategic | • Reputation | • Cyber Security | • Investment Objectives | ||||||||||||
Audit Committee | Organization & Compensation Committee | Nominating, Governance & Sustainability Committee | Technology Committee | Investment Committee | ||||||||||||
• Financial Statement integrity and reporting • Legal, regulatory and compliance • Internal controls • Cyber security risk oversight | • Executive compensation policies and practices • Non-executive compensation policies and practices • Succession planning • Human Capital Management | • Governance structure and processes • Legal and policy matters • Stockholder concerns • Board refreshment • Environmental, Social and related-Governance (ESG) oversight | • Information security, technology and privacy & data protection • Company IT strategy and consumer facing technology | • Investment objectives and policies • Investment results and performance evaluation | ||||||||||||
Management Business units identify and manage business risks; Central functions design risk framework (setting boundaries and monitoring risk appetite); and Internal Audit provides independent assurance on design and effectiveness of |
Humana is committed to having sound corporate governance principles and operates within a comprehensive plan of corporate governance for the purpose of defining responsibilities, setting high standards of professional and personal conduct, and assuring compliance with such responsibilities and standards. Sound corporate governance is essential to running our business effectively and to maintaining our reputation of integrity in the marketplace. At the heart of these efforts lie our company values, the guiding forces behind all our actions — Inspire Health, Cultivate Uniqueness, Rethink Routine, Pioneer Simplicity, and Thrive Together. Our Board of Directors has adopted Corporate Governance Guidelines, which we refer to as the Guidelines, intended to comply with the requirements of Section 303A.09 of the NYSE Listed Company Manual. The Guidelines may be viewed on our website atwww.humana.com. From thewww.humana.com website, click on “Investor Relations,” then click on “Corporate Governance,” and then click on the link entitled “Corporate Governance Guidelines.”
Role of the Board and Board Leadership
Role of the Board
The business of the Company is managed under the direction of the Board, whose members are elected annually by the Company’s stockholders. The basic responsibility of the Board is to lead the Company by exercising its business judgment to act in what each director reasonably believes to be in the best interests of Humana and its stockholders, while engaging in active and independent oversight of the management of the Company’s business affairs and assets. In order to fulfill its responsibilities to the Company’s stockholders, the Board, both directly and through its committees, regularly engages with management, ensures management accountability and reviews the most critical issues that face the Company, such as approval of the Company’s strategy and mission, execution of the Company’s financial and strategic goals, oversight of risk management, succession planning, and determination of executive compensation.
Board Oversight of Risk
While management is responsible for designing and implementing the Company’s risk management process, controls and oversight, the Board, both as a whole and through its committees, has overall responsibility for oversight of the Company’s risk management. The full Board regularly reviews risks that may be material to the Company, including those detailed in the Audit Committee’s reports and as disclosed in the Company’s quarterly and annual reports filed with the SEC.
Audit Committee. Pursuant to its charter, and in compliance with applicable NYSE listed company rules, the Audit Committee is responsible for discussing the Company’s policies with respect to overall risk assessment and risk management, with primary responsibility for monitoring risks with respect to the Company’s accounting and financial reporting principles and policies and internal audit controls and procedures. To accomplish this, the Audit Committee regularly reviews with both internal Company personnel and our independent registered public accounting firm the risks that may be material to the Company, as well as major legislative and regulatory developments which could materially impact the Company’s risks. The Audit Committee meets separately with representatives of our independent registered public accounting firm and members of management in charge of internal controls and procedures with respect to financial reporting. The Company has also instituted a management Enterprise Risk Management Committee to assess the risks of the Company and coordinate with and report to the Audit Committee the results of this assessment.
Organization & Compensation Committee. The Board of Directors has delegated to the Organization & Compensation Committee the responsibility of reviewing management’s assessment of the risks associated with the Company’s compensation practices and policies for employees, including consideration of the counterbalance of risk-taking incentives and risk-mitigating factors in Company practices and policies.
The goal of these processes is to achieve serious and thoughtful board-level attention to the Company’s risk management process and system, the nature of the material risks faced by the Company, and the adequacy of the Company’s risk management process and system designed to respond to and mitigate these risks.
Board Leadership
Leadership of the Board is essential to facilitate the Board acting effectively as a working group to the benefit of the Company and its performance. As Chairman of the Board and our lead independent director, Mr. Kurt J. Hilzinger serves as Chair of regular sessions of the Board, runs the Board process and ensuresassumes key duties to ensure effectiveness and collaboration in all aspects of the Board’s role, and leadsrole.
Duties of Our Chairman | ||
Serves as Chair of regular sessions of the Board and manages the overall Board process. Leads the Board in anticipating and responding to crises. Oversees and monitors Board engagement, participation and continued education to ensure our directors are in-tune with issues of our dynamic industry and the evolving landscape. Supports the Nominating, Governance & Sustainability Committee with director on-boarding and orientation programs. Models culture, philosophy, inclusivity and values expected of all directors. Conducts individual meetings with other directors, including the CEO, and management team to encourage open communication, collaboration and differences in perspective. | Evaluates overall Board effectiveness, with emphasis on identifying areas of enhancement, development and/or furtherance and communicating these observances to the Board for discussion. Represents the Board on occasions where it is important for the Board to respond on matters independently from the Company’s management team. Provides guidance and direction to the CEO and management team. Engages with stockholders, through verbal or written communications, and presides over the Company’s Annual Meeting of Stockholders. Also recommends to the Board an agenda to be followed at the Annual Meeting. Works with the Organization & Compensation Committee to develop the process for CEO compensation evaluations. |
10 | Humana | 2022 Proxy Statement •Corporate Governance |
The Board believes that the advisability of having a separate or combined chairman and chief executive officer positions is dependent upon the strengths of the individual or individuals that hold these positions and the most effective means of leveraging these strengths, in light of the challenges and circumstances facing the Company, which may change over time. At this time, given the composition of the Company’s Board, the effective interaction between Mr. Hilzinger, as Chairman, and Mr. Broussard, as Chief Executive Officer, Mr. Hilzinger’s status as an independent director and previous service as our Lead Director, and the current challenges faced by the Company, the Board believes that separating the chief executive officer and Boardboard chairman positions provides the Company with the right foundation to pursue the Company’s strategic and operational objectives, while maintaining effective independent oversight and objective evaluation of the performance of the Company.
QualificationsBoard Engagement and ProcessUndertakings
The Board holds itself to a high standard of engagement, with a hands-on approach that leads to critical insights regarding our customers, operations and business and enhances their level of governance and oversight. An essential component to the Board’s engagement is communicating with the Company’s internal and external stakeholders. To accomplish this, meetings of the Board may be held in key Company markets where, together with management, the Board will personally meet with associates, customers, providers and other stakeholders to gain direct feedback into the Company’s operations, experiences and overall effectiveness. Despite continued COVID-19 restrictions and the Company’s workforce having remained primarily work-from-home, the Board maintained its commitment to engagement and continued to meet with stakeholders virtually, by videoconference and teleconference.
Certain other engagement practices of our Board are described below.
Follows an annual topical calendar used to balance strategic, operational, compliance, and cultural matters, among others, and receives detailed reports on those topics, in addition to ad hoc subjects, throughout the year.
Utilizes clear and proactive Board meeting agendas to achieve high productivity at each meeting.
Holds executive sessions during every meeting, with the CEO present and then with only the independent directors. Relevant feedback is then reported to the CEO and the management team, creating a feedback loop from the Board to the management team.
Maintains regular communication with the CEO and management team, apart from formal Board meetings, to ensure consistent and continuous progress toward established goals.
Employs Board technology tools to review Board materials and to remain informed of ongoing Company endeavors, to efficiently communicate with the management team and to take formal action when necessary.
Performs in-depth organizational structure reviews, through the Organization & Compensation Committee, of line and functional teams within the Company to assess leadership bench strength, culture, succession planning, diversity and related matters, and engages regularly with rising leaders within the Company. In addition, the Organization & Compensation Committee regularly reviews associate engagement scores, which maintained momentum during 2021, with 89% of our associates saying that Humana is committed to their health and well-being.
Receives continued education from external consultants on a wide range of industry topics to keep them apprised of the latest trends and anticipated future trajectories. In addition to our director’s individual pursuits, Board education opportunities during 2021, included, (i) a formal education session with external consultants; (ii) guest speaker attendance during select meetings; and (iii) routine briefings on regulatory developments.
2021 Notable Board Actions • Appointed 2 new directors to the Board • Elected 2 new executive officers in connection with management succession planning • Oversaw enhanced ESG disclosures, as well as, the Company’s transition to an integrated ESG reporting framework – Humana’s Impact Report • Approved strategic acquisitions of One Homecare Solutions and the remaining interests in Kindred at Home | 2021 Board and Committee Meetings 34 Videoconference / Teleconference Meetings 5 In-person Meetings 1 Annual Stockholder Meeting (Virtual) | 2021 Director Attendance Average 97% (Based on aggregated Board and Committee meeting attendance; includes all directors having served during 2021.) |
Corporate Governance• 2022 Proxy Statement | Humana | 11 |
Our associates are essential to our Company’s success in delivering on our core strategy, creating positive healthcare experiences and providing human care for Nominatingour members. We are committed to recruiting, developing, and retaining strong, diverse teams, activelypromoting a culture of inclusion and diversity to foster a workplace where all associates feel they can be authentic and bring their whole selves to work every day – cultivating uniqueness and thriving together.
These efforts are overseen by our Board of Directors – which has designated to our Organization & Compensation Committee the responsibility for Board-level oversight of the Company’s human capital management and inclusion and diversity policies and practices – and implemented under the direction of our Chief Administrative Officer. As of December 31, 2021, we had approximately 95,500 associates and approximately 1,400 additional medical professionals working under management agreements primarily between us and affiliated physician-owned associations.
Our Culture and Approach to Work We believe that our members’ experience is linked to our associates’ experience—engaged, productive associates are the key to building a healthy company, a caring environment where our associates go above and beyond for our members, driving innovation, and offering fulfilling experiences that incentivizes them to stay with us over the long-term. We provide opportunities for our associates to add to their personal well-being experiences that go beyond health to enhance their individual need for purpose, belonging and security. Each year, we measure our success and opportunities to advance through our annual, third-party administered Associate Experience Survey – results of the 2021 survey showed that 91% of associates are highly engaged, which is world-class level. We provide the survey results to our entire associate population and encourage leaders to use the information to create open, honest action plans with their teams to build upon and further deepen our collective engagement. | 7.3 Years Average Associate Tenure | |||
84% Of associates have a strong sense that they belong at Humana | ||||
Listening to the voice of our associates reinforces our Value of Rethink Routine. We send pulse surveys to associates throughout the year to get feedback on how we’re doing, allowing us to assess our approach to work and take action when needed. We believe this helps to strengthen our culture and support associate engagement. It was through this process that WorkLife Reimagined was formed – our latest work style model that’s focused on flexibility and collaboration. We’ve learned that there isn’t just one way to operate or one way work gets done. That’s why WorkLife Reimagined includes work styles that benefit everyone and will continue to guide and shape our culture. As our associates transition to their new work style we’re equipping them with the tools they need to be successful – whether working at home, the office, in the field or a hybrid style – they’ll stay connected no matter where they sit.
Strong Company culture starts with leadership at the top. Our CEO inspires Company culture by sending a weekly Company-wide email where he engages with associates on a variety of topics including business matters, current events, health and well-being, family and personal interests. A survey link is included within these communications encouraging associates to speak up and share their own experiences directly with our CEO.
Inclusion and Diversity
Identifying NomineesCelebrating diverse backgrounds and creating an environment of inclusion is at the heart of Humana. We take intentional steps to nurture a culture where all employees, no matter who they are, feel like they can be their best selves and do their best work. Only then can we make the best decisions for Directorsour customers to ensure that they all have a fair and just opportunity to be as healthy as possible.
Our associates’ vast experiences and perceptions—their unique characteristics, backgrounds and beliefs—drive the groundbreaking, strategic thinking that gives our Company its competitive edge in a diverse marketplace. Our approach fosters innovative thinking and creativity, expands insights and generates better business outcomes.
We are committed to having balanced diversity at all levels of the Company and have developed a pathway for top, diverse talent within our recruiting initiatives. To achieve our recruiting and hiring goals we proudly partner with local and national advocacy groups, including the CEO Action for Diversity and Inclusion, the Catalyst CEO Champions for Change, and the OneTen Coalition, to provide information about open roles, assistance with resume preparation and application submission, and to design and execute other talent acquisition and development initiatives. We’re proud to be recognized as a Military Friendly employer. Under our Veterans Hiring Initiative we partner with dozens of organizations for veteran recruitment, including the Wounded Warrior Project, United States Army Reserve, and Paralyzed Veterans of America, and have hired thousands of veterans and military spouses. We have also designed and implemented programs that enhance our hiring initiatives aimed toward women in technology, retiree/mature worker populations, and closing the hiring gap of persons with disabilities versus those without disabilities.
We’ve also incorporated balanced interview panels into our interview process, through which we strategically engage a broad spectrum of interviewers that bring greater diversity and perspective. This proven best practice strengthens the candidate experience and hiring of diverse talent, ensuring we get the right talent for any given role, and minimizes the potential for personal blind spots when evaluating candidates. Balanced interview panels enhance the experience of interviewees and demonstrate our Values in action.
12 | Humana | 2022 Proxy Statement •Corporate Governance |
October 2021 Joined the Historically Black Colleges and Universities (HBCU) Partnership A bi-partisan effort to promote greater engagement and support between private companies and HBCUs. | November 2021 Signed the Disability:IN CEO Pledge A global organization with the world’s most comprehensive disability inclusion benchmarking, serving as a resource to corporations desiring to drive disability inclusion and equality in business. | Ranked # 1 Network Resource Groups (NRG) Our NRGs were recognized by DiversityInc in its 2021 Top Companies for Employee Resource Groups. |
We’re committed to building balanced diversity at all levels of the Company through a focused effort on supporting a pathway for top, diverse talent, strengthening current collaborations and forging new partnerships. Achievement in this area requires a mindset of shared accountability and commitment to enterprise outcomes. In 2020, Humana leaders aligned to high-level goals – hiring and promotion of diverse talent, retention of diverse senior leadership (VP and above), inclusion, mentoring and leaders participating in conscious inclusion training – with shared accountability focused on driving inclusion and diversity throughout the enterprise. We’ve employed a metrics-driven approach to address areas of improvement quickly and goal achievement is linked to executive compensation (refer to section entitled “Compensation Discussion & Analysis – Associate Incentive Plan” within this proxy statement for more information on executive compensation). Since introducing these shared accountability measures, we’ve seen year-over-year (YOY) improvements among our female associates and associates of color. Our workforce representation is tracked through self-disclosure by our associates, and are committed to transparent disclosure of our demographic data. The charts below represent our workforce demographics as of December 31, 2021.
Associate Demographics |
Pay and Benefits Philosophy, Compensation and Financial Security We believe all of our associates have the right to receive a fair living wage and we are committed to maintaining a pay and benefits philosophy that is market-based and recognizes an associate’s contributions so that we can attract and retain an engaged, talented team. Our Company’s pay and benefits structure is designed to motivate and reward our associates - at all levels of the organization - for their skill development, demonstration of our Values and performance. While our programs vary by location, employee type and business, they generally include: | ||||
90% Of associates would recommend Humana as a great place to work | ||||
• Competitive Base Pay • Associate Incentive Plan (Annual Bonus) • Supplemental Pay (Including Overtime) • Recognition Pay and Service Awards • 401(k) Retirement Savings Plan with Company Match Program • Life Insurance • Short- and Long-Term Disability Insurance | • Medical, Dental and Vision Benefits • Supplemental Health Benefits • Long-Term Care Insurance • Go365® Wellness and Rewards Program • Health Plan Incentives • On-site Health and Fitness Centers • On-site Health Screenings and Vaccinations | • Paid Time Off, Paid Holidays, Paid Volunteer Time Off and Jury Duty Pay • Paid Parental Leave Program (6 Weeks) • Paid Caregiver Time Off Program (2 Weeks) • Employee Assistance Program • Associate Discount Programs and Services • Helping Hands Program • Transit Services |
Corporate Governance• 2022 Proxy Statement | Humana | 13 |
Talent Development and Growth Opportunities
We champion the individual goals and development of our associates, and provide a number of programs to ensure that our associates have the resources and support they need to deliver on their passion. The Humana Learning Center gives our associates the opportunity to earn professional certifications through continued education programs and to participate in instructor-led and online courses designed to strengthen soft and hard-skills and enhance leadership development. Our Career Cultivation team sponsors workshops and events to promote associate accountability within their personal and professional growth as part of overall career development. In 2021, our associates averaged approximately 35 learning and development hours per active associate.
Our associates are also encouraged to participate in mentoring programs with people of various backgrounds and cultures. We view mentoring as an essential development tool for sharing skills and knowledge so we can all succeed. Our commitment to mentoring feeds the successful future of our Company. In 2021, our associates participated in more than 2,700 mentoring circles, underscoring the Company’s focus on creating a culture of mentoring and inclusion. We also utilize development programs to enhance talent within our business segments through targeted internal initiatives, where we aim to upskill and reskill existing associates for opportunities in new career pathways.
84% Of associates believe Humana provides them with opportunity for growth and development. | 216,843 Hours Volunteer hours tracked by 16,400 of our | $1.2 Million Total associate matching gift dollars made by The Humana Foundation in 2021 |
A Workplace With Purpose
Having a purpose and a connection to a community improves well-being. That’s why we strive to make it easy for our associates to give back, either as individuals or a team, to causes that ignite their passion and sense of purpose. Volunteerism is a tangible way to impact the health and well-being of the communities we serve and enrich our workplace.
We’ve created programs and practices to make volunteering easier and more vibrant for associates.
Our full-time associates annually receive eight hours of paid Volunteer Time Off (VTO)
We help associates discover and track volunteer opportunities through our Humana Together volunteer portal
We integrate volunteerism in our leadership development and team-building
We offer a matching charitable gift program through The Humana Foundation
We feature associates sharing their volunteerism stories on our Intranet to inspire others
We offer our associates paid time off to get vaccinated, including boosters, for COVID-19, helping to reduce barriers associates may have in taking time away from work to get vaccinated and supporting healthy communities
Board Oversight of Environmental, Social and Governance Matters
The Nominating, Governance & Sustainability Committee has responsibility for Board-level oversight of the Company’s ESG strategy, practices and reporting. The Nominating, Governance & Sustainability Committee receives formal ESG reports from management at least twice annually regarding the Company’s ESG initiatives, metrics and progress on established goals, as well as, ad hoc ESG communications as necessary. In addition, we have an internal ESG Steering Committee, overseen by our Chief Administrative Officer and Chief Legal Officer, to guide the integration of our ESG efforts with our long-term business strategy. This ESG governance structure complements the long-standing responsibility of our Board and each of our Board committees in overseeing various aspects of the Company’s ESG-related risks and practices, as illustrated below:
BOARDOF DIRECTORS | ||||||||||||
Nominating, Governance & Sustainability Committee | ||||||||||||
Audit Committee | Organization & Compensation Committee | Technology Committee | Investment Committee | |||||||||
• Risk Management • Cyber Security | �� | • Human Capital Management • Inclusion & Diversity Practices • Company Compensation Plans & Policies | • Privacy & Data Protection • Information Security | • Investment Portfolio • Investment Guidelines | ||||||||
Chief Administrative Officer and Chief Legal Officer (In collaboration with members of the executive management team) | ||||||||||||
ESG Steering Committee | ||||||||||||
Oversight | Management | Implementation |
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Strategic Focus on ESG
We realize that the future of our business is linked with the well-being of our associates, members and patients, the communities we serve, the healthcare system, and the environment. It’s with our stakeholders in mind that we’ve established five key pillars of our ESG program that align to our strategic business goals, supporting our commitments to sustainable business and improving health outcomes. These pillars – Access to Healthcare; Data Privacy & Protection; Environmental Impact; Product Quality & Safety; and Talent & Diversity – are the driving force behind our impact platform and will guide our ESG program.
We’ve developed quantitative and/or qualitative metrics within each pillar to track, monitor, measure and report our performance. Transparent disclosures are a top priority, as such, we’ve mapped our ESG disclosures to frameworks established by the Sustainability Accounting Standards Board (SASB) Managed Care Standard, the Task Force on Climate-Related Financial Disclosures (TCFD), and the Global Reporting Initiative (GRI). We also support the United Nations Sustainable Development Goals, aligning our efforts to three goals where our Company can most contribute: Goal 3 – Good Health and Well-being; Goal 8 – Decent Work and Economic Growth; Goal 12 – Responsible Consumption and Production.
Our Impact Platform
We’ve set our intentions to have a positive well-being impact among all of our stakeholder groups and have developed a platform where we believe we can make the most difference. Our impact platform sets the direction for how we will advance health equity, address needs in our communities and drive sustainable change with shared value. The pillars may connect to one or more categories within the impact platform, reinforcing the interconnectedness of our holistic approach to ESG. We’ve highlighted below key elements of our ESG program along with some of our notable pillar metrics.
For each person, we make it easier for people to achieve their best health. | For each community, we work to advance population health. | For our business and the collective healthcare system, we help build more equitable and sustainable practices. | For the environment, we invest in the health and sustainability of the environments around us. | |||
We are all on a unique journey to our own best health, so through empathy and a personalized approach, we not only address medical needs, but meet people where they are by helping our customers, employees – everyone – address human needs, too. | Where people live, work and play is inextricable from their health outcomes, so we’re passionate about taking on the social determinants of health that impact their communities on a local level. | The future of health depends on the health of the collective system, so alongside our partners, we’re striving to create a more equitable health ecosystem that incorporates sustainable business practices, to better serve all of us, and the next generation. | The health of individuals is deeply tied to the health of their environments, so we do our part to invest in, protect and care for the places and planet all people depend on. |
For Each Person
Our members achieving their best health is at the top of our mind. We know that health is not linear. Every member is unique as are the communities we serve. That’s why we’re continuously working to ensure that our health plan products and services are as affordable as possible, as well as, addressing access to healthcare barriers so that all of our members can receive the care they need. As we cultivate our philosophy of whole-person health care, we’re addressing the most crucial needs of our members, which means truly caring about them, understanding what is important to them and finding ways to make it easy for them to live their best life. Thanks to processes such as integrated care delivery and using health screenings that consider social determinants of health, we have a clearer view of each member’s very personal barriers to their best health. Through our integrated approach, we are building the tools to address the physical, behavioral and social factors that all play such a critical role in promoting improved health outcomes. Please refer to our Value-Based Care Report for more information on these efforts.
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Our associates are the driving force behind our Company’s well-being initiatives. We believe that when we invest in our associates they pay it forward by investing in others. In this effort we actively live out our Values, cultivating uniqueness and thriving together.
29% Associate participation in at least With over 8,574 members, the Women’s NRG is the largest. | The Company’s Office of Inclusion & Diversity (our “I&D Office”) efforts are led by our Chief Inclusion and Diversity Officer, who reports directly to the Chief Administrative Officer. The I&D Office works with key partners like the Chief Health Equity Officer, our new Director of Diverse Talent Strategy, our Executive Inclusion & Diversity Council (the “Council”), our Network Resource Groups (“NRGs”), local Inclusion and Diversity Councils, and Culture & Engagement professionals across the enterprise, to maximize our vibrant diversity and inclusive culture to empower our business strategy to help the communities we serve achieve their best health. |
To help integrate inclusion and diversity into the fabric of the organization from the top down, the Council is led by our President and CEO, with top priorities consisting of (i) leading and informing the strategy to drive the hiring, developing, promotion and retaining of our full diverse workforce; (ii) creating and maintaining an inclusive culture; (iii) reviewing our supply base and spend for diversification opportunities; and (iv) improving transparency and accountability to sustain outcomes. The Council sets company-wide inclusion and diversity goals and objectives that complement our Talent & Diversity pillar.
Our inclusion and diversity objectives also aim to build an awareness of biases and beliefs, identify differences and similarities of our multi-generational workforce and enable associates to leverage differences to drive innovation and create value. We are committed to growing our associates’ inclusion skills and diversity knowledge and provide a variety of associate training programs and workshop opportunities in areas of unconscious bias, disability awareness, cultural competency, racial equity, and social justice, among others.
Our fundamental belief that every person has the right to a safe workplace includes having freedom of gender identity and expression, which we have included within our non-discrimination and anti-harassment policies. Additionally, our Company adopted guidance to support associates who are transgender and/or identify as non-binary. Our Workplace Gender Transition Guidelines, available to all associates, outlines a collaborative process to help guide transitioning associates, their coworkers and leaders by addressing the needs and issues that may arise in the workplace, and includes alignment of workplace resources, education and coaching. | 91% Of associates believe top leaders of their organization would not tolerate workplace behavior that is discriminatory or retaliatory. |
KEY PILLAR METRICS
Talent & Diversity Voluntary Turnover Rate (VTR) Goal Reduce Director Level+ VTR We’re working to retain representation among women and people of color in leadership levels of director and above, and have set VTR goals, excluding voluntary retirement, of ≤4% in each demographic. 2021 Women VTR: 5% 2021 POC VTR: 9% | Talent & Diversity Hiring and Promotion Goal Increase in Director Level+ Representation We’re working to increase representation among women and people of color in leadership levels of director and above, and have set targets of 50% for women and 30% for POC. 2021 Women: 47% 2021 POC: 29% |
For Each Community
We recognize that we are part of a bigger community – one that is connected to our members, patients, employees and neighbors. We are dedicated to the holistic health of all people, and that is why we invest in communities across the country to advance health equity. Health equity is about making sure we all have a fair and just opportunity to be as healthy as possible. Helping communities and the people in them grow stronger benefits all of us, because where people live, work and play is inextricable from their health outcomes. We’re partnering with communities to advance health equity on a local level and take on the social determinants of health that impact all of us.
As our Company shifts from an insurance company with elements of health to a health company with elements of insurance, we are focused on five areas of influence to help improve health and aging: primary care, home health, pharmacy, behavioral health and social determinants of health. Championing this effort is our Bold Goal – a population health strategy launched in 2015 to improve the health of the people and communities we serve by creating solutions to address unmet social needs and making it easier to achieve their best health.
Since 2015 we’ve continued to adapt as we learned more about our communities and our members. We discovered how important it is to develop personalized solutions, determining how best to meet the needs of our members while striving to (i) help Humana and its partners understand social determinants of health and their prevalence in our communities; (ii) convey how such determinants actualize into social needs that limit or prevent health care; and (ii) create impactful care solutions that account for our members specific health-related social needs. That has meant getting to know our members better and the daily health-related challenges they’re facing in order to connect them to people and organizations who can support them – not only in their clinical needs, but also in their individual health-related social needs,
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such as getting access to healthy food, helping to connect them socially and addressing their housing needs. With community-based organizations and healthcare practices, we are creating evidence-based, scalable and financially-sustainable solutions to improve population health at a local level. We’ve scaled social determinants of health screenings across our business, which has impacted millions – connecting those in need to community resources and support.
Because we know social determinants of health play a significant role in addressing health needs, we have developed a variety of programs, services, benefits and resources for members and the public. Our Far From Alone campaign, with many partners, strives to improve the mental health and wellness of others by increasing social connectedness and reducing feelings of loneliness. The campaign drives awareness, action, and advocacy in support of addressing this important social determinant of health. Learn more about our Far From Alone campaign, and how you can get involved, at its website https://farfromalone.com.
$3.6 Million Invested by The Humana Foundation | Over 1.6 Million Meals Provided through our Basic Needs |
KEY PILLAR METRICS
Access to Healthcare Value-Based Primary Care Goal Expand Geographic Presence We’re working to grow and expand our geographic presence in value-based primary care to provide more access and high-quality care to patients, including those in underserved areas. We ended 2021 with 206 primary care centers, representing a 32% increase over the prior year. | Access to Healthcare State Medicaid Goal Increase Medicaid Footprint We’re working to expand the number of our state-based Medicaid contracts to deliver care to more individuals of this vulnerable population. As of December 31, 2021 we had Medicaid contracts in six states: FL, IL, KY, OH, SC, and WI. |
For Our Business and the Collective Healthcare System
Throughout our operations, we are dedicated to ensuring that every business decision we make reflects our commitment to improving the health and well-being of our members and patients, our associates, the communities we serve, and our environment. Our holistic, integrated approach to care and longstanding commitment to caring for vulnerable populations also afford us a unique opportunity to promote health equity and address the effects of health disparities in the U.S. healthcare system. We have established policies and programs that illustrate our commitment to responsible business practices that lead to a more efficient, equitable and sustainable healthcare system.
Our suppliers are essential to delivering services within our business, which is why we incorporate ESG principles into our procurement strategy - ensuring a fair and equitable approach to procurement. We understand that partnering with diverse suppliers and small businesses, and engaging with them to support common ESG goals, can lead to future sustainability and a reduction in environmental costs. We also understand that inclusive procurement practices deliver broad societal benefits by creating economic opportunities for traditionally underserved or underrepresented groups. That’s why we’ve made it a priority and strive to attract qualified, certified suppliers who reflect our customers, associates and communities we serve. Leveraging these suppliers now and in the future is a win-win for everyone.
Our Supplier Diversity Program promotes an inclusive approach to procurement that ensures we invest our dollars with a balance of partnerships with historically underutilized businesses. We also support the growth of small and diverse-owned businesses by being a resource partner for them, and during 2021 we launched a Supplier Diversity Mentor-Protégé program. The program is a 12-month pilot with half-day, onsite seminars featuring leadership from across our organization exploring topics impacting business growth and operations of small and diverse businesses. The program is designed to identify and overcome barriers that typically inhibit or restrict the success of small and diverse businesses and better position them for growth, sustainability and inclusion.
We also survey suppliers annually through a sustainability scorecard that addresses sustainability, diversity practices and supplier performance. The scorecard is distributed at year-end to our top 50 Prime Suppliers (top spend suppliers) and we typically receive a 25-30% overall spend response rate. We also hold our suppliers accountable for complying with our Company’s Standard of Excellence and Ethics Every Day policy – to the same degree as our associates.
Our governance practices and policies reflect strong controls that provide a solid foundation for our continued success. We are committed to supporting the delivery of consistent high-quality care, promoting efficient outcomes in the healthcare system and ensuring that healthcare remains affordable for all members and patients. Further, in a healthcare industry increasingly driven by quality, we have a corporate Quality Improvement (QI) program – with practicing network physicians as members of various quality subcommittees – to monitor, evaluate and facilitate improvement in the quality of health care services provided to our members. The QI program is overseen by our Corporate Quality Improvement Committee (CQIC), which among other things, promotes alignment to the third dimension of
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quality (experience and outcomes) through collaboration with stakeholders, personal accountability and speaking up when quality does not meet our standards.
Our associates are integral to running our Company responsibly and key to our ethics and compliance practices. That’s why all Humana associates and contractors are required to complete an annual ethics and compliance training, and why our Enterprise Compliance team places an emphasis on communicating about ethics, compliance and risk in an intentional way, throughout the year. Our Company is also committed to building digital care delivery operations and leveraging key insights from enterprise analytics. Integrating these critical capabilities across the organization will further accelerate our Company’s move toward differentiated experiences for our customers at the intersection of healthcare and lifestyle, tailored especially to the needs of seniors. We recognize that our emphasis on technology comes with great responsibility as our customers trust us with keeping their information safe. To that end, we are proud to be an industry leader in the adoption of principles and governance to guide our implementation of emerging technologies.
KEY PILLAR METRICS
Talent & Diversity Diverse Supplier Spend Goal Increase Supplier Diversity We’re working to increase our diverse supplier base through an inclusive and equitable approach to procurement, and set yearly goals to increase total diverse supplier spend among our Prime Suppliers. Our 2021 target increase was 9%. 2021 Total Diverse Spend: $345 Million, an 8.99% increase over 2020 | Product Quality & Safety Star Ratings Goal Continue Leadership of Members in Plans with 4+ Star Rating Our commitment to quality of care, patient-centered clinical outcomes and customer service is reflected in the consistent strength of our plan’s Star Ratings. Membership in plans with 4+ Star Rating1: 4.8 million members (2022); 4.1 million members (2021); 3.7 million members (2020) |
For the Environment
We know that a strategic focus on environmental sustainability is critical to fulfilling our mission of helping people achieve lifelong well- being. The better we do at protecting the health of our environments, including our operations, supply chain, and communities around us, the better we can do at positively supporting people on their health journeys. We believe that our demonstrated commitment to environmental sustainability not only positions us to offer reliable and cost-effective service to our customers, but also embodies the principle of an intrinsic link between the health of our planet, our business, and the services we provide.
As a services company, our direct environmental impacts are concentrated within our internal operations. As such, our focus is on areas where we feel we can make the most impact: energy, emissions, and waste. We augment these initiatives with a broader effort to conserve other resources such as water, manage our real estate footprint, and collaborate with our stakeholders – namely our associates – to actively embrace sustainability. We understand that climate change impacts pose risks and opportunities for our business and seek to manage such impacts in several ways, including: continuous strengthening of our already robust business continuity program, investing in energy management and efficiency projects and applying financial incentives to support efforts toward reducing our environmental footprint. We also set challenging environmental targets, as shown below, that promote collaboration with vendors and associates to achieve them. These efforts mitigate risks and demonstrate our commitment by validating the intrinsic link between environment and well-being.
Our Workplace Experience team, overseen by our Chief Administrative Officer, is responsible for day-to-day planning, coordination and implementation of the Company’s operational environmental sustainability policies, including those around energy management and climate-change mitigation/ adaptation. The Workplace Experience team also leads initiatives toward achieving environmental targets in addition to tracking/reporting progress and assessing opportunity toward setting new climate-change mitigation/adaptation targets.
We are now working with a global leader in the digital transformation of energy management and automation, to create a more robust next generation goal that will align with the Science Based Targets initiative (SBTi) to address climate change. We understand that a path forward to net zero emissions is important to our collective future and we’re analyzing tactics, appropriate to our business, that allow us to contribute to net zero goals. We expect to publicly announce our new SBTi aligned environmental goal in late 2022. We encourage you to review our Environmental Sustainability Policy Statement and our 2021 CDP Report to learn more about our sustainability efforts and areas of concentration.
1 | Membership totals in plans with 4+ Star Rating reflect membership as of the September date when the applicable Star Ratings were released. |
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KEY PILLAR METRICS
Environmental Impact Humana Pharmacy Goal TRUE Certified Zero-Waste Site Our West Chester, OH distribution center is working to achieve a 90% waste diversion rate (WDR) for its production materials by the end of 2022, becoming Humana’s first TRUE certified site. 2021 WDR: 89% Target WDR: 90% | Environmental Impact Paper Reduction Goal Increase Adoption of Digital Materials We’re working to increase the digital adoption rate (DAR) among our medical plan members, encouraging them to receive more of their information from us online instead of on paper, and we plan to announce our goal metrics in Spring 2022. |
ENVIRONMENTAL SUSTAINABILITY INITIATIVES
Greenhouse Gas (GHG) Emissions Reduction | Energy Reduction | |||||||||||
• We achieved our goal to reduce greenhouse gas emissions by 2.1% year-over-year (from a 2017 baseline) by the end of 2022 and are now pushing to go beyond our baseline measure. In 2021, keeping in line with best practices around goal setting, we expanded our goal boundary to include all Humana owned1 and leased properties and recalculated our goal progression over the last five years. Our emissions goal results2 ending 2021 reached 16%. ✓We offer our associates new workstyle options and alternative transportation options, engage in partnerships and programs designed to reduce emissions. ✓We put our buildings into “hibernation” to conserve energy while our associates were working from home during the pandemic. We used this opportunity to expedite repairs and replace equipment and infrastructure. ✓We calculate GHG emissions in accordance with the methodologies outlined by the GHG Protocol. ✓We provide a full report of our yearly energy consumption and reduction efforts within the Global Reporting Initiative (GRI) Content Index. We report our GHG initiatives to CDP and utilize a third-party assurance contractor to provide limited assurance verification of our information. We also align our reporting to the framework established by the Task Force on Climate-Related Disclosures (TCFD). | • We assess and make investments in renewable energy sources when and where it makes sense, environmentally and financially. ✓We’ve installed solar panels on the rooftop of an owned facility. ✓Our fleet is greener because our mobile marketing offices – vans equipped with WiFi, cameras and more – have been fitted with solar panels to reduce energy and power to operate the vehicles. • We incorporate standards from both the ENERGY STAR Program and the U.S. Green Building Council’s LEED standards (Leadership in Energy and Environmental Design) into the design of new construction projects. ✓We proudly have 31 ENERGY STAR certified facilities within our portfolio sites. ✓Our data centers now have new energy-efficient cooling units and smart flooring to distribute air more efficiently. Both data centers are ENERGY STAR certified. ✓We continue working toward 100% replacement of fluorescent lights with LED lights across our portfolio sites. | |||||||||||
Waste Reduction | ||||||||||||
•Absolute Target: 60% waste diversion rate (WDR) of waste to landfills via reduction and recycling efforts at our portfolio sites where Humana and our vendors manage waste recycling services, by the end of 2022. We not only achieved our goal early – we exceeded it – at a WDR of 65%. In 2021, keeping in line with best practices around goal setting, we expanded our goal boundary to include certain acquisitions1 where we have direct payment and available frequency data.2 ✓Humana Pharmacy, our mail-order pharmacy, engages in medical waste reduction efforts by donating unused prescription medication – which would otherwise be incinerated – to nonprofit organizations that provide free healthcare, dental care and prescription medication to individuals who are uninsured or underinsured. ✓We partner with Georgia Pacific to recycle and reuse our baled empty pill bottles, pill bottle caps, cardboard and shrink wrap. ✓We promote and track our reduction and recycling efforts and make it convenient for our associates to recycle in our facilities. We also report our waste reduction initiatives to CDP and utilize a third-party assurance contractor to provide limited assurance verification of our information. | 1 Kindred at Home is excluded from the re-baselining of GHG emissions and waste diversion. 2 2021 results described herein have been estimated. The final data will be published on our website (www.Humana.com) when available, which is anticipated during the second quarter of 2022. |
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ETHICAL SUSTAINABILITY INITIATIVES | Helpful ESG Resources | |||||||
Ethics & Compliance | We invite you to review the additional materials below to learn more about our Company’s ESG related reports, programs, policies and initiatives. Annual Reports https://humana.gcs-web.com Humana Impact Report(Available Spring 2022) 2021 CDP Report 2021 Bold Goal Progress Report 2021 Value-Based Care Report Policy Statements https://humana.gcs-web.com Environmental Sustainability Policy and Standard Supplier Diversity Statement Statement of AI Principles Ethics https://humana.gcs-web.com/corporate-governance Ethics Every Day Anti-Corruption Statement Supplier Diversity Program https://www.humana.com/supplier-information/supplier-diversity. Fraud, Waste and Abuse https://www.humana.com/legal/fraud-waste-and-abuse Ethics Every Day for Contracted Healthcare Providers Compliance Policy for Contracted Healthcare Providers Population Health https://populationhealth.humana.com Data Privacy and Cyber Security https://www.humana.com/legal/privacy Public Policy https://www.humana.com/about/public-policy Workplace Benefits https://careers.humana.com/why-choose-humana The Humana Foundation https://www.humanafoundation.org Humana Healthcare Research https://research.humana.com | |||||||
• Our associates are the key to ethics and compliance. ✓ We have an Enterprise Compliance team that regularly communicates and engages with associates on ethics and compliance topics throughout the year. ✓ We require all associates (including executive officers and independent directors) and contractors to complete an annual training course on ethics and compliance matters. ✓ We enforce Standards of Conduct and a Compliance Policy, which are specifically designed for our contracted healthcare providers and third parties in effort to deter fraud, waste and abuse. • Humana is an industry leader in the adoption of principles and governance to guide its implementation of emerging technologies. ✓ We govern our use of Artificial and Augmented Intelligence according to industry-leading principles. ✓ We have interdisciplinary committees that establish governance over the deployment and quality of Artificial and Augmented Intelligence models. ✓ We have signed the EqualAI pledge committing to ensuring our Artificial and Augmented Intelligence tools do not incorporate unintentional bias, and require all of our Artificial or Augmented Intelligence models that inform decisions about individuals to be reviewed to detect inadvertent bias. We also ask our vendors who utilize Artificial and Augmented Intelligence tools to sign the EqualAI pledge or another similar pledge. | ||||||||
Data Privacy | ||||||||
• We are committed to continuously enhancing and strengthening our technology infrastructure and security protocols. ✓ We employ best-practice precautions to safeguard information and protect our members’ data. We deploy defensive practices against the ever-evolving cyber threat landscape by measuring and maturing our cybersecurity capabilities and actively monitoring risks posed by threat actors. ✓ We have established formal data governance, which includes accountability, oversight, processes and controls to ensure our data usage transparency and non-repudiation. ✓ We refresh our data privacy and security policies at least annually. ✓ We provide Company-wide cyber security training to associates, led by our Enterprise Information Protection team, on how to avoid security vulnerabilities and equip them with the necessary tools to protect Company data and to reduce risk. We also test their knowledge through internal phishing campaigns – tracking and reporting aggregated outcomes to leadership. ✓ We report data breaches, as required by law, to the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR). Our reports are publicly available, free of charge, and can be obtained through the OCR Portal at: ✓ We engage an independent third party audit firm to perform an Annual Service Organizational Controls (SOC) 2 audit of enterprise claims platforms within the following Trust Services Criteria: availability, confidentiality and security. | ||||||||
Safety & Security | ||||||||
• We integrate a culture of safety and security into all aspects of our business to provide our associates, contractors, members and visitors a safe and secure work environment – we are committed to protecting people and safeguarding key assets, properties and information. 94% of associates feel safe and protected from physical risks while working. ✓ We have an Enterprise Safety and Security Policy that applies to our associates, facilities (owned or leased), and anyone requesting facility admittance regardless of relationship. ✓ We maintain and utilize the following resources to manage/mitigate occupational health and safety: Environmental Health and Safety Manual, Incident Reporting System, Associate Safety Handbook and Associate Emergency Preparedness Training. 95% of associates trust Humana would take appropriate action if a physical safety or security concern/incident was reported. ✓ Our safety and security team periodically performs on-site compliance audits to ensure safety plans and practices are implemented, in addition to providing training tools and information. |
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Corporate Responsibility Awards and Recognition
We are pleased to have received recognition for our 2021 corporate responsibility and ESG efforts and we appreciate the acknowledgement of our commitment to inspiring health and well-being. Highlighted below are just a few of our valued achievements, however a complete list of awards and recognition is available on our website at www.humana.com – from there click “Corporate Responsibility” and then click “See Our Awards.”
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Board Evaluation Practices
The Board has delegated an established screening process for director nomineesis committed to a rigorous self-evaluation process. Through evaluation, directors annually review the performance of the Board and each committee, as well as their own individual contributions, including areas where the Board feels it functions effectively, and most importantly, areas where the Board can improve. The Nominating, Governance & Corporate GovernanceSustainability Committee, with counselparticipation from our Chairman ourand Chief Executive Officer, initiates the annual Board evaluation process. We believe that having a review process for each group helps to (i) ensure an adequate representation of requisite skills; (ii) encourage high levels of engagement from directors; and outside consultants as appropriate. The goal(iii) strengthen the overall effectiveness of our Board. Results of the screening process is to assemble a group of potential board membersevaluations are shared with deep, varied experience, sound judgment, and commitment to the Company’s success.
The Committee receives notice of potential candidates through anyChairman of the following avenues: (i) Board self-identification; (ii) third-party recommendations; and (iii) stockholder nominations. While director nominees may be presented to the Board for consideration byChairman of the Nominating, Governance & Sustainability Committee through any of these methods, the Board is ultimately responsible for selecting its own members – with annual stockholder voting thereafter for a director’s continued tenure on the Board. Once the Committee has compiled its group of suitable candidates and conducted appropriate diligence, it then meetslater discussed with the entire Board to review the candidatesin an aggregated manner, with agreed upon actions and improvements then implemented and monitored for further consideration.effectiveness.
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Each of our Board committees engages in an annual performance evaluation and a general charter adequacy review. Each committee is responsible for determining the |
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Director Qualifications
In assessing a director nominee, the Nominating & Corporate Governance Committee considers the appropriate balance of experience, skills and other qualifications required for service on our Board, including (i) qualifications or characteristics that are expected and befitting of all directors, and (ii) specific skills, experience or qualifications that should be represented collectively on our Board. Our Corporate Governance Guidelines contain Board membership criteria that apply to all nominees recommended for a position on the Board.
The following are core criteria that are expected of each director or nominee:
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Although the Board and the Nominating & Corporate Governance Committee do not have a policy with regard to the consideration of diversity in identifying director nominees, the director nominee screening process is designed to ensure that the Board includes members with diverse backgrounds, including race, ethnicity, gender, skills and experience, such as appropriate financial and other expertise relevant to the Company’s business. The Company also values diversity of thought and perspective. The director nominee analysis also helps to determine whether a nominee would meet the criteria for independence set forth in the Guidelines established by the Board and in accordance with independence requirements of the NYSE and the SEC.
The qualifications employed by our Nominating & Corporate Governance Committee recognizes that our Board should represent a diverse group of experience, skills and other qualities, and as a collective group should have expertise in certain substantive areas including; corporate governance, finance/capital markets, board of directors experience, health care industry experience, CEO or otherC-suite leader with significant business acumen, direct to consumer marketing, diversity, experience with complex organizations, technology/business processes, clinical practice and government relations and/or public policy and regulatory knowledge. Certain directors or director nominees may possess expertise in the designated areas however a director or director nominee need not individually possess the experience, skill or other requisite qualification in all areas.
The Nominating & Corporate Governance Committee has determined that our Board collectively satisfies all of the above core criteria, complementing each other’s skills, background and perspectives to create a collection of diverse, knowledgeable and experienced directors. In particular, the addition of two directors in 2017, each of whom has extensive experience with technology as a solution to complex problems, enabled us to fully staff a Technology Committee when combined with existing director skills and experience. For a discussion of the individual experience and qualifications of our Board members, please refer to the section entitled, “Proposal One: Election of Directors” in this proxy statement.
The Guidelines contain independence standards to assist the Board in its determination of director independence. In addition, to qualify as independent under the Guidelines, the Board of Directors must affirmatively determine that a director has no material relationship with the Company, other than as a director.
Pursuant to the Guidelines, the Board undertakes an annual review of director independence. During this review, the Board considers transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates, including transactions or relationships that are reported under “Certain Transactions with Management and Others” in this proxy statement. As provided in the Guidelines, the purpose of this review is to determine whether any such transactions or relationships are inconsistent with a determination that a director is independent.
In the course of this review for the current year, the Board specifically analyzed and discussed several matters:
(1) | a relationship between the Company and Fiserv Solutions, Inc., a subsidiary of Fiserv, Inc., or Fiserv, for which Frank. J. Bisignano, one of our former directors, serves as an executive officer and a director; |
(2) | a relationship between the Company and Pfizer Inc., or Pfizer, for which Frank A. D’Amelio, one of our current directors, serves as an executive officer; |
(3) | a relationship between the Company and |
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(4) | a relationship between the Company and |
(5) | a relationship between the Company and Chrysalis Ventures, LLC, or Chrysalis, for which David A. Jones, Jr., one of our current directors, serves as Chairman and Managing Partner and in which Mr. Jones, Jr. has a financial interest; |
(6) | a relationship between the Company and Foundation Radiology Group PC, or Foundation Radiology, for which Mr. Jones, Jr., one of our current directors, served as a director |
(7) | financing arrangements between the Company and |
Fiserv. In 2021, we contracted for certain marketing and advertising services from Fiserv in connection with member communication materials for which we paid approximately $12.15 million, which is comparable to other non-affiliated vendors for the provision of similar services, is not material to the Company, and does not represent a direct or indirect material interest to Mr. Bisignano.
Pfizer. The relationship between the Company and Pfizer consists ofincludes a negotiated rebate based on the volume of prescriptions of Pfizer drugs obtained by Humana members, which volume includes claims paid by Humana for our members and theco-payments paid by our members for Pfizer drugs. These rebate amounts are significant. However, these paymentsmembers. Payments to Humana from Pfizer result from activity with many intermediaries over whom Humana exercises no control (i.e., the providers who prescribe these medications, the distributors who sell to the retailers, and the retailers from which our members get prescriptions). In 2017,2021, the rebatePfizer rebates amounted to approximately 174.1 million.$71.3 million, substantially all of which were passed through to our members in the form of lower premiums and/or higher benefits. Our subsidiary, Competitive Health Insights,Humana Healthcare Research, Inc. or CHI,HHR, has also completescontracted with Pfizer to complete various research studies forat commercial rates and following our standard protocols; HHR received approximately $250,750 in fees from Pfizer for this service in 2021. The Company also received approximately $254,250 from Pfizer during 2021 related to hanger rental and other associated aircraft incidentals. The relationships described herein did not represent a direct or indirect material interest for Mr. D’Amelio.
Cerner. Cerner has a license subscription contract with our subsidiary, Humana Digital Health and Analytics Platform Services, Inc., or HDH&A. In 2021, Cerner paid HDH&A approximately $6.5 million in associated licensing, professional service and maintenance fees, which we wereis comparable to other non-affiliated customers for the provision of similar services. Our subsidiary, Conviva Medical Center Management, LLC, has a database subscription contract with Cerner for which it paid Cerner approximately $7,000 in associated fees during 2021, which is comparable to other non-affiliated customers for the provision of similar services. The relationships described herein are not material to the Company and do not represent a direct or indirect material interest to Dr. Feinberg.
Howard. The relationship between the Company and Howard includes arrangements between the Howard University healthcare system in which the Company paid approximately $153,100$314,405 in feesmedical claims during 2021. Additionally, the Company paid $25,000 to Howard’s School of Business, Career Services for participation in Howard’s career recruitment program and sponsorship of a Howard business conference. The relationships described herein did not represent a direct or indirect material interest for Dr. Frederick.
Chrysalis. In 2021, we contracted for services to be provided by Pfizercertain companies in 2017. We also received voluntary critical illness plan premiums from Pfizer in an immaterial amount,Chrysalis’ investment portfolio. In each case, the amounts paid under which arrangement the premiums charged and benefits provided arethese arrangements were comparable to those extended to ourfor othernon-affiliated customers.vendors, were not material to the Company, and did not represent a direct or indirect material interest for Mr. Jones.
The University of Texas System.Foundation Radiology. The University of Texas SystemFoundation Radiology, a multi-institutional radiology services group, serves as a provider in our network, for which services we paid approximately $7$1.26 million in 2017, collectively, to certain of its health care institutions,medical claims during 2021, which is an amount that is comparable to othernon-affiliated vendorsproviders for the provision of similar services, is not material to the Company, and does not represent a direct or indirect material interest for Dr. DeSalvo.Mr. Jones.
MyHealthDirect. MyHealthDirect is a vendor to the Company, for which services we paid approximately $4.6 million in 2017, an amount comparable to othernon-affiliated vendors, is not material to the Company, and does not represent a direct or indirect material interest for Mr. Jones, Jr.
JAPCFinancing Arrangements. In 2017, we provided hangar space, pilot services and maintenance for an airplane owned by JAPC, forCertain of our non-employee directors are partners, shareholders and/or officers of companies that have commercial paper programs or other financing arrangements in which we were fully reimbursed by JAPCparticipate in the aggregate amountordinary course of approximately $516,300, at a rate at least as favorablebusiness. Payments to or from such companies constituted less than the Company as market rates.
First Data Corporation, Inc.First Data Corporation, Inc. is a vendor togreater of $200,000 or 1% of each of Humana’s and the Company, for which services we paid approximately $578,000recipient’s annual revenue, respectively, in 2017, an amount comparable to othernon-affiliated vendors, is not material toeach of the Company, and does not represent a direct or indirect material interest for Mr. Bisignano.past three years.
Health Insurance Customers.In 2017, we received health care premium payments from certain customers with whom one of our current directors or a relative of that director has a relationship. Under each such arrangement, the premiums charged and benefits provided are comparable to those extended to our othernon-affiliated customers. The following relationships were included in this review:
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At the conclusion of its review for the current year, the Board affirmatively determined that in each case the relationship between the Company or its affiliate and each director-related entity was not material, was below the thresholds for independence prescribed by the NYSE, and did not impact the independence of any of our directors. Each directorDirectors recused themselves from the independence assessment as the matter was relative to himself or herself. Consistent with these considerations, and based on its review of director independence in light of the standards contained in the Guidelines, the Board determined that each member of the Board of Directors (except Mr. Broussard, as a current employee of the Company) is independent.
Corporate Governance• 2022 Proxy Statement | Humana | 23 |
Committee Membership and Attendance
The Board of Directors has the following standing committees: Audit; Organization & Compensation; Nominating, Governance & Corporate Governance;Sustainability; Executive; Technology and Investment. Only directors meeting the applicable SEC and NYSE director independence standards and Internal Revenue Code “outside director” criteria may serve on the Audit Committee, the Organization & Compensation Committee, and the Nominating, Governance & Corporate GovernanceSustainability Committee. Each standing Board committee operates pursuant to a charter, which may be viewed on our website atwww.humana.com. From thewww.humana.comwebsite, click on “Investor Relations,” then click on “Corporate Governance,” and then you will see a link toclick on the Committee Charters.“Committee Charters” subcategory. The number of Board committee meetings (telephonic and in-person)held in 20172021 and membership as of March 1, 2018,2022, were as follows:
Audit | Organization Compensation | Nominating & Corporate Governance | Executive | Technology1 | Investment | |||||||||||||||||||
Number of Meetings in 2017 | 9 | 8 | 6 | 0 | 0 | 4 | ||||||||||||||||||
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Frank J. Bisignano2 | M | |||||||||||||||||||||||
Director | Audit |
Organization & Compensation |
Nominating Governance & Sustainability | Executive | Technology | Investment | ||||||||||||||||||
Kurt J. Hilzinger |
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Bruce D. Broussard | C |
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Raquel C. Bono, M.D. |
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Frank A. D’Amelio | C | M |
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Karen B. DeSalvo, M.D.3 | M | |||||||||||||||||||||||
W. Roy Dunbar | C | M | ||||||||||||||||||||||
Kurt J. Hilzinger | M | |||||||||||||||||||||||
David T. Feinberg, M.D.1 | ||||||||||||||||||||||||
Wayne A. I. Frederick, M.D. |
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John W. Garratt |
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David A. Jones, Jr. | M | C | M |
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Karen W. Katz |
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Marcy S. Klevorn |
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William J. McDonald | M | M |
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William E. Mitchell | M | M | ||||||||||||||||||||||
David B. Nash, M.D. | M | M | ||||||||||||||||||||||
Jorge S. Mesquita |
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James J. O’Brien | M | C |
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Marissa T. Peterson | M | C |
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Number of Meetings in 2021
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= Chair = Member
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Elected to the Board effective |
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Audit Committee
Committee Responsibilities
Pursuant to its charter, the Audit Committee:
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assists the Board of Directors with the oversight of the integrity of our financial statements and disclosures and internal controls, our compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence and the performance of our internal audit function and the independent registered public accounting firm;
bears responsibility for the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm engaged to prepare the audit report or perform other audit, review or attest services;
reviews with the independent registered public accounting firm, our internal audit department, and our financial and accounting personnel, the effectiveness of our accounting and financial controls and, where appropriate, makes recommendations for the improvement of these internal control procedures;
reviews the scope, funding and results of our internal audit function, including the independence and authority of our reporting obligations, the proposed audit plans for the year, and the coordination of these plans with the independent registered public accounting firm;
reviews the scope, funding and results of our Enterprise Risk Management program and compliance program, including receiving, at least quarterly, an update from our Chief Risk Office and internal compliance department regarding any significant matters regarding our risk management and compliance with regulatory requirements and contracts with government entities, respectively;
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collaborates with the Technology Committee to regularly receive updates on risks, and risk mitigation measures, related to Company’s information technology, internal controls, information security, cyber security, business continuity and disaster recovery programs;
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reviews the financial statements and other information contained in our Annual Report and other reports to stockholders with management and the independent registered public accounting firm to determine that the independent registered public accounting firm is satisfied with the disclosure and content of the financial statements to be presented to the stockholders and reviews any changes in accounting principles;
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confers independently with our internal auditors, Chief Risk Officer, internal compliance department, key members of management, and the independent registered public accounting firm;
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determines and approves the appropriateness of the fees for audit and permissible non-audit services performed by the independent registered public accounting firm;
discusses with management our compliance with applicable legal requirements and with our internal policies regarding related party transactions and conflicts of interest; discusses our policies with respect to risk assessment and risk management; maintains free and open means of communication between the members of our Board of Directors, the independent registered public accounting firm, our internal audit department, our Chief Risk Officer, our internal compliance department, and our financial management; and annually evaluates its performance.
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Corporate Governance Determinations
The Board of Directors has determined that each of the members of the Audit Committee at February 15, 201816, 2022 is independent according to SEC and NYSE requirements, and each is financially literate, as defined in the NYSE listing standards. The Board of Directors has determined further that Messrs. D’Amelio and O’BrienGarratt and Dr. Bono each meet
the definition of “audit committee financial expert.” PricewaterhouseCoopers LLP, our independent registered public accounting firm, reports directly to the Audit Committee. No member of the Board’s Audit Committee serves on the audit committees of more than three publicly traded companies. The Report of the Audit Committee for the year ended December 31, 2017,2021, is set forth in this proxy statement under the caption “Audit Committee Report.”
Organization & Compensation Committee
Committee Responsibilities
Pursuant to its charter, the Organization & Compensation Committee:
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reviews and approves our goals and objectives relevant to the compensation of our CEO, evaluates the CEO’s performance in light of those goals and objectives, and, either as a Committee or together with the other independent directors, determines and approves the CEO’s compensation level based on this evaluation;
review and approves all elements of compensation paid to our current or prospective executive officers, including without limitation, base compensation, incentive-compensation plans and equity-based plans, employment, change in control or severance programs and agreements, and any special compensation or benefits, including supplemental retirement benefits and any perquisites;
approves equity-based grants to our executive officers and other associates;
reviews and discusses with management the Company’s compensation plans and policies for all employees (including the Named Executive Officers) with respect to risk management and risk-inducing incentives;
ensures preparation of the Compensation Discussion and Analysis and the Compensation Committee Report as required by SEC regulations;
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monitors compliance of executive officers andnon-employee directors with relevant stock ownership guidelines; |
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reviews with management periodically, as it deems appropriate, management succession and inclusion and diversity practices;
administers our Executive Management Incentive Compensation Plan and other substantially similar or successor incentive compensation plans; and
annually evaluates its performance.
Corporate Governance• 2022 Proxy Statement | Humana |
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Scope of Authority, Processes and Procedures
The Organization & Compensation Committee acts on behalf of the Board of Directors to establish the compensation of our executive officers and provides oversight of our compensation philosophy, as described in this proxy statement under the caption “Compensation Discussion and Analysis.” The role of the executive officers and the outside compensation consultant in establishing executive compensation is discussed in this proxy statement under the caption “Compensation Discussion and Analysis.” Other than routine administrative matters and the ability of our CEO to approve grants of equity awards subject to certain individual and annual thresholds, no executive compensation decisions are delegated to management.
Compensation Committee Interlocks and Insider Participation
No member of the Organization & Compensation Committee: (i) is or has ever been an officer or employee of the Company; or (ii) is or was, during the last fiscal year, a participant in a “related person” transaction requiring disclosure under Item 404 of the SEC’s regulations (see discussion in this proxy statement under the caption “Certain Transactions with Management and Others”); or (iii) is an executive officer of another entity at which one of our executive officers serves either as a director or on its compensation committee.
Corporate Governance Determinations
During 2021, James J. O’Brien (Chair), Frank J. Bisignano (until April 2021), Wayne A. I. Frederick, M.D. and David A. Jones, Jr. served as members of our Organization & Compensation Committee. Considering (i) the source of each director’s compensation, including any consulting, advisory or other compensatory fees paid by the Company; and (ii) whether each director has an affiliate relationship with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company, the Board has determined that each member of the Organization & Compensation Committee at February 15, 2018,16, 2022, is independent, as defined by the SEC and the NYSE, and is considered to be an “outside director” under Section 162(m) of the Internal Revenue Code.
Compensation Risk Determination
In 2017,early 2022, the Organization & Compensation Committee reviewed management’s assessment of the risks associated with the Company’s compensation practices and policies for employees, including a consideration of the counterbalance of risk-taking incentives and risk-mitigating factors in Company practices and policies. Following a review of this assessment, the Organization & Compensation Committee determined that the risks arising from the Company’s compensation practices and policies are not reasonably likely to have a material adverse effect on the Company.
Nominating, Governance & Corporate GovernanceSustainability Committee
Committee Responsibilities
Pursuant to its charter, the Nominating, Governance & Corporate GovernanceSustainability Committee:
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recommends to the full Board criteria for the selection and qualification of the members of the Board;
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evaluates and recommends for nomination by the Board candidates to be proposed for election by the stockholders at each annual meeting;
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seeks out and assists in the recruitment of highly qualified candidates to serve on the Board;
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recommends for Board approval candidates to fill vacancies on the Board which occur between annual meetings;
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develops, periodically reviews and recommends to the Board revisions to the Guidelines;
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studies and reviews with management the overall effectiveness of the organization of the Board and the conduct of its business, and makes appropriate recommendations to the Board;
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reviews the overall relationship of the Board and management;
reviews issues and developments pertaining to corporate governance; reviews our public policy and political spending practices through regular reviews of our policy on political expenditures, expenditures and payments made with corporate funds, and overall political activity, including review of our Political Contributions and Related Activity Report; reviews the Company’s programs and policies relating to significant ESG and sustainability matters, and periodically receive updates from the Company’s management regarding significant ESG and sustainability undertakings; and annually evaluates its performance.
Executive Committee Pursuant to its charter, the Executive Committee possesses the authority to exercise all the powers of the Board of Directors except as otherwise provided by Delaware law and our Bylaws during intervals between meetings of the Board. The Executive Committee does not have the power, to, among other things, declare a dividend, issue stock, adopt a certificate of merger or sell substantially all of the Company’s business. Investment Committee Pursuant to its charter, the Investment Committee establishes investment objectives and policies for our various investment portfolios and investment options available under various employee benefit plans, reviews investment results, and annually evaluates its performance. Technology Committee Pursuant to its charter, the Technology Committee represents and assists the Board of Directors with the oversight of:
our process, awareness, evaluation and perspective on potentially disruptive technologies and convergences that may represent threats or opportunities for our business operations;
our process and perspective on strategic technology capabilities that enable transformational business capabilities;
our process, execution roadmaps, requisite capital, progress in delivering technology-enabled transformational capabilities and their related outcomes; and
management’s focus on organizational, talent and cultural enablers required to ensure achievement of those outcomes. The Technology Committee has five regular meetings each year, during which senior leadership briefs the Committee and board members on matters relating to the Company’s strategic technology capabilities, including information security capabilities. The Technology Committee may also assist the Audit Committee in its oversight of our information technology internal controls, cyber security, business continuity and disaster recovery programs. Senior leadership provides briefings to the Audit Committee and Technology Committee on information technology controls and risk as least once per year, and separately update the full Board of Directors on cyber security matters at least once per year. Briefings are also provided as-needed in response to industry or company specific developments or material events. Majority Vote Policy Under our Bylaws, a director nominee will be elected if the number of votes cast for the nominee exceeds the number of votes cast against the nominee. In contested elections, those in which a stockholder has nominated a person for election to the Board, the voting standard is a plurality of votes cast. The Board has also adopted a policy to require the Board to nominate for election only nominees who agree that, if they are elected to the Board, they will tender an irrevocable resignation conditioned on, first, the failure to achieve the required vote forre-election at any future meeting at which they facere-election, and second, the Board’s acceptance of their resignation following that election. In addition, the Board may fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other directors, as described above. The Nominating, Governance & Change in Director’s Primary Position The Board has adopted a policy requiring that a director whose primary position or affiliation changes must promptly notify the Board and the Nominating, Governance & Director Stock Ownership Policy Our Board believes that directors should be stockholders and have a significant personal financial stake in the
Each non-employee director must maintain a minimum equity ownership level of five times the annual cash retainer.
Shares deferred at the election of the director are considered owned for purposes of the calculation of the ownership requirement. Any Shares owned by a non-employee director (or Shares received upon the exercise of options or vesting of restricted stock or restricted stock units, less an amount to cover the exercise price and/or current tax liabilities) must be held by the director until the minimum equity ownership level is reached and thereafter maintained. Once the minimum equity ownership level has been achieved, any Shares received upon the vesting of restricted stock or restricted stock units, less an amount to cover current tax liabilities, must be held by the director until one year following the vesting date. Compliance with these guidelines is monitored by the Organization & Compensation Committee. Director Attendance The Board has developed a number of specific expectations of directors to define their responsibilities and to promote the efficient conduct of the Board’s business. With respect to the level of commitment expected of directors and related attendance protocols, as part of the Guidelines, the Board formally adopted a policy that all directors should make every effort to attend all meetings of the Board and the Committees of which they are members, and the Company’s Annual Meeting of Stockholders. Attendance by telephone or video conference may be used to facilitate a Director’s attendance. During
Executive Sessions ofNon-Management Directors In Code of Ethics and Code of Business Conduct The Company has adopted the “Code of Conduct for the Chief Executive Officer and Senior Financial Officers,” which we refer to as the Executive Code of Ethics, violations of which are reported to the Audit Committee. In addition, we operate under the omnibus Humana Inc. Ethics Every Day, which we refer to as the Code of Ethics, which applies to all associates (including executive officers) and directors. The Humana Ethics Office is responsible for the design and enforcement of our ethics policies, the goal of which is to create a workplace climate in which ethics is so integral today-to-day operations that ethical behavior is self-enforcing. All employees are required annually to review and affirm in writing their acceptance of the Code of Ethics. The Code of Ethics and the Executive Code of Ethics may be viewed on our website atwww.humana.com. Any waiver for directors or executive officers from the provisions of the Code of Ethics or the Executive Code of Ethics must be made by the Board of Directors, and will be disclosed within four days of the waiver on our website at Policy Regarding Employee, Officer and Director Hedging The Company has a policy prohibiting all associates (including executive Public Policy Our Company has an active voice on healthcare policy issues that matter most to the people we serve. From Medicare Advantage, TRICARE and home health; to integrated care, Medicaid and healthcare reform – we are committed to advancing public policy that moves us toward a future in which everyone can enjoy lifelong health and well-being. The Company has also
does it contribute to Communication with Directors Stockholders and other interested parties may communicate directly with our Chairman,non-management directors as a group, or any other individual director by writing to the speciale-mail address published on our
Election of Directors The Board of Directors of the Company, in accordance with the provisions of the Company’s Articles of Incorporation and Bylaws, has determined that the number of directors to be elected at the Annual Meeting of the Company shall be Each of the nominees has consented to be named as a nominee and agreed to serve if elected. If any nominee becomes unable to serve for any reason (which is not anticipated), the Shares represented by the proxy granted to Messrs. Hilzinger and Broussard may be voted for the substituted nominee as may be designated by the Board of Directors. The Board has established a policy thatnon-employee directors must retire at the first annual meeting following his or her seventy-third birthday. The following
Vote Required and Recommendation of the Board of Directors A director nominee will be elected if the number of votes cast for the nominee exceeds the number of votes cast against the nominee. Shares not present at the Annual Meeting and Shares voting “abstain” or broker non-votes have no effect on the election of directors. Under the Company’s Majority Vote Policy, following election to our Board of Directors, a director is required to submit his or her irrevocable resignation to our Board of Directors, conditioned upon (i) the director not achieving the requisite stockholder vote at any future meeting at which they face re-election, and (ii) acceptance of the resignation by the Board of Directors following that election. The Board of Directors has 90 days to determine whether or not to accept the director’s resignation and to report this information to our stockholders. FOR THE REASONS STATED HEREIN, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ALL NOMINEES.
Director Skills and Qualifications The Nominating, Governance & Sustainability Committee (“Committee”) regularly assesses the skills and experiences necessary to ensure that the Board has appropriate skill composition to oversee the Company’s long-term business strategy, operations, and risks. The Committee recognizes that our Board should represent a diverse group of individuals who bring a range of experience, skills and other attributes to their individual role on the Board and to the Board as a collective group. On an annual basis, the Committee assesses each Board candidate to determine whether to recommend currently serving directors for reelection to the Board and whether to recommend candidates for initial election to the Board. In assessing a director nominee, the Committee considers the appropriate balance of experience, skills and other qualifications required for service on our Board, including (i) core attributes that are expected of our directors, and (ii) specific skills, experience or qualifications that should be represented collectively on our Board. Although not an exhaustive assignment of skills and attributes, we have highlighted for each director the substantive areas of expertise that they bring to the Board in the biography of each nominee located in the section entitled “Director Nominee Biographies.”
Board Composition and Refreshment Board Tenure and Refreshment The Committee and the Board strive to maintain a balance of tenure on the Board. Longer-serving directors bring valuable experience and a deep understanding of our complex business and industry, along with a historical perspective of our long-term successes, challenges and business cycles, and how these past experiences may inform our current strategy. Newer directors are also critical to the advancement of our strategy, bringing new skills and experiences and contributing fresh perspectives. The Board has established a policy that non-employee directors must retire at the first annual meeting following his or her seventy-third birthday. To encourage director refreshment, there are no exemptions or conditions in this policy. The illustrations below depict independence, age and tenure represented in the current composition of our director nominees.
Identifying Nominees for Directors The Board has delegated an established screening process for director nominees to the Nominating, Governance & Sustainability Committee, with counsel from our Chairman, our Chief Executive Officer, and outside consultants as appropriate. The goal of the screening process is to assemble a group of potential board members with deep, varied experience, sound judgment, and commitment to the Company’s success. The Committee receives notice of potential candidates through any of the following avenues: (i) Board self-identification; (ii) third-party recommendations; and (iii) stockholder nominations. While director nominees may be presented to the Board for consideration by the Committee through any of these methods, the Board is ultimately responsible for assessing the needs of the Board, appointing candidates to the Board, and nominating candidates for election by our stockholders at our annual meeting. Once the Committee has compiled its group of suitable candidates and conducted appropriate diligence, it then meets with the Board to review the candidates for further consideration. Board Self-Identification. The Committee regularly assesses the appropriate size of the Board, the areas of expertise required to effectively contribute to the Board process, and whether any vacancies are anticipated. It also annually assesses the director qualification criteria to ensure the Board has appropriate skill composition aimed at the Company’s long-term business strategy, operations, risks, thought and perspective. As a result, the Committee may recommend to the Board a need for an additional director, Board refreshment for certain requisite skills and qualifications, and/or suggest the replacement of an existing director for other credible reasons. Third-Party Recommendations. From time to time, the Committee engages a professional third-party search firm to assist the Board of Directors and the Committee in identifying and recruiting candidates for Board membership. Stockholder Nominees. The policy of the Committee is to consider properly submitted stockholder nominations for candidates for membership on the Board as described above under “Identifying Nominees for Directors.” Stockholder nominations for election to the Board of Directors are governed by specific provisions in our Bylaws, a copy of which is available on our website at www.humana.com. From the www.humana.com website, click on “Investor Relations,” and then click on “Corporate Governance,” and then click on the link entitled, “Bylaws.” The Bylaws require that a stockholder provide written notice of intent to nominate a candidate
Board of Directors Nominee Determination At the recommendation of the Nominating, Governance & Sustainability Committee, the Board has nominated 13 individuals for this year’s election. The Board believes that each director nominee possesses and demonstrates the character, integrity, independence, business We believe that the current Board members Director
During
Director Compensation• 2022 Proxy Statement | Humana
The following table shows the compensation earned by ournon-employee directors
Security Ownership of Certain Beneficial Owners of Company Common Stock We know of no person or entity that may be deemed to own beneficially more than 5% of our outstanding common stock except for:
Security Ownership of Directors and Executive Officers The following table shows stock ownership as of January 15,
The number of Shares listed:
This Compensation Discussion and Analysis (CD&A) presents in detail our executive compensation policies and practices, describing each element of compensation and the decision-making process by our Organization & Compensation Committee (“Committee”) that supports it.
2021 was another extraordinary and challenging year for our Company, members, associates, and stakeholders as the COVID-19 pandemic and the emergence of the Delta and Omicron variants continued to drive an uncertain environment for the healthcare system. The widespread adoption of vaccines allowed the healthcare system to remain open and our members resume routine interactions with their healthcare providers, while unanticipated surges in the pandemic led to increased hospitalizations, particularly among the unvaccinated. Nonetheless, our core operations remained strong as we maintained focus on ensuring our members and patients received the right care at the right time, providing the highest quality health care experience, advancing our strategy and delivering on our commitments to ESG. To that end, we were pleased to be recognized by CMS for having 97% of our members in 2021 in 4-Star or higher contracts for 2022, and increasing the number of our contracts that received a 5-Star rating from 1 contract in 2021 to 4 contracts in 2022, the most in our history. This accomplishment further demonstrates our enterprise-wide focus on quality, clinical outcomes and best-in-class customer service, which has been recognized from notable organizations such as Forrester, J.D. Power and USAA. We also saw an improvement of 930 basis points in our Net Promoter Score this past year, reflecting our ongoing efforts to enhance the customer experience. The year was also marked by significant progress in our strategy to advance our healthcare services platform. We accelerated the growth of our senior-focused, value-based primary care organization, the largest in the nation, through the opening of fifteen de novo senior-focused centers and the completion of nine strategic acquisitions, which brought an additional forty wholly-owned centers to our portfolio. We also completed the acquisition of Kindred at Home, the largest home health and hospice organization in the nation. Together with our acquisition in the first half of 2021 of One Homecare Solutions (onehome), we continue our efforts to transform home health to a value-based model and capture the meaningful opportunity for home health organizations to engage differently with patients and Medicare Advantage payers to more holistically address patient needs and improve health outcomes and reduce the total cost of care. We are excited about the continued progress of our strategy in both primary care and the home. We also saw continued growth in our pharmacy business, with our PBM, the fourth largest in the country, processing 515 million 30-day equivalent scripts in 2021, an 8 percent increase year over year. In addition, our pharmacy dispensing business continues to deliver industry leading mail order penetration and we have successfully implemented tools to enhance our e-commerce experience, while expanding our mail order footprint to move us closer to the consumer. We offer superior quality to our members, have a strong brand, and a long history of expertise in caring for people as they age. Additionally, our clinical focus and suite of Healthcare Services capabilities allows us to take a holistic approach to supporting members, ensuring they receive high quality, proactive and comprehensive care, which improves health outcomes. We will continue leveraging the strength of these core fundamentals to drive meaningful results for our Company and each of our stakeholders. 2021 Financial Performance Highlights Our 2021 results demonstrate the continued strength of our core operations, and the commitment of the Board and executive management team to achieving strong operating results as we navigated through significant headwinds presented by the continued volatility and uncertainly of the COVID-19 pandemic, which ultimately had a more significant impact than we initially anticipated. Highlights of our fiscal year 2021 financial performance are illustrated below.
Compensation Program Highlights The Committee is dedicated to maintaining a robust, structured and balanced compensation program designed to motivate and reward the Company’s executives to drive Humana’s performance. Our maturing compensation program is a testament to the Committee’s thoughtful consideration and progressive approach to evolve and align with market best practices and stockholders’ interests. The chart below identifies certain elements of our compensation program.
Our executive compensation program
Our robust and structured compensation program reflects the Committee’s belief that strong corporate governance is imperative for prudent compensation decision-making. Below are key governance elements of our compensation programs. We also identify certain common pay practices that we do not follow because they do not align with the
Overview of Compensation Elements The material components of our executive compensation programs are: (i) base salary; (ii) short-term cash incentives; and (iii) long-term equity incentives. We believe that having a combination of pay elements motivates and challenges our executives to achieve positive results for our Company and our stockholders. Each element of compensation is summarized as follows:
Inputs Into Compensation Decisions For 2021, the Committee received input from a number of sources and reference points to guide its design of the Company’s executive compensation programs and individual pay decisions. These various perspectives allow the Committee to have visibility into our peer companies’ practices, investor viewpoints, changes in external market practices and each executive’s individual performance, as part of its review of compensation. The Committee regularly reviews input and data received from its independent compensation consultant, our stockholders, external market practice surveys and individual performance assessments to make informed compensation decisions for our NEOs. In addition, the Committee regularly reviews tally sheet information that provides a comprehensive look at total compensation for each of our NEO’s. The chart below further describes the primary sources contributing to the Committee’s decision-making process.
For
The amount of fees received by the firm from the Company, as a percentage of such firm’s total revenue; The firm’s policies and procedures that are designed to prevent conflicts of interest; Whether the firm’s representatives providing services to the Committee Whether the firm’s representatives providing services Whether the firm’s representatives providing services to After considering all of the above factors, the Committee determined that the service provided to the Committee as
The Board, together with its committees and management team, routinely reviews and responds to the feedback received from our stockholders – through formal stockholder engagements, stockholder voting results and routine communication during the year – creating a feedback loop of The Board views these engagements as an opportunity to gain insight and perspective on issues that matter most to our stockholders, and believes that the most constructive way to achieve meaningful dialogue is to connect with them directly. Accordingly, the Company offers attendance by Board and executive management team members throughout the engagement process. Our Board respects the views voiced by our stockholders and understands the importance of regular engagement as priority issues evolve over time. Feedback received during dialogue with stockholders has, in some cases, led to the reaffirmation of, or enhancements to, certain of our corporate governance, ESG, and executive compensation practices.
In addition to the above interactions, the Company routinely meets with stockholders, analysts and prospective investors throughout the year during industry conferences and other events. The Company’s meeting schedule, presentations to investors and webcast replays are available via the Investor Relations section on our website. From www.humana.com, click on “Investor Relations” and then click on the “Calendar of Events” tab. The illustration below further details our stockholder engagement and feedback consideration methods.
Stockholder Engagement Key Discussion Themes
Say-on-Pay Support Our 2021 say-on-pay proposal maintained its typically high level of approval with 95% of our stockholders voting in favor of the Company’s compensation strategy. We believe that the result of our 2021 say-on-pay proposal indicates that stockholders are generally supportive of our executive compensation program, and therefore the Committee made no material changes to the executive compensation program as a result of this vote. Stockholder Voting Trend Our peer group is used as a reference point in making compensation decisions, such as developing base salary ranges, developing short-term and long-term incentive award ranges, determining competitiveness of
For
☐ Cigna Corporation
Plan Design and Award Decisions On an annual basis, the Committee, in consultation with its independent compensation consultant, reviews the market data and current base salaries for our executives, considering adjustments as deemed appropriate. Salary increases, if any, must receive advance approval from the Committee. While the Committee approved no increases in 2020, the 2021 evaluation revealed that base salary increases were necessary for our NEOs in order to maintain competitive market pay levels. In addition to market data, the 2021 determinations took into account demonstration of enterprise value along with certain expansions of responsibilities. The table below represents base salaries for our CEO and other NEOs as of March 1, 2021, compared to March 1, 2020.
Our STI is administered through the Associate Incentive Plan (AIP), a discretionary, annual cash-based incentive plan. The goal of our plan is to recognize and reward all of our full-time and part-time associates, including our executive officers, for their contributions to the Company’s overall performance, while also uniting associates around a common purpose for the year. The AIP plan year is effective January 1 through December 31 of each fiscal year. Associates who participate in other Company incentive plans, such as Sales Incentive/Commission Plans and Targeted Incentive Plans, are not dually eligible to participate in the AIP. Associates may not participate in more than one incentive plan. For our executive officers, the AIP is administered through the Executive Incentive Compensation Plan, as filed with the SEC on annual and quarterly reports on Form 10-K and Form 10-Q, respectively, and can be accessed on our website. From the www.humana.com website, click on “Investor Relations,” then click on “SEC Filings and Financial Reports,” and then click on “SEC Filings.” Each associate’s AIP payout is calculated based on Eligible Earnings during the AIP Performance Period, each as defined under the AIP Plan Document. Eligible Earnings under AIP excludes salary or wages classified as commissions, incentive pay, bonuses, rewards, long-term disability, overtime and shift differential compensation. Refer to section entitled “2021 AIP Performance Results” for discussion of AIP payout of our Named Executive Officers. On an annual basis the Committee, in consultation with its independent compensation consultant, reviews and approves the AIP as outlined below:
The Committee selected the following performance measures for the 2021 AIP, aligning our executives to the key financial and operational objectives of our overall strategy:
In addition to the above performance measures, the Committee also established a funding gate for our management team, whereby no AIP would be paid unless the Company achieves threshold Adjusted EPS performance. Further, the terms of the plan provide that the performance measures determined by the Committee shall automatically adjust to reflect the impact of certain non-recurring events, including the impacts of merger, acquisition and disposition activity, changes in accounting standards, litigation or regulatory investigations outside of the ordinary course of business, restructuring activity outside of the ordinary course of business, business exit or disposal activities, and any extraordinary, natural disaster, unusual or infrequent event. However, the Committee retains the ability to exercise negative (but not positive) judgment with respect to the payout results regardless of the impact of any automatic adjustments. Under our AIP, individual performance and contributions are taken into consideration when determining each associate’s final payout. For the 2021 AIP period, the Committee determined that contributions to the advancement of the Company’s inclusion and diversity efforts would be included in the assessment of the individual performance of our executive officers and members of senior management levels, with the potential for an individual’s payout to be decreased (but not increased) in connection with the individual’s contributions to these efforts. A Closer Look at AIP Strategic Measures The Company has a set of strategic initiatives that, if achieved, will improve member health, improve relationships with our providers and position us for long-term sustainable growth. The Committee believes that having strategic measures embedded within the AIP targets is critical to help drive organizational focus and prioritization in advancing our long-term strategy. The 2021 strategic measures directly align to our integrated care approach. We saw encouraging progress in 2021 related to each strategic measure which has a positive, direct impact on our members.
Under the terms of the
In Following this review the management team recommended, and the Committee elected, to exercise negative discretion to reduce the AIP funding rate for the management team to 90% of
NEOs. The Committee, in consultation with The
The Committee
As detailed further within the “Human Capital Management” section of this proxy statement, our associates’ total compensation may include base pay, incentive pay, overtime and other supplemental pay. We regularly review associate compensation and conduct benchmarking of our pay to the external market where we compete for talent, as well as, internal reviews of associate pay compared to those doing similar work in similar capacities across the Company– all to ensure we are competitive and aligned with industry standards. With respect to our CEO and other Named Executive Officers, as discussed further within the “Compensation Discussion & Analysis” section of this proxy statement, the Organization & Compensation Committee believes that current levels of compensation are appropriate based on the Committee’s multifaceted review. Our 2021 CEO pay ratio was calculated in compliance with the requirements set forth in Item 402(u) of RegulationS-K. Outlined below is the process that was applied for identifying our median associate for our comparative compensation analysis of the median associate to our CEO. We identified the median We During 2021, the median associate participated in one of our
We then calculated the median Applying this methodology, our median
Grants of Plan-Based Awards The following table provides information about equity awards granted in
Outstanding Equity Awards at FiscalYear-End The following table provides information on the stock option, restricted stock units and performance-based restricted stock unit holdings of our Named Executive Officers as of December 31,
Option Exercises and Stock Vested The following table provides information on the stock options exercised by, and
Nonqualified Deferred Compensation The following table and narrative that follows provides information on contributions and earnings for the Humana Retirement Equalization Plan
We have a 401(k) plan, the Humana Retirement Savings Plan, and a nonqualified, unfunded, defined contribution plan, the Humana Retirement Equalization Plan. The Internal Revenue Code imposes limitations on the contributions that may be made to a qualified plan, like our Humana Retirement Savings Plan. In The benefits accrued under the Humana Retirement Equalization Plan are those Company contributions that cannot be made to the qualified Humana Retirement Savings Plan because of the IRS limitations. The maximum percentage of compensation (base salary and
incentive compensation) that can be contributed by a highly compensated employee to the Humana Retirement Savings Plan is 35% for We also maintain a Humana Deferred Compensation Plan, which is designed to provide certain key employees of the Company and its subsidiaries with the opportunity to defer receipt of a portion of certain incentive compensation to which they may become entitled while the plan is in effect. The Humana Deferred Compensation Plan is an unfunded, nonqualified deferred compensation plan that is maintained for the purpose of allowing deferred compensation to certain highly-compensated employees, within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, whose annual rate of base compensation exceeds the limitation provided in IRS Code Section 401(a)(17) for the plan year. For 2021, participants may elect to have the payment of up to 80% of his or her incentive compensation for a plan year deferred pursuant to the Humana Deferred Compensation Plan; provided, that such amount must be equal to or greater than $25,000. If a participant’s deferral election results in a deferral amount of less than $25,000, then the deferral amount shall be zero. Deferral elections under the Humana Deferred Compensation Plan are made annually and are irrevocable. The deferral account accrues interest using the established two-year U.S. Treasury note rate. Distributions from the Humana Deferred Compensation Plan are distributable upon the payment commencement date, as determined upon the participant’s deferral election, which may be (i) the date that is six months following the date of the participant’s separation from the Company; (ii) a date specified by the participant in his or her deferral election; or (iii) the earlier of either the date that is six months following the date of (i) or (ii). Distributions may take the form of a lump sum payment or periodic installments (quarterly or annually) not to exceed ten (10) years — if the deferral balance is less than $100,000, then payment will be made in lump sum regardless of the participant’s election. Mr. Fleming is the only Named Executive Officer who has participated in the Humana Deferred Compensation Plan, however he made no contributions during 2021. Mr. Fleming’s 2021 accrued earnings of $1,947 and 2021 deferral account balance of $230,239 are each included within the table above under column (d) and column (f), respectively.
Potential Payments Upon Termination or Change in Control of the Company In accordance with our past disclosure practice, the table below discloses amounts payable to our Named Executive Officers under various scenarios had such occurred as of December 31,
Humana | 2022 Proxy Statement •Executive Compensation
At December 31, Voluntary Termination. Under the Stock
Involuntary Termination Involuntary Termination for Cause. Under the Stock Retirement. Under the Stock Death or Disability. Under the Stock Change in Control. (3) Change in Control Policy and We have a Change in Control
Under
Pursuant to our long-standing Company policy, (4) Treatment of Equity Awards Granted to our CEO Prior to 2018 The Company and Mr. Broussard previously had in force an Amended and Restated Employment Agreement, dated as of February 27, 2014, later amended on July 2, 2015 and August 16, 2018, which we refer to herein as the Broussard Agreement. Effective as of January 1, 2019, Mr. Broussard and the Company agreed not to renew the Broussard Agreement, but that certain provisions pertaining to the treatment of equity awards granted prior to December 31, 2018,
The table above discloses potential payments upon termination or a (5) Pension and Retirement Plans In the event of termination, each
The Humana Retirement Savings Plan amounts are payable under various forms of distribution, the specific form to be elected by the participant. The forms of distribution are a single lump sum in cash or our common stock (if invested in the Humana common stock fund); substantially equal monthly, quarterly, or annual installments for a period of 5, 10, 15 or 20 years not to exceed the life expectancy of the participant, or the joint and last survivor expectancy of the participant and a designated beneficiary.
(6) Retirement As noted above, under the Stock (7) Life, Health and Other Benefits Upon termination (other than a termination in connection with a Change in Control as described above), all officers elected by our Board of Directors, including our In the event of death, the estate of each
(8) Payments to Mr. Kane in Connection with his Departure In connection with Mr. Kane’s transition from Chief Financial Officer to a strategic advisor effective as of June 1, 2021, Mr. Kane entered into a Separation and Transition Agreement on March 22, 2021. While serving as a strategic advisor, Mr. Kane continued to receive his base salary and was eligible for incentive compensation and benefits from the Company. Mr. Kane transitioned to an advisory role in order to facilitate a smooth transition with respect to the Company’s finance and reporting functions, and continued to provide strategic advisory services to the Company. On February 28, 2022, at the end of the transition period, Mr. Kane’s employment with the Company terminated due to the elimination of his role and, subject to his execution of a general release and compliance with applicable restrictive covenants, Mr. Kane became entitled to the benefits pursuant to the Company’s Executive Severance Policy and stock incentive plans that participants receive in connection with a position elimination. Accordingly, Mr. Kane is entitled to base salary continuation for eighteen (18) months following his termination of employment ($1,147,500) and his outstanding restricted stock units and unvested stock options continue to vest for one year following the date that his employment terminated as if Mr. Kane had continued to be employed through the end of such period. In addition, Mr. Kane continues to be bound by non-compete and non-solicit covenants during the applicable severance period.
The Board of Directors has determined that there are no material transactions involving a current director or director nominee of the Company. For a discussion of the transactions reviewed, please see the discussion under “Independent Directors” herein. The Board of Directors has During 2021, the Company had an agreement with BlackRock, Inc., or BlackRock, which holds greater than five percent of the Company’s outstanding stock as of December 31, 2021. Under this agreement, BlackRock provided fixed income investment management services to the Company, for which the Company paid approximately $3.83 million in fees for the year ended December 31, 2021. The fees were determined solely on the amount of assets under management, and, to our knowledge, were comparable to those of non-affiliated customers. During 2021 the Company received approximately $48,600 in fees associated with employee assistance program services, which is an amount that is comparable to other During 2021, the Company maintained a mutual fund with FMR LLC, or Fidelity Investments, in which the Company invested in the Fidelity Investments Money Market Treasury Portfolio mutual fund. In connection with this mutual fund, the Company paid approximately $108,472 in management fees for the year ended December 31, 2021. The fees were determined solely based on the institutional share class expense ratio of 0.14%, as
The Board of Directors has adopted a policy for review, approval and monitoring of transactions involving the Company and directors and executive officers or their immediate family members, or stockholders owning five percent or greater of the Company’s outstanding stock. The policy covers any related person transaction that meets the minimum threshold for disclosure under the SEC’s regulations. The Related Party Transaction Approval Policy may be viewed on our website. From thewww.humana.comwebsite, click on “Investor Relations,” then click on “Corporate Governance,” and then click on the link entitled “Policy Regarding Related Person
Our Audit Committee currently is comprised of four directors. All members are independent and are financially literate as defined in the NYSE listing standards. The Board of Directors has determined that Messrs. D’Amelio and As set forth in its Charter, our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm engaged to prepare the audit report or perform other audit, review or attestation services. The Audit Committee has retained PricewaterhouseCoopers LLP, or PwC, as the Company’s independent registered public accounting firm for fiscal The Audit Committee reviews Humana’s financial reporting processes on behalf of the Board of Directors. In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the audited financial statements contained in our Annual Report on Form10-K for the year ended December 31, During The Audit Committee reviewed and evaluated the relevant requirements of the Sarbanes-Oxley Act of 2002, the rules of the SEC and the listing standards of the NYSE regarding audit committee procedures and responsibilities, including a review of our internal controls and procedures. The Audit Committee reviewed and approved the services provided by PwC to us consisting of the following:
Audit Fees include activities relating to the audit of our consolidated financial statements, the audit of internal control over financial reporting, statutory and other separate Company audits, work performed in connection with registration statements, and consultations related to miscellaneous SEC and financial reporting matters. The increase in audit fees primarily relates to our acquisition of Kindred at Home in 2021.
Tax Fees include activities relating to tax compliance, consultation and support services.
All Other Fees include activities related to advisory services and the annual renewal of software licenses for accounting research.
The Audit Committee discussed with our internal auditors and with PwC the overall scope and plans for their respective audits. At each meeting, the Audit Committee is provided the opportunity to meet with the internal auditors and with PwC with and without management present, and, in fact, met with the internal auditors and with PwC with and without management present in connection with each regularly scheduled Board of Directors meeting in The Audit Committee has established policies and procedures forpre-approving all audit, review and attest services that are required under the securities laws and all other permissible tax andnon-audit services necessary to assure PwC’s continued independence. The Audit Committee annuallypre-approves the following permissiblenon-audit services:
related assurance and attestation services;
risk and control services;
transaction services; and
The fees shown in the table above were allpre-approved in accordance with these policies and procedures. The Audit Committee separately will consider any proposed retention of the independent registered public accounting firm for permissiblenon-audit services other than those listed above. The Audit Committee is responsible for the audit fee negotiations associated with the Company’s retention of PwC. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Humana Annual Report on Form10-K for the year ended December 31, All members of the Audit Committee of the Company whose names follow submit the foregoing report: AUDIT COMMITTEE Frank A. D’Amelio, Chairman Raquel C. Bono, M.D. John W. Garratt William J. McDonald
Background The Board of Directors, in accordance with the recommendation of its Audit Committee, believes that the continued retention of PwC as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders, and therefore has appointed PwC to audit the consolidated financial statements of the Company for the year ending December 31, We are asking our stockholders to ratify the appointment of PwC as our independent registered public accounting firm. Although ratification is not required by our Charter, Bylaws, Delaware law or otherwise, the Board is submitting the appointment of PwC to our stockholders for ratification because we value our stockholders’ views on our independent registered public accounting firm. If our stockholders fail to ratify the appointment, it will be considered as anon-binding recommendation to the Board and the Audit Committee to consider the appointment of a different firm for fiscal year Vote Required and Recommendation of the Board of Directors The affirmative vote of a majority of the votes present and entitled to vote with respect to the proposal is required for the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. Shares not present at the meeting have no effect on the ratification of the appointment of PricewaterhouseCoopers LLP, while THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
Background The Dodd-Frank Act At our RESOLVED, that the stockholders of Humana Inc. approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as described in the Compensation Discussion and Analysis section, the compensation tables, and the accompanying narrative disclosure, set forth in the Company’s proxy statement. The compensation of our Named Executive Officers is disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosures contained in this proxy statement. As discussed in those disclosures, our philosophy is that compensation should be market-based, competency-paced and contribution-driven. Our compensation programs are designed to challenge participants as well as reward them for superior performance for our Company and our stockholders, with an emphasis on pay for performance principles to align the interests of our Named Executive Officers with those of our stockholders. Our compensation practices and policies enable us to attract and retain talented and experienced executives to lead the Company successfully in a competitive environment. Your vote on this Proposal Three is an advisory one, and therefore is not binding on the Company, the Organization & Compensation Committee, or the Board. The vote will not be construed to create or imply any change to the fiduciary duties of the Company or the Board, or to create or imply any additional fiduciary duties for the Board. Nevertheless, our Board and our Organization & Compensation Committee value the opinions of our stockholders, and intend to consider any stockholder concerns evidenced by this vote. We will continue to evaluate and disclose whether any actions are necessary to address those concerns. Vote Required and Recommendation of the Board of Directors The affirmative vote of a majority of the votes present and entitled to vote with respect to the proposal is required for the approval of thenon-binding advisory vote with respect to the compensation of the Company’s Named Executive Officers. Shares not present at the meeting and brokernon-votes have no effect on the approval of thisnon-binding advisory vote, while abstentions will count as votes “against.” Pursuant to NYSE regulations, brokers do not have discretionary voting power over this proposal, and therefore, if you hold Shares through a broker or other NYSE member organization and do not provide voting instructions to your broker or other NYSE member organization, your Shares will not be voted with respect to this proposal. If you timely submit a signed proxy but fail to specify instructions to vote with respect to this proposal, the accompanying proxy will be voted FOR this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THE COMPENSATION DISCUSSION AND ANALYSIS, THE COMPENSATION TABLES, AND THE RELATED DISCLOSURES CONTAINED IN THIS PROXY STATEMENT.
The Organization & Compensation Committee Report and the Audit Committee Report (including the reference to the independence and financial expertise of the Audit Committee members), each contained in this proxy statement, are not deemed filed with the SEC and shall not be deemed incorporated by reference into any prior or future filings made by Humana under the Securities Act of 1933, except to the extent that we specifically incorporate such information by reference into any of these future filings.
Our Annual Report on Form10-K for the year ended December 31, Our Annual Report onForm 10-K and all other filings with the SEC may also be accessed via the Investor Relations page on our website atwww.humana.com. From thewww.humana.comwebsite, click on “Investor Relations,” and then click on the report you wish to review under the “SEC Filings By Order of the Board of Directors,
Joseph M. Ruschell Associate Vice President, Assistant General Counsel & Corporate Secretary
DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. — — — — —— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — D67746-P66007
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