RESOLVED, on an advisory basis, the stockholders of The Allstate Corporation approve the compensation of the named executives, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis and accompanying tables and narrative onpages 31-67 of the Notice of 2018 Annual Meeting and Proxy Statement.
 | Allstate achieved all five 2017 operating priorities, and financial results improved, with net income rising to $3.07 billion in 2017 from $1.76 billion in the prior year. | | Total shareholder return was 43.3% for 2017 in comparison to 19.1% for the compensation peer group. | | Total 2017 compensation for the CEO increased from 2016 by $4,830,432 to $17,069,187 excluding the change in pension value, as shown in the Summary Compensation Table. | | The annual incentive compensation plan was funded for the named executives, at 181.4%as disclosed pursuant to the compensation disclosure rules of target in 2017. Basedthe SEC, including the Compensation Discussion and Analysis and accompanying tables and narrative on companypages 42-77of the Notice of 2020 Annual Meeting and individual performance, the named executives received the following annual incentive payments, which were higher than the prior two years’ awards:
Proxy Statement. | | |
| | Named Executive | | 2015 Annual
Incentive
($) | | 2016 Annual
Incentive
($) | | 2017 Annual
Incentive
($) | | Mr. Wilson | | 2,888,136 | | 1,982,880 | | 6,759,264 | | Mr. Shebik | | 850,000 | | 600,000 | | 2,600,000 | | Mr. Civgin | | 768,629 | | 535,066 | | 1,806,645 | | Mr. Dugenske(1) | | – | | – | | 1,377,908 | | Mr. Winter | | 1,600,000 | | 1,017,513 | | 3,625,590 |
(1) | For Mr. Dugenske, only the last fiscal year is shown since this is the first year he is a named executive. The award was pro-rated based on his March 2017 start date.
|
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Table of Contents
Compensation Discussion and Analysis Executive Compensation
Compensation Discussion and Analysis EXECUTIVE OVERVIEWExecutive Overview
Our Compensation Discussion and Analysis describes Allstate’s executive compensation program, including total 20172019 compensation for our named executives listed below(1): Thomas J. Wilson— Chair and Chief Executive Officer (CEO)
Steven E. Shebik— Executive Vice President and Chief Financial Officer (CFO)
Don Civgin— President, Emerging Businesses
John E. Dugenske— Executive Vice President and Chief Investment Officer
Matthew E. Winter— President
(1) | THOMAS J. WILSON
Chair, President, and Chief Executive Officer (CEO) | | MARIO RIZZO
Executive Vice President and Chief Financial Officer (CFO) | | DON CIVGIN
President, Service Businesses | | GLENN T. SHAPIRO
President, Allstate Personal Lines | | STEVEN E. SHEBIK
Vice Chair | | | | | | | | | | | | | |
| (1) | The titles and responsibilities changed for certain of these officers changed in 2018. Additionally, Mr. Winter retired effective February 23, 2018.2020. See Appendix C for current titles and a full list of Allstate’s other executive officers.officers and current titles. |
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Table of Contents Compensation Discussion and Analysis < Executive Compensation Business Highlights In 2017,2019, Allstate delivered strong results and implemented multiple initiatives to drive long-term profitable growth. Our management team continued to advance all five operating priorities:Operating Priorities: $1.9 billion
Distributed to stockholders in cash through stock repurchases and common stock dividends
| | $2.5 billion
Distributed to stockholders in cash through stock repurchases and common stock dividends | | |
| Operating Priorities | | Results | Better serve
our customers | ●Net Promoter Score increased.
●Customer retention improved for Allstate brand in the second half of 2017, and Esurance auto insurance improved in each quarter of 2017 compared to 2016.
●Expanded QuickFoto Claim® utilization.
| Achieve target
economic returns
on capital | ●►Property-Liability recorded combined ratio of 93.6 for the full year.
●Auto insurance underlying combined ratio* improved across all three underwritten brands.
●Allstate brand homeowners insurance generated an underwriting profit of $725 million despite $2.1 billion of catastrophe losses.
●Allstate Annuities incomeEnterprise net promoter score increased significantly, while returns remained low.with improvement at most businesses
| | Grow customer base | | ●►Total policies in force increased to 82.3reached 145.9 million, due to acquisition of SquareTrade.a 27.7% increase from prior year
●►Property-Liability policies increased 1.3% from prior year to 33.7 million
| | Achieve target returns on capital | | ►Adjusted net income return on common shareholders’ equity* of 16.9% in force declined as a result of profit improvement actions. ●SquareTrade policies grew 10 million or 35.8% for the year.
●Allstate Benefits policy growth of 7.4%.2019
| Proactively manage
investments | | ●►Net investment income of $3.2 billion in 2019 reflects higher market-based yields
►Performance-based results were below expectations, but long-term results have been strong ►Total return of 5.9%, reflecting strong results from both the market-based and performance-based strategies.9.2% on $88.4 billion investment portfolio in 2019 | Build long-term
growth platforms | | ●►SquareTrade expanded U.S. retail distribution and European cellphone protection.Accelerating Transformative Growth Plan
●►Arity continued to supportexpand telematics usage and capabilities
►Expanding Allstate and Esurance telematics expansion; signed first third-party insurance carrier.Identity Protection ►Avail, a car sharing business, initiated operations |
| * | Measures used in this proxy statement that are not based on generally accepted accounting principles (“non-GAAP”) are denoted with an asterisk (*). These measures areThis measure is defined and reconciled to the most directly comparable GAAP measuresmeasure in Appendix A.
|
Table of Contents
Executive Compensation Compensation Discussion and Analysis
Allstate’s one-yearone, three, and five-year total shareholder return was 43.3%.38.8%, 60.4%, and 75.8%, respectively. The following chart shows Allstate’s total shareholder return over one, three and five years relative to the market cap weighted average of the peer group used for 20172019 compensation benchmarking (identified onpage 4558). Comparison of Total Shareholder ReturnCOMPARISON OF TOTAL SHAREHOLDER RETURN (%)
 (1) | Market Cap Weighted Average |
2020 Proxy Statement 43
Table of Contents Executive Compensation > Compensation Discussion and Analysis Compensation Highlights The committee actively solicits the views of our significant stockholders on executive compensation matters. In determining the structure and amount of executive pay, the committee carefully considered this feedback.At our last stockholder meeting, 89% of votes cast supported our executive compensation program.Investors generally believed that Allstate utilized many best practices and focused on pay for performance, but some questioned certain elements of the performance measures and targets established by the committee. The committee considered the vote results, investor input and current market practices and made changes to respond to that feedback, as described below. Compensation Governance
Allstate’s executive compensation program includes industry best practices with a focus onpay for performanceand astrong link between performance measures and strategic objectives.
| | Shareholder Feedback
The Board considers feedback from shareholders on matters including compensation. At our last shareholder meeting,95% of votes cast supported our executive compensation program. The committee considered the vote results, investor input, and current market practices and determined that no significant changes should be made to the program.
| | | | Comparison with Peers
The committee uses the50thpercentile of our peer companiesas a guideline when setting total target direct compensation.
| | | | What We Heard | | Independent ConsultantWhat We Do | | | As a general rule, incentive targets for the annual incentive plan should not be set below prior year actual results. If in the committee’s discretion that is deemed warranted, the committee should ensure full and transparent disclosure of the process used and rationale for setting targets below prior year results. | | An independent compensation consultant provides►adviceThe committee assesses highly variable components of the performance measures, such as catastrophe losses, to establish targets using probability and scenario analysis.
►Total Premiums target was set above the prior year as it has been for over ten years. ►Performance Net Income target for 2019 was above 2018 reflecting top-line growth and consistent margins. Catastrophe losses were assumed to be higher than the prior year, reflecting long-term weather patterns. ►Net Investment Income target was set above 2018 based on incentive designhigher market-based income. ►A detailed summary of the goal setting process and the overall executive2019 ranges for each performance measure are included on page 53. | | | Investors generally like to see little to no discretion applied in the annual incentive program, particularly annual incentive awards paid to the CEO. | | ►The annual incentive compensation programpool is calculated based on three numerical measures and pay levels.no positive discretion has been applied to the pool in the last five years. Individual discretion is utilized to reward high performers, but this is funded by reducing amounts paid to other executives. ►The annual cash incentive awards for the CEO and three other NEOs were equal to the calculated funding level, with no discretion applied. ►A detailed description of how the annual incentive corporate pool is funded and distributed to individual participants is included on pages 54-55. | | | Performance awards should be aligned with stockholder value, and the committee should consider whether total shareholder return would be an appropriate performance measure for the incentive program. | | ►For the 2020-2022 performance stock awards, the committee replaced the Earned Book Value measure with a Relative TSR measure. ►For additional detail on the 2020 performance stock award design, see page 56. | | | | | | |
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Table of Contents Compensation Discussion and Analysis < Executive Compensation Alignment of Pay with Performance Annual Cash IncentiveANNUAL CASH INCENTIVE
  | (1) | For a description of how these measures are determined, seepages 64-6675-77 | (2)^ | This performance measure has been utilized in prior years,Reflects 2018 actual results of Total Premiums of $37,451, Performance Net Income of $3,095, and was previously called Adjusted OperatingNet Investment Income of $3,240 |
Annual Incentive Plan ("AIP")ANNUAL INCENTIVE PLAN % of TargetOF TARGET
 
2015-2017 Performance Stock Awards2017-2019 PERFORMANCE STOCK AWARDS
 
PSA % PAYOUT FOR ALL NEOs 
2018 Proxy Statement(1) | 33For a description of how these measures are determined, seepages 75-77 |
2020 Proxy Statement 45
Table of Contents Executive Compensation > Compensation Discussion and Analysis 2017 COMPENSATION MIX2019 Compensation Mix
The committee designs the executive compensation program to award pay in accordance with corporate, business unit and individual performance. A large percentage of total target compensation is at risk through long-term equity awards and annual cash incentive awards. These awards are linked to performance measures that correlate with long-term stockholder value creation. The mix of target total direct compensation for 20172019 for our CEO and the average of our other named executives is shown in the chart below. Chief Executive OfficerCHIEF
EXECUTIVE
OFFICER
| |  | | | | | Other OTHER
NEOs
 | |  |
ALLSTATE’S EXECUTIVE COMPENSATION PRINCIPLESAllstate’s Executive Compensation Principles
Allstate’s executive compensation program is designed to ensure that the interests of our executives are aligned with our shareholders:stockholders: We Pay for Performance | We Establish a Strong Link Between Performance Measures and Strategic Objectives | The majority of our CEOCEO’s and other NEOsNEOs’ compensation opportunity is at-risk and based on measurable performance goals. We Establish A Strong Link between Performance Measures and Strategic Objectives
| Performance measures are linked to operating priorities designed to create long-term stockholder value. |
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Table of Contents Compensation Discussion and Analysis < Executive Compensation Moreover, our program adheres to high standards of compensation governance. 34 | | www.allstate.com |
2020 Proxy Statement 47
Table of Contents Executive Compensation > Compensation Discussion and AnalysisExecutive Compensation COMPENSATION ELEMENTSCompensation Elements
The following table lists the elements of target direct compensation for our 20172019 executive compensation program. | Short-Term | | | TypeMid-Term | | | Long-Term | | FIXED | | | VARIABLE | | Base Salary | | | Annual Cash Incentive Awards | | | Performance Stock Awards | | | Stock Options | | Cash | | | Cash | | | Equity | | | Equity |  | | |  | Element and
Delivery(1) | |  | | |  | Why We Pay This
Element | | Key Characteristics | | How We Determine Amount |  | | | | | | | | | | | |  | | | | Base Salary; Cash
| | Attract and retain executives with competitive level of cash compensation. | | Reviewed annually and adjusted when appropriate. | | Amounts based on experience, job scope, market data, and individual performance. | | | | | | | | | | | |  | | | | | Annual Cash
Incentive
Awards; Cash
| | Motivate and reward executives for performance on key strategic, operational, and financial measures during the year. | | A corporate-wide funding pool based on performance on four measures:
●Performance Net Income(2)
●Total Premiums(2)
●Net Investment Income(2)
●Total Return(2)
Pool is then allocated based on individual performance.
| | Individual awards are based on job scope, market data, pool funding, and individual performance. |
|
 | | | | Performance
Stock Awards
(“PSAs”); Equity
|
| Motivate and reward executives for performance on key long-term measures. Align the interests of executives with long-term stockholder value. Retain executive talent. | | | Align the interests of executives with long-term stockholder value. Retain executive talent. | Key Characteristics | | | | | | | | | | Reviewed annually and adjusted when appropriate. | | | A corporate-wide funding pool based on performance on three measures: ►Total Premiums(2) ►Performance Net Income(2) ►Net Investment Income(2) Pool is then allocated based on business unit and individual performance; positive net income required for any payout above target. | | | PSAs vest on the day before the third anniversary of the grant date. | | Awards based on job scope, market data, and individual performance.
Actual amounts of PSAs vesting based on performance on three-year Performance Net Income Return on Equity(2)and Earned Book Value(2)with a requirement of positive Net Incomenet income for any payout above target. | Stock Options; Equity
| | Align the interests of executives with long-term stockholder value.
Retain executive talent.
| | Non-qualified stock options to purchase shares at the market price when awarded. Vest ratably over three years. Expire in ten years or, in the event of retirement, the earlier of five years or normal expiration. | | Awards granted based on job scope, market data, and individual performance. |
| (1) | Represents the average of the target direct compensation elements for all of the named executives in 2017. 2019. | | (2) | For a description of how these measures are determined, seepages 64-6675-77. | (3) | The compensation and succession committee may award cash and/or restricted stock units in connection For 2020 awards, Earned Book Value was replaced with the hire of a new executive. Awards are typically to cover compensation amounts forfeited at prior employer.
Relative Total Shareholder Return. |
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Table of Contents Executive CompensationCompensation Discussion and Analysis< Executive Compensation
COMPENSATION DECISIONS FOR 2017Compensation Decisions for 2019
THOMASThomas J. WILSONWilson
Chair, President, and Chief Executive Officer(1) Our Chair, President, and CEO wasis responsible for managing the company’s business operations and the oversight of senior management. He led the execution of Allstate’s overall strategic direction, performance,operating results, organizational health, ethics and operations. compliance, and corporate responsibility. | | 2017 Compensation (millions)2019 COMPENSATION
(in millions) | | Mr. Wilson’s total compensation and the amount of each compensation element are driven by the design of our compensation program, his responsibilities, experience his responsibility for Allstate’s overall strategic direction,and performance, and operations, and the committee’s analysis of peer company CEO compensation. In conjunction with theThe committee’s independent compensation consultant the committee conducts an annual review ofannually reviews Mr. Wilson’s total target direct compensation and determinespayments to advise the committee if any changes are warranted. Mr. Wilson’s performance as Chair, President, and CEO is evaluated under the following categories, which are determined by the committee:five categories: operating results, total shareholder return, developing and implementing long-term strategy, maintaining and motivating a high-performance team, corporate stewardship and Board effectiveness. Performance is assessed over one- and three-year time periods. | |
●►Operating Results.AchievedExcellent results on all five 2017 operating priorities.2019 Operating Priorities.
● Total Shareholder Returns.Strong shareholder returns over one, three,Insurance premiums and five years.contract charges increased by $2.1 billion (5.7%), and policies in force grew by 27.7% to 145.9 million.●Adjusted net income* rose to $3.48 billion in 2019 from $3.13 billion in the prior year.Allstate’s annual total shareholder return in 2019 was 38.8%. Allstate’s three-year period total return was 60.4%, which exceeds both the three-year return of peers (34.4%), and the three-year return of the S&P 500 index (53.1%). | | ►Long-term Strategy.Improved competitive position of existing businesses and building or acquiring newwhile continuing to build long-term growth platforms. ●Initiated Transformative Growth Plan to grow personal property-liability market shareStrategy to grow other protection offerings being driven by rapid growth of Allstate Protection Products and Allstate Identity Protection ►High-Performance Team.Extremely competent,Talented, experienced and highly engaged team that hadwith excellent operating performance.collaboration to achieve strategic vision. | | ►Corporate Stewardship.Corporate reputation is at an all-time high. Allstate is a leader in supporting youth empowerment and ending domestic violence. ●►Board Effectiveness.Excellent governance processes, Board diversity, and shareholderstockholder engagement.
|
2019 Compensation Decisions
During the 2017 annual review, the committee determined that Mr. Wilson’s target direct compensation was appropriately aligned with the median of the compensation peer group. Furthermore, Mr. Wilson’s annual cash incentive target of 300% of salary and long-term equity incentive target of 750%775% of salary remained unchanged.
| ●►Salary.The committee approved an increase from $1,300,000 to $1,350,000 during 2019 based on evaluation of his performance, level of responsibility, experience and target compensation as compared to the peer group.
| | ►In 2017, the Board increased Mr. Wilson’s salary from $1,200,000 to $1,250,000. Mr. Wilson’s last salary increase was in March 2015. ●Annual Cash Incentive Award.Mr. Wilson’s target annual incentive payment of 300% of base salary with a maximum funding opportunity for the award pool of 200% of target was unchanged in 2017.2019. The committee approved an annual cash incentive award of $6,759,264,$4,730,100, which was 181.4% of target and equal to the funding level as determined by the actual results for the fourthree performance measures. This was 67.6%measures of the maximum payment established by the Board.117.5% of target.
| | ●►Equity Incentive Awards.In February 2017,2019, based on its assessment of Mr. Wilson’s performance in delivering strong business results in 2016,2018, his job scope, and market data, the committee granted him equity awards of stock options with a grant date fair value of $3,599,997 and performance stock awards with a grant date fair value of $5,400,039,$10,075,000, which was Mr. Wilson’s target equity incentive award opportunity of 750%775% of salary.
●Other.The change in pension value for Mr. Wilson in 2017 of $1,688,142 was $2,599,785 lower than the change would have been had management not recommended a change in pension benefits beginning in 2014, as discussed onpage 46. The total value of Mr. Wilson’s pension benefit as of December 31, 2017, is $16,043,029 less than it would have been without the 2014 pension change. |
(1) | Served in these roles during 2017.
2020 Proxy Statement 49 |
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Table of Contents Executive Compensation > Compensation Discussion and AnalysisExecutive Compensation STEVEN E. SHEBIKMario Rizzo
Executive Vice President and Chief Financial Officer(1) Our CFO hadhas primary responsibility for the management of the company’s overall financial condition, as well as forsystem of internal controls, capital allocation, financial analysisreporting, investor relations, acquisitions and reporting. Mr. Shebik served as interim Chief Investment Officer until Mr. Dugenske joined the company in March 2017. Mr. Shebik also served as interim Chief Risk Officer until the election of Mr. Merten in December 2017. divestitures, and capital market transactions. | | 2017 Compensation (millions)2019 COMPENSATION
(in millions)
| 2019 Performance
Mr. Rizzo’s annual performance is evaluated on four criteria: overall corporate results, area of responsibility results, developing and implementing long-term strategy and corporate leadership. In 2019, Mr. Rizzo’s compensation was at target funding with no discretion applied based on the following accomplishments: ►The Annual Incentive Plan funded at 117.5% based on a $2.0 billion (5.4%) Total Premium increase over the prior year being below an aggressive target, Performance Net Income of $3.57 billion being $421 million above target and Net Investment Income being $55 million below target despite having a total portfolio return of 9.2%. ►Enhanced operational performance by coordinating expense reductions, providing strong operational oversight and measurement and maintaining strong internal controls. ►Created shareholder value by increasing use of preferred stock, optimizing capital allocation and overseeing the share repurchase program. | |
2019 Compensation Decisions | 2017 Performance►
●Salary.Exceptional performance as Chief Financial Officer and acted as an interim Chief Investment Officer and Chief Risk Officer.
| Compensation Decisions
●Salary.The committee approved an increase from $750,000$700,000 to $800,000$720,000 during 2017,2019 based on an evaluation of his performance, level of responsibility, experience and target compensation as compared to the peer group.
| | ●►Incentive Targets.Mr. Shebik’s AIP Target was increased during 2017. Mr. Shebik’sRizzo’s annual incentive target was 175%125% of salary and his target equity incentive opportunity was 300% of salary.
●►Annual Cash Incentive Award.The committee approved an annual cash incentive award of $2,600,000$1,053,000 for Mr. Shebik. This awardRizzo, which was slightly above poolequal to the funding level as determined by the actual results for the three performance measures of 117.5% of target.
| | ►Equity Incentive Awards.In February 2019, based on his expanded responsibilities in 2017. This was 36.8% of the maximum payment established by the committee. ●Equity Incentive Awards.In February 2017, based on a reviewits assessment of Mr. Shebik’sRizzo’s performance during 2016,in delivering strong business results in 2018, his job scope, and market data, the committee granted him equity awards with a grant date fair value of $3,325,020,$2,100,000, which was approximately $1,000,000 above hisMr. Rizzo’s target equity incentive award opportunity.
|
President, EmergingService Businesses(1) Mr. Civgin oversaw Allstate Emergingwas President, Service Businesses, includingand is a member of Allstate’s Operating Committee. In this role, he oversees the leadership of Allstate Dealer Services, Allstate Roadside Services, Answer Financial, Arity, Allstate Protection Plans and SquareTrade. Mr. Civgin also oversaw Esurance. Avail. | | 2017 Compensation (millions)2019 COMPENSATION
(in millions)
| 2019 Performance
Mr. Civgin’s annual performance is evaluated on four criteria: overall corporate results, area of responsibility results, developing and implementing long-term strategy and corporate leadership. In 2019, Mr. Civgin’s compensation was above target funding with positive discretion applied based on the following accomplishments: ►The Annual Incentive Plan funded at 117.5% based on a $2.0 billion (5.4%) Total Premium increase over the prior year being below an aggressive target, Performance Net Income of $3.57 billion being $421 million above target and Net Investment Income being $55 million below target despite having a total portfolio return of 9.2%. ►Allstate Protection Plans policy growth of 45% reaching 99 million with increased Adjusted Net Income. Continued progress in building Arity and Avail businesses. | |
| (1) | The titles and responsibilities changed for certain of these officers in 2020. See Appendix C for a full list of Allstate’s executive officers and current titles. |
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Table of Contents Compensation Discussion and Analysis < Executive Compensation 2019 Compensation Decisions | 2017 Performance►
●Salary.Significant improvement in Esurance profitability, continued building Arity strategy and business capabilities, and strong growth of SquareTrade.
| Compensation Decisions
●Salary.The committee approved an increase from $780,000$820,000 to $800,000$840,000 during 2017,2019, based on an evaluation of his performance, level of responsibility, experience and target compensation as compared to the peer group.
●►Incentive Targets.No changes were made to Mr. Civgin’s incentive targets during 2017. Mr. Civgin’s annual incentive target was 125% of salary and his target equity incentive opportunity was 300% of salary.
| | ●►Annual Cash Incentive Award.The committee approved an annual cash incentive award of $1,806,645$1,400,000 for Mr. Civgin, which was at133.9% of target and above the calculated pool funding and 25.6% of the maximum payment establishedlevel as determined by the committee.actual results for the three performance measures.
●►Equity Incentive Awards.In February 2017,2019, based on a reviewits assessment of Mr. Civgin’s performance during 2016,in delivering strong business results in 2018, his job scope, and market data, the committee granted him equity awards with a grant date fair value of $2,340,028,$2,460,000, which was Mr. Civgin’s target equity incentive award opportunity.
|
Glenn T. Shapiro
President, Allstate Personal Lines(1) Key Responsibilities
Mr. Shapiro was President of Allstate Personal Lines and led the product, claims, operations, risk, finance and distribution for this business, which comprises approximately 80% of Allstate’s total insurance premiums and contract charges. | | 2019 COMPENSATION
(in millions) 
| 2019 Performance
Mr. Shapiro’s annual performance is alignedevaluated on four criteria: overall corporate results, area of responsibility results, developing and implementing long-term strategy and corporate leadership. In 2019, Mr. Shapiro’s compensation was at target funding with no discretion applied based on the following accomplishments: ►The Annual Incentive Plan funded at 117.5% based on a $2.0 billion (5.4%) Total Premium increase over the prior year being below an aggressive target, Performance Net Income of $3.57 billion being $421 million above target and Net Investment Income being $55 million below target despite having a total portfolio return of 9.2%. ►Enhanced Allstate brand personal lines competitive position by improving customer service, reducing expenses and enhancing analytics. | |
2019 Compensation Decisions | ►Salary.The committee approved an increase from $750,000 to $780,000 during 2019 based on evaluation of his performance, level of responsibility, experience and target compensation as compared to the peer group. | | ►Incentive Targets.Mr. Shapiro’s annual incentive target was 150% of salary and his target equity incentive opportunity was 325% of salary. ►Annual Cash Incentive Award.The committee approved an annual cash incentive award of $1,366,000 for Mr. Shapiro, which was equal to the funding level as determined by the actual results for the three performance measures of 117.5% of target. | | ►Equity Incentive Awards.In February 2019, based on its assessment of Mr. Shapiro’s performance in delivering strong business results in 2018, his job scope, and market data, the committee granted him equity awards with a grant date fair value of $2,437,500, which was Mr. Shapiro’s target equity incentive award opportunity. |
| (1) | ServedThe titles and responsibilities changed for certain of these officers in this role during 2017.
2020. See Appendix C for a full list of Allstate’s executive officers and current titles. |
2020 Proxy Statement 51
Table of Contents Executive Compensation > Compensation Discussion and Analysis JOHNSteven E. DUGENSKEShebik
Executive Vice President and Chief Investment OfficerChair(1)
As Vice Chair, Mr. Dugenske was Executive Vice President and Chief Investment OfficerShebik had primary responsibility for oversight of Allstate Life and Retirement, Allstate Benefits, Allstate Identity Protection, Encompass, Esurance, Allstate Business Insurance, CompanyCorporate Business Transformation, Discontinued Lines, and President of Allstate Investments. He oversaw the company’s $83 billion investment portfolio. D3, a corporate analytics team. | | 2017 Compensation (millions)2019 COMPENSATION
(in millions)
| | 2019 Performance
Mr. Shebik’s annual performance is evaluated on four criteria: overall corporate results, area of responsibility results, developing and implementing long-term strategy and corporate leadership. In 2019, Mr. Shebik’s compensation was at target funding with no discretion applied based on the following accomplishments: 2017►The Annual Incentive Plan funded at 117.5% based on a $2.0 billion (5.4%) Total Premium increase over the prior year being below an aggressive target, Performance Net Income of $3.57 billion being $421 million above target and Net Investment Income being $55 million below target despite having a total portfolio return of 9.2%.
●►Strong investmentoperating results with a total returnincluding expansion of 5.9%, which exceeded relevant benchmarks.shared economy insurance, life profitability and improved returns for the Esurance and Encompass brands.
| Compensation Decisions
●Salary.$725,000
●Bonus.Mr. Dugenske received a sign-on bonus of $4,000,000 payable in cash in two installments to offset the value of awards forfeited upon leaving his prior employer. The first installment of $2,000,000 became payable within sixty days of his start date, with the balance of $2,000,000 becoming payable within thirty days after the first anniversary of his start date. In order to receive the second installment, Mr. Dugenske must be employed by Allstate on the date the installment becomes payable. If Mr. Dugenske terminates his employment within twenty-four months of either sign-on payment date, he must repay a prorated amount calculated over a twenty-four month period from the payment date.
●Incentive Targets.Mr. Dugenske’s annual incentive target was 125% of salary and his target equity incentive opportunity was 300% of salary.
●Annual Cash Incentive Award.The committee approved an annual cash incentive award of $1,377,908 for Mr. Dugenske. The award was pro-rated based on his March 2017 start date. The award was calculated at pool funding and 19.5% of the maximum payment establishment by the committee.
●Equity Incentive Awards.Mr. Dugenske received a $4,000,002 grant of restricted stock units on April 5, 2017, to offset the value of awards forfeited upon leaving his prior employer. These RSUs will become 100% vested on April 4, 2020. The committee also granted Mr. Dugenske equity awards with a grant date fair value of $2,175,017, which is aligned with his target equity incentive award opportunity.
|
MATTHEW E. WINTER2019 Compensation Decisions
President(1)
Key Responsibilities
Mr. Winter was President of The Allstate Corporation and Chief Executive Officer of Allstate Life Insurance Company. He led the personal property-liability businesses, including the Allstate agency and Encompass operations. He was responsible for all business operations and distribution, which includes the 15 field offices located across the United States and in Canada. Mr. Winter retired effective February 23, 2018.
| 2017 Compensation (millions)
| | 2017 Performance►
●Salary.Significant improvement in auto insurance margins, implementation of Allstate Agency trusted advisor initiative, and meaningful contributions to corporate-wide initiatives.
| Compensation Decisions
●Salary.The committee approved an increase from $825,000$850,000 to $900,000$870,000 during 2017,2019 based on an evaluation of his performance, level of responsibility, experience and target compensation as compared to the peer group.
●►Incentive Targets.No changes were made to Mr. Winter’s incentive targets during 2017. Mr. Winter’sShebik’s annual incentive target was 225%200% of salary and his target equity incentive opportunity was 375%350% of salary.
| | ●►Annual Cash Incentive Award.The committee approved an annual cash incentive award of $3,625,590$2,037,000 for Mr. Winter,Shebik, which was at calculated poolequal to the funding and 38.5% of the maximum payment establishedlevel as determined by the committee.actual results for the three performance measures of 117.5% of target.
●►Equity Incentive Awards.In February 2017,2019, based on a reviewits assessment of Mr. Winter’sShebik’s performance during 2016,in delivering strong business results in 2018, his job scope, and market data, the committee granted him equity awards with a grant date fair value of $3,093,772,$2,975,000, which is aligned with hiswas Mr. Shebik’s target equity incentive award opportunity.
|
| (1) | ServedThe titles and responsibilities changed for certain of these officers in this role during 2017.
2020. See Appendix C for a full list of Allstate’s executive officers and current titles. |
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Table of Contents Compensation Discussion and Analysis < Executive Compensation INCENTIVE DESIGN AND GOAL SETTINGIncentive Design and Goal Setting
For the annual and long-term incentive programs, the committee oversees a rigorous and comprehensive goal-setting process. The committee works to identifyuses performance measures and ranges of performance in the annual and long-term programs that (1) align with the company’s strategy, operating principles and priorities, and stockholder interests, (2) support the achievement of corporate goals, and (3) reflect the company’s overall performance. The following timeline of key events reflects the committee’s process: Incentive Design, Payout, and Goal-Setting Process March-JuneONGOING
| | | | | ●►Review compensation philosophy and objectives in light of company performance, goals and strategy, stockholder feedback, and external benchmarking
| | ►Monitor compensation estimates in comparison to actual and relative performance | | ►Monitor compliance with management equity ownership requirements | | | | | |
APRIL-JULY Benchmarking | | NOVEMBER-JANUARY Establishing Plan Design and Key Metrics | | FEBRUARY Calculating Payouts | ►Evaluate peer group to determine if any changes are required for the next performance cycle ●►Compare against peers’ actual compensation paid, operating results, and stockholder returns from previous year to peer groupover one, three and five years as provided by the independent compensation consultantconsultant’s pay for performance analysis
●►Review feedback from stockholders and governance firms on compensation
|  | July-October
●►Independent compensation consultant provides advice on incentive design and overall executive compensation program and executive pay levels
●►The consultant also provides compensation data from the peer group and information on current market practices and industry trends
| | |  | January-February►Establish plan design and performance measures
●►CalculateReview the annual operating plan to establish target performance and ranges for threshold and maximum for the annual incentive program, and review historical and expected performance, market expectations and industry trends when approving the ranges of performance for the long-term incentive program
►Review operating plans and compensation measures for alignment with enterprise risk and return principles | | ►Actual performance on goals determines the corporate pool for the annual incentive award ►CEO reviews overall company funding for each business area based on actual performance ●Allocate the calculated corporate pool amongst Market-Facing Businesses and Areas of Responsibility based on theirits operating performance in relationship to target amounts. Allocate these pools based on individual performance goals
●►Determine the number of performance stock awards that will vest for the applicable measurement period based on actual performance
●Approve specific measurable goals for current year for annual incentive plan and three-year performance stock awards
●►Review and approve salary adjustments and annual incentive payments and equity targetsgrants for executive officers
|  | November-January
●Establish plan design, performance measures and ranges (target, threshold, and maximum) for upcoming year for annual incentive plan and long-term incentive awards
●Review plans and measures for alignment with enterprise risk and return principles
| | | | Ongoing
●Review compensation philosophy and objectives in light of company performance, company goals and strategy, stockholder feedback, and external benchmarking
●Monitor compensation estimates in comparison to actual and relative performance
|
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Executive Compensation Compensation Discussion and Analysis
Salary ●► | In setting executive salary levels, the committee uses the 50th percentile of total target direct compensation of our peer companies as a guideline, which supports Allstate’s ability to compete effectively for and to retain executive talent. Annual merit increases for named executives are based on evaluations of their performance usingand external benchmarking as provided by the enterprise-wide merit increase budget as a guideline.independent compensation consultant. |
2020 Proxy Statement 53
Table of Contents Executive Compensation > Compensation Discussion and Analysis Annual Cash Incentive Awards ●► | The committee sets annual cash incentive performance measure goals based on the annual operating plan. Target performance is equal to the operating plan. Threshold and maximum measures are based on a range of sensitivities relative to the operating plan. To further test the appropriateness of the ranges, the committee’s independent consultant provides advice based on peer performance, market expectations and industry trends. The chief risk officer reviews the performance measures and ranges to ensure they are consistent with Allstate’s risk and return principles.
| ●► | Actual performance on the performancepreviously approved measures determines the overall funding level of the corporate pool and the aggregate total award budget for eligible employees. In 2017,2019, the pool was funded based on the collective results of fourthree measures: Total Premiums, Performance Net Income, Total Premiums,and Net Investment Income, and Total Return. Income.Funding for each measure is equal to 0% below threshold, 50% at threshold, 100% at target and 200% at maximum, and results between threshold, target and maximum are subject to interpolation.
| ●► | In the event of a net loss, the corporate pool funding is reduced by 50% of actual performance for senior executives.executives, including the named executive officers. For example, if performance measures ordinarily would fund the corporate pool at 60% and there was a net loss, then the corporate pool would be funded at 30% for senior executives. This mechanism ensures alignment of pay and performance in the event of amultiple large natural catastrophe catastrophes and/or extreme financial market conditions. |
●► | Target annual incentive percentages for each named executive are based on market data pay levels of peer companies and our benchmark target for total direct compensation at the 50th percentile.
| ●► | Individual awards are based on job scope, market data, pool funding, and individual performance.
| ● | Allstate has established the maximum awards that could be paid to any of the named executives as the lesser of the stockholder approved maximum of $10 million under the Annual Executive Incentive Plan or a percentage of an award pool, which we refer to herein as the “162(m) Pool.” For 2017, the 162(m) Pool is equal to 1.0% of Performance Net Income (defined onpages 64-65), and the percentage of the award pool for Mr. Wilson is 35%, Mr. Winter, 20%, and for each other named executive, 15%. Allstate established these maximums in order to qualify annual cash incentive awards for 2017 as deductible performance-based awards under Internal Revenue Code Section 162(m) as was in effect prior to the passage of the Tax Cuts and Jobs Act (the “Tax Legislation”). Under the Tax Legislation, the exemption for deductibility of performance-based compensation under Internal Revenue Code Section 162(m) has generally been eliminated for fiscal years beginning after December 31, 2017. The committee retains complete discretion to pay less than the maximums established by the Annual Executive Incentive Plan and the award pool. |
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Table of Contents
Compensation Discussion and Analysis Executive Compensation
● | We paid the 20172019 cash incentive awards in March 2018.2020. The following tabledescription shows how thethis corporate pool was funded and distributed to individual participants: |
STEP
1 | | FormulaicDetermine Calculation of Corporate Funding Pool
ActualFormulaic with calculation based on three performance is determined after the endmeasures established at beginning of the performance period. period
| |  | | ►The total pool available for distribution iswas calculated in accordance with a formula based on fourthree performance measures.Performance Net Income
(aligns with stockholders’ expectationsmeasures established by the committee at the beginning of current performance)the performance period:
►Total Premiums (43%)(1)Total Premiums
( – captures growth and competitive position of the businesses)businesses
►Performance Net Income (43%)(1) – aligns with stockholders’ expectations of operating profitability (1)►Net Investment Income
( (14%)(1) – reflects a significant component of profitability) (10%)profitability ►The committee approved the total company funding after the end of the performance period based on the actual results on these performance measures. For the actual results and detail on how each measure was defined and calculated, seepages 75-76. (1)The numbers reflect the approximate percentage that each performance measure contributed to the total pool. | | The annual incentive compensation plan was funded at 117.5% of target in 2019 for officers. | Total ReturnSTEP
(captures all investment results for the business) (4%)(1)2
| | Determine Annual Corporate Pool DistributionIncentive Payments to the Named Executives
and other Executive Officers
Minimal discretion was applied to the Named Executives by the committee in 2019 | | | | 1.►Committee approves corporate pool based on review of actual performance in comparison to goals.
2.CEO allocates corporate pool between Market-Facing Businesses and Areas of Responsibility based on relative performance against annual operating goals,for participants other than senior executives.
●In 2017, the CEO did not exercise discretion in allocating pool funding between the Market-Facing Businesses or Areas of Responsibility.
3.Committee’s compensation recommendationsfor the CEOare reviewed and approved by the independent directors of our Board in executive session.
4.►Committee reviews and approves CEO recommendationsfor executive officers based on pool funding, the target annual incentive percentages for each NEO, and individual performance.
5.►The individual performance factors considered by the committee for both CEO and executive officer performance are outlined onpages 49-52.
| | The payout for the Named Executives ranged from $1.1 million to $4.7 million and the average was 119% of target. |
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Table of Contents Compensation Discussion and Analysis<Executive Compensation
STEP
3 | | Determine Annual Incentive Payment for Other Eligible Participants
The committee was not involved with annual incentive decisions below executive officers | | | | ►The CEO allocated the corporate pool between the market-facing businesses and areas of responsibility based on relative performance against annual operating goals and other key business success metrics | | For 2019, the CEO exercised discretion in allocating pool funding. | | | ►Individual awardsfor othereligible employees are were determined by senior leaders of Market-Facing Businesses and Areas of Responsibility and arewere subject to approval by the CEO – ►seniorSenior leaders arewere tasked to ensure high-performingthe highest quartile performing participants earnearned awards (as a percent of funding) that arewere at least 2.0two times the awards earned by lower-performingthe lower quartile performing participants on a relative basis. | | For 2019, actual differentiation for the annual incentive plan. The same level of discretion is targeted for equity components of compensation.top quartile was 2.2 times the lowest quartile.
|
(1) | The committee has discretion to determine the amount of the awards paid from the corporate pool to the named executives. For treatment of catastrophe losses and performance-based long-term income in the funding calculation, see discussion of performance measures onpages 64-67.
|
Performance Stock Awards and Stock Options ●► | We grant equity awards annually to executives consistent with market practice and our philosophy that a significant amount of compensation should be in the form of equity. Additionally, from time to time, equity awards are granted to attract new executives and to retain existing executives.
| ●► | Since 2016, the mix of equity incentives for senior executives has been 60% PSAs and 40% stock options. We believe both PSAs and stock options are forms of performance-based incentive compensation because PSAs are earned based on achieving established performance goals and stock options require stock price appreciation to deliver value to an executive. For awards prior to 2020, the PSAs vest based on results for Average Performance Net Income ROE (70%) and Earned Book Value (30%) over the three-year measurement period. The actual number of PSAs vesting is between 0% to 200% of the target number of PSAs granted. |
stock options. We believe both PSAs and stock options are forms of performance-based incentive compensation because PSAs are earned based on achieving established performance goals and stock options require stock price appreciation to deliver value to an executive. The PSAs vest based on results for Performance Net Income ROE (70%) and Earned Book Value (30%) over the three-year measurement period. The actual number of PSAs vesting is between 0% to 200% of target number of PSAs granted.
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Executive Compensation Compensation Discussion and Analysis
● | The committee selected Performance Net Income ROE as aone performance measure because it:
|
● | Measures performance in a way that is tracked and understood by investors.
| ● | Captures both income statement and balance sheet impacts, including capital management actions.
| ● | Provides a useful gauge of overall performance while limiting the effects of factors management cannot influence, such as extreme weather conditions.
| ● | Correlates to changes in long-term stockholder value.
|
●► | Earned Book Value was selected to create greater alignment withas the increase in performance-based assetssecond measure since it includes unrealized changes in the value of the investment portfolio.
portfolio and excludes the impacts in utilization of debt. | ●► | In 2020, a Relative TSR measure was selected as the second measure replacing Earned Book Value. This is consistent with market practice. Payouts under this performance measure are defined as 0% for performance less than 25th percentile, 50% for performance at the 25th percentile, 100% for performance at the 55th percentile, and 200% for performance at the 90th percentile, relative to a custom TSR peer group. The TSR peer group consists of The Allstate Corporation, the compensation peers (Bothpage 58), S&P 500 Index, and S&P Financial Index. | | ► | The measures are further described onpages 64-67page 77. For both measures,each measure, the committee considered historical and expected performance, market expectations and industry trends when approving the range of performance.
| ●► | For awards granted in 2015, the number of PSAs that vested depended on the three-year Average Performance Net Income ROE. Performance Net Income ROE for 2015 is defined onpages 64-67.
| ● | For allAll PSA awards Performance Net Income and Earned Book Value include a minimum or maximum amount of after-tax catastrophe losses if actual catastrophe losses are less than or exceed those amounts, respectively, which serves to decrease volatility and stabilize the measure.
|
●► | The committee requires positive net income in order for oursenior executives to earn PSAs based on Average Performance Net Income ROE above target. If Allstate has a cumulative net loss in a measurement period, the number of PSAs vested would not exceed target, regardless of the Average Performance Net Income ROE. This positive Net Incomenet income hurdle is included to prevent misalignment between Allstate reported net income and the PSAs vested based on the Average Performance Net Income ROE result. This situation could occur if, for example, catastrophe losses or capital losses that are not included in Performance Net Income ROE caused Allstate to reportresult in a net loss for the period.
For a description of the calculation, seepage 77. | ●► | At the end of each measurement period, the committee certifies the level of our Performance Net Income ROE and Earned Book Value achievement. PSAs will vest following the end of the three-yearachievement on each performance cycle if the performance conditions are met, subject to continued employment (other than in the event of death, disability, retirement, or a qualifying termination following a change in control). measure. |
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2020 Proxy Statement 55
Table of Contents Executive Compensation > Compensation Discussion and AnalysisExecutive Compensation For the 2018-20202020-2022 award, the Average Performance Net Income ROE and Earned Book ValueRelative TSR measures are calculated, respectively, as follows: Performance
Net Income(1) |  | ±Catastrophe Losses | Catastrophe Losses
Adjustment | ÷ | Adjusted Common
Shareholders’ Equity(2) | = |  | Average Performance
Net Income ROE | | Average for three years in the performance cycle | | Adjusted to reflect a minimum or maximum amount of catastrophe losses | | Average of common shareholders’ equity excluding unrealized gains and losses, after tax, at December 2017,2019, and at the end of each year in the performance cycle | | 70% of PSA Performance Measure | | | | | | | | | | | | | | | | | | | Common
Shareholders’ EquityFinal Average Adjusted Close Price(3) |  | Initial Average Adjusted Stock Price(4) | | +Total Shareholder Return (TSR) | Capital Transactions | ±TSR is ranked relative to 11 peer companies (including Allstate), S&P 500 Index, and S&P Financial Index
| Catastrophe Losses
Adjustment | → | Earned Book Value:
Compound annual growth
rate between reported
common shareholders’
equity at December 2017
and adjusted common
shareholders’ equity at
December 2020(3) | Reported common shareholders’ equity at December 2020 | | Adjusted to add back common share repurchases and common share dividends during the performance period | | Adjusted to reflect a minimum or maximum amount of catastrophe losses | | 30% of PSA Performance Measure | | | | | | | | | | | Three-Year Measurement PeriodInitial Average Adjusted Stock Price(4)
| | | |
| (1) | Performance Net Income for the 2018-20202020-2022 PSA award is defined onpages 64-6775-77. | | (2) | Adjusted Common Shareholders’ Equity for the 2018-20202020-2022 PSA award is defined onpage 6677. | | (3) | Earned Book ValueFinal Average Adjusted Close Price is defined onpages 66-67.the average Adjusted Close Price over the 20 trading days prior to and including the final day of the Performance Period. | | (4) | Initial Average Adjusted Stock Price is the average Adjusted Stock Price over the 20 trading days prior to the first day of the Performance Period. |
2018-2020 Performance Stock Award Range of Performance2020-2022 PERFORMANCE STOCK AWARD RANGE OF PERFORMANCE
| | Performance Measures | | Performance Measures | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | Average Performance Net Income ROE (70%)(1) | | 7.0% | | 13.5% | | 15.0% | | 7% | | 14% | | 17% | | Earned Book Value (Compound Annual Growth) (30%) | | 7.0% | | 12.5% | | 14.0% | | | Relative Percentile Rank TSR (30%)(2) | | | <25th | | 55th | | 90th | | Payout | | 0% | | 100% | | 200% | | 0% | | 100% | | 200% |
| (1) | Subject to positive Net Income hurdle net income hurdle. For a description of how this measure is determined, see page 77. | | (2) | The 25th percentile would result in a 50% payout. If greater than the 25th percentile, results would be interpolated. |
Equity Ownership Requirements Instituted in 1996, stock ownership guidelines requirerequirements oblige each of the named executives to own Allstate common stock worth a multiple of base salary to link management and stockholders’ interests. The following chart shows the salary multiple guidelinesrequirement and the equity holdings that count toward the requirement. The current stock ownership guidelines apply to 94 of our senior executives and other officers as of December 31, 2017, and require these executives to hold 75% of net shares received as a result of equity compensation awards until their salary multiple guidelines are met.
2018 Proxy Statement | | The current stock ownership requirements apply to 105 of our senior executives and other officers as of December 31, 2019, and require these executives to hold 75% of net shares received as a result of equity compensation awards until their salary multiple requirements are met. | 43 |
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Table of Contents Executive Compensation Compensation Discussion and Analysis< Executive Compensation
Stock Ownership as Multiple of Base Salary as of DecemberSTOCK OWNERSHIP AS MULTIPLE OF BASE SALARY AS OF DECEMBER 31, 20172019
| | | Stock Ownership | | Vested in the
Money Option
Value (after-tax) | | Named Executive | | Guideline | | Actual | | Vested in
The Money
Option
Value
(after-tax) | | 49 times
annual salary The value of shares of Allstate's Common Stock held by Mr. Wilson as of December 31, 2017 | | Requirement | | Actual | | | Mr. Wilson | | 6 | | 49 | | 60 | | | 6 | | 58 | | 61.6 | | Mr. Rizzo | | | 3 | | 2 | | 2.5 | | Mr. Civgin | | | 3 | | 20 | | 1.2 | | Mr. Shapiro | | | 3 | | 2 | | 0.3 | | Mr. Shebik | | 3 | | 13 | | 8 | | | 3 | | 17 | | 12.5 | | Mr. Civgin | | 3 | | 15 | | 5 | | 49 times
annual salary The value of shares of Allstate's Common Stock held by Mr. Wilson as of December 31, 2017 | | | Mr. Dugenske | | 3 | | 7 | | 0 | | | | Mr. Winter | | 3 | | 16 | | 8 | | |
| | 58times annual salary The value of shares of Allstate’s common stock held by Mr. Wilson as of December 31, 2019 | | |
| | | | |  | What Counts Toward the GuidelineRequirement | |  | What Does Not Count Toward the Requirement | ●►Allstate shares owned personally and beneficially
●►Shares held in the Allstate 401(k) Savings Plan
●►Unvested restricted stock units
| | ►Unexercised stock options ►Unvested performance stock awards | | | |
Retention Requirements
Allstate no longer utilizes additional equity holding requirements for any equity awards outstanding. Allstate previously required, regardless of stock ownership level, senior executives to retain 75% of net shares received as a result of equity compensation awards for one year. After benchmarking peers and reviewing leading practices, it was determined that the additional equity holding requirements are not aligned with the market, and are a minority practice.
Policies on Hedging and Pledging Securities We have a policy that prohibits all officers, directors, and employees from engaging in transactions in securities issued by Allstate or any of its subsidiaries that might be considered speculative and engaging in derivative or hedging,other transactions designed to hedge or offset any decrease in market value of the securities held by them, such as selling short or buying or selling options.options, puts or calls, and entering into prepaid variable forward contracts, equity swaps or collars. We also have a policy that prohibits senior executives and directors from pledging Allstate securities as collateral for a loan or holding such securities in a margin account, unless an exception is granted by the Chair or lead director.Lead Director (or by the Lead Director in the case of a request by the Chair). What Does Not Count Toward the Guideline
●Unexercised stock options
●Unvested performance stock awards
|
Timing of Equity Awards and Grant Practices Typically, the committee approves grants of equity awards during a meeting in the first fiscal quarter. The timing allows the committee to align awards with our annual performance and business goals. Throughout the year, the committee may grant equity incentive awards to newly hired or promoted executives or to retain or recognize executives. The grant date for these awards was fixed as the third business day of a month following the later of committee action or the date of hire or promotion, or for recognition grants, such other date specified by the committee.promotion. For additional information on the committee’s practices, see portions of the Board Leadership StructureOversight and Practices sectionBoard Meetings and Committees sections of this proxy statement onpages 21-22, and24. 44 | | www.allstate.com |
Table of Contents
Compensation Discussion and Analysis Executive Compensationpages 29and35, respectively.
Peer Benchmarking The committee monitors performance toward goals throughout the year and reviews the executive compensation program design and executive pay levels annually. As part of that evaluation, Compensation Advisory Partners,CAP, the committee’s independent compensation consultant, provided executive compensation data, information on current market practices, and alternatives to consider when determining compensation for our named executives. The committee benchmarks executive compensation program design, executive pay, and performance against a group of peer companies that are publicly traded. Product mix, market segment, annual revenues, premiums, assets, and market value were considered when identifying peer companies. The committee believes Allstate competes against these companies for executive talent, business and stockholder investment. The committee reviews the composition of the peer group annually with the assistance of its compensation consultant. In 2017, the committee made one change The compensation consultant’s recommendation has been to the peer group. CNA Financial Corporation is now included in theuse a peer group for 2017 compensation benchmarking.that reflects Allstate’s business and operations. Currently, eight out of ten of Allstate’s peer companies also include Allstate in their respective peer company lists. The following table reflects the peer group used for 20172019 compensation benchmarking. No changes were made to the peer group for 2018.2020. 2020 Proxy Statement 57
Table of Contents Peer CompaniesExecutive Compensation > Compensation Discussion and Analysis
PEER COMPANIES(1) | | Total Shareholder Return (%) | | | | | | | | | | Total Shareholder Return (%) | | Company Name | | Revenue
($ in billions) | | Market Cap
($ in billions) | | Assets
($ in billions) | | Premiums
($ in billions) | | One Year | | Three
Years | | Five
Years | | Revenue
($ in billions) | | Market Cap
($ in billions) | | Assets
($ in billions) | | Premiums
($ in billions) | | One Year | | Three
Years | | Five
Years | | AFLAC Inc. | | 21.7 | | 34.3 | | 137.2 | | 18.5 | | 28.6 | | 54.0 | | 85.3 | | 22.3 | | 38.4 | | 152.8 | | 18.8 | | 18.6 | | 62.4 | | 94.5 | | American International Group Inc. | | 49.5 | | 53.6 | | 498.3 | | 34.3 | | -6.8 | | 12.2 | | 80.4 | | 49.7 | | 44.7 | | 525.1 | | 33.6 | | 33.6 | | -15.5 | | 2.1 | | Chubb Limited | | 32.4 | | 67.8 | | 167.0 | | 29.0 | | 12.7 | | 35.4 | | 103.2 | | 34.2 | | 70.4 | | 176.9 | | 31.3 | | 22.9 | | 25.3 | | 50.9 | | CNA Financial Corporation | | 9.5 | | 14.4 | | 56.6 | | 7.0 | | 35.3 | | 68.8 | | 149.9 | | 10.8 | | 12.2 | | 60.6 | | 7.4 | | 9.5 | | 33.2 | | 69.4 | | The Hartford Financial Services Group Inc. | | 17.0 | | 20.1 | | 225.3 | | 14.3 | | 20.1 | | 42.2 | | 172.1 | | 20.7 | | 21.9 | | 70.8 | | 17.2 | | 39.7 | | 35.7 | | 61.0 | | Manulife Financial Corporation | | 43.7 | | 41.4 | | 581.7 | | 21.8 | | 20.6 | | 20.1 | | 77.8 | | 58.6 | | 39.6 | | 623.8 | | 26.8 | | 49.2 | | 27.6 | | 27.6 | | MetLife Inc. | | 62.1 | | 52.8 | | 719.9 | | 44.5 | | 8.3 | | 14.5 | | 96.2 | | 69.6 | | 46.7 | | 740.5 | | 47.8 | | 28.8 | | 17.7 | | 25.2 | | The Progressive Corporation | | 26.8 | | 32.8 | | 38.7 | | 25.7 | | 60.6 | | 121.1 | | 201.6 | | 39.0 | | 42.3 | | 54.9 | | 36.2 | | 25.1 | | 121.0 | | 207.1 | | Prudential Financial Inc. | | 59.7 | | 48.6 | | 831.9 | | 37.4 | | 13.4 | | 37.9 | | 144.1 | | 64.8 | | 37.4 | | 896.6 | | 40.2 | | 20.1 | | 0.3 | | 23.2 | | The Travelers Companies Inc. | | 28.9 | | 36.8 | | 103.5 | | 25.7 | | 13.1 | | 36.4 | | 109.6 | | 31.6 | | 35.0 | | 110.1 | | 28.3 | | 17.0 | | 19.9 | | 45.1 | | Allstate | | 38.5 | | 37.1 | | 112.4 | | 34.7 | | 43.3 | | 56.8 | | 183.7 | | 44.7 | | 35.8 | | 120.0 | | 38.6 | | 38.8 | | 60.4 | | 75.8 | | Allstate Ranking Relative to Peers: | | | | | | | | | | | | | | | | | —Property and Casualty Insurance Products | | 3 of 8 | | 4 of 8 | | 5 of 8 | | 2 of 8 | | 2 of 8 | | 3 of 8 | | 2 of 8 | | —Life Insurance and Financial Products | | 5 of 7 | | 5 of 7 | | 7 of 7 | | 3 of 7 | | 1 of 7 | | 1 of 7 | | 1 of 7 | | | Property and Casualty Insurance Products | | | 3 of 8 | | 5 of 8 | | 4 of 8 | | 2 of 8 | | 2 of 8 | | 2 of 8 | | 2 of 8 | | Life Insurance and Financial Products | | | 5 of 7 | | 6 of 7 | | 6 of 7 | | 3 of 7 | | 3 of 7 | | 2 of 7 | | 2 of 7 | | All Peer Companies | | 5 of 11 | | 6 of 11 | | 8 of 11 | | 3 of 11 | | 2 of 11 | | 3 of 11 | | 2 of 11 | | 5 of 11 | | 8 of 11 | | 7 of 11 | | 3 of 11 | | 3 of 11 | | 3 of 11 | | 3 of 11 |
| (1) | Information as of year-end 2017. 2019. |
In its executive pay discussions, the committee also reviewed compensation information for 19 general industry companies in the S&P 100 with fiscal year 2016 revenues between $16 billion and $56 billion. The committee uses compensation surveys for certain executives that provide information on companies of similar size and business mix as Allstate, as well as companies with a broader market context.
The committee uses the 50th percentile of our peer group as a guideline in setting the target total direct compensation of our named executives. Within the guideline, the committee balances the various elements of compensation based on individual experience, job scope and responsibilities, performance, tenure, and market practices.
Table of Contents
Executive Compensation Compensation Discussion and Analysis
Other Elements of Compensation To remain competitive with other employers and to attract, retain, and motivate highly talented executives and other employees, we offer the benefits listed in the following table. | Benefit or Perquisite | | Named Executives | | Other Officers and
Certain Managers | | All Full-time
and Regular
Regular Part-time
Employees | | 401(k)(1)and defined benefit pension | | ● | | ● | | ● | | Supplemental retirement benefit | | ● | | ● | | | | Health and welfare benefits(2) | | ● | | ● | | ● | | Supplemental long-term disability | | ● | | ● | | | | Deferred compensation | | ● | | ● | | | | Tax preparation and financial planning services(3) | | ● | | ● | | | | Personal use of aircraft, ground transportation, and mobile devices(4) | | ● | | ● | | | | Tickets to Allstate events(5) | | ● | | ● | | ● |
| (1) | Allstate contributed $0.80 for every dollar of matchable pre-tax or Roth 401(k) deposits made in 20172019 (up to 5% of eligible pay). | | (2) | Including medical, dental, vision, life, accidental death and dismemberment, long-term disability, and group legal insurance. For named executives and other senior officers, Allstate offers an executive physical program. | | (3) | All officers are eligible for tax preparation services. Financial planning services were provided only to senior executives. | | (4) | The Board encourages the CEO to use our corporate aircraft when it improves his efficiency in managing the company, even if it is for personal purposes. Personal usage is counted as taxable compensation. The committee also approved the President’s usage of corporate aircraft for personal use up to 40 hours annually. In limited circumstances approved by the CEO, other senior executives are permitted to use our corporate aircraft for personal purposes. Ground transportation is available to senior executives. Mobile devices are available to senior executives, other officers, and certain managers and employees depending on their job responsibilities. | | (5) | Tickets to Allstate-sponsored events or the Allstate Arena are offered as recognition for service. |
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Table of Contents Compensation Discussion and Analysis < Executive Compensation Retirement Benefits Each named executive participates in two different defined benefit pension plans. The Allstate Retirement Plan (ARP) is a tax qualified defined benefit pension plan available to all of our regular full-time and regular part-time employees who meet certain age and service requirements. The ARP provides an assured retirement income based on an employee’s level of compensation and length of service at no cost to the employee. As the ARP is a tax qualified plan, federal tax law limits (1) the amount of an individual’s compensation that can be used to calculate plan benefits and (2) the total amount of benefits payable to a plan participant on an annual basis. For certain employees, these limits may result in a lower benefit under the ARP than would have been payable otherwise. Therefore, the Supplemental Retirement Income Plan (SRIP) is used to provide ARP-eligible employees whose compensation or benefit amount exceeds the federal limits with an additional defined benefit in an amount equal to what would have been payable under the ARP if the federal limits did not exist. Effective January 1, 2014, Allstate modified its defined benefit pension plans so that thereafter, all eligible employees earn future pension benefits under a new cash balance formula. Change-in-ControlChange in Control and Post-Termination Benefits
Consistent with our compensation objectives, we offer these benefits to attract, motivate, and retain executives. A changeChange in control of Allstate could have a disruptive impact on both Allstate and our executives. Change-in-control benefits and post-termination benefits are designed to mitigate that impact and to maintain alignment between the interests of our executives and our stockholders.stockholders in the event of a sale or merger of the company. The following summarizes Allstate’s change-in-control benefits for the executive officers: ●► | The change-in-control severance plan (CIC Plan) does not include excise tax gross ups or a lump sum cash pension enhancement.
| | | ● | For the CEO, the amount of cash severance payable is three times the sum of base salary and target annual incentive. For the other executive officers, the amount of cash severance payable is two times the sum of base salary and target annual incentive. |
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Table of Contents
Compensation Discussion and Analysis Executive Compensation
● | In order to receive the cash severance benefits under the CIC Plan, a participant must have been terminated (other than for cause, death, or disability) or the participant must have terminated employment for good reason (such as adverse changes in the terms or conditions of employment, including a material reduction in base compensation, a material change in authority, duties, or responsibilities, or a material change in job location) within two years following a change in control. | | ► | | ● | Long-term equity incentive awards vest on an accelerated basis due to a change in control only if the participant has been terminated (other than for cause, death, or disability) or the participant terminated employment for good reason (as defined above) within two years following a change in control. |
The change-in-controlchange in control and post-termination arrangements that are described in thePotential Payments as a Result of Termination or Change in Controlsection onpages 60-6271-73are not provided exclusively to the named executives. A larger group of management employees is eligible to receive many of the post-termination benefits described in that section. Clawback of Compensation Awards made to executive officers after May 19, 2009, under short- and long-term incentive compensation plans, are subject to clawback in the event of certain financial restatements. Annual cash incentive and equity awards granted after May 19, 2009, are also subject to cancellation or recovery in certain circumstances if the recipient violates non-solicitation covenants. Equity awards granted after February 21, 2012, are subject to cancellation in certain circumstances if the recipient violates non-competition covenants.
 | Equity awards granted in 2019 and annual cash incentive awards for the 2019 performance year for executive officers whose fraud or intentional misconduct resulted in a restatement to correct a material error or inaccuracy are subject to clawback. A new clawback policy was approved by the committee that provides for the recovery of certain equity awards granted after February 18, 2020, and annual cash incentive awards paid after March 15, 2020, to executive officers and other executive vice presidents. If performance results are later subject to a downward adjustment as a result of a material financial restatement, irrespective of cause, then the paid awards are recalculated with revised results with the compensation overpayment subject to clawback. It also provides for recovery of equity and annual cash incentive awards in certain circumstances if an executive is terminated for improper conduct that leads to a material adverse impact on the reputation of, or a material adverse economic consequence for, the company. |
Impact of Tax Considerations on Compensation In 2017, we were able to takeInternal Revenue Code Section 162(m) generally precludes Allstate from taking a tax deduction of no more than $1 million per executive for compensation paid in any yearexcess of $1 million annually to certain current and former executive officers, including our CEO, CFO and the three other most highly compensated executives, excluding any individual that served as CFO during the year, as of the last day of the fiscal year in which the compensation
is otherwise deductible, unless the compensation met specific standards. Under Internal Revenue Code Section 162(m) as in effect beforeis paid pursuant to certain “grandfathered” arrangements entered into prior to November 2, 2017. Prior to the passage of the Tax Legislation,Cuts and Jobs Act of 2017 (the
2020 Proxy Statement 59
Table of Contents Executive Compensation > Compensation Discussion and Analysis “Tax Legislation”), we were able to deduct more than $1 million in compensation if the compensation was performance-based, andwas paid under a plan that met certain requirements. The committee considered the impact of this Internal Revenue Code rule in developing, implementing,performance-based requirements and administering our compensation programs for 2017. Under the Tax Legislation, the exemption for deductibility of performance-based compensationotherwise met certain requirements under Internal Revenue Code Section 162(m) has. In determining compensation for our executive officers, the committee considers the extent to which the compensation is deductible, including the effect of Internal Revenue Code Section 162(m). In prior years, the committee generally been eliminated for fiscal years beginning after December 31, 2017.sought to structure our executive incentive compensation so that it qualified as performance-based compensation under Section 162(m) where doing so was consistent with Allstate’s compensation objectives, but it reserved the right to award nondeductible compensation and on occasion did so. The committee has and will continuecontinues to considerevaluate the deductibility of compensation, including in light of the revisionschanges to Internal Revenue Code Section 162(m). However, the committee balances this consideration with our primary goals of structuring and their significance to Allstate’s compensation programs, to attract, motivate and retain executives and ensuring that pay aligns with performance. In light of this balance and the need to maintain flexibility in administering compensation programs, the committee may authorize compensationbut in any year that exceeds $1 million for which we mayevent its primary focus in its compensation decisions will remain on most productively furthering Allstate’s business objectives and not be able to recognize a tax deduction.on whether the compensation is deductible. Earned Annual Cash Incentive Awards In 2017,2019, the total corporate pool was based on fourthree measures: Total Premiums, Performance Net Income, Total Premiums,and Net Investment Income, and Total Return.Income. The 20172019 annual incentive plan targets for each of the measures were above 2018 actual results. Total Premiums target was set above the prior year as it has been for at least the last decade. Performance Net Income target for 2019 was above 2018 reflecting top-line growth and margin maintenance. Net Investment Income and Total Return were both lower than actual 2016 performance to reflect the business and market conditions in the operating plan. Modest adjustments were made to the range between threshold and maximum for each of the performance measures in alignment with the operating plan and the probability of achieving the results.target was set above 2018 driven by market-based income increases. The 20182020 annual incentive plan targets are not included since those targets do not relate to 20172019 pay, and because target performance is set at the 20182020 operating plan, which is proprietary information.
Table of Contents
Executive Compensation Compensation Discussion and Analysis
| | 2018 | | 2019 | | Measure | | Target | | Actual | | Payout % | | Target | | Actual | | Payout % | | Total Premiums($ in millions) | | 36,100 | | 37,451 | | 200.0% | | 39,800 | | 39,455 | | 75.4% | | Performance Net Income($ in millions) | | 2,800 | | 3,095 | | 149.2% | | 3,150 | | 3,571 | | 164.8% | | Net Investment Income($ in millions) | | 3,100 | | 3,240 | | 162.2% | | 3,315 | | 3,260 | | 87.5% | | Aggregate Payout Percentage for Named Executives | | — | | — | | 173.4% | | — | | — | | 117.5% |
For a description of how the 20172019 measures are determined, seepages 64-6675-76. The ranges of performance and 20172019 actual results are shown in the following table. 2017 Annual Cash Incentive Award Ranges of Performance2019 ANNUAL CASH INCENTIVE AWARD RANGES OF PERFORMANCE
| Measure | | Threshold | | Target | | Maximum | | Actual Results | | %Target | | Performance Net Income(in millions) | | $1,400 | | | $2,000 | | $2,600 | | $2,703 | | 200 | | Total Premiums(in millions) | | $34,125 | | | $34,900 | | $35,275 | | $35,120 | | 159 | | Net Investment Income(in millions) | | $2,825 | | | $3,000 | | $3,175 | | $3,188 | | 200 | | Total Return | | -1.5% | | | 3.5% | | 6.5% | | 5.9% | | 180 | | Payout Percentages | | | | | | | | | | | | | Named Executives(1) | | 50% | (2) | | 100% | | 200% | | | | 181.4 |
| Measure | | 2018 Actual
Results | | Threshold | | | Target | | Maximum | | Actual Results | | Increase/(Decrease)
Versus 2018
Actual Results | | % Target | | Total Premiums($ in millions) | | 37,451 | | 39,100 | | | 39,800 | | 40,200 | | 39,455 | | 2,004 | | 75.4% | | Performance Net Income($ in millions) | | 3,095 | | 2,350 | | | 3,150 | | 3,800 | | 3,571 | | 476 | | 164.8% | | Net Investment Income($ in millions) | | 3,240 | | 3,095 | | | 3,315 | | 3,535 | | 3,260 | | 20 | | 87.5% | | Payout Percentages | | | | | | | | | | | | | | | | | Named Executives(1) | | | | 50% | (2) | | 100% | | 200% | | | | | | 117.5% |
| (1) | Payout percentages reflect contribution to incentive compensation pool. Actual awards are fully discretionary and vary depending on individual performance. | | (2) | Actual performance below threshold results in a 0% payout. |
Performance Stock Awards (“PSAs”) For the last five PSA grants, the performance measures and levels of performance needed to earn the threshold, target and maximum number of PSAs, as well as actual results and payout percentages, are set forth in the table below. The total shareholder returns for Allstate and its peers are also shown.shown for completed cycles. Performance Stock Awards Ranges of Performance60 www.allstateproxy.com
| | | | | | | | | | | | Payout
Percentage | | | Total Shareholder
Returns | | Performance Cycle(1) | | | Threshold | | Target | | Maximum | | | Actual Results | | | | Allstate | | Peers | | Vested Awards | | | | | | | | | | | | | | | | | | | 2013-2015(2) | | | 6.0% | | 12.0% | | 13.5% | | | 12.8% | | 154.8% | | | 63.0% | | 63.1% | | 2014-2016 | | | 6.0% | | 13.0% | | 14.5% | | | 12.1% | | 87.1% | | | 43.2% | | 26.8% | | 2015-2017 | | | 6.0% | | 13.5% | | 14.5% | | | 12.2% | | 82.7% | | | 56.8% | | 40.0% | | Outstanding Awards | | | | | | | | | | | | | | | | | | | 2016-2018 | | | | | | | | | | | | | | | | | | | - Performance Net Income ROE (70%) | | | 6.0% | | 13.0% | | 14.0% | | | Two year results are above
target for both measures |
(3) | | 74.1% | | 40.2% | | - Earned Book Value (30%) | | | 6.0% | | 12.0% | | 15.0% | | | | | | 2017-2019 | | | | | | | | | | | | | | | | | | | - Performance Net Income ROE (70%) | | | 6.0% | | 11.0% | | 13.0% | | | One year results are above
target for both measures |
(3) | | 43.3% | | 19.1% | | - Earned Book Value (30%) | | | 6.0% | | 9.0% | | 11.0% | | | | | | Payout Percentages | | | 0% | | 100% | | 200% | | | | | | | | | | | | | | | | | | | | | | | | | | | | Subject to positive Net Income hurdle
For Performance Net Income ROE | | | | | | | | | | |
(1) | For the performance cycles prior to 2016, Average Performance Net Income ROE was the performance measure. In 2016, Earned Book Value was added as a second performance measure.
| (2) | Represents the average of the separate one-year performance goals and payouts. Actual results are 13.4%, 13.2%, 11.9% with payout percentage of 200.0%, 180.0% and 84.3% for 2013, 2014 and 2015, respectively.
| (3) | Payouts under the PSAs are based on performance over the three-year period, and actual results will not be known until the end of the performance period.
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Table of Contents Compensation Committee Report < Executive Compensation The following table shows the target number of PSAs granted to each of our named executives for the 2015-2017, 2016-2018, and 2017-2019 performance cycles.PERFORMANCE STOCK AWARDS RANGES OF PERFORMANCE
| Performance Cycle(1) | | Threshold | | Target | | Maximum | | Actual
Results | | Payout
Percentage | | Total Shareholder Return | | Allstate | | Peers | | Vested Awards | | | | | | | | | | | | | | | | 2015-2017 | | | | | | | | | | | | | | | | - Performance Net Income ROE | | 6.0% | | 13.5% | | 14.5% | | 12.2% | | 82.7% | | 56.8% | | 40.0% | | 2016-2018 | | | | | | | | | | 161.5% | | 40.7% | | 25.3% | | - Performance Net Income ROE (70%) | | 6.0% | | 13.0% | | 14.0% | | 13.9% | | 190% | | | | | | - Earned Book Value (30%) | | 6.0% | | 12.0% | | 15.0% | | 11.7% | | 95% | | | | | | 2017-2019 | | | | | | | | | | 200% | | 60.4% | | 34.4% | | - Performance Net Income ROE (70%) | | 6.0% | | 11.0% | | 13.0% | | 16.2% | | 200% | | | | | | - Earned Book Value (30%) | | 6.0% | | 9.0% | | 11.0% | | 17.2% | | 200% | | | | |
| Performance Cycle(1) | | Threshold | | Target | | Maximum | | Actual
Results | | Payout
Percentage | | Outstanding Awards | | | | | | | | | | | | 2018-2020 | | | | | | | | | | | | - Performance Net Income ROE (70%) | | 7.0% | | 13.5% | | 15.0% | | Two year results are above | | - Earned Book Value (30%) | | 7.0% | | 12.5% | | 14.0% | | target for both measures(2) | | 2019-2021 | | | | | | | | | | | | - Performance Net Income ROE (70%) | | 7.0% | | 14.0% | | 16.0% | | One year results are above | | - Earned Book Value (30%) | | 7.0% | | 12.0% | | 14.0% | | target for both measures(2) | | Payout Percentages | | 0% | | 100% | | 200% | | | | | | | | | | | | | | | | | | | | Subject to positive net income hurdle
For Performance Net Income ROE | | | | |
| (1) | For the performance cycles prior to 2016, Average Performance Net Income ROE was the performance measure. In 2016, Earned Book Value was added as a second performance measure. | | (2) | Payouts under the PSAs are based on performance over the three-year period, and actual results will not be known until the end of the performance period. |
The following table shows the target number of PSAs granted to each of our named executives for the 2017-2019, 2018-2020, and 2019-2021 performance cycles. PERFORMANCE CYCLE(1) | | Target Number of PSAs for | | Named Executive | | 2017-2019 Performance Cycle | | 2018-2020 Performance Cycle | | 2019-2021 Performance Cycle | | Mr. Wilson | | 68,922 | | 62,635 | | 65,380 | | Mr. Rizzo | | 2,929 | | 13,578 | | 13,628 | | Mr. Civgin | | 17,920 | | 15,517 | | 15,964 | | Mr. Shapiro | | 11,966 | | 15,760 | | 15,818 | | Mr. Shebik | | 25,463 | | 19,235 | | 19,306 |
| (1) | The actual number of PSAs that will vest will vary from 0% to 200% of the target PSAs based on Average Performance Net Income ROE and Earned Book Value for the measurement period. The number of PSAs that vest will be determined in 2020, 2021, and 2022 respectively. |
Compensation Committee Report The committee has reviewed and discussed with management the Compensation Discussion and Analysis contained onpages 42-61of this proxy statement. Based on such review and discussions, the committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. The Compensation and Succession Committee
| Named Executive | | Target Number of PSAs for
2015-2017 Performance Cycle | | Target Number of PSAs for
2016-2018 Performance Cycle | | Target Number of PSAs for
2017-2019 Performance Cycle | | Mr. Wilson | | 65,054 | | 86,650 | | 68,922 | | Mr. Shebik | | 15,910 | | 26,476 | | 25,463 | | Mr. Civgin | | 16,872 | | 23,107 | | 17,920 | | Mr. Dugenske | | N/A | | N/A | | 15,942 | | Mr. Winter | | 21,921 | | 30,809 | | 23,692 |
 | |  | |  | |  | | MICHAEL L. ESKEW (CHAIR) | | MARGARET M. KEANE | | ANDREA REDMOND | | PERRY M. TRAQUINA |
2020 Proxy Statement 61
Table of Contents Executive Compensation > Summary Compensation Table Summary Compensation Table The following table summarizes the compensation of the named executives for the last three fiscal years. However, for Messrs. Rizzo and Shapiro, only the last two fiscal years are shown since this is their second year as a named executive. The titles and responsibilities for certain of the officers listed below changed in 2020. See Appendix C for a complete list of current titles. Name and
Principal Position | Year | Salary
($) | Bonus
($) | Stock
Awards
($)(1) | Option
Awards
($)(2) | Non-Equity
Incentive Plan
Compensation
($) | Change in
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings
($)(3) | All Other
Compensation
($)(4) | Total
($) | Total
Without
Change in
Pension
Value
($)(5) | Thomas J. Wilson
Chair, President,
and Chief
Executive Officer | 2019 | 1,340,385 | — | 6,045,035 | 4,030,005 | 4,730,100 | 3,354,557 | 115,614 | 19,615,696 | 16,261,139 | | 2018 | 1,290,385 | — | 5,812,528 | 3,874,998 | 6,719,194 | 873,170 | 116,971 | 18,687,246 | 17,814,076 | 2017
| 1,241,346 | — | 5,400,039 | 3,599,997 | 6,759,264 | 1,688,142 | 68,541 | 18,757,329 | 17,069,187 | Mario Rizzo
Executive Vice
President and Chief
Financial Officer | 2019 | 716,154 | — | 1,260,045 | 840,002 | 1,053,000 | 531,414 | 25,530 | 4,426,145 | 3,894,731 | 2018
| 690,577 | — | 1,260,038 | 840,004 | 1,510,788 | — | 25,391 | 4,326,798 | 4,326,798 | Don Civgin
President, Service
Businesses | 2019 | 836,154 | — | 1,476,031 | 983,993 | 1,400,000 | 111,961 | 33,101 | 4,841,240 | 4,729,279 | | 2018 | 816,154 | — | 1,439,978 | 960,000 | 1,900,000 | 80,984 | 37,580 | 5,234,696 | 5,153,712 | | 2017 | 796,538 | — | 1,404,032 | 935,996 | 1,806,645 | 83,779 | 27,730 | 5,054,720 | 4,970,941 | Glenn T. Shapiro
President, Allstate
Personal Lines | 2019 | 774,231 | — | 1,462,532 | 974,999 | 1,366,000 | 77,506 | 35,281 | 4,690,549 | 4,613,043 | 2018
| 743,942 | — | 1,462,528 | 974,995 | 2,050,000 | 46,564 | 38,270 | 5,316,299 | 5,269,735 | Steven E. Shebik
Vice Chair | 2019 | 866,154 | — | 1,785,033 | 1,190,001 | 2,037,000 | 1,063,345 | 37,415 | 6,978,948 | 5,915,603 | | 2018 | 848,654 | — | 1,785,008 | 1,190,005 | 2,945,289 | 351,319 | 37,560 | 7,157,835 | 6,806,516 | | 2017 | 795,673 | — | 1,995,026 | 1,329,994 | 2,600,000 | 512,201 | 38,398 | 7,271,292 | 6,759,091 |
| (1) | The actual number of PSAs that will vest will vary from 0% to 200% of the target PSAs based on Average Performance Net Income ROE or Average Performance Net Income ROE and Earned Book Value for the measurement period. The number of PSAs that vest will be determined in 2018, 2019, and 2020, respectively.
|
Compensation Committee Report
The aggregate grant date fair value of PSAs granted in 2019, 2018, and 2017, is computed in accordance with Financial Accounting StandardsBoard (FASB) Accounting Standards Codification Topic 718 (ASC 718). The fair value of PSAs is based on the final closing price of Allstate’s common stock on the grant date, which in part reflects the payment of expected future dividends. (See note 18 to our audited financial statements for 2019.) This amount reflects an accounting expense and does not correspond to actual value that will be realized by the named executives. The value of PSAs assumes target-level performance, which is the probable achievement level of the performance conditions. The number of PSAs granted in 2019 to each named executive is provided in theGrants of Plan-Based Awardstable onpage 64. The value of the PSAs granted in 2019 at grant date fair value share price if maximum corporate performance were to be achieved is as follows: Mr. Wilson $12,090,070, Mr. Rizzo $2,520,090, Mr. Civgin $2,952,062, Mr. Shapiro $2,925,064, and Mr. Shebik $3,570,066.
|
Allstate Board Service
In 2019, the nominating and governance committee reviewed sustainability matters at two meetings, including in one joint session with the Board.
Report,pg. 81
What We Do
What We Do Not Do
