EXHIBIT 10.9--DIRECTOR AND NAMED EXECUTIVE OFFICER COMPENSATION SUMMARY
Named Executive Officer Compensation
All of the named executive officers are employees at-will. Compensation for each
is established or reviewed by the compensation committee of the board of
directors. The committee seeks input from the company's chief executive officer
in setting compensation for executive officers other than the chief executive
officer. In November each year, annual salary rates for the upcoming year are
established and bonuses for the current year are awarded. In November of 2004,
the committee established the salaries and awarded cash bonuses for the named
executive officers as set forth in the following table:
ANNUAL SALARY
RATE CASH BONUS
ESTABLISHED AWARDED FOR
NAMED EXECUTIVE OFFICER FOR 2005 2004
----------------------- -------------- -----------
John J. Schiff, Jr., CPCU $699,643 $325,438
President and Chief Executive Officer
Cincinnati Financial Corporation
James E. Benoski $385,000 $297,938
Chief Insurance Officer and Senior Vice President
Cincinnati Financial Corporation
Kenneth W. Stecher $364,323 $200,143
Chief Financial Officer and Senior Vice President, Secretary,
Treasurer
Cincinnati Financial Corporation
Jacob F. Scherer, Jr. $322,632 $259,832
Senior Vice President
The Cincinnati Insurance Company
Thomas A. Joseph, CPCU $306,752 $185,620
Senior Vice President
The Cincinnati Insurance Company
Director Compensation
Cincinnati Financial Corporation directors are compensated solely for their
attendance at meetings; there is no retainer. Non-employee directors of the
company are paid a fee of $4,500 for attendance at each board meeting and $1,500
for attendance at each committee meeting and subsidiary board and committee
meetings, with fees for all meetings in any one day not to exceed $6,000. They
also are reimbursed for actual travel expenses incurred in attending meetings.
In 2004, one of the board meetings was scheduled to coincide with the company's
incentive meeting for the company's highest performing agencies. The company
invited directors' spouses to attend this meeting and paid for associated
transportation expenses and meals. In 2004, the average travel and meal expense
for a director's spouse was $2,911. The company also provides directors with
personal umbrella liability and life insurance policies written through the
company's insurance subsidiaries. Premiums for the personal umbrella liability
policies provided to directors in 2004 range from $766 to $2,991. Premiums for
the life insurance policies provided to directors in 2004 ranged from $165 to
$275.
In 2003, the company's board of directors adopted the 2003 Non-Employee
Directors' Stock Plan. The purpose of the plan is to enable Cincinnati Financial
Corporation to attract and retain the services of experienced and knowledgeable
non-employee directors and to strengthen the alignment of interests between
non-employee directors and the shareholders of the company through the increased
ownership of shares of the company's common stock. This is accomplished by
granting directors shares of common stock as a part of their annual
compensation. Under the plan, directors receive shares with a fair market value
on the date of grant equal to the cash director's fees received by such
directors during the prior calendar year. The plan limits the annual value of
any grant to an individual director to a maximum of $60,000. Since the stock
plan was adopted by the board of directors, a total of 43,492 shares, or less
than one-tenth of one percent of the outstanding shares of common stock, have
been issued to non-employee directors under the plan. Disclosure relevant to the
2003 Non-Employee Directors' Stock Plan and its submission to shareholders for
approval in 2005 to satisfy certain Nasdaq listing rules is contained in the
company's Definitive Proxy Statement to be filed with respect to its 2005 Annual
Meeting of Shareholders, which is incorporated herein by reference.