Definitive Proxy Statement
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant ¨
Check the appropriate box:
|
|
|
¨ |
|
Preliminary Proxy Statement |
|
|
¨ |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
|
þ |
|
Definitive Proxy Statement |
|
|
¨ |
|
Definitive Additional Materials |
|
|
¨ |
|
Soliciting Material Pursuant to § 240.14a-12 |
MetLife, Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the
appropriate box)
|
|
|
|
|
|
|
þ |
|
No fee required. |
|
|
¨ |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
|
|
|
|
(1) |
|
Title of each class of securities to which transaction applies:
|
|
|
(2) |
|
Aggregate number of securities to which transaction applies:
|
|
|
(3) |
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): |
|
|
(4) |
|
Proposed maximum aggregate value of transaction:
|
|
|
(5) |
|
Total fee paid: |
|
|
|
|
|
|
|
|
|
|
¨ |
|
Fee paid previously with preliminary materials. |
|
|
¨ |
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
|
|
|
|
|
(1) |
|
Amount Previously Paid:
|
|
|
(2) |
|
Form, Schedule or Registration Statement No.:
|
|
|
(3) |
|
Filing Party:
|
|
|
(4) |
|
Date Filed:
|
NOTICE
OF
2015 ANNUAL MEETING
AND
PROXY STATEMENT
MetLife, Inc.
200 Park Avenue, New York, NY 10166
March 23, 2015
Dear Shareholder:
You are invited to attend MetLife, Inc.s
2015 annual meeting of shareholders, which will be held on Tuesday, April 28, 2015 beginning at 11:30 a.m., Eastern Time, on the 23rd floor of 1095 Avenue of the Americas, New York, New York.
At the meeting you will vote on a number of important matters described in the attached Proxy Statement. You will also act on such other matters as may properly
come before the meeting.
The vote of every shareholder is important. You can ensure that your shares will be represented and voted at the meeting by
voting on the Internet or by telephone or by signing and returning the enclosed proxy card. The proxy card contains detailed instructions on how to vote on the Internet or by telephone. If you choose to vote by mail, we have included a postage-paid,
pre-addressed envelope to make it convenient for you to do so.
Sincerely yours,
Steven A. Kandarian
Chairman of
the Board,
President and Chief Executive Officer
MetLife, Inc.
200 Park Avenue
New York, NY 10166
Notice of Annual Meeting of Shareholders
The 2015 annual meeting of the shareholders of MetLife, Inc. will be held on the 23rd floor of 1095 Avenue of the Americas, New York, New York on Tuesday, April 28, 2015 at 11:30 a.m., Eastern Time. At the
meeting, shareholders will consider and vote on the following matters:
|
1. |
the election of 12 Directors, each for a one-year term; |
|
2. |
two amendments to the Certificate of Incorporation to change each supermajority common shareholder vote requirement to a majority vote requirement; |
|
3. |
the ratification of the appointment of Deloitte & Touche LLP as MetLife, Inc.s independent auditor for 2015; |
|
4. |
an advisory (non-binding) vote to approve the compensation paid to MetLife, Inc.s Named Executive Officers; and |
|
5. |
such other matters as may properly come before the meeting. |
Information about the matters to be acted upon at the meeting is contained in the accompanying Proxy Statement.
Shareholders of record of MetLife, Inc. common stock at the close of business on February 27, 2015 will be entitled to vote at the meeting or any adjournment
or postponement thereof.
By Order of the Board of Directors,
Timothy J. Ring
Senior Vice President and Secretary
New York, New York
March 23, 2015
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to be Held on April 28, 2015
The accompanying Proxy Statement, the MetLife, Inc. 2014
Annual Report to Shareholders and directions to the location of the 2015 annual meeting of shareholders are available at http://investor.metlife.com by selecting the appropriate link under Related Links.
|
|
|
|
|
TABLE OF CONTENTS |
PROXY
STATEMENT
This Proxy Statement contains information about the 2015 annual meeting of shareholders (Annual Meeting) of MetLife, Inc.
(MetLife or the Company). Proxy materials which are furnished in connection with the solicitation of proxies by MetLifes Board of Directors, including this Proxy Statement and the accompanying proxy card, are being mailed and
made available electronically to shareholders on or about March 23, 2015.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
1 |
|
|
|
|
|
|
PROXY SUMMARY |
Proxy Summary
This summary provides highlights of information contained elsewhere in this Proxy Statement and does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully
before voting.
Voting Your Shares
Record date |
February 27, 2015. |
Voting |
Shareholders as of the record date are entitled to vote. Each share of MetLife common stock (Share) is entitled to one vote for each Director nominee and one vote for each of the other proposals.
|
Your vote is important. Shareholders of record may vote their Shares in person at the Annual Meeting or by using any of the methods below. Beneficial owners whose Shares are held at a brokerage firm or by a bank or
other nominee should follow the voting instructions received from such nominee. Participants in retirement and savings plans should refer to voting instructions on page 81.
Internet |
www.investorvote.com/MET no later than 11:59 p.m., Eastern Time, April 27, 2015. |
Telephone |
1-800-652-8683 until 11:59 p.m., Eastern Time, April 27, 2015. |
Mail |
Complete, sign and return your proxy card by mail so that it is received by MetLife c/o Computershare prior to the Annual Meeting. |
Proposals for Your Vote
|
|
|
|
|
|
|
|
|
Proposal |
|
Directors Recommendation |
|
Vote Required |
|
Page Reference |
1. |
|
Election of 12 Directors to one-year terms |
|
FOR each nominee |
|
Majority of Shares voted |
|
6 |
2(a). |
|
Change Each Supermajority Common Shareholder Vote Requirement for Amendments to the Certificate of Incorporation to a Majority Vote Requirement |
|
FOR |
|
Three-quarters of Outstanding Shares |
|
25 |
2(b). |
|
Change the Supermajority Vote Requirement for Shareholders to Amend the By-Laws to a Majority Vote Requirement |
|
FOR |
|
Three-quarters of Outstanding Shares |
|
26 |
3. |
|
Ratification of appointment of Deloitte & Touche LLP as MetLifes independent auditor for 2015 |
|
FOR |
|
Majority of Shares voted |
|
27 |
4. |
|
Advisory vote to approve compensation paid to the Named Executive Officers |
|
FOR |
|
Majority of Shares voted |
|
30 |
|
|
|
2 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
PROXY SUMMARY |
Director Nominees
The following table provides summary information about each Director nominee.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Committee Membership |
Nominee |
|
Experience and Qualifications Highlights |
|
Independent |
|
Audit |
|
Compensation |
|
Executive |
|
Finance and
Risk
|
|
Governance and Corporate
Responsibility
|
|
Investment (1) |
Cheryl W. Grisé Former Executive Vice President, Northeast Utilities |
|
- Corporate Governance -
Executive Leadership - Global Business Experience - Business Operations |
|
ü |
|
ü |
|
ü |
|
ü |
|
|
|
C |
|
|
Carlos M. Gutierrez Co-Chair, The Albright Stonebridge Group |
|
- Executive Leadership
- Global Business Experience - Business
Operations - Government Service - Public
Policy - Civic Leadership |
|
ü |
|
|
|
|
|
|
|
|
|
ü |
|
ü |
R. Glenn Hubbard, Ph.D. Dean and Russell L. Carson Professor of Economics and Finance, Graduate School of Business, Columbia
University |
|
- Public Policy - Academic
Experience - Investments - Civic Leadership
- Executive Leadership |
|
ü |
|
|
|
|
|
ü |
|
ü |
|
|
|
C |
Steven A. Kandarian Chairman of the Board, President and Chief Executive Officer, MetLife, Inc. |
|
- Knowledge of MetLifes
Business and Operations - Executive
Leadership - Global Business Experience
- Business Operations |
|
|
|
|
|
|
|
C |
|
|
|
|
|
|
Alfred F. Kelly, Jr. Former President, American Express Company |
|
- Executive Leadership
- Global Business Experience - Business
Operations |
|
ü |
|
ü |
|
ü |
|
ü |
|
C |
|
|
|
|
Edward J. Kelly, III Former Chairman, Institutional Clients Group, Citigroup Inc. |
|
- Executive Leadership
- Global Business Experience - Financial
Expertise - Business Operations |
|
ü |
|
ü |
|
|
|
|
|
ü |
|
|
|
|
William E. Kennard Former U.S. Ambassador to the European Union |
|
- Government Service - Public
Policy - Global Business Experience
- Business Operations - Investments
- Corporate Governance |
|
ü |
|
|
|
|
|
|
|
ü |
|
|
|
ü |
James M. Kilts Founding Partner, Centerview Capital |
|
- Executive Leadership
- Global Business Experience - Business
Operations - Investments |
|
ü |
|
|
|
C |
|
ü |
|
|
|
|
|
ü |
Catherine R. Kinney Former President and Co-Chief Operating Officer, New York Stock Exchange, Inc. |
|
- Corporate Governance -
Executive Leadership - Global Business Experience - Business Operations |
|
ü |
|
ü |
|
|
|
|
|
ü |
|
|
|
|
Denise M. Morrison President and Chief Executive Officer, Campbell Soup Company |
|
- Executive Leadership
- Global Business Experience - Business
Operations - Civic Leadership |
|
ü |
|
|
|
ü |
|
|
|
|
|
ü |
|
|
Kenton J. Sicchitano Former Global Managing Director, PricewaterhouseCoopers LLP |
|
- Accounting / Auditing - Tax and Financial
Advisory - Executive Leadership
- Global Business Experience - Risk
Management |
|
ü |
|
C |
|
ü |
|
ü |
|
ü |
|
|
|
|
Lulu C. Wang Chief Executive Officer and Founder, Tupelo Capital Management LLC |
|
- Investments - Executive
Leadership - Global Business Experience
- Business Operations - Civic Leadership |
|
ü |
|
|
|
|
|
|
|
|
|
ü |
|
ü |
C Chair
(1) |
Members of the Investment Committee, which the Board of Directors established in December 2014, served on the Investment Committee of the Board of Directors of Metropolitan Life
Insurance Company during 2014. Please refer to Investment Committee on page 20 for more information. |
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
3 |
|
|
|
|
|
|
PROXY SUMMARY |
Each of the current Directors who served during 2014
attended more than 75% of the aggregate number of meetings of the Board of Directors and the Committees on which he or she served. See Board and Committee Information beginning on page 13 for more information regarding Board Committees
and Committee membership.
Executive Pay for Performance
The Companys 2014 performance exceeded its goals in a number of key metrics, including Operating Earnings, Operating Earnings Per Share (Operating EPS), and Operating Return on Equity, excluding
accumulated other comprehensive income (loss) (Operating ROE).
These performance measures should be read in conjunction with the discussion of Company Financial Performance Goals and
Results on page 42 and in Appendix A to this Proxy Statement. These measures are not calculated under accounting principles generally accepted in the United States of America (GAAP); the definitions of these terms and
reconciliations to the most directly comparable GAAP measures are included in Appendix A.
The Company also maintained its pay for performance
practices, as illustrated below. A substantial portion of the Executive Group members Total Compensation for 2014 performance was variable and depended on performance. In addition, the ultimate value of long-term incentives depends on future
Company performance and the value of Shares.
To align executive and shareholder interests, in determining Total Compensation for 2014 performance, and to encourage future
contributions to performance, the Compensation Committee allocated a greater portion of the Executive Group members variable compensation to long-term stock-based incentives than it allocated to annual cash incentives.
For more information, see the Compensation Discussion and Analysis, which begins on page 32.
|
|
|
4 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
PROXY SUMMARY |
Proposals to Change Each Supermajority
Common Shareholder Vote Requirement in the Companys Charter to a Majority Vote Requirement
The Board recommends that shareholders approve
changing each supermajority common shareholder vote requirement in the Companys Certificate of Incorporation (its Charter) to a requirement for an affirmative vote of a majority of outstanding Shares of the Company entitled to vote
generally in the election of Directors (the Outstanding Shares).
|
|
|
|
|
Shareholder Action |
|
Charter Requirement for Shareholder Vote |
|
Current |
|
Proposed |
Amend Portions of the Charter |
|
75% of Outstanding Shares |
|
Majority of Outstanding Shares |
Amend the By-Laws |
|
75% of Outstanding Shares |
|
Majority of Outstanding Shares |
In accordance with the current terms of the Charter, each amendment to the Charter will become effective only if at least 75% of
the Outstanding Shares vote in favor of that amendment. See Proposals 2(a) and 2(b) Approval of Amendments to the Certificate of Incorporation to Change Each Supermajority Common Shareholder Vote Requirement to a Majority Vote
Requirement beginning on page 25 for more information on these proposals.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
5 |
|
|
|
|
|
|
ELECTION OF DIRECTORS |
PROPOSAL 1 ELECTION OF DIRECTORS FOR A ONE-YEAR TERM ENDING
AT THE 2016 ANNUAL MEETING OF SHAREHOLDERS
The Board of Directors recommends that you vote FOR the election of each of the Director nominees.
Director Nominees
The Companys success and long-term value depend on the judgment, initiative and efforts of its Directors. As a
Board, these individuals oversee MetLifes business policies and strategies. They also oversee the Chief Executive Officer and the other most senior executives of the Company (Executive Officers or Executive Group) in their
management of the Companys business.
The Board of Directors currently has 13 members. One current member, Gen. John Keane, will retire from
the Board as of the Annual Meeting.
Each of the Director nominees is currently serving as a Director of MetLife and has agreed to continue to serve if
elected. The Board of Directors has no reason to believe that any nominee would be unable to serve if elected; however, if for any reason a nominee should become unable to serve at or before the Annual
Meeting, the Board could reduce the size of the Board or nominate a replacement candidate for election. If you granted a proxy to vote your Shares, the individuals who have your proxy could use
their discretion to vote for a replacement candidate nominated by the Board. The proxies will not have authority to vote for a greater number of nominees than the number of nominees named on the proxy card, and will accordingly not have authority to
fill the vacancy resulting from the retirement of Gen. Keane.
Each of the Director nominees is also currently serving as a director of
Metropolitan Life Insurance Company (MLIC), a direct, wholly-owned subsidiary of MetLife with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act), in
connection with the issuance of certain insurance products. The common stock of MLIC is not publicly traded.
|
|
|
6 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
Cheryl W. Grisé
age 62 Former Executive Vice President,
Northeast Utilities |
|
|
|
|
|
Carlos M. Gutierrez age
61 Co-Chair, The Albright Stonebridge Group |
Professional Highlights:
|
|
Northeast Utilities, a public utility holding company engaged in the distribution of electricity and natural gas (1980 2007)
|
|
|
|
Executive Vice President (December 2005 July 2007) |
|
|
|
Chief Executive Officer of principal operating subsidiaries (September 2002 January 2007) |
|
|
|
President, Utility Group, Northeast Utilities Service Company (May 2001 January 2007) |
|
|
|
President, Utility Group (May 2001 December 2005) |
|
|
|
Senior Vice President, Secretary and General Counsel (1998 2001) |
Other Professional and Leadership Experience:
|
|
Member, Board of Trustees, Kingswood-Oxford School |
|
|
Trustee Emeritus, University of Connecticut Foundation |
|
|
Senior Fellow, American Leadership Forum |
|
|
Other public company directorships: Pall Corporation; PulteGroup, Inc.; ICF International |
Education:
|
|
B.A., University of North Carolina at Chapel Hill |
|
|
J.D., Thomas Jefferson School of Law |
|
|
Executive Management Program, Yale University School of Organization and Management |
Director since 2004
Ms. Grisés experience as the chief executive officer of
a major enterprise subject to complex regulations has provided her with a substantive understanding of the challenges of managing a highly regulated company such as MetLife. With her executive experience and her experience as a general counsel and
corporate secretary, Ms. Grisé brings a unique perspective on the Boards responsibility for overseeing the management of a regulated enterprise and with respect to the effective functioning of the Companys corporate
governance structures.
Professional Highlights:
|
|
The Albright Stonebridge Group, a consulting firm (April 2013 present) |
|
|
|
Co-Chair (February 2014 Present) |
|
|
|
Vice Chair (April 2013 February 2014) |
|
|
Vice Chairman, Institutional Client Group, Citigroup Inc., a financial services corporation (January 2011 February 2013) |
|
|
Chairman and Founding Consultant of Global Political Strategies, a division of APCO Worldwide, Inc., a consulting firm (2010 2011)
|
|
|
Secretary of Commerce of the United States (February 2005 January 2009) |
|
|
Kellogg Company, a manufacturer of packaged food products |
|
|
|
Chairman and Chief Executive Officer (2003 2005) |
|
|
|
Chairman, President and Chief Executive Officer (2000 2003) |
|
|
|
President and Chief Executive Officer (1999 2000) |
|
|
|
President and Chief Operating Officer (1998 1999) |
|
|
|
Various other positions (1975 1998) |
Other Professional and Leadership Experience:
|
|
Chairman, Republicans for Immigration Reform, a political action committee |
|
|
Member, Board of Directors, U.S.-Mexico Foundation |
|
|
Chairman, Board of Trustees, Meridian International Center |
|
|
Co-founder, TheDream.US |
|
|
National Member, Board of Trustees, University of Miami |
|
|
Member, Board of Directors, Viridis Learning, Inc. |
|
|
Co-Chair, Regional Migration Study Group |
|
|
Other public company directorships: Occidental Petroleum Corporation; Time Warner, Inc. |
|
|
Prior public company directorships (past five years): Corning, Inc.; Lighting Science Group Corporation; United Technologies Corporation
|
Education:
|
|
Instituto Tecnologico y de Estudios Superiores de Monterrey, Business Administration Studies |
Director since 2013
As Chairman and Chief
Executive Officer of Kellogg, Secretary Gutierrez gained deep insight into the complex challenges of guiding a large enterprise in a competitive global economy. As Secretary of Commerce, he worked with government and business leaders to promote
Americas economic interests. Secretary Gutierrezs unique mix of experience gives him a valuable perspective and ability to oversee managements efforts to grow and develop MetLifes global business and its interactions with
domestic and foreign governments and regulators.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
7 |
|
|
|
|
|
|
ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
R. Glenn Hubbard, Ph.D.
age 56 Dean and Russell L. Carson Professor of
Economics and Finance, Graduate School of
Business, Columbia University |
|
|
|
|
|
Steven A. Kandarian age
63 Chairman of the Board, President and
Chief Executive Officer, MetLife, Inc. |
Professional Highlights:
|
|
|
Dean, Graduate School of Business (2004 Present) |
|
|
|
Russell L. Carson Professor of Economics and Finance, Graduate School of Business (1994 Present) |
|
|
|
Professor of Economics, Faculty of Arts and Sciences (1997 Present) |
|
|
Co-Chair, Committee on Capital Markets Regulation, an independent nonprofit research organization (2006 Present) |
|
|
Chairman, Presidents Council of Economic Advisers, an agency within the Executive Office of the President of the United States (2001 2003)
|
|
|
Chairman of the Economic Policy Committee, Organization for Economic Cooperation and Development, an international economic and trade organization (2001
2003) |
|
|
Deputy Assistant Secretary for Tax Policy, United States Department of the Treasury (1991 1993) |
Other Professional and Leadership Experience:
|
|
Dr. Hubbard is a member of numerous professional and civic organizations, including: |
|
|
|
Economic Advisory Panel, Federal Reserve Bank of New York |
|
|
|
Council on Foreign Relations |
|
|
|
Advisory Board of the National Center on Addiction and Substance Abuse |
|
|
Other public company directorships: Automatic Data Processing, Inc.; BlackRock Closed-End Funds |
|
|
Prior public company directorships (past five years): KKR Financial Holdings LLC |
Education:
|
|
B.A. and B.S., University of Central Florida |
|
|
Ph.D. and A.M., Harvard University |
Director since 2007
As an economic policy advisor to the highest levels of government and
financial regulatory bodies, Dr. Hubbard has an unparalleled understanding of current global economic conditions and emergent regulations and economic policies. This expertise is relevant to the Boards understanding of how shifting
economic conditions and developing regulations and economic policies will likely impact MetLifes investments, businesses and operations worldwide.
Professional Highlights:
|
|
|
Chairman of the Board (January 2012 Present) |
|
|
|
President and Chief Executive Officer (May 2011 Present) |
|
|
|
Executive Vice President and Chief Investment Officer (April 2005 April 2011) |
|
|
Executive Director, Pension Benefit Guaranty Corporation, a United States government agency (2001 2004) |
|
|
Founder and Managing Partner, Orion Partners, LP, a private equity firm (1993 2001) |
|
|
Founder and President, Eagle Capital Holdings, where Mr. Kandarian formed a private merchant bank to sponsor equity investments in small and mid-sized
businesses (1990 1993) |
|
|
Managing Director, Lee Capital Holdings, a private equity firm (1984 1990) |
|
|
Mr. Kandarian began his career at Rotan Mosle, Inc., an investment bank |
Other Professional and Leadership Experience:
|
|
|
Board of Directors, Damon Runyon Cancer Research Foundation |
|
|
|
Board of Directors, Lincoln Center for the Performing Arts |
|
|
|
Financial Services Forum |
|
|
|
Partnership for New York City |
|
|
Vice Chairman, Insurance Regulatory Committee of the Institute of International Finance (IIF) |
Education:
|
|
J.D., Georgetown University Law Center |
|
|
M.B.A., Harvard Business School |
Director since 2011
Mr. Kandarians leadership and financial acumen, as well as his experience with the Company, including as President and Chief Executive Officer and his
earlier responsibilities for Investments, Global Brand and Marketing Services, and enterprise-wide corporate strategy, have provided him with a deep understanding of the Companys businesses and global operations and the Companys
strategic direction and leadership selection.
|
|
|
8 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
Alfred F. Kelly, Jr. age
56 Former President, American Express Company |
|
|
|
|
|
Edward J. Kelly, III age
61 Former Chairman, Institutional Clients Group, Citigroup Inc. |
Professional Highlights:
|
|
Chairman of the Board, President and Chief Executive Officer, NY/NJ Super Bowl Host Company, a nonprofit fundraising and planning organization (April 2011
August 2014) |
|
|
American Express Company, a financial services corporation |
|
|
|
President (July 2007 April 2010), responsible for global consumer businesses, including consumer and small business cards, customer service, global
banking, prepaid products, consumer travel, and risk and information management |
|
|
|
Group President (2005 2007), responsible for several key businesses, including U.S. consumer and small business cards, U.S. customer service, and risk
management |
|
|
Head of Information Systems, White House (1985 1987), with oversight of the information processing functions for several government agencies that comprise
the Executive Office of the President |
Other Professional and Leadership Experience:
|
|
Chairman, Board of Directors, School of the Holy Child |
|
|
Vice Chairman, Wall Street Charity Golf Classic (benefits the Cystic Fibrosis Foundation) |
|
|
Member, Boards of Trustees, of: |
|
|
|
New York-Presbyterian Hospital |
|
|
|
St. Josephs Seminary and College |
|
|
|
New York Catholic Foundation |
|
|
Other public company directorships: Visa Inc. |
|
|
Prior public company directorships (past five years): Affinion Group Holdings, Inc. and its wholly-owned subsidiary, Affinion Group, Inc.
|
Education:
|
|
B.A. and M.B.A., Iona College |
Director since 2009
Through his roles as a
senior executive of a global financial services business and as the head of information systems of the White House, Mr. Kelly brings significant experience in risk management and mitigation, marketing, information technology and data
management, as well as a sophisticated understanding of the considerations of shareholder value creation. These experiences and expertise are relevant to the Boards oversight of the Companys design and approach to risk management.
Professional Highlights:
|
|
Citigroup Inc., a financial services corporation |
|
|
|
Chairman, Institutional Clients Group (January 2011 July 2014) |
|
|
|
Chairman, Global Banking (April 2010 January 2011) |
|
|
|
Vice Chairman (July 2009 March 2010) |
|
|
|
Chief Financial Officer (March 2009 July 2009) |
|
|
|
Head of Global Banking (September 2008 March 2009) |
|
|
|
President and Chief Executive Officer, Citi Alternative Investments (March 2008 August 2008) |
|
|
|
President, Citi Alternative investments (February 2008 March 2008) |
|
|
Managing Director, The Carlyle Group, an asset management firm (July 2007 January 2008) |
|
|
Executive and leadership positions at various organizations, including: |
|
|
|
The PNC Financial Services Group, Inc., a financial services corporation (March 2007 June 2007) |
|
|
|
Mercantile Bankshares Corporation, a financial services corporation (March 2001 March 2007) |
|
|
|
J.P. Morgan Chase & Co. (and its predecessor company J.P. Morgan & Co. Incorporated), a financial services corporation (November 1994 January
2001) |
|
|
Partner, Davis Polk & Wardwell LLP, a law firm (January 1988 October 1994) |
Other Professional and Leadership Experience:
|
|
Senior Advisor, Corsair Capital, a private equity firm (October 2014 present) |
|
|
Member, Board of Directors, Securities Industry and Financial Markets Association, a financial industry trade association (January 2009 April 2014)
|
|
|
Other public company directorships: CSX Corporation; XL Group plc |
|
|
Prior public company directorships (past five years): Hartford Financial Services Group |
Education:
|
|
A.B., Princeton University |
|
|
J.D., University of Virginia School of Law |
Director since 2015
Mr. Kellys extensive leadership experience as an executive in the
financial services industry further strengthens the Boards strong qualifications to oversee the execution of MetLifes strategies in complex legal and regulatory environments. Mr. Kellys contributions to building the
client-centric model and managing the global operations of a major financial institution give him a background directly relevant to MetLifes challenges and initiatives. Further, Mr. Kellys deep knowledge of investments and financial
products and services makes him a valuable asset to MetLife and its shareholders.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
9 |
|
|
|
|
|
|
ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
William E. Kennard age
58 Former U.S. Ambassador to the European Union |
|
|
|
|
|
James M. Kilts age
67 Founding Partner, Centerview Capital |
Professional Highlights:
|
|
Co-Founder and Non-Executive Chairman, Velocitas Partners LLC, an asset management firm (November 2013 Present)
|
|
|
Member of Operating Executive Board, Staple Street Capital, a private equity firm (November 2013 Present) |
|
|
United States Ambassador to the European Union (December 2009 August 2013) |
|
|
Managing Director, The Carlyle Group, an asset management firm (May 2001 December 2009) |
|
|
United States Federal Communications Commission (December 1993 January 2001) |
|
|
|
Chairman (November 1997 January 2001) |
|
|
|
General Counsel (December 1993 November 1997) |
|
|
Partner, Verner, Liipfert, Bernhard, McPherson and Hand (now DLA Piper), a law firm (April 1984 December 1993) |
Other Professional and Leadership Experience:
|
|
|
U.S. Department of State Foreign Policy Advisory Board |
|
|
|
Board of Directors, Center for a New American Security |
|
|
|
Board of Directors, International African American Museum |
|
|
Trustee, Yale Corporation |
|
|
Other public company directorships: Duke Energy Corporation; AT&T Inc.; Ford Motor Company |
Education:
|
|
B.A., Phi Beta Kappa, Stanford University |
Director since 2013
Mr. Kennards
career has given him public policy and global investment expertise. As United States Ambassador to the European Union, Mr. Kennard worked to promote transatlantic trade and investment and reduce regulatory barriers to commerce. In his years of
public service, Mr. Kennard advanced access of underserved populations to technology. Mr. Kennards extensive regulatory and international experience enhances the Boards ability to oversee MetLifes strategies.
Professional Highlights:
|
|
Founding Partner, Centerview Capital, a private equity firm (October 2006 Present) |
|
|
Vice Chairman, Board of Directors, The Procter & Gamble Company, a consumer products company (October 2005 October 2006)
|
|
|
The Gillette Company, a consumer products company |
|
|
|
Chairman of the Board (January 2001 October 2005) |
|
|
|
Chief Executive Officer (February 2001 October 2005) |
|
|
|
President (November 2003 October 2005) |
|
|
President and Chief Executive Officer, Nabisco Group Holdings Corp.; President and Chief Executive Officer, Nabisco Holdings Corp. and Nabisco Inc., manufacturer
and marketer of packaged food products (January 1998 December 2000) |
|
|
Executive Vice President, Worldwide Food, Philip Morris, a manufacturer and marketer of packaged food products (1994 1997) |
|
|
Various positions, Kraft, a manufacturer and marketer of packaged food products (through 1994), including: |
|
|
|
President, Kraft USA and Oscar Mayer |
|
|
|
Senior Vice President, Strategy and Development |
|
|
|
President, Kraft Limited in Canada |
|
|
|
Senior Vice President, Kraft International |
Other Professional and Leadership Experience:
|
|
|
Board of Overseers, Weill Cornell Medical College |
|
|
|
Board of Trustees, Knox College |
|
|
|
Board of Trustees, University of Chicago |
|
|
|
Board of Directors, Cato Institute |
|
|
Founder and Member, Steering Committee, Kilts Center for Marketing, University of Chicago Booth School of Business |
|
|
Other public company directorships: Pfizer, Inc.; Non-Executive Director of Nielsen N.V. |
|
|
Prior public company directorships (past five years): The New York Times Company; MeadWestvaco Corporation |
Education:
|
|
M.B.A., University of Chicago |
Director since 2005
As a founding partner of
a private equity firm and as a senior executive of several major consumer product companies with global sales and operations, Mr. Kilts brings an in-depth understanding of the business challenges and opportunities of diversified global
enterprises and the related financial, risk management, talent management and shareholder value creation considerations. These experiences and knowledge are relevant to the Boards oversight of the management of MetLife.
|
|
|
10 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
Catherine R. Kinney age
63 Former President and Co-Chief Operating Officer,
New York Stock Exchange, Inc. |
|
|
|
|
|
Denise M. Morrison age
61 President and Chief Executive Officer, Campbell Soup
Company |
Professional Highlights:
|
|
NYSE Euronext, a provider of financial services including securities exchange and clearing operations |
|
|
|
Served in Paris, France, with responsibility for overseeing the global listing program, marketing and branding (July 2007 March 2009)
|
|
|
|
President and Co-Chief Operating Officer, New York Stock Exchange, Inc. (merged with Euronext in 2008 to form NYSE Euronext) (2002 2008)
|
|
|
|
Ms. Kinney joined the New York Stock Exchange in 1974 and held management positions in several divisions, with responsibility for all client relationships
(1996 2007), trading floor operations and technology (1987 1996), and regulation (2002 2004) |
Other Professional and Leadership Experience:
|
|
Chair, Board of Trustees, Catholic Charities of the Archdiocese of New York |
|
|
|
Board of Directors, Sharegift USA |
|
|
|
Economic Club of New York |
|
|
Other public company directorships: NetSuite, Inc.; MSCI Inc.; QTS Realty Trust, Inc. |
Education:
|
|
B.A., magna cum laude, Iona College |
|
|
Advanced Management Program, Harvard Graduate School of Business |
|
|
Honorary Degrees: Georgetown University; Fordham University; Rosemont College |
Director since 2009
Ms. Kinneys experience as a senior executive and chief
operating officer of a multinational, regulated entity, her key role in transforming the New York Stock Exchange (NYSE) to a publicly held company, and her leadership in developing and establishing the NYSE corporate governance standards for
its listed companies (including MetLife) demonstrate her knowledge of and experience with issues of corporate development, transformation and governance. These qualities are relevant to ensuring that the Board establishes and maintains effective
governance structures appropriate for a global provider of insurance and financial products and services.
Professional Highlights:
|
|
Campbell Soup Company, a food and beverage company (2003 Present) |
|
|
|
President and Chief Executive Officer (August 2011 Present) |
|
|
|
Executive Vice President and Chief Operating Officer (October 2010 July 2011) |
|
|
|
President, North America Soup, Sauces and Beverages (October 2007 September 2010) |
|
|
|
President, Campbell USA (June 2005 September 2007) |
|
|
|
President, Global Sales and Chief Customer Officer (April 2003 May 2005) |
|
|
Kraft Foods, Inc., a food and beverage company (1995 2003) |
|
|
|
Various leadership roles, including: Executive Vice President and General Manager, Kraft Snacks (2001 2003); Executive Vice President and
General Manager, Kraft Confections (2001); Senior Vice President and General Manager, Nabisco Down the Street (2000); Senior Vice President, Nabisco Sales and Integrated Logistics (1998 2000) |
|
|
Various senior marketing and sales positions, Nestlé USA, Inc., a food and beverage company (1984 1995) |
|
|
Various trade and business development positions, PepsiCo, Inc., a food and beverage company (1982 1984) |
|
|
The Procter & Gamble Company, a consumer products company (1975 1982) |
Other Professional and Leadership Experience:
|
|
Member of President Barack Obamas Export Council |
|
|
Member, Boards of Directors, of: |
|
|
|
Consumer Goods Forum (Vice Co-Chair) |
|
|
|
Catalyst, Inc., a nonprofit organization that strives to expand opportunities for women in business |
|
|
|
Grocery Manufacturers Association |
|
|
Other public company directorships: Campbell Soup Company |
|
|
Prior public company directorships (past five years): The Goodyear Tire & Rubber Company |
Education:
Director since 2014
Ms. Morrison has a
long and distinguished track record of building strong businesses and growing iconic brands. Her experience as chief executive officer of a global company provides her with a strong understanding of the key strategic challenges and opportunities of
running a large, complex business, including financial management, operations, risk management, talent management and succession planning. Ms. Morrisons strong commitment to corporate social responsibility and civic engagement make her a
valuable resource for MetLife and its shareholders.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
11 |
|
|
|
|
|
|
ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
Kenton J. Sicchitano age
70 Former Global Managing Director,
PricewaterhouseCoopers LLP |
|
|
|
|
|
Lulu C. Wang age
70 Founder and Chief Executive Officer, Tupelo Capital
Management LLC |
Professional Highlights:
|
|
PricewaterhouseCoopers LLP, a provider of audit and assurance, tax and consulting services (1970 2001) |
|
|
|
Mr. Sicchitano joined Price Waterhouse LLP, a predecessor firm of PricewaterhouseCoopers LLP, in 1970, becoming a Partner in 1979. He held a variety of
global leadership positions, including Global Managing Partner of Audit and Business Advisory Services and Global Managing Partner responsible for Audit and Business Advisory, Tax and Legal, and Financial Advisory Services.
|
Other Professional and Leadership Experience:
|
|
Director and Chair of the Finance Committee, New England Deaconess Hospital |
|
|
Trustee, New England Aquarium |
|
|
President, Harvard Business School Association of Boston |
|
|
Director, Harvard Alumni Association and Harvard Business School Alumni Association |
|
|
Other public company directorships: PerkinElmer, Inc.; Analog Devices, Inc. |
Education:
|
|
M.B.A., Harvard Business School |
Director since 2003
Mr. Sicchitanos experience as a managing partner in a global advisory services firm has provided him with an understanding of the challenges and
opportunities of managing a global business enterprise. His oversight of the firms audit practices and its Audit/Assurance, Business Advisory and Tax Services gave him broad knowledge of accounting and tax issues. This experience and knowledge
are relevant to the Boards oversight of the management of MetLife, a global insurance and financial services firm.
Professional Highlights:
|
|
Founder and Chief Executive Officer, Tupelo Capital Management LLC, an investment management firm (1997 Present) |
|
|
Director and Executive Vice President, Jennison Associates Capital Corporation, an investment management firm (1988 1997) |
|
|
Senior Vice President and Managing Director, Equitable Capital Management, an investment management firm (1978 1988) |
Other Professional and Leadership Experience:
|
|
Consulting Director, New York Community Trust |
|
|
|
Board of Overseers, Columbia Business School |
|
|
|
Board of Trustees, Metropolitan Museum of Art |
|
|
|
Board of Trustees, Rockefeller University |
|
|
|
Board of Trustees, Asia Society |
|
|
Trustee Emerita, Wellesley College |
|
|
Trustee Emerita, WNYC Public Radio |
Education:
|
|
B.A., Wellesley College |
|
|
M.B.A., Columbia Business School |
Director since 2008
Ms. Wangs extensive experience in investment management and
financial services, her knowledge and understanding of global capital markets, particularly in Asia, and her service on the boards and investment committees of major educational and civic organizations have given her a perspective that is
particularly relevant to the Boards oversight of the management of the Company and its investments, as well as a deep understanding of the importance of MetLifes and MetLife Foundations contributions to community institutions.
|
|
|
12 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
CORPORATE GOVERNANCE |
Corporate
Governance
The Board of Directors recognizes the importance of effective corporate governance in fulfilling its responsibilities
to shareholders. This section describes some of MetLifes key governance practices.
Corporate
Governance Guidelines
The Board of Directors has adopted Corporate Governance Guidelines that set forth the Boards policies on a number of
governance-related matters, including:
|
|
Director qualifications, independence and responsibilities; |
|
|
the identification of candidates for Board positions; |
|
|
Director access to management and outside advisors, including certain restrictions on the retention by Directors of an outside advisor that is otherwise engaged
by the Company for another purpose; |
|
|
Director stock ownership guidelines; |
|
|
the appointment of a Lead Director by the Independent Directors; |
|
|
Director orientation and continuing education; and |
|
|
Annual evaluation of the Boards performance. |
The Corporate Governance Guidelines and the Companys By-Laws provide for a majority voting standard in uncontested Director elections.
A printable version of the Corporate Governance Guidelines is available on MetLifes website at www.metlife.com/corporategovernance under the link Corporate Governance Guidelines.
Board and Committee Information
Composition and Independence of the Board of Directors. The Board currently
consists of 13 Directors, 12 of whom are both Non-Management Directors and Independent Directors. A Non-Management Director is a Director who is not an officer of the Company or of any entity in a consolidated group with the Company.
An Independent Director is a Non-Management Director who the Board of Directors has affirmatively determined has no material relationships with the Company or any of its consolidated subsidiaries and is independent within the meaning of the
NYSE Corporate Governance Standards. An Independent Director for Audit and Compensation Committee purposes meets additional requirements under the NYSE Corporate Governance Standards and Rules
10A-3 and 10C-1, as applicable, under the Exchange Act.
The Board of Directors has adopted categorical standards to assist it in making determinations regarding Director independence. The Independent Directors satisfy
all applicable categorical standards. The categorical standards are included in the Corporate Governance Guidelines of the Company, which are available on MetLifes website at www.metlife.com/corporategovernance under the link
Corporate Governance Guidelines.
The Board has affirmatively determined that all of the Directors, other than Steven A. Kandarian, the
Companys Chairman of the Board, President and Chief Executive Officer, are Independent Directors. The Board affirmatively determined in 2014 that each of Kurt M. Campbell and Hugh B. Price, who served as Directors during portions of 2014, was
an Independent Director.
Board Leadership Structure. After careful consideration, in 2006, the Board of Directors determined that the preferred leadership structure for MetLife would be a Chairman of the Board who also is the Companys Chief Executive
Officer, and a separate empowered Lead Director who also is an Independent Director. The successful partnership between the executive Chairman of the Board and the independent Lead Director has provided strong, independent oversight of management
and demonstrates that this leadership structure continues to be the most appropriate and effective model for the Company.
Mr. Kandarian, as the
Companys Chief Executive Officer, is responsible for the day-to-day operations of the Company and for setting its strategic business direction. In the performance of his responsibilities, both in his role as Chief Executive Officer and in his
prior role as Chief Investment Officer with oversight of MetLifes enterprise-wide corporate strategy, he has demonstrated a deep understanding of the Companys business, opportunities and challenges, and the capabilities and talents of
the senior leadership team all of which he brings to bear in the performance of his responsibilities as Chairman of the Board.
Cheryl W.
Grisé, the Companys independent Lead Director, was appointed as Lead Director by the Companys Independent Directors, as provided by the
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
13 |
|
|
|
|
|
|
CORPORATE GOVERNANCE |
Companys Corporate Governance Guidelines. Pursuant to the Guidelines, her responsibilities as Lead Director include:
|
|
presiding at executive sessions of the Board of Directors; |
|
|
conferring with the Chairman of the Board and Chief Executive Officer about Board meeting schedules, agendas and information to be provided to the Directors;
|
|
|
conferring with the Chairman of the Board and Chief Executive Officer on issues of corporate importance that may involve action by the Board;
|
|
|
participating in the Compensation Committees annual performance evaluation of the Chairman of the Board and Chief Executive Officer; and
|
|
|
in the event of the incapacity of the Chairman of the Board and Chief Executive Officer, directing the Secretary of the Company to take all necessary and
appropriate action to call a special meeting of the Board as specified in the By-Laws to consider the action to be taken under the circumstances. |
Having an independent Lead Director and an executive Chairman of the Board helps ensure that the Directors are provided with appropriate information about the Companys businesses and operations and have
direct access to senior management, which enables them to effectively oversee the management of the Company and perform their roles and responsibilities as Directors of a complex, highly regulated, global enterprise.
Executive Sessions of Independent Directors. At each regularly scheduled meeting of the Board of Directors, the Independent Directors of the Company meet in executive session without management present. The Lead Director presides at the executive
sessions of the Independent Directors.
Director Nomination
Process. Under the Companys Corporate Governance Guidelines, the following specific, minimum qualifications must be met by any candidate whom the Governance and Corporate
Responsibility Committee would recommend for election to the Board of Directors:
|
|
Financial Literacy. Such person
should be financially literate, as such qualification is interpreted by the Companys Board of Directors in its business judgment. |
|
|
Leadership Experience. Such person
should possess significant leadership experience, such as experience in business, finance, accounting, law, education or
|
|
|
government, and shall possess qualities reflecting a proven record of accomplishment and an ability to work with others. |
|
|
Commitment to the Companys
Values. Such person shall be committed to promoting the financial success of the Company and preserving and enhancing the Companys reputation as a global leader in business and shall be
in agreement with the values of the Company as embodied in its codes of conduct. |
|
|
Absence of Conflicting
Commitments. Such person should not have commitments that would conflict with the time commitments of a Director of the Company. |
|
|
Reputation and Integrity. Such person
shall be of high repute and recognized integrity, and shall not have been convicted in a criminal proceeding or be named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses). Such person shall not have
been found in a civil proceeding to have violated any federal or state securities or commodities law, and shall not be subject to any court or regulatory order or decree limiting his or her business activity, including in connection with the
purchase or sale of any security or commodity. |
|
|
Other Factors. Such person shall have
other characteristics considered appropriate for membership on the Board of Directors, including significant experience and accomplishments, an understanding of marketing and finance, sound business judgment, and an appropriate educational
background. |
In recommending candidates for election as Directors, the Governance and Corporate Responsibility Committee will take
into consideration the need for the Board to have a majority of Directors that meet the independence requirements of the New York Stock Exchange Corporate Governance Standards, the ability of candidates to enhance the perspective and experience of
the Board as a whole, and such other criteria as shall be established from time to time by the Board of Directors.
Potential candidates for nomination
as Directors are identified by the Governance and Corporate Responsibility Committee and the Board of Directors through a variety of means, including search firms, Board members, Executive Officers and shareholders. Potential candidates for
nomination as Director provide information about their qualifications and participate in interviews conducted by individual Board members.
|
|
|
14 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
CORPORATE GOVERNANCE |
Candidates are evaluated based on the information supplied by the candidates and information obtained from other sources.
The Governance and Corporate Responsibility Committee will consider shareholder recommendations of candidates for nomination as Director. To be timely, a shareholder recommendation must be submitted to the
Governance and Corporate Responsibility Committee, MetLife, Inc., 1095 Avenue of the Americas, New York, NY 10036, Attention: Corporate Secretary, not later than 120 calendar days prior to the first anniversary of the previous years annual
meeting. Recommendations for nominations of candidates for election at MetLifes 2016 annual meeting of shareholders must be received by the Corporate Secretary of MetLife, Inc. no later than December 30, 2015 or such other date as may be
announced by the Company in accordance with the Companys By-Laws.
The Governance and Corporate Responsibility Committee makes no distinctions in
evaluating nominees based on whether or not a nominee is recommended by a shareholder. Shareholders recommending a nominee must satisfy the notification, timeliness, consent and information requirements set forth in the Companys By-Laws
concerning Director nominations by shareholders.
The shareholders recommendation must set forth all the information regarding the recommended
candidate that is required to be disclosed in solicitations of proxies for election of Directors pursuant to Section 14 of the Exchange Act and related regulations, and must include the recommended candidates written consent to being
named in the Proxy Statement as a nominee and to serving as a Director if elected. The recommendation must also be accompanied by a completed disclosure questionnaire on a form posted on the Companys website. In addition, the
shareholders recommendation must include: (i) the name and address of, and class and number of shares of the Companys securities owned beneficially and of record by, the recommending shareholder and any other person on whose behalf
the shareholder is acting or with whom the shareholder is acting in concert; (ii) a description of all arrangements or understandings between any shareholder and the person being recommended and any other persons (naming them) pursuant to which
the nominations are to be made by the shareholder; (iii) satisfactory evidence that each shareholder is a beneficial owner, or a representation that the shareholder is a holder of record, of the
Companys stock entitled to vote at the meeting, and a representation that the shareholder intends to appear in person or by a qualified representative at the meeting to propose the
nomination; and (iv) if the recommending shareholder intends to solicit proxies, a statement to that effect.
Oversight of Risk Management by the Board of Directors. The Board of Directors is responsible for overseeing management in the
execution of its responsibilities and for overseeing the design and implementation of the Companys approach to risk management.
In performing its
risk management oversight functions, the Board oversees managements development and execution of appropriate business strategies to mitigate the risk that such strategies will fail to generate long-term value for the Company and its
shareholders or that such strategies will motivate management to take excessive risks.
The Board of Directors also oversees the development and
implementation of processes and procedures to mitigate the risk of failing to ensure the orderly succession of the Chief Executive Officer and the senior executives of the Company. The Board believes that the continuing development of the
Companys managerial leadership is critically important to its success. The Board, in coordination with the Governance and Corporate Responsibility Committee, periodically reviews the skills, experience, and development plans of the
Companys senior leaders who may ultimately be candidates for senior executive positions. The Directors meet regularly with senior leaders in the context of Board business, giving them an opportunity to assess the qualifications of these
individuals. In addition, the Board plans for executive succession to ensure that the Company will have managerial talent available to replace current executives when that becomes necessary.
The Board of Directors has allocated its oversight of risk management among the Board as a whole and to the Committees of the Board, which meet regularly and report back to the full Board. All Committees play
significant roles in risk oversight.
The Finance and Risk Committee has broad oversight responsibilities for the Companys risk management.
Annually, the Committee reviews, and recommends for Board approval, the Companys Enterprise Risk Appetite Statement, which establishes quantitative and qualitative risk appetite measures and risk exposure
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
15 |
|
|
|
|
|
|
CORPORATE GOVERNANCE |
considerations and guidelines, and the Companys Capital Policy and Liquidity Risk Management Policy. The Committee reviews the Companys assessment and management of material risks,
including its performance against applicable policies and procedures and related benchmarks and target metrics. The Committee oversees the Companys financial policies and strategies, capital planning and adequacy, certain capital actions,
mergers and acquisitions projects, and other financial matters. The Committee coordinates its oversight with the efforts of the Chief Risk Officer (who oversees and coordinates risk assessment and mitigation enterprise-wide) and other members of
management. It also coordinates its oversight of management with the Chairs of the other Board Committees.
In addition to the Finance and Risk
Committees oversight of the Companys material risks, the Audit Committee, the Compensation Committee, the Governance and Corporate Responsibility Committee and the Investment Committee also exercise direct oversight of aspects of the
Companys enterprise risk management. Specifically,
|
|
The Audit Committee reviews with management, the internal auditor and the independent auditor, the Companys system of internal control over financial
reporting that is relied upon to provide reasonable assurance of the integrity of the Companys financial statements. |
|
|
The Compensation Committee is responsible for reviewing the Companys compensation practices and overseeing risk management with respect to the
Companys compensation arrangements. |
|
|
The Governance and Corporate Responsibility Committee, in coordination with the Board, reviews the Companys proposed succession and development plans for
executive officers. It reviews the Companys ethics and compliance programs and its sales practices to mitigate the risk of non-compliance, customer and regulatory complaints and other reputational risks. It also oversees the Companys
goals and strategies concerning legislative and regulatory initiatives that impact the interest of the Company. |
|
|
The Investment Committee oversees the management and mitigation of risks associated with the investment portfolios of MetLife and of the consolidated MetLife
enterprise, including credit risk; interest rate risk; portfolio allocation and diversification risk; derivatives risk; counterparty risk; duration mismatch risk; and compliance with
|
|
|
insurance laws and regulations that govern insurance company investments. |
For
further discussion of the Committees responsibilities, see Board Committees, Audit Committee, Compensation Committee, Finance and Risk Committee, Governance and Corporate Responsibility
Committee and Investment Committee below.
Throughout the year, the Board and its Committees receive reports from the Chief Risk
Officer and other senior management on enterprise risk management and specific risk topics. In particular, the Finance and Risk Committee reviews reports from the Chief Risk Officer and other senior management of the steps taken to measure, monitor
and manage risk exposure in the enterprise. At each regularly scheduled meeting of the Finance and Risk Committee, the Chief Risk Officer meets in executive session of the independent Committee members without the Companys Executive Officers
to further discuss enterprise risk management.
Board Membership. For information about the current membership of the Board and the Board Committees, see the Proxy Summary on page 3. In addition to the memberships noted in the Proxy Summary, Gen. John Keane, who will retire from
the Board as of the Annual Meeting, serves on the Audit Committee and the Governance and Corporate Responsibility Committee.
Board Meetings and Director Attendance. In 2014, the Board held seven meetings and the Board Committees of MetLife held a total of
34 meetings. All of the current Directors attended more than 75% of the aggregate number of meetings of the Board of Directors and the MetLife Committees on which they served during 2014.
Board Committees. MetLifes Board of Directors has designated six standing
Board Committees: Audit; Compensation; Executive; Finance and Risk; Governance and Corporate Responsibility; and Investment. The Board of Directors has delegated authority to the Committees, as described in their charters, to assist the Board in
overseeing the management of the Company.
All Committees, other than the Executive Committee, are chaired by and consist entirely of Independent
Directors. The Committees perform essential functions on behalf of the Board. The Committee Chairs review and approve agendas for all meetings of their respective Committees. The responsibilities of each Committee are defined in its charter and
summarized below.
|
|
|
16 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
CORPORATE GOVERNANCE |
The charters for the Audit, the Compensation, and the Governance and Corporate Responsibility Committees incorporate
the requirements of the Securities and Exchange Commission (SEC) and the NYSE to the extent applicable. Current, printable versions of these charters are available on MetLifes website at www.metlife.com/corporategovernance.
Audit Committee. The
Audit Committee oversees:
|
|
the Companys accounting and financial reporting processes and the audits of its financial statements; |
|
|
the adequacy of the Companys internal control over financial reporting; |
|
|
the integrity of its financial statements; |
|
|
the qualifications and independence of the independent auditor; |
|
|
the appointment, retention, performance and compensation of the independent auditor and the performance of the internal audit function; and
|
|
|
the Companys compliance with legal and regulatory requirements. |
The Audit Committee periodically discusses the Companys guidelines and policies with respect to the process by which the Company undertakes risk assessment and risk management, including risks relating to
MetLife information security systems. The Audit Committee meets at least six times a year, and meets regularly in executive session separately with management and with the Companys internal and external auditors. The Audit Committee met 13
times in 2014. The Audit Committees activities during 2014 with respect to the oversight of the independent auditor are described in more detail in Proposal 3 Ratification of Appointment of the Independent Auditor
beginning on page 27. The Audit Committee Charter provides a more detailed description of the role and responsibilities of the Audit Committee.
Independence, Financial Literacy and Audit Committee Financial Experts. All six members of the Audit Committee, including Gen. John Keane,
who will retire from the Board as of the Annual Meeting, are Independent Directors who meet the additional independence requirements of the NYSE Corporate Governance Standards and Rule 10A-3 under the Exchange Act and are financially literate, as
such qualification is interpreted by the Board of Directors. The Board of Directors has determined that the following three members of the Audit Committee qualify as audit committee financial experts, as such term is defined by the SEC:
Kenton J. Sicchitano (Chair), Alfred F. Kelly, Jr., and Edward J. Kelly, III.
Compensation Committee.
The Role and Responsibilities of the Compensation Committee. The Compensation Committee:
|
|
assists the Board in fulfilling its responsibility to oversee the development and administration of compensation programs for the Companys executives and
other employees of the MetLife enterprise; |
|
|
approves the goals and objectives relevant to the Chief Executive Officers Total Compensation, evaluates the Chief Executive Officers performance in
light of such goals and objectives, and endorses, for approval by the Independent Directors, the Chief Executive Officers Total Compensation level based on such evaluation; |
|
|
reviews, and recommends for approval by the Board, the Total Compensation of each person who is an executive officer of the Company under the
Exchange Act and related regulations or an officer of the Company under Section 16 of the Exchange Act and related regulations, as well as the Companys Chief Risk Officer, including their base salaries, annual incentive
compensation, and long-term equity-based incentive compensation; |
|
|
oversees the management and mitigation of risks associated with the development and administration of the Companys compensation programs, including efforts
to ensure that the Companys incentive plans do not encourage or reward excessive risk taking; and |
|
|
reviews and discusses with management the Compensation Discussion and Analysis to be included in the proxy statement (and incorporated by reference in the Annual
Report on Form 10-K), and, based on this review and discussion, (1) recommends to the Board of Directors whether the Compensation Discussion and Analysis should be included in the Proxy Statement, and (2) issues the Compensation Committee
Report for inclusion in the Proxy Statement. The 2014 Compensation Committee Report appears on page 31 of this Proxy Statement. |
A
more detailed description of the role and responsibilities of the Compensation Committee is set forth in the Compensation Committee Charter. Under its charter, the Compensation Committee may delegate to a subcommittee or to the Chief Executive
Officer or other officers of the Company any portion of its duties and responsibilities, if it believes such delegation is in the best interests of the Company and the delegation is not prohibited by law, regulation or the NYSE Corporate Governance
Standards. Managements
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
17 |
|
|
|
|
|
|
CORPORATE GOVERNANCE |
delegated authority does not include granting salary increases or incentive compensation to any Executive Officer, to any officer subject to the reporting requirements under Section 16 of
the Exchange Act, or to the Companys Chief Risk Officer. The Compensation Committee met eight times in 2014.
The Companys processes for
consideration and determination of executive compensation, and the central role of the Compensation Committee in those processes, are further described in the Compensation Discussion and Analysis beginning on page 32.
Executive Compensation Advisors. The
Compensation Committee has sole authority to retain or obtain the advice of a compensation consultant, independent legal counsel, or other advisor to the committee. It is not required to implement or act consistently with the advice or
recommendations of any advisor, but retains discretion to act according to its own judgment. The Compensation Committee may retain or obtain the advice of an advisor only after taking into consideration factors related to that persons
independence from management that it determines are relevant, including each of the factors it is required to take into consideration under the Corporate Governance Standards of the New York Stock Exchange, unless the retention of the advisor is
exempt from this requirement under NYSE rules. The Compensation Committee is responsible for the appointment, compensation, and oversight of any advisor it retains. The Company is obligated to provide appropriate funding for reasonable compensation
of any such advisor, as determined by the Compensation Committee.
To assist the Compensation Committee in carrying out its responsibilities, the
Compensation Committee retained Meridian Compensation Partners, LLC (Meridian) as its executive compensation consultant. Meridian has provided the Compensation Committee with competitive market compensation data and overall market trends
about executive compensation, has advised the Compensation Committee about the overall design and implementation of MetLifes executive compensation programs, including decisions made under the programs, and has advised the Committee about
regulatory, governance and accounting developments that may affect the Companys executive compensation programs.
The Compensation Committee
believes that its compensation consultant must be able to provide it with candid, direct, independent and objective advice.
In order to promote the objectivity, independence, and candor of Meridians advice:
|
|
Meridian reports directly to the Committee about executive compensation matters; |
|
|
Meridian meets with the Committee in executive sessions that are not attended by any of the Companys Executive Officers; |
|
|
Meridian has direct access to the Chair and members of the Committee between meetings; and |
|
|
the Committee has not directed Meridian to perform its services in any particular manner or under any particular method. |
To help ensure that the Committee continues to receive independent and objective advice, the Companys Corporate Governance Guidelines provide that any
consultant retained by the Compensation Committee on executive compensation matters should not be retained to provide any other services to the Company. Meridian did not provide any such other services in 2014.
In addition, Meridian has provided the Compensation Committee with information regarding its relationship with MetLife and Meridians independence from
management. This included information covering factors the Compensation Committee is required under NYSE rules to take into consideration before selecting an advisor. The Compensation Committee did not find that Meridians work raised any
conflict of interest.
For information about the key factors that the Compensation Committee considers in determining the compensation of the
members of the Executive Group, as well as the role of the Chief Executive Officer and the Executive Vice President and Chief Human Resources Officer in setting such compensation, see the Compensation Discussion and Analysis beginning on
page 32. Also see the Compensation Discussion and Analysis for information about compensation paid to the persons listed in the Summary Compensation Table on page 52.
Compensation Committee Interlocks and Insider Participation. No member of
the Compensation Committee has ever been an officer or employee of MetLife or any of its subsidiaries. During 2014, no Executive Officer of MetLife served as a Director or member of the compensation committee (or other committee serving an
equivalent function) of any other entity where one of the executive officers is or has been a Director of MetLife or a member of MetLifes Compensation Committee.
|
|
|
18 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
CORPORATE GOVERNANCE |
Executive Committee. The Executive Committee may exercise the powers and authority of the Board of Directors during intervals between meetings of the Board of Directors. The Executive Committee did not meet in 2014.
Finance and Risk Committee. The
Finance and Risk Committee oversees the Companys financial policies and strategies; its capital structure, plans and policies, including capital adequacy, dividend policies and share repurchases; its proposals on certain capital actions and
other financial matters; its assessment and management of material risks; and in consultation with the Compensation Committee, the appointment, retention and performance of the Chief Risk Officer. The Finance and Risk Committee has in the past
engaged and is likely from time to time in the future to engage external consultants to assess the alignment of the Companys risk models and practices to industry best practices.
Specifically, the Finance and Risk Committee:
|
|
reviews the Companys key financial, risk and business metrics; |
|
|
reviews and monitors all aspects of the Companys capital plan, actions and policies (including the guiding principles used to evaluate all proposed capital
actions), targets and structure (including the monitoring of capital adequacy and of compliance with the Companys capital plan); |
|
|
consistent with the Companys capital plan, safety and soundness principles and applicable law, reviews proposals and reports concerning certain capital
actions and other financial matters; and |
|
|
reviews policies, practices and procedures regarding risk assessment and management. |
The Finance and Risk Committee met six times in 2014. For further discussion of the Finance and Risk Committees responsibilities for oversight of risk management, see Oversight of Risk Management by the
Board of Directors beginning on page 15.
Governance and Corporate
Responsibility Committee. The Governance and Corporate Responsibility Committee assists the Board of Directors in identifying individuals qualified to become members of the Companys
Board, consistent with the criteria established by the Board; proposing candidates to be nominated for election as Directors at annual or special
meetings of shareholders or to be elected by the Board to fill any vacancies on the Board; developing and recommending to the Board of Directors for adoption corporate governance guidelines
applicable to the Company; and reviewing proposed succession plans for the Chief Executive Officer and succession and development plans for the Companys executive officers, and making recommendations to the Board of Directors with respect to
such plans. It also oversees the Companys compliance responsibilities and activities, including its legislative and regulatory initiatives, sales practices and ethics and compliance programs, as well as the Companys policies concerning
its corporate citizenship programs.
Each year, the Governance and Corporate Responsibility Committee oversees a robust Board evaluation. The Committee
solicits comments from Directors on the Boards and its Committees performance, including the adequacy of the time allocated to Board and Committee business, the quality of materials provided by management, and the quality of the
presentations. Directors are also invited to recommend topics for the Board to consider at future meetings. The Committee reports these results to the full Board. The Board completes its evaluation through a discussion in executive session
without any management present.
The Governance and Corporate Responsibility Committee also oversees the management and mitigation of risks related to
failure to comply with required or appropriate corporate governance standards.
The Governance and Corporate Responsibility Committee also is
responsible for reviewing the compensation and benefits of the Companys non-employee Directors and recommending any changes to the Board. During 2014, Meridian provided the Board with an analysis of the competitiveness of the compensation
program for Non-Management Directors, market observations, and relevant compensation trends. The Committee recommended, and the non-management members of the Board of Directors approved, the increase in the stock ownership guidelines for
non-management directors from three to four times the cash component of the annual retainer. The Committee did not make any other changes to Non-Management Director compensation in 2014.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
19 |
|
|
|
|
|
|
CORPORATE GOVERNANCE |
The Governance and Corporate Responsibility Committee Charter provides a more detailed
description of the role and responsibilities of the Governance and Corporate Responsibility Committee. The Governance and Corporate Responsibility Committee met
seven times in 2014.
Investment Committee. The Investment Committee oversees the management of investment activities of MetLife and, on a consolidated basis, of MetLife and all of its direct and indirect subsidiaries. In performing its oversight
responsibilities, the Committee reviews reports from the investment officers on (i) the investment activities and performance of the investment portfolios of MetLife and its subsidiaries and (ii) the conformity of investment activities
with the
Investment Committees general authorizations and investment guidelines. The Investment Committee also oversees the management and mitigation of risks associated with the investment
portfolios of MetLife and its subsidiaries.
The Board of Directors formed MetLifes Investment Committee on December 9, 2014, and it met for the
first time in 2015. Prior to that time, the Investment Committee of the Board of Directors of MLIC oversaw the investment portfolios of MetLife and its subsidiaries at the request of the MetLife Board of Directors. During 2014, each of the members
of the Investment Committee served on the Investment Committee of the Board of Directors of MLIC. The MLIC Investment Committee met six times in 2014.
|
|
|
20 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
CORPORATE GOVERNANCE |
Director
Compensation in 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned or Paid in Cash ($) |
|
|
Stock Awards ($) |
|
|
All Other Compensation ($) |
|
|
Total ($) |
|
Kurt M. Campbell |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
299 |
|
|
$ |
299 |
|
Cheryl W. Grisé |
|
$ |
180,000 |
|
|
$ |
130,010 |
|
|
$ |
1,619 |
|
|
$ |
311,629 |
|
Carlos M. Gutierrez |
|
$ |
130,000 |
|
|
$ |
130,010 |
|
|
$ |
1,619 |
|
|
$ |
261,629 |
|
R. Glenn Hubbard |
|
$ |
155,000 |
|
|
$ |
130,010 |
|
|
$ |
6,619 |
|
|
$ |
291,629 |
|
John M. Keane |
|
$ |
130,000 |
|
|
$ |
130,010 |
|
|
$ |
1,619 |
|
|
$ |
261,629 |
|
Alfred F. Kelly, Jr. |
|
$ |
155,000 |
|
|
$ |
130,010 |
|
|
$ |
6,619 |
|
|
$ |
291,629 |
|
William E. Kennard |
|
$ |
130,000 |
|
|
$ |
130,010 |
|
|
$ |
6,619 |
|
|
$ |
266,629 |
|
James M. Kilts |
|
$ |
155,000 |
|
|
$ |
130,010 |
|
|
$ |
6,619 |
|
|
$ |
291,629 |
|
Catherine R. Kinney |
|
$ |
130,000 |
|
|
$ |
130,010 |
|
|
$ |
4,119 |
|
|
$ |
264,129 |
|
Denise M. Morrison (1) |
|
$ |
151,429 |
|
|
$ |
151,481 |
|
|
$ |
1,487 |
|
|
$ |
304,397 |
|
Hugh B. Price |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,889 |
|
|
$ |
2,889 |
|
Kenton J. Sicchitano |
|
$ |
155,000 |
|
|
$ |
130,010 |
|
|
$ |
4,119 |
|
|
$ |
289,129 |
|
Lulu C. Wang |
|
$ |
130,000 |
|
|
$ |
130,010 |
|
|
$ |
1,619 |
|
|
$ |
261,629 |
|
(1) |
Ms. Morrison was appointed to the Board of Directors in 2014 before that years Annual Meeting. As a result, the Company paid Ms. Morrison a prorated annual retainer fee for
the period of anticipated service in 2014 until the 2014 Annual Meeting. Approximately 50% of the retainer, or $21,471, was paid through the grant of 425 Shares at a grant date fair value of per Share of $50.52, the closing price of a Share on the
NYSE on the grant date. The rest of the retainer was paid in $21,429 cash. For directors who were members of the Board of Directors in 2013, the retainer fee for the portion of 2014 prior to the 2014 Annual Meeting was paid in 2013.
|
The Non-Management Directors included in the 2014 Director Compensation table, and the discussion below pertaining to
the table, are limited to those who served as Directors during the year. Ms. Morrison was first elected to the Board of Directors during 2014. Mr. Campbell resigned from the Board of Directors prior to the Companys 2014 Annual Meeting.
Mr. Price retired from the Board of Directors as of the Companys 2014 Annual Meeting.
Fees Earned or Paid in Cash and Stock Awards. The Non-Management Directors annual retainer fees are reported under Fees
Earned or Paid in Cash and Stock Awards in the Director Compensation table.
After the Companys 2014 Annual Meeting, each active
Non-Management Director was paid an annual retainer of $260,000 in advance for services through the 2015 Annual Meeting. Approximately 50% of the retainer, or $130,010, was paid through the grant of 2,505 Shares at a grant date fair value per share
of $51.90, the closing price of a Share on the NYSE on the grant date. The rest of the retainer was paid in $130,000 cash.
In addition, the Company
paid an annual cash retainer fee of $25,000 in 2014 to each Non-Management Director
who served as Chair of a Board Committee (Ms. Grisé, Mr. Kelly, Mr. Kilts, and Mr. Sicchitano) and the Non-Management Director who served as Chair of the Investment
Committee of MLIC (Mr. Hubbard). The Company also paid an annual cash retainer of $25,000 in 2014 to its Lead Director (Ms. Grisé).
The MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan (2005 Director Stock Plan), which was approved by the Companys shareholders in
2004, authorized the Company to issue Shares in payment of Director retainer fees. The dollar amounts reported under Stock Awards represent the grant date fair value of such Share awards as computed for financial statement reporting
purposes in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (ASC 718). The grant date fair value represents the number of Shares granted multiplied by the closing price of the Shares on the
NYSE on the grant date. Share awards granted to the Non-Management Directors as part of their annual retainer vest and become payable immediately upon their grant. As a result, no Share awards were outstanding for any of the Non-Management Directors
as of December 31, 2014. None of the Non-
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
21 |
|
|
|
|
|
|
CORPORATE GOVERNANCE |
Management Directors had any outstanding and unexercised Stock Options as of December 31, 2014.
A Non-Management Director may defer the receipt of all or part of his or her fees payable in cash or Shares (and any imputed reinvested dividends on those deferred Shares) until a later date or until after he or
she ceases to serve as a Director.
All Other Compensation. The Non-Management Directors 2014 benefits, gift programs, and reportable perquisites and other personal benefits are included under All Other Compensation in the Director Compensation
table.
Life Insurance
Programs. MetLife paid $1,584 in premiums for each Non-Management Director who joined the Board on or after January 1, 2003, and who served the entirety of 2014, to receive $200,000 of
group life insurance coverage during 2014. The Company incurred a pro rata portion of that cost to provide coverage to Mr. Campbell ($264) and Ms. Morrison ($1,452) for the portion of 2014 during which each served as a Director.
Non-Management Directors who joined the Board prior to January 1, 2003 receive $200,000 of individual life insurance coverage under policies then
in existence. Until his retirement, Mr. Price was the only Non-Management Director eligible for this program. MetLife paid a program administration fee of $1,538 for Mr. Prices coverage.
Business Travel Insurance
Program. MetLife provided each Non-Management Director with business travel accident insurance coverage for travel on MetLife business. MetLifes per Director cost for this coverage in
2014 was $35.
Charitable and Matching Gifts Programs. The MetLife Foundation provided up to $5,000 in matching contributions for each Non-Management Directors contributions to colleges and universities in 2014 under a matching gift program for employees and
Non-Management Directors. The foundation contributed $5,000 to match contributions made by each of Mr. Hubbard, Mr. Kelly, Mr. Kennard, and Mr. Kilts in 2014. It also contributed $2,500 to match contributions made by each of Ms. Kinney and Mr.
Sicchitano in 2014.
In addition, the foundation provided a matching contribution of $2,500 for contributions that each of Ms. Kinney and Mr. Sicchitano
made in 2013. Because these contributions related to the directors 2013
contributions, they are not reported on the table above. They were not reported in the Companys 2014 Proxy Statement because the process for matching the contributions did not begin until
after that Proxy Statement was filed.
In addition, Mr. Price participates in a charitable gift program for Non-Management Directors elected to the
Board of MLIC prior to October 1, 1999. Under that program, Non-Management Directors may recommend one or more charitable or educational institutions to receive, in the aggregate, a $1 million contribution from MLIC in the name of the Director
following the Directors death. The proportionate share of a service fee paid by MLIC in 2014 to administer the program attributable to Mr. Price was $1,316. The premiums for the insurance policies under the program were paid in
full prior to 2014.
Perquisites and Other Personal Benefits. The Company paid for personal expenses of certain Non-Management Directors or their guests in
connection with Company business conferences or other events in 2014. For each Non-Management Director for whom such expenses were paid, the aggregate amount paid by the Company in 2014 was less than $10,000, and as a result is not reported.
Compensation of Mr. Kandarian. Mr. Kandarian was compensated as an employee in 2014, and received no compensation in his capacity as a member of the Board of Directors. For information about compensation for Mr. Kandarian in
2014, see the Summary Compensation Table on page 52 and the accompanying discussion.
Director
Stock Ownership Guidelines; Anti-Hedging Policy; Restrictions on Pledging
During 2014, the Board of Directors increased its expectations of each
directors Share ownership. Under the stock ownership guidelines established by the Board of Directors, each Non-Management Director is now expected to own stock-based holdings equal in value to at least four times the cash component of the
Non-Management Directors annual retainer. The previous guideline was three times the cash component of the retainer.
Each Non-Management Director
is expected to achieve this new level of ownership by December 31 of the year in which the fourth anniversary of his or her election to the Board occurs. As of December 31, 2014, each Non-Management Director who had served beyond
the fourth anniversary of his or her election to the Board had met these guidelines.
|
|
|
22 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
CORPORATE GOVERNANCE |
Pursuant to the Companys Insider Trading Policy, Directors may not engage in short sales, hedging, or trading
in put and call options with respect to the Companys securities. Directors pledging of Company securities are also subject to restrictions under the Insider Trading Policy, as further discussed in the Compensation Discussion and Analysis
beginning on page
32. No serving Director pledged any Company equity securities during 2014.
Director Retirement
Policy
The retirement policy adopted by the Board of Directors provides that no Director may stand for election as a Board member after he or she
reaches the age of 72, and that a Director may continue to serve until the annual meeting coincident with or immediately following his or her 72nd birthday. In addition, each Director must offer to resign from the Board upon a change or
discontinuance of his or her principal occupation or business responsibilities. The Directors retirement policy is set forth in the Companys Corporate Governance Guidelines.
Director Indemnity Plan
The Companys By-Laws provide for the
Company to indemnify, and advance expenses to, a person who is threatened with litigation or made a party to a legal proceeding because of the persons service as a Director of the Company. In addition, the Companys Director
Indemnity Plan affirms that a Directors rights to this indemnification and expense advancement are contract rights. The indemnity plan also provides for expenses to be advanced to former Directors on the same basis as they are advanced to
current Directors. Any amendment or repeal of the rights provided under the indemnity plan would be prospective only and would not affect a Directors rights with respect to events that have already occurred.
Procedures for Reviewing Related Person Transactions
The Company has established written procedures for the review, approval or ratification of related person transactions. A related person transaction includes certain financial transactions, arrangements or
relationships in which the Company is or is proposed to be a participant and in which a Director, Director nominee or Executive Officer of the Company or any of their immediate family members has or will have a material interest. Related person
transactions may include:
|
|
Legal, investment banking, consulting or management services provided to the Company by a
|
|
|
related person or an entity with which the related person is affiliated; |
|
|
Sales, purchases and leases of real property between the Company and a related person or an entity with which the related person is affiliated;
|
|
|
Material investments by the Company in an entity with which a related person is affiliated; |
|
|
Contributions by the Company to a civic or charitable organization for which a related person serves as an executive officer; and |
|
|
Indebtedness or guarantees of indebtedness involving the Company and a related person or an entity with which the related person is affiliated.
|
Under the procedures, Directors, Director nominees and Executive Officers of the Company are required to report related person
transactions in writing to the Company. The Governance and Corporate Responsibility Committee reviews, approves or ratifies related person transactions involving Directors, Director nominees and the Chief Executive Officer or any of their immediate
family members. A vote of a majority of disinterested Directors of the Governance and Corporate Responsibility Committee is required to approve or ratify a transaction. The Chief Executive Officer reviews, approves or ratifies related person
transactions involving Executive Officers of the Company (other than the Chief Executive Officer) or any of their immediate family members. The Chief Executive Officer may refer any such transaction to the Governance and Corporate Responsibility
Committee for review, approval or ratification if he believes that such referral would be appropriate.
The Governance and Corporate Responsibility
Committee or the Chief Executive Officer will approve a related person transaction if it is fair and reasonable to the Company and consistent with the best interests of the Company, taking into account the business purpose of the transaction,
whether the transaction is entered into on an arms-length basis on terms fair to the Company, and whether the transaction is consistent with applicable codes of conduct of the Company. If a transaction is not approved or ratified, it may be
referred to legal counsel for review and consultation regarding possible further action by the Company. Such action may include terminating the transaction if not yet entered into or, if it is an existing transaction, rescinding the transaction or
modifying it in a manner that would allow it to be ratified or approved in accordance with the procedures.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
23 |
|
|
|
|
|
|
CORPORATE GOVERNANCE |
Related Person Transactions
Executive Officers. A Company affiliate employs a sibling of Maria R. Morris,
Executive Vice President and member of the Executive Group for 2014. Ms. Morris sibling earned compensation of approximately $218,291 for 2014.
The employee is not an Executive Group member, does not report directly to any member of the Executive Group and does not report indirectly to the Executive Group member to whom the employee is related. The
employee participates in compensation and benefit arrangements generally applicable to similarly-situated employees.
Codes of Conduct
Financial Management Code of Professional
Conduct. The Company has adopted the MetLife Financial Management Code of Professional Conduct, a code of ethics as defined under the rules of the SEC that applies to the
Companys Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and all professionals in finance and finance-related departments. A current, printable version of the Financial Management Code of Professional Conduct is
available on the Companys website at www.metlife.com/corporategovernance by selecting Corporate Conduct and then the appropriate link under the heading Codes of Conduct.
Directors Code of Business Conduct and
Ethics and Code of Conduct for MetLife Employees. The Company has adopted the Directors Code of Business Conduct and Ethics, which is applicable to all members of the Companys
Board of Directors including the Chief Executive Officer, and the Code of Conduct, which applies to all employees of the Company and its affiliates, including the Executive Officers of the Company. Current, printable versions of the Directors
Code and the Code of Conduct for MetLife employees are available on the Companys website at www.metlife.com/corporategovernance by selecting Corporate Conduct and then the appropriate link under the heading Codes of
Conduct.
|
|
|
24 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
APPROVAL OF AMENDMENTS TO THE CERTIFICATE OF INCORPORATION |
PROPOSALS 2(a) AND 2(b) APPROVAL OF AMENDMENTS TO THE CERTIFICATE OF INCORPORATION TO
CHANGE EACH SUPERMAJORITY COMMON SHAREHOLDER VOTE REQUIREMENT TO A MAJORITY VOTE REQUIREMENT
The Board of Directors recommends that you vote FOR the approval of amendments to the Certificate of Incorporation to change each
supermajority common shareholder vote requirement to a majority vote requirement.
MetLifes Certificate of Incorporation, as amended to date (Certificate of Incorporation or
Charter), provides that certain provisions of the Charter may be amended only by the affirmative vote of at least three-quarters of the then outstanding Shares of MetLife entitled to vote generally in the election of Directors (Outstanding
Shares). The Charter also provides that shareholders may amend the Companys Amended and Restated By-Laws (By-Laws) by the affirmative vote of at least three-quarters of the Outstanding Shares.
The Board of Directors reviews the Companys corporate governance practices on a continuing basis. In light of evolving practices and shareholder input, the
Board has determined that it is in the best interests of the Company to amend the Charter to change each of the supermajority Share vote requirements to a requirement for an affirmative vote of a majority of Outstanding Shares. The majority voting
requirements will give shareholders enhanced flexibility to change the Companys governing documents, while ensuring that fundamental changes made by shareholders will be acceptable to the holders of a majority of Shares. The Board of Directors
will retain the ability to amend the By-Laws.
The proposed amendments may, if adopted, make it easier for one or more shareholders to change the Companys
corporate governance and, therefore, make it more difficult for the Board of Directors to protect shareholders interests, e.g., if they are presented with an acquisition proposal that undervalues the Company. Nevertheless, there are other
actions that the Board of Directors can take to protect shareholders interests on such occasions.
The Board of Directors is proposing these
amendments for the reasons described above. It does not otherwise have any current plans to amend the By-Laws or any of the Charter provisions described below that currently require a supermajority vote, or to take or propose to take any action
contemplated by such provisions. The proposed amendments do not affect the voting rights of the Companys preferred stock. The general description of provisions of our Charter and By-Laws and the proposed amendments set forth below are
qualified in their entirety by reference to the text of Appendices B and C.
The Board recommends that the shareholders vote to approve each of the two
proposals.
Proposal 2(a): Change Each Supermajority Common Shareholder Vote Requirement for Amendments to the Certificate of
Incorporation to a Majority Vote Requirement
Article IX of the Charter currently requires the affirmative vote of at least three-quarters of the Outstanding
Shares to amend certain Charter provisions. These are:
|
|
Article IV, Section 5 Shareholder rights plans; |
|
|
Article VI Board of Directors; management of the Company (which includes provisions relating to the Board of Directors and management of the business of
the Company and the MetLife Policyholder Trust, the removal of Directors, the filling of Directorship vacancies, advance notice of nominations for the election of Directors, and Board and shareholder authority to amend the By-Laws);
|
|
|
Article VII Liability of Directors; |
|
|
Article VIII No shareholder actions by written consent; and |
|
|
Article IX Amendment of the Charter |
If
the shareholders approve Proposal 2(a), then Article IX of the Charter will allow shareholders to amend the provisions of the Charter described above by an affirmative vote of a majority of the Outstanding Shares. Appendix B shows the proposed
changes to Article IX of the Charter.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
25 |
|
|
|
|
|
|
APPROVAL OF AMENDMENTS TO THE CERTIFICATE OF INCORPORATION |
Proposal 2(b): Change the Supermajority Vote Requirement for Shareholders to Amend the By-Laws to a Majority Vote Requirement
Article VI, Section 3(f) of the Charter currently provides that the shareholders can amend the By-Laws by
affirmative vote of at least three-quarters of the Outstanding Shares. If the shareholders approve Proposal 2(b), then Article VI, Section 3(f) of the Charter will allow the shareholders to amend the By-Laws by an affirmative vote of a majority
of Outstanding Shares. Appendix C shows the proposed changes to Article VI, Section 3(f) of the Charter.
In addition, if the shareholders
vote to approve Proposal 2(b), the By-Laws will be automatically amended to conform to the provisions of the Charter, effective at the same time the Charter changes. Currently, Section 10.01(b) of the By-Laws provides that the
shareholders can amend the By-Laws by affirmative vote of three-quarters or more of the Outstanding Shares. The Board of Directors has amended the By-Laws, contingent and effective upon a filing
of a certificate of amendment of Article VI, Section 3(f) of the Charter with the Secretary of State of Delaware in accordance with Proposal 2(b). If the amendment becomes effective, the By-Laws will allow shareholders to amend the By-Laws by
affirmative vote of a majority of Outstanding Shares. Appendix D shows the proposed changes to the By-Laws.
Thus, if the amendments to the
Charter are approved by shareholders, all of the supermajority voting requirements in the Charter and By-Laws that are applicable to Shares will be replaced with an affirmative vote of a majority of Outstanding Shares standard.
Votes Required to Approve; Effectiveness
Shareholders will vote on Proposals 2(a) and 2(b) separately, and the approval of each proposal is not conditioned on
the approval of the other proposal. Approvals of Proposals 2(a) and 2(b) will each require the affirmative vote of the holders as of the record date of at least three-quarters of the Outstanding Shares. Abstentions and failures to vote will have the
same effect as votes cast against the approval of Proposal 2(a) or Proposal 2(b). Charter amendments, if approved, will not be effective until the Company files certificates of amendment with the
Secretary of State of Delaware following the Annual Meeting. If shareholders do not approve Proposal 2(a) or Proposal 2(b), the related current voting requirement will remain in place.
The Board of Directors recommends, on the basis of the foregoing, that you vote FOR the approval of each of these proposals to
amend the Charter.
|
|
|
26 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITOR |
PROPOSAL 3 RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITOR
The Board of Directors recommends that you vote FOR the ratification of the appointment of Deloitte & Touche LLP as
MetLifes independent auditor for the fiscal year ending December 31, 2015.
The Audit Committee has appointed Deloitte & Touche LLP (Deloitte) as the Companys independent
auditor for the fiscal year ending December 31, 2015. Deloittes long-term knowledge of MetLife and the MetLife group of companies, combined with its insurance industry expertise and global presence, has enabled it to carry out its audits
of the Companys financial statements with effectiveness and efficiency. The members of the Audit Committee believe that the continued retention of Deloitte to serve as the Companys independent auditor is in the best interests of the
Company and its shareholders.
The appointment of Deloitte by the Audit Committee is being presented to the shareholders for ratification. If the
shareholders do not ratify the appointment, the Audit Committee will reconsider its decision and may continue to retain Deloitte. If the shareholders ratify the appointment, the Audit Committee continues to have the authority to and may change such
appointment at any time during the year. The Audit Committee will make its determination regarding such retention or change in light of the best interests of MetLife and its shareholders.
In considering Deloittes appointment, the Audit Committee reviewed the firms qualifications and competencies, including the following factors:
|
|
Deloittes status as a registered public accounting firm with the Public Company Accounting Oversight Board (United States) (PCAOB) as required by
the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the Rules of the PCAOB; |
|
|
Deloittes independence and its processes for maintaining its independence; |
|
|
the results of the independent review of the firms quality control system; |
|
|
the global reach of the Deloitte network of member firms and its alignment with MetLifes worldwide business activities; |
|
|
the key members of the engagement team, including the lead audit partner, for the audit of the Companys financial statements; |
|
|
Deloittes performance during its engagement for the fiscal year ended December 31, 2014; |
|
|
the quality of Deloittes communications with the Audit Committee regarding the conduct of the audit, and with management with respect to issues
|
|
|
identified in the audit, and the consistency of such communications with applicable auditing standards; |
|
|
Deloittes approach to resolving significant accounting and auditing matters, including consultation with the firms national office; and
|
|
|
Deloittes reputation for integrity and competence in the fields of accounting and auditing. |
Deloitte has served as independent auditor of the Company since 1999, and as auditor of affiliates of the Company for more than 75 years. Under current legal
requirements, the lead or concurring auditor partner for the Company may not serve in that role for more than five consecutive fiscal years, and the Audit Committee ensures the regular rotation of the audit engagement team partners as required by
law. The Chair of the Audit Committee is actively involved in the selection process for the lead and concurring partners.
The Audit Committee approves
Deloittes audit and non-audit services in advance as required under Sarbanes-Oxley and SEC rules. Before the commencement of each fiscal year, the Audit Committee appoints the independent auditor to perform audit services that the Company
expects to be performed for the fiscal year and appoints the auditor to perform audit-related, tax and other permitted non-audit services. The Audit Committee or a designated member of the Audit Committee to whom authority has been delegated may,
from time to time, pre-approve additional audit and non-audit services to be performed by the Companys independent auditor. Any pre-approval of services between Audit Committee meetings must be reported to the full Audit Committee at its next
scheduled meeting.
The Audit Committee is responsible for approving fees for the audit and for any audit-related, tax or other permitted non-audit
services. If the audit, audit-related, tax and other permitted non-audit fees for a particular period or service exceed the amounts previously approved, the Audit Committee determines whether or not to approve the additional fees.
Representatives of Deloitte will attend the Annual Meeting. They will have an opportunity to make a statement if they desire to do so, and they will be available
to respond to appropriate questions.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
27 |
|
|
|
|
|
|
INDEPENDENT AUDITORS FEES FOR 2014 AND 2013 |
Independent
Auditors Fees for 2014 and 2013
The table below presents fees for professional services rendered by Deloitte for the audit of the
Companys annual financial statements, audit-related services, tax services and all other services for the years ended December 31, 2014 and 2013. All fees shown in the table were related to services that were approved by the Audit
Committee.
The fees that the Company incurs for audit, audit-related, tax and other professional services reflect the complexity and scope of the
Companys operations, including:
|
|
operations of the Companys subsidiaries in multiple, global jurisdictions (approximately 40 during 2014); |
|
|
the complex, often overlapping regulations to which the Company and its subsidiaries are subject in each of those jurisdictions; |
|
|
the operating insurance companies responsibility for preparing audited financial statements; and |
|
|
the applicability of SEC reporting requirements to several of the Companys operating insurance subsidiaries, which are SEC registrants.
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
($
in millions) |
|
Audit Fees (1) |
|
$ |
71.4 |
|
|
$ |
70.2 |
|
Audit-Related Fees (2) |
|
$ |
7.0 |
|
|
$ |
8.1 |
|
Tax Fees (3) |
|
$ |
3.1 |
|
|
$ |
4.3 |
|
All Other Fees (4) |
|
$ |
0.3 |
|
|
$ |
0.8 |
|
(1) |
Fees for services to perform an audit or review in accordance with auditing standards of the PCAOB and services that generally only the Companys independent auditor can
reasonably provide, such as comfort letters, statutory audits, attest services, consents and assistance with and review of documents filed with the SEC. In 2014, Deloitte issued over 250 audit reports. |
(2) |
Fees for assurance and related services that are traditionally performed by the Companys independent auditor, such as audit and related services for employee benefit plan
audits, due diligence related to mergers, acquisitions and divestitures, accounting consultations and audits in connection with proposed or consummated acquisitions and divestitures, control reviews, attest services not required by statute or
regulation, and consultation concerning financial accounting and reporting standards. |
(3) |
Fees for tax compliance, consultation and planning services. Tax compliance generally involves preparation of original and amended tax returns, claims for refunds and tax payment
planning services. Tax consultation and tax planning encompass a diverse range of advisory services, including assistance in connection with tax audits and filing appeals, tax advice related to mergers, acquisitions and divestitures, advice related
to employee benefit plans and requests for rulings or technical advice from taxing authorities. In 2014, tax compliance and tax preparation fees total $1.3 million and tax advisory fees total $1.8 million and in 2013, tax compliance and
preparation fees total $2.9 million and tax advisory fees total $1.4 million. |
(4) |
Fees for other types of permitted services, including employee benefit advisory services, risk consulting services, financial advisory services and valuation services.
|
|
|
|
28 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
AUDIT COMMITTEE REPORT |
Audit Committee Report
This report is submitted by the Audit Committee of the MetLife, Inc. (MetLife or the Company) Board of Directors. No portion of this Audit Committee
Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the Securities Act), or the Securities Exchange Act of 1934, as amended (the Exchange Act), through any general
statement incorporating by reference in its entirety the proxy statement in which this Report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be
deemed to be soliciting material or to be filed under either the Securities Act or the Exchange Act.
The Audit Committee
currently consists of five independent Directors who satisfy the audit committee independence standards of the SEC and the NYSE. The Audit Committee, on behalf of the Board, is responsible for overseeing managements conduct of MetLifes
financial reporting processes and audits of the Companys financial statements, the adequacy of the Companys internal control over financial reporting and the appointment, retention, performance and compensation of the Companys
independent auditor. For more information on the Audit Committee and its qualifications and responsibilities, see Corporate Governance Board and Committee Information Oversight of Risk Management by the Board of
Directors beginning on page 15, Corporate Governance Board and Committee Information Audit Committee on page 17, and the Audit Committee Charter on the Companys website at
www.metlife.com/corporategovernance.
Management is responsible for the preparation of MetLifes consolidated financial statements and the
reporting process. Deloitte & Touche LLP (Deloitte), as MetLifes independent auditor, is responsible for auditing MetLifes consolidated financial statements in accordance with auditing standards of the Public Company
Accounting Oversight Board (United States) (PCAOB).
Deloitte has discussed with the Audit Committee those matters described in the PCAOB
Standard, Communications with Audit Committees (AU 380), Statement on Auditing Standards No. 114, and Rule 2-07 of Regulation S-X promulgated by the Securities and Exchange Commission. Deloitte has also provided to the Audit
Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding Deloittes communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Deloitte its
independence from MetLife.
During 2014, management updated its internal control documentation for changes in internal control and completed its
testing and evaluation of MetLifes system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. In doing so, management utilized
the criteria established in the Internal ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Audit Committee was kept apprised of the progress of the evaluation and
provided oversight and advice to management during the process. In connection with this oversight, the Audit Committee received updates provided by management and Deloitte at each regularly scheduled Audit Committee meeting and met in executive
session separately with the internal and the independent auditor to discuss the results of their examinations, observations and recommendations regarding internal control over financial reporting. The Audit Committee also reviewed the report of
managements assessment of the effectiveness of internal control over financial reporting contained in the Companys 2014 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission (the 2014
Form 10-K). The Audit Committee also reviewed Deloittes report regarding its audit of the effectiveness of the Companys internal control over financial reporting.
The Audit Committee reviewed and discussed with management and with Deloitte MetLifes audited consolidated financial statements for the year ended December 31, 2014 and Deloittes Report of
Independent Registered Public Accounting Firm dated February 26, 2015 regarding the 2014 audited consolidated financial statements included in the 2014 Form 10-K. The Deloitte report states that MetLifes 2014 audited consolidated
financial statements present fairly, in all material respects, the consolidated financial position of MetLife and its subsidiaries as of December 31, 2014 and 2013 and the results of their operations and cash flows for each of the three years
in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. In reliance upon the reviews and discussions with management and Deloitte described in this Audit Committee
Report, and the Board of Directors receipt of the Deloitte report, the Audit Committee recommended to the Board that MetLifes 2014 audited consolidated financial statements be included in the 2014 Form 10-K.
Respectfully,
Kenton J. Sicchitano, Chair
Cheryl W. Grisé
John M. Keane
Alfred F. Kelly, Jr.
Catherine R. Kinney
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
29 |
|
|
|
|
|
|
ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO
THE COMPANYS NAMED EXECUTIVE OFFICERS |
PROPOSAL 4 ADVISORY VOTE TO APPROVE THE COMPENSATION
PAID TO THE COMPANYS NAMED EXECUTIVE OFFICERS
The Board of Directors recommends that you vote FOR this proposal: RESOLVED, that the compensation paid to the
Companys Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is
hereby APPROVED.
In accordance with Section 14A of the Exchange Act, this proposal will give shareholders the opportunity to
endorse or not endorse the Companys executive compensation programs and policies and the resulting compensation for the individuals listed in the Summary Compensation Table on page 52 (the Named Executive Officers), as described in
this Proxy Statement.
The Compensation Committee will take into account the outcome of the vote when considering future compensation arrangements.
Because the vote is advisory, the result will not be binding on the Compensation Committee and it will not affect, limit, or augment any existing compensation or awards.
The Board has approved an annual frequency for shareholder votes to approve executive officer compensation. As a result, unless the Board determines
otherwise, the next such vote will be held at the Companys 2016 Annual Meeting. The Company also anticipates that, unless the Board determines otherwise, management will next ask
shareholders in 2017 to vote on their preference for the frequency of such votes.
The Compensation Committee and Board of Directors believe that the
Companys compensation programs and policies, and the compensation of the Named Executive Officers, promote the Companys business objectives with appropriate compensation delivered in appropriate forms. See the Compensation Discussion and
Analysis, beginning on page 32. Accordingly, the Board of Directors recommends that you vote FOR this proposal.
|
|
|
30 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION COMMITTEE REPORT |
Compensation
Committee Report
This report is furnished by the Compensation Committee of the MetLife, Inc. (MetLife or the Company)
Board of Directors. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that is set forth on pages 32 through 51 of the Companys 2015 Proxy Statement and, based on such review and
discussion, the Compensation Committee recommended to the Board of Directors that such Compensation Discussion and Analysis be included in the 2015 Proxy Statement and incorporated by reference in the Companys Annual Report on Form 10-K for
the fiscal year ended December 31, 2014.
No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any
filing under the Securities Act of 1933, as amended
(the Securities Act), or the Securities Exchange Act of 1934, as amended (the Exchange Act), through any general statement incorporating by reference in its entirety the proxy
statement in which this Report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be soliciting material or to be
filed under either the Securities Act or the Exchange Act.
Respectfully,
James M. Kilts, Chair
Cheryl W. Grisé
Alfred F. Kelly, Jr.
Denise M. Morrison
Kenton J. Sicchitano
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
31 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Discussion and Analysis
|
|
|
32 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
This Compensation Discussion and Analysis describes the objectives and policies underlying MetLifes executive
compensation program for the Named Executive Officers and the rest of the Executive Group, who comprise the Executive Officers of the Company. It also describes the key factors that the Compensation Committee considered in determining the
compensation of the members of the Executive Group.
Executive Summary and Overview
Highlights of 2014 Business Results
In 2014, under the leadership of Chief Executive Officer Steven A. Kandarian, the Company generated results
that exceeded both its Business Plan goals and its 2013 results in key measures such as Operating Earnings and Operating Earnings Per Share, and that exceeded its Business Plan goal for Operating Return on Equity. For more details, see page 42. The
Company achieved key elements of its multi-year strategy in 2014 by shifting toward less capital-intensive products and completing pre-tax net expense savings of $600 million. The Company also completed a $1 billion Share repurchase
program announced mid-year.
2014 Compensation
Highlights
MetLife maintained its commitment to its pay for performance philosophy in
2014.
The Compensation Committees decisions on the Named Executive Officers compensation reflected the Committees view of the
Companys performance and each executives performance relative to his goals and other challenges and opportunities that arose in 2014.
Under
the leadership of Mr. Kandarian and his Executive Group, the Company had a strong year of performance on strategic and operational matters and solid financial performance, consistent with an aggressive Business Plan and in the face of strong
regulatory headwinds. MetLifes achievements in 2014 include:
|
|
Improved customer centricity, meeting Net Promoter Score targets at 20 critical customer
touch points across our businesses in six key markets. |
|
|
Expanded the Global Employee Benefits business through local employee benefit revenue as
well as multinational and expatriate sales. |
|
|
Grew emerging markets earnings notably year-over-year. |
|
|
Exceeded cost savings initiatives through consolidating operations and real estate,
prudent expense management, and streamlining processes.
|
|
|
Strengthened relationships with the investor community through conferences, meetings, and
Company-hosted events. |
|
|
Reduced variable annuity sales, as planned, to shift toward less capital-intensive
products. |
|
|
Enhanced enterprise succession bench strength and goals, fostering diversity and
inclusion. |
Based on these and other accomplishments, some individual executive annual incentives increased over last year, some
decreased, and some stayed the same. The rationale for individual incentive decisions is covered starting on page 43.
MetLife continued to emphasize
variable performance-based compensation over fixed or guaranteed pay. The Companys Chief Executive Officer was paid 92% of his Total Compensation for 2014 performance in a form that was variable rather than fixed. The Chief Executive
Officers long-term stock-based incentive compensation was 67% of his total incentive compensation for 2014, based on MetLifes compensation valuation methodology. The Compensation Committee allocated 85% of all other Executive Group
members Total Compensation for 2014 to a variable form, and 60% of all their incentive compensation to stock-based long-term awards. MetLife determines the number of Performance Shares, Performance Units, Restricted Stock Units, and Restricted
Units in each award by dividing the portion of the value attributable to the award by the Share closing price on the grant date, and the number of Stock Options in the award by dividing the portion of the value attributable to the award by
one-third of the Share closing price on the grant date. If, however, the Share closing price on the grant date is outside a 15% range (higher or lower) of the average Share closing price for the year to date, MetLife uses that average closing price
instead of the closing price on the grant date. Regardless, the exercise price of Stock Options is the closing price on the grant date.
The
Company determined the total amount of 2014 annual incentive compensation to management and other administrative employees in light of Operating Earnings (excluding variable investment income in excess of 10% higher than target) compared to its
Business Plan goal. For 2014, the Company exceeded its Business Plan goal by 1.1%, producing an above-target performance factor for purposes of determining the maximum amount available for annual incentive compensation.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
33 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
The Companys long-term performance, including changes to the price of Shares, has a significant impact on the
Named Executive Officers compensation. For example, the performance factor for the 2011-2013 Performance Shares (paid out in 2014) was 80%, based on the Companys three-calendar year performance relative to a group of competitors. The
total shareholder return on Shares, including change in Share price and imputed reinvested dividends (TSR) for the performance period, was 27.9%.
Key Features of MetLifes Executive Compensation Program
MetLifes compensation program has a number of features that promote the Companys success, including:
ü
|
|
paying for performance: most compensation
is variable and dependent on achievement of business results. |
ü
|
|
aligning executives interests with those of shareholders: most incentive compensation is stock-based, and executives are expected to meet stock ownership guidelines. |
ü
|
|
encouraging long-term decision-making:
Stock Options and Restricted Stock Units vest over three years, Stock Options may normally be exercised over 10 years, and the ultimate value of Performance Shares is determined by the Companys performance over three years.
|
ü
|
|
rewarding achievement of the Companys business goals: amounts available for annual incentive awards are based on Company performance compared to its Business Plan; individual awards take account of individual executive performance relative to individual goals.
|
ü
|
|
avoiding incentives to take excessive
risk: the Company does not make formulaic awards as part of its normal program, uses Operating Earnings (which excludes net investment gains and losses and net derivative gains and losses) as a key
performance indicator, and uses multiple-year performance to determine the ultimate value of stock-based awards. |
The Companys
compensation program excludes practices that would be contrary to the Companys compensation philosophy and contrary to shareholders interests. For example, the Company:
× |
|
does not offer a supplemental executive
retirement plan that provides benefits under a different formula than the pension plan applicable to most U.S.-based employees, or that adds to years of service or includes long-term incentive compensation in the benefits formula.
|
× |
|
does not provide excessive perquisites.
|
× |
|
does not allow repricing or replacing of
Stock Options or stock appreciation rights without prior shareholder approval. |
× |
|
does not provide any single
trigger change-in-control severance pay or any severance pay beyond two times average pay. |
× |
|
does not provide for single
trigger vesting of stock-based awards upon a change-in-control without the opportunity for the Company or a successor to substitute alternative awards that remain subject to vesting. |
× |
|
does not provide for any excise tax
payment or tax gross-up for change-in-control related payments, or for tax gross-up for any perquisites or benefits, other than in connection with relocation or other transitionary arrangements when an Executive Group member begins employment.
|
× |
|
does not allow executives, or other
associates, to engage in short sales, hedging, or trading in put and call options with respect to the Companys securities. |
× |
|
restricts directors and employees,
including executives, in how they may pledge MetLife securities. |
Risk
Management
MetLifes compensation program aligns with Company strategies and has a number of features that contribute to prudent decision making
and avoid providing executives with an incentive to take excessive risks.
One important feature of MetLifes program is its use of Operating
Earnings as a metric in incentive programs. Operating Earnings excludes net investment gains and losses and net derivative gains and losses. This removes incentives not to hedge exposures to various risks inherent in a number of products or to
disrupt the risk balance in MetLifes investment portfolio by harvesting capital gains for the sole purpose of enhancing incentive compensation. It also removes incentives to use derivatives for speculative purposes, a practice that the Company
prohibits. In addition, the Company uses three-year overlapping performance periods and vesting for long-term incentive compensation, so that time horizons for compensation reflect the extended time horizons for the results of many business
decisions.
|
|
|
34 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
Other features of MetLifes program, such as Share ownership requirements and a performance-based compensation
recoupment policy, ensure that executives interests are aligned with those of shareholders. Through policies such as these, the Company encourages prudent risk-taking to the long-term benefit of shareholders, including the executives.
Management has reviewed the employee incentive compensation programs to ensure that, in design and operation and taking into account all of the risk
management processes in place, they do not encourage excessive risk taking. In doing so, it followed principles provided by the Companys Chief Risk Officer regarding performance measures, performance periods, payment determination processes,
management controls, and other aspects of the arrangements. As a result of this review and his own assessment of the programs, the Companys Chief Risk Officer has concluded that risks arising from the compensation policies and practices for
employees of the Company and its affiliates are not reasonably likely to have a material adverse effect on the Company as a whole, in light of the features of those policies and practices and the controls in place to limit and manage risk. The Chief
Risk Officer discussed his analysis with the Compensation Committee in 2014.
2014 Say-on-Pay Vote and Shareholder
Engagement In 2014, 97% of the Companys shareholders voted to approve the Companys executive compensation programs and policies and the resulting compensation
described in the 2014 Proxy Statement (based on Shares voted). Because the vote was advisory, the result was not binding on the Compensation Committee. However, the Compensation Committee considered the vote to be an endorsement of the
Companys executive compensation programs and policies, and took into account that support in reviewing those programs and policies. The Company has also discussed the vote, along with aspects of its executive compensation and corporate
governance practices, with a number of shareholders to gain a deeper understanding of their perspectives.
Compensation Philosophy and Objectives
MetLifes executive compensation program is designed to:
|
|
provide competitive Total Compensation opportunities that will attract, retain and motivate high-performing executives; |
|
|
align the Companys compensation plans with its short- and long-term business strategies; |
|
|
align the financial interests of the Companys executives with those of its shareholders through stock-based incentives and stock ownership requirements;
and |
|
|
reinforce the Companys pay for performance culture by making a significant portion of Total Compensation variable, and differentiating awards based on
Company and individual performance. |
Overview of Compensation Program
MetLife uses a competitive total compensation structure that consists of base salary, annual incentive awards and stock-based long-term incentive award
opportunities. The Compensation Committee considers and recommends the amount of each of these three elements together. It submits its recommendations for the Companys Chief Executive Officer for approval by the Independent Directors, and for
each of the other Executive Group members for approval by the Board of Directors. For purposes of this discussion and MetLifes compensation program, Total Compensation for an Executive Group member means the total of only these
three elements. Items such as sign-on payments and others that are not determined under the Companys general executive compensation practices are approved by the Compensation Committee, but are generally not included in descriptions of Total
Compensation.
The Committees Total Compensation decisions are driven by performance. Each Executive Group members Total Compensation
reflects the Compensation Committees assessment of the Companys and the executives performance as well as competitive market data based on peer compensation comparisons. Decisions on the award or payment amount of one element of
Total Compensation impact the decisions on the amount of other elements. The Compensation Committees Total Compensation approach means that it does not structure particular elements of Total Compensation to relate to separate individual goals
or performance.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
35 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
The Compensation Committee allocates a greater portion of the Executive Group members Total Compensation to
variable components that depend on performance or the value of Shares rather than a fixed component. It also allocates a greater portion of the Executive Group members variable compensation to stock-based long-term incentives than it allocates
to annual cash incentives. Given this mix of pay and other features of MetLifes compensation programs, Executive Group members interests are aligned with those of shareholders. Further, the Companys Share ownership guidelines are
designed to align executives interests with those of shareholders and reinforce the focus on long-term shareholder value.
The Compensation
Committee also reviews other compensation and benefit programs, such as retirement benefits and potential payments that would be made if an Executive Group members employment were to end. Benefits such as retirement and medical programs do not
impact Total Compensation decisions since they apply to substantially all employees. As a
result, decisions about those benefits do not vary based on decisions about an Executive Group members base salary or annual or stock-based awards.
The Compensation Committees independent executive compensation consultant, Meridian, assisted the Committee in its design and review of the Companys
compensation program. For more information on the role of Meridian regarding the Companys executive compensation program, see Corporate Governance Board and Committee Information Compensation Committee beginning on
page 17.
Generally, the forms of compensation and benefits provided to Executive Group members in the United States are similar to those
provided to other U.S.-based officer-level employees. None of the Executive Group members based in the United States is a party to any agreement with the Company that governs the executives employment.
|
|
|
36 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
Peer
Compensation Comparisons
The Compensation Committee periodically reviews the competitiveness of MetLifes Total Compensation structure using
data reflecting a comparator group of companies in the insurance and broader financial services industries with which MetLife competes for executive talent (the Comparator Group).
The Committee chose the members of the Comparator Group based on the size of the firms relative to MetLife and the extent of their global presence, or their similarity to MetLife in the importance of investment and
risk management to their business, or both. It reviews the composition of the Comparator Group from time to time to ensure that the group remains an appropriate comparison for the Company. The Compensation Committee last changed the group in 2012 in
order to better reflect the Companys competitors for executive talent and MetLifes size, global scope and complexity. The resulting Comparator Group consists of the 18 financial services companies listed below.
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparator
Group Company |
|
Revenues (1), (3) |
|
|
Total Assets (1), (4) |
|
|
Market Capitalization (2), (4) |
|
Aegon N.V. (5), (8) |
|
$ |
41,131 |
|
|
$ |
488,168 |
|
|
$ |
19,905 |
|
Aflac Incorporated |
|
$ |
23,939 |
|
|
$ |
121,307 |
|
|
$ |
30,689 |
|
The Allstate Corporation |
|
$ |
34,507 |
|
|
$ |
123,520 |
|
|
$ |
24,489 |
|
American Express Company (6) |
|
$ |
32,974 |
|
|
$ |
153,375 |
|
|
$ |
96,537 |
|
AXA S.A. (5), (8) |
|
$ |
125,924 |
|
|
$ |
1,044,857 |
|
|
$ |
67,322 |
|
Bank of America Corporation (6) |
|
$ |
88,942 |
|
|
$ |
2,102,273 |
|
|
$ |
164,915 |
|
Citigroup Inc. (6) |
|
$ |
76,366 |
|
|
$ |
1,880,382 |
|
|
$ |
157,854 |
|
The Hartford Financial Services Group, Inc. |
|
$ |
26,236 |
|
|
$ |
277,884 |
|
|
$ |
16,423 |
|
HSBC Holdings plc (5), (6) |
|
$ |
68,330 |
|
|
$ |
2,671,318 |
|
|
$ |
124,730 |
|
ING Groep N.V. (5), (6), (7), (8) |
|
$ |
38,788 |
|
|
$ |
1,485,711 |
|
|
$ |
53,479 |
|
JPMorgan Chase & Co. (6) |
|
$ |
96,606 |
|
|
$ |
2,415,689 |
|
|
$ |
219,657 |
|
Manulife Financial Corporation (5), (9) |
|
$ |
17,552 |
|
|
$ |
482,810 |
|
|
$ |
36,410 |
|
Morgan Stanley (6) |
|
$ |
32,417 |
|
|
$ |
832,702 |
|
|
$ |
60,991 |
|
Prudential Financial, Inc. |
|
$ |
41,461 |
|
|
$ |
731,781 |
|
|
$ |
42,703 |
|
Sun Life Financial Inc. (5), (9) |
|
$ |
13,042 |
|
|
$ |
187,559 |
|
|
$ |
21,479 |
|
The Travelers Companies, Inc. |
|
$ |
26,191 |
|
|
$ |
103,812 |
|
|
$ |
32,006 |
|
U.S. Bancorp (6) |
|
$ |
19,378 |
|
|
$ |
364,021 |
|
|
$ |
73,719 |
|
Wells Fargo & Company (6) |
|
$ |
83,780 |
|
|
$ |
1,527,015 |
|
|
$ |
238,675 |
|
MetLife |
|
$ |
68,199 |
|
|
$ |
885,296 |
|
|
$ |
60,500 |
|
50th
Percentile |
|
$ |
36,648 |
|
|
$ |
609,975 |
|
|
$ |
57,235 |
|
75th
Percentile |
|
$ |
74,357 |
|
|
$ |
1,516,689 |
|
|
$ |
117,682 |
|
MetLife, Inc. Percentile of Comparator Group Companies |
|
|
71st |
|
|
|
60th |
|
|
|
53rd |
|
(1) |
Source (other than AXA S.A.): 2013 Annual Reports on Forms 10-K, 20-F, or 40-F as applicable. Source for AXA S.A.: 2013 Annual Report. |
(3) |
Amounts in millions for fiscal year ended December 31, 2013. |
(4) |
Amounts in millions as of December 31, 2013. |
(5) |
Amounts reported under International Financial Reporting Standards. All other companies information reported under GAAP. |
(6) |
For these companies with banking operations, revenues are shown net of the interest expense associated with deposits, short-term borrowings, trading account liabilities,
long-term debt, etc. This is consistent with the presentation in each companys financial statements. |
(7) |
Total income reported in place of revenues. |
(8) |
Amounts converted from Euros at 1 = U.S.$1.38, the exchange rate
as of December 31, 2013. |
(9) |
Amounts converted from Canadian dollars at CAD1 = U.S.$0.94, the exchange rate as of December 31, 2013. |
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
37 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
In determining the Executive Group members Total Compensation for 2014, the Compensation Committee considered
the increasingly global nature of the Companys business, the size of the Companys assets, revenue, and market capitalization relative to its peers, the challenges the Executive Group faces, and the Committees expectations
for the Companys performance. MetLifes competitive compensation philosophy is generally to provide Total Compensation around the size-adjusted median for like positions at Comparator Group companies, taking into account
MetLifes assets, revenue, and market capitalization relative to other companies in the Comparator Group. As a result, the Compensation Committee considered an Executive Group members Total Compensation to be competitive if it fell
within a reasonable range of that size-adjusted median. Total Compensation for individual Executive Group members may vary based on individual factors such as experience, retention considerations, contributions to performance, and
performance results. The Compensation Committees primary focus was on Total Compensation. It did, however, review individual elements of the executives Total Compensation in comparison to available Comparator Group data. For 2014
performance, each Named Executive Officers Total Compensation fell between 80% and 120% of the point representing the size-adjusted median for his position, with the exception of Mr. Hele who fell slightly above based primarily on his
strong performance.
Determining Total
Compensation for 2014 Performance
In determining executive compensation for
performance year 2014, the Compensation Committee considered the Executive Groups performance both as a whole and individually. The Committee also reviewed reports and analyses on competitive compensation for comparable positions at peer
companies and in the broader market where the Company competes for executive talent. In the case of the Executive Group members beyond the Chief Executive Officer, Mr. Kandarian recommended to the Compensation Committee compensation actions for each
individual reflecting his assessment of the executives performance, as well as his and the Compensation Committees review of competitive compensation data. In each case, Mr. Kandarian and the Compensation Committee considered the
executives performance, future potential and retention needs, and fit within the
executive talent market, aligned with MetLifes compensation philosophy and objectives.
The
process for determining Total Compensation is described further below.
Process
for Determining Chief Executive Officer Compensation. Early in 2014, Mr. Kandarian and the Compensation Committee established goals and objectives that were designed to drive Company
performance. For a description of these goals, see Annual Incentive Awards beginning on page 40.
In early 2015, the Compensation
Committee approved and recommended Mr. Kandarians Total Compensation for 2014, including annual and stock-based long-term incentives, to the Independent Directors for their approval. The Committees Total Compensation recommendations
for 2014 reflected its assessment of MetLifes and Mr. Kandarians performance against goals.
Mr. Kandarians compensation is
higher than other Executive Group members due to Mr. Kandarians broader responsibilities and higher levels of accountability as the most senior executive in the Company, as well as competitive market data.
Process for Determining Compensation of Other Executive Group Members. Early in 2014, Mr. Kandarian and each Executive Group member agreed on the respective executives goals for 2014. In early 2015, Mr. Kandarian provided to the Compensation Committee an
assessment of each of the Executive Group members performance during 2014 relative to their goals and the additional business challenges and opportunities that arose during the year. He also recommended to the Committee Total Compensation
amounts for each Executive Group member, other than himself, taking into account performance during the year, retention considerations, and available competitive data and compensation opportunities for each position. The Committee reviewed
these recommendations. It approved and endorsed the components of each Executive Group members Total Compensation for the Board of Directors approval.
The Executive Vice President and Chief Human Resources Officer of the Company provided the Compensation Committee with advice and recommendations on the form and overall level of executive compensation, and
provided guidance and information to Mr. Kandarian to assist him in making
|
|
|
38 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
recommendations to the Compensation Committee of Total Compensation amounts for each Executive Group member, other than himself. He also provided guidance to the Committee on the Committees
general administration of the programs and plans in which Executive Group members, as well as other employees, participate.
Other than as described above, no Executive Group member played a role in determining the compensation of any of the
other Executive Group members. No Executive Group member took part in the Boards consideration of his or her own compensation.
Components of Compensation and Benefits
The primary components of the Companys regular executive compensation and benefits program play various strategic roles:
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
39 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
The primary components of the Companys executive compensation and benefits program are further discussed below.
Base Salary
The base salaries earned by the Named Executive Officers in 2014 are reported in the Summary Compensation Table on page 52. The Compensation Committee approved base salary increases for Mr. Kandarian of
$100,000, Mr. Hele of $50,000, Mr. Wheeler of $25,000, and Mr. Townsend of the equivalent of $50,000. Each was effective April 1, 2014. The increases were approved in light of their levels of responsibility, their performance, and the
competitive market.
Annual Incentive Awards
The MetLife Annual Variable Incentive Plan (AVIP) provides eligible employees, including the Executive Group members, the opportunity to earn annual cash incentive awards. For awards for 2014 performance,
which will be paid in 2015, AVIP was administered as a Cash-Based Awards program under the MetLife, Inc. 2015 Stock and Incentive Compensation Plan. The 2014 AVIP awards are reported in the Non-Equity Incentive Plan Compensation column
of the Summary Compensation Table on page 52.
Determining the Amount
Available for Awards. Each year, the Compensation Committee approves the maximum aggregate amount available for AVIP awards
to all covered employees. Substantially all administrative (non-sales) employees around the world, approximately 34,200 employees for 2014, are covered.
Late in 2013, the Compensation Committee determined that the amount available for 2014 AVIP awards would be determined in a similar manner as it had been for 2013.
This approach uses an AVIP Performance Factor, based on the Companys Operating Earnings compared to the Companys 2014 Business Plan, multiplied by the total annual incentive compensation planning targets for all covered
employees, subject to the Compensation Committees assessment of overall performance and other relevant factors. The calculation has the following features:
|
|
Operating Earnings is adjusted to eliminate the impact (if any) of variable investment income on an after-tax basis that was higher or lower than the Business
Plan goal by 10% or more. |
|
|
For each 1% deviation in Operating Earnings within 3% above or below Business Plan, the AVIP Performance Factor moves 1% (up or down). For each 1% deviation
outside of that 3% corridor, the Performance Factor moves 2.5% up or down, to a minimum funding level of 50% or maximum funding level of 150%. |
|
|
The AVIP Performance Factor is zero and no funds are generated for AVIP awards if the Operating Earnings is less than 50% of the Business Plan
Goal. |
|
|
|
40 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
This formula avoids providing employees with an incentive to take excessive risk through several of its features.
Operating Earnings excludes net investment gains and losses and net derivative gains and losses. The exclusion of after-tax variable investment income outside the 10% range higher or lower than the Business Plan goal also avoids providing rewards or
penalties for volatile investment returns. As a result, the formula does not provide an incentive to take excessive risk in the Companys investment portfolio. Nor is the formula an
unlimited function of revenues. Rather, the formula caps the amount that can be generated for AVIP awards, and is a function of financial measures that account for the Companys costs and liabilities.
The Companys adjusted Operating Earnings
produced the AVIP Performance Factor and resulting amount available for all AVIP and annual incentive compensation awards shown below.
|
|
|
|
|
($ in millions) |
|
|
|
Calculation of 2014 AVIP Performance Factor and Total Amount Available for Awards |
|
|
|
|
Operating Earnings (1) |
|
$ |
6,677 |
|
Less excess or shortfall of variable investment income, to the extent more than 10% higher or lower than the Business Plan
target |
|
$ |
(124 |
) |
|
|
|
|
|
Result is adjusted Operating Earnings |
|
$ |
6,553 |
|
Business Plan Operating Earnings Goal |
|
$ |
6,480 |
|
Adjusted Operating Earnings as a percentage of Business Plan Operating Earnings goal |
|
|
101.1 |
% |
Performance Factor component attributable to meeting Business Plan goal results in 100% Performance Factor |
|
|
100 |
% |
Performance Factor component attributable to first 3% of performance over Business Plan goal; each 1% over goal adds 1% to Performance
Factor |
|
|
1.1 |
% |
|
|
|
|
|
Total is AVIP Performance Factor |
|
|
101.1 |
% |
Total target-performance planning amount of all employees AVIP (the AVIP Planning Target) |
|
$ |
492 |
|
Total amount available for all AVIP equals AVIP Performance Factor times AVIP Planning Target |
|
$ |
497 |
|
(1) |
The amount of Operating Earnings used for this purpose excluded a charge of $117 million, net of income tax, recorded in the fourth quarter to increase the Companys
reserves for asbestos litigation. The Compensation Committee chose to exercise its discretion to exclude this charge because it relates to alleged activities in the 1920s through the 1950s and does not relate to the Companys
current operations or the consequences of any current management decisions. Rather, this charge reflects the fact that the frequency and severity claims relating to asbestos have increased. |
MLIC is named as a defendant in asbestos litigation. MLIC has never engaged in the business of manufacturing, producing, distributing or selling
asbestos or asbestos-containing products. Nor has MLIC issued liability or workers compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. The lawsuits
principally have focused on allegations with respect to certain research, publication and other activities during the period from the 1920s through approximately the 1950s and allege that MLIC learned or should have learned of certain
health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. MLIC believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however,
is uncertain.
Performance Goals and Results. The Compensation Committee determined the Executive Group members 2014 AVIP awards in consideration of the Companys key financial performance goals and results. The Committee also considered
aspects of each executives performance in light of their objectives, which aligned with the Companys strategic goals.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
41 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
Company Financial Performance Goals and Results. The Executive Group members key shared financial performance goals for 2014 are
below, each as set forth in the Business Plan. Under the leadership of Mr. Kandarian and the Executive Group, the Company achieved the results in 2014 compared below to its 2014 Business Plan and its 2013 results and Business Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2014 Business Plan |
|
|
2013 (1) |
|
|
2013 As Reported
in the
2014 Proxy Statement |
|
|
2013 Business Plan |
|
Operating Earnings ($ in millions) |
|
$ |
6,560 |
|
|
$ |
6,480 |
|
|
$ |
6,261 |
|
|
$ |
6,287 |
|
|
$ |
5,710 |
|
Operating EPS |
|
$ |
5.74 |
|
|
$ |
5.65 |
|
|
$ |
5.61 |
|
|
$ |
5.63 |
|
|
$ |
5.13 |
|
Operating ROE (excluding AOCI) (2), (3) |
|
|
11.6 |
% |
|
|
11.3 |
% |
|
|
11.9 |
% |
|
|
12.0 |
% |
|
|
10.7 |
% |
Operating Expense Ratio |
|
|
23.9 |
% |
|
|
24.5 |
% |
|
|
24.3 |
% |
|
|
24.3 |
% |
|
|
24.0 |
% |
Book Value Per Share (excluding AOCI) (2), (4) |
|
$ |
52.44 |
|
|
$ |
52.50 |
|
|
$ |
48.49 |
|
|
$ |
48.49 |
|
|
$ |
50.17 |
|
(1) |
After the Companys 2014 Proxy Statement was filed, the Companys 2013 results were revised to reflect the 2014 sale of MetLife Assurance Limited, a Company affiliate
that conducted a United Kingdom pension closeout business. The Company is presenting these updated and current amounts here to provide better comparability to the Companys 2014 results. |
(2) |
The Company has continued to expand its business outside of the U.S., thereby continuing to increase its exposure to foreign currency fluctuations. In order to enhance the
understanding of its performance in light of such expansion, the Company has developed an additional method of calculating Operating ROE that included the impact of foreign currency translation adjustments (FCTA) in both components of the
ratio (Operating Earnings and equity). The original method of calculating Operating ROE excluded all components of accumulated other comprehensive income (loss) (AOCI), including FCTA; the new method refines the calculations by excluding AOCI
other than FCTA. FCTA can have a positive or negative impact on these results depending on the strength of the U.S. dollar compared to other currencies. Reflecting FCTA in both components of the ratio mitigates volatility attributable to foreign
currency fluctuations. Further, the Company developed an additional method of calculating Book Value Per Share to have a consistent approach with the equity component of the Operating ROE ratio. Under these new methods, Operating ROE, excluding AOCI
other than FCTA is 12.0% and 12.2% for the years ended December 31, 2014 and 2013, respectively and Book Value Per Share, excluding AOCI other than FCTA is $49.53 and $47.01 for the years ended December 31, 2014 and 2013, respectively. The 2014
Business Plan figures revised under the new method are 11.8% for Operating ROE, excluding AOCI other than FCTA and $50.85 for Book Value Per Share, excluding AOCI other than FCTA. |
(3) |
The 2014 Business Plan was built using economic and market assumptions at the end of 2013 using external economists consensus and MetLife forecasts for 2014. This includes
equity markets, interest rates, foreign currency rates and other variables that impact results. In addition, the regulatory environment is considered when building the Business Plan including risk assumptions and capital actions. The 2014 Business
Plan Operating ROE goal and Operating ROE 2014 results were lower than the 2013 results, in part because 2014 equity markets were not as favorable as they were 2013, and because the U.S. dollar was stronger against most foreign currencies in 2014
than it was in 2013. In addition, growth in stockholders equity contributed to the decrease in Operating ROE from 2013 to 2014. |
(4) |
The 2014 Book Value per Share, excluding AOCI (Book Value Per Share) of $52.44 is below the 2014 Business Plan goal of $52.50 due to the increase in the quarterly Share
dividend from 27.5 cents per Share to 35 cents per Share in the second quarter of 2014, which had the impact of lowering Book Value Per Share. The Business Plan did not include an increase to the Share dividend. Excluding the impact of the
Share dividend, the 2014 result would have been above the Business Plan goal. |
These performance measures should be read in conjunction
with Appendix A to this Proxy Statement, which includes definitions of these terms and, where applicable, reconciliations to the most directly comparable measures that are based on GAAP. The most directly comparable GAAP measures for Operating
Earnings and Operating EPS are net income (loss) available to MetLifes common shareholders and net income (loss) available to MetLifes common shareholders per diluted common share. MetLifes common stockholders equity,
excluding AOCI should not be viewed as a substitute for total MetLifes stockholders equity calculated in accordance with GAAP.
|
|
|
42 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
Aspects of Individual Performance. Key aspects of each of the Named Executive Officers performance relative to their objectives are described below.
Steven A. Kandarian, Chief Executive Officer
Under Mr. Kandarians leadership, the
Company had a strong year of financial, strategic and operational performance consistent with an aggressive plan and in the face of strong regulatory headwinds.
Financial Performance:
The Company:
|
|
generated 2014 Operating Earnings of $6.6 billion, up 5% over 2013, reflecting growth in every region; |
|
|
grew Operating EPS at a compound annual rate of 9.6% from 2011 through 2014; |
|
|
produced full-year 2014 Operating ROE (excluding AOCI) of 11.6% or higher for the second year in a row; and |
|
|
exceeded gross cash savings objectives for the year. |
Strategic Performance:
|
|
MetLife enhanced Customer Centricity, meeting Net Promoter Score targets at 20 critical customer touch points across our businesses in six key markets, and
demonstrating improvement across 53 million customer interactions. |
|
|
The Global Employee Benefits business grew through local employee benefit revenue as well as multinational and expatriate sales. |
|
|
Emerging markets earnings growth increased notably year-over-year. |
|
|
Variable Annuity sales were reduced as planned, to shift toward less capital-intensive products. |
External Stakeholders:
|
|
Mr. Kandarian clearly communicated MetLifes value proposition through participation in conferences, investor meetings, and Company-hosted investor events
such as Investor Day and the Outlook Call. |
Internal Talent:
|
|
MetLife enhanced its enterprise succession bench strength and goals and fostered diversity and inclusion. |
In assessing Mr. Kandarians compensation, the Compensation Committee considered Mr. Kandarians performance against goals for 2014, as well as a
competitive assessment of compensation relative to peers and the Companys established compensation philosophy. The Compensation Committees
recommendations were approved by the full Board including the independent members. His annual cash incentive award for 2014 as reported in the Summary Compensation Table on page 52 is the same as
for 2013, reflecting a strong year of operational performance for the Company, consistent with plan. The Compensation Committee believes Mr. Kandarians Total Compensation is appropriately aligned with the Companys targeted competitive
position.
In the case of the Named Executive Officers beyond the Chief Executive Officer, Mr. Kandarian recommended to the Compensation Committee
compensation actions for each individual reflecting his assessment of the executives performance, as well as his and the Compensation Committees review of competitive compensation data.
John C. R. Hele, Chief Financial Officer
Under Mr. Heles leadership, the Company delivered another year of solid financial performance.
|
|
MetLife maintained key capital adequacy ratios based on current regulations above minimum targets and exceeded free cash flow goals. |
|
|
The Company exceeded its cost savings goals for 2014. Mr. Heles organization successfully aligned pricing, capital management and reporting to support
strategy implementation balanced with sound risk management principles. |
|
|
He played a leading role with our global investor community, including meetings with shareholders, as well as dozens of investor firms representing more than
half of outstanding shares, to clearly communicate MetLifes value proposition. |
|
|
Mr. Hele was recognized as Institutional Investor Magazines Best Chief Financial Officer in U.S. Insurance (#1 buy-side); further, his Investor Relations
organization was recognized as Best Investor Relations in U.S. Insurance (#2 buy-side, #1 sell-side). |
Mr. Hele was appointed
Executive Vice President and Chief Financial Officer in September 2012. In addition to reviewing performance against goals and market data, Mr. Kandarian and the Committee considered how successfully Mr. Hele has mastered his role since joining
MetLife as Chief Financial Officer in 2012. His annual cash incentive award for 2014 as reported in the Summary Compensation Table reflects an increase over 2013, in recognition of his strong performance, demonstrated personal and professional
growth, and appropriate competitive positioning.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
43 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
William J. Wheeler, President, Americas
Under Mr. Wheelers leadership, the Americas business overall achieved its business plan for Operating Earnings, Operating ROE, and Operating premiums, fees
and other revenues.
|
|
Total Operating Earnings for the Americas were up 7% (8% on a constant currency basis) over 2013, driven by strong results across the
region. |
|
|
Mr. Wheelers organization attained several important goals around enhancing customer centricity by increasing Net Promoter Score on several key touch
points, and improving the timeliness and quality of responses to customers. |
|
|
The Retail business successfully executed against its strategic plan, nearing completion of consolidating operations in Charlotte, North Carolina, including
solid progress on talent management. |
|
|
Americas achieved sales growth in emerging markets in Latin America. |
The Americas business, while delivering solid performance against its plan for 2014, had very strong results in 2013. As a result, Mr. Wheelers annual cash incentive award for 2014 is lower than his 2013
award. This 2014 award provides meaningful recognition of these solid 2014 results and maintains market competitiveness.
Martin J.
Lippert, Executive Vice President,
Global Technology & Operations
Under Mr. Lipperts leadership, Global Technology & Operations exceeded goals across all cost savings initiatives through consolidating operations and real
estate, prudent expense management, and streamlining processes.
|
|
Global Technology & Operations delivered on top business initiatives to create a differentiated customer experience and increase operating leverage around
the world. |
|
|
Mr. Lipperts team delivered global platforms, including one to support the Investments organization in nearly 50 countries. |
|
|
Global Technology & Operations created the companys first large-scale technology hub in Raleigh, North Carolina. |
Mr. Lippert was named head of Global Technology & Operations in September 2011. In addition to reviewing performance against goals and market data, Mr.
Kandarian and the Compensation Committee considered how successfully Mr. Lippert has evolved in his role since joining MetLife in 2011. His annual cash incentive for 2014 is higher than 2013 reflecting strong progress across his area of
responsibility, demonstrated
personal and professional growth, and appropriate competitive positioning.
Christopher G. Townsend, President, Asia
Under Mr. Townsends leadership, the region increased Operating Earnings by 4% (8% on a constant currency basis) over 2013, driven by growth across Asia,
primarily in Japan and Korea.
|
|
The Asia region expanded its reach by successfully launching operations in Vietnam and establishing a joint venture in Malaysia. |
|
|
Mr. Townsend sponsored the development of a Digital, Data Analytics and Innovation Center to build differentiation across Asia and on a global basis.
|
|
|
Mr. Townsend led a successful Investor Day in Tokyo. |
Mr. Townsend became President of the Asia region in 2012. In determining Mr. Townsends compensation, Mr. Kandarian and the Compensation Committee reviewed his performance along with a review of competitive
compensation data. His annual cash incentive for 2014 is slightly higher than 2013 reflecting solid performance against plan, and appropriate competitive positioning.
Stock-Based Long-Term Incentive Awards
The Company awards Stock
Options, Performance Shares, and Restricted Stock Units (and, in some cases with respect to Executive Group members outside the United States, cash-payable equivalents). It determines the amount of such awards as part of MetLifes Total
Compensation program.
Stock Options. The Company grants Stock Options with an exercise price equal to the closing price of Shares on the grant date. The ultimate value of Stock Options depends exclusively on increases in the price
of Shares. One-third of each award of Stock Options becomes exercisable on each of the first three anniversaries of the date of grant.
Restricted Stock Units. Restricted Stock Units are units that may become payable in Shares at the end of a predetermined
vesting period. Awards generally vest and pay out in thirds on each of the first three anniversaries of the grant date, assuming that the Company meets goals set for purposes related to Section 162(m) of the United States Internal Revenue Code
(Section 162(m)) (see Tax Considerations on page 51).
From time to time, the Company grants Restricted Stock Units that vest and pay
out on the third or later anniversary of their grant date. It does so in order to encourage a candidate to begin employment with MetLife (especially where the candidate would forfeit long-term compensation awards from another employer by doing so)
or as a means of reinforcing its retention efforts, particularly in cases of exceptional performance, skills, or talent.
|
|
|
44 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
Performance Shares. Performance Shares are units that may become payable in Shares at the end of a three-year performance
period, depending on Company performance, and assuming that goals set for Section 162(m) are met.
Performance Share Awards in 2013 and later. The Compensation Committee has approved performance guidelines for awards made in 2014 based on the Companys annual Operating ROE
compared to its business plan goals and TSR compared to a custom group of competitors. Each of these two factors is measured with respect to the three-year performance period beginning in 2014 and each is weighted equally. The guidelines, and the
Compensation Committees discretion to adjust them, are subject to the satisfaction of the applicable Section 162(m) goals and the overall limit of 175% as the maximum performance factor.
The guidelines to determine the Operating ROE component of the Performance Factor are:
|
|
|
|
|
|
|
Annual Operating ROE Performance
as
a Percentage of Business Plan Goal |
|
Performance Factor |
Below Threshold |
|
0-79% |
|
0% |
Threshold |
|
80% |
|
25% |
Target |
|
100% |
|
100% |
Maximum |
|
120% |
|
175% |
Above Maximum |
|
121%+ |
|
175% |
With respect to the TSR component of the Performance Factor, the Compensation Committee intends to assess the Companys
performance on a global basis against competitors around the world. As a result, it intends to use a group of competitors that is somewhat more globally diverse than the Comparator Group it uses for peer Total Compensation purposes.
For awards made in 2013 and later, the Compensation Committee plans to use the TSR of the following companies in comparison to the Companys TSR:
|
|
The Allstate Corporation |
|
|
American International Group, Inc. |
|
|
Assicurazioni Generali S.p.A. |
|
|
The Dai-ichi Life Insurance Company, Limited |
|
|
The Hartford Financial Services Group Inc.
|
|
|
Legal & General Group PLC |
|
|
Lincoln National Corporation |
|
|
Manulife Financial Corporation |
|
|
Ping An Insurance (Group) Company of China, Ltd. |
|
|
Principal Financial Group, Inc. |
|
|
Prudential Financial, Inc. |
|
|
The Travelers Companies, Inc. |
|
|
Zurich Financial Services AG
|
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
45 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
The guidelines to determine the TSR component of the
Performance Factor are:
|
|
|
|
|
|
|
TSR Performance as a Percentile of Peers |
|
Performance Factor |
Below Threshold |
|
0-24th %ile |
|
0% |
Threshold |
|
25th %ile |
|
25% |
Target |
|
50th %ile |
|
100% |
Maximum |
|
87.5th %ile |
|
175% |
Above Maximum |
|
87.5th-99th %ile |
|
175% |
If the Companys TSR for the performance period is zero or negative, the Committee may cap the entire
performance factor at target.
The Compensation Committee has retained discretion to adjust these guidelines, or to consider other factors, should it
find that it is appropriate to do so. Other factors may include significant unplanned acquisitions or dispositions, unplanned tax, accounting, and presentation changes, unplanned restructuring or reorganization costs, and others the Compensation
Committee finds appropriate.
Performance Share Awards in 2012
and Earlier. For the payout for awards made in 2012 and earlier, Company performance was (and, for awards yet to be paid out, will be) compared to the Fortune 500® companies included in the Standard & Poors Insurance Index, excluding Berkshire Hathaway Inc. (Insurance
Index Comparators). The Insurance Index Comparators were chosen to measure MetLifes relative performance because insurance is the predominant portion of the Companys overall business mix. The final number of Performance Shares paid
for such awards is to be determined by the Companys performance in TSR and change in annual net Operating EPS (as defined by the Company for each year) compared to the other Insurance Index Comparators. The amount paid can be as low as zero
and as high as twice the number of Performance Shares granted. For awards made in 2009 through 2012, if the Company did not produce a positive TSR for the performance period, the number of Shares to be paid out, if any, would have been, or will be,
reduced by 25%.
In 2010, Standard & Poors added Berkshire Hathaway Inc. (BHI) to its insurance index. The Compensation Committee
excluded BHI from the Insurance Index Comparators beginning with Performance Share awards for the 2011-2013 performance period. Given the size of BHI, and the diversity of its business outside of insurance and financial services, the Committee
determined that excluding BHI from the Insurance
Index Comparators for future awards would maintain an appropriate peer comparison. Without this change, BHI would comprise a disproportionate part of the Insurance Index Comparators.
The Performance Shares for the 2012-2014 performance period will become payable later in 2015. They are not yet payable because not all of the information on
Insurance Index Comparators that is necessary to determine the number of Performance Shares is available.
The Performance Shares for the 2011-2013
performance period became payable during 2014. MetLifes performance relative to the Insurance Index Comparators for that period produced a performance factor of 80%. That performance factor was applied to all vested Performance Share awards to
produce the number of Final Performance Shares payable.
For more information about these payments, see the table entitled Option Exercises and
Stock Vested in 2014 on page 63.
Phantom Stock-Based Awards. The Company makes cash-settled stock-based awards (Phantom Awards) to employees outside the United States, if they are more appropriate in light of tax and other regulatory circumstances than
stock-payable awards.
|
|
Each Unit Option represents the right to receive a cash payment equal to the closing price of a Share on the surrender date chosen by the employee, less
the closing price on the grant date. One-third of each award of Unit Options becomes exercisable on each of the first three anniversaries of the date of grant. |
|
|
Performance Units are units that, if they vest, are multiplied by the same performance factor used for Performance Shares for the applicable period
to produce a number of final Performance Units, each of which is payable in cash equal to the closing price of a Share on or around the payment date. Payout of Performance Units is contingent on achievement of goals set for Section 162(m) purposes.
|
|
|
|
46 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
|
|
Restricted Units are units that vest on the same schedules as Restricted Stock Units and, if they vest, each is paid in cash equal to the closing
price of a Share on or around the payment date. Payout of Restricted Units that vest and pay out in thirds on each of the first three anniversaries of the grant date is contingent on achievement of goals set for Section 162(m) purposes.
|
Vesting. For grants made through 2014, stock-based
long-term incentive awards are normally forfeited if the executive leaves the Company voluntarily before the end of the applicable performance period or vesting period and is not Retirement Eligible or (except for Phantom Awards) Bridge Eligible. An
employee is considered Retirement Eligible when the employee meets any one of the age and service combinations defined in the Metropolitan Life Retirement Plan for the United States Employees (the Retirement Plan) to begin payout of
certain benefits immediately upon separation from service (or, for the Phantom Awards, meets equivalent age and service criteria). See Pension Program for U.S.-Based Executives beginning on page 48 for more information about the
Retirement Plan. Bridge Eligibility is available to employees based on a combination of age and service who have a final separation agreement under a particular severance plan. Bridge Eligible employees are eligible for post-retirement
medical benefits despite not being Retirement Eligible.
For grants made in 2015, the Company will use a simpler approach. Employees who have a combined
age and MetLife employment of 65 or more, with at
least 5 years of MetLife employment, will retain their awards following the end of their employment.
For information about the specific grants of stock-based long-term incentive awards to the Named Executive Officers in 2014, see the table entitled Grants of Plan-Based Awards in 2014 on page 58.
Share Ownership
To further align managements interests with the interests of shareholders, the Company has established minimum Share ownership guidelines for officers at the Senior Vice President level and above, including
the Executive Group members. The Company expects each person covered by the guidelines to own Shares equal in value to a multiple of annual base salary rate depending on position. The Company imposes no formal deadline to reach the expected
ownership level. However, the Company expects each person covered by the guidelines to retain all net Shares acquired from compensation awards until the individual meets the guidelines.
Employees may count toward these guidelines the value of Shares they or their immediate family members own directly or in trust. They may also count Shares held in the Companys savings and investment program,
Shares deferred under the Companys nonqualified deferred compensation program and deferred cash compensation or auxiliary benefits measured in Share value.
The Share ownership of the Named Executive Officers is reported below as of February 27, 2015:
|
|
|
|
|
Name
|
|
Guideline |
|
Ownership |
Steven A. Kandarian |
|
7 |
|
7.7 |
John C. R. Hele |
|
4 |
|
0.4 |
William J. Wheeler |
|
4 |
|
20.5 |
Martin J. Lippert |
|
4 |
|
1.6 |
Christopher G. Townsend |
|
3 |
|
0 |
Each of these executives has complied with the requirement to retain any net Shares acquired from compensation awards until meeting
the guideline. Mr. Lippert joined the Company in 2011, and Mr. Hele and Mr. Townsend joined the Company in 2012; each has significant outstanding awards payable in Shares (or Share equivalents) that align his interests with those of
shareholders.
Equity Award Timing Practices
The Compensation Committee grants stock-based long-term incentive awards to the Executive Group members at its regularly scheduled meeting in February
of each year. The amount of each grant is made with consideration of the Total Compensation for each Executive Group member, including annual cash incentive awards and any base
salary increases. The
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
47 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
exercise price of Stock Options or Unit Options is the closing price of a Share on the grant day. On the rare occasions when the Committee grants awards in connection with the hiring or change in
responsibilities of an Executive Group member, or in order to encourage the executive to become or remain employed, it does so coincident with (or shortly after) the hiring, change in responsibilities, or other related changes. The Company has never
granted, and has no plans to grant, any stock-based awards to current or new employees in coordination with the release of non-public information about the Company or any other company. The Chief Executive Officer does not have any authority to
grant Share-based awards of any kind to any Executive Group members, the Chief Accounting Officer, the Chief Risk Officer, or Directors of the Company.
Performance-Based Compensation Recoupment Policy
The Companys
performance-based compensation recoupment policy applies to all employees of the Company and its affiliates. The policy applies when an employee engages in or contributes to fraudulent or other wrongful conduct that causes financial or reputational
harm to the Company or its affiliates. Under those circumstances, the policy provides that the Company (and its affiliates or subsidiaries) may seek the recovery of performance-based compensation (including gains from sale of securities) purportedly
earned by or paid to the employee during or after the period of the misconduct. The policy is part of the terms of all performance-based compensation granted or paid by the Company and its affiliates. It does not limit the Company or any of its
affiliates in enforcing any other rights or remedies they may have. The policy reinforces the Companys intent to consider recovering performance-based compensation under the circumstances it covers.
Policy Prohibiting Hedging Company Securities
The Company prohibits all employees, including the Executive Group members, from engaging in short sales, hedging, and trading in put and call options, with respect to the Companys securities.
Policy Restricting Pledging Company Securities
The Company restricts directors and employees in how they may pledge MetLife securities to prevent a misalignment of interests with Company shareholders
or the appearance of such a misalignment. Directors and employees:
|
|
may not pledge Shares necessary to meet Share ownership guidelines; |
|
|
may not pledge Shares while aware of any non-public information that is material to Shares; and |
|
|
may not pledge MetLife securities in connection with a non-recourse loan, i.e., one in which the borrowers liability is limited to the forfeiture of the
securities. |
In addition, the Company expects all Directors and employees who pledge MetLife securities to maintain adequate resources
to repay the loan, aside from any MetLife securities, in order to avoid the foreclosure or sale of the MetLife securities. No serving Executive Group member pledged any Company equity securities during 2014.
Retirement and Other Benefits
MetLife recognizes the importance of providing comprehensive, cost-effective employee benefits to attract, retain and motivate talented associates. The Company reviews its benefits program from time to time and
makes adjustments to the design of the program to meet these objectives and to remain competitive with other employers.
Pension Program for U.S.-Based Executives
The Company sponsors a pension program in which all eligible U.S. employees, including the Executive
Group members employed in the U.S., participate after one year of service. The program includes the Retirement Plan and the MetLife Auxiliary Pension Plan (Auxiliary Pension Plan), an unfunded nonqualified plan.
The program rewards employees for the length of their service and, indirectly, for their job performance, because the amount of benefits increases with the length
of employees service with the Company and the salary and annual incentive awards they earn. Benefits under the Companys pension program are determined under two separate benefit formulas. For any given period of time, an employees
benefit is determined under one or the other formula. In no event do benefits accrue for the same period under both formulas. The Traditional Formula is based on length of service and final average compensation. The Personal Retirement
Account Formula is based on monthly contributions for each employee based on the employees compensation, plus interest.
The Auxiliary
Pension Plan does not provide any pension benefits for any Executive Group members,
|
|
|
48 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
other than those that would apply under the (qualified) Retirement Plan if U.S. tax limits on accruals did not apply. The same final average compensation formula is used for Traditional Formula
pension benefits in both plans, for benefits accrued in 2010 and later.
For additional information about pension benefits for the Named Executive
Officers, see the table entitled Pension Benefits at 2014 Fiscal Year-End on page 64.
Mr. Townsend did not participate in
a defined benefit pension plan in 2014.
Mandatory Provident Fund Applicable to
Mr. Townsend
Mr. Townsend participates in the Mandatory Provident Fund program for employees in Hong Kong. Applicable law requires employees to
contribute a fixed portion of their eligible earnings to the program. An employer contribution at a rate based on the employees length of service is also made, as required by law. The program allows employees to make additional contributions
from their earnings, with employer matching contributions on a limited basis. Employees choose from among a number of funds in which to invest contributions. The employer contributions vest over time through ten years of service. Because the rate
and vesting of employer contributions are based on length of service, the program encourages employees to remain with the Company.
Savings and Investment Program
The Company sponsors a savings and
investment program for U.S. employees in which each Executive Group member employed in the U.S. is eligible to participate. The program includes the Savings and Investment Plan for Employees of Metropolitan Life and Participating Affiliates
(Savings and Investment Plan), a tax-qualified defined contribution plan that includes pre-tax deferrals under Internal Revenue Code Section 401(k), and the Metropolitan Life Auxiliary Savings and Investment Plan (Auxiliary Savings
and Investment Plan), an unfunded nonqualified deferred compensation plan.
Employee contributions to the Savings and Investment Plan may be made on
a pre-tax 401(k), Roth 401(k) or after-tax basis. The Company also provides a contribution to employees after one year of service in order to encourage and reward such savings. The Auxiliary Savings and Investment Plan provides additional Company
contributions to employees who
elect to contribute to the Savings and Investment Plan and who have compensation beyond Internal Revenue Code limits. Company contributions for the Named Executive Officers are included in the
All Other Compensation column of the Summary Compensation Table on page 52. Because the Auxiliary Savings and Investment Plan is a nonqualified deferred compensation plan, the Companys contributions to the Named Executive
Officers accounts, and the Named Executive Officers accumulated account balances and any payouts made during 2014, are reported in the table entitled Nonqualified Deferred Compensation at 2014 Fiscal Year-End on page 67.
Nonqualified Deferred Compensation Program for U.S.-Based Executives
The Company sponsors a nonqualified deferred compensation program for officer-level employees in the U.S., including the Executive Group members employed in the
U.S. Participants may choose from a range of simulated investments, according to which the value of their deferrals may go up or down. See the table entitled Nonqualified Deferred Compensation at 2014 Fiscal Year-End on page 67 for
amounts of nonqualified deferred compensation reported for the Named Executive Officers.
Employees choose in advance the amount they want to defer, the
date on which they want payment of their deferred compensation to begin, and whether they want to receive payment in a lump sum or in up to 15 annual payments. The continued deferral of income taxation and pre-tax simulated investment earnings
through the employees chosen payment dates encourage employees to remain with the Company.
Perquisites
The
Company provides its Executive Group members with limited perquisites.
|
|
The Company leases an aircraft for purposes of efficient business travel by the Companys executives. While the Chief Executive Officer may occasionally use
the Companys aircraft for personal travel, Company policy does not require him to use the Companys aircraft for all personal and business travel. |
|
|
To maximize the accessibility of Executive Group members, the Company makes leased vehicles and drivers and outside car services available to U.S.-based
executives for commuting and personal use. |
|
|
For recordkeeping and administrative convenience of the Company, the Company pays certain other costs,
|
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
49 |
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
|
|
such as those for travel and meals for family members accompanying Executive Group members on business functions. |
|
|
The Company holds events to facilitate and strengthen its relationship with customers, potential customers, and other business partners, such as events at
MetLife Stadium. The Company occasionally allows employees, including the Executive Group members, and their family members, personal use of its facilities at MetLife Stadium, to the extent space at such events is available or the facilities are not
in use for business purposes. |
|
|
The Company provides benefits to Mr. Townsend in connection with his overseas assignment that are common and typical for senior management in such
circumstances, such as a subsidy of childrens education expenses, tax return preparation assistance, security services during periods of local civil unrest, and benefits related to housing. |
Aside from any business travel tax equalization, each Executive Group member is responsible for any personal income taxes due as a result of receiving these
benefits.
The incremental cost of perquisites provided to the Named Executive Officers in respect of 2014 is included in the All Other
Compensation column of the Summary Compensation Table on page 52, if the total cost of those perquisites for that executive exceeded $10,000.
Sign-On Payments
From time to time, the Company offers newly-hired
Executive Group members sign-on payments and/or relocation benefits in order to encourage them to come to MetLife. On such occasions, the Company typically either delays the date the payment is earned and paid or requires repayment if the executive
leaves MetLife before the first or later anniversary of beginning employment.
Business Travel Income Tax
Equalization
As executives of a global insurance and employee benefits enterprise, MetLife Executive Group members are engaged
in international business travel. Some executives are required by the demands of their roles to travel to jurisdictions that impose additional taxes on them beyond what they owe in their home jurisdiction. Providing such executives with
income tax equalization to their home jurisdiction, by paying or reimbursing the executive for any excess income taxes the executive owes in other jurisdictions as a result of business travel,
is a prevalent business practice. Doing so allows the executive to engage in business travel that is necessary to lead MetLifes business efforts and perform job responsibilities without
being financially penalized. It also prevents the additional personal income tax liability from being a disincentive to engage with associates, customers, or others outside of the executives home jurisdiction. In such cases, no taxes the
executive owes as a result of travel taken solely for personal purposes are covered by these equalization arrangements. MetLife has established such arrangements only with Executive Group members who are based outside the United States.
Mr. Townsend entered into such an agreement in 2013.
Severance Pay and Related Benefits
If the employment of an Executive Group member employed in the U.S. ends involuntarily due to job elimination or, in limited circumstances, due to
performance, he or she may be eligible for the severance program available to substantially all salaried employees. The program generally provides employees with severance pay, outplacement services and other benefits. Employees terminated for
cause, as defined under the program, are not eligible. The amount of severance pay reflects the employees salary grade, base salary rate and length of service, with longer-service employees receiving greater payments and benefits than
shorter-service employees given the same salary grade and base salary. Employees who are not Retirement Eligible or Bridge Eligible and who receive severance pay also receive a pro rata cash payment in consideration of their unvested Performance
Shares and Performance Units. The Company also may enter into severance agreements that can differ from the general terms of the program, where business circumstances warrant.
Change-in-Control Arrangements
The Company has adopted arrangements
that would impact the Executive Group members compensation and benefits upon a change-in-control of MetLife. None of the Executive Group members is entitled to any excise tax gross-up either on severance pay or on any other benefits payable in
connection with a change-in-control of the Company.
Executive Severance Plan
The Company established the MetLife Executive Severance Plan (Executive Severance Plan) in 2007 to apply to all Executive Group members and replace
individual change-in-control agreements.
|
|
|
50 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
The Compensation Committee determined the terms of the plan based on its judgment of what is necessary to maximize
shareholder value should a change-in-control occur. The Company designed the elements of its change-in-control definition to include circumstances where effective control over the Company would be captured by interests that differ substantially from
those of the broad shareholder base the Company now has, without impinging on the Companys flexibility to engage in transactions that are unlikely to involve such a transformation. An Executive Group member who receives benefits under the
Executive Severance Plan would not also be eligible to receive severance pay under the Companys severance plan that is available to substantially all salaried employees.
The Executive Severance Plan does not provide for any payments or benefits based solely on a change-in-control of MetLife. Rather, the Plan provides for
severance pay and related benefits only if the executives employment also ends under certain circumstances.
Additional Change-in-Control Arrangements
The Companys
stock-based long-term agreements also include change-in-control arrangements. Under these arrangements, MetLife or its successor may substitute an alternative award of equivalent value and vesting provisions no less favorable than the award being
replaced. Only if such substitution does not occur would the awards vest immediately upon a change-in-control.
For additional information about
change-in-control arrangements, including the Companys definition of change-in-control for these purposes, see Potential Payments upon Termination or Change-in-Control at 2014 Fiscal Year-End beginning on page
72.
Tax Considerations
Section 162(m) of the United States Internal Revenue Code limits the deductibility of compensation paid to certain executives, but exempts certain
performance-based compensation from those limits. For 2014, the Compensation Committee established limits and performance goals in order for AVIP awards to the Companys Executive Group members to be eligible for this exemption. As
part of the Section 162(m) goal-setting process for 2014, the Committee set the maximum amount that any Executive Group member could be paid as $10 million. See Non-Equity Incentive Plan Awards on page 58 for more information
about the individual maximums set for 2014 AVIP awards. The Company has also designed Performance Shares, Stock Options and (with respect to awards to Executive Group members in 2013 and 2014) Restricted Stock Units with the intention of making them
eligible for the performance-based compensation exemption from Section 162(m) limits. However, the Committee reserves the right to grant compensation that does not meet Section 162(m) requirements if it determines it is
appropriate to do so.
Accounting Considerations
Performance Shares granted in 2012 and earlier, Stock Options, and Restricted Stock Units qualify as equity-classified instruments whose fair value for determining
compensation expense under current accounting rules is fixed on the date of grant. The Compensation Committee approved guidelines to determine the performance factor applicable to Performance Shares granted in 2013 and later, and retained discretion
to adjust them, or to consider other factors, should it find that it is appropriate to do so. As a result, these awards qualify for expense reporting on a liability, or variable, basis. Phantom Awards also qualify for expense reporting on a
liability basis because they are paid in cash.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
51 |
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE |
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position |
|
Year |
|
Salary ($) |
|
Bonus ($) |
|
Stock Awards
($)
|
|
Option Awards ($) |
|
Non-Equity Incentive Plan Compensation ($) |
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)
|
|
All Other Compensation ($) |
|
Total ($) |
Steven A. Kandarian |
|
2014 |
|
$ 1,325,000 |
|
$ 0 |
|
$ 6,027,795 |
|
$ 1,806,120 |
|
$ 5,000,000 |
|
$ 709,963 |
|
$ 294,924 |
|
$ 15,163,802 |
Chairman of the |
|
2013 |
|
$ 1,212,500 |
|
$ 0 |
|
$ 5,854,539 |
|
$ 1,729,089 |
|
$ 5,000,000 |
|
$ 578,929 |
|
$ 239,281 |
|
$ 14,614,338 |
Board, |
|
2012 |
|
$ 1,066,667 |
|
$ 0 |
|
$ 3,897,031 |
|
$ 3,760,313 |
|
$ 4,200,000 |
|
$ 431,984 |
|
$ 313,016 |
|
$ 13,669,011 |
President and
Chief Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John C. R. Hele |
|
2014 |
|
$ 637,500 |
|
$ 0 |
|
$ 1,870,695 |
|
$ 560,409 |
|
$ 2,200,000 |
|
$ 213,406 |
|
$ 75,123 |
|
$ 5,557,133 |
Chief Financial Officer (1) |
|
2013 |
|
$ 600,000 |
|
$ 0 |
|
$ 585,460 |
|
$ 172,911 |
|
$ 1,500,000 |
|
$ 9,332 |
|
$ 19,397 |
|
$ 2,887,100 |
|
2012 |
|
$ 195,769 |
|
$ 450,000 |
|
$ 1,027,795 |
|
$ 967,105 |
|
$ 450,000 |
|
$ 0 |
|
$ 0 |
|
$ 3,090,669 |
William J. Wheeler |
|
2014 |
|
$ 768,750 |
|
$ 0 |
|
$ 2,251,763 |
|
$ 674,562 |
|
$ 2,000,000 |
|
$ 766,086 |
|
$ 194,345 |
|
$ 6,655,506 |
President, Americas (2) |
|
2013 |
|
$ 750,000 |
|
$ 0 |
|
$ 2,122,270 |
|
$ 626,795 |
|
$ 3,250,000 |
|
$ 82,514 |
|
$ 124,430 |
|
$ 6,956,009 |
|
2012 |
|
$ 750,000 |
|
$ 0
|
|
$ 1,503,586 |
|
$ 1,450,836 |
|
$ 1,750,000
|
|
$ 587,801
|
|
$ 148,692
|
|
$ 6,190,915 |
Martin J. Lippert |
|
2014 |
|
$ 625,000 |
|
$ 0 |
|
$ 1,732,125 |
|
$ 518,903 |
|
$ 2,200,000 |
|
$ 245,080 |
|
$ 0 |
|
$ 5,321,108 |
Executive Vice President,
Global Technology & Operations |
|
2013 |
|
$ 618,750 |
|
$ 0 |
|
$ 1,756,381 |
|
$ 518,723 |
|
$ 1,750,000 |
|
$ 189,823 |
|
$ 0 |
|
$ 4,833,677 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher G. Townsend |
|
2014 2013 |
|
$ 537,532
$ 500,000 |
|
$ 200,010 $ 200,268 |
|
$ 1,039,275
$ 951,349 |
|
$ 311,345
$ 280,973 |
|
$ 951,838 $ 901,393 |
|
$ 0
$ 0 |
|
$ 646,096 $ 475,696 |
|
$ 3,686,096
$ 3,309,679 |
President, Asia (3) |
|
|
|
|
|
|
|
|
|
(1) |
Mr. Hele was paid a sign-on bonus in 2012, which is presented in the Bonus column. If Mr. Hele had left MetLife before the first anniversary of beginning employment, he
would have owed repayment on a pro rata basis. |
Mr. Hele began employment in 2012 and had no increase in present value of
accumulated benefits as of December 31, 2012, which is presented in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. Mr. Hele was eligible for pension benefits under the applicable pension plan when he had one year
of service.
(2) |
The present value of Mr. Wheelers pension benefits is determined assuming that the Company will pay benefits beginning when Mr. Wheeler reaches age 62. The Company uses a
combination of interest rates and bond yields to determine the discount rate to calculate the present value of those benefits. The change in present value of Mr. Wheelers pension benefit from year to year varies largely according to changes in
the discount rate, and is presented in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. |
(3) |
Mr. Townsend was paid a sign-on bonus in each of 2013 and 2014 on the first two anniversaries of the date his employment began, which in presented in the Bonus column.
|
Mr. Townsend did not participate in a defined benefit pension plan in 2013 or 2014, which is reflected in the Change in
Pension Value and Nonqualified Deferred Compensation Earnings column.
The amount of tax equalization benefits is a component of the
amount disclosed in the All Other Compensation column for Mr. Townsend for 2013. The amount reported for tax equalization benefits for 2013 in the Companys 2014 Proxy Statement was $427,940. That amount was based on an estimate of such
benefits, as the amount could not be determined due to differences between various jurisdictions tax years and the Companys fiscal year. The amount of the benefit has now been determined to have been $207,509. This amount is reflected in
the All Other Compensation and Total columns for Mr. Townsend for 2013 in this table. Accordingly, the amounts disclosed in the All Other Compensation and Total columns for Mr. Townsend for 2013 in this table are different from the amounts in such
columns in the Summary Compensation Table in the Companys 2014 Proxy Statement.
Amounts for Mr. Townsend in this table that were
denominated, accrued, earned, or paid in Hong Kong Dollars have been converted to U.S. dollars at a rate of H.K.$1 = U.S.$0.1290322. Amounts reported for 2013 have been adjusted from amounts reported in the Companys 2014 Proxy Statement, as
applicable, to reflect this exchange rate.
|
|
|
52 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
SUMMARY COMPENSATION TABLE |
Basis for the information in the Summary Compensation Table
The amounts reported in the table above for 2014 include several elements that were not yet paid to the Named Executive Officers in 2014. The table includes items
such as salary and cash incentive compensation that have been earned. It also includes the grant date fair value of Share-based long-term incentive awards granted in 2014 which may never become payable or may ultimately have a value that differs
substantially from the values reported in this table. The table also includes changes in the value of pension benefits from prior year-end to year-end 2014 which will become payable only after the Named Executive Officer ends employment. The items
and amounts reported in the table above for 2013 and 2012 bear a similar relationship to performance and amounts paid or payable in those years.
In
addition, the amounts in the Total column do not represent Total Compensation as defined for purposes of the Companys compensation structure and philosophy, and include elements that do not relate to 2014 performance. For
additional information, see the Compensation Discussion and Analysis beginning on page 32.
The Company is required to include compensation in the
Summary Compensation Table for years prior to 2014 to the extent that it was disclosed in any of its prior Proxy Statements. Mr. Lippert and Mr. Townsend were not Named Executive Officers in the Companys 2012 Proxy Statement. As a
result, their respective compensation for 2012 is not reported in the table above.
The amounts in each of the columns of the
Summary Compensation Table are further discussed below.
Salary
The amount reported in the Salary column is the amount of base salary earned by each Named Executive Officer in that year.
For the relationship of each Named Executive Officers 2014 base salary earnings to that officers 2014 Total Compensation, see Executive Pay for Performance in the Proxy Summary on page 4.
Stock Awards
Performance Shares and Performance Units. Performance Share awards were made pursuant to the MetLife, Inc. 2005 Stock and Incentive Plan
(the 2005
Stock and Incentive Plan). Performance Unit awards were made pursuant to the MetLife, Inc. Performance Unit Incentive Compensation Plan. No monetary consideration was paid by a Named
Executive Officer for any awards. No dividends or dividend equivalents are earned on any awards. For a description of the effect on the awards of a termination of employment or change-in-control of MetLife, see Potential Payments upon
Termination or Change-in-Control at 2014 Fiscal Year-End beginning on page 72.
Performance Shares are paid in Shares. Performance Units are
paid in cash using the price of Shares.
On February 25, 2014, the Compensation Committee granted Performance Units to Mr. Townsend and
Performance Shares to each other Named Executive Officer. The Performance Shares and Performance Units granted in 2014 are payable after the end of the three-year performance period from January 1, 2014 to December 31, 2016. In
order for these Performance Shares and Performance Units to be eligible to be fully tax deductible under Section 162(m), the Compensation Committee established separate threshold goals. As a result, for those awards to become payable, the
Company must generate either (1) positive income from continuing operations before provision for income tax, excluding net investment gains (losses) (defined in accordance with Section 3(a) of Article 7.04 of SEC Regulation S-X), which includes total net investment gains (losses) and net derivatives gains (losses), either for the third year of the performance period or for the performance period as a whole, or (2) positive TSR
either for the third year of the performance period or for the performance period as a whole.
If any of the above income or TSR goals are met, the
number of Shares or Units payable at the end of the performance period is calculated by multiplying the number of Performance Shares by a performance factor (from 0% to 175%). The performance factor is to be determined by the Compensation Committee
in consideration of the Companys annual Operating ROE compared to its three-year business plan and TSR during the performance period compared to the Companys peers.
For a further discussion of the performance goals applicable to the Performance Share and Performance Unit awards in 2014, see the Compensation Discussion and Analysis beginning on page 32. For a discussion
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
53 |
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE |
of the 2013 and 2012 Performance Share and Performance Unit awards, see the Companys 2014 and 2013 Proxy Statements, respectively.
Restricted Stock Unit and Restricted Unit Awards. Restricted Stock Unit awards were made pursuant to the 2005 Stock and Incentive Plan. Restricted Unit awards were made pursuant to the MetLife, Inc. Restricted Unit Incentive Compensation Plan. No
monetary consideration was paid by a Named Executive Officer for any awards. No dividends or dividend equivalents are earned on any awards. For a description of the effect on the awards of a termination of employment or change-in-control of MetLife,
see Potential Payments upon Termination or Change-in-Control at 2014 Fiscal Year-End beginning on page 72.
Restricted Stock Units are
paid in Shares. Restricted Units are paid in cash using the price of Shares.
On February 25, 2014, the Compensation Committee granted Restricted Units
to Mr. Townsend and Restricted Stock Units to each other Named Executive Officer. One-third of each Restricted Stock Unit and Restricted Unit award vests and becomes payable on each of the first three anniversaries of the grant
date. In order for these awards to be eligible to be fully tax deductible under Section 162(m), the Compensation Committee established separate threshold goals. As a result, for those awards to become payable, the Company must generate either
(1) positive income from continuing operations before provision for income tax, excluding net investment gains (losses) (defined in accordance with Section 3(a) of Article 7.04 of SEC Regulation S-X), which includes total net investment
gains (losses) and net derivatives gains (losses), either for the third year of the performance period or for the performance period as a whole, or (2) positive TSR either for the third year of the performance period or for the performance
period as a whole.
For a discussion of the 2013 Restricted Stock Unit and Restricted Unit awards, see the Companys
2014 Proxy Statement.
Method for Determining Amounts Reported. The amounts reported in this column for Performance Shares and Performance Units were calculated by multiplying the number of shares or units by their respective grant date fair value:
|
|
$46.19 for February 25, 2014. |
|
|
$32.20 for February 26, 2013. |
|
|
$31.34 for September 4, 2012. |
|
|
$35.63 for February 28, 2012. |
The
amounts reported in this column for Restricted Stock Units and Restricted Units were calculated by multiplying the number of units by their respective grant date fair value:
|
|
$46.19 for February 25, 2014. |
|
|
$32.20 for February 26, 2013. |
Those
amounts represent the aggregate grant date fair value of the awards under ASC 718 consistent with the estimate of aggregate compensation cost to be recognized over the service period. For Performance Shares and Performance Units, the amounts
are based on target performance, which is a total performance factor of 100%. This is the probable outcome of the performance conditions to which those awards are subject, determined under ASC 718. The grant date fair values of the
Performance Shares and Performance Units granted in 2014 and 2013 assuming the highest level of performance conditions would be 1.75 times the amounts reported in this column, as the same grant date fair value per share would be used but the total
performance factor used would be 175%. For 2014 Performance Share and Performance Unit awards, that would produce the following hypothetical Grant Date Fair Values:
|
|
|
Executive
|
|
Hypothetical Grant Date Fair Value of 2014 Performance Shares and Performance Units at
Maximum Performance Level |
Steven A. Kandarian |
|
$ 7,032,428 |
John C. R. Hele |
|
$ 2,182,478 |
William J. Wheeler |
|
$ 2,627,056 |
Martin J. Lippert |
|
$ 2,020,813 |
Christopher G. Townsend |
|
$ 1,212,488 |
|
|
|
54 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
SUMMARY COMPENSATION TABLE |
The grant date fair values of the Performance Shares and Performance Units granted in 2012 assuming the highest level
of performance conditions would be double the amounts reported in the Stock Awards column of the Summary Compensation Table, as the same grant date fair value per share would be used but the total performance factor used would be 200%.
For a description of the assumptions made in determining the expenses of Share awards, see Notes 1 and 16 to the Consolidated Financial
Statements in the 2014, 2013, and 2012 Forms 10-K. In determining these expenses, it was assumed that each Named Executive Officer would satisfy any service requirements for vesting or payment of the award. As a result, while a discount for the
possibility of forfeiture of the award for this reason was applied to determine the expenses of these awards as reported in the Companys Annual Reports on Form 10-K, no such discount was applied in determining the expenses reported in this
column.
Option Awards
Stock
Option awards were made pursuant to the 2005 Stock and Incentive Plan. No monetary consideration was paid by a Named Executive Officer for any awards. For a description of the effect on the awards of a termination of employment or change-in-control
of MetLife, see Potential Payments upon Termination or Change-in-Control at 2014 Fiscal Year-End beginning on page 72.
On
February 25, 2014, the Compensation Committee granted Stock Options to each Named Executive Officer. Each of these awards had a per option exercise price equal to the closing price of a Share on the grant date: $50.53. The Stock Options will
normally become exercisable at the rate of one-third of each grant on each of the first three anniversaries of the grant date, and expire on the day before the tenth anniversary of that grant date.
For a discussion of the 2013 and 2012 Stock Options, see the Companys 2014 and 2013 Proxy Statements, respectively.
Method for Determining Amounts
Reported. The amounts reported in this column were calculated by multiplying the number of Stock Options by a grant date fair value per option of:
|
|
$13.84 for February 25, 2014. |
|
|
$9.51 for February 26, 2013. |
|
|
$9.83 for September 4, 2012.
|
|
|
$11.46 for February 28, 2012. |
Those
amounts represent the aggregate grant date fair value of the Stock Options granted in each year under ASC 718, consistent with the estimate of aggregate compensation cost to be recognized over the service period.
For a description of the assumptions made in determining the expenses of Stock Option awards, see Notes 1 and 16 to the Consolidated Financial
Statements in the 2014, 2013, and 2012 Forms 10-K. In determining these expenses, it was assumed that each Named Executive Officer would satisfy any service requirements for vesting or payment of the award. As a result, while a discount for the
possibility of forfeiture of the award was applied to determine the expenses of these awards as reported in the Companys Annual Reports on Form 10-K, no such discount was applied in determining the expenses reported in this column. In each
case, the grant date of the awards was the date that the Compensation Committee approved the awards.
Non-Equity Incentive Plan
Compensation
The amounts reported in the Non-Equity Incentive Plan Compensation column for each Named Executive Officer include the 2014 AVIP awards
made in February 2015 by the Compensation Committee to each of the Named Executive Officers, which are based on 2014 performance. The AVIP awards are payable in cash by March 15, 2015. The factors considered and analyzed by the Compensation
Committee in determining the awards are discussed in the Compensation Discussion and Analysis. For a description of the maximum award formula that applied to the awards for tax deductibility purposes, see the table entitled Grants of
Plan-Based Awards in 2014 on page 58.
Amounts reported in this column for 2013 and 2012 are AVIP awards with a similar relationship to
performance in those years. The basis of these awards to the Named Executive Officers who appear in the Companys 2014 and 2013 Proxy Statements, respectively, is discussed further in those Proxy Statements.
Change in Pension Value and Nonqualified Deferred Compensation Earnings
The amounts reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column for 2014 represent any aggregate increase during 2014 in the present value of accumulated pension benefits
for each of the Named Executive
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
55 |
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE |
Officers who participates in a defined benefit pension plan. The increase in the present value of these benefits reflects additional service in 2014, base salary compensation earned in 2014
(reflecting any increases in base salary rate), annual incentive awards payable in March 2014 for 2013 performance, and, in the case of Mr. Wheeler, the impact of changes in the discount rates used to value those benefits. The U.S.-based Named
Executive Officers participate in the same retirement program that applies to other administrative employees in the U.S. For a description of pension benefits, including the formula for determining benefits, see the table entitled Pension
Benefits at 2014 Fiscal Year-End on page 64.
None of the Named Executive Officers earnings on their nonqualified deferred compensation in
2014, 2013, or 2012 were above-market or preferential. As a result, earnings credited on their nonqualified deferred compensation are not required to be, nor are they, reflected in this column. For a description of the Companys
nonqualified deferred compensation plans and the simulated investments used to determine earnings, see the table entitled Nonqualified Deferred Compensation at 2014 Fiscal Year-End on page 67.
All Other Compensation
The amounts reported in this column for 2014 include all other items of compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Employer Savings and
Investment
Program and Mandatory Provident Fund
Contributions
|
|
|
Perquisites and Other Personal Benefits |
|
|
Life Insurance Above Standard Formula |
|
|
Health Insurance Above Standard Formula |
|
|
Tax Equalization Benefits |
|
|
Total |
|
Steven A. Kandarian |
|
$ |
253,000 |
|
|
$ |
41,924 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
294,924 |
|
John C. R. Hele |
|
$ |
64,125 |
|
|
$ |
10,998 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
75,123 |
|
William J. Wheeler |
|
$ |
160,750 |
|
|
$ |
27,314 |
|
|
$ |
6,281 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
194,345 |
|
Martin J. Lippert (1) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Christopher G. Townsend (2) |
|
$ |
32,250 |
|
|
$ |
306,813 |
|
|
$ |
1,532 |
|
|
$ |
21,000 |
|
|
$ |
284,501 |
|
|
$ |
646,096 |
|
(1) |
Mr. Lipperts aggregate amount of perquisites and other personal benefits in 2014 was less than $10,000 and is therefore reported at $0. |
(2) |
Amounts for Mr. Townsend that were denominated, accrued, earned, or paid in Hong Kong Dollars have been converted to U.S. dollars at a rate of
H.K.$1 = U.S.$0.1290322 |
Employer Savings and Investment Program and
Mandatory Provident Fund Contributions. U.S. based eligible employees may make contributions to the Savings and Investment Plan, which is a tax-qualified 401(k) plan. Employer matching
contributions are also made to that plan. In 2014, matching contributions to that plan of $10,400 were made for Mr. Kandarian and Mr. Wheeler, and $7,800 for Mr. Hele.
Employer contributions are made to the Auxiliary Savings and Investment Plan due to U.S. Internal Revenue Code limits on the amount of compensation that is eligible for contributions to the Savings and Investment
Plan.
Employer contributions are also made to the Mandatory Provident Fund, in which Mr. Townsend and other eligible employees in Hong Kong
participate. These contributions match contributions made by employees up to limits determined under that fund.
The amount of contributions for each Named Executive Officer, other than those made to the Savings and Investment
Plan, is also reflected in the Registrant Contributions in Last FY column of the Nonqualified Deferred Compensation table on page 67.
Perquisites and Other Personal
Benefits. The Companys aggregate incremental cost to provide perquisites or other personal benefits to each Named Executive Officer in 2014 (other than for Mr. Lippert) is
included in the All Other Compensation column for 2014.
Goods or services provided to the Named Executive Officers are perquisites or
personal benefits only if they confer a personal benefit on the executive. However, goods or services that are directly and integrally related to the executives job duties, or are offered generally to all employees, or for which the executive
fully
|
|
|
56 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
SUMMARY COMPENSATION TABLE |
reimbursed the Company are not perquisites or personal benefits. Each type of perquisite or other personal benefit is discussed below.
Personal Car Service. These amounts include the cost paid by the Company for car service
provided by vendors for personal travel. Where the Company used its own vehicles, the cost of tolls, fuel, and driver overtime compensation is included.
Personal Company Aircraft Use. These
amounts include the variable costs for personal use of aircraft that were charged to the Company by the vendor that operates the Companys leased aircraft for trip-related crew hotels and meals, landing and ground handling fees, hangar and
parking costs, in-flight catering and telephone usage, and similar items. Fuel costs were calculated based on average fuel cost per flight hour for each hour of personal use. Because the aircraft is leased primarily for business use, fixed costs
such as lease payments are not included in these amounts. The Company does not require the Chief Executive Officer to use the Companys aircraft for all personal and business travel.
Personal Conference, Event, and Travel. These amounts include the costs incurred by the
Company for personal items for the Named Executive Officer at a Company business conference or meeting, at MetLife Stadium or at other events, and for personal guests of the Named Executive Officer at such events. Costs for personal security on
certain business trips outside the United States, and costs paid to a vendor to make personal travel reservations for the Named Executive Officers or their family members, are also included.
Overseas Assignment Benefits. The Company provided Mr. Townsend, in connection
with his assignment in Hong Kong, $115,067 in housing, $100,049 in subsidy of childrens education, $41,602 in personal security services during local civil unrest and tax preparation services of $38,000. The Companys incremental costs
to provide these items are included in the table above. For this purpose, amounts paid or accrued in Hong Kong Dollars have been converted to U.S. dollars at a rate of H.K.$1 = U.S.$0.1290322.
Life Insurance Coverage Above Standard Formula. In 2003, the Company discontinued its split-dollar life insurance programs in which a small group of senior officers and some other employees and agents participated. Former participants in those programs
were given the opportunity to continue to receive group life insurance coverage at the levels that were provided under the program. The amounts shown in the table above for Mr. Wheeler reflect the additional cost to the Company in 2014 to
provide group life insurance coverage at those former levels over and above the cost for the standard group life coverage.
Employees in
Hong Kong, including Mr. Townsend, are provided life insurance at levels that vary based on compensation grade level. The cost of providing such coverage to Mr. Townsend in 2014 is reflected in the table above.
Health Insurance Above Standard Formula. Employees in Hong Kong, including Mr. Townsend, are provided health benefits at levels that vary based on compensation grade level. The cost of providing such benefits to Mr. Townsend in 2014 is
reflected in the table above.
Tax Equalization
Benefits. The Company will pay any income taxes Mr. Townsend owes as a result of 2014 travel on Company business in excess of what he would have owed had he provided the services in
his home jurisdiction. The amount reflected in the table above is an estimate of such taxes, as Mr. Townsends precise liability has not yet been determined. The estimate is based on extensive travel to multiple jurisdictions in Asia and
elsewhere in furtherance of MetLifes business. For further information, see Business Travel Income Tax Equalization on page 50.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
57 |
|
|
|
|
|
|
GRANTS OF PLAN-BASED AWARDS IN 2014 |
Grants of Plan-Based Awards in 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Grant Date |
|
Estimated Possible Payouts Under Non- Equity Incentive Plan Awards |
|
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards |
|
All Other Stock Awards: Number of Shares of Stock or Units (#) |
|
All Other Option Awards: Number of Shares or Units Underlying Options (#) |
|
Exercise Price of Options ($/Sh) |
|
Grant Date Fair Value of Stock and Option Awards ($) |
|
|
Maximum ($) |
|
|
|
Threshold (#) |
|
Target (#) |
|
Maximum (#) |
|
|
|
|
Steven A. Kandarian |
|
December 9, 2013 |
|
$ 10,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 25, 2014 |
|
|
|
|
|
21,750 |
|
87,000 |
|
152,250 |
|
|
|
|
|
|
|
$4,018,530 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
43,500 |
|
|
|
|
|
$2,009,265 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
130,500 |
|
$ 50.53 |
|
$1,806,120 |
John C. R. Hele |
|
December 9, 2013 |
|
$ 10,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 25, 2014 |
|
|
|
|
|
6,750 |
|
27,000 |
|
47,250 |
|
|
|
|
|
|
|
$1,247,130 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
13,500 |
|
|
|
|
|
$ 623,565 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
40,492 |
|
$ 50.53 |
|
$ 560,409 |
William J. Wheeler |
|
December 9, 2013 |
|
$ 10,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 25, 2014 |
|
|
|
|
|
8,125 |
|
32,500 |
|
56,875 |
|
|
|
|
|
|
|
$1,501,175 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
16,250 |
|
|
|
|
|
$ 750,588 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
48,740 |
|
$ 50.53 |
|
$ 674,562 |
Martin J. Lippert |
|
December 9, 2013 |
|
$ 10,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 25, 2014 |
|
|
|
|
|
6,250 |
|
25,000 |
|
43,750 |
|
|
|
|
|
|
|
$1,154,750 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
12,500 |
|
|
|
|
|
$ 577,375 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
37,493 |
|
$ 50.53 |
|
$ 518,903 |
Christopher G. Townsend |
|
December 9, 2013 |
|
$ 10,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 25, 2014 |
|
|
|
|
|
3,750 |
|
15,000 |
|
26,250 |
|
|
|
|
|
|
|
$ 692,850 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
7,500 |
|
|
|
|
|
$ 346,425 |
|
|
February 25, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
22,496 |
|
$ 50.53 |
|
$ 311,345 |
Non-Equity Incentive Plan Awards
In December, 2013, the Compensation Committee made each Named Executive Officer eligible for an AVIP award for 2014 performance of up to $10 million, if the Company attained either of two Section 162(m)
performance goals in 2014. Those goals were: (1) positive income from continuing operations before provision for income tax, excluding net investment gains (losses) (defined in accordance with Section 3(a) of Article 7.04 of SEC Regulation
S-X), which includes total net investment gains (losses) and net derivatives gains (losses); or (2) positive TSR. These goals were established for the purpose of making AVIP awards to certain of the Companys executives for 2014 eligible
for the performance-based exemption from the limits on tax deductibility under Section 162(m). This limit is labeled maximum in this table. No amounts were established as minimum or target awards.
The amounts of the 2014 AVIP awards paid to the Named Executive Officers are reflected in the Non-Equity Incentive Plan Compensation column of the
Summary Compensation Table on page 52. The factors and analysis of results considered by the Compensation Committee in determining the 2014 AVIP awards are discussed in the Compensation
Discussion and Analysis.
Equity Incentive Plan Awards
The amounts in these columns reflect a range of potential payouts for Performance Shares or Performance Units granted to each Named Executive Officer in 2014. In each case, it is also possible that no
payout will be made.
If the 25% threshold performance factor in the guidelines approved by the Compensation Committee applies, each Named Executive
Officer would receive the number of Performance Shares (or Performance Units) reflected in the Threshold column of this table. If the target performance factor applies, each Named Executive Officer would receive the number of Performance Shares or
Performance Units reflected in
|
|
|
58 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
GRANTS OF PLAN-BASED AWARDS IN 2014 |
the Target column of the table. The maximum performance factor of 175% is reflected in the Maximum column of the table.
For a more detailed description of the material terms and conditions of these awards, see the Summary Compensation Table on page 52.
All Other Stock Awards
The amounts in these columns reflect the potential payout for
Restricted Stock Units or Restricted Units
granted to each Named Executive Officer in 2014. In each case, it is also possible that no payout will be made.
For a more detailed description of the material terms and conditions of these awards, see the Summary Compensation Table on page 52.
All Other Option Awards
For a description of the material terms and conditions of these
awards, see the Summary Compensation Table on page 52.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
59 |
|
|
|
|
|
|
OUTSTANDING EQUITY AWARDS AT 2014 FISCAL YEAR-END |
Outstanding
Equity Awards at 2014 Fiscal Year-End
This table presents information about:
|
|
Stock Options granted to the Named Executive Officers that were outstanding on December 31, 2014 because they had not been exercised or forfeited as of that
date. |
|
|
Performance Shares and Performance Units granted to the Named Executive Officers that were outstanding on December 31, 2014 because they had
|
|
not vested or become payable as of that date (except for the Performance Shares for the performance period of January 1, 2012 to December 31, 2014, which vested on December 31,
2014, but for which the amounts payable are not yet known). |
|
|
Restricted Stock Units and Restricted Units granted to the Named Executive Officers that were outstanding on December 31, 2014 because they
had not vested or become payable as of that date. |
The awards reported in this table include
awards granted in 2014, which are also reported in the Summary Compensation Table on page 52 and the table entitled Grants of Plan-Based Awards in 2014 on page 58.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards (1), (2), (3) |
|
|
|
Stock Awards |
Name
|
|
Number of Securities
Underlying
Unexercised Options (#)
Exercisable
|
|
Number of Securities
Underlying
Unexercised Options (#)
Unexercisable
|
|
Option Exercise
Price
($) |
|
Option Expiration
Date
|
|
|
|
Number of Shares or
Units
of Stock That Have Not Vested (4)
(#)
|
|
Market Value of
Shares
or Units of Stock That Have Not
Vested (5)
($) |
|
Equity Incentive Plan
Awards:
Number of Unearned Shares, Units
or
Other Rights That Have Not Vested (6)
(#)
|
|
Equity Incentive Plan
Awards:
Market or Payout Value of Unearned
Shares, Units
or Other Rights That Have Not Vested (7)
($)
|
Steven A. Kandarian |
|
17,500 |
|
0 |
|
$50.12 |
|
February 27, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
0 |
|
$62.80 |
|
February 26, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
43,500 |
|
0 |
|
$60.51 |
|
February 25, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
106,800 |
|
0 |
|
$23.30 |
|
February 23, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
53,400 |
|
0 |
|
$23.30 |
|
February 23, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
76,000 |
|
0 |
|
$34.84 |
|
February 22, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
80,000 |
|
0 |
|
$45.79 |
|
February 22, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
150,000 |
|
0 |
|
$44.59 |
|
March 20, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
218,750 |
|
109,375 |
|
$38.29 |
|
February 27, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
60,606 |
|
121,212 |
|
$34.86 |
|
February 25, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
130,500 |
|
$50.53 |
|
February 24, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,904 |
|
$4,538,367 |
|
583,121 |
|
$ 31,541,015 |
John C. R. Hele |
|
65,590 |
|
32,793 |
|
$34.00 |
|
September 3, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
6,060 |
|
12,122 |
|
$34.86 |
|
February 25, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
40,492 |
|
$50.53 |
|
February 24, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,541 |
|
$ 948,793 |
|
134,052 |
|
$ 7,250,873 |
William J. Wheeler |
|
35,000 |
|
0 |
|
$38.47 |
|
April 14, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
0 |
|
$50.12 |
|
February 27, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
0 |
|
$62.80 |
|
February 26, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
46,500 |
|
0 |
|
$60.51 |
|
February 25, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
130,000 |
|
0 |
|
$23.30 |
|
February 23, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
65,000 |
|
0 |
|
$23.30 |
|
February 23, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
84,000 |
|
0 |
|
$34.84 |
|
February 22, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
85,000 |
|
0 |
|
$45.79 |
|
February 22, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
112,500 |
|
0 |
|
$44.59 |
|
March 20, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
84,400 |
|
42,200 |
|
$38.29 |
|
February 27, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
21,969 |
|
43,940 |
|
$34.86 |
|
February 25, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
48,740 |
|
$50.53 |
|
February 24, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,897 |
|
$1,671,219 |
|
218,168 |
|
$ 11,800,707 |
|
|
|
60 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
OUTSTANDING EQUITY AWARDS AT 2014 FISCAL YEAR-END |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards (1), (2), (3) |
|
|
|
Stock Awards |
Name
|
|
Number of Securities
Underlying
Unexercised Options (#)
Exercisable
|
|
Number of Securities
Underlying
Unexercised Options (#)
Unexercisable
|
|
Option Exercise
Price
($) |
|
Option Expiration
Date
|
|
|
|
Number of Shares or
Units
of Stock That Have Not Vested (4)
(#)
|
|
Market Value of
Shares
or Units of Stock That Have Not
Vested (5)
($) |
|
Equity Incentive Plan
Awards:
Number of Unearned Shares, Units
or
Other Rights That Have Not Vested (6)
(#)
|
|
Equity Incentive Plan
Awards:
Market or Payout Value of Unearned
Shares, Units
or Other Rights That Have Not Vested (7)
($)
|
Martin J. Lippert |
|
37,500 |
|
0 |
|
$ 29.50 |
|
September 5, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
21,868 |
|
10,932 |
|
$ 38.29 |
|
February 27, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
18,181 |
|
36,364 |
|
$ 34.86 |
|
February 25, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
37,493 |
|
$ 50.53 |
|
February 24, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,622 |
|
$1,331,804 |
|
129,287 |
|
$ 6,993,134 |
Christopher G. Townsend |
|
29,578 |
|
14,787 |
|
$ 30.43 |
|
July 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
9,848 |
|
19,697 |
|
$ 34.86 |
|
February 25, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
22,496 |
|
$ 50.53 |
|
February 24, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,066 |
|
$ 760,830 |
|
90,298 |
|
$ 4,884,219 |
(1) |
Each of these Option Awards is a Stock Option. Each has an expiration date that is the day before the tenth anniversary of its grant date. Except as described in
note 2 to this table, each of the Stock Options for each Named Executive Officer will become exercisable at a rate of one-third of each annual grant on each of the first three anniversaries of the grant date, subject to conditions.
|
(2) |
Mr. Kandarians and Mr. Wheelers Stock Options that expire on March 20, 2021 became exercisable on the third anniversary of their grant date, subject
to conditions. |
(3) |
Portions of Mr. Kandarians outstanding Stock Options have been effectively transferred other than for value under a domestic relations order: 19,125 of those
expiring in 2017 and 11,310 of those expiring in 2018. |
(4) |
Each of these Stock Awards are Restricted Stock Units, except for Mr. Townsends Stock Awards which are Restricted Units. |
(5) |
The hypothetical amount reflected in this column for each Named Executive Officer is equal to the number of Restricted Stock Units and Restricted Units reflected in the column
entitled Number of Shares or Units of Stock That Have Not Vested multiplied by the closing price of a Share on December 31, 2014, the last business day of that year. |
(6) |
This column reflects outstanding Performance Shares and (for Mr. Townsend) Performance Units for the following performance periods for each Named Executive
Officer: |
|
|
|
|
|
|
|
|
|
2012-2014 |
|
2013-2015 |
|
2014-2016 |
Steven A. Kandarian |
|
109,375 |
|
121,212 |
|
87,000 |
John C. R. Hele |
|
32,795 |
|
12,121 |
|
27,000 |
William J. Wheeler |
|
42,200 |
|
43,939 |
|
32,500 |
Martin J. Lippert |
|
10,950 |
|
36,364 |
|
25,000 |
Christopher G. Townsend |
|
14,789 |
|
19,697 |
|
15,000 |
None of these Performance Shares and Performance Units has been paid. If they are paid, the amount that is paid may
be different than the amounts reflected in this table. Under the terms of the awards, the number of Shares (or their equivalent in cash) that will be paid, if any, will be determined using a performance factor based upon a three-year performance
period.
The number of Performance Shares or Performance Units in this column for each Named Executive Officer is the maximum amount that
could become payable. The amounts have been determined by (1) multiplying the
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
61 |
|
|
|
|
|
|
OUTSTANDING EQUITY AWARDS AT 2014 FISCAL YEAR-END |
aggregate Performance Shares or Performance Units awarded to each Named Executive Officer for the 2012-2014 performance period described above by a hypothetical performance factor
of 200%; and (2) multiplying the aggregate Performance Shares or Performance Units granted to each Named Executive Officer for the 2013-2015 and 2014-2016 performance periods described above by a hypothetical performance factor of
175%. In each case, this hypothetical performance factor is the maximum performance factor that could be applied to the awards. The maximum performance factor has been used because it was not possible to determine the Companys performance in
2014, 2015, or 2016 in comparison to the performance of other Insurance Index Comparators at the time this Proxy Statement was filed. See the Summary Compensation Table on page 52 for a description of the terms of the Performance Share
and Performance Unit awards.
In each case, the Performance Shares and Performance Units vest on December 31 of the
final calendar year of the performance period, subject to conditions. As a result, none of the Performance Shares and Performance Units reflected in this column has vested, with the exception of the Performance Shares or Performance Units for the
performance period of 2012-2014. The final number of Performance Shares payable for the 2012-2014 period is not yet known, and will be determined by the Companys performance in comparison to the performance of the Insurance Index Comparators
over the three-year performance period and be payable in the second quarter of 2015. The amount that is payable may be different than the amounts reflected in this table.
(7) |
The hypothetical amount reflected in this column for each Named Executive Officer is equal to the number of Performance Shares and Performance Units reflected
in the column entitled Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested multiplied by the closing price of a Share on December 31, 2014, the last business day of that year.
|
|
|
|
62 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
OPTION EXERCISES AND STOCK VESTED IN 2014 |
Option
Exercises and Stock Vested in 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
|
|
Stock Awards |
|
Name
|
|
Number of Shares Acquired on Exercise
(#)
|
|
Value Realized on Exercise
($)
|
|
|
|
|
Number of Shares Acquired on Vesting
(#)
|
|
Value Realized on Vesting
($)
|
|
Steven A. Kandarian |
|
0 |
|
|
$ 0 |
|
|
|
|
82,202 |
|
$ |
4,352,534 |
|
John C. R. Hele |
|
0 |
|
|
$ 0 |
|
|
|
|
2,020 |
|
$ |
100,939 |
|
William J. Wheeler |
|
0 |
|
|
$ 0 |
|
|
|
|
60,363 |
|
$ |
3,225,847 |
|
Martin J. Lippert |
|
0 |
|
|
$ 0 |
|
|
|
|
28,560 |
|
$ |
1,532,768 |
|
Christopher G. Townsend |
|
0 |
|
|
$ 0 |
|
|
|
|
3,282 |
|
$ |
164,002 |
|
Option Awards
None of the Named Executive Officers exercised any Stock Options or Unit Options in 2014. The exercise of Stock Options that had been effectively transferred by a
Named Executive Officer other than for value under a domestic relations order are excluded.
Stock Awards
These amounts include payouts of Restricted Stock Units and Restricted Units that vested in 2014. The value realized on vesting was determined using the closing
price of a Share on the vesting date. None of the Named Executive Officers had the opportunity to defer the Shares payable for these awards.
These
amounts also include payouts of Performance Shares and Performance Units for the 2011-2013 performance period, which vested on December 31, 2013. The value realized on vesting was determined using the closing price of Shares on the last
business day of 2013.
The number of Shares payable for this award was calculated by multiplying the number of Performance Shares by the performance
factor that pertained to the awards, which was 80%. This factor was the total of the Operating EPS Performance Factor and the TSR Performance Factor, each of which could have been as low as 0% and as high as 100%, and each with a target performance
factor of 50%.
The factor based on the Companys Operating EPS growth was above target, at 55%. This was the average percentage determined by the
Companys year-over-year change in Operating EPS relative to other Standard and Poors Insurance Index comparators for each of the three years of the performance period:
|
|
|
|
|
Year
|
|
Company
Performance |
|
Performance Factor |
2011 |
|
above 75th percentile |
|
100% |
2012 |
|
61st percentile |
|
66% |
2013 |
|
below 25th percentile |
|
0% |
The factor based on the Companys TSR was below target, at 25%. This was determined by comparing the Companys
performance relative to that of other Standard & Poors Insurance Index Comparators with respect to TSR for the performance period. The TSR of the Insurance Index Comparators, less MetLifes TSR, was 25%. That result produced a
performance factor of 25%.
Each Named Executive Officer who had a Performance Share award for the 2011-2013 performance period had the
opportunity to defer the Shares payable for that award. Mr. Wheeler deferred all of the Shares payable to him for his award.
The Performance Shares for
the 2012-2014 performance period have vested, but the actual amounts payable are not yet known and are not reflected in this table. See the table entitled Outstanding Equity Awards at 2014 Fiscal Year-End on page 60 for more information
about the Named Executive Officers Performance Shares for this performance period. The amounts payable for the 2012-2014 performance period will be reflected in the table entitled Option Exercises and Stock Vested in 2015 in the
Companys 2016 Proxy Statement.
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
63 |
|
|
|
|
|
|
PENSION BENEFITS AT 2014 FISCAL YEAR-END |
Pension
Benefits at 2014 Fiscal Year-End
|
|
|
|
|
|
|
Name
(1) |
|
Plan Name |
|
Number of Years Credited Service (#) |
|
Present Value of Accumulated Benefit ($) |
Steven A. Kandarian |
|
Retirement Plan |
|
9.750 |
|
$ 154,676 |
|
|
Auxiliary Pension Plan |
|
9.750 |
|
$ 2,320,273 |
John C. R. Hele |
|
Retirement Plan |
|
2.333 |
|
$ 30,433 |
|
|
Auxiliary Pension Plan |
|
2.333 |
|
$ 192,305 |
William J. Wheeler |
|
Retirement Plan |
|
17.250 |
|
$ 469,047 |
|
|
Auxiliary Pension Plan |
|
17.250 |
|
$ 3,130,453 |
Martin J. Lippert |
|
Retirement Plan |
|
3.333 |
|
$ 51,915 |
|
|
Auxiliary Pension Plan |
|
3.333 |
|
$ 392,502 |
(1) |
Mr. Townsend did not participate in a defined benefit pension plan in 2014. |
Pension Benefits for U.S.-Based Executives
The U.S.-based Named Executive Officers are eligible to participate in the Retirement Plan and the Auxiliary Pension Plan. Eligible employees qualify for pension
benefits after one year of service and become vested in their benefits after three years of service.
Pension Plans. Pension benefits are paid under two separate plans, primarily due to tax requirements. The Retirement Plan is a
tax-qualified defined benefit pension plan that provides benefits for eligible employees on the United States payroll. The U.S. Internal Revenue Code imposes limitations on eligible compensation and on the amounts that can be paid under the
Retirement Plan. The purpose of the Auxiliary Pension Plan is to provide benefits which eligible employees would have received under the Retirement Plan if these limitations were not imposed. Benefits under the Auxiliary Pension Plan are calculated
in substantially the same manner as they are under the Retirement Plan. The Auxiliary Pension Plan is unfunded, and benefits under that plan are general promises of payment not secured by any rights to Company property.
Determination of Benefits. An
employees benefit is calculated under either one or a combination of two different formulas, only one of which applies to any given period of service. Mr. Wheelers benefit will be determined using the Traditional Formula for
service prior to 2003 and the Personal Retirement Account Formula for service in 2003 and later. Each other U.S.-based Named Executive Officers respective benefit will be determined exclusively under the Personal
Retirement Account Formula. Mr. Wheeler had sufficient service as of year-end 2014 to be fully vested in both his Traditional Formula benefit and Personal Retirement Account Formula benefit. Mr. Kandarian
and Mr. Lippert had sufficient service as of year-end 2014 to be fully vested in his Personal Retirement Account Formula benefit.
The Personal Retirement Account Formula is based on amounts contributed or credited for each participant based on the participants eligible compensation, plus interest. All employees hired (or rehired) on or
after January 1, 2002 accrue benefits for 2002 and later under the Personal Retirement Account Formula. Under the Personal Retirement Account Formula, an employee is credited each month with an amount equal to 5% of eligible compensation
up to the Social Security wage base (for 2014, $117,000), plus 10% of eligible compensation in excess of that wage base. In addition, amounts credited to each employee earn interest at an approximation of the U.S. governments 30-year Treasury
securities rate.
The Traditional Formula is based on length of service and final average compensation. The Traditional Formula is used to
calculate benefits for Mr. Wheelers service before 2003. Employees hired before 2002 who remained employed throughout 2002 accrued benefits for 2002 under the Traditional Formula. These employees, including Mr. Wheeler, were given the
opportunity to continue accruing their pension benefits under the Traditional Formula for service in 2003 and later or to begin accruing benefits for 2003 and later under the Personal Retirement Account Formula. Mr. Wheeler elected to begin
accruing benefits for 2003 and later under the Personal Retirement Account Formula.
Mr. Wheelers annual benefit under the Traditional Formula was
determined and frozen at the end of 2002 and represents approximately one-fifth of his total benefit value. This frozen annual benefit is calculated
|
|
|
64 |
|
MetLife 2015 Proxy Statement |
|
|
|
|
|
PENSION BENEFITS AT 2014 FISCAL YEAR-END |
by multiplying Mr. Wheelers years of service through 2002 by the sum of (1) 1.1% of his final average compensation up to the average Social Security wage base over the past 35 years,
and (2) 1.7% of his employees final average compensation in excess of the average Social Security wage base over the past 35 years. Mr. Wheelers final average compensation was calculated by determining the consecutive five-year
period (within the period from Mr. Wheelers date of hire through 2002) during which his eligible compensation (including base salary and eligible annual incentive awards) produced the highest average annual compensation.
For pension benefit purposes, the 2009 annual incentive awards, which were paid outside of AVIP, are considered on the same basis as AVIP awards.
Form of Payment of Benefits. Whether an employees pension benefit is determined
under the Traditional Formula or (except with respect to amounts accrued under the Auxiliary Pension Plan during or after 2005) the Personal Retirement Account Formula, the employee may choose to receive the benefit as a life annuity, life annuity
with term certain, contingent survivor annuity, or first-to-die annuity. Amounts accrued during or after 2005 under the Auxiliary Pension Plan that are determined by the Personal Retirement Account Formula are paid in a lump sum. Employees may
choose a lump sum payout of any of the rest of their vested benefits under the Personal Retirement Account Formula at termination of their employment or later. The Named Executive Officer participants could also have selected, no later than
December 31, 2008 and subject to the approval of the Compensation Committee or its designee, the timing and form of the Traditional Formula benefit payment under the Auxiliary Pension Plan, including a lump sum payment. The actuarial value of
all forms of payment is substantially equivalent.
Retirement
Eligibility. Normal Retirement Eligibility applies at age 65 with at least one year of service. An employee is eligible for early Retirement Eligibility beginning at age 55 with 15 years
of service. Each year of age over age 57 1/2 reduces the number of years of service required to qualify for early retirement, until normal Retirement Eligibility at age 65 and at least one year of service.
The Traditional Formula benefit may not be paid to employees before they become Retirement Eligible. Early retirement payments for Traditional Formula
participants are reduced from normal retirement benefits by an early retirement factor that depends on the employees age at the time payments begin and years of service at the end of
employment. If an employee has 20 years of service or more and is Retirement Eligible, the factors range from 72% at age 55 to 100% at age 62. If an employee does not have 20 years of service at the end of employment, the factors range from 54.8% at
age 55 to 100% at age 65.
However, attaining Retirement Eligibility does not affect Personal Retirement Account benefits. Personal
Retirement Account participants qualify to be paid their full vested benefit when their employment ends. Because Personal Retirement Account benefits are based on total amounts credited for the employee and not final average compensation, those
benefits are not reduced for any early retirement.
Attaining Retirement Eligibility also affects whether an employee retains stock-based long-term
incentive awards granted in 2014 or earlier. See the text accompanying the table entitled Potential Payments upon Termination or Change-in-Control at 2014 Fiscal Year-End on page 72 for a discussion of these effects as of 2014
year-end.
Of the Named Executive Officers based in the U.S., only Mr. Kandarian was Retirement Eligible during 2014.
Section 409A
Requirements. Amounts that were vested in the Auxiliary Pension Plan after 2004 are subject to the requirements of U.S. Internal Revenue Code Section 409A (Section 409A).
Participants had the opportunity in 2008 to choose their form of payment (including a lump sum) for their accrued benefit, so long as they did not begin receiving payments in the year of the election. Payments of amounts that are subject to the
requirements of Section 409A to the top 50 highest paid officers in the Company that are due upon separation from service are delayed for six months following their separation, as required by Section 409A.
Present Value Calculation
Assumptions. The present value of each Named Executive Officer participants accumulated pension benefits is reported in the table above using certain assumptions. In the case
of each Named Executive Officer with a benefit determined in part under the Traditional Formula, the assumptions used in the determination of present value as of December 31, 2014 include assumed retirement at the
|
|
|
|
|
MetLife 2015 Proxy Statement |
|
|
65 |
|
|
|
|
|
|
PENSION BENEFITS AT 2014 FISCAL YEAR-END |
earliest date the executive could retire with full pension benefits. This was the earlier of the date the executive reached at least age 62 with at least 20 years of service, or the normal
retirement date (age 65). Otherwise, the assumptions used were the same as those used for financial reporting under GAAP. For a discussion of the assumptions made regarding this valuation, see Notes 1 and 16 to the Consolidated Financial
Statements in the 2014 Form 10-K.
In the case of each Named Executive Officer with a benefit determined exclusively under the Personal Retirement
Account Formula, the present value of his benefit as of December 31, 2014 is equal to his Personal Retirement Account balance. Of those Named Executive Officers, only Mr. Kandarian and Mr. Lippert were vested in such benefit as of that
date. Vested Personal Retirement Account balances may be paid in full upon termination of employment at any time.