DEF 14A 1 pnx_14a.htm DEFINITIVE PROXY STATEMENT pnx_14a.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A Information
 
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
 
(Amendment No. )

Filed by Registrant þ
 
Filed by Party other than Registrant o
 
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Preliminary Proxy Statement
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þ
Definitive Proxy Statement
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Definitive Additional Materials
     
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Soliciting Materials Pursuant to §240.14a-12
   
 
THE PHOENIX COMPANIES, INC.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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April 3, 2012
 
Dear Shareholder:
 
You are cordially invited to attend the Annual Meeting of Shareholders on Tuesday, May 15, 2012, at 10 a.m. Eastern time, at our offices at One American Row, Hartford, Connecticut 06102.
 
The proxy statement accompanying this letter provides an outline of the business to be conducted at the meeting. We also will report on the progress of the Company during the past year and answer your questions.
 
In 2011, Phoenix made progress critical to our future success. The fundamentals of the business are now solid and we achieved positive momentum on key metrics including capital growth, earnings, expense management, sales, business persistency, investment performance and portfolio quality. From an earnings perspective, 2011 was our strongest year since 2007. Overall, the company is on a solid foundation and gaining traction on profitable growth.
 
Beyond the financial progress, Phoenix today is quite different from just a few years ago. We are now a growing boutique firm serving middle market customers’ retirement and protection needs through select independent distributors. While we offer a variety of life insurance and annuity products, we are currently focused on sales of fixed indexed annuities and indexed universal life products. We believe we have an edge in our target market because of our recognized brand and well designed products which offer a competitive value proposition. As we grow, we remain cognizant of where we have been, so we approach growth with discipline to balance sales, capital and earnings.
 
We appreciate your continuing involvement and support and want to make sure your shares are represented at the Annual Meeting. If you have a brokerage account, you should know that the New York Stock Exchange regulations have changed and your broker will not be able to vote for directors and the say on pay proposals on your behalf without instructions from you. No matter how you hold your shares, or whether or not you plan to attend the Annual Meeting, we encourage you to vote by proxy via the internet, telephone, or mail as promptly as possible.
 
Thank you.
 
Yours truly,
 
     
Thomas S. Johnson
   
James D. Wehr
 
Chairman of the Board
   
President and Chief Executive Officer
 
 
 
 
 
 
 
 
 
 
 
 
One American Row
 
 
P.O. Box 5056
860 403 5000 Phone
 
Hartford, CT 06102-5056
www.phoenixwm.com
 
 
 

 
 
   
 
THE PHOENIX COMPANIES, INC.
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 
———————
 
April 3, 2012
 
To Our Shareholders:
 
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of THE PHOENIX COMPANIES, INC. will be held at our offices at One American Row, Hartford, Connecticut 06102, on Tuesday, May 15, 2012, at 10 a.m. Eastern time, to consider and act upon the following matters:
 
 
1.
Election of three directors to serve until the 2015 Annual Meeting of Shareholders;
 
 
2.
Ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2012;
 
 
3
An advisory, non-binding vote on the compensation of our Named Executive Officers;
 
 
4.
Grant to the Board of discretionary authority to amend the Company’s certificate of incorporation to effect a reverse stock split and authorized share reduction; and
 
 
5.
Consideration of such other business as may properly come before the meeting or any postponements or adjournments thereof.
 
Only shareholders of record at the close of business on March 19, 2012 are entitled to notice of, to attend and to vote at, the meeting and any postponement or adjournment thereof. To enter the meeting, all shareholders will be asked to present both a valid picture identification and proof of ownership of shares of our Common Stock.
 
You may also listen to the meeting live via the internet by going to our web site, www.phoenixwm.com. A replay will be available until at least May 31, 2012.
 
Your vote is very important. Whether or not you plan to attend the Annual Meeting of Shareholders, we urge you to vote by submitting your proxy via the internet, telephone or mail. If you are a registered shareholder and attend the meeting after submitting a proxy, you may revoke the proxy prior to its exercise at the meeting and vote your shares in person by following the instructions in the accompanying Proxy Statement. If you hold your shares through a bank or broker and want to vote your shares in person at the meeting, please contact your bank or broker to obtain a legal proxy.
 
By Order of the Board of Directors,
 
 
   
John T. Mulrain
   
Secretary
   
 
 
 
 
 
 
One American Row
 
 
P.O. Box 5056
860 403 5000 Phone
 
Hartford, CT 06102-5056
www.phoenixwm.com
 
 
 

 
 
TABLE OF CONTENTS
 
       
GENERAL INFORMATION
    1  
         
PROPOSAL 1: ELECTION OF DIRECTORS
    6  
Continuing Directors
    9  
Board Committee Membership and Meetings
    11  
Executive Sessions of the Board
    13  
Director Independence
    14  
Audit Committee Financial Expert
    14  
Director and Management Performance Evaluations
    14  
Director Nomination Process
    14  
Director Orientation and Continuing Education
    15  
Code of Conduct
    15  
Policy Regarding Transactions with Related Persons
    15  
Transactions with Related Persons
    16  
Shareholder Rights Plan
    16  
Board Attendance and Annual Meeting Policy
    16  
Shareholder and Interested Party Communications
    16  
         
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    18  
Fees Incurred for Services Performed by PwC
    18  
         
OTHER MATTERS
    19  
         
AUDIT COMMITTEE CHARTER AND REPORT
    20  
Audit Committee Charter
    20  
Audit Committee Report
    20  
         
COMPENSATION COMMITTEE CHARTER, PROCESSES, INTERLOCKS AND REPORT
    21  
Compensation Committee Charter
    21  
Processes and Procedures Related to Executive and Director Compensation
    21  
Compensation Committee Interlocks and Insider Participation
    22  
Compensation Committee Report
    22  
         
COMPENSATION OF EXECUTIVE OFFICERS
    23  
Compensation Discussion and Analysis
    23  
Summary Compensation Table for 2011 Fiscal Year
    46  
Grants of Plan-Based Awards in Fiscal Year 2011
    49  
Outstanding Equity Awards at 2011 Fiscal Year-End
    51  
Option Exercises and Stock Vested in Fiscal Year 2011
    52  
Pension Benefits at 2011 Fiscal Year-End
    53  
Non-Qualified Deferred Compensation in Fiscal Year 2011
    56  
Change-in-Control Agreements and Severance
    58  
Risk Assessment of Compensation Programs for All Employees
    63  
         
COMPENSATION OF DIRECTORS
    64  
Director Compensation Philosophy
    64  
Elements of Director Compensation
    64  
Director Compensation Review
    65  
Director Compensation Table for 2011
    66  
         
PROPOSAL 3: AN ADVISORY, NON-BINDING VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
    67  
         
PROPOSAL 4: GRANT TO THE BOARD OF DISCRETIONARY AUTHORITY TO AMEND THE COMPANY’S CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT AND AUTHORIZED SHARE REDUCTION
    69  
         
OWNERSHIP OF COMMON STOCK
    76  
Directors and Executive Officers
    76  
Five Percent Shareholders
    77  
         
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
    78  
         
ANNEX A – FORM OF CERTIFICATE OF AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE PHOENIX COMPANIES, INC.
    79  
 
 
 

 
 
PROXY STATEMENT
 
THE PHOENIX COMPANIES, INC.
 
ANNUAL MEETING OF SHAREHOLDERS
 
May 15, 2012
 
GENERAL INFORMATION
 
This Proxy Statement is being provided to the shareholders of The Phoenix Companies, Inc., a Delaware corporation (the “Company”, “we”, “our” or “us”), in connection with the solicitation by our Board of Directors (the “Board”) of proxies to be voted at the Annual Meeting of Shareholders (the “Annual Meeting”) to be held on Tuesday, May 15, 2012, at 10 a.m. Eastern time, at One American Row, Hartford, Connecticut 06102, and at any adjournment or postponement of that meeting. The mailing to shareholders of the notice of internet availability of proxy materials (the “Notice”) took place on April 3, 2012.
 
The Company will pay the expenses of this proxy solicitation. Depending upon the response to the initial solicitation, proxies may be solicited in person or by mail, telephone, electronic mail or facsimile by employees of the Company. The Company has retained Morrow & Co., LLC, 470 West Avenue, Stamford, Connecticut 06902, to assist in the solicitation at a total estimated cost of $6,000 plus reimbursement of certain expenses. The Company will, upon request, also reimburse banks, brokers and other nominees for providing proxy materials to beneficial owners.
 
WHY DID I RECEIVE A ONE-PAGE NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS?
 
In accordance with rules and regulations adopted by the United States Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials to each shareholder of record, we may furnish proxy materials by providing access to those documents on the internet. Generally, you will not receive printed copies of the proxy materials unless you request them. Instead, you received the Notice containing instructions as to how to access and review all of the proxy materials on the internet. The Notice also instructs you as to how to submit your proxy on the internet. If you would like to receive a paper or e-mail copy of our proxy materials, you should follow the instructions in the Notice for requesting those materials.
 
WHAT AM I VOTING ON?
 
You will be voting on the following:
 
 
Proposal 1 — election of three members to the Board;
 
 
Proposal 2 — ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm of the Company for the year ending December 31, 2012;
 
 
Proposal 3 — an advisory, non-binding vote on the compensation of our Named Executive Officers; and
 
 
Proposal 4 — grant to the Board of discretionary authority to amend the Company’s certificate of incorporation to effect a reverse stock split and authorized share reduction.
 
The Company recommends a vote FOR Proposals 1, 2, 3 and 4.
 
You also may vote on any other business properly coming before the Annual Meeting.
 
WHO IS ENTITLED TO VOTE?
 
You may vote if you owned shares of the Company’s common stock (“Common Stock”) as of the close of business on March 19, 2012 (the “Record Date”). Each share of Common Stock entitles the owner to one vote. As of the Record Date, we had 116,328,742 shares of Common Stock outstanding.
 
 
1

 
 
HOW DO I VOTE BEFORE THE MEETING?
 
If you are a registered shareholder, meaning that you hold your shares in certificate form or through an account with our transfer agent, Computershare (formerly BNY Mellon Shareowner Services), you have three options for voting before the meeting:
 
 
via the internet, at the address shown on the Notice;
 
 
if you request printed copies of the proxy materials by mail, by promptly completing, signing, dating and returning a proxy card in the envelope provided; or
 
 
by telephone, through the number shown on the proxy card.
 
If you hold your shares through an account with a bank, broker or other registered holder, you are considered the beneficial owner of shares held in “street name,” and you must direct your bank, broker or other registered holder on how to vote your shares by following the voting instructions it provides you. If you do not instruct the bank, broker or other registered holder, your shares will not be voted for certain proposals.
 
Your vote is important, and the Board of Directors urges you to exercise your right to vote. Whether or not you plan to attend the Annual Meeting, you can ensure that your shares are voted by properly voting through the internet, by telephone, by proxy card or by voting instruction form.
 
MAY I VOTE AT THE MEETING?
 
Registered shareholders may vote in person at the Annual Meeting. If you are a beneficial owner, you must obtain a legal proxy from the bank, broker or other registered holder authorizing you to vote at the Annual Meeting. A legal proxy is an authorization from your bank, broker or other registered holder to vote the shares held in its name for your benefit.
 
MAY I CHANGE MY MIND AFTER I VOTE?
 
If you are a registered shareholder, you may revoke your proxy at any time before it is voted at the Annual Meeting by:
 
 
voting in person at the Annual Meeting at any time before the polls close at the conclusion of the meeting;
 
 
voting again via the internet or telephone prior to 11:59 p.m. Eastern time on May 14, 2012; or
 
 
signing another proxy card with a later date and returning it to us prior to the Annual Meeting.
 
If you are a beneficial owner of shares, you must submit new voting instructions by contacting your bank, broker or other registered shareholder, if you do not plan to attend the Annual Meeting in person. You may also vote in person at the Annual Meeting if you obtain a legal proxy as described in the answer to the previous question.
 
All shares that have been properly voted and not revoked will be voted at the Annual Meeting.
 
WHAT IF I RETURN A PROXY CARD BUT DO NOT PROVIDE VOTING INSTRUCTIONS?
 
Proxies that are signed and returned but do not contain instructions will be voted:
 
 
FOR the election of all of the nominees for director named in this Proxy Statement;
 
 
FOR the ratification of PwC as our independent registered public accounting firm for 2012;
 
 
FOR the approval of the advisory resolution on compensation paid to the Company’s Named Executive Officers;
 
  
FOR the grant to the Board of discretionary authority to amend the Company’s certificate of incorporation to effect a reverse stock split and authorized share reduction; and
 
 
According to the best judgment of the named proxies on any other matters properly brought before the Annual Meeting.
 
This does not apply to proxies that you send to your bank, broker or other registered shareholder.
 
 
2

 
 
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE NOTICE?
 
It means that you have multiple accounts with our transfer agent and/or banks, brokers or other registered shareholders. Please vote all of your shares. If you would like information on consolidating your accounts, please contact Phoenix Shareholder Services at 800.490.4258.
 
WHY DID MY FAMILY RECEIVE ONLY ONE COPY OF THE NOTICE?
 
Unless separate copies were previously requested, we sent only one copy of the Notice to households in which multiple shareholders share the same address, a procedure called “householding.” This reduces our printing costs and benefits the environment. If you would like to receive separate copies of the Notice or wish to receive separate copies of the Notice in the future, please contact Phoenix Shareholder Services by calling 800.490.4258.
 
If you are eligible for householding, or hold stock in more than one account and wish to receive only a single copy of the Notice for your household, please contact Phoenix Shareholder Services as indicated above.
 
HOW WILL SHARES HELD IN THE PHOENIX COMPANIES, INC. COMMON STOCK FUND BE VOTED?
 
This Proxy Statement is being used to solicit voting instructions with respect to shares of Common Stock held in The Phoenix Companies, Inc. Common Stock Fund (the “Fund”) by Fidelity Management Trust Company (“Fidelity”), the trustee of The Phoenix Companies, Inc. Savings and Investment Plan (the “401(k) Plan”). These shares are held of record and voted by Fidelity. If you are a participant in the 401(k) Plan and have an account balance in the Fund as of March 14, 2012, you may direct Fidelity as to how to vote the shares of Common Stock attributable to the units of the Fund credited to your individual account through any of the three options described under How Do I Vote Before the Meeting? on page 2. Voting instructions for these shares must be received by 11:59 p.m. Eastern time on May 10, 2012 to allow sufficient time to process voting instructions and vote on behalf of the Fund shares.
 
WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY OR VOTING INSTRUCTION FORM?
 
If you are a registered shareholder and do not provide a proxy, your shares will not be voted unless you attend the Annual Meeting and cast your vote. If you are a beneficial owner of shares, they may be voted with respect to certain routine matters, even if you do not provide voting instructions on your voting instruction form. Under the NYSE rules, the only proposal considered a routine matter for which brokerage firms may vote without specific instructions is the proposal to ratify our independent registered public accounting firm.
 
If you hold shares through the Fund and voting instruction forms for the shares attributable to your account are not received by 11:59 p.m. Eastern time on May 10, 2012, these shares will be voted in the same proportion as the voting instruction forms received on a timely basis from other participants in the 401(k) Plan.
 
New York Stock Exchange (“NYSE”) regulations restrict the ability of your bank or broker to vote your uninstructed shares in the election of Directors, any executive compensation matters and certain corporate governance matters on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote, no votes will be cast on your behalf with respect to Proposals 1 and 3 of this Proxy Statement. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm with respect to Proposals 2 and 4 of this Proxy Statement. If you are a shareholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the Annual Meeting. We strongly encourage you to submit your proxy card and exercise your right to vote as a shareholder.
 
WHO MAY ATTEND THE MEETING?
 
The Annual Meeting is open only to persons who owned Common Stock as of the Record Date. To attend the meeting, you will need to bring valid picture identification and an admission ticket, proxy card or other proof of your ownership of Common Stock. If you are a registered shareholder and you received your proxy materials by mail, your admission ticket is attached to your proxy card. If you are a registered shareholder and you received your proxy materials electronically via the internet, you will need to click on “I Will Attend Meeting” after you vote and we will be able to verify your ownership of Common Stock electronically at the Annual Meeting. If you are a beneficial owner of shares, you will need to contact your bank, broker or other registered shareholder to request a legal proxy, which will serve as your admission ticket.
 
 
3

 
 
HOW DO I GET TO THE MEETING?
 
Directions to the Annual Meeting at our offices at One American Row in Hartford are available on our web site, www.phoenixwm.com in the Investor Relations section.
 
CAN I LISTEN TO THE MEETING VIA THE INTERNET?
 
You can listen to the Annual Meeting live over our web site, www.phoenixwm.com in the Investor Relations section, by clicking on the Annual Meeting icon. A replay will be available on the web site until at least May 31, 2012.
 
MAY SHAREHOLDERS ASK QUESTIONS AT THE MEETING?
 
Yes. Representatives of the Company will answer shareholders’ questions of general interest at the end of the Annual Meeting. If you are listening to the Annual Meeting live over our web site, you will not be able to ask questions.
 
HOW MANY VOTES MUST BE PRESENT TO CONDUCT BUSINESS AT THE ANNUAL MEETING?
 
In order for us to conduct our Annual Meeting, holders of one-third of our shares of Common Stock outstanding as of the Record Date must be present at the meeting in person or by proxy. This is referred to as a quorum. You are counted as present at the meeting if you attend the meeting and vote in person or if you vote by proxy via the internet, telephone or mail. Abstentions and broker non-votes will be counted for purposes of establishing a quorum at the meeting. A “broker non-vote” occurs when a bank, broker or other registered shareholder holding shares for a beneficial owner does not vote on a particular proposal because the holder does not have discretionary voting power for that item and has not received instructions from the beneficial owner.
 
HOW MANY VOTES ARE NEEDED TO APPROVE THE COMPANY’S PROPOSALS?
 
Proposal 1: Election of Directors
 
Directors will be elected by a plurality of votes cast at the Annual Meeting, meaning the three nominees receiving the most votes will be elected. Only votes cast FOR or AGAINST a nominee will be counted. Shares not voted will have no effect on the election of directors. Each proxy received will be voted FOR ALL of the nominees for director, unless the proxy is otherwise marked.
 
Proposal 2: Ratification of the Appointment of our Independent Registered Public Accounting Firm
 
Ratification of the appointment of PwC as our independent registered public accounting firm for 2012 requires that a majority of the votes represented at the Annual Meeting be voted FOR the proposal. If you vote to ABSTAIN with respect to this proposal, your shares will be counted as present for purposes of establishing a quorum, but the abstention will have the same effect as a vote AGAINST the proposal.
 
Proposal 3: Adoption of the Advisory Resolution on the Compensation of our Named Executive Officers
 
Approval of the advisory resolution on the compensation of our Named Executive Officers requires that a majority of the votes represented at the Annual Meeting be voted FOR the proposal. If you vote to ABSTAIN with respect to this proposal, your shares will be counted as present for purposes of establishing a quorum, but the abstention will have the same effect as a vote AGAINST the proposal.
 
 Although the advisory vote on Proposal 3 is non-binding, as provided by law, our Board will review the results of the vote and will take it into account in making a determination concerning executive compensation.
 
Proposal 4: Grant to the Board of Discretionary Authority to Amend the Company’s Certificate of Incorporation to Effect a Reverse Stock Split and Authorized Share Reduction
 
The granting to the Board of discretionary authority to effect a reverse stock split by approving an amendment to the Company's Amended and Restated Certificate of Incorporation to effect the reverse stock split and to reduce proportionately the total number of authorized shares of Common Stock requires that a majority of the outstanding votes be voted FOR the proposal. If you vote to ABSTAIN with respect to this proposal, your shares will be counted as present for purposes of establishing a quorum, but the abstention will have the same effect as a vote AGAINST the proposal.
 
 
4

 
 
HOW MANY DIRECTORS DO YOU HAVE? HOW MANY ARE INDEPENDENT?
 
Our Board currently has 10 members, whom we have determined to be independent under the NYSE rules, except Mr. James D. Wehr, who is also our President and Chief Executive Officer.
 
WHERE CAN I LEARN MORE ABOUT THE BOARD’S LEADERSHIP STRUCTURE AND RESPONSIBILITIES?
 
Please turn to Election of Directors on page 6.
 
WHO CAN ANSWER MY QUESTIONS ABOUT THE COMPANY?
 
If you have questions about your shares or status as a shareholder of the Company, please call Phoenix Shareholder Services at 800.490.4258. If you have questions about our Proxy Statement or our Annual Meeting, please call Phoenix Investor Relations at 860.403.7100.
 
WHO IS THE TRANSFER AGENT FOR PHOENIX?
 
Computershare (formally BNY Mellon Shareowner Services) acts as transfer agent for Phoenix. Note that Computershare acquired BNY Mellon Shareowner Services on December 31, 2011. In this capacity, Computershare maintains stockholder records for The Phoenix Companies, Inc. common stock and performs all stock registrations, transfers and disbursements. They also handle all shareholder account requests, including change of address, dividend checks and duplicate 1099s. For information on your account, please call 1.800.490.4258 or go to www.computershare.com, click on EquityAccess & More, under Shareowners, Login to Investor ServiceDirect®.
 
HOW DO I REQUEST PAPER COPIES OF THIS YEAR’S ANNUAL MEETING MATERIALS?
 
If you are a shareholder, please follow the instructions for requesting paper copies on the “Notice Regarding the Availability of Proxy Materials” that you received in the mail.
 
For all other inquiries, please contact Phoenix Investor Relations at 860.403.7100 or visit the Investor Relations section of our Company web site at www.phoenixwm.com.
 
HOW CAN I GET COPIES OF THE DOCUMENTS REFERENCED IN THIS PROXY?
 
You may receive a copy of any document referenced or incorporated by reference herein without charge. We will respond to any such request within one business day of our receipt of the request and provide the documentation by first class mail or an equally prompt means of delivery. If you would like to make such a request, please contact our Corporate Secretary by e-mail to corporate.secretary@phoenixwm.com or by mail to:
 
Corporate Secretary
The Phoenix Companies, Inc.
One American Row
P.O. Box 5056
Hartford, Connecticut 06102-5056
 
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
 
FOR THE 2012 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 15, 2012.
 
The Company’s Proxy Statement for the 2012 Annual Meeting of Shareholders and the Company’s Annual Report to
Shareholders for the fiscal year ended December 31, 2011 are available at
 http://bnymellon.mobular.net/bnymellon/pnx.
 
 
5

 
 
PROPOSAL 1: ELECTION OF DIRECTORS
 
Our Board is responsible for providing effective governance over the Company’s affairs. Our commitment to good corporate governance, which aligns the interests of the Board and management with those of shareholders and promotes honesty and integrity, is reflected in our Corporate Governance Principles. To maintain corporate governance best practices, our Corporate Governance Principles are reviewed at least annually by the Governance Committee, and to the extent deemed appropriate in light of emerging practices, revised accordingly, upon recommendation to and approval by the Board. Highlights of our corporate governance practices, including our Corporate Governance Principles, are described below. More information about corporate governance, including our Corporate Governance Principles, may be found on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance.” Copies may also be obtained by contacting our Corporate Secretary at one of the addresses listed under Shareholder and Interested Party Communications on page 16.
 
Currently, the roles of chief executive officer (“CEO”) and Chairman of the Board (“Chairman”) are separate. Mr. James D. Wehr is our CEO and focuses on the operation of the Company. Mr. Thomas S. Johnson, who has over 10 years of service on the Board, is the Chairman.
 
Our corporate governance guidelines allow the Board to choose whether to keep the roles of CEO and Chairman separate or have one person serve in both capacities. We believe the separate leadership structure is best for our Company and shareholders at this time, because it allows our CEO to devote his attention to the significant strategic and operational transition currently under way, and because we have an experienced independent Board member who is highly qualified to fill the Chairman’s role.
 
Our governance guidelines require that if the Chairman is an independent member of the Board, he or she shall also serve as the chairman of the Company’s Executive Committee. If the Chairman is also the CEO, the independent members of the Board will appoint an independent member of the Board to serve as the chairman of the Executive Committee. The chairman of the Executive Committee will perform the functions typically assigned to a lead director, including presiding at executive sessions, being available to the other members of the Board to discuss matters of importance to the Company, advising on agendas and Board materials, and assuming other responsibilities and initiatives as appropriate. Pursuant to the Company’s Bylaws, the chairman of the Executive Committee will have the authority to call meetings of the Board if and when the chairman deems appropriate.
 
Our Board currently has nine independent members and one non-independent member, the CEO. We have five committees of the Board created to perform critical oversight functions. Three of these are standing committees: the Audit Committee, the Compensation Committee, and the Executive Committee. The Board has created two additional committees by resolution: the Finance Committee and the Governance Committee. Only directors who are not current or former employees of the Company or its affiliates (“Non-Employee Directors”) may be members of the Audit Committee, the Compensation Committee or the Governance Committee. It is our practice that, except for the Executive Committee, only Non-Employee Directors may be members of the Board committees. Our Chairman currently serves as the chair of the Executive Committee and other Non-Employee Directors serve as the chairs of the other committees. We believe that the number of independent, experienced directors that make up our Board, along with the independent oversight of the Board by the non-executive Chairman, benefits our Company and our shareholders.
 
Our Board is responsible for the oversight and review of the Company’s policies, practices and procedures relating to risks and risk management processes, with the assistance of our Audit Committee. While every Committee considers risks that are associated with its area of responsibility, the Audit Committee has specific responsibilities. The Audit Committee, as required by the New York Stock Exchange rules, meets periodically with management to discuss policies with respect to risk assessment and management and to review major financial risk exposures and the steps taken to monitor and control them. The Audit Committee reports regularly to the Board. The Board focuses on the most significant risks facing the Company and the Company’s general risk management strategy to assess whether risks undertaken by the Company are consistent with the Board’s tolerance for risk. While the Board oversees the Company’s risk management, Company management is responsible for day-to-day risk management processes. On the management level, we have a comprehensive, enterprise-wide risk management program. Our Chief Risk Officer (“CRO”) monitors our risk management activities. The Board holds executive session with the CRO at each regularly scheduled meeting to review risk exposures and issues. We have an Enterprise Risk Management Committee, chaired by the CEO, whose functions are to establish risk management principles, monitor key risks and oversee our risk-management practices. Several management committees oversee and address issues pertaining to all our major risks—operational, market and product—as well as capital management. We believe this division of responsibilities is the most effective approach for addressing the risks facing our Company and that our Board leadership structure supports this approach.
 
 
6

 
 
Our Board consists of three classes of directors, the members of which are each elected to three-year terms. At our Annual Meeting on May 15, 2012, three directors will be elected to hold office for three years. These terms may be limited by the mandatory retirement provisions of our Corporate Governance Principles.
 
A number of our independent Board members are currently serving or have served as members of senior management of other public companies and have served as directors of other public companies. We believe our Board members have demonstrated leadership skills and have experience and judgment in areas that are relevant to our business. We believe that their ability to challenge and direct management and their dedication to the affairs of the Company collectively serve the interests of the Company and its shareholders.
 
The nominees listed on page 8 are all current directors and the Board supports the election of each of these nominees. Your proxy card will be used to vote for the election of all of the Board’s three nominees that follow on page 8, unless you withhold the authority to do so when you submit your proxy electronically or by mail. If any of the nominees becomes unable or unwilling to accept nomination or election, it is intended that, in the absence of contrary specifications in a proxy, each proxy will be voted for the balance of those named and for a substitute nominee or nominees. We know of no reason to anticipate such an occurrence. All nominees have consented to be named as nominees and to serve as directors if elected.
 
 
7

 
 
 THE FOLLOWING PERSONS ARE NOMINEES FOR ELECTION AS DIRECTORS OF THE COMPANY FOR TERMS TO EXPIRE AT THE 2015 ANNUAL MEETING OF SHAREHOLDERS; THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR ALL OF THEM:
 
The Board of Directors has determined that, given the businesses in which the Company is involved and the issues it confronts, it has need for several competencies among its members, including the following backgrounds: current or prior experience as the chief executive officer of a public company; finance experience; accounting expertise; investment management experience; law practice; and marketing experience. The Board also believes that it is important that its membership reflect the diversity of the constituencies it serves.
 
Name/Age(1)
Service as Director(2)
Business Experience/Other Directorships
Sanford Cloud, Jr., Esq.
age 67
since 2001
Chairman and member of the Board of Trustees of the UConn Health Center since 2011; Chairman and Chief Executive Officer of The Cloud Company, LLC since 2005; Chairman, The Connecticut Health Foundation since 2010; President and Chief Executive Officer of The National Conference for Community and Justice from 1994 through 2004; partner at the law firm of Robinson & Cole LLP from 1993 to 1994; Vice President at Aetna, Inc. from 1986 to 1992; Connecticut State Senator from 1977 to 1980; Trustee of Northeast Utilities since 2000 and non-executive Chairman of Ironwood Mezzanine Fund L.P. Mr. Cloud is an attorney who has worked in private practice, as in-house counsel, served in the state legislature, and served as a senior officer of a major insurance company and as a chief executive officer of a large not-for-profit organization.
Gordon J. Davis, Esq.
age 70
since 2000
(for Phoenix Life since 1986)
Partner at the law firm of Dewey & LeBoeuf LLP since 1994, except during much of 2001 (formerly LeBoeuf, Lamb, Greene & MacRae LLP); President of Lincoln Center for the Performing Arts from January to November 2001; Director of Consolidated Edison, Inc. since 1997, director of Consolidated Edison Company of New York, Inc. since 1989 and of approximately 35 registered investment companies within the Dreyfus family of funds. Mr. Davis is an attorney who currently serves as a director of a number of funds; has served as chief executive officer of a large not-for-profit organization; and over the course of his career, has worked in and with city and state government.
Augustus K. Oliver, II
age 62
since 2008
Managing Member of Oliver Press Partners, LLC since 2005; Managing Member of Oliver Press Investors, LLC since 2005; Managing Member of WaterView Advisors, LLC from 1999 to 2005; Director of Scholastic Corporation since 1995 and Comverse Technology, Inc. since 2007. Mr. Oliver has experience in investment matters.
(1) All ages are as of March 19, 2012.
(2) Of both the Company and of its principal subsidiary, Phoenix Life Insurance Company (“Phoenix Life”), except as otherwise noted.
 
 
8

 
 
Continuing Directors
 
The following directors, whose terms expire at the 2013 Annual Meeting of Shareholders, will continue to serve as directors:
 
Name/Age(1)
Service as Director(2)
Business Experience/Other Directorships
Arthur P. Byrne
age 66
since 2000
(for Phoenix Life since 1997)
Operating partner of J.W. Childs Associates, L.P., a private equity fund based in Boston, Massachusetts since 2002; Chairman of The Esselte Corporation since 2002; President, Chief Executive Officer and Chairman of The Wiremold Company from 1991 to 2002; Chairman of W/S Packaging Inc. since 2006. Mr. Byrne has many years of prior experience as a chief executive officer and significant experience in the areas of finance, acquisitions and strategic planning.
Ann Maynard Gray
age 66
since 2002
President of the Diversified Publishing Group of Capital Cities/ABC, Inc. from 1991 to 1998; Director of Duke Energy Corporation since 1994. Ms. Gray has many years of experience in finance and marketing functions, as well as the experience of having presided over a major division of a public company.
Arthur F. Weinbach
age 68
since 2008
Chairman of Broadridge Financial Solutions, Inc. since 2010 and retired in 2011, executive Chairman from 2007 to 2010. Associated with Automatic Data Processing, Inc. (ADP) since 1980, served as Chairman and Chief Executive Officer of ADP from 1998 to 2006 and retired as Chief Executive Officer in 2006 and retired as Chairman in 2007; Chairman of CA Technologies since 2010 and director since 2008. Mr. Weinbach has a long career as a certified public accountant and experience in many executive roles, including having served as a chief executive officer.
James D. Wehr
age 54
since 2009
President and Chief Executive Officer of The Phoenix Companies, Inc. since April 2009; Senior Executive Vice President and Chief Investment Officer from February 2007; Executive Vice President and Chief Investment Officer from February 2005; Senior Vice President and Chief Investment Officer of the Company and Phoenix Life from January 1, 2004; Senior Managing Director and Portfolio Manager at Phoenix Investment Partners (now Virtus Investment Partners, Inc.) from 1995 through 2003; joined Phoenix in 1981and held a series of increasingly senior investment positions, including credit research, trading and portfolio management prior to 1995. As the Company’s Chief Executive Officer, Mr. Wehr serves on the Board of Directors. Mr. Wehr also serves on the Board of Directors of the Back9Network since 2011.
(1) All ages are as of March 19, 2012.
(2) Of both the Company and of its principal subsidiary, Phoenix Life, except as otherwise noted.
 
 
9

 
 
The following directors, whose terms expire at the 2014 Annual Meeting of Shareholders, will continue to serve as directors:
 
Name/Age(1)
Service as Director(2)
Business Experience/Other Directorships
Martin N. Baily
age 67
since 2005
Senior Fellow at the Brookings Institution since 2007; Senior Fellow at the Peterson Institute for International Economics from 2001-2007; Senior Advisor to McKinsey & Company since 2002; Chairman and a Cabinet Member of the President’s Council of Economic Advisors from 1999 to 2001; Principal of McKinsey & Company from 1996 to 1999. Mr. Baily holds a PhD in economics from Massachusetts Institute of Technology and has expertise in the field of finance through work in the private sector and government.
John H. Forsgren
age 65
since 2005
Vice Chairman, Executive Vice President and Chief Financial Officer of Northeast Utilities from 2001 through 2004, and Executive Vice President and Chief Financial Officer from 1996 to 2001; Managing Director of Chase Manhattan Bank from 1995 to 1996; Executive Vice President of Sun International Investments, Ltd. from 1994 to 1995; Senior Vice President and Chief Financial Officer of Euro Disney (a subsidiary of The Walt Disney Company) from 1990 to 1994 and Vice President and Treasurer of The Walt Disney Company from 1986 to 1990; Director of NEON Communications Group, Inc. from 1998 to 2007; Director of CuraGen Corporation from 2002 to 2009 and Executive Chairman during 2009; Director of Trident Resources Corp. since 2007 and Port Townsend Paper Co. since 2008; director of Duke Energy Corporation since August 2009. He also serves on the board of several privately held companies. Mr. Forsgren served as chief financial officer of a public company, served in financial functions in a variety of different businesses and has experience in accounting, finance and investments.
Thomas S. Johnson
age 71
since 2000
Chairman of the Board of the Company since April 2009; Chairman and Chief Executive Officer of GreenPoint Financial Corporation from 1993 to 2004; President and Director of Manufacturers Hanover Trust Company and Manufacturers Hanover Corporation from 1989 to 1991; director of Freddie Mac from 2004 to 2008; Director of R.R. Donnelley & Sons Company, Inc. since 1990 and Alleghany Corporation since 1997. Having had a career working for several banks in increasingly senior roles, including chief executive officer and chief financial officer, Mr. Johnson is experienced in accounting and finance.
(1) All ages are as of March 19, 2012.
(2) Of both the Company and of its principal subsidiary, Phoenix Life, except as otherwise noted.
 
 
10

 
 
Board Committee Membership and Meetings
 
It is the general practice of the Company that all major decisions are to be considered and made by the Board as a whole. However, to operate efficiently, the Board has created five committees to perform what the Board believes are basic and essential functions. Three of these are standing committees: the Audit Committee, the Compensation Committee and the Executive Committee. The Board has created two additional committees by resolution: the Finance Committee and the Governance Committee. Only Non-Employee Directors may be members of the Audit Committee, the Compensation Committee and the Governance Committee. Members of these three committees must also meet certain other independence standards, including those of the NYSE and the Sarbanes-Oxley Act of 2002. It is our practice that, except for the Executive Committee, only Non-Employee Directors may be members of the Board committees. The Audit, Compensation and Governance Committees have authority to independently retain advisors to help fulfill their responsibilities.
 
The current Board committees, their responsibilities, committee membership and the number of meetings of each committee in 2011 follow. The descriptions are summaries; each is subject to additional details and qualifications imposed by applicable law, the Company’s certificate of incorporation, the committees’ respective charters and resolutions of our Board and our Corporate Governance Principles. The Audit Committee, Compensation Committee, Finance Committee and Governance Committee charters may be found on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance.”
 
Each director of the Company also serves, without additional compensation, as a member of the board of directors of the Company’s subsidiary, Phoenix Life. Phoenix Life established the Policyholder Affairs Committee, the responsibilities of which include oversight of the closed block of insurance contracts created when Phoenix Life demutualized in 2001. The members of this committee are also members of Phoenix Life’s Investment Committee and the Board’s Finance Committee. Mr. Thomas S. Johnson, as Chairman, is an ex-officio member of all committees, except the Executive Committee, where he serves as the Committee chair.
 
The chair of each committee below is listed with an asterisk.
 
AUDIT COMMITTEE
Responsibilities
Members
Number of 2011 Meetings
Recommending to the Board the selection of our independent registered public accounting firm
 
Arthur F. Weinbach*
Arthur P. Byrne(1)
John H. Forsgren
Augustus K. Oliver, II
11
Reviewing the scope, plans and results relating to our internal and external audits and financial statements
 
 
Reviewing our financial condition
 
   
Reviewing the quality and integrity of our financial accounting and reporting processes and procedures
 
   
Reviewing our significant business and financial risks and exposures and evaluating the adequacy of our internal controls in connection with such risks and exposures
 
   
Reviewing our policies on ethical business conduct and monitoring our compliance with those policies
   
 
See also the Audit Committee Report beginning on page 20 for a discussion of the Audit Committee’s oversight responsibilities.
 
The four members of the Audit Committee have been determined to possess the qualifications to sit on the Committee based on their professional experience: Mr. Weinbach is a certified public accountant and has served as both a chief financial officer and a chief executive officer; Mr. Byrne holds undergraduate and graduate degrees in economics and business administration, has served as the chief executive officer of a corporation and has been designated the Committee’s financial expert; Mr. Forsgren holds a Master of Business Administration degree and has served in financial officer positions, including chief financial officer, in several different businesses; and Mr. Oliver has been a principal in the investment management business for many years and holds a law degree.
(1) Financial Expert
 
 
11

 
 
  COMPENSATION COMMITTEE
Responsibilities
Members
Number of 2011 Meetings
Evaluating the targeted compensation of the chief executive officer, senior executive vice presidents, executive vice presidents, and other officers required by law
 
Sanford Cloud, Jr., Esq.*
Arthur P. Byrne
Ann Maynard Gray
Arthur F. Weinbach
7
Reviewing and recommending to the independent members of the Board for approval the compensation of the chief executive officer
 
 
Reviewing and, with respect to certain senior officers, approving base salary levels, incentive compensation opportunities and incentive awards
 
   
Reviewing and, with respect to certain senior officers, approving benefits under plans exempt from the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
 
   
Reviewing and recommending compensation of the members of the Board
 
   
Overseeing the granting of stock options, restricted stock units and other equity-based compensation
 
   
Reviewing and approving the annual compensation programs for all employees
   
 
See also the Compensation Committee Charter, Processes, Interlocks and Report, beginning on page 21 and Compensation Discussion and Analysis on page 23 for further detail regarding the functions of the Compensation Committee.
 
The four members of the Committee have been chief executive officers of organizations and have significant experience in addressing the compensation needs of the organizations they have run: Mr. Cloud served for several years as the chief executive officer of National Conference for Community and Justice and is an attorney; Mr. Byrne served as chief executive officer of Wiremold Corporation; Ms. Gray served as the president of the Diversified Publishing Group of Capital Cities/ABC, Inc.; and Mr. Weinbach served in several different roles, and ultimately chief executive officer, at Automatic Data Processing, Inc. and served as chairman of Broadridge Financial Solutions, Inc. and CA Technologies.

EXECUTIVE COMMITTEE
Responsibilities
Members
Number of 2011 Meetings
Exercising the powers and authority of the Board with respect to overseeing our property, affairs and businesses during periods between meetings of the Board
Thomas S. Johnson*
Sanford Cloud, Jr., Esq.
John H. Forsgren
Ann Maynard Gray
James D. Wehr
Arthur F. Weinbach
 
None
The six members of the Executive Committee are the chairs of our four other committees, in addition to Mr. Wehr, as Chief Executive Officer and Mr. Johnson, as chair of the Executive Committee. 
 
 
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FINANCE COMMITTEE
Responsibilities
Members
Number of 2011 Meetings
Exercising the authority of the Board with respect to our financial and investment policies
 
John H. Forsgren*
Martin N. Baily
Gordon J. Davis, Esq.
Augustus K. Oliver, II
5
Establishing and exercising general supervision over our investment policies and programs and authorizing the issuance of debt and the establishment of financing arrangements (other than through the issuance of stock)
 
 
Exercising general supervision over the disposition of our subsidiaries and of material assets
 
   
Reviewing policies and positions, and those of our major subsidiaries, regarding interest rate risk, liquidity management, counterparty risk, derivative usage and foreign exchange risk
   
 
The four members of the Finance Committee have deep experience in finance and/or investment: Mr. Forsgren holds a Master of Business Administration degree and has served in financial officer positions, including chief financial officer, in several different businesses; Mr. Baily holds a PhD in economics and has utilized his expertise in several positions in private sector and government, including the Council of Economic Advisers; Mr. Davis has served for many years on the boards of several mutual funds; and Mr. Oliver has been a principal in the investment management business for many years and holds a law degree.
 

GOVERNANCE COMMITTEE
Responsibilities
Members
Number of 2011 Meetings
Making recommendations to the Board with respect to matters of corporate governance
 
Ann Maynard Gray*
Martin N. Baily
Sanford Cloud, Jr., Esq.
Gordon J. Davis, Esq.
 
6
Reviewing the committee structure of the Board
 
 
Presenting qualified candidates to the Board for election as directors
 
 
Exercising the authority of the Board with respect to matters relating to the interests of our shareholders or to our relationships to the community at large
   
 
The four members of the Governance Committee have significant experience in governance, from varying perspectives: Ms. Gray has served on several outside boards of directors and currently serves as the lead director of Duke Energy Corporation; Mr. Baily holds a PhD in economics and has utilized his expertise in several positions in private sector and government, including the Council of Economic Advisers; Mr. Cloud is an attorney, has served as the chief executive officer of a not-for-profit organization, has sat on the boards of several companies and has held elective office in the State of Connecticut; and Mr. Davis is an attorney, has served as the chief executive officer of a not-for-profit organization, has sat on the boards of several companies and has worked in various capacities for the City of New York.
 
Executive Sessions of the Board
 
    As provided in the Corporate Governance Principles, the Non-Employee Directors of the Company meet in executive session at each regularly scheduled Board meeting. The non-employee chairman of the Board and chair of the Executive Committee of the Board, currently Mr. Thomas S. Johnson, presides at these meetings.
 
 
13

 
 
Director Independence
 
A majority of the directors of the Board must meet the criteria for independence established by the Board in accordance with the NYSE rules. Under these rules, a director will not qualify as independent unless the Board affirmatively determines that the director has no material relationship with the Company. As permitted by the NYSE rules, the Governance Committee has recommended, and the Board has adopted, a set of categorical standards (the “Categorical Independence Standards”) to assist the Board in making independence determinations. These Categorical Independence Standards may be found on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance.”
 
In March 2012, the Governance Committee and the Board evaluated the independence of each director other than our chief executive officer, who is a Company employee, in accordance with the provisions of the Categorical Independence Standards and the NYSE rules. As a result of this evaluation, the Governance Committee has recommended, and the Board has affirmatively determined, that all members of the Board other than the chief executive officer, including all directors standing for election, are independent under both the Categorical Independence Standards and the NYSE rules.
 
Audit Committee Financial Expert
 
Mr. Arthur P. Byrne was determined by the Board, based on his education and experience, as set forth in the first chart under “Continuing Directors” section on page 9, to be the Audit Committee financial expert, as defined by applicable federal securities law. Mr. Byrne was determined by the Board to be independent, as described in Director Independence above.
 
Director and Management Performance Evaluations
 
The Board is required under the Corporate Governance Principles to conduct an annual self-evaluation to assess its performance. As part of this self-evaluation process, the Governance Committee receives comments from all directors and provides its assessment to the Board as to the performance of the directors and the committees of the Board. This assessment focuses on the Board’s contribution to the Company, as well as areas in which either the directors or management believes the Board could improve. The Audit, Compensation, Governance and Finance Committees also conduct annual self-evaluations to assess their performance.
 
The Board also conducts an annual review of the Chief Executive Officer’s performance to ensure that the Chief Executive Officer is providing the best leadership for the Company in the long- and short-term. Under the procedures set forth in our Corporate Governance Principles, this process is led by our Governance Committee and Compensation Committee, in consultation with the entire Board, and the results of the review are communicated to the Chief Executive Officer directly by the chairs of the Governance Committee, the Compensation Committee and the Executive Committee, or their designees.
 
Director Nomination Process
 
Our Corporate Governance Principles give the Governance Committee responsibility for proposing qualified candidates to the Board. In considering candidates for nomination to the Board, the Governance Committee weighs a director candidate’s professional achievements, intellectual skills, diversity of professional experience, personal diversity, commitment to board service and integrity. In recruiting director candidates for nomination to the Board, the Governance Committee seeks to identify individuals whose records of achievement, breadth of experience, commitment to excellence and unquestioned integrity will best serve the Company in its pursuit of growth in the markets in which it operates, and in potential markets it may enter in the future, while at the same time assuring the Company’s shareholders and other constituencies that the Company remains firmly committed to the Company’s core ethical values. The application of these factors involves the exercise of judgment. As a result, the Governance Committee does not have a standard set of fixed qualifications that applies to all director candidates, although at a minimum each director candidate’s ability to satisfy any applicable legal requirements or listing standards and his or her ability and willingness to devote significant attention to the Company’s needs through regular attendance at meetings, preparation for meetings and availability for regular consultation between meetings is assessed.
 
Diversity is among the factors that the Governance Committee considers in identifying nominees for director. To that end, the Governance Committee has adopted a diversity policy with respect to the identification of director nominees. The policy provides that when assessing potential candidates, the Governance Committee (1) seeks candidates having a variety of backgrounds, including investment, management, accounting, marketing, law, economics, manufacturing, public sector, human relations and academia, and (2) seeks directors who are committed to ensuring that the organization values diversity. The Board therefore seeks candidates who will increase the diversity of the board in all respects and thereby benefit the Company with their ideas, perspectives, experience and wisdom.
 
 
14

 
 
When applying such factors in identifying director nominees, the Governance Committee considers how the candidate would contribute to the Board’s overall balance of diversity of expertise, perspectives, backgrounds and experiences in substantive matters pertaining to the Company’s business. On an annual basis, the Governance Committee, in consultation with the rest of the Board, conducts an evaluation on the composition of the Board and reviews the diversity policy to assess the effectiveness of such policy.
 
The Governance Committee may also consider particular areas of expertise for a given vacancy either because of needs arising from the retirement of a director or those arising out of changes in our business focus, our industry or the regulatory environment. Except in special circumstances, the Governance Committee generally will not recommend an increase in the number of directors beyond the current level of nine independent directors, plus our Chief Executive Officer.
 
The Governance Committee looks to its members and to other directors for recommendations for new directors. It may also retain a search firm and will consider individuals recommended by shareholders. Shareholders should submit their recommendation as outlined under Shareholder and Interested Party Communications on page 16. Shareholder recommendations for nominees will be evaluated on the same basis as other proposed nominees. If a vacancy on the Board exists or is anticipated, the Governance Committee will evaluate all proposed nominees in light of the standards above, as well as others deemed relevant or will consider recommending to the Board a reduction in the size of the Board upon such resignation. Following its evaluation of all proposed nominees and consultation with our Chief Executive Officer, the Governance Committee will recommend to the Board the individual(s) it considers most qualified to be nominated to run for election to the Board. The Board will make the final determination as to the individual(s) who will be nominated to run for election.
 
Director Orientation and Continuing Education
 
To best enable directors to serve as the ultimate monitor of the Company’s performance, the Company has an orientation and continuing education process for Board members that includes extensive materials, meetings with key management and visits to the Company’s headquarters. Through this process, members of the Board are educated on issues of importance to the Board, the Company and the businesses in which the Company is engaged by members of management or third parties having expertise in the subject areas discussed.
 
Code of Conduct
 
We have adopted a written Code of Conduct to govern and strengthen our commitment to our shareholders, customers, corporate citizenship, employees, ethics and compliance. The Company is committed to the highest standards of legal and ethical conduct in all of our business dealings, and the Code of Conduct represents a compilation of certain key policies, standards and guidelines which guide our business activities to ensure we uphold these standards. The Code of Conduct covers all areas of professional conduct, including, among others, conflicts of interest, corporate opportunities, insider trading, hedging of Company securities (see Anti-Hedging Policy on page 43 for more detail on the policy), confidentiality, protection and use of company property, customer complaints, fraud, compliance with legal and regulatory requirements, equal opportunity, sexual harassment, workplace safety and code compliance. All of our directors, officers and employees are required to abide by our Code of Conduct. Employees are required to report suspected violations of the Code of Conduct.
 
The Code of Conduct is available on our web site at www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance.” We intend to post any amendments to, or waivers of, the Code of Conduct applicable to our principal executive officer, principal financial officer or principal accounting officer on our web site. You may request a printed copy of the Code of Conduct, without charge, by writing to the Corporate Secretary at either of the addresses listed under Shareholder and Interested Party Communications on page 16.
 
Policy Regarding Transactions with Related Persons
 
On November 2, 2006, the Board adopted a written Policy Regarding Transactions with Related Persons (the “Related Person Policy”). The Related Person Policy provides that any Related Person (as defined by Item 404(a) of Regulation S-K) must promptly report to the Company’s General Counsel any direct or indirect material interest in any transaction that is reportable by the Company in its Proxy Statement pursuant to Item 404(a) of Regulation S-K (each, a “Related Person Transaction”), that is, any transaction in which the Company was or is to be a participant, the amount involved exceeds $120,000 and any Related Person had or will have a direct or indirect material interest. No Related Person Transaction may be consummated or shall continue without the approval or ratification of the Audit Committee and any director that is a party to a Related Person Transaction shall recuse himself or herself from any such vote.
 
 
15

 
 
Transactions with Related Persons
 
State Farm Mutual Automobile Insurance Company (“State Farm”) beneficially owns more than 5% of our outstanding Common Stock. In 2011, our subsidiaries incurred total compensation of $2.4 million to entities which were either subsidiaries of State Farm or owned by State Farm employees, for the sale of our insurance and annuity products. During 2011, Phoenix Life made payments of $2.4 million to State Farm entities for this compensation.
 
Director Sanford Cloud, Jr., Esq. is a member of Ironwood Mezzanine Management LLC (“IMM”), which is the general partner of Ironwood Mezzanine Fund LP (“Ironwood”), a mezzanine debt fund, and Ironwood Capital Advisors LLC (“ICA”), which is the investment advisor to Ironwood. For his services as a member of IMM and ICA, Mr. Cloud receives an annual fee of $25,000. He also has equity interests in both IMM and ICA. Phoenix Life is an investor in, and limited partner of, Ironwood. During 2011, Phoenix Life did not fund any pre-existing commitments to Ironwood; however, Phoenix Life did receive returns on sums previously invested in the amount of $1,482,336.
 
All Related Person Transactions have been approved or ratified by the Audit Committee in compliance with the Related Person Policy. The Board has determined that Mr. Cloud is independent under the Categorical Independence Standards and the NYSE rules.
 
Shareholder Rights Plan
 
We had a shareholder rights plan that was enacted at the time of the demutualization of the Company in 2001. Its 10-year initial term expired in June 2011 and the Board decided not to extend it.
 
Board Attendance and Annual Meeting Policy
 
Directors are expected to attend our Annual Meetings of Shareholders, Board meetings and meetings of the committees on which they serve. In 2011, there were 11 meetings of the Board. Each of the directors attended at least 75% of the meetings of the Board and committees on which he or she served. All members of the Board attended the 2011 Annual Meeting of Shareholders.
 
Shareholder and Interested Party Communications
 
If you would like to nominate an individual for election to the Board or submit a shareholder proposal for the 2013 Annual Meeting of Shareholders, we must receive your proposal at our executive offices in Hartford, Connecticut no later than November 30, 2012. Proposals for inclusion in the Proxy Statement must comply with the requirements of the Securities Exchange Act of 1934, as amended, including Rule 14a-8, as well as with our bylaws. A copy of our bylaws may be obtained from our Corporate Secretary at one of the addresses below.
 
Proposals should be addressed by e-mail to corporate.secretary@phoenixwm.com or by mail to:

Corporate Secretary
The Phoenix Companies, Inc.
One American Row
P.O. Box 5056
Hartford, Connecticut 06102-5056

If you wish to present a matter for action at the 2013 Annual Meeting of Shareholders, but choose not to do so under Rule 14a-8, you must deliver a notice containing the information required by the Company’s bylaws to our Corporate Secretary at the address above on or before February 13, 2013, but no earlier than January 15, 2013.
 
 
16

 
 
Shareholders and other interested parties who wish to communicate with any director(s), committee(s), the presiding director at meetings of non-management directors of the Company, the non-management directors as a group or the entire Board, should send such communication to the relevant director, committee, or group of directors in care of the Corporate Secretary at the mailing address above or to the e-mail address listed above, indicating the director, committee, or group of directors with which they wish to communicate. If shareholders or other interested parties making such communications want their identity to be kept confidential, they should so indicate in their letter or e-mail. The Corporate Secretary will promptly forward all communications to the designated director, committee or group of directors. Where appropriate, communications will also be reviewed by the Company’s General Counsel and/or Chief Compliance Officer.
 
 
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PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
On March 7, 2012, the Audit Committee of our Board (the “Audit Committee”), subject to ratification by the shareholders, appointed PricewaterhouseCoopers LLP (“PwC”), an independent registered public accounting firm, to audit and report on our consolidated financial statements for the fiscal year ending December 31, 2012. We have been advised that representatives of PwC will attend the Annual Meeting. They will have the opportunity to make a statement and to respond to questions from shareholders.
 
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF PwC AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2012.
 
Fees Incurred for Services Performed by PwC
 
Our Board has a policy to assure the independence of its independent registered public accounting firm. Prior to each fiscal year, the Audit Committee receives a written report from PwC describing the elements expected to be performed in the course of its audit of the Company’s financial statements for the coming year. The Audit Committee may approve the scope and fees not only for the proposed audit, but also for various recurring audit-related services. For services of its independent registered public accounting firm that are neither audit-related nor recurring, a Company vice president may submit in writing a request to the Company’s internal auditor, accompanied by approval of the Company’s chief financial officer or chief accounting officer. The Audit Committee may pre-approve the requested service as long as it is not a prohibited non-audit service and the performance of such service would be consistent with all applicable rules on auditor independence. The Audit Committee may also delegate pre-approval authority to one or more of its members.
 
All services performed for us by PwC in 2011 and 2010 were pre-approved by the Audit Committee pursuant to the policy described above.
 
The services performed by PwC in 2011 and 2010 are described below. PwC does not provide any services to us prohibited under applicable laws and regulations. To the extent PwC provides us with consulting services, those services are closely monitored and controlled by both management and the Audit Committee to ensure that their nature and extent do not interfere with PwC’s independence. The independence of PwC is also considered annually by our Board.
 
PwC Fees
 
2011
   
2010
 
         
 
 
Audit Fees(1)
 
$
2,418,000
 
 
$
2,384,500
 
Audit-Related Fees(2)
   
115,000
     
517,400
 
Tax Fees
   
0
     
0
 
All Other Fees(3)
   
2,400
     
3,700
 
Total Fees
 
$
2,535,400
   
$
2,905,600
 

(1)
Amounts represent fees for the annual audits of our financial statements and internal controls, reviews of our financial statements for interim periods, audits of statutory and other regulatory filings and audits of our internal control over financial reporting. In addition, these amounts include fees for consents and other assistance related to documents filed with the Securities and Exchange Commission.
 
(2)
Amounts represent fees for employee benefit plan audits, control reviews, and the performance of agreed-upon procedures for regulatory purposes. The 2010 amount includes fees for due diligence reviews.
 
(3)
Amounts represent fees for research and regulatory reporting compliance software.
 
 
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OTHER MATTERS
 
We are not aware of any matters, other than those referred to in this Proxy Statement, which will be presented at the Annual Meeting of Shareholders. If any other appropriate business is properly presented at the Annual Meeting of Shareholders, the proxies named in the accompanying form of proxy will vote the proxies in accordance with their best judgment in the interests of the Company.
 
 
19

 
 
AUDIT COMMITTEE CHARTER AND REPORT
 
Audit Committee Charter
 
The Audit Committee of the Board (the “Audit Committee”) reports to the Board and is responsible for overseeing and monitoring the Company’s financial accounting and reporting process, the system of internal controls established by management and the audit process of the Company. The Board adopted a written charter for the Audit Committee in 2001. Since then, the Board has amended the charter to conform to new requirements under applicable law, United States Securities and Exchange Commission (“SEC”) regulations and the New York Stock Exchange listing standards. A copy of this amended charter may be found on our web site, www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance.” The charter sets out the responsibilities, authority and specific duties of the Audit Committee. It also specifies the structure and membership requirements of the committee, as well as the relationship of the Audit Committee to the Company’s independent registered public accounting firm, internal auditor and management.
 
Audit Committee Report
 
The Audit Committee has submitted the following report for inclusion in this Proxy Statement:
 
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation, presentation and integrity of the Company’s financial statements and for the Company’s reporting process, including its systems of internal controls. PricewaterhouseCoopers LLP (“PwC”) is the Company’s independent registered public accounting firm, responsible for auditing the Company’s annual financial statements and performing quarterly reviews. In fulfilling its responsibilities, the Audit Committee relies, without independent verification, on the information provided by the Company’s management and by PwC.
 
In fulfilling its oversight responsibilities, the Audit Committee reviewed and has met, reviewed and discussed with management and with PwC, the Company’s audited financial statements for the year ended December 31, 2011. The Audit Committee also discussed with PwC the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T, including:
 
 
PwC’s responsibilities under generally accepted auditing standards;
 
the Company’s significant accounting policies;
 
management’s judgments and accounting estimates;
 
any significant audit adjustments;
 
any disagreements with management; and
 
any difficulties encountered in performing the audit.
 
Additionally, the Audit Committee met throughout the year with PwC, the Company’s chief financial officer and the Company’s internal auditor to discuss the results of their examinations and evaluations of the Company’s internal controls and of the overall quality, not just the acceptability, of the Company’s financial reporting process. The meetings with PwC occurred both with and without members of management present; the meetings with the chief financial officer and the internal auditor occurred both with and without other members of management present.
 
The Audit Committee has received from PwC the written disclosure and the letter required by the applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence from the Company. PwC has confirmed in its letter that, in its professional judgment, it is independent of the Company within the meaning of the federal securities laws. The Audit Committee has considered whether provision of the non-audit services rendered by PwC during the Company’s most recent fiscal year is compatible with maintaining the independence of such auditors and deemed that it was.
 
Based on the reviews and discussions referred to in this report, the Audit Committee recommended to the Board, and the Board has approved, that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, and be filed with the SEC. The Audit Committee has also approved, subject to shareholder ratification, the selection of PwC as the Company’s independent registered public accounting firm for the fiscal year 2012.

 
THE AUDIT COMMITTEE
   
 
Arthur F. Weinbach, Chair
 
Arthur P. Byrne
 
John H. Forsgren
 
Augustus K. Oliver, II
 
 
20

 
 
COMPENSATION COMMITTEE CHARTER, PROCESSES, INTERLOCKS AND REPORT
 
Compensation Committee Charter
 
The Compensation Committee of the Board (the “Compensation Committee”) consists of independent members of the Board, and meets at scheduled times during the year. Its purpose is to assist the Board in fulfilling its responsibility to maximize long-term return to our shareholders by ensuring that directors and employees are compensated according to the Company’s compensation philosophies, objectives and policies. The Compensation Committee’s responsibilities, summarized on page 12 of this Proxy Statement, are explicitly set forth within the terms of its charter, and are reviewed by the Board at least once a year. A copy of this charter may be found on our web site, www.phoenixwm.com, in the Investor Relations section, under the heading “Corporate Governance.” The charter sets out the responsibilities, authority and specific duties of the Compensation Committee. It also specifies the structure and membership requirements for the Compensation Committee.
 
Processes and Procedures Related to Executive and Director Compensation
 
Pursuant to its charter, the Compensation Committee has the following authority and responsibilities with regard to determination and consideration of executive and director compensation:
 
 
assisting the Company in defining an executive total compensation policy for the Company and its subsidiaries that:
 
 
-
supports the Company’s overall strategy and objectives;
 
 
-
supports the attraction and retention of executives;
 
 
-
links total compensation to financial performance and the attainment of strategic objectives; and
 
 
-
provides competitive total compensation opportunities at a reasonable cost while enhancing the ability to fulfill the Company’s objectives;
 
 
evaluating the risk related to the design and operation of the Company’s incentive compensation plans;
 
 
reviewing and approving new compensation plans when appropriate to maintain consistency with our compensation policy and to monitor the appropriateness and effectiveness of such plans;
 
 
making any and all determinations necessary to qualify any compensation intended to be exempt from section 162(m) of the Internal Revenue Code of 1986, as amended, as performance-based compensation; and
 
 
reviewing director compensation at least biennially and recommending to the Board any changes it believes to be appropriate. See Director Compensation Review on page 65.
 
Annually, the chief executive officer (“CEO”) makes recommendations to the Compensation Committee with regard to base pay, target annual incentives, and target long-term incentives (collectively referred to as “Direct Compensation”) for:
 
 
all Named Executive Officers (“NEOs”) except the CEO; and
 
 
executive vice presidents and above, as well as any Section 16 officers who are below the level of executive vice president.
 
The Compensation Committee is responsible for reviewing the CEO’s recommendations and all components of the NEOs’ compensation and making final decisions on Total Direct Compensation based on the Company’s compensation philosophy. See Determining Total Direct Compensation Levels on page 26.
 
With regard to the CEO, the Compensation Committee is responsible for making compensation recommendations to the Board for its approval.
 
 
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      The Compensation Committee has delegated the following authority to the CEO, except as to Section 16 officers and executive vice presidents and above (as defined in the Compensation Committee charter):
 
 
granting awards of restricted stock, restricted stock units (“RSUs”) and long-term performance units under The Phoenix Companies, Inc. 2003 Restricted Stock, Restricted Stock Unit and Long-Term Incentive Plan (the “RSU Plan”);
 
 
determining the treatment of stock options under the Stock Incentive Plan, except for senior vice presidents and higher, and RSUs under the RSU Plan upon retirement for participants who terminate employment for any reason other than for cause, provided the participant qualifies for immediate commencement of early or normal retirement benefits under The Phoenix Companies, Inc. Employee Pension Plan (the “Employee Pension Plan”); and
 
 
determining the terms of RSU deferral offerings under the RSU Plan, including but not limited to, the opportunity to defer receipt of RSUs until termination of employment (or later, if required by law), receipt of dividend equivalents during deferral period, receipt of interest on dividend equivalents, and reinvestment of dividend equivalents in additional RSUs.
 
The Company’s legal and human resources executives support the Compensation Committee in its work. These executives or the CEO recommend, but do not determine, the amount and form of executive and director compensation. During 2011, the Compensation Committee and the Board had its own independent compensation consultant that advised it on executive compensation matters. See Role of Compensation Consultant on page 44. The Compensation Committee has the sole authority to retain and terminate any such compensation consultant used to assist it in the evaluation of director, CEO or senior executive compensation. The Compensation Committee also has the sole authority to approve the consultant’s fees and other retention terms and to monitor the consultant’s objectivity and independence when rendering advice to the Compensation Committee. The Board’s and Committee’s consultant provided advice on a variety of matters in 2011.
 
Compensation Committee Interlocks and Insider Participation
 
None of the members of the Compensation Committee during 2011 or as of the date of this Proxy Statement is or has been an officer or employee of the Company and no executive officer of the Company served on the compensation committee or board of any company that employed any member of the Compensation Committee or Board.
 
Compensation Committee Report
 
The Compensation Committee has submitted the following report for inclusion in this Proxy Statement:
 
Our Compensation Committee has reviewed and discussed Compensation Discussion and Analysis (which follows this report) contained in this Proxy Statement with management. Based on our review of, and the discussions with management with respect to, Compensation Discussion and Analysis, we recommended to the Board that Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 for filing with the United States Securities and Exchange Commission.
 
The foregoing report is provided by the following directors, who constitute the Compensation Committee:

 
THE COMPENSATION COMMITTEE
   
 
Sanford Cloud, Jr., Esq., Chair
 
Arthur P. Byrne
 
Ann Maynard Gray
 
Arthur F. Weinbach
 
 
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COMPENSATION OF EXECUTIVE OFFICERS
 
The following compensation discussion contains statements regarding future individual and Company performance targets and goals. These targets and goals are disclosed in the limited context of our discussion regarding the compensation of our executive officers in this Proxy Statement and should not be interpreted, or relied upon, as statements of our expectations or estimates of results or other guidance. We specifically caution our shareholders not to apply these statements to other contexts.
 
Compensation Discussion and Analysis
 
Introduction
 
This Compensation Discussion and Analysis (“CD&A”) describes the material elements of Phoenix’s executive compensation program for fiscal 2011 for our named executive officers (“NEOs”). For fiscal 2011, our NEOs are:
 
James D. Wehr, President and Chief Executive Officer (“CEO”);
Peter A. Hofmann, Senior Executive Vice President and Chief Financial Officer (“CFO”);
Philip K. Polkinghorn, Senior Executive Vice President, Business Development;
Bonnie J. Malley, Executive Vice President and Chief Administrative Officer; and
Christopher M. Wilkos, Executive Vice President and Chief Investment Officer.
 
Executive Summary
 
In this Executive Summary, we will provide an overview of our executive compensation program and results in the context of our business strategy and performance.
 
The design and objectives of our executive compensation program are based on a pay for performance philosophy in which incentives represent a significant component of an executive’s compensation opportunity. It is focused on execution against performance measures that align directly with our strategic direction. All elements of the compensation program have been designed with this philosophy in mind, and resulting compensation shows a clear alignment with financial results and shareholder interests.
 
Following the global economic downturn in 2008 and 2009, the Company changed its strategic direction and business model and adjusted compensation practices to reflect this new direction as well as its smaller size. Mr. Wehr was promoted to CEO in 2009, and under his leadership, the Company has pursued a business plan based on our four strategic pillars: balance sheet strength, policyholder service, operational efficiency and profitable growth. These pillars represent the highest priorities for the business and are a critical foundation as we rebuild the Company for current and future success. We believe that improvement in these pillars will lead to long term value for our shareholders.
 
The Company has made significant progress, despite the challenging operating environment. In 2011, the fundamentals of our business were solid, and there was measurable progress against each of the four strategic pillars outlined above. Our balance sheet is stronger, with significant improvements to statutory surplus, risk based capital ratio, and investment portfolio quality and performance. Our focus on policyholder service resulted in significant improvement in policy persistency. We reduced expenses meaningfully by pursuing operational efficiencies in addition to previous workforce reductions and adjustments to compensation and benefit programs. Also, we have begun to see profitable growth, both in sales of our repositioned annuity product line and earnings from our distribution subsidiary.  Two of the major rating agencies (Moody’s and A.M. Best) acknowledged this progress by revising Phoenix’s outlook from “stable” to “positive.”
 
Over the last three years, the Company has adjusted compensation practices to reflect various internal and external challenges as well as its smaller size. For example, when changes in leadership have occurred, the Company has established a practice to set target pay levels for new incumbents, including the CEO, lower than that of their predecessors. We also reduced aggregate long-term incentive target awards and adjusted market references used in determining pay levels down. In addition to these market references, we factor in a number of considerations in determining pay levels, including individual performance and strategic importance of role.
 
The 2011 compensation program was designed to reflect dynamics more suited to a stable, growing company and to continue to demonstrate the Company’s commitment to responsible pay practices and sound corporate governance. For example, long-term incentive opportunities were designed to incorporate an equity aspect through the inclusion of the stock price modifier to more closely align the cash awards with shareholder interests. We increased the weights related to profitable growth within our annual and long-term incentive plans. In addition, we reduced the benefits under change-in-control agreements effective on January 1, 2012 to align them further with prevailing practices. The Compensation Committee has and will continue to take action to structure our executive compensation practices in a manner that is performance-based with a view towards maximizing long-term shareholder value.
 
 
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Consistent with our pay for performance philosophy, the compensation for executives who bear the most responsibility for our performance is heavily weighted toward at-risk incentives based on multiple metrics closely aligned with our business objectives.  Seventy-five percent (75%) of our CEO’s target pay and, on average, 64% of the pay for our other NEOs is performance-based and subject to the achievement of pre-defined performance targets.
 
Performance measures in our 2011 annual and long-term incentive (“LTI”) programs are tied directly to our four strategic pillars, which are the underpinnings of our turnaround strategy. Under both the annual and LTI plans, four one-year performance goals are set at levels that generally require meaningful improvement over the prior year. Because of share constraints, 2011-2013 LTI awards will be paid in performance cash. To align the interests of our executives with those of our shareholders, these LTI performance cash awards are also adjusted at the end of the performance period based on stock price performance using a stock price modifier. Consistent with the implementation of our strategic business plan, both our 2012 annual incentive plan and 2012-2014 LTI cycle will be revised to better align with the evolving strategic focus areas. In the annual plan, we will add new measures related to new business profitability, and increase the overall weighting on measures related to the profitable growth strategic pillar from 40% to 50%. Within the 2012-2014 LTI Program, we are implementing different measures, increasing the emphasis on profitable growth and increasing our performance period from one to two years, while maintaining the three-year stock price modifier capped at 150%.
 
The Summary Compensation Table for 2011 Fiscal Year on page 46 shows an increase in CEO pay year-over-year. The increase reflects two key factors and is primarily attributable to increases in performance-based compensation. First, in recognition of his early success in leading the Company to a stronger position, and to align him further with the success of future growth initiatives, Mr. Wehr received an 8% increase to his ongoing target pay opportunity and a one-time special award of performance restricted stock units (“PSUs”) with target opportunity at grant equal to roughly 21% of his new ongoing pay target. There is no accelerated vesting of Mr. Wehr’s awards in the event of termination. Second, Mr. Wehr’s 2011 annual incentive payout increased because of strong results against 2011 targets.
 
In summary, the Company has made significant changes to its strategic direction, business strategy, and compensation practices over the past several years, and has made meaningful progress on operational and financial measures. While the positive momentum was not yet reflected in the stock price at the end of 2011, we believe we are focused on the right priorities, and that improvement in our established performance measures will lead to long-term value for our shareholders.
 
Objectives of Executive Compensation Program
 
Closely aligned with our business strategy, our executive compensation program seeks to motivate and reward strong business performance to position the Company for continued growth. It is designed to achieve the following objectives:
 
 
Link compensation to performance results. The program is weighted in favor of incentive pay, in the form of annual and long-term performance incentives, to motivate and reward the creation of shareholder value.
 
 
Attract, motivate and retain high-caliber leadership by providing competitive compensation opportunities. The program assesses total compensation opportunities against appropriate groups of life insurance companies to attract and retain executives with the experience and talent required to achieve our strategic objectives. We complement this review by assessing the strategic value of each NEO role to align total compensation opportunities with relative strategic value.
 
 
Align the interests of our NEOs and shareholders. The program rewards our NEOs when their performance produces profitable growth and improving returns. In 2011, the business goals used for determining annual and long-term incentive awards were based on four measures aligned with the business strategy, three financial and one operational. These measures of success create a close alignment between our NEOs and shareholder interests. Further, the long-term incentive awards are adjusted based on stock price performance.
 
 
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Elements of Compensation
 
The executive compensation program consists of base pay, annual incentives and long-term incentives (collectively referred to as “Total Direct Compensation”), broad-based benefit plans available to all employees, stock awards to recognize special circumstances, share ownership and retention guidelines, deferred compensation, perquisites, executive severance and change-in-control arrangements.
 
A description and the objective of each compensation element are summarized in the table that follows.
 
Compensation Element
Description
Objective
Base Salary
Fixed rate of pay that compensates employees for fulfilling their basic job responsibilities.
For NEOs, increases are generally provided in the case of a significant increase in responsibilities or a significant discrepancy vs. the market.
Attract and retain high-caliber leadership
Annual Incentives
Incentive compensation that promotes and rewards the achievement of annual performance objectives.
Most employees participate in a Company incentive plan. Because the continued focus in 2011 was on building the Company’s financial strength, annual measurements were based on four measures (three financial and one operational) for all NEOs except the Chief Investment Officer (“CIO”), whose measures were equally weighted between the corporate and investment incentive plans.
Annual incentive targets are denominated as a percent of salary.
Link compensation to annual performance results
Attract, motivate and retain high-caliber leadership
Align the interests of NEOs and shareholders
Long-Term Incentives
Incentive compensation that promotes and rewards the achievement of long-term performance objectives.
When equity vehicles are used, stock options typically vest ratably over three years with a 10-year option term and RSUs typically vest on the third anniversary of the award date.
In 2011, due to equity constraints, the Company’s core program provided for one-year performance-based cash, subject to a stock price modifier to provide alignment with shareholders. An additional two-year vesting period was required if performance measures were met. See 2011-2013 Long-Term Incentive Program on page 39.
Link compensation to performance results
Attract, motivate and retain high-caliber leadership
Align the interests of NEOs and shareholders
Non-Qualified Deferred Compensation
The opportunity to defer receipt of base salary and long-term incentives (RSUs) may be offered to assist NEOs and certain other employees in tax and retirement planning.
Salary deferral includes additional Company matching contributions which are otherwise above Internal Revenue Code limits on The Phoenix Companies, Inc. Savings and Investment Plan (the “401(k) Plan”).
Cash deferrals can be allocated to investment options similar to those in the 401(k) Plan. Equity deferrals are denominated in the form of RSUs.
Attract and retain high-caliber leadership
Provide market competitive compensation
Supplemental Retirement
Plans
Non-qualified pension plans that provide retirement income to select employees based upon the Company’s broad-based retirement plan formulas, which are restricted by certain Internal Revenue Code limits and, for certain benefits, do not include incentive pay. All benefit accruals under the plans were frozen as of March 31, 2010.
Retain high-caliber leadership
Executive Severance and Change-in-Control Agreements
NEOs and select executives are eligible to receive executive severance or change-in-control protections in certain circumstances. As of December 31, 2011, there were nine executives with change-in-control agreements and 18 employees eligible for the executive severance plan.
These benefits provide income protection in the event of involuntary loss of employment not due to cause in exchange for the executive’s agreement not to bring claims against the Company, or engage in competitive activities.
Attract and retain high-caliber leadership
Perquisites
Perquisites provided to NEOs include nominal reimbursement for preventive medical care expenses, a financial planning allowance, relocation benefits and reimbursements for spousal travel expenses when required for business functions.
Provide market competitive compensation
Share Ownership and
Retention Guidelines
Guidelines that provide a target ownership level to be attained and require the retention of a portion of all stock awards, including long-term incentive RSUs.
Align the interests of Senior Management and shareholders
 
 
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Determining Total Direct Compensation Levels
 
For our purposes, Total Direct Compensation target is defined as base salary plus target annual incentives plus target long-term incentives. As one input to establishing target levels of Total Direct Compensation opportunity for NEOs, the Compensation Committee conducts an assessment of current compensation levels relative to the market. The Company’s changing size and business model required a new approach to evaluating executive pay levels that acknowledged the fact that the Company continues to compete with larger insurance companies for talent, but on a smaller asset base. Therefore, in 2011, for each executive position that can be matched to the market, we consider median target cash compensation levels (base salary plus target annual incentive) from three perspectives, as available (additional detail of each survey is provided below):
 
 
2011 Towers Watson Diversified Insurance Study of Executive Compensation
 
2011 US Mercer Benchmark Database — Executive — All-Industry
 
2011 US Mercer Benchmark Database — Executive — Insurance Subset
 
2011 Towers Watson Diversified Insurance Study of Executive Compensation (“DIS”)
 
The DIS provides data based on input from 29 insurance companies with median assets of $141 billion, and includes subset reports on smaller participants, representing 13 companies (including the Company) with assets under $125 billion. We assess against the median of companies with assets under $125 billion when sufficient data exists. When sufficient data does not exist for smaller companies, we assess against the 25th percentile for all companies.
 
Subset of Companies Included in DIS with Total Assets Below $125 Billion
AFLAC, Inc.
The Phoenix Companies, Inc.
American United Life
Securian Financial Group
CIGNA
Sun Life Financial, Inc.
CNO Financial
Thrivent Financial for Lutherans
Genworth Financial
Unum Group
Guardian Life
USAA
Pacific Life
 
 
2011 US Mercer Benchmark Database — Executive (“Mercer”)
 
The Mercer survey provides general industry data on executive positions based on input from over 2,400 organizations, with median revenues of $1 billion, including data on over 100 insurance companies, with median assets of about $15 billion.
 
How We Determine Compensation Adjustments
 
Adjustments to individual target compensation levels are based on an assessment of three factors:
 
 
1.
Compensation Relative to Market. Prior to 2009, we targeted between the 50th and 75th percentiles of the DIS subset of smaller companies. As previously mentioned, a new assessment approach was introduced in 2009, in which we compare total salary and annual incentive target opportunities for our NEOs to a range of median market values based on the market data discussed above. As a result, given the change in the assessment approach, and the resulting lower market values of target cash for comparison purposes, some of our senior managers, including some of our NEOs, are now at or above the high end of the new market ranges. In response to this, except for NEOs who were new to their roles in 2009, 2010-2012 LTI targets were reduced by 30% to 51% to better align with the market.
 
 
2.
Strategic Value of the Position. The CEO evaluates each NEO position on its potential impact to the Company’s ability to meet strategic objectives and financial and operational targets and makes recommendations to the Compensation Committee based on such evaluations. This assessment is typically conducted annually, as changes to business priorities may cause a role to increase or decrease in strategic importance relative to other roles.
 
 
 
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3.
Individual Performance. The CEO assesses each NEO based on individual performance evaluations for the most recent one to two years, including an assessment of the individual’s contribution to the Company’s overall results, performance against business unit goals and leadership and makes recommendations to the Compensation Committee based on the assessments.
 
In general, for individuals within or below the market range, increases to Total Direct Compensation targets will typically be accomplished through any mix of increases to base salary, annual incentives or long-term incentives. For individuals above market range, increases and decreases to Total Direct Compensation targets will typically be accomplished through adjustments to long-term incentives.
 
The Compensation Committee takes a similar approach to evaluating the CEO’s compensation in making its recommendation to the Board.
 
As a result of our pay for performance philosophy and the significance placed on incentives tied to our business objectives, actual compensation can vary significantly from Total Direct Compensation targets, and can vary significantly from year to year relative to peer companies based on company performance.
 
In 2012, none of our NEOs will receive compensation increases, and there are no special incentive awards. Additionally, within our annual and LTI incentive programs, we have increased the emphasis on earnings, and increased the performance period on our LTI measures from one to two years.
 
Other Pay Practices
 
Consistent with our pay for performance philosophy, NEO total pay packages are comprised primarily of the direct pay elements discussed in detail above (i.e., base salary, annual incentive, and long-term incentives). We are also committed to responsible pay practices and sound corporate governance with our other pay practices, many of which reflect changes made during the last several years.
 
 
In our change-in-control agreements, we eliminated gross ups for excise taxes, capped the benefits to 2.99 times average annual compensation, eliminated retirement enhancements, and imposed non-compete restrictions, among other things.
 
To encourage stock ownership, the Company provides a set of guidelines that require ownership and retention levels of Common Stock for NEOs, further aligning the common interests of management and shareholders.
 
The Company has a Sarbanes-Oxley-compliant clawback policy.
 
There is an anti-hedging policy for all directors and employees of the Company as part of its Code of Conduct.
 
As part of the process for risk oversight, the Company performs a risk assessment of all compensation programs annually.
 
As of March 31, 2010, all benefit accruals in the Company’s broad-based pension plan and SERPs were frozen.
 
Perquisites and other personal benefits are a de minimis component of our executive compensation program.
 
Determining Other Compensation Levels and Elements
 
In addition to the market reviews that we conduct to identify target compensation levels for Total Direct Compensation, we periodically conduct studies among peer companies concerning general compensation and benefit practices, plan designs, and trends, including executive compensation practices such as change-in-control and severance design. For this purpose, we typically consider appropriate groups of peer companies, including many that we compete with for talent in the Greater Hartford region. General industry practices may also be considered. Depending on the purpose of the study and the segment(s) of the Company involved, the peer groups may vary from study to study. This informs us about our competitors’ practices when designing programs to meet our compensation objectives.
 
For purposes of determining the types and levels of broad-based benefits that are generally available to all of our employees, our overall benefit plan strategy is to provide a core set of health, welfare, work-life, pension and retirement-savings benefits that are competitive with the market. The supplemental retirement and non-qualified benefits discussed in this Proxy Statement are determined based on this strategy, since these programs serve a broader group of employees than the NEOs, and complement our other retirement programs. The Company’s most recent comprehensive review for these benefits was conducted in 2009 using the Hewitt Benefit Index for 2009, which was an analysis of 13 insurance companies chosen by the Company. This analysis was supplemented with a study of practices of other financial companies doing business in the Hartford region. As a result of the 2009 study, the Company decided to freeze benefit accruals under its broad-based and non-qualified pension plans as of March 31, 2010, enhance its broad-based and non-qualified 401(k) plans as of April 1, 2010 and revise its retiree health and welfare coverages as of April 1, 2010 and January 1, 2011.
 
 
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For purposes of determining the design and level of other executive compensation elements, such as change-in-control agreements and severance plan design, the Company also considers market practices and trends, typically for both general industry and peer companies. Market reviews concerning executive compensation elements are typically directed by the Compensation Committee, and performed by its compensation consultant and management. The Company’s most recent comprehensive review for change-in-control provisions was conducted in 2011 based on a review of general industry trends and a review of 10 public insurance companies with assets similar in size to the Company. Assets for the group range from approximately $10 billion to $60 billion and median assets of approximately $22 billion.
 
Change-in-Control Peer Group Companies
American Equity Investment Life Holding Company
Protective Life Corp.
CNO Financial
Stancorp Financial Group, Inc.
Delphi Financial Group, Inc.
Symetra Financial
FBL Financial Group
Torchmark Corp
Primerica
Unum Group

That analysis revealed that our change-in-control arrangements that were effective January 1, 2012 were generally consistent with market practice. The next review is scheduled to be conducted in 2013 for change-in-control agreements, if any, that will be effective January 1, 2014. See also Change-in-Control Agreements on page 58.
 
Commitment to Pay for Performance
 
Consistent with the compensation objectives outlined above, we have established a strong pay-for-performance culture, including a mix of compensation elements for NEOs heavily weighted in favor of incentive programs aligned with our business objectives. For example, the 2011 target compensation mix for Mr. Wehr, our CEO, was 25% base salary and 75% incentive pay, while the target 2011 compensation mix for the other NEOs was 30% to 40% base salary and 60% to 70% incentive pay, as described in more detail in the Total Direct Compensation Mix section on page 30.
 
Performance Measurement
 
Since Mr. Wehr’s promotion to CEO in 2009, we have pursued a business plan based on our four strategic pillars, which we believe will lead to creating value for shareholders.
 
 
Balance sheet strength
 
Policyholder service
 
Operational efficiency
 
Profitable growth
 
The performance measures in our annual and long-term incentives (LTI) programs are directly tied to these four pillars.
 
Alignment of Compensation Design to Our Business Objectives
Four Strategic Pillars
Annual Incentive Plan
Performance Measures
Long-Term Incentive
Performance Measures
Balance Sheet Strength
Risk Based Capital
Risk Based Capital
Policyholder Service
Surrender Ratios
Surrender Ratios
Operational Efficiency
Cash-Based Expenses
Cash-Based Expenses
Profitable Growth
Pre-Tax Operating Income
Pre-Tax Operating Income
 
Stock Price
 
 
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In addition to performance against four pillar goals, LTI awards are adjusted based on stock price performance. Because of share constraints, 2011-2013 LTI awards will be paid in performance cash. To align the interests of our executives with those of our shareholders, these LTI performance cash awards are also adjusted at the end of the performance period based on stock price performance using a stock price modifier or multiplier.
 
 
 
     
   
     
Stock price ultimately drives value for shareholders, and for our NEOs as described below.  
   
  Despite marked improvement on the four strategic pillars, our stock price declined 34% in 2011, and, if this decline is sustained, LTI awards will be impacted accordingly.  
   
   
   
   
 
1 Reflects closing price of stock on April 14, 2009. Mr. Wehr was appointed CEO effective April 15, 2009.
 
As a design element, the modifier is relatively simple. An initial LTI award is earned based on annual performance against the established performance measures. The award vests after two years and the final payout is determined by stock price performance for the full three-year period. At the end of the three-year period, the initial award amount is multiplied by the modifier, which equals the ending stock price (as determined by the 30-day average trading price at the end of 2013) as a percentage of grant date stock price (up to a maximum of 150%). Incorporation of the stock price modifier allows cash awards to mimic equity as it moves on a one for one basis with stock price.
 
CEO Compensation
 
The Summary Compensation Table for 2011 Fiscal Year on page 46 shows an increase in CEO pay year-over-year. The increase reflects two key factors and is primarily attributable to increases in performance-based compensation.
 
-­   
Increases in target pay opportunity. In early 2011, the Committee approved an 8% increase to Mr. Wehr’s ongoing target pay opportunity (8% increases to each of base salary, target bonus, and target LTI values) and also approved a one-time special award of performance restricted stock units (PSUs) with target opportunity at grant equal to roughly 21% of his new ongoing target total pay. The Committee made this adjustment to recognize Mr. Wehr’s early success in leading Phoenix to a stronger position since his promotion to CEO. Strategic initiatives implemented under his leadership have taken hold and are yielding positive results. To maintain momentum, and further align him with the success of future growth initiatives, the special award was made in PSUs. With these changes, his compensation is still within the middle of the range of the Phoenix insurance company peer group (his pay upon becoming CEO had originally been set at the lower end of the peer group taking into account the company’s size, financial challenges and near-term growth opportunities as well as Mr. Wehr’s newness in the role).
 
-    
Above-target annual incentive payout. Mr. Wehr’s FY 2011 annual incentive payout increased because of strong results against targets. Realizable pay from his 2011 annual incentive, LTI, and special award of PSUs is aligned with company performance results on the four strategic pillars. The two latter elements are explicitly tied to stock price performance, directly linking Mr. Wehr’s pay to underperformance of the stock should it continue over the performance period.
 
-    
Historical target and actual pay. When Mr. Wehr became CEO, he received a one-time special equity grant of 100% PSUs and options that have a $5.00 vesting condition in May 2012 and May 2014, respectively. Prior to 2011, Mr. Wehr had not received an increase to his ongoing pay since becoming CEO in 2009, and the realizable value of his annual and LTI awards from 2009 and 2010 has been below target.
 
 
 
29

 
 
To the extent stock price underperforms for our shareholders, Mr. Wehr is similarly impacted with respect to long-term elements of his compensation. Based on our stock price as of fiscal year end 2011, the values of our long-term cash and equity awards to Mr. Wehr over the past three years were 38% lower than the grant date values, and the value of his overall compensation was 22% lower than the grant date values. The chart below illustrates the grant date value versus realizable value, based on a 2011 fiscal year end share price of $1.68, of cumulative CEO compensation over the last three years.
 
Other elements of Mr. Wehr’s compensation include participation in our retirement programs, eligibility for change in control and post-termination arrangements, and limited perquisites.
 
Total Direct Compensation Mix
 
In line with our pay-for-performance philosophy, the compensation for executives who bear the most responsibility for our performance is heavily weighted toward at-risk annual and long-term incentives based on multiple metrics closely aligned with our business objectives. We generally structure incentive pay between 70% and 80% for the CEO and between 60% and 70% for the other NEOs for target performance. We may, at times, deviate from these ranges due to market conditions, retention risks, changes in business strategy, or other factors. Currently, each NEO’s incentive pay targets are within these ranges. For 2011, 75% of our CEO’s target pay and, on average, 64% of the pay for our other NEOs is performance-based and subject to the achievement of pre-defined performance targets. Long-term performance awards account for 50% of CEO compensation and, on average, 26% of other NEO compensation. Due to equity constraints, these awards were granted in performance cash subject to a stock price modifier, which ties them to the long-term performance of our share price. Adjusting the cash awards based on share price strongly aligns the interests of our executives with those of our shareholders.
 
 
30

 

 
Note that in the CEO graphic, the LTI portion excludes a one-time PSU grant with grant date fair value of $600,000.
 
Base Salaries
 
Base salaries are also based on market comparisons, relative strategic value of role, and individual performance. As a result, since 2009, none of our NEOs, except for Messrs. Wehr and Wilkos, have had an increase in base salary. Messrs. Wehr and Wilkos have had increases due to their promotions to positions of greater responsibility. In 2009, Mr. Wehr was appointed as CEO, and Mr. Wilkos was appointed as his successor as CIO. Messrs. Wehr and Wilkos also received increases to their ongoing target pay opportunity of 8% and 5%, respectively, in 2011 based upon their strong performance and compensation relative to market.
 
In 2009, the Company established a practice to set pay levels for new incumbents, including the CEO, lower than that of their predecessors.
 
2011 Base Salary and Incentive Targets
Name
Position
Base
Salary
Annual and
Long-Term Incentives
at Target
Total Direct
Compensation
at Target
Incentive at
Target as Percentage of Total Direct
Compensation Target
James D. Wehr
President and
Chief Executive Officer
$700,000
$2,100,000(1)
$2,800,000
75%
Peter A. Hofmann
Senior Executive Vice President
and Chief Financial Officer
425,000
765,000
1,190,000
64%
Philip K. Polkinghorn
Senior Executive Vice President,
Business Development
475,000
867,500
1,342,500
65%
Bonnie J. Malley
Executive Vice President and
Chief Administrative Officer
360,000
556,000
916,000
61%
Christopher M. Wilkos
Executive Vice President and
Chief Investment Officer
370,000
663,000
1,033,000
64%
(1) Excludes special one-time grant of PSUs with grant date fair value of $600,000.
 
 
31

 
 
Annual and Long-Term Incentive Targets
 
Annual and long-term incentive targets are determined by a variety of factors, as described above in the Determining Total Direct Compensation Levels section on page 26, including current compensation relative to market, relative strategic value of role, and individual performance. As highlighted in the Executive Summary:
 
 
Annual incentive target opportunities as a percent of salary in 2011 reflect 2008 levels for all NEOs except for incumbents who changed roles during the period. In 2009, Mr. Wehr was appointed as Chief Executive Officer, and Mr. Wilkos was appointed as his successor as Chief Investment Officer.
 
 
Annual incentive target payout levels in 2011 were 50% of target for threshold performance, 100% of target for target performance, and 200% of target for maximum performance.
 
 
In 2010, the approach to long-term incentive program (“LTIP”) targets was revised from a set LTIP award target as a percentage of salary to an allocation based on a number of factors that may vary from year to year. In 2010 and 2011, adjustments to individual awards were made for relative strategic value of role, individual performance, and target total cash compensation relative to market. As a result, LTIP awards for the majority of participants are lower than pre-2010 levels.
 
2011 Base Salary and Incentive Targets as Percentage of Total Direct Compensation
Name
Position
Base
Salary
Annual
Incentive Target
Long-Term
Incentive Target
James D. Wehr
President and Chief Executive Officer
25%
25%
50%
Peter A. Hofmann
Senior Executive Vice President and Chief Financial Officer
36%
36%
29%
Philip K. Polkinghorn
Senior Executive Vice President, Business Development
35%
46%
19%
Bonnie J. Malley
Executive Vice President and Chief Administrative Officer
39%
33%
27%
Christopher M. Wilkos
Executive Vice President and Chief Investment Officer
36%
32%
32%

Annual Incentives
 
Annual incentives provide our NEOs with compensation opportunities that promote and reward the achievement of annual performance objectives. Under our annual incentive plan, each NEO is eligible for incentive awards based upon the achievement of pre-determined Company financial and operational goals approved by the Compensation Committee.
 
The financial and operational goals approved by the Compensation Committee determine the amount of the annual incentive awards based on actual results versus the goals. These goals (threshold, target, and maximum) are established based on the strategic and financial plans adopted by the Board. The Compensation Committee determines these goals based on an assessment of the degree of difficulty and the minimum acceptable performance results. Threshold goals are generally set to require performance equal to or above prior year results so that payouts are limited if performance does not improve over time. Target goals are set at an aggressive but achievable level. Maximum goals are set to reward performance that is significantly better than target performance.
 
In 2011, the measures used for the Phoenix corporate annual incentive plan were designed to directly tie eligible employees’ incentive compensation to our four strategic pillars, which are the underpinnings of our turnaround strategy. The Performance Measures focused on the following goals:
 
 
improving our capital position, as measured by the National Association of Insurance Commissioners (“NAIC”) Company Action Level Risk-Based Capital (“RBC”) ratio for Phoenix Life,
 
 
realizing significant expense reductions, as measured by cash-based expenses excluding restructuring charges and certain other expenses,
 
 
conserving the value of our in-force business, as measured by persistency, and
 
 
generating profits, as measured by GAAP pre-tax operating income.
 
 
32

 
 
Incentive awards can range from 0% to 200% of an individual’s incentive target and are determined based upon the achievement of our incentive goals, as set forth below. Incentive payouts under the corporate-level 2011 incentive plan tied to 2011 performance were calculated at 143% of target. This above-target result reflects strong performance across key metrics as discussed below.
 
2011 Annual Incentive Performance Results
 
Incentive Goals
   
Payout Level
50%
100%
200%
   
Performance Measure(1)
Weight
Threshold
Target
Maximum
Actual
Results
Percentage of Incentive
Target Earned(2)
NAIC RBC Ratio(3)
25%
282%
300%
335%
363%
200%
Cash-Based Expenses(4)
15%
$188
$178
$158
$172
128%
Business Conservation(5)
20%
10.0%
9.2%
7.5%
7.4%
200%
GAAP Pre-Tax Operating Income(6)
40%
$ 22
$ 63
$100
$ 51
85%(8)
Total
100%
       
143%(7)(8)
 
(1)
To achieve any payment under this plan, the GAAP Pre-Tax Operating Income performance measure had to achieve an actual result greater than $5 million.
(2)
For results between threshold and target and between target and maximum, this percentage is prorated.
(3)
NAIC RBC Ratio is total adjusted capital divided by two times risk-based required capital for Phoenix Life.
(4)
Cash-Based Expenses exclude Saybrus direct expenses, pension expenses, and restructuring charges such as severance. This measure is different from the statutory measure of the same name used to assess our performance and furnished to our investorson a periodic basis. Goals and results are rounded and expressed in millions.
(5)
Business Conservation is persistency of in-force block of business (surrender ratio) — statutory surrender benefits and withdrawals divided by average assets.
(6)
GAAP Pre-Tax Operating Income excludes the unlocking of assumptions related to deferred policy acquisition costs and includes realized gains associated with equity indexed annuity products. Goals and results are rounded and expressed in
millions.
(7)
Based on the performance measure results and the weight attached to each as reflected, the final incentive result was 143% of target award for all NEOs except the Chief Investment Officer. See table on page 37.
(8)
Pre-Tax Operating Income excludes an $11.5 million out-of-period adjustment related to certain retirement benefits pre-dating the Company’s 2001 demutualization. The Compensation Committee approved the removal of this adjustment from the calculation of the incentive plans’ measure due to the age of the item and the fact that these benefits have been reflected as an expense when paid. This action by the Compensation Committee is consistent with the intent of the governing incentive plans. The adjustment made in 2011 reflects a liability for a number of individual retirement agreements with former employees dating as far back as the 1980s. The establishment of the liability does not reflect any increase in the Company’s contractual obligations. While the contractual payments under these agreements have been reflected in operating income, there was no balance sheet liability established when each of the agreements was entered into. If this item was not excluded, the percentage of overall incentive target earned would have been lower by 6%.
 
 
33

 
 
RBC is a key measurement of capital adequacy used by regulators and rating agencies; higher RBC is better.
   
RBC at end of 2011 was 140 percentage points higher than at end of 2009.
   
Results generated a 200% incentive payout for this metric.
   
   
   
   
   
   
   
   

Company continued to focus on achieving expense reductions; lower expenses are better.
   
2011 expenses were $116 million (40%) lower than 2009.
   
 
 
 
 
 
 
 
Results generated a 128% incentive payout for this metric.
 
 
 
 
 
 
 

Preserving the value of our inforce business continued to be a key business priority; lower surrender ratio is better.
   
2011 surrender ratios were 3.3 percentage points lower than 2009.
   
 
 
 
 
 
 
 
Results generated a 200% incentive payout for this metric.
 
 
 
 
 
 
 
     

Profitable growth is a key measure of interest to investors, analysts, and other stakeholders; increasing pre-tax operating income is better.
   
2011 pre-tax operating income was $210 million higher than 2009.
   
 
 
 
 
 
 
 
 
Results generated an 85% incentive payout for this metric.
 
 
 
 
 
 
 
 
 
 
34

 
 
Investment Incentive Plan
 
The CIO’s annual incentive is equally weighted between the 2011 Phoenix corporate annual incentive plan described above and The Phoenix Companies, Inc. 2011 Investment Incentive Plan (“Investment Incentive Plan”) described below. During 2011, two events mandated the revision of the Investment Incentive Plan metrics and weightings: (1) the cancellation of the retail funds subadvisory agreements with our spun-off asset management subsidiary as of May 31, 2011, and (2) the sale of Goodwin Capital Advisers, Inc., our fixed income investment management subsidiary, on November 18, 2011. As of June 1, 2011, all performance measures associated with the retail funds were eliminated and the weightings associated with the remaining performance measures were adjusted. Payouts under the 2011 Investment Incentive Plan were determined based upon achievement of the incentive goals set forth below:
 
Period 1: January 1, 2011 through May 31, 2011
Performance Measure
Weight as Percent of Target
Peer Group/ Benchmark
 
Threshold
Target
Maximum
2011 Actual Results(4)
2011 Actual Payout %(5)
Institutional Core Plus Composite(1)/
Institutional Core Composite(2)
10%
Bps above Lehman
Universal Bond Index/
Lehman Aggregate
Bond Index
1-year
3-year
5-year
Benchmark
Benchmark
Benchmark
Benchmark+25bps
Benchmark+25bps
Benchmark+25bps
Benchmark+50bps
Benchmark+50bps
Benchmark+50bps
+66/+26
+305/
+188
+20/-23
104% -200%
200%
0%-80%
Virtus Multi Sector/
Phoenix Edge Multi Sector/
Virtus Multi Sector Short Term Bond Fund / Variable Fund
26%
Peer Group % Ranking – Lipper
1-year
3-year
5-year
50%
50%
50%
40%
35%
35%
30%
20%
20%
2%-40%
2%-22%
6%-40%
100%-200%
187%-200%
67%-200%
Phoenix Balanced Funds Composite (Fixed Portion)(3)/
Phoenix Pension Trust
4%
Bps above Lehman / Salomon Index
1-year
3-year
5-year
Benchmark
Benchmark
Benchmark
Benchmark
+25bps
Benchmark
+25bps
Benchmark
+25bps
Benchmark+50bps
Benchmark+50bps
Benchmark+50bps
+648/
+92
+280/
+126
+109/+0
200%
200%
0%-200%
New Money Spread
25%
   
Target Spread
Target+
35bps
Target+
90bps
+86
193%
Public/Private/Structured/ CLO/CDO Bond Credit Losses
25%
   
100% of 12-month corporate/ structured bond default losses
80% of
12-month corporate bond default losses
50% of
12-month corporate bond default losses
5%-85%
88%-200%
Goodwin Third Party Revenue
10%
   
$5.2 million
$5.5 million
$6.3 million
$5.6 million
136%
Payout based on actual results
100%
50% of Composite
 
50% of target payout
100% of target payout
200% of target payout
 
167%
Phoenix Corporate Plan
 
50% of Composite
         
143%
Period 1 Composite Results
             
155%
 
 
35

 
 
Period 2: June 1, 2011 through December 31, 2011
Performance Measure
Weight as Percent of Target
Peer Group/ Benchmark
 
Threshold
Target
Maximum
2011 Actual Results(4)
2011 Actual Payout %(5)
Institutional Core Plus Composite(1)/ Institutional Core Composite(2)
20%
Bps above Lehman
Universal Bond Index/
Lehman Aggregate
Bond Index
1-year
3-year
5-year
Benchmark
Benchmark
Benchmark
Benchmark+25bps
Benchmark+25bps
Benchmark+25bps
Benchmark+50bps
Benchmark+50bps
Benchmark+50bps
+66/+26
+305/
+188
+20/-23
104% -200%
200%
0%-80%
Phoenix Pension Trust
5%
Bps above Lehman / Salomon Index
1-year
3-year
5-year
Benchmark
Benchmark
Benchmark
Benchmark+25bps
Benchmark+25bps
Benchmark+25bps
Benchmark+50bps
Benchmark+50bps
Benchmark+50bps
+92
+126
+0
200%
200%
0%
New Money Spread
35%
   
Target Spread
Target+
35bps
Target+
90bps
+86
193%
Public/Private/Structured/ CLO/CDO Bond Credit Losses
35%
   
100% of 12-month corporate/ structured bond default losses
80% of
12-month corporate bond default losses
50% of
12-month corporate bond default losses
5%-85%
88%-200%
Goodwin Third Party Revenue
5%
   
$1.18 million
$1.24 million
$1.42 million
$1.21 million
43%
Payout based on actual results
100%
50% of Composite
 
50% of target payout
100% of target payout
200% of target payout
 
153%
Phoenix Corporate Plan
 
50% of Composite
         
143%
Period 2 Composite Results
             
148%
Combined Period 1 and Period 2 Investment Results
             
159%
Phoenix Corporate Plan
             
143%
Combined Period 1 and Period 2 Results
             
151%
 
(1) This is an institutional composite comprised of the Institutional Bond Mutual Fund and separately managed institutional accounts.
(2) This is an institutional composite comprised of one separately managed account, the PLIC (General Account) 901 Core Bond Account and the Phoenix Core Bond Mutual Fund.
(3) This composite is comprised of the Balanced Fund, Income and Growth Fund, and Strategic Allocation Edge Series. The Balanced Composite will be a dollar weighted gross performance composite based on year-end assets.
(4) Actual results denominated such that +/- represents basis points above or below benchmark, and percentage is percentile ranking.
(5) Ranges reflect consolidated results from different funds.

 
36

 
 
The total incentive earned as a percentage of incentive target for each NEO is equal to the sum of the weighted percentages for each separate performance measure. The annual incentive payment received by each NEO is equal to the total percentage of incentive target earned multiplied by the annual incentive target for that NEO, as set forth in the following table. The percentages related to each performance measure for performance results falling between threshold and target or between target and maximum have been determined by linear interpolation between the threshold (50%) and target (100%) percentages, or target and maximum (200%) percentages, as appropriate.
 
Target annual incentive opportunities for 2011 and payout results for our NEOs are shown in the table below:
 
Name
Position/Title
Annual
Incentive
Target
Percentage of Incentive
Target Earned
Payout
Results
James D. Wehr
President and Chief Executive Officer
$700,000
143%
$1,001,000
Peter A. Hofmann
Senior Executive Vice President and Chief Financial Officer
425,000
143%
607,750
Philip K. Polkinghorn
Senior Executive Vice President, Business Development
617,500
143%
883,025
Bonnie J. Malley
Executive Vice President and Chief Administrative Officer
306,000
143%
437,580
Christopher M. Wilkos(1)
Executive Vice President and Chief Investment Officer
333,000
151%
502,830
(1) Mr. Wilkos’ incentive is equally weighted between the 2011 annual incentive plan as set forth on page 32 and the Investment Incentive Plan as set forth on page 35. His percentage of incentive target earned is as follows:
 
 
Plan
Plan Weight
Plan Result
 
 
2011 Annual Incentive Plan
50%
143%
 
 
2011 Investment Incentive Plan
50%
159%
 
 
Weighted Average Result
 
151%
 
 
 
2012 Annual Incentive Plan
 
Consistent with the implementation of our strategic business plan, the 2012 annual incentive plan continues our focus of maintaining a healthy balance sheet, reducing expense and preserving our inforce business while increasing the emphasis on profitable growth. We will add new performance measures related to new business profitability, and increase the overall weighting on measures related to the profitable growth strategic pillar from 40% to 50%.
 
Long-Term Incentives
 
2009-2011 Long-Term Incentive Program
 
In 2009, we evaluated the design of the long-term incentive plan due to the uncertain and volatile economic and company-specific environment and resulting difficulty in setting long-term performance goals. Additionally, the Company faced share constraints, which were magnified by the significant decline in the Company’s stock price.
 
As a result, the Compensation Committee approved an incentive plan design which measured performance based on one-year results (2009), while still requiring generally that the participants complete three years of service to receive the award. The performance measures were the same as those used in the 2009 annual incentive plan: NAIC RBC Ratio, Cash-Based Expenses, Business Conservation, and GAAP Book Value per Share. Payouts under this plan were paid in cash, rather than equity due to share constraints. There was an additional two-year service vesting requirement after the end of the performance period. As a result, these awards vested in March 2012.
 
Payout ranges for this cycle were reduced from threshold, target, and maximum payouts of 50%, 100%, and 200% of target, respectively, to threshold, target, and maximum payouts of 35%, 70%, and 150% of target, respectively, to reflect the Company’s smaller size and resulting change in compensation market assessment approach, as described in How We Determine Compensation Adjustments on page 26.
 
 
37

 
 
Incentive awards were as follows:
 
Name
Position
Long-Term Incentive
Targets in Dollars
Percentage of Incentive Target Earned(3)
Payout
Results
James D. Wehr(1)
President and Chief Executive Officer
$1,300,000
53%
$631,583
 
Senior Executive Vice President and Chief Investment Officer
342,000
53%
15,105
 
Total for Mr. Wehr
   
$646,688
Peter A. Hofmann
Senior Executive Vice President and Chief Financial Officer
425,000
53%
225,250
Philip K. Polkinghorn
Senior Executive Vice President, Business Development
617,500
53%
327,275
Bonnie J. Malley
Executive Vice President and Chief Administrative Officer
306,000
53%
162,180
Christopher M. Wilkos(2)
Executive Vice President and Chief Investment Officer
315,000
53%
$148,400
 
Senior Vice President, Corporate Portfolio Management
216,000
53%
12,720
 
Total for Mr. Wilkos
   
$161,120
(1) Mr. Wehr’s LTIP payout was prorated over a three-year cycle in accordance with the plan cycle documents: three months as Chief Investment Officer and 33 months as President and Chief Executive Officer.
(2) Mr. Wilkos’ LTIP payout was prorated over a three-year cycle in accordance with the plan cycle documents: four months as Senior Vice President of Corporate Portfolio Management and 32 months as Chief Investment Officer.
(3) See 2010 Proxy Statement for this calculation.
 
2010-2012 Long-Term Incentive Program
 
The 2010-2012 LTIP used a combination of PSUs and stock options as the payment vehicle. Due to continued share constraints, stock options provided only 7.5% of each individual’s target incentive opportunity. Stock options vest in one-third increments over a three-year period. The remaining 92.5% of each individual’s target incentive opportunity was provided through PSUs. Similar to 2009, performance was measured on the same one-year performance results as the 2010 annual incentive plan: NAIC RBC Ratio, Cash-Based Expenses, Business Conservation, and GAAP Pre-Tax Operating Income. Target payouts were restored to historic levels of 50% of target for threshold performance and 100% of target for target performance; however, the maximum award for each individual was maintained at 150% of target. Additionally, except for NEOs who were new to their roles in 2009, 2010-2012 LTI targets were reduced by 30% to 51% to better align with the market. There is an additional two-year service vesting requirement after the end of the performance period. As a result, these awards will vest on March 8, 2013.
 
Incentive awards were as follows:
 
Name
Position
Total Long-Term
Incentive Target
In Dollars
Percentage of Performance-
Based Incentive Target Earned (RSU portion only)(1)
Total Payout
Results
in Dollars
James D. Wehr
President and Chief Executive Officer
$1,300,000
93%
$1,215,825
Peter A. Hofmann
Senior Executive Vice President and Chief Financial Officer
297,500
93%
278,237
Philip K. Polkinghorn
Senior Executive Vice President, Business Development
302,575
93%
282,983
Bonnie J. Malley
Executive Vice President and Chief Administrative Officer
214,200
93%
200,331
Christopher M. Wilkos
Executive Vice President and Chief Investment Officer
315,000
93%
294,604
 
(1) See 2011 Proxy Statement for this calculation.
 
 
38

 
 
2011-2013 Long-Term Incentive Program
 
The performance measures in our 2011-2013 long-term incentive (LTI) program are the same as the 2011 annual incentive plan. These four one-year performance goals are set at levels that generally require meaningful improvement over the prior year. Under each goal, a maximum of 200% of target can be earned with an overall cap at 150% of target for LTI plan performance. Because of share constraints and the Company’s current stock price, the 2011-2013 LTI awards will be paid in performance cash. To align the interests of our executives with those of our shareholders and maintain strong alignment with long-term shareholder value, these LTI performance cash awards determined after the one-year performance period are also adjusted based on stock price performance. The final payout is determined by multiplying the amount of the award earned for annual performance by a stock price modifier, which is calculated as the 30-day average stock price at end of 3-year period divided by the closing stock price on grant date. The modifier is capped at 150% (overall LTIP payout is therefore capped at 225%). These awards are scheduled to vest in March 2014.
 
As an illustration, if the stock price at the end of the three-year period is $1.68 (the same as the price at the end of 2011), then the modifier would be calculated at 67% for the CEO and 63% for the other NEOs (the ending price of $1.68 divided by the price on grant date of $2.52 and $2.67, respectively, based upon a grant date of March 2, 2011 for Mr. Wehr and February 11, 2011 for the other NEOs). This means that LTI awards, which were initially calculated at 143% of target based on the performance criteria, would be multiplied by a modifier of 67% or 63%, resulting in a final payout of 95% or 90% of target, respectively. The 2011 result of 143% was calculated pursuant to the same performance criteria as the annual incentive. See 2011 Annual Incentive Performance Results table on page 33.
 
Initial award payout
Based on
1-year performance
(determined in early 2012
Following end of year 1)
X
 
ILLUSTRATIVE
(assuming 12/31/11
Stock price of $1.68)
 
Stock price modifier based
on 3-year performance
(determined in early 2014
following end of year 3)
 
=
ILLUSTRATIVE
(assuming 12/31/11
Stock price of $1.68)
 
Final payout
(determined in early 2014
following end of year 3)
 
143%
 
 
67%
 
 
95%
 

 
Incentive awards were as follows:
 
Name
Position
Total
Long-Term
Incentive
Target in
Dollars
Percentage of
Performance-
Based
Incentive
Target
Earned
Total Payout
Results in
Dollars, Subject to Stock Price Modifier
Total Value
as of December
31, 2011
(2)
James D. Wehr
President and Chief Executive Officer
$ 2,000,000(1)
143%
$2,860,000
$1,906,667
Peter A. Hofmann
Senior Executive Vice President and Chief Financial Officer
340,000
143%
486,200
305,924
Philip K. Polkinghorn
Senior Executive Vice President, Business Development
250,000
143%
357,500
224,944
Bonnie J. Malley
Executive Vice President and Chief Administrative Officer
250,000
143%
357,500
224,944
Christopher M. Wilkos
Executive Vice President and Chief Investment Officer
330,000
143%
471,900
296,926
 
(1)
Includes special one-time grant of PSUs with grant date fair value of $600,000. These PSUs are not subject to the stock price modifier. See CEO Compensation on page 29 for details about and rationale for Mr. Wehr’s award.
(2)
Values reflect the December 31, 2011 stock price of $1.68 and the grant date stock price of $2.52 for Mr. Wehr and $2.67 for all other NEOs for the purpose of the stock price modifier.
 
 
39

 
 
2012-2014 Long-Term Incentive Program
 
Consistent with the implementation of our strategic business plan, the 2012-2014 LTI Program design will be revised to better align with the evolving strategic focus areas. We are increasing the emphasis on profitable growth, with the overall weighting on GAAP Pre-tax Operating Income increasing from 40% to 55%, while eliminating the Business Conservation measure from the LTI program. We are increasing our performance period from one to two years, while maintaining the three-year stock price modifier, capped at 150% as in the prior year.
 
Non-Qualified Deferred Compensation
 
We maintain non-qualified deferred compensation plans that allow NEOs and select employees to defer a portion of their salary and the receipt of RSUs. We eliminated the deferral opportunity for annual incentive awards on May 21, 2009. The plans are maintained to:
 
 
provide a competitive benefit;
 
 
allow participants an opportunity to defer tax payments and receive Company matching contributions on their cash compensation in excess of the Code limits on compensation placed on the 401(k) Plan; and
 
 
promote ownership by providing an opportunity to defer the receipt of RSUs.
 
For more information about the non-qualified deferred compensation benefits provided to NEOs in 2011, see the Non-Qualified Deferred Compensation in Fiscal Year 2011 table and accompanying notes, sub-tables and narrative beginning on page 56.
 
Supplemental Retirement Benefits
 
The SERPs are non-qualified defined benefit pension plans that provide supplemental retirement income to our NEOs and select employees. The SERPs provide the same benefits as those provided under the broad-based Employee Pension Plan, except that the benefit limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”), and the exclusion of annual incentive compensation in the definition of earnings under the Employee Pension Plan formula prior to July 1, 2007 are not taken into account. Accordingly, the SERPs permitted us to provide participants with retirement benefits on the same basis as other similarly situated employees without reduction due to the limits of the Code and the exclusion of their annual incentive awards. Benefit accruals under the Company’s SERPs and participation were frozen at the end of business on March 31, 2010.
 
For more detailed information about the SERPs’ benefit, please refer to the narrative to the Pension Benefits at 2011 Fiscal Year-End table on page 53.
 
Change-in-Control Agreements and Severance
 
Change-in-Control Agreements
 
During change-in-control events, the Board considers maintaining a sound management team that exercises judgment without bias due to personal circumstances, to be essential to protecting and enhancing the best interests of the Company and our shareholders. To that end, we afford certain change-in-control benefits to certain executives, including our NEOs, because they hold critical positions within the Company and would be integral to effectuating a corporate transaction. During any period in which a change-in-control occurs, these change-in-control benefits are designed to assure a continuity of management, preserve morale and productivity, enable the NEOs to focus on their responsibilities without undue distraction due to concerns about personal financial and job security and encourage retention. These benefits are also designed to assure that in these circumstances, these NEOs are not influenced in their actions by events that could occur following a change-in-control. These change-in-control arrangements help to align the interests of executives with the interests of our shareholders when considering corporate transactions. Our arrangements are generally consistent with market practice and our approach is generally competitively positioned relative to current market and insurance company practices.
 
We have change-in-control agreements with a select group of executives, which includes our NEOs. Our change-in-control agreements are “double trigger,” meaning that the additional benefits set forth in the agreements will not be paid upon a change-in-control unless the NEO’s employment is terminated involuntarily (other than for cause) or for good reason within a specified period following the transaction. We chose this approach because we believe that executives are materially harmed only if a change-in-control results in reduced responsibilities, reduced compensation opportunity or loss of employment. If we did not require termination of employment to trigger benefits, a change-in-control could result in significant payments even if the executive’s position, responsibilities, and compensation were unaffected.
 
 
40

 
 
Based on the 2011 review of change-in-control agreements by the Compensation Committee and the Board, new change-in-control agreements were entered into with our NEOs effective January 1, 2012 with an expiration date of December 31, 2013 (the “Initial Term”) and will renew automatically for successive one-year periods unless either party provides prior written notice.
 
The new change-in-control agreements are substantially similar to the existing template agreements. The significant changes in the new agreements are as follows: (a) provide for the elimination of the additional service credit under the Company’s defined benefit pension plans because the pension plans have been frozen since April 1, 2010; (b) provide that unvested stock options are subject to double trigger vesting provisions wherein both a change in control and an executive’s termination of employment within certain prescribed periods must occur for the stock options to vest on an accelerated basis; (c) provide that, with respect to the determination of performance-based long-term incentive awards, where a change in control occurs after the performance period but before the vesting date, the pro rata award payments will be based on the actual results, not the target amount; and (d) provide that, for those executives who are subject to non-compete covenants, outplacement services will be provided for a period of up to 12 months following the end of the non-compete period, limited pursuant to Internal Revenue Code section 409A requirements.
 
The change-in-control and post-termination arrangements, which are described in Change-in-Control Agreements and Severance on page 40, are not provided exclusively to the NEOs.
 
Severance
 
Severance benefits are provided to the NEOs in circumstances outside of a change-in-control through The Phoenix Companies, Inc. Executive Severance Allowance Plan (the “Executive Severance Allowance Plan”) if the NEO is terminated without cause. The Executive Severance Allowance Plan applies to all NEOs and to any other employee that the CEO determines to be integral to the formulation or execution of our business strategy.
 
All of our NEOs are covered under the Phoenix Executive Severance Allowance Plan and are eligible for, subject to certain conditions, severance equal to monthly base salary and the average of the last two annual incentive awards already paid as of the termination date. The benefits are tiered based on years of service and, for NEOs, the minimum months of payment are nine months of severance and the maximum are 18 months of severance. In addition, the NEOs are paid a prorated portion of their annual and long-term incentive based on actual plan results for the year they are terminated under the Executive Severance Allowance Plan.
 
An executive who is covered by a change-in-control agreement and the Executive Severance Allowance Plan can receive only the benefits of one of the coverages in the event of a termination.
 
 
41

 
 
Perquisites
 
We provide perquisites to our NEOs as an incremental benefit to recognize their position within the Company. Perquisites are not a material part of our executive compensation.
 
Perquisite
Description
Annual Preventative Medical Care Reimbursement
Reimburse NEOs (up to $500)
Annual Reimbursement for Financial Planning and Tax Services
Reimburse the CEO and senior executive vice presidents (up to $3,000)
Travel
Reimburse the CEO and senior executive vice presidents for expenses associated with spousal travel while attending events on occasions where spousal attendance is expected in connection with a business function
Relocation Assistance
Provide NEOs with financial assistance for house hunting trips, temporary living, lease cancellation, new home purchase closing costs, prior home sale closing costs, moving household goods, certain final moving trip expenses and miscellaneous allowance
 
Provide NEOs with consulting assistance in new home purchase, prior home sale and procuring rental or mortgage
 
Company offers relocation assistance to a broader group of employees, but at lower assistance levels.

Effective January 1, 2009, the Company eliminated tax gross-ups attributable to perquisites and other compensation, except for employee relocation, for employees and directors.
For information about perquisites provided to NEOs in 2011, see Note 6 of the Summary Compensation Table for 2011 Fiscal Year on pages 46 and 47. The Company does not provide any NEO with the personal use of aircraft or driving services, nor does it reimburse executives for any home security entitlements or other personal protections.
 
Equity Grant Procedures
 
Stock options and RSUs are granted to both executive and non-executive employees pursuant to our equity grant policy. Under this policy:
 
 
all stock option and RSU awards made as part of a recurring annual compensation program, such as our annual long-term incentive awards to NEOs, will be approved and granted at a meeting of the Compensation Committee or, for the CEO, the Board, that occurs within 20 days after the Company’s earnings release for the prior fiscal year.
 
 
all other stock options and RSUs, other than those for the CEO, are granted by the CEO or the Compensation Committee, as applicable, on four scheduled grant dates each year, to occur following the filing of each quarter’s periodic report with the United States Securities and Exchange Commission (“SEC”). The Board will grant stock option and RSU awards for the CEO on the same scheduled grant dates. The first such grant date occurs 65 calendar days following year-end which is five days following the due date of our Form 10-K. Subsequent grant dates occur 45 calendar days following the end of the first, second and third fiscal quarters, each of which is five days following the due date of our Form 10-Q for each fiscal quarter. If this date falls on a day that no Company shares are traded on the New York Stock Exchange (“NYSE”), then the grant date is the next date that trading occurs. Awards are approved by the CEO individually, or the Compensation Committee or Board, as applicable, at the last meeting preceding the applicable grant date, to be effective on the grant date. Neither the CEO, the Board nor the Compensation Committee may not take any action with respect to any stock option that would be treated as a “repricing” of such stock option.
 
 
the Compensation Committee may, in its discretion, approve and grant equity awards at other times, if it determines that such action is in the best interests of shareholders.
 
 
42

 
 
Historically, it has been our practice not to consider material inside information in determining award amounts or grant dates, and our policy reinforces this practice by intentionally selecting grant dates when decision makers are the least likely to be in possession of material inside information.
 
Share Ownership and Retention Guidelines
 
To facilitate stock ownership by our directors and NEOs, we adopted the following ownership and retention guidelines:
 
 
For NEOs, the guidelines call for each executive to accumulate ownership of our Common Stock (including, for these purposes, RSUs) at a specified multiple of salary, as indicated in the table below. Instead of a fixed timeframe for attaining these levels of ownership, executives must retain a portion of the equity received from stock-based benefit and compensation plans. When the specific ownership thresholds are met, as measured using the current fair market value of our Common Stock, the retention ratios for future grants are reduced. NEOs must retain their stock for six months after retirement or termination from the Company. As of December 31, 2011, none of our NEOs had met target ownership levels, but they have met their stock retention requirements.
 
 
For directors who are not current or former employees of the Company or its affiliates (“Non-Employee Directors”), the guidelines call for each director to accumulate 100,000 shares of our Common Stock (including, for these purposes, RSUs) within five years of the initial election to our Board. Each Non-Employee Director must hold such stock until the end of his or her service as a director. The accumulation period to reach 100,000 shares for those directors who were Board members on January 1, 2010 is the three-year period ending December 31, 2012.
 
Position
Target
Ownership
Initial Retention
Ratio(1)
Chief Executive Officer
5.0 x Salary
75%
Senior Executive Vice Presidents
3.5 x Salary
50%
Other Executives
1.0 – 3.0 x Salary
25% – 40%
Non-Employee Directors
100,000 shares
N/A
(1) These retention ratios apply to all shares and RSUs awarded after June 5, 2003.
 
Anti-Hedging Policy
 
The Compensation Committee has adopted an Anti-Hedging Policy for all directors and employees of the Company as part of its Code of Conduct. The policy provides that all employees and directors are prohibited from engaging in any hedging transactions against the Company’s securities and any derivative securities of the Company. Such transactions include, but are not limited to, short selling, trading in put and call options, and forward sale contracts.
 
Clawback Policy
 
The Company’s policy currently does not go beyond Sarbanes-Oxley requirements, but the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) requires companies to adopt a broader policy. When the SEC and NYSE provide mandatory guidance, the Board will consider the guidance and adopt an appropriate policy.
 
Tax and Accounting Considerations
 
Code section 162(m) generally disallows a tax deduction to publicly held companies for compensation over $1 million paid to a company’s chief executive officer or any of the three other most highly compensated executive officers (other than the CFO), unless the compensation is performance-based. Qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met.
 
The Compensation Committee intends to structure compensation for executive officers in a manner that is intended to qualify for deductibility under Code section 162(m) to the extent it determines to be feasible. As noted in Objectives of Executive Compensation Program on page 24, we follow a pay-for-performance philosophy and have determined that a significant majority of the compensation paid to our NEOs and, in particular, our NEOs, should be variable compensation that is contingent upon achievement of performance conditions. For this reason, where applicable, our incentive compensation is generally designed in a manner that is intended to meet the requirements of performance-based compensation exempt from Code section 162(m) limitations. Generally, our annual incentives and long-term performance awards were designed in a manner intended to qualify as exempt performance-based compensation. However, to maintain a competitive compensation position and to attract and retain high caliber executive talent, the Compensation Committee retains the authority to authorize payments, including salary and annual incentives, that may not be intended to be deductible. Regardless of such determinations, we cannot guarantee that awards that are intended to qualify as performance-based awards under Code section 162(m) will qualify for such beneficial tax treatment due to the fact-based nature of this analysis and the limited availability of binding guidance.
 
 
43

 
 
Other tax considerations are factored into the design of our compensation programs. Code section 409A provides that amounts deferred under non-qualified deferred compensation plans are included in an employee’s income when vested unless certain requirements are met. If these requirements are not met, employees are also subject to an additional income tax and interest penalties. It is our intent that our non-qualified deferred compensation plans be operated and administered to meet, and have been amended to meet, these requirements.
 
Code section 280G disallows a company’s tax deduction for what are defined as “excess parachute payments” and Code section 4999 imposes a 20% excise tax on any person who receives excess parachute payments. As discussed on page 58, NEOs are entitled to certain payments upon termination of their employment, including termination following a change-in-control of the Company. Beginning January 1, 2010, the Company eliminated any gross-up tax payment to compensate NEOs or make them whole in respect of the excise taxes imposed under Code section 4999. Change-in-control payments have been capped with the intent to eliminate any excess parachute payments.
 
Congress and the Internal Revenue Service consider from time to time legislation, regulations and other regulatory rulings that could modify or eliminate these tax benefits. Such actions would prompt an evaluation of the impact on our executive compensation programs.
 
Accounting considerations also play a role in designing the compensation programs made available to our NEOs. Principal among these is Financial Accounting Standards Board Statement of Financial Accounting Standards Accounting Standards Codification Topic No. 718, Compensation — Stock Compensation (“ASC 718“), which addresses the accounting treatment of certain equity-based compensation.
 
Role of Compensation Consultant
 
The Compensation Committee has retained an independent compensation consultant, Semler Brossy Consulting Group, LLC (“Semler Brossy”), for advice on executive compensation matters. The chair of the Compensation Committee oversees all of the consultant’s work with assistance from management. Management does not retain its own consultant for executive compensation matters and did not use any consulting services from Semler Brossy in 2011.
 
During 2011, Semler Brossy advised the Compensation Committee on emerging best compensation practices and assisted the Compensation Committee in its review and analysis of executive and director compensation, including its assessment of named executive officer compensation levels, its analysis of comparative market data, and the structure of the Company’s annual and long-term incentive programs, severance and change-in-control provisions.
 
While our policy requires Semler Brossy to address the Compensation Committee in executive session at least once each calendar year, in 2011 Semler Brossy addressed the Compensation Committee in executive session at most of its sessions.
 
Approving Pay Decisions
 
The CEO is responsible for making compensation recommendations to the Compensation Committee regarding other NEOs. The CEO makes compensation recommendations for Direct Compensation, taking into account compensation relative to market, strategic value of the position, and individual performance. The Compensation Committee is responsible for reviewing these recommendations and making final decisions with regard to compensation.
 
With regard to the CEO, the Compensation Committee is responsible for evaluating performance and making compensation recommendations to the Board for its approval. The CEO compensation recommendations are set by the Compensation Committee during executive session based on the Compensation Committee’s assessment of the CEO’s individual performance, the financial and operating performance of the Company, market value, and input from individual members of the Compensation Committee.
 
 
44

 
 
Say-on-Pay and Say-on-Frequency Results from 2010
 
At our 2011 Annual Meeting of Shareholders, approximately 90% of our shares present at our meeting and entitled to vote, voted to approve the advisory vote on our executive compensation programs for fiscal year 2010. Because of the strong favorable vote that we received last year, the design of our 2011 executive compensation program is largely unchanged from 2010 and continues to align executive and shareholder interests. We encourage our shareholders to once again approve the non-binding advisory vote on our executive compensation program.
 
Also at our 2011 Annual Meeting of Shareholders, our shareholders voted to adopt the Board recommended frequency of annual say-on-pay votes. The annual option received 78% of our shares voted. The Company adopted the frequency of annual say-on-pay votes until the next frequency vote by the shareholders occurs.
 
 
45

 
 
Summary Compensation Table for 2011 Fiscal Year
 
The following table sets forth information concerning the 2011 compensation of our executives who were our NEOs as of December 31, 2011. For those executives that were also reported in the Summary Compensation Table of our Proxy Statement for the 2010 and 2009 fiscal year, 2010 and 2009 compensation information is also included. The table includes salary, annual incentives and long-term incentive compensation. Additional information may be found in the narrative and supporting tables that accompany this table.
 
Name and
Principal Position
(a)
Year
(b)
Salary(1)
(c)
 
Bonus
(d)
Stock
Awards(2)
(e)
Option
Awards(3)
(f)
Non-Equity
Incentive Plan
Compensation(4)
(g)
Change in
Pension Value and
Non-Qualified
Deferred
Compensation
Earnings(5)
(h)
 
All Other
Compensation(6)
(i)
Total
(j)
James D. Wehr
President and Chief
Executive Officer(7)
2011
$
691,667
 
$
 
$
2,000,000
(13)
$
 
$
1,001,000
 
$
993,974
 
$
81,063
 
$
4,767,704
 
2010
 
650,000
   
   
1,202,500
(11)
 
97,500
   
604,500
   
895,365
   
59,500
   
3,509,365
 
2009
 
582,500
   
   
318,200
(8)
 
362,500
(8)
 
1,022,091
(12)
 
1,101,680
   
52,425
   
3,439,396
 
Peter A. Hofmann
Senior ExecutiveVice President and Chief Financial Officer
2011
 
425,000
   
   
340,000
(13)
 
   
607,750
   
397,123
   
36,806
   
1,806,679
 
2010
 
425,000
   
   
275,188
(11)
 
22,313
   
395,250
   
112,466
   
25,500
   
1,255,716
 
2009
 
425,000
   
   
   
   
450,500
(12)
 
116,833
   
25,500
   
1,017,833
 
Philip K. Polkinghorn
Senior Executive Vice
President, Business
Development
2011
 
475,000
   
   
250,000
(13)
 
   
883,025
   
99,837
   
40,969
   
1,748,831
 
2010
 
475,000
   
   
279,882
(11)
 
22,693
   
574,275
   
82,601
   
31,500
   
1,465,951
 
2009
 
475,000
   
   
   
   
654,550
(12)
 
88,274
   
21,375
   
1,239,199
 
Bonnie J. Malley
Executive Vice President and Chief Administrative Officer
2011
 
360,000
   
   
250,000
(13)
 
   
437,580
   
438,704
   
41,850
   
1,528,134
 
Christopher M. Wilkos
Executive Vice President and
Chief Investment
Officer(9)
2011
 
367,500
   
   
330,000
(13)
 
   
502,830
(14)
 
186,043
   
36,751
   
1,423,124
 
2010
 
350,000
   
   
291,375
(11)
 
23,625
   
433,125
(14)
 
170,219
   
26,250
   
1,294,594
 
2009
 
326,970
   
5,000
(10)
 
   
   
426,070
(12)
(14)
 
198,357
   
24,523
   
980,920
 
(1)
Figures are shown for the year earned, and have not been reduced for deferrals. For 2011, each of the NEOs elected to defer a portion of their salary until following termination of employment or, in certain circumstances, such earlier specified date elected by the NEO: Mr. Wehr deferred $98,800, Mr. Hofmann deferred $40,800, Mr. Polkinghorn deferred $45,000, Ms. Malley deferred $35,800, and Mr. Wilkos deferred $31,800. For 2010, Mr. Wehr deferred $92,550, Mr. Hofmann deferred $35,300, Mr. Polkinghorn deferred $45,000, and Mr. Wilkos deferred $30,800. For 2009, Mr. Wehr deferred $82,425, Mr. Hofmann deferred $35,300, Mr. Polkinghorn deferred $45,000, and Mr. Wilkos deferred $23,918.
(2)
Represents the grant date fair market value for respective years for all stock awards granted to NEOs (excluding stock options which are reflected in column (f)) as calculated pursuant to ASC 718, excluding the effect of estimated forfeitures. The assumptions used for determining this value are stated in Note 18 of the Company’s financial statements included in its Annual Report on Form 10-K for the respective years.
(3)
Represents the grant date fair market value for the respective years for all stock option awards granted to NEOs as calculated pursuant to ASC 718, excluding the effect of estimated forfeitures. The assumptions used for determining this value are stated in Note 18 of the Company’s financial statements included in its Annual Report on Form 10-K for the respective years.
(4)
Except as otherwise noted, represents the cash-based incentive earned under The Phoenix Companies, Inc. Annual Incentive Plan for Executive Officers for the applicable performance year, paid in March of the following year.
(5)
Represents the increase in the actuarial value of accumulated pension benefits accrued during the year. For 2011, 2010 and 2009, this represents the change in value between December 31, 2010 and December 31, 2011, December 31, 2009 and December 31, 2010, and December 31, 2008 and December 31, 2009, respectively, determined using, where applicable, the discount rates disclosed in the Annual Report on Form 10-K for those years and based on the other actuarial assumptions described in Note 2 to Pension Benefits at 2011 Fiscal Year-End for each applicable year on page 54 for 2011. These benefit accruals pertain solely to benefits accrued under the Company’s pension plans and exclude all account-based plans that NEOs may participate in, such as The Phoenix Companies, Inc. Savings and Investment Plan and The Phoenix Companies, Inc. Non-Qualified Excess Investment Plan. Since the plan was frozen on March 31, 2010, the primary driver of the 2011 change in value was the decline in interest rates used to value the pension benefit.
(6) All Other Compensation Sub-Table:
 
 
46

 
 
     
Perquisite
   
Name
Year
Company Contributions to 401(k) Plan
and Excess Investment Plan
Reimbursement for Financial Planning and Tax Services
Anniversary
Award
Total
James D. Wehr
2011
$ 79,313
$ 1,000
$ 750
$ 81,063
2010
58,500
1,000
 
59,500
2009
52,425
   
52,425
Peter A. Hofmann
2011
36,656
 
150
36,806
2010
25,500
   
25,500
2009
25,500
   
25,500
Philip K. Polkinghorn
2011
40,969
   
40,969
2010
28,500
3,000
 
31,500
2009
21,375
   
21,375
Bonnie J. Malley
2011
41,850
 
 
41,850
Christopher M. Wilkos
2011
36,751
   
36,751
2010
26,250
   
26,250
2009
24,523
   
24,523
 
(7)
Mr. Wehr was appointed by the Board to be the Company’s President and Chief Executive Officer effective April 15, 2009.
(8)
Represents the awards granted to Mr. Wehr on May 15, 2009 as part of his promotion to Chief Executive Officer.
(9)
Mr. Wilkos was promoted from Senior Vice President, Corporate Portfolio Management to Executive Vice President and Chief Investment Officer on May 4, 2009.
(10)
Mr. Wilkos received a recognition award of $5,000 in January 2009 for his contribution to the year-end capital planning process.
(11)
Awards associated with the RSU portion of the 2010-2012 Long-Term Incentive Program were subject to achievement of performance measures and vesting disclosed on page 38. Grant date fair value awards for the RSU portion of the 2010-2012 Long-Term Incentive Program reported in the above table are based on assumed achievement at target. Potential values at target and maximum and actual value earned are as follows:
 
Name
Potential Stock
Awards at Target
Potential Maximum
Stock Award
Actual
Award Earned
James D. Wehr
$1,202,500
$1,803,750
$1,118,325
Peter A. Hofmann
275,188
412,782
255,925
Philip K. Polkinghorn
279,882
419,823
260,290
Christopher M. Wilkos
291,375
437,063
270,979
 
 
2010-2012 Long-Term Incentive Program also includes stock option awards included in column (f).
(12)
Includes the cash-based incentives earned under the 2009-2011 Long-Term Incentive Program. These awards are subject to a two-year vesting requirement and will be paid in March 2012. Actual awards earned for all NEOs are reflected in the 2009-2011 Long-Term Incentive Program one-year performance results table on page 38.
 
(13)
Represents cash-based awards at target subject to a stock price modifier associated with the 2011-2013 Long-Term Incentive Program based on assumed achievement at target and the stock price modifier being flat. The awards were subject to achievement of performance measures and vesting disclosed on page 39 as well as actual award amounts. Mr. Wehr’s award also included a one-time RSU portion, which is not subject to the stock price modifier. Grant date fair value awards at target and maximum and with the maximum benefit of the stock price modifier are as follows:
 
Name
Award
Payout Type
Potential Awards
at Target
Potential Maximum
Award Based on Performance
Potential Maximum
Award Based
on Maximum Performance and
Stock Price Modifier
James D. Wehr
RSU
$ 600,000
$ 900,000
$ 900,000
James D. Wehr
Cash
1,400,000
2,100,000
3,150,000
Peter A. Hofmann
Cash
340,000
510,000
765,000
Philip K. Polkinghorn
Cash
250,000
375,000
562,500
Bonnie J. Malley
Cash
250,000
375,000
562,500
Christopher M. Wilkos
Cash
330,000
495,000
742,500
 
(14)
As described in the Investment Incentive Plan section on page 35, a portion of Mr. Wilkos’ annual incentive award was determined under the 2011 Investment Incentive Plan.
 
 
47

 
 
2011 Base Salary and Incentive Target Adjustments
 
Effective March 1, 2011, Mr. Wehr’s base salary and annual incentive target were each increased from $650,000 to $700,000, and his ongoing long-term incentive target was increased from $1,300,000 to $1,400,000. He also received a one-time PSU grant with grant date fair value of $600,000.
 
Effective February 16, 2011, Mr. Wilkos’ base salary was increased from $350,000 to $370,000, his annual incentive target was increased from $315,000 to $333,000, and his long-term incentive target was increased from $315,000 to $330,000.
 
Mr. Hofmann’s long-term incentive target was increased from $297,500 to $340,000.
 
Ms. Malley’s long-term incentive target was increased from $214,200 to $250,000.
 
Mr. Polkinghorn’s long-term incentive target was reduced from $302,575 to $250,000.
 
Salary and Incentives as a Percentage of Total Compensation
 
In 2011, the proportion of salary and incentives reflected in columns (c) through (g) of the Summary Compensation Table for 2011 Fiscal Year on page 46 to total compensation as reflected in column (j) of that table ranged from 69% to 92%. For 2010, it ranged from 73% to 92%. For 2009, it ranged from 66% to 91%.
 
Employment Agreements
 
None of the NEOs has an employment agreement with the Company.
 
 
48

 
 
Grants of Plan-Based Awards in Fiscal Year 2011
 
The following table supplements the information provided in the Summary Compensation Table for 2011 Fiscal Year on page 46 concerning 2011 awards granted to NEOs, including the range of compensation opportunities under our 2011 annual and 2011-2013 long-term incentive plans if specified pre-determined performance goals are met. Additional information concerning these awards may be found in the narrative that accompanies the table below.
 
     
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards(1)
Estimated Future Payouts
Under Equity Incentive Plan Awards
All Other Stock Awards:
Number
of Shares
of Stock
or Units
(i)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(j)
Exercise
or Base
Price of
Option
Awards
($/Sh)
(k)
Grant Date Fair Value of Stock and Option Awards
(l)
Name
(a)
Grant Date
(b)
Approval
Date
Threshold
(c)
Target
(d)
Maximum
(e)
Threshold
(# of shares)
(f)
Target
(# of shares)
(g)
Maximum
(# of shares)
(h)
James D. Wehr
   
$350,000
$700,000
$1,400,000
             
 
3/2/2011
3/2/2011
     
119,048
238,095(2)
357,143
     
600,000(4)
 
3/2/2011
3/2/2011
     
416,667
833,333(3)
1,875,000
     
1,400,000(5)
Peter A. Hofmann
   
 
212,500
425,000
 
850,000
             
 
2/11/2011
2/11/2011
     
101,190
202,381(3)
455,357
     
340,000(5)
Philip K.
Polkinghorn
   
 
308,750
617,500
 
1,235,000
             
 
2/11/2011
2/11/2011
     
74,405
148,810(3)
334,821
     
250,000(5)
Bonnie J. Malley
   
153,000
306,000
612,000
           
 
 
2/11/2011
2/11/2011
     
74,405
148,810(3)
334,821
     
250,000(5)
Christopher M. Wilkos
   
  166,500
333,000(6)
666,000
             
 
2/11/2011
2/11/2011
     
98,214
196,429(3)
441,964
     
330,000(5)
(1)
Except as otherwise noted below, the first line for each NEO represents the incentive opportunity under the Annual Incentive Plan for Executive Officers for the 2011 performance period, as described in 2011 awards on page 32. Awards under this plan are funded when the company meets established performance thresholds as described in the notes to the 2011 annual incentive plan design table on page 33.
(2)
Represents a special one-time grant of PSUs subject to the performance criteria of the 2011-2013 Long-Term Incentive Program, but not subject to its stock price modifier, as described in 2011-2013 Long-Term Incentive Program on page 39. These awards were approved and granted on March 2, 2011.
(3)
Represents cash-based awards under the 2011-2013 Long-Term Incentive Program, as described in 2011-2013 Long-Term Incentive Program on page 39. While subject to a stock price modifier at the end of the three-year cycle, these awards are paid out in cash, but shown above in stock equivalents, based on the December 31, 2011 closing price of $1.68. Mr. Wehr’s award was approved and granted on March 2, 2011. The awards for all other NEOs were approved and granted on February 11, 2011.
(4)
Represents the grant date fair value at target of the PSUs described in Note 2 above, pursuant to ASC 718, excluding the effect of estimated forfeitures.
(5)
Represents the grant date fair value at target of the performance cash awards described in Note 3 above, pursuant to ASC 718, excluding the effect of estimated forfeitures.
(6)
As described in the Investment Incentive Plan section on page 35, a portion of Mr. Wilkos’ annual incentive award for 2011 was determined under the 2011 Investment Incentive Plan.
 
Estimated Future Payouts under Non-Equity Incentive Plan Awards
 
The annual incentive awards for NEOs are provided under The Phoenix Companies, Inc. Annual Incentive Plan for Executive Officers. The Annual Incentive Plan for Executive Officers is designed to accomplish the objectives described under Annual Incentives on page 32, and allows us to structure awards in a manner intended to maximize our tax deductions on performance-based pay as described under Tax and Accounting Considerations on page 43. To accomplish each of these objectives, maximum awards for each NEO must be first determined formulaically as provided in the plan, and then may be reduced to any amount, including zero, based on any factor(s) deemed appropriate by the Compensation Committee. In 2011, the maximum payout opportunity was 200% of target.
 
See the 2011 annual incentive financial goals and results on page 33.
 
Stock Option Plan
 
In 2001, the Compensation Committee adopted The Phoenix Companies, Inc. Stock Incentive Plan to align the interests of our NEOs and other employees with those of shareholders. This plan allows the Compensation Committee to grant incentive stock options (“ISOs”), which qualify for certain tax advantages as provided under Code section 422, and non-statutory stock options for the purchase of Common Stock to our employees. Depending on the Company’s incentive design for a given year, stock options may be used as part of the Company’s long-term incentive program. We also use stock option awards to recognize promotions, to reward significant individual contributions or extraordinary efforts that may not be reflected in other incentive plan awards and as part of employment offers for certain positions.
 
 
49

 
 
All option awards are granted at the grant date fair market value of our Common Stock on the date the award is approved, or, if later, effective. Generally, all awards are subject to a three-year graded vesting schedule, and recipients have a maximum of 10 years to exercise the option. Upon termination of employment, stock options generally must be exercised within 30 days following termination of employment. In cases of termination due to death, disability or retirement under the Employee Pension Plan, as described in the notes and narrative to the Pension Benefits at 2011 Fiscal Year-End table on page 53, options must be exercised at the earlier of five years from the date of termination of employment or the option’s expiration date. For termination of employment in connection with a qualifying business disposal or divestiture, the Compensation Committee may allow options to be exercised within three years from the date of termination of employment or divestiture. In the case of terminations due to cause, all outstanding options expire immediately. In 2011, the Company did not grant stock option awards as part of its long-term incentive program.
 
Restricted Stock Unit Plan
 
In 2003, shareholders approved The Phoenix Companies, Inc. 2003 Restricted Stock, Restricted Stock Unit, and Long-Term Incentive Plan to foster and promote the long-term financial success of the Company by motivating superior performance through performance incentives, enabling the Company to attract and retain high quality management talent and encouraging and providing for the acquisition of ownership interest in the Company to align the interests of our NEOs and other employees with those of shareholders. The plan allows the Compensation Committee to grant both performance-based incentive awards and service-vested awards. The type of awards granted to NEOs in a given year is determined based on the Company’s compensation philosophy and strategy. In 2011, the Company did not grant restricted stock unit awards as part of its long-term incentive program.
 
 
50

 
 
Outstanding Equity Awards at 2011 Fiscal Year-End
 
The following table sets forth information concerning stock options and non-vested RSU awards held by the NEOs as of December 31, 2011.
 
 
Option Awards
Stock Awards
Name
(a)
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(b)
Number of
Securities
Underlying
Unexercised
Options
Unexercisabe (c)
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(d)
Option
Exercise
Price
(e)
Option
Grant
Date
(f)
Option
Expiration
Date
(g)
Number of
Shares or
Units of
Stock That
Have Not
Vested(2)
(h)
Market Value
of Shares or
Units of
Stock That
Have Not
Vested(1)
(i)
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(2)
(j)
Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(1)
(k)
James D. Wehr
22,886
45,772
(7)
$ 2.84
3/8/2010
3/8/2020
393,778
(6)
$661,547
 
238,095
(3)
$400,000
 
 
43,484
 
9.84
2/13/2008
2/13/2018
       
215,000
(5)
361,200
 
 
34,786
 
11.14
2/3/2005
2/3/2015
               
 
250,000
(4)
1.85
5/15/2009
5/15/2014
               
 
34,787
 
10.56
1/2/2004
1/2/2014
               
 
11,595
 
7.59
6/5/2003
6/5/2013
               
 
17,393
 
13.98
6/25/2002
6/25/2012
               
Peter A. Hofmann
5,237
10,475
(7)
$ 2.84
3/8/2010
3/8/2020
90,114
(6)
$151,392
         
 
54,037
 
9.84
2/13/2008
2/13/2018
               
 
28,988
 
12.54
2/8/2007
2/8/2017
               
 
40,585
 
10.78
4/29/2004
4/29/2014
               
 
5,797
 
13.98
6/25/2002
6/25/2012