DEF 14A 1 d288491ddef14a.htm DEFINITIVE PROXY STATEMENT Definitive Proxy Statement
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Filed by the Registrant  ☑                          Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to § 240.14a-12

MetLife, Inc.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box)

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

     

  (2)  

Aggregate number of securities to which transaction applies:

 

     

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

  (4)  

Proposed maximum aggregate value of transaction:

 

     

  (5)   Total fee paid:
   

     

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


Table of Contents

LOGO


Table of Contents

LOGO

MetLife, Inc.

200 Park Avenue, New York, NY 10166

April 27, 2017

Dear Shareholder:

You are invited to attend MetLife, Inc.’s 2017 annual meeting of shareholders, which will be held on Tuesday, June 13, 2017 beginning at 2:30 p.m., Eastern Time, at 200 Park Avenue, New York, New York.

At the meeting you will vote on a number of important matters described in the attached Proxy Statement. You will also act on such other matters as may properly come before the meeting.

The vote of every shareholder is important. You can ensure that your shares will be represented and voted at the meeting by voting online or by telephone or by signing and returning a proxy card. Detailed instructions on how to vote on the Internet or by telephone may be found in the attached Proxy Statement on page 1. If you received printed proxy materials and choose to vote by mail, you may use the postage-paid, pre-addressed envelope provided with the materials.

Sincerely yours,

LOGO

Steven A. Kandarian

Chairman of the Board,

President and Chief Executive Officer


Table of Contents

LOGO

MetLife, Inc.

200 Park Avenue, New York, NY 10166

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The 2017 annual meeting of the shareholders of MetLife, Inc. will be held at 200 Park Avenue, New York, New York on Tuesday, June 13, 2017 at 2:30 p.m., Eastern Time. At the meeting, shareholders will consider and vote on the following matters:

  1. the election of 11 Directors, each for a one-year term;  
  2. the ratification of the appointment of Deloitte & Touche LLP as MetLife, Inc.’s independent auditor for 2017;  
  3. an advisory (non-binding) vote to approve the compensation paid to MetLife, Inc.’s Named Executive Officers;  
  4. an advisory (non-binding) vote on the frequency of future advisory votes to approve the compensation paid to the MetLife, Inc.’s Named Executive Officers;  
  5. a shareholder proposal to reduce the ownership required for shareholders to call a special meeting; and  
  6. such other matters as may properly come before the meeting.  

Information about the matters to be acted upon at the meeting is contained in the accompanying Proxy Statement.

Shareholders of record of MetLife, Inc. common stock at the close of business on April 14, 2017 will be entitled to vote at the meeting or any adjournment or postponement thereof.

By Order of the Board of Directors,

 

LOGO

Timothy J. Ring

Senior Vice President and Secretary

New York, New York

April 27, 2017

 

 

Important Notice Regarding the Availability of Proxy Materials for the

Shareholder Meeting to be Held on June 13, 2017

The accompanying Proxy Statement, the MetLife, Inc. 2016 Annual Report to Shareholders, the Chairman’s Letter, and directions to the location of the 2017 annual meeting of shareholders are available at http://investor.metlife.com by selecting the appropriate link under “Related Links.”


Table of Contents

Table of Contents

 

PROXY STATEMENT

 

This Proxy Statement contains information about the 2017 annual meeting of shareholders (Annual Meeting) of MetLife, Inc. (MetLife or the Company). We are providing proxy materials to solicit proxies on behalf of the MetLife Board of Directors. We are sending certain of our shareholders a Notice of Internet Availability of Proxy Materials (Notice) on or about April 27, 2017. The Notice includes instructions on how to access our Proxy Statement, 2016 Annual Report to Shareholders, and Chairman’s Letter online. Shareholders who have previously requested a printed or electronic copy of the proxy materials will continue to receive such a copy of the proxy materials, which will be sent on or about April 27, 2017. Please see “Accessing your proxy materials” on page 100 for additional information.

 

 

 

TABLE OF CONTENTS

   
i
 

A NOTE ABOUT NON-GAAP MEASURES

    ii  

PROXY SUMMARY

    1  

PROPOSAL 1 –  Election of Directors for a
One-Year Term Ending at the 2018 Annual
Meeting of Shareholders

    11  

Director Nominees

    11  

Corporate Governance

    23  

Director Compensation in 2016

    33  

PROPOSAL 2 –  Ratification of Appointment of the Independent Auditor

    35  

Independent Auditor’s Fees for 2016 and 2015

    36  

Audit Committee Report

    37  

PROPOSAL 3 –  Advisory Vote to Approve the Compensation Paid to the Company’s Named Executive Officers

    39  

Compensation Committee Report

    40  

Compensation Discussion and Analysis

    41  

Summary Compensation Table

    72  

Grants of Plan-Based Awards in 2016

    78  

Outstanding Equity Awards at 2016 Fiscal Year-End

    80  

Option Exercises and Stock Vested in 2016

    83  

Pension Benefits at 2016 Fiscal Year-End

    84  

Nonqualified Deferred Compensation at 2016 Fiscal Year-End

    86  

Potential Payments upon Termination or
Change-in-Control at 2016 Fiscal Year-End

    91  

PROPOSAL 4 –  Advisory Vote on the Frequency of Future Advisory Votes to Approve the Compensation Paid to the Company’s Named Executive Officers

    95  

OTHER INFORMATION

    96  

Security Ownership of Directors and Executive Officers

    96  

Deferred Shares Not Beneficially Owned and Deferred Share Equivalents

    98  

Section 16(a) Beneficial Ownership Reporting Compliance

    98  

Security Ownership of Certain Beneficial Owners

    99  

Information About the Annual Meeting, Proxy Voting, and Other Information

    100  

PROPOSAL 5 –  Shareholder Proposal to Reduce the Ownership Required for Shareholders to Call a Special Meeting

    106  

Appendix A –  Compensation Discussion and Analysis Supplementary Information

    A-1  

Appendix B –  Non-GAAP and Other Financial Disclosures

    B-1  

Cover image:

MetLife’s principal executive

offices, 200 Park Avenue in

New York City.

 

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    i                 

 


Table of Contents

A NOTE ABOUT NON-GAAP MEASURES

 

In this Proxy Statement, MetLife presents certain measures of its performance that are not calculated in accordance with accounting principles generally accepted in the United States of America (GAAP). Non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:

 

                                                                                               
    ($ in millions, except per Share data and as otherwise indicated)            

 

    2016

 

           

    2015

 

               

      2014  

 

               

      2013  

 

               

      2012  

 

         
                                   
 

Net income (loss) available to MetLife, Inc.’s common shareholders

        $ 697           $ 5,152             $ 6,187             $ 3,246             $ 1,202      
 

Net income (loss) available to MetLife, Inc.’s common shareholders per diluted common share

        $ 0.63           $ 4.57                        
 

Asia – Operating earnings available to common shareholders

        $ 1,242           $ 1,380                        
 

Premiums, fees and other revenues

        $ 50,118           $ 50,035                        
 

Return on MetLife, Inc.’s common stockholder equity

        1.0         7.5                      
 

Book value per common share

        $ 59.56           $ 60.00                        
 

MetLife, Inc.’s stockholders’ equity

        $ 67,309           $ 67,949                        
 

MetLife, Inc.’s net cash provided by (used in) operating activities ($ in billions)

        $ 3.7           $ 1.6             $ 2.6             $ 1.9             $ 2.6      
                                                                                               

For more information, see Appendix B – Non-GAAP and Other Financial Disclosures.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    ii                 

 


Table of Contents

Proxy Summary

 

PROXY SUMMARY

 

This summary provides highlights of information contained elsewhere in this Proxy Statement and does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting.

 

 

Voting Your Shares

 

Record date

      April 14, 2017
 

Voting

      Shareholders as of the record date are entitled to vote. Each share of MetLife common stock (a Share) is entitled to one vote for each Director nominee and one vote for each of the other proposals.

Your vote is important. Shareholders of record may vote their Shares in person at the Annual Meeting or by using any of the following methods. Beneficial owners whose Shares are held at a brokerage firm or by a bank or other nominee should follow the voting instructions received from such nominee. Participants in retirement and savings plans should refer to voting instructions on pages 100-01.

 

             
LOGO        LOGO        LOGO
Internet        Telephone        Mail

www.investorvote.com/MET no later than

11:59 p.m. Eastern Time, June 12, 2017.

      

1-800-652-8683 until 11:59 p.m.,

Eastern Time, June 12, 2017.

      

Complete, sign and return your proxy card by
mail (if you received printed copies of the proxy

materials) so that it is received by MetLife c/o

Computershare prior to the Annual Meeting.

             

Proposals for Your Vote

 

                                             
    Proposal                

 

Directors’ Recommendation

 

                  Vote Required                  

 

Page
    Reference    

 

   
                     
 

Proposal 1

Election of 11 Directors to one-year terms

      FOR each nominee       Majority of Shares voted       11  
 

Proposal 2

Ratification of appointment of Deloitte & Touche LLP
as MetLife’s independent auditor for 2017

      FOR       Majority of Shares voted       35  
 

Proposal 3

Advisory vote to approve compensation paid to the Company’s Named Executive Officers

      FOR       Majority of Shares voted       39  
 

Proposal 4

Advisory Vote on the frequency of future advisory votes to approve the compensation paid to the Company’s Named Executive Officers

      ONE YEAR       Plurality of Shares voted       95  
 

Proposal 5

Shareholder proposal to reduce the ownership required for shareholders to call a special meeting

      AGAINST       Majority of Shares voted       106  
                                             

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    1                 

 


Table of Contents

Proxy Summary

 

Company Strategy and Initiatives

The Company has taken, and continues to take, numerous actions to maximize shareholder value. MetLife is transforming itself to drive superior shareholder returns in a range of economic conditions.

Free Cash Flow as a Percentage of Operating Earnings

 

 

LOGO

1 The 2015 Free Cash Flow as a Percentage of Operating Earnings, has been adjusted to exclude a non-cash charge of $792 million, net of income tax, related to an uncertain tax position. Unadjusted, the Free Cash Flow as a Percentage of Operating Earnings would be approximately 73%.
2 The 2016 Free Cash Flow as a Percentage of Operating Earnings, has been adjusted to exclude $2.3 billion, net of income tax, of items related to the anticipated separation of Brighthouse Financial (the Separation), which reduced the holding companies’ liquid assets as well as MetLife Free Cash Flow. These Separation-related items consisted of Separation-related outflows comprised of an incremental capital contribution to Brighthouse Life Insurance Company (formerly MetLife Insurance Company USA) (Brighthouse Insurance), capital contributions to intended Brighthouse Financial subsidiaries and Separation-related costs, forgone subsidiary dividends from Brighthouse Insurance and forgone incremental debt at MetLife, net of Separation-related inflows comprised of incremental subsidiary dividends from New England Life Insurance Company and Brighthouse Insurance. In addition, the 2016 Free Cash Flow as a Percentage of Operating Earnings also excludes total Notable Items (as defined below), primarily related to the actuarial assumption review and other insurance adjustments, of $1.0 billion, net of income tax, and Separation-related costs of $15 million, net of income tax, both of which negatively impacted Operating Earnings. Unadjusted, the Free Cash Flow as a Percentage of Operating Earnings would be 48%.

 

   Notable Items are identified in the Company’s Quarterly Financial Supplements as: “(1) variable investment income, as compared to Business Plan; (2) catastrophe experience and prior year development, net; (3) actuarial assumption review and other insurance adjustments; (4) litigation reserves & settlement costs; (5) tax adjustments; and (6) expense initiative costs.” Notable Items reflect the unexpected impact of events that affect the Company’s results, but that were unknown and that the Company could not anticipate when it devised its Business Plan. Notable Items include the unexpected impact of events such as a high or low effect of catastrophes, certain beneficial or detrimental tax items, certain litigation, high or low returns on alternative asset investment portfolios, and charges or benefits for actuarial assumptions and other insurance adjustments that the Company could not recognize until sufficient and credible data were available. Notable Items can affect Company results either positively or negatively. The Company reports Notable Items quarterly so investors have a better understanding of Company results and can evaluate and forecast that performance.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    2                 

 


Table of Contents

Proxy Summary

 

Refreshed Enterprise Strategy

 

LOGO

 

 

Optimize value and risk

 

  
    Focus on in-force and new business opportunities using Accelerating Value analysis
    Optimize cash and value
    Balance risk across MetLife

 

 

Drive operational excellence

 

  
    Become a more efficient, high performance organization
    Focus on the customer with a disciplined approach to unit cost improvement

 

Deliver the right solutions for the right customers

 

  
    Use customer insights to deliver differentiated value propositions - products, services and experiences to win the right customers and earn their loyalty

 

 

Strengthen distribution advantage

 

  
    Transform our distribution channels to drive productivity and efficiency through digital enablement, improved customer persistency and deeper customer relationships
 

“One MetLife,” “Simplify,” and “Digital” are the key enablers of our strategy

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    3                 

 


Table of Contents

Proxy Summary

 

Anticipated Separation of Brighthouse Financial, which MetLife expects to:

 

  allow MetLife to operate with greater focus

 

  increase MetLife’s predictability of distributable cash flows, and reduce its balance sheet and income statement volatility, by lowering exposure to market-sensitive products

 

  move MetLife’s mix of U.S. business towards shorter-tail liabilities

 

  diversify MetLife’s Operating Earnings across multiple markets

 

  contribute to improved operating return on equity, after the costs of the Separation are eliminated

 

  reduce MetLife’s cost of capital

 

  maintain common dividend despite the Separation

Resumption of Share Repurchases, which:

 

  reaffirmed MetLife’s philosophy that excess capital belongs to shareholders

 

  is facilitated by a new $3 billion authorization in November 2016, which is MetLife’s largest ever buyback authorization

 

  shows, together with a common stock dividend that has grown by a 16% compound annual growth rate over the past 3 years, that MetLife’s strategy of generating higher, sustainable Free Cash Flow is gaining momentum

$800 Million Net Savings by 2020

MetLife intends:

 

  to invest $1 billion by 2020 to generate $800 million in pre-tax annual run rate savings, net of stranded overhead

 

  to reduce overall costs to meet this goal and eliminate the estimated $250 million of stranded overhead

 

  to benchmark its unit cost improvement; if peers improve expense ratios, savings targets move higher

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    4                 

 


Table of Contents

Proxy Summary

 

Executive Pay for Performance

The Company maintained its pay for performance practices in 2016. Most of the Named Executive Officers’ Total Compensation for 2016 performance was variable and depended on performance. In addition, the Compensation Committee allocated a greater portion of variable compensation to stock-based long-term incentives than to annual cash incentives. These long-term incentives align executive and shareholder interests and encourage future contributions to performance. Ultimately, the value of long-term incentives depends on future Company performance and stock price performance.

 

Chief Executive Officer Compensation

for 2016 Performance

LOGO

Other Named Executive Officers’

Compensation for 2016 Performance as a Whole

 

LOGO

 

For more information, see the Compensation Discussion and Analysis beginning on page 41.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    5                 

 


Table of Contents

Proxy Summary

 

Track Record of Best Practices in Corporate Governance

The Company has a proven track record of best practices in corporate governance.

 

                          
            
 

Independent Lead Director

 

        

 

 
 

Independent Board Committees

 

        

 

 
 

World-Class, Experienced Board

        

 

 
 

Annually Elected Directors

 

        

 

 
 

Independent Directors Meet Regularly in Executive Session Without Management

 

        

 

 
 

Comprehensive Annual Board and Committee Assessment Process

 

        

 

 
 

Majority Vote Standard

 

        

 

 
 

No “Poison Pill”

 

        

 

 
 

Publicly Disclosed Political Contributions

 

        

 

 
 

Share Ownership Requirements for Executives and Directors

 

        

 

 
 

Policy Prohibiting Hedging or Pledging Company Securities

 

        

 

 
 

Performance-Based Compensation Recoupment Policy

 

        

 

 
 

Shareholder Proxy Access

 

        

 

 
 

Shareholder Right to Call Special Meeting

 

        

            

 

 
            

Board Oversight of Risk Management

The Company’s Board of Directors has active and robust practices in oversight of risk management:

 

  Finance and Risk Committee oversees assessment, management, and mitigation of material risks, as well as capital and liquidity management practices.

 

  Other committees also have significant risk management oversight:

 

  Audit: legal and regulatory compliance and internal controls;

 

  Governance and Corporate Responsibility: ethics, compliance programs and sales practices;

 

  Investment: investment portfolio risks; and

 

  Compensation: compensation plan risks, e.g. avoiding incentives to take excessive risk.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    6                 

 


Table of Contents

Proxy Summary

 

Say-on-Pay Vote Results

 

LOGO

Shareholder feedback, including the outcome of say-on-pay vote results, continues to inform compensation decisions.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    7                 

 


Table of Contents

Proxy Summary

 

Director Nominees

The Company has nominated highly-qualified, independent leaders to continue to serve on its Board of Directors.

 

                  
 

Board  

Independence  

    

 

  Independent Lead Director

 

  10 of 11 Directors are independent

 

  All Board committees composed entirely of Independent Directors (except Executive Committee)

 
        
                

 

 

Leadership  

Experience  

    

 

  Directors include current or former chief executive officers, chief operating officers, chief financial officers, presidents, and directors of other world-class public companies, including AIG, American Express, Campbell Soup Company, Gillette, Kellogg, NYSE, Pfizer, and Visa

 

  All Independent Directors have served on other public company boards

 
        
                

 

 

Financial Services and  

Investment Experience  

    

 

  Board comprised of Directors with current and former leadership positions at leading financial institutions, including AIG, American Express, Carlyle Group, Citigroup, and Visa

 
        
                

 

 

Ongoing Board  

Refreshment and Diversity  

    

 

  Three new Directors since 2014

 

  Directors come from various industries and bring diverse experience

 

  Three of 11 Directors, including the current Lead Director who is also Chair of the Governance and Corporate Responsibility Committee, are women

 
                  

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    8                 

 


Table of Contents

Proxy Summary

 

The following table provides summary information about each Director nominee. The designations below will be effective June 13, 2017 immediately following the Annual Meeting, provided that each Director is re-elected. Notes describe any differences from current designations.

 

                                                                                                                                         
                                                         

Committee Membership

 

   
   

Nominee

 

              

 

Experience and

Qualifications Highlights

 

 

             

 

Independent  

 

 

             

Audit

 

             

Compensation  

 

             

Executive  

 

             

Finance and Risk  

 

             

Governance and
  Corporate Responsibility  

 

             

Investment  

 

   
                                             
 

Cheryl W. Grisé(1)

Former Executive Vice President,

Northeast Utilities

     

- Corporate Governance

- Executive Leadership

- Global Business Experience

- Business Operations

      Û       Û       Û       Û             CHAIR        
               
 

Carlos M. Gutierrez

Co-Chair, The Albright Stonebridge Group

     

- Executive Leadership

- Global Business Experience

- Business Operations

- Government Service

- Public Policy

- Civic Leadership

 

      Û                               Û       Û  
               
 

David L. Herzog(2)

Former Chief

Financial Officer and Executive Vice President, American International Group

     

- Executive Leadership

- Insurance Expertise

- Risk Management

- Accounting/Auditing

 

      Û       CHAIR       Û       Û       Û              
               
 

R. Glenn Hubbard, Ph.D.(3)

Lead Director

Dean and Russell L. Carson

Professor of Economics and Finance, Graduate School of Business, Columbia University

     

- Public Policy

- Academic Experience

- Investments

- Civic Leadership

- Executive Leadership

 

      Û                   Û             Û       Û  
               
 

Steven A. Kandarian

Chairman of the Board, President and Chief Executive Officer, MetLife, Inc.

     

- Knowledge of MetLife’s

  Business and Operations

- Executive Leadership

- Global Business Experience

- Business Operations

 

                        CHAIR                    
               
 

Alfred F. Kelly, Jr.(4)

Chief Executive Officer,

Visa Inc.

     

- Executive Leadership

- Global Business Experience

- Business Operations

 

      Û       Û                  

Û

             
               
 

Edward J. Kelly, III(5)

Former Chairman, Institutional Clients Group, Citigroup Inc.

     

- Executive Leadership

- Global Business Experience

- Financial Expertise

- Business Operations

 

      Û       Û       Û       Û       CHAIR              
                                                                                                                                         

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    9                 

 


Table of Contents

Proxy Summary

 

 

                                                                                                                                                 
                                                              

Committee Membership

 

     
       

Nominee

 

             

 

Experience and

Qualifications Highlights

 

 

               

 

Independent  

 

 

             

Audit

 

             

Compensation 

 

             

Executive 

 

             

Finance and Risk 

 

             

Governance and
  Corporate Responsibility  

 

             

Investment 

 

     
                                                   
   

William E. Kennard(6)

Former U.S. Ambassador to the European Union

     

- Government Service

- Public Policy

- Global Business Experience

- Business Operations

- Investments

- Corporate Governance

 

      Û                   Û       Û             CHAIR    
   

James M. Kilts

Founding Partner, Centerview Capital

     

- Executive Leadership

- Global Business Experience

- Business Operations

- Investments

 

      Û             CHAIR       Û             Û       Û    
   

Catherine R. Kinney

Former President and Co-Chief Operating Officer, New York Stock Exchange, Inc.

     

- Corporate Governance

- Executive Leadership

- Global Business Experience

- Business Operations

 

      Û       Û                   Û                
   

Denise M. Morrison

President and Chief Executive Officer, Campbell Soup Company

     

- Executive Leadership

- Global Business Experience

- Business Operations

- Civic Leadership

 

      Û             Û                   Û          
                                                                                                                                               

 

1 Ms. Grisé currently serves as the Lead Director. Consistent with the Company’s commitment to Board leadership refreshment, she will be succeeded by Dr. Hubbard effective June 13, 2017.

 

2 Mr. Herzog currently serves on the Audit Committee and the Finance and Risk Committee. The Board of Directors designated Mr. Herzog the Chair of the Audit Committee effective June 13, 2017 to succeed Mr. Sicchitano, who will retire from the Board as of the Annual Meeting. Mr. Herzog will also serve on the Compensation Committee and the Executive Committee effective June 13, 2017.

 

3 Dr. Hubbard currently serves on the Executive Committee and the Finance and Risk Committee and as the Chair of the Investment Committee. The Independent Directors elected Dr. Hubbard to serve as the Lead Director effective June 13, 2017 to succeed Ms. Grisé. Dr. Hubbard will also serve on the Governance and Corporate Responsibility Committee, remain a member of the Investment Committee and the Executive Committee, and leave the Finance and Risk Committee, effective June 13, 2017.

 

4 Mr. Alfred F. Kelly currently serves on the Executive Committee, but will no longer do so effective June 13, 2017.

 

5 Mr. Edward J. Kelly, III currently serves on the Audit Committee and the Compensation Committee and as the Chair of the Finance and Risk Committee. Mr. Kelly will also serve on the Executive Committee effective June 13, 2017.

 

6 Mr. Kennard currently serves on the Finance and Risk Committee and the Investment Committee. The Board of Directors designated Mr. Kennard as the Chair of the Investment Committee effective June 13, 2017 to succeed Dr. Hubbard. Mr. Kennard will also serve on the Executive Committee effective June 13, 2017.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    10                 

 


Table of Contents

PROPOSAL 1 — Election of Directors for a One-Year  Term Ending at the 2018 Annual Meeting of Shareholders

 

PROPOSAL 1 — ELECTION OF DIRECTORS FOR A ONE-YEAR TERM ENDING AT THE 2018 ANNUAL MEETING OF SHAREHOLDERS

 

 

LOGO      The Board of Directors recommends that you vote FOR the election of each of the Director nominees.

 

Director Nominees

The Company’s success and long-term value depend on the judgment, initiative, and efforts of its Directors. As a Board, these individuals oversee MetLife’s business policies and strategies. They also oversee the Chief Executive Officer and the other most senior executives of the Company (Executive Officers or Executive Group) in their management of the Company’s business.

The Board of Directors currently has 13 members. Two current members, Kenton J. Sicchitano and Lulu C. Wang, will retire from the Board as of the Annual Meeting.

Each of the Director nominees is currently serving as a Director of MetLife and has agreed to continue to serve if elected. The Board of Directors has no reason to believe that any nominee would be unable to serve if elected; however, if for any reason a

nominee should become unable to serve at or before the Annual Meeting, the Board could reduce the size of the Board or nominate a replacement candidate for election. If you granted a proxy to vote your Shares, the individuals who have your proxy could use their discretion to vote for a replacement candidate nominated by the Board. The proxies will not have authority to vote for a greater number of nominees than the number of nominees named on the proxy card, and will accordingly not have authority to fill the vacancies resulting from the retirement of Mr. Sicchitano and Ms. Wang.

Each of the Director nominees is also currently serving as a director of Metropolitan Life Insurance Company (MLIC), a direct, wholly-owned subsidiary of MetLife with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act), in connection with the issuance of certain insurance products. The common stock of MLIC is not publicly traded.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    11                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

Cheryl W. Grisé

age 64, Former Executive Vice President, Northeast Utilities

 

 

Current Lead Director

Director since 2004

Ms. Grisé’s experience as the chief executive officer of a major enterprise subject to complex regulations has provided her with a substantive understanding of the challenges of managing a highly regulated company such as MetLife. With her executive experience and her experience as a general counsel and corporate secretary, Ms. Grisé brings a unique perspective on the Board’s responsibility for overseeing the management of a regulated enterprise and with respect to the effective functioning of the Company’s corporate governance structures. Consistent with the Company’s commitment to Board leadership refreshment, she will be succeeded by Dr. Hubbard as the Lead Director effective June 13, 2017, provided that he is re-elected at the Annual Meeting.

 

 

LOGO Professional Highlights:

 

  Northeast Utilities, a public utility holding company engaged in the distribution of electricity and natural gas (1980 – 2007)
    Executive Vice President (December 2005 – July 2007)
    Chief Executive Officer of principal operating subsidiaries (September 2002 – January 2007)
    President, Utility Group, Northeast Utilities Service Company (May 2001 – January 2007)
    President, Utility Group (May 2001 – December 2005)
    Senior Vice President, Secretary and General Counsel (1998 – 2001)

LOGO Other Professional and Leadership Experience:

 

  Trustee Emeritus, University of Connecticut Foundation
  Senior Fellow, American Leadership Forum
  Other public company directorships: PulteGroup, Inc.; ICF International
  Prior public company directorships (past five years): Pall Corporation

LOGO Education:

 

  B.A., University of North Carolina at Chapel Hill
  J.D., Thomas Jefferson School of Law
  Executive Management Program, Yale University School of Organization and Management
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    12                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

Carlos M. Gutierrez

age 63, Co-Chair, The Albright Stonebridge Group

 

 

Director since 2013

As Chairman and Chief Executive Officer of Kellogg, Secretary Gutierrez gained deep insight into the complex challenges of guiding a large enterprise in a competitive global economy. As Secretary of Commerce, he worked with government and business leaders to promote America’s economic interests. Secretary Gutierrez’s unique mix of experience gives him a valuable perspective and ability to oversee management’s efforts to grow and develop MetLife’s global business and its interactions with domestic and foreign governments and regulators.

 

 

LOGO Professional Highlights:

 

  The Albright Stonebridge Group, a consulting firm (April 2013 – Present)
    Co-Chair (February 2014 – Present)
    Vice Chair (April 2013 – February 2014)
  Vice Chairman, Institutional Client Group, Citigroup Inc., a financial services corporation (January 2011 – February 2013)
  Chairman and Founding Consultant of Global Political Strategies, a division of APCO Worldwide, Inc., a consulting firm (2010 – 2011)
  Secretary of Commerce of the United States (February 2005 –January 2009)
  Kellogg Company, a manufacturer of packaged food products (1975 – 2005)
    Chairman and Chief Executive Officer (2003 – 2005)
    Chairman, President and Chief Executive Officer (2000 – 2003)
    President and Chief Executive Officer (1999 – 2000)
    President and Chief Operating Officer (1998 – 1999)

LOGO Other Professional and Leadership Experience:

 

  Chairman, U.S.-Cuba Business Council
  Member, Board of Directors, U.S.-Mexico Foundation
  Chairman, Board of Trustees, Meridian International Center
  Co-founder, TheDream.US
  Member, Board of Directors, Viridis Learning, Inc.
  Other public company directorships: Occidental Petroleum Corporation; Time Warner, Inc.

LOGO Education:

 

  Instituto Tecnologico y de Estudios Superiores de Monterrey, Business Administration Studies
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    13                 

 


Table of Contents

Director Nominees

 

 

 

     LOGO     

 

 

David L. Herzog

age 57, Former Chief Financial Officer and Executive Vice President of American International Group

 

 

Director since 2016

Mr. Herzog brings more than three decades of life insurance and financial services expertise to MetLife. His experience as the chief financial officer of a global insurance company uniquely positions him to enhance shareholder value by leveraging his financial and risk management expertise, executive leadership experience, and deep understanding of the insurance business. These qualities and his broad knowledge of and experience in accounting are valuable to the Board’s oversight of the management of MetLife, a global insurance and financial services firm.

 

 

LOGO Professional Highlights:

 

  American International Group (AIG), an insurance company (2000 – 2016)
    Chief Financial Officer and Executive Vice President (October 2008 – April 2016)
    Senior Vice President and Comptroller (June 2005 – October 2008)
    Chief Financial Officer for worldwide life insurance operations (April 2004 – June 2005)
    Vice President, Life Insurance (2003 – 2004)
    Various senior officer positions, including Chief Financial Officer and Chief Operating Officer of American General Life following its acquisition by AIG
  Various executive positions, GenAmerica Corporation (1991 – 2000), including:
    Chief Financial Officer (1999 – 2000)
    President, GenAm Shared Services (1998 – 1999)
  Controller, Family Guardian Life Insurance Company (1987 – 1991)
  Coopers & Lybrand, a predecessor firm of PricewaterhouseCoopers LLP (1982 – 1987)

LOGO Other Professional and Leadership Experience:

 

  Member of numerous professional and civic organizations, including:
    Investment Advisory Committee, University of Missouri
    Strategic Development Board, University of Missouri Business School
  Former member of Federal Advisory Committee on Insurance
  Other public company directorships: Ambac Financial Group, Inc.; DXC Technology Company
  Prior public company directorships (past five years): AerCap Holdings N.V.

LOGO Education:

 

  B.S., University of Missouri-Columbia
  M.B.A., University of Chicago Booth School of Business
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    14                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

R. Glenn Hubbard, Ph.D.

age 58, Dean and Russell L. Carson Professor of Economics and Finance, Graduate School of Business, Columbia University

 

 

Lead Director Designee

Director since 2007

As an economic policy advisor to the highest levels of government and financial regulatory bodies, Dr. Hubbard has an unparalleled understanding of global economic conditions and emergent regulations and economic policies. This expertise contributes to the Board’s understanding of how shifting economic conditions and developing regulations and economic policies may impact MetLife’s investments, businesses, and operations worldwide. Dr. Hubbard will serve as the Lead Director effective June 13, 2017, provided that he is re-elected at the Annual Meeting.

 

 

LOGO Professional Highlights:

 

  Columbia University
    Dean, Graduate School of Business (2004 – Present)
    Russell L. Carson Professor of Economics and Finance, Graduate School of Business (1994 – Present)
    Professor of Economics, Faculty of Arts and Sciences (1997 – Present)
  Co-Chair, Committee on Capital Markets Regulation, an independent nonprofit research organization (2006 – Present)
  Chairman, President’s Council of Economic Advisers, an agency within the Executive Office of the President of the United States (2001 – 2003)
  Chairman of the Economic Policy Committee, Organization for Economic Cooperation and Development, an international economic and trade organization (2001 – 2003)
  Deputy Assistant Secretary for Tax Policy, United States Department of the Treasury (1991 – 1993)

LOGO Other Professional and Leadership Experience:

 

  Member of numerous professional and civic organizations, including:
    Economic Advisory Panel, Federal Reserve Bank of New York
    Council on Foreign Relations
    Advisory Board of the National Center on Addiction and Substance Abuse
  Other public company directorships: Automatic Data Processing, Inc.; BlackRock Closed-End Funds
  Prior public company directorships (past five years): KKR Financial Holdings LLC

LOGO Education:

 

  B.A. and B.S., University of Central Florida
  Ph.D. and A.M., Harvard University
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    15                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

Steven A. Kandarian

age 65, Chairman of the Board, President and Chief Executive Officer, MetLife, Inc.

 

 

Director since 2011

Mr. Kandarian’s leadership and financial acumen, as well as his experience with the Company, including as President and Chief Executive Officer and his earlier responsibilities for Investments, Global Brand and Marketing Services, and enterprise-wide corporate strategy, have provided him with a deep understanding of the Company’s businesses and global operations and the Company’s strategic direction and leadership selection.

 

 

LOGO Professional Highlights:

 

  MetLife, Inc.
    Chairman of the Board (January 2012 – Present)
    President and Chief Executive Officer (May 2011 – Present)
    Executive Vice President and Chief Investment Officer (April 2005 – April 2011)
  Executive Director, Pension Benefit Guaranty Corporation, a United States government agency (2001 – 2004)
  Founder and Managing Partner, Orion Partners, LP, a private equity firm (1993 – 2001)
  Founder and President, Eagle Capital Holdings, where Mr. Kandarian formed a private merchant bank to sponsor equity investments in small and mid-sized businesses (1990 – 1993)
  Managing Director, Lee Capital Holdings, a private equity firm (1984 – 1990)
  Mr. Kandarian began his career at Rotan Mosle, Inc., an investment bank

LOGO Other Professional and Leadership Experience:

 

  Member of:
    Board of Directors, Damon Runyon Cancer Research Foundation
    Board of Directors, Lincoln Center for the Performing Arts
    Board of Directors, Partnership for New York City
    Business Council
    Business Roundtable
  Chair, Insurance Regulatory Committee of the Institute of International Finance (IIF)

LOGO Education:

 

  B.A., Clark University
  J.D., Georgetown University Law Center
  M.B.A., Harvard Business School
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    16                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

Alfred F. Kelly, Jr.

age 58, Chief Executive Officer, Visa Inc.

 

 

Director since 2009

Through his roles as a senior executive of a global financial services business and a global payments technology company, and as the head of information systems of the White House, Mr. Kelly brings significant experience in risk management and mitigation, marketing, information technology and data management, as well as a sophisticated understanding of the considerations of shareholder value creation. These experiences and expertise are important to the Board’s oversight of the Company’s design and approach to risk management.

 

 

LOGO Professional Highlights:

 

  Chief Executive Officer, Visa Inc., a global payments technology company (December 2016 – Present)
  President and Chief Executive Officer, Intersection, a digital technology and media company (March 2016 – October 2016)
  Management Advisor, TowerBrook Capital Partners L.P., an investment management firm (April 2015 – February 2016)
  Chairman, 2015 Papal Visit to New York City (January 2015 – November 2015)
  Chairman of the Board, President and Chief Executive Officer, NY/NJ Super Bowl Host Company, a nonprofit fundraising and planning organization (April 2011 – August 2014)
  American Express Company, a financial services corporation
    President (July 2007 – April 2010), responsible for global consumer businesses, including consumer and small business cards, customer service, global banking, prepaid products, consumer travel, and risk and information management
    Group President (2005 – 2007), responsible for several key businesses, including U.S. consumer and small business cards, U.S. customer service, and risk management
  Head of Information Systems, White House (1985 – 1987), with oversight of the information processing functions for several government agencies that comprise the Executive Office of the President

LOGO Other Professional and Leadership Experience:

 

  Vice Chairman, Wall Street Charity Golf Classic (benefits the Cystic Fibrosis Foundation)
  Member, Boards of Trustees, of:
    New York-Presbyterian Hospital (Chair of Audit and Compliance Committee, Member of Executive Committee)
    St. Joseph’s Seminary and College
    New York Catholic Foundation
    Boston College
  Other public company directorships: Visa Inc.
  Prior public company directorships (past five years): Affinion Group Holdings, Inc. and its wholly-owned subsidiary, Affinion Group, Inc.

LOGO Education:

 

  B.A. and M.B.A., Iona College
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    17                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

Edward J. Kelly, III

age 63, Former Chairman, Institutional Clients Group, Citigroup Inc.

 

 

Director since 2015

Mr. Kelly’s extensive leadership experience as an executive in the financial services industry further strengthens the Board’s strong qualifications to oversee the execution of MetLife’s strategies in complex legal and regulatory environments. His experience includes key roles in building a client-centric model and managing the global operations of a major financial institution. Further, Mr. Kelly’s deep knowledge of investments and financial products and services makes him a valuable asset to MetLife and its shareholders.

 

 

LOGO Professional Highlights:

 

  Citigroup Inc., a financial services corporation
    Chairman, Institutional Clients Group (January 2011– July 2014)
    Chairman, Global Banking (April 2010 – January 2011)
    Vice Chairman (July 2009 – March 2010)
    Chief Financial Officer (March 2009 – July 2009)
    Head of Global Banking (September 2008 – March 2009)
    President and Chief Executive Officer, Citi Alternative Investments (March 2008 – August 2008)
    President, Citi Alternative investments (February 2008 –March 2008)
  Managing Director, The Carlyle Group, an asset management firm (July 2007 – January 2008)
  Executive and leadership positions at various organizations, including:
    The PNC Financial Services Group, Inc., a financial services corporation (March 2007 – June 2007)
    Mercantile Bankshares Corporation, a financial services corporation (March 2001 – March 2007)
    J.P. Morgan Chase & Co. (and its predecessor company J.P. Morgan & Co. Incorporated), a financial services corporation (November 1994 – January 2001)
  Partner, Davis Polk & Wardwell LLP, a law firm (January 1988 – October 1994)

LOGO Other Professional and Leadership Experience:

 

  Senior Advisor, Corsair Capital, a private equity firm
  Member, Board of Directors, Focused Ultrasound Foundation, a non-profit entity
  Lecturer, University of Virginia School of Law
  Former member of Board of Directors, Securities Industry and Financial Markets Association, a financial industry trade association
  Other public company directorships: CSX Corporation; XL Group plc

LOGO Education:

 

  A.B., Princeton University
  J.D., University of Virginia School of Law
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    18                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

William E. Kennard

age 60, Former U.S. Ambassador to the European Union

 

 

Director since 2013

Mr. Kennard’s career has given him public policy and global investment expertise. As United States Ambassador to the European Union, Mr. Kennard worked to promote transatlantic trade and investment and reduce regulatory barriers to commerce. In his years of public service, Mr. Kennard advanced access of underserved populations to technology. Mr. Kennard’s extensive regulatory and international experience enhances the Board’s ability to oversee MetLife’s strategies.

 

 

LOGO Professional Highlights:

 

  Co-Founder and Non-Executive Chairman, Velocitas Partners LLC, an asset management firm (November 2013 – Present)
  Senior Industry Advisor, Astra Capital Management, a private equity firm (June 2016 – Present)
  Member of Operating Executive Board, Staple Street Capital, a private equity firm (November 2013 – Present)
  United States Ambassador to the European Union (December 2009 – August 2013)
  Managing Director, The Carlyle Group, an asset management firm (May 2001 – December 2009)
  United States Federal Communications Commission (December 1993 – January 2001)
    Chairman (November 1997 – January 2001)
    General Counsel (December 1993 – November 1997)
  Partner, Verner, Liipfert, Bernhard, McPherson and Hand (now DLA Piper), a law firm (April 1984 – December 1993)

LOGO Other Professional and Leadership Experience:

 

  Member of:
    Board of Directors, Center for a New American Security
    Board of Directors, International African American Museum
  Trustee, Yale Corporation
  Other public company directorships: Duke Energy Corporation; AT&T Inc.; Ford Motor Company

LOGO Education:

 

  B.A., Phi Beta Kappa, Stanford University
  J.D., Yale Law School
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    19                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

James M. Kilts

age 69, Founding Partner, Centerview Capital

 

 

Director since 2005

As a founding partner of a private equity firm and as a senior executive of several major consumer product companies with global sales and operations, Mr. Kilts brings an in-depth understanding of the business challenges and opportunities of diversified global enterprises and the related financial, risk management, talent management, and shareholder value creation considerations. These experiences and knowledge enhance the Board’s ability to oversee the management of MetLife.

 

 

LOGO Professional Highlights:

 

  Founding Partner, Centerview Capital, a private equity firm (October 2006 – Present)
  Vice Chairman, Board of Directors, The Procter & Gamble Company, a consumer products company (October 2005 – October 2006)
  The Gillette Company, a consumer products company
    Chairman of the Board (January 2001 – October 2005)
    Chief Executive Officer (February 2001 – October 2005)
    President (November 2003 – October 2005)
  President and Chief Executive Officer, Nabisco Group Holdings Corp. and Nabisco Inc., manufacturer and marketer of packaged food products (January 1998 – December 2000)
  Executive Vice President, Worldwide Food, Philip Morris, a manufacturer and marketer of packaged food products (1994 – 1997)
  Various positions, Kraft, a manufacturer and marketer of packaged food products (1989 – 1994), including:
    President, Kraft USA and Oscar Mayer
    Senior Vice President, Strategy and Development
    President, Kraft Limited in Canada
    Senior Vice President, Kraft International

LOGO Other Professional and Leadership Experience:

 

  Member of:
    Board of Overseers, Weill Cornell Medicine
    Board of Trustees, Knox College
    Board of Trustees, University of Chicago
    Board of Directors, Cato Institute
  Founder and Member, Steering Committee, Kilts Center for Marketing, University of Chicago Booth School of Business
  Other public company directorships: Pfizer, Inc.; Non-Executive Director of Nielsen Holdings plc; Unifi, Inc.; Executive Chairman of Conyers Park Acquisition Corp.
  Prior public company directorships (past five years): MeadWestvaco Corporation

LOGO Education:

 

  B.A., Knox College
  M.B.A., University of Chicago
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    20                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

Catherine R. Kinney

age 65, Former President and Co-Chief Operating Officer, New York Stock Exchange, Inc.

 

 

Director since 2009

Ms. Kinney’s experience as a senior executive and chief operating officer of a multinational, regulated entity, her key role in transforming the New York Stock Exchange (NYSE) to a publicly held company, and her leadership in developing and establishing the NYSE corporate governance standards for its listed companies (including MetLife) demonstrate her knowledge of and experience with issues of corporate development, transformation and governance. These qualities are relevant to ensuring that the Board establishes and maintains effective governance structures appropriate for a global provider of insurance and financial products and services.

 

 

LOGO Professional Highlights:

 

  NYSE Euronext, a provider of financial services including securities exchange and clearing operations
    Served in Paris, France, with responsibility for overseeing the global listing program, marketing and branding (July 2007 – March 2009)
    President and Co-Chief Operating Officer, New York Stock Exchange, Inc. (merged with Euronext in 2008 to form NYSE Euronext) (2002 – 2008)
    Ms. Kinney joined the New York Stock Exchange in 1974 and held management positions in several divisions, with responsibility for all client relationships (1996 – 2007), trading floor operations and technology (1987 – 1996), and regulation (2002 – 2004)

LOGO Other Professional and Leadership Experience:

 

  Chair, Board of Trustees, Catholic Charities of the Archdiocese of New York
  Member of Economic Club of New York
  Other public company directorships: MSCI Inc.; QTS Realty Trust, Inc.
  Prior public company directorships (past five years): NetSuite, Inc.

LOGO Education:

 

  B.A., magna cum laude, Iona College
  Advanced Management Program, Harvard Graduate School of Business
  Honorary Degrees: Georgetown University; Fordham University; Rosemont College
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    21                 

 


Table of Contents

Director Nominees

 

 

     LOGO     

 

 

Denise M. Morrison

age 63, President and Chief Executive Officer, Campbell Soup Company

 

 

Director since 2014

Ms. Morrison has a long and distinguished track record of building strong businesses and growing iconic brands. Her experience as chief executive officer of a global company provides her with a strong understanding of the key strategic challenges and opportunities of running a large, complex business, including financial management, operations, risk management, talent management and succession planning. Ms. Morrison’s strong commitment to corporate social responsibility and civic engagement make her a valuable resource for MetLife and its shareholders.

 

 

LOGO Professional Highlights:

 

  Campbell Soup Company, a food and beverage company (2003 – Present)
    President and Chief Executive Officer (August 2011 – Present)
    Executive Vice President and Chief Operating Officer (October 2010 – July 2011)
    President, North America Soup, Sauces and Beverages (October 2007 – September 2010)
    President, Campbell USA (June 2005 – September 2007)
    President, Global Sales and Chief Customer Officer (April 2003 – May 2005)
  Kraft Foods, Inc., a food and beverage company (1995 – 2003)
    Various leadership roles, including: Executive Vice President and General Manager, Kraft Snacks (2001 – 2003); Executive Vice President and General Manager, Kraft Confections (2001); Senior Vice President and General Manager, Nabisco Down the Street (2000); Senior Vice President, Nabisco Sales and Integrated Logistics (1998 – 2000)
  Various senior marketing and sales positions, Nestlé USA, Inc., a food and beverage company (1984 – 1995)
  Various trade and business development positions, PepsiCo, Inc., a food and beverage company (1982 – 1984)
  The Procter & Gamble Company, a consumer products company (1975 – 1982)

LOGO Other Professional and Leadership Experience:

 

  Member, Boards of Directors, of:
    Consumer Goods Forum (Co-Chair)
    Catalyst, Inc., a nonprofit organization that strives to expand opportunities for women in business
    Grocery Manufacturers Association
  Member of:
    President Donald Trump’s Manufacturing Jobs Initiative
    Business Roundtable
    Business Council
  Other public company directorships: Campbell Soup Company
  Prior public company directorships (past five years): The Goodyear Tire & Rubber Company

LOGO Education:

 

  B.S., Boston College
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    22                 

 


Table of Contents

Corporate Governance

 

Corporate Governance

The Board of Directors recognizes the importance of effective corporate governance in fulfilling its responsibilities to shareholders. This section describes some of MetLife’s key governance practices.

Corporate Governance Guidelines

The Board of Directors has adopted Corporate Governance Guidelines that set forth the Board’s policies on a number of governance-related matters, including:

 

  Director qualification standards, independence requirements and responsibilities;

 

  the identification of candidates for Board positions;

 

  management succession;

 

  Director access to management and outside advisors, including certain restrictions on the retention by Directors of an outside advisor that is otherwise engaged by the Company for another purpose;

 

  Director compensation;

 

  Director Share ownership requirements;

 

  the election of a Lead Director by the Independent Directors;

 

  Director orientation and continuing education;

 

  Annual evaluation of the Board’s performance; and

 

  Annual review of the Corporate Governance Guidelines.

The Corporate Governance Guidelines and the Company’s By-Laws provide for a majority voting standard in uncontested Director elections.

The Corporate Governance Guidelines provide that no Director may stand for election as a Board member after he or she reaches the age of 72, and that a Director may continue to serve until the annual meeting coincident with or immediately following his or her 72nd birthday. In addition, each Director must offer to resign from the Board upon a change or discontinuance of his or her principal occupation or business responsibilities.

A printable version of the Corporate Governance Guidelines is available on MetLife’s website at www.metlife.com/ corporategovernance under the link “Corporate Governance Guidelines.”

Information About the Board of Directors

Composition and Independence of the Board of Directors. The Board currently consists of 13 Directors, 12 of whom are both Non-Management Directors and Independent Directors. A Non-Management Director is a Director who is not an officer of the Company or of any entity in a consolidated group with the Company. An Independent Director is a Non-Management Director who the Board of Directors has affirmatively determined has no material relationships with the Company or any of its consolidated subsidiaries and is independent within the meaning of the NYSE Corporate Governance Standards. An Independent Director for Audit and Compensation Committee purposes meets additional requirements under the NYSE Corporate Governance Standards and Rules 10A-3 and 10C-1, as applicable, under the Exchange Act.

The Board of Directors has adopted categorical standards to assist it in making determinations regarding Director independence. None of the relationships between the Independent Directors and MetLife is material, as provided by the Company’s categorical standards. The categorical standards are included in the Corporate Governance Guidelines of the Company, which are available on MetLife’s website at www.metlife.com/corporategovernance at the link “Corporate Governance Guidelines.”

The Board has affirmatively determined that all of the Directors, other than Steven A. Kandarian, the Company’s Chairman of the Board, President and Chief Executive Officer, are Independent Directors.

Board Leadership Structure. The Board of Directors believes that the best and most effective leadership structure for MetLife and its shareholders at this time is to have the Company’s Chief Executive Officer serve as Chairman of the Board, and an independent Director serve as Lead Director empowered with significant governance responsibilities.

Mr. Kandarian, as the Company’s Chief Executive Officer, is responsible for setting the Company’s strategic business direction, executing its strategic plans and managing its operations. Through his experience as Chief Executive Officer, and before that as Chief Investment Officer with oversight of MetLife’s enterprise-wide corporate strategy, Mr. Kandarian has gained a deep knowledge and understanding of the Company’s business, opportunities and challenges, and the capabilities and talents of the senior leadership team. Mr. Kandarian brings this

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    23                 

 


Table of Contents

Corporate Governance

 

knowledge and understanding to bear in the performance of his responsibilities as Chairman of the Board, by helping to guide the Board’s oversight on key business, strategic and risk matters for the Company and its shareholders. This insight is particularly important as the Company faces unique and extensive regulatory challenges and undertakes significant strategic initiatives, including the anticipated Separation of Brighthouse Financial.

Having an executive Chairman of the Board helps ensure that the Directors receive appropriate information about the Company’s businesses and operations and have direct access to senior management. This approach strengthens the Directors’ oversight of the Company and their performance as Directors of a complex, highly regulated, global enterprise.

Cheryl W. Grisé is the Company’s current Lead Director. Consistent with the Company’s commitment to Board leadership refreshment, the Independent Directors of the Company have elected R. Glenn Hubbard to succeed Ms. Grisé to serve as the Lead Director effective June 13, 2017, provided that he is re-elected at the Annual Meeting. Pursuant to the Corporate Governance Guidelines, the responsibilities of the Lead Director include:

 

  Presiding over meetings of the Board of Directors at which the Chairman of the Board is not present, including executive sessions of the independent Directors;

 

  Presiding over discussions of the Board of Directors when the topic presents a conflict (or potential conflict) for the Chairman of the Board;

 

  Calling meetings of the independent Directors, as necessary;

 

  Approving information sent to the Board for the Board meetings, as appropriate;

 

  In coordination with the Chairman of the Board, approving meeting agendas for the Board;

 

  Approving meeting schedules for the Board to ensure that there is sufficient time for discussion of all agenda items;

 

  Providing input on Board and Board Committee meeting agendas;

 

  Conferring with the Chairman of the Board on matters of importance that may require action or oversight by the Board, ensuring the Board focuses on key issues and tasks facing the Company;
  Facilitating communication and serving as a liaison between the Chairman of the Board and the independent Directors;

 

  Providing guidance to the Chairman of the Board regarding the ongoing development of Directors;

 

  Participating in the Compensation Committee’s annual performance evaluation of the Chairman of the Board and the Chief Executive Officer;

 

  Participating in any Chief Executive Officer succession planning;

 

  Together with the Chairman of the Board, ensuring the efficient and effective performance and functioning of the Board;

 

  Assisting the Board, the Governance and Corporate Responsibility Committee and management in promoting corporate governance best practices;

 

  In the event of the incapacity of the Chairman of the Board and Chief Executive Officer, overseeing the process for calling a special meeting to determine the action to be taken under the circumstances; and

 

  Being available, if requested by shareholders, when appropriate, for consultation and direct communication.

The Independent Directors elected Dr. Hubbard to serve as Lead Director on the strength of his leadership qualities, unparalleled understanding of global economic conditions and markets, and his expertise in public policy and regulatory developments. As Lead Director, he will draw on these skills and experiences in working with the Chairman of the Board to set the Board’s agenda. He will also bring a strong and independent voice to the boardroom to effectively lead the Independent Directors as they challenge management, consult on development of the Company’s strategy, and support the long-term success of the Company for its shareholders.

In addition, each of the Board Committees (with the exception of the Executive Committee) is chaired by an Independent Director with demonstrated expertise in the responsibilities of that Committee and strong leadership skills. Each of the Committees is also composed entirely of Independent Directors.

The successful partnership between the executive Chairman of the Board, independent Lead Director, Committee Chairs and other Independent Directors provides the Company with strong leadership and effective independent oversight of the Company and management. This demonstrates to the Board that this

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    24                 

 


Table of Contents

Corporate Governance

 

leadership structure is in the best interests of the Company and its shareholders at this time.

Executive Sessions of Independent Directors. At each regularly scheduled meeting of the Board of Directors, the Independent Directors of the Company meet in executive session without management present. The Lead Director presides at the executive sessions of the Independent Directors.

Director Nomination Process. Nominations for election as Director at the Company’s annual meetings may be made either by the Board or by a shareholder or shareholders in compliance with the requirements of the Company’s By-Laws, as described below.

Nominations by the Board. The Company’s Board nominates Director nominees upon the recommendation of the Governance and Corporate Responsibility Committee. Potential Director nominees are identified by the Governance and Corporate Responsibility Committee and the Board of Directors through a variety of means, including search firms, Board members, Executive Officers and shareholders. Potential Director nominees provide information about their qualifications and participate in interviews conducted by individual Board members. Candidates are evaluated based on the information supplied by the candidates and information obtained from other sources.

In recommending candidates for election as Directors, the Governance and Corporate Responsibility Committee will take into consideration the need for the Board to have a majority of Directors that meet the independence requirements of the NYSE Corporate Governance Standards, the ability of candidates to enhance the perspective and experience of the Board as a whole, and any other criteria the Board of Directors establishes from time to time.

Under the Company’s Corporate Governance Guidelines, the following specific, minimum qualifications must be met by any candidate whom the Governance and Corporate Responsibility Committee would recommend for election to the Board of Directors:

 

  Financial Literacy. Such person should be “financially literate,” as such qualification is interpreted by the Company’s Board of Directors in its business judgment.

 

  Leadership Experience. Such person should possess significant leadership experience, such as experience in business, finance, accounting, law, education or government, and shall possess
   

qualities reflecting a proven record of accomplishment and an ability to work with others.

 

  Commitment to the Company’s Values. Such person shall be committed to promoting the financial success of the Company and preserving and enhancing the Company’s reputation as a global leader in business and shall be in agreement with the values of the Company as embodied in its codes of conduct.

 

  Absence of Conflicting Commitments. Such person should not have commitments that would conflict with the time commitments of a Director of the Company.

 

  Reputation and Integrity. Such person shall be of high repute and recognized integrity, and shall not have been convicted in a criminal proceeding or be named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses). Such person shall not have been found in a civil proceeding to have violated any federal or state securities or commodities law, and shall not be subject to any court or regulatory order or decree limiting his or her business activity, including in connection with the purchase or sale of any security or commodity.

 

  Other Factors. Such person shall have other characteristics considered appropriate for membership on the Board of Directors, including significant experience and accomplishments, an understanding of marketing and finance, sound business judgment, and an appropriate educational background.

The Governance and Corporate Responsibility Committee will consider shareholder recommendations of candidates for nomination as Director. To be timely, a shareholder recommendation must be submitted to the Governance and Corporate Responsibility Committee, MetLife, Inc., 200 Park Avenue, New York, NY 10166, Attention: Corporate Secretary, no earlier than 150 calendar days and no later than the close of business on the 120th calendar day prior to the first anniversary of the previous year’s annual meeting. Recommendations for nominations of candidates for election at MetLife’s 2018 annual meeting of shareholders must be received by the Corporate Secretary of MetLife, Inc. no earlier than January 14, 2018 and no later than the close of business on February 13, 2018 or such other date as may be announced by the Company in accordance with the Company’s By-Laws.

The Governance and Corporate Responsibility Committee makes no distinctions in evaluating nominees based on whether or not

a nominee is recommended by a shareholder. Shareholders

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    25                 

 


Table of Contents

Corporate Governance

 

recommending a nominee must satisfy the notification, timeliness, consent and information requirements set forth in the Company’s By-Laws concerning Director nominations by shareholders. Among other things, the shareholder’s recommendation must set forth all the information regarding the recommended candidate that is required to be disclosed in solicitations of proxies for election of Directors pursuant to Section 14 of the Exchange Act and related regulations, and must include the recommended candidate’s written consent to being named in the Proxy Statement as a nominee and to serving as a Director if elected. The recommendation must also be accompanied by a completed Stockholder Disclosure Questionnaire. The Company’s By-Laws and the Stockholder Disclosure Questionnaire are available at www.metlife.com/corporategovernance.

Shareholder Proxy Access. In December 2015, the Board of Directors adopted amendments to the Company’s By-Laws to implement shareholder proxy access. Under the By-Laws, a shareholder, or a group of up to 20 shareholders, owning three percent or more of the Company’s outstanding shares of common stock continuously for at least three years, may nominate and include in the Company’s annual meeting proxy materials Director nominees constituting up to the greater of two individuals or 20% of the Board, provided that the shareholders and nominees satisfy the requirements specified in the By-Laws. For further information on procedures governing the submission of shareholder nomination of director nominees, see “Other Information — Information About the Annual Meeting, Proxy Voting, and Other Information — Deadline for submission of shareholder proposals and nominations for the 2018 annual meeting of shareholders” on page 103.

Risk Management Oversight. The Board of Directors oversees management in the design and implementation of the Company’s approach to risk management. For example, the Board oversees management’s development and execution of appropriate business strategies to mitigate the risk that such strategies will fail to generate long-term value for the Company and its shareholders or that such strategies will motivate management to take excessive risks.

The Board of Directors also oversees the development and implementation of processes and procedures to mitigate the risk of failing to ensure the orderly succession of the Chief Executive Officer and the senior executives of the Company. The Board believes that the continuing development of the Company’s

managerial leadership is critically important to the Company’s success. The Board, in coordination with the Governance and Corporate Responsibility Committee, periodically reviews the skills, experience, and development plans of the Company’s senior leaders who may ultimately be candidates for senior executive positions. The Directors meet regularly with senior leaders in the context of Board business, giving them an opportunity to assess the qualifications of these individuals. In addition, the Board plans for executive succession to ensure that the Company will have managerial talent available to replace current executives when that becomes necessary.

The Board of Directors has allocated its oversight of risk management among the Board as a whole and to Committees of the Board, which meet regularly and report back to the full Board. The Committees play significant roles in risk oversight.

The Finance and Risk Committee has broad oversight responsibilities for the Company’s risk management. The Committee oversees the Company’s financial policies and strategies, risk targets and risk positions, capital planning and adequacy, certain capital actions, mergers and acquisitions projects, and other financial matters. Annually, the Committee reviews, and recommends for Board approval, the Company’s Enterprise Risk Appetite Statement, which establishes quantitative and qualitative risk appetite measures and risk exposure considerations and guidelines, and the Company’s Capital Policy and Liquidity Risk Management Policy. The Committee reviews the Company’s assessment and management of material risks, including its performance against applicable policies and procedures and related benchmarks and target metrics. The Committee also receives and reviews the Own Risk and Solvency Assessment report, which summarizes the results of the Company’s analysis of its current and future risks, on an annual basis. The Committee coordinates its oversight with the efforts of the Chief Risk Officer (who oversees and coordinates risk assessment and mitigation enterprise-wide) and other members of management. It also coordinates its oversight of management with the Chairs of the other Board Committees.

The Audit Committee oversees the Company’s compliance with legal and regulatory requirements, reviews the Company’s policies on ethical conduct and periodically discusses the guidelines and policies with respect to the process by which the Company undertakes risk assessment and management, including risks relating to MetLife information security systems and vendor risk management programs. The Audit Committee

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    26                 

 


Table of Contents

Corporate Governance

 

also reviews with management, the internal auditor and the independent auditor, the Company’s system of internal control over financial reporting that is relied upon to provide reasonable assurance of the integrity of the Company’s financial statements.

The Compensation Committee is responsible for reviewing the Company’s compensation practices and overseeing risk management with respect to the Company’s compensation arrangements. For example, the Committee oversees the design of the Company’s compensation arrangements to avoid creating incentives to take excessive risk. The Chief Risk Officer meets with the Compensation Committee annually to review the Company’s compensation arrangements for this purpose, and on other occasions at the Committee’s request to assist the Committee in its risk management oversight role.

The Governance and Corporate Responsibility Committee, in coordination with the Board, reviews the Company’s proposed succession and development plans for Executive Officers. It reviews the Company’s ethics and compliance programs and its sales practices to mitigate the risk of non-compliance, customer and regulatory complaints and other reputational risks. It also oversees the Company’s goals and strategies concerning legislative and regulatory initiatives that impact the interest of the Company.

The Investment Committee, in coordination with the Finance and Risk Committee, oversees the management and mitigation of risks associated with the investment portfolios of MetLife and of the consolidated MetLife enterprise, including credit risk, portfolio allocation and diversification risk, derivatives risk and counterparty risk associated with such portfolios.

Throughout the year, the Board and its Committees receive reports from the Chief Risk Officer and other senior management on enterprise risk management and specific risk topics. In particular, the Finance and Risk Committee reviews reports from the Chief Risk Officer and other senior management of the steps taken to measure, monitor and manage risk exposure in the enterprise. At each regularly scheduled meeting of the Finance and Risk Committee, the Chief Risk Officer provides a report on enterprise risk management and meets in executive session of the independent Committee members without the Company’s Executive Officers to further discuss enterprise risk management.

For further discussion of the Committees’ responsibilities, see “Board Committees,” “Audit Committee,” “Compensation Committee,” “Finance and Risk Committee,” “Governance and

Corporate Responsibility Committee” and “Investment Committee” below.

Board Membership. For information about the current membership of the Board and the Board Committees among directors nominated for re-election, see the Proxy Summary on pages 9-10. Mr. Sicchitano serves on the Audit Committee, the Compensation Committee, the Executive Committee and the Finance and Risk Committee, and Ms. Wang serves on the Governance and Corporate Responsibility Committee and the Investment Committee.

Board Meetings and Director Attendance. In 2016, the Board held ten meetings and the Board Committees of MetLife held a total of 39 meetings. Each of the current Directors who served during 2016 attended more than 75% of the aggregate number of meetings of the Board and the Committees on which the Director served.

Information About Board Committees

MetLife’s Board of Directors has designated six standing Board Committees: Audit; Compensation; Executive; Finance and Risk; Governance and Corporate Responsibility; and Investment. All Committees, other than the Executive Committee, are chaired by and consist entirely of Independent Directors. The Committee Chairs review and approve agendas for all meetings of their respective Committees.

The Board of Directors has delegated authority to the Committees to assist the Board in overseeing the management of the Company. The responsibilities of each Committee are defined in its charter and summarized below. The charters for the Audit, the Compensation, and the Governance and Corporate Responsibility Committees incorporate the requirements of the Securities and Exchange Commission (SEC) and the NYSE to the extent applicable. Current, printable versions of these charters are available on MetLife’s website at www.metlife.com/corporategovernance.

Audit Committee. The Audit Committee oversees:

 

  the Company’s accounting and financial reporting processes and the audits of its financial statements;

 

  the adequacy of the Company’s internal control over financial reporting;

 

  the integrity of its financial statements;

 

  the qualifications and independence of the independent auditor;
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    27                 

 


Table of Contents

Corporate Governance

 

  the appointment, retention, performance and compensation of the independent auditor and the performance of the internal audit function; and

 

  the Company’s compliance with legal and regulatory requirements.

In performing its oversight responsibilities, the Audit Committee reviews and discusses with management, the internal auditor and the independent auditor a number of significant issues regarding accounting and auditing principles and practices and financial statement presentations. From time to time, these matters may include critical accounting policies and estimates, significant changes in the Company’s selection or application of accounting principles and the adequacy of the Company’s internal control over financial reporting including special audit steps adopted in light of material control deficiencies. The Audit Committee discusses with management the Company’s practices regarding earnings press releases and reviews in advance the financial and earnings information prepared for earnings announcements. The Audit Committee periodically discusses the Company’s guidelines and policies with respect to the process by which the Company undertakes risk assessment and risk management, including risks relating to MetLife information security systems and vendor risk management programs.

The Audit Committee meets at least six times a year, or more frequently as circumstances may require, and meets regularly in executive session separately with management and with the Company’s internal and external auditors. The Audit Committee met 12 times in 2016. The Audit Committee’s activities during 2016 with respect to the oversight of the independent auditor are described in more detail in “Proposal 2 — Ratification of Appointment of the Independent Auditor” beginning on page 35 and its responsibilities for oversight of risk management are further discussed under “Risk Management Oversight” beginning on page 26. The Audit Committee Charter provides a more detailed description of the role and responsibilities of the Audit Committee.

Independence, Financial Literacy and Audit Committee Financial Experts. All six members of the Audit Committee, including Kenton J. Sicchitano, who will retire from the Board as of the Annual Meeting, are Independent Directors who meet the additional independence requirements of the NYSE Corporate Governance Standards and Rule 10A-3 under the Exchange Act and are financially literate, as such qualification is interpreted by the Board of Directors. The Board of Directors has determined

that the following three members of the Audit Committee qualify as “audit committee financial experts,” as such term is defined by the SEC: David L. Herzog, Alfred F. Kelly, Jr. and Edward J. Kelly, III.

Compensation Committee.

The Role and Responsibilities of the Compensation Committee. The Compensation Committee:

 

  assists the Board in fulfilling its responsibility to oversee the development and administration of the Company’s compensation programs for executives and other employees;

 

  approves the goals and objectives relevant to the Chief Executive Officer’s Total Compensation, evaluates the Chief Executive Officer’s performance in light of such goals and objectives, and endorses, for approval by the Independent Directors, the Chief Executive Officer’s Total Compensation level based on such evaluation;

 

  reviews, and recommends for approval by the Board, the Total Compensation of each person who is an “executive officer” of the Company under the Exchange Act and related regulations or an “officer” of the Company under Section 16 of the Exchange Act and related regulations, as well as the Company’s Chief Risk Officer, including their base salaries, annual incentive compensation, and stock-based long-term incentive compensation;

 

  oversees management’s efforts to mitigate risks associated with the development and administration of the Company’s compensation programs, including efforts to ensure that the Company’s incentive plans do not encourage or reward excessive risk taking; and

 

  reviews and discusses with management the Compensation Discussion and Analysis to be included in the proxy statement (and incorporated by reference in the Annual Report on Form 10-K), and, based on this review and discussion, (1) recommends to the Board of Directors whether the Compensation Discussion and Analysis should be included in the Proxy Statement, and (2) issues the Compensation Committee Report for inclusion in the Proxy Statement. The 2017 Compensation Committee Report appears on page 40 of this Proxy Statement.

A more detailed description of the role and responsibilities of the Compensation Committee is set forth in the Compensation Committee Charter. Under its charter, the Compensation Committee may delegate to a subcommittee or to the Chief

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    28                 

 


Table of Contents

Corporate Governance

 

Executive Officer or other officers of the Company any portion of its duties and responsibilities, if it believes such delegation is in the best interests of the Company and the delegation is not prohibited by law, regulation or the NYSE Corporate Governance Standards. Management’s delegated authority does not include granting salary increases or incentive compensation to any Executive Officer, to any officer subject to the reporting requirements under Section 16 of the Exchange Act, or to the Company’s Chief Risk Officer. The Compensation Committee met seven times in 2016.

The Chairs of the Finance and Risk, Governance and Corporate Responsibility, and Audit Committees have served on the Compensation Committee. These Directors bring information and perspective from the work of other committees directly to bear on the Compensation Committee’s decisions. This enhances the Compensation Committee’s execution of its role, including its role in risk management oversight.

Executive Compensation Advisors. The Compensation Committee has sole authority to retain or obtain the advice of a compensation consultant, independent legal counsel, or other advisor to the committee. It is not required to implement or act consistently with the advice or recommendations of any advisor, but retains discretion to act according to its own judgment. The Compensation Committee may retain or obtain the advice of an advisor only after taking into consideration factors related to that person’s independence from management that it determines are relevant, including each of the factors it is required to take into consideration under the Corporate Governance Standards of the NYSE, unless the retention of the advisor is exempt from this requirement under NYSE rules. The Compensation Committee is responsible for the appointment, compensation, and oversight of any advisor it retains. The Company is obligated to provide appropriate funding for reasonable compensation of any such advisor, as determined by the Compensation Committee.

To assist the Compensation Committee in carrying out its responsibilities, the Compensation Committee retained Meridian Compensation Partners, LLC (Meridian) as its executive compensation consultant. Meridian has provided the Compensation Committee with competitive market compensation data and overall market trends about executive compensation, has advised the Compensation Committee about the overall design and implementation of MetLife’s executive compensation programs, including decisions made under the

programs, and has advised the Committee about regulatory, governance and accounting developments that may affect the Company’s executive compensation programs.

The Compensation Committee believes that its compensation consultant must be able to provide it with candid, direct, independent and objective advice. In order to promote the objectivity, independence, and candor of Meridian’s advice:

 

  Meridian reports directly to the Committee about executive compensation matters;

 

  Meridian meets with the Committee in executive sessions that are not attended by any of the Company’s Executive Officers;

 

  Meridian has direct access to the Chair and members of the Committee between meetings; and

 

  the Committee has not directed Meridian to perform its services in any particular manner or under any particular method.

To help ensure that the Committee continues to receive independent and objective advice, the Company’s Corporate Governance Guidelines provide that any consultant retained by the Compensation Committee on executive compensation matters should not be retained to provide any other services to the Company. Meridian did not provide any such other services in 2016.

In addition, Meridian has provided the Compensation Committee with information regarding its relationship with MetLife and Meridian’s independence from management. This included information covering factors the Compensation Committee is required under NYSE rules to take into consideration before selecting an advisor. The Compensation Committee did not find that Meridian’s work raised any conflict of interest.

The Company’s processes for determining executive compensation and the central role of the Compensation Committee in those processes, the key factors that the Compensation Committee considers, and the role of the Chief Executive Officer and the Executive Vice President and Chief Human Resources Officer in those processes are described in the Compensation Discussion and Analysis beginning on page 41. Also see the Compensation Discussion and Analysis for information about compensation paid to the persons listed in the Summary Compensation Table on page 72.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    29                 

 


Table of Contents

Corporate Governance

 

Compensation Committee Interlocks and Insider Participation. No member of the Compensation Committee has ever been an officer or employee of MetLife or any of its subsidiaries. During 2016, no Executive Officer of MetLife served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity where one of the executive officers of that other entity is or has been a Director of MetLife or a member of MetLife’s Compensation Committee.

Executive Committee. The Executive Committee may exercise the powers and authority of the Board of Directors during intervals between meetings of the Board of Directors. The Executive Committee did not meet in 2016.

Finance and Risk Committee. The Finance and Risk Committee oversees the Company’s financial policies and strategies; its capital structure, plans and policies, including capital adequacy, dividend policies and share issuances and repurchases; its proposals on certain capital actions, strategic actions and other financial matters; its assessment and management of material risks; and in consultation with the Compensation Committee, the appointment, retention and performance of the Chief Risk Officer. The Finance and Risk Committee has in the past engaged and is likely from time to time in the future to engage external consultants to assess the alignment of the Company’s risk models and practices to industry best practices.

Specifically, the Finance and Risk Committee:

 

  reviews the Company’s key financial, risk and business metrics;

 

  reviews and monitors all aspects of the Company’s capital plan, actions and policies (including the guiding principles used to evaluate all proposed capital actions), targets and structure (including the monitoring of capital adequacy and of compliance with the Company’s capital plan);

 

  reviews proposals and reports concerning certain capital actions and other financial matters, consistent with the Company’s capital plan, safety and soundness principles and applicable law; and

 

  reviews policies, practices and procedures regarding risk assessment and management.

The Finance and Risk Committee met six times in 2016. For further discussion of the Finance and Risk Committee’s responsibilities for oversight of risk management, see “Risk Management Oversight” beginning on page 26.

Governance and Corporate Responsibility Committee. The Governance and Corporate Responsibility Committee assists the Board of Directors in identifying individuals qualified to become members of the Company’s Board, consistent with the criteria established by the Board; proposing candidates to be nominated for election as Directors at annual or special meetings of shareholders or to be elected by the Board to fill any vacancies on the Board; developing and recommending to the Board of Directors corporate governance guidelines applicable to the Company; and reviewing proposed succession plans for the Chief Executive Officer and the Company’s other executive officers, and making recommendations to the Board of Directors with respect to such plans. It also oversees the Company’s compliance responsibilities and activities, including its legislative and regulatory initiatives, sales practices, and ethics and compliance programs, as well as the Company’s policies concerning its corporate citizenship programs.

Each year, the Governance and Corporate Responsibility Committee oversees a robust Board evaluation. The Committee solicits comments from Directors on the Board’s and its Committees’ performance, including, among other things, the adequacy of the time allocated to Board and Committee business, the quality of materials provided by management, and the quality of the presentations. Directors are also invited to recommend topics for the Board to consider at future meetings. The Committee reports these results to the full Board for discussion. The Board also conducts individual self and peer Director evaluations, and one-on-one feedback is shared with each Director.

The Governance and Corporate Responsibility Committee is responsible for reviewing the compensation and benefits of the Company’s non-employee Directors and recommending any changes to the Board. During 2016, Meridian provided the Board with an analysis of the competitiveness of the compensation program for Non-Management Directors, market observations, and relevant compensation trends. For more information on Director Compensation, see “Director Compensation in 2016” on page 33.

The Governance and Corporate Responsibility Committee also oversees the management and mitigation of risks related to failure to comply with required or appropriate corporate governance standards.

The Governance and Corporate Responsibility Committee Charter provides a more detailed description of the role and

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    30                 

 


Table of Contents

Corporate Governance

 

responsibilities of the Governance and Corporate Responsibility Committee. The Governance and Corporate Responsibility Committee met eight times in 2016.

Investment Committee. The Investment Committee oversees the management of investment activities of MetLife and, on a consolidated basis, of MetLife and all of its direct and indirect subsidiaries. In performing its oversight responsibilities, the Committee reviews reports from the investment officers on (i) the investment activities and performance of the investment portfolios of MetLife and its subsidiaries and (ii) the conformity of investment activities with the Investment Committee’s general authorizations and investment guidelines. The Investment Committee, in coordination with the Finance and Risk Committee, also oversees the management and mitigation of risks associated with the investment portfolios of MetLife and of the consolidated MetLife enterprise. The Investment Committee met six times in 2016.

Director Share Ownership Requirements; Hedging and Pledging Prohibited

Each Non-Management Director is expected to achieve a level of ownership equal in value to at least four times the cash component of the annual retainer by December 31 of the year in which the fourth anniversary of election to the Board occurs. As of December 31, 2016, each Non-Management Director who had served beyond the fourth anniversary of election to the Board had met these requirements.

The Company prohibits Directors and employees, including Executive Group members, from engaging in short sales, hedging, and trading in put and call options, with respect to the Company’s securities. The Company’s policy also prohibits Directors and employees, including Executive Group members, from pledging MetLife securities. These policies are intended to prevent a misalignment of interests with Company shareholders or the appearance of such a misalignment.

Director Indemnity Plan

The Company’s By-Laws provide for the Company to indemnify, and advance expenses to, a person who is threatened with litigation or made a party to a legal proceeding because of the person’s service as a Director of the Company. In addition, the Company’s Director Indemnity Plan affirms that a Director’s rights to this indemnification and expense advancement are contract rights. The indemnity plan also provides for expenses to be advanced to former Directors on the same basis as they are

advanced to current Directors. Any amendment or repeal of the rights provided under the indemnity plan would be prospective only and would not affect a Director’s rights with respect to events that have already occurred.

Shareholder Right to Call a Special Meeting

In March 2016, the Board of Directors adopted amendments to the Company’s By-Laws that allow shareholders to call a special meeting. Under the By-Laws, shareholders representing ownership of 25% or more of the Company’s outstanding Shares may call a special meeting of the shareholders, provided that the shareholders requesting the meeting satisfy the requirements specified in the By-Laws. The Board believes that the By-Laws afford shareholders with a meaningful right to call a special meeting and recommends against the shareholder proposal to reduce the ownership required for shareholders to call a special meeting. For more information on the related shareholder proposal, see “Proposal 5 - Shareholder Proposal to Reduce Ownership Required for Shareholders to Call a Special Meeting” on page 106.

Procedures for Reviewing Related Person Transactions

The Company has established written procedures for the review, approval or ratification of related person transactions. A related person transaction includes certain financial transactions, arrangements or relationships in which the Company is or is proposed to be a participant and in which a Director, Director nominee or Executive Officer of the Company or any of their immediate family members has or will have a material interest. Related person transactions may include:

 

  Legal, investment banking, consulting or management services provided to the Company by a related person or an entity with which the related person is affiliated;

 

  Sales, purchases and leases of real property between the Company and a related person or an entity with which the related person is affiliated;

 

  Material investments by the Company in an entity with which a related person is affiliated;

 

  Contributions by the Company to a civic or charitable organization for which a related person serves as an executive officer; and

 

  Indebtedness or guarantees of indebtedness involving the Company and a related person or an entity with which the related person is affiliated.
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    31                 

 


Table of Contents

Corporate Governance

 

Under the procedures, Directors, Director nominees and Executive Officers of the Company are required to report related person transactions in writing to the Company. The Governance and Corporate Responsibility Committee reviews, approves or ratifies related person transactions involving Directors, Director nominees and the Chief Executive Officer or any of their immediate family members. A vote of a majority of disinterested Directors of the Governance and Corporate Responsibility Committee is required to approve or ratify a transaction. The Chief Executive Officer reviews, approves or ratifies related person transactions involving Executive Officers of the Company (other than the Chief Executive Officer) or any of their immediate family members. The Chief Executive Officer may refer any such transaction to the Governance and Corporate Responsibility Committee for review, approval or ratification if he believes that such referral would be appropriate.

The Governance and Corporate Responsibility Committee or the Chief Executive Officer will approve a related person transaction if it is fair and reasonable to the Company and consistent with the best interests of the Company, taking into account the business purpose of the transaction, whether the transaction is entered into on an arm’s-length basis on terms fair to the Company, and whether the transaction is consistent with applicable codes of conduct of the Company. If a transaction is not approved or ratified, it may be referred to legal counsel for review and consultation regarding possible further action by the Company. Such action may include terminating the transaction if not yet entered into or, if it is an existing transaction, rescinding the transaction or modifying it in a manner that would allow it to be ratified or approved in accordance with the procedures.

Related Person Transactions

A Company affiliate employs a sibling of Maria R. Morris, Executive Vice President and member of the Executive Group. Ms. Morris’ sibling earned compensation of approximately $590,392 for 2016. The employee is not an Executive Group

member and does not report directly to an Executive Group member. The employee participated in compensation and benefit arrangements for 2016 generally applicable to similarly-situated employees. The employee is primarily engaged in sales activity, and the employee’s compensation is significantly driven by incentive compensation for sales to group insurance customers. The employee produced over twice the revenue for 2016 as for the prior year. There were no material changes to the terms of the employee’s sales incentive compensation arrangements from 2015.

Codes of Conduct

Financial Management Code of Professional Conduct. The Company has adopted the MetLife Financial Management Code of Professional Conduct, a “code of ethics” as defined under the rules of the SEC that applies to the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and all professionals in finance and finance-related departments. A current, printable version of the Financial Management Code of Professional Conduct is available on the Company’s website at www.metlife.com/corporategovernance by selecting Corporate Conduct and then the appropriate link under the heading “Codes of Conduct.”

Directors’ Code of Business Conduct and Ethics and Code of Conduct for Employees. The Company has adopted the Directors’ Code of Business Conduct and Ethics, which is applicable to all members of the Company’s Board of Directors including the Chief Executive Officer, and the Code of Conduct, which applies to all employees of the Company and its affiliates, including the Executive Officers of the Company. Current, printable versions of the Directors’ Code and the Code of Conduct for MetLife employees are available on the Company’s website at www.metlife.com/corporategovernance by selecting Corporate Conduct and then the appropriate link under the heading “Codes of Conduct.”

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    32                 

 


Table of Contents

Director Compensation in 2016

 

Director Compensation in 2016

 

                                                                         
    Name              

 

Fees Earned or
Paid in Cash
($)

 

              Stock
Awards
($)
              All Other
Compensation
($)
             

Total

($)

   
                           
 

Cheryl W. Grisé

     

$219,519

     

$150,023

     

$1,635

     

$371,177

 
 

Carlos M. Gutierrez

     

$150,000

     

$150,023

     

$1,635

     

$301,658

 
 

David L. Herzog(1)

     

$  96,841

     

$  96,841

     

$   447

     

$194,129

 
 

R. Glenn Hubbard, Ph.D.

     

$175,000

     

$150,023

     

$6,635

     

$331,658

 
 

Alfred F. Kelly, Jr.

     

$185,000

     

$150,023

     

$6,635

     

$341,658

 
 

Edward J. Kelly, III

     

$168,269

     

$150,023

     

$1,635

     

$319,927

 
 

William E. Kennard

     

$170,000

     

$150,023

     

$6,635

     

$326,658

 
 

James M. Kilts

     

$180,000

     

$150,023

     

$6,635

     

$336,658

 
 

Catherine R. Kinney

     

$150,000

     

$150,023

     

$6,635

     

$306,658

 
 

Denise M. Morrison

     

$170,000

     

$150,023

     

$1,635

     

$321,658

 
 

Kenton J. Sicchitano

     

$190,000

     

$150,023

     

$4,135

     

$344,158

 
 

Lulu C. Wang

     

$150,000

     

$150,023

     

$1,635

     

$301,658

 
                                                                         

 

1 David L. Herzog was appointed to the Board of Directors in 2016 after that year’s Annual Meeting. As a result, the Company paid Mr. Herzog a prorated annual retainer fee in advance for services from his appointment through the 2017 Annual Meeting. Approximately 50% of the retainer, or $96,841, was paid through the grant of 2,088 Shares at a grant date fair value of per Share of $46.38, the closing price of a Share on the NYSE on the grant date. The rest of the retainer was paid in $96,841 cash. For directors who were members of the Board of Directors in 2015, the retainer fee for the portion of 2016 prior to the 2016 Annual Meeting was paid in 2015.

 

The Non-Management Directors included in the 2016 Director Compensation table, and the following discussion pertaining to the table, are limited to those who served as Directors during 2016.

Fees Earned or Paid in Cash and Stock Awards

The Non-Management Directors’ annual retainer fees are reported under “Fees Earned or Paid in Cash” and “Stock Awards” in the Director Compensation table.

After the Company’s 2016 Annual Meeting, it paid each active Non-Management Director an annual retainer of $300,000 in advance for services through the 2017 Annual Meeting. Approximately 50% of the retainer, or $150,023, was paid through the grant of 3,550 Shares at a grant date fair value per share of $42.26, the closing price of a Share on the NYSE on the grant date. In each case, the grant date fair value of the stock awards is slightly higher than 50% of the total annual retainer because the number of Shares the Company delivered to the

director was rounded up to a whole number of Shares. The rest of the retainer was paid in $150,000 cash.

In addition, the Company paid the following annual cash retainer fees in 2016 to each Non-Management Director who served as Chair of a Board Committee.

 

         
  Committee      

 

Annual

Retainer Rate for Committee Chair

 

 
 

Audit Committee (Mr. Sicchitano)

      $40,000  
 

Finance and Risk

Committee (Alfred F. Kelly, Jr.)

     

 

$35,000

 
 

Compensation Committee (Mr. Kilts)

      $30,000  
 

Governance and Corporate Responsibility Committee (Ms. Grisé)

     

 

$25,000

 
 

Investment Committee (Dr. Hubbard)

      $25 ,000  
         
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    33                 

 


Table of Contents

Director Compensation in 2016

 

The Board also approved a cash payment of $20,000 in 2016 to each of Mr. Kennard and Ms. Morrison for services on a Special Committee of the Board, and a pro rata cash payment of $18,269 to Edward J. Kelly, III for service as Chair of the Finance and Risk Committee beginning in December, 2016.

The Governance and Corporate Responsibility Committee is responsible for reviewing the compensation and benefits of the Company’s non-employee Directors and recommending any changes to the Board. During 2016, Meridian provided the Board with an analysis of the competitiveness of the compensation program for Non-Management Directors, market observations, and relevant compensation trends. The Committee recommended, and the non-management members of the Board of Directors approved, a $15,000 increase to the $35,000 annual cash retainer paid to the Lead Director, effective immediately, making the new annual retainer $50,000. After the Company’s 2016 Annual Meeting, it paid Ms. Grisé a Lead Director retainer at the former rate. Subsequently in 2016, the Company made a pro rata payment of $9,519 to Ms. Grisé to reflect the increase in the Lead Director retainer for the period from the 2016 Annual Meeting to the 2017 Annual Meeting.

The MetLife, Inc. 2015 Non-Management Director Stock Compensation Plan (2015 Director Stock Plan), which was approved by the Company’s shareholders in 2014, authorizes the Company to issue Shares in payment of Director retainer fees. The dollar amounts reported under “Stock Awards” represent the grant date fair value of such Share awards as computed for financial statement reporting purposes in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (ASC 718). The grant date fair value represents the number of Shares granted multiplied by the closing price of the Shares on the NYSE on the grant date. Share awards granted to the Non-Management Directors as part of their annual retainer vest and become deliverable immediately upon their grant. As a result, no Share awards were outstanding for any of the Non-Management Directors as of December 31, 2016. None of the Non-Management Directors had any outstanding and unexercised Stock Options as of December 31, 2016.

A Non-Management Director may defer the receipt of all or part of his or her fees payable in cash or deliverable in Shares (and any imputed reinvested dividends on such deferred Shares) until a later date or until after he or she ceases to serve as a Director.

All Other Compensation

The Non-Management Directors’ 2016 benefits, gift programs, and reportable perquisites and other personal benefits are included under “All Other Compensation” in the Director Compensation table.

Life Insurance Programs. MetLife paid $1,584 in premiums for each Non-Management Director who served the entirety of 2016. This provided each with $200,000 of group life insurance coverage during 2016. The Company incurred a pro rata portion of that cost to provide coverage to Mr. Herzog (a cost of $396) for the portion of 2016 during which he served as a Director.

Business Travel Insurance Program. MetLife provided each Non-Management Director with business travel accident insurance coverage for travel on MetLife business. MetLife’s per Director cost for this coverage in 2016 was $51.

Charitable and Matching Gifts Programs. The MetLife Foundation provided up to $5,000 in matching contributions for each Non-Management Director’s contributions to colleges and universities in 2016 under a matching gift program for employees and Non-Management Directors. The foundation contributed $5,000 to match contributions made by each of Dr. Hubbard, Alfred F. Kelly, Jr., Mr. Kennard, Ms. Kinney and Mr. Kilts, and $2,500 to match contributions made by Mr. Sicchitano, in 2016.

In addition, the foundation provided a matching contribution of $5,000 and $3,750 for contributions that Mr. Kennard and Mr. Sicchitano, respectively, made in 2015. Because these contributions related to the directors’ 2015 contributions, they are not reported on the table above. They were not reported in the Company’s 2016 Proxy Statement because the process for matching the contributions did not begin until after that Proxy Statement was filed.

Perquisites and Other Personal Benefits. Any personal expenses the Company paid for Non-Management Directors in 2016 were less than $10,000, and as a result are not reported.

Compensation of Mr. Kandarian

Mr. Kandarian was compensated as an employee for 2016, and received no compensation in his capacity as a member of the Board of Directors. For information about compensation for Mr. Kandarian for 2016, see the Summary Compensation Table on page 72 and the accompanying discussion.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    34                 

 


Table of Contents

Proposal 2 — Ratification of Appointment of the Independent Auditor

 

PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITOR

LOGO     

The Board of Directors recommends that you vote FOR the ratification of the appointment of Deloitte & Touche LLP as MetLife’s independent auditor for the fiscal year ending December 31, 2017.

 

 

The Audit Committee has appointed Deloitte & Touche LLP (Deloitte) as the Company’s independent auditor for the fiscal year ending December 31, 2017. Deloitte’s long-term knowledge of MetLife and the MetLife group of companies, combined with its insurance industry expertise and global presence, has enabled it to carry out its audits of the Company’s financial statements with effectiveness and efficiency. The members of the Audit Committee believe that the continued retention of Deloitte to serve as the Company’s independent auditor is in the best interests of the Company and its shareholders.

The appointment of Deloitte by the Audit Committee is being presented to the shareholders for ratification. If the shareholders do not ratify the appointment, the Audit Committee will reconsider its decision and may continue to retain Deloitte. If the shareholders ratify the appointment, the Audit Committee continues to have the authority to and may change such appointment at any time during the year. The Audit Committee will make its determination regarding such retention or change in light of the best interests of MetLife and its shareholders.

In considering Deloitte’s appointment and Deloitte’s compensation for audit and non-audit services, the Audit Committee reviewed the firm’s qualifications, competencies and performance, including the following factors:

 

  Deloitte’s status as a registered public accounting firm with the Public Company Accounting Oversight Board (United States) (PCAOB) as required by the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the Rules of the PCAOB;

 

  Deloitte’s independence and its processes for maintaining its independence;

 

  the results of the independent review of the firm’s quality control system;

 

  the global reach of the Deloitte network of member firms and its alignment with MetLife’s worldwide business activities;

 

  the key members of the engagement team, including the lead audit partner, for the audit of the Company’s financial statements;
  Deloitte’s performance during its engagement for the fiscal year ended December 31, 2016 and data related to audit quality and performance, including recent PCAOB inspection reports on Deloitte;

 

  the quality of Deloitte’s communications with the Audit Committee regarding the conduct of the audit, and with management with respect to issues identified in the audit, and the consistency of such communications with applicable auditing standards;

 

  Deloitte’s approach to resolving significant accounting and auditing matters, including consultation with the firm’s national office; and

 

  Deloitte’s reputation for integrity and competence in the fields of accounting and auditing.

Deloitte has served as independent auditor of the Company since 1999, and as auditor of affiliates of the Company for more than 75 years. Under current legal requirements, the lead or concurring audit partner for the Company may not serve in that role for more than five consecutive fiscal years, and the Audit Committee ensures the regular rotation of the audit engagement team partners as required by law. The Chair of the Audit Committee is actively involved in the selection process for the lead and concurring partners.

The Audit Committee approves Deloitte’s audit and non-audit services in advance as required under Sarbanes-Oxley and SEC rules. Before the commencement of each fiscal year, the Audit Committee appoints the independent auditor to perform audit services that the Company expects to be performed for the fiscal year and appoints the auditor to perform audit-related, tax and other permitted non-audit services. The Audit Committee or a designated member of the Audit Committee to whom authority has been delegated may, from time to time, pre-approve additional audit and non-audit services to be performed by the Company’s independent auditor. Any pre-approval of services between Audit Committee meetings must be reported to the full Audit Committee at its next scheduled meeting.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    35                 

 


Table of Contents

Proposal 2 — Ratification of Appointment of the Independent Auditor / Independent Auditor’s Fees for 2016 and 2015

 

The Audit Committee is responsible for approving fees for the audit and for any audit-related, tax or other permitted non-audit services. If the audit, audit-related, tax and other permitted non-audit fees for a particular period or service exceed the amounts previously approved, the Audit Committee determines whether or not to approve the additional fees.

Representatives of Deloitte will attend the Annual Meeting. They will have an opportunity to make a statement if they desire to do so, and they will be available to respond to appropriate questions.

The Board of Directors recommends that you vote FOR the ratification of the appointment of Deloitte & Touche LLP as MetLife’s independent auditor for the fiscal year ending December 31, 2017.

 

Independent Auditor’s Fees for 2016 and 2015

The table below presents fees for professional services rendered by Deloitte for the audit of the Company’s annual financial statements, audit-related services, tax services and all other services for the years ended December 31, 2016 and 2015. All fees shown in the table were related to services that were approved by the Audit Committee.

The fees that the Company incurs for audit, audit-related, tax and other professional services reflect the complexity and scope of the Company’s operations, including:

 

  operations of the Company’s subsidiaries in multiple, global jurisdictions (approximately 37 during 2016);

 

  the complex, often overlapping regulations to which the Company and its subsidiaries are subject in each of those jurisdictions;

 

  the operating insurance companies’ responsibility for preparing audited financial statements; and

 

  the applicability of SEC reporting requirements to several of the Company’s operating insurance subsidiaries, which are SEC registrants.

The Audit Committee has advised the Board of Directors that, in its opinion, the non-audit services rendered by Deloitte during the most recent fiscal year are compatible with Deloitte’s

maintaining its independence. For 2016 and 2015, fees for these non-audit services totaled six percent of the total amount paid.

 

                                                         
   

 

($ in millions)

 

                

 

2016  

 

                      

 

2015  

 

       
                     
 

Audit Fees(1)

         $ 78.1            $ 71.8    
 

 

Audit-Related Fees(2)

        

 

$

 

13.4

 

 

        

 

$

 

9.8

 

 

 
 

Tax Fees(3)

         $ 4.7            $ 4.0    
 

All Other Fees(4)

         $ 1.2            $ 1.0    
                                                         
1 Fees for services to perform an audit or review in accordance with auditing standards of the PCAOB and services that generally only the Company’s independent auditor can reasonably provide, such as comfort letters, statutory audits, attest services, consents and assistance with and review of documents filed with the SEC. In 2016 Deloitte issued approximately 300 audit reports. The increase in audit fees in 2016 over 2015 is due largely to services provided in connection with the anticipated Separation of Brighthouse Financial.

 

2 Fees for assurance and related services that are traditionally performed by the Company’s independent auditor, such as audit and related services for employee benefit plan audits, due diligence related to mergers, acquisitions and divestitures, accounting consultations and audits in connection with proposed or consummated acquisitions and divestitures, control reviews, attest services not required by statute or regulation, and consultation concerning financial accounting and reporting standards. The increase in audit-related fees in 2016 over 2015 is due largely to services provided in connection with a strategic project.

 

3

Fees for tax compliance, consultation and planning services. Tax compliance generally involves preparation of original and amended tax returns, claims for refunds and tax payment planning services. Tax consultation and tax planning encompass a diverse range of advisory services, including assistance in connection with tax audits and filing appeals, tax advice related to mergers, acquisitions and divestitures, advice related to employee benefit plans and requests for rulings or technical advice from taxing authorities. In 2016, tax compliance and tax preparation fees total $1.6 million

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    36                 

 


Table of Contents

Independent Auditor’s Fees for 2016 and 2015 / Audit Committee Report

 

 

and tax advisory fees total $3.1 million and in 2015, tax compliance and tax preparation fees total $1.9 million and tax advisory fees total $2.1 million.

 

4 Fees for other types of permitted services, including employee benefit advisory services, risk and other consulting services, financial advisory services and valuation services.

Audit Committee Report

This report is submitted by the Audit Committee of the MetLife, Inc. (MetLife or the Company) Board of Directors. No portion of this Audit Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the Securities Act), or the Securities Exchange Act of 1934, as amended (the Exchange Act), through any general statement incorporating by reference in its entirety the proxy statement in which this Report appears, except to the extent that the Company specifically incorporates this

report or a portion of it by reference. In addition, this report shall not be deemed to be “soliciting material” or to be “filed” under either the Securities Act or the Exchange Act.

The Audit Committee currently consists of six independent Directors who satisfy the audit committee independence standards of the SEC and the NYSE. The Audit Committee, on behalf of the Board, is responsible for overseeing management’s conduct of MetLife’s financial reporting processes and audits of the Company’s financial statements, the adequacy of the Company’s internal control over financial reporting and the appointment, retention, performance and compensation of the Company’s independent auditor. More information on the Audit Committee and its qualifications and responsibilities is included elsewhere in the proxy statement and in the Audit Committee Charter on the Company’s website at www.metlife.com/corporategovernance.

Management is responsible for the preparation of MetLife’s consolidated financial statements and the reporting process. Deloitte & Touche LLP (Deloitte), as MetLife’s independent auditor, is responsible for auditing MetLife’s consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board (United States) (PCAOB).

Deloitte has discussed with the Audit Committee those matters described in the PCAOB Standard, Communications with Audit

Committees (Auditing Standard No. 16), Auditing Standard No. 1301, and Rule 2-07 of Regulation S-X promulgated by the Securities and Exchange Commission. Deloitte has also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Deloitte its independence from MetLife.

During 2016, management updated its internal control documentation for changes in internal control and completed its testing and evaluation of MetLife’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. In doing so, management utilized the criteria established in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Audit Committee was kept apprised of the progress of the evaluation and provided oversight and advice to management during the process. In connection with this oversight, the Audit Committee received updates provided by management and Deloitte at each regularly scheduled Audit Committee meeting and met in executive session separately with the internal and the independent auditor to discuss the results of their examinations, observations and recommendations regarding internal control over financial reporting. The Audit Committee also reviewed the report of management’s assessment of the effectiveness of internal control over financial reporting contained in the Company’s 2016 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission (the 2016 Form 10-K). The Audit Committee also reviewed Deloitte’s report regarding its audit of the effectiveness of the Company’s internal control over financial reporting.

The Audit Committee reviewed and discussed with management, and with Deloitte, MetLife’s audited consolidated financial statements for the year ended December 31, 2016 and Deloitte’s Report of Independent Registered Public Accounting Firm dated February 28, 2017 regarding the 2016 audited consolidated financial statements included in the 2016 Form 10-K. The Deloitte report states that MetLife’s 2016 audited consolidated financial statements present fairly, in all material respects, the consolidated financial position of MetLife and its subsidiaries as of December 31, 2016 and 2015 and the results of their operations and cash flows for each of the three years in the

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    37                 

 


Table of Contents

Audit Committee Report

 

period ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. In reliance upon the reviews and discussions with management and Deloitte described in this Audit Committee Report, and the Board of Directors’ receipt of the Deloitte report, the Audit Committee recommended to the Board that MetLife’s 2016 audited consolidated financial statements be included in the 2016 Form 10-K.

Respectfully,

Kenton J. Sicchitano, Chair

Cheryl W. Grisé

David L. Herzog

Alfred F. Kelly, Jr.

Edward J. Kelly, III

Catherine R. Kinney

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    38                 

 


Table of Contents

Proposal 3 — Advisory Vote to Approve the Compensation Paid to the Company’s Named Executive Officers

 

PROPOSAL 3 — ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS

 

 

LOGO

    

The Board of Directors recommends that you vote FOR this proposal: “RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

 

 

In accordance with Section 14A of the Exchange Act, this proposal will give shareholders the opportunity to approve, or not approve, the Company’s executive compensation programs and policies and the resulting compensation for the individuals listed in the Summary Compensation Table on page 72 (the Named Executive Officers or NEOs), as described in this Proxy Statement.

The Compensation Discussion and Analysis beginning on page 41 summarizes our executive compensation program. In summary, in determining compensation for the Named Executive Officers, the Board considered that 2016 was one of the most transformative years in the history of MetLife. The strategic transformation Mr. Kandarian is leading provides a clear path to MetLife becoming a simpler company with less market sensitivity and higher, sustainable Free Cash Flow. The Company’s 2016 shortfall relative to its Operating Earnings target was driven by lower underwriting and reserve updates, as well as by the anticipated Separation of Brighthouse Financial (the Separation), which the Company believes is essential to creating long-term shareholder value. For 2016, the Board approved annual incentive funding at 87% of target, based on Operating Earnings performance, adjusted (per the originally-established funding formula) to eliminate the impact of variable investment income on an after-tax basis that was lower than the Business Plan goal by 10% or more, and also excluding costs associated with the Separation and certain non-cash charges. The CEO’s annual incentive award is down $500,000 (decrease of 11%) from 2015, and three of the four other NEOs received an annual incentive award for 2016 that was lower than for 2015. The Board also approved a performance factor of 44.4% for the 2014-2016 Performance Shares and Performance Units that vested at the end of 2016, a below target payout resulting

largely from Total Shareholder Return. The Board’s actions aligned each NEO’s pay with individual and Company performance for 2016, which reflects multiple strategic actions that impacted financial performance in the short-term while laying the foundation for value creation and superior shareholder return for the long-term.

The Compensation Committee will take into account the outcome of the vote when considering future compensation arrangements. Because the vote is advisory, the result will not be binding on the Compensation Committee and it will not affect, limit, or augment any existing compensation or awards.

The Board has approved an annual frequency for shareholder votes to approve executive compensation. As a result, the Company currently expects to hold the next vote at the 2018 Annual Meeting. Shareholders have the opportunity at the 2017 Annual Meeting to cast an advisory vote on how frequently they would like the Company to hold future such votes. The Board has recommended that shareholders vote in favor of annual future votes. See “Proposal 4 – Advisory Vote on the Frequency of Future Advisory Votes to Approve the Compensation Paid to the Company’s Named Executive Officers” on page 95.

The Compensation Committee and Board of Directors believe that the Company’s compensation programs and policies, and the compensation of the Named Executive Officers, promote the Company’s business objectives with appropriate compensation delivered in appropriate forms. See the Compensation Discussion and Analysis, beginning on page 41. Accordingly, the Board of Directors recommends that you vote FOR this proposal.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    39                 

 


Table of Contents

Compensation Committee Report

 

Compensation Committee Report

This report is furnished by the Compensation Committee of the MetLife, Inc. (MetLife or the Company) Board of Directors. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that is set forth on pages 41 through 71 of the Company’s 2017 Proxy Statement and, based on such review and discussion, the Compensation Committee recommended to the Board of Directors that such Compensation Discussion and Analysis be included in the 2017 Proxy Statement.

No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the Securities Act), or the Securities Exchange Act of 1934, as amended (the Exchange Act), through any general statement incorporating by reference in its entirety the proxy statement in which this Report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be “soliciting material” or to be “filed” under either the Securities Act or the Exchange Act.

Respectfully,

James M. Kilts, Chair

Cheryl W. Grisé

Edward J. Kelly, III

Denise M. Morrison

Kenton J. Sicchitano

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    40                 

 


Table of Contents

Compensation Discussion and Analysis

 

Compensation Discussion and Analysis

The Compensation Discussion and Analysis describes the objectives and policies underlying MetLife’s executive compensation program for the Named Executive Officers and the rest of the Executive Group. It also describes the key factors that the Compensation Committee (in this discussion, also referred to as the Committee) considered in determining the compensation of the members of the Executive Group.

Key Highlights

MetLife:

  launched new enterprise strategy and brand with significant progress on transformation to a simpler company with less market sensitivity and higher, sustainable Free Cash Flow.

 

  generated Free Cash Flow (as adjusted) that continued to increase (77% in 2016 vs. 26% in 2012) and exceeded the mid-point of the Business Plan range.

 

  announced the largest share repurchase program in MetLife’s history at $3 billion.

 

  sold its U.S. retail advisor force, generating expected cost savings while reducing regulatory risk.

 

  prevailed in U.S. District Court litigation to rescind systemically important financial institution (SIFI) designation.

 

  experienced below target 2016 Operating Earnings, driven by lower underwriting, reserve updates, and the anticipated Separation of Brighthouse Financial.

MetLife’s Compensation Committee:

  approved a CEO annual incentive award for 2016 down $500,000 (decrease of 11%) from 2015.

 

  approved a lower annual incentive award for 2016 than for 2015 for 3 of the 4 other Named Executive Officers.

 

  approved 2014-2016 Performance Shares distribution at 44.4% of target, a below target payout resulting largely from Total Shareholder Return relative to peers.

MetLife’s compensation programs:

  provide the largest portion of executives’ Total Compensation in variable, performance-dependent awards.

 

  align executives with shareholders through Share-based awards and Share ownership requirements.

 

  incorporate risk management through appropriate financial metrics, non-formulaic performance assessment, and Chief Risk Officer program review.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    41                 

 


Table of Contents

Compensation Discussion and Analysis

 

Table of Contents

for the Compensation Discussion and Analysis

 

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    42                 

 


Table of Contents

Compensation Discussion and Analysis

 

LOGO

 

Highlights of 2016 Business Results 

In 2016, under the leadership of Chief Executive Officer Steven A. Kandarian, the Company continued to execute its 2012 enterprise strategy of reducing risks by refocusing the U.S. business, growing in emerging markets, extending the reach of MetLife’s market-leading group benefits business beyond the U.S., and embracing customer-centricity and a global brand.

At the same time, MetLife embarked upon an ambitious business transformation in 2016, informed by the Accelerating Value initiative. This initiative ensures a consistent capital allocation approach across the enterprise, and now covers 98% of MetLife’s allocated capital for new business. For example, through this initiative MetLife has:

 

  improved the risk return profile of the Retirement and Income Solutions business;

 

  shifted focus to grow our non-Yen denominated and accident and health businesses in Japan while dramatically reducing the interest-rate sensitive Yen whole life business;

 

  begun to extend its accident and health presence from the public to the private sector in Mexico; and

 

  continued to optimize its investment portfolio asset mix.

MetLife’s most important Accelerating Value decision to date has been to separate a substantial portion of its former U.S.

Retail business, now known as Brighthouse Financial. The Company’s Accelerating Value work also led to MetLife’s refreshed enterprise strategy and portfolio approach to managing five clusters of businesses, and to a commitment to invest $1 billion by 2020 to generate $800 million in pre-tax annual run rate savings, net of stranded overhead costs primarily due to the anticipated Separation. See pages 2-4 for a description of these initiatives.

MetLife also launched a new brand in 2016 to reflect the trusted partnership the Company’s customers want from MetLife. MetLife’s new logo, the partnership M, and its new tagline, “navigating life together,” embody this commitment.

All of the Company’s major decisions are informed by the need to generate Free Cash Flow and return capital to shareholders. To that end, MetLife’s Board of Directors authorized a $3 billion share repurchase program in 2016, and management began implementing the program during the year. The Company also announced its intention to keep MetLife’s common stock dividend constant after a Separation even though it will be shedding approximately 20% of its Operating Earnings capacity.

The Compensation Committee’s decisions on the active Named Executive Officers’ compensation for 2016 reflected its view of the Company’s performance and each executive’s performance relative to his goals and other challenges and opportunities that arose in 2016.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    43                 

 


Table of Contents

Compensation Discussion and Analysis

 

In 2016, under the leadership of Mr. Kandarian and the Executive Group, the Company achieved the results shown on pages 45-46 compared to its Business Plan, as reviewed by the Compensation Committee and Board. The Company’s 2015 results and 2015 Business Plan are included for reference.

The 2016 Business Plan anticipated a decline in Operating Earnings, flat Operating ROE, and a slight increase in Operating Earnings Per Share from the 2015 Business Plan.

The Board determined that the Business Plan was appropriate in light of several macroeconomic factors, including:

 

  strengthening of the U.S. dollar on consensus foreign currency exchange rates;

 

  continued low long-term interest rates; and

 

  narrowing of the spread between short-term and long-term interest rates within consensus interest rates.

The 2016 Business Plan also included planned expense reductions and higher Share repurchases that increased Operating Earnings Per Share and Operating ROE Business Plan targets, partially mitigating the anticipated Operating Earnings decline.

Two events negatively impacted the Company’s results in 2016. Second quarter reserve charges, influenced in part by the anticipated Separation, negatively impacted Net Income and Operating Earnings. The fourth quarter derivatives loss negatively impacted Net Income, primarily driven by significantly higher interest rates; the Company uses derivatives almost exclusively to protect against market fluctuations in interest rates, equities, and currencies.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    44                 

 


Table of Contents

Compensation Discussion and Analysis

 

 

  LOGO    LOGO  
  LOGO    LOGO  
 

LOGO

 

  

 

LOGO

 

 

1 The 2016 results of Operating Earnings, Operating EPS and Operating ROE have been adjusted to reflect the results reviewed by the Compensation Committee and Board for incentive compensation purposes. The adjustments excluded certain non-cash charges totaling $469 million, net of income tax, and Separation costs of $232 million, net of income tax. See “Annual Incentive Awards” beginning on page 58, and the discussion of “Performance Shares” beginning on page 61, for further information on these items. Unadjusted, these amounts would be $5,089 million, $4.59 and 8.9%, respectively.

The Compensation Committee and Board used the same 2016 Business Plan goals in its assessment of the Chief Executive Officer’s 2016 performance. For that purpose, 2016 results for Operating Earnings, Operating EPS and Operating ROE were adjusted for

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    45                 

 


Table of Contents

Compensation Discussion and Analysis

 

total Notable Items and foreign currency translation. These adjustments produced results of $6,041 million, $5.45, and 10.5%, respectively. For other key aspects of Mr. Kandarian’s performance, see “Aspects of Individual Performance” beginning on page 48.

 

2 The 2016 Operating Expense Ratio has been adjusted to exclude a Notable Item of $44 million related to the Company’s unit cost initiative expenses. Unadjusted, the Operating Expense Ratio would be 22.4%.

 

3 The 2016 Free Cash Flow as a Percentage of Operating Earnings has been adjusted to exclude $2.3 billion, net of income tax, of Separation-related items, which reduced holding companies’ liquid assets as well as MetLife Free Cash Flow. These Separation-related items consisted of Separation-related outflows comprised of an incremental capital contribution to Brighthouse Insurance, capital contributions to intended Brighthouse Financial subsidiaries and Separation-related costs, forgone subsidiary dividends from Brighthouse Insurance and forgone incremental debt at MetLife, net of Separation-related inflows comprised of incremental subsidiary dividends from New England Life Insurance Company and Brighthouse Insurance. In addition, the 2016 Free Cash Flow as a Percentage of Operating Earnings also excludes total Notable Items, primarily related to the actuarial assumption review and other insurance adjustments, of $1.0 billion, net of income tax, and Separation-related costs of $15 million, net of income tax, both of which negatively impacted Operating Earnings. Unadjusted, the Free Cash Flow as a Percentage of Operating Earnings would be 48%. The 2016 Free Cash Flow as a Percentage of Operating Earnings was adjusted to exclude total Notable Items and items related to the Separation since these items were not anticipated at the time the 2016 Business Plan was approved.

 

4 The 2015 results of Operating Earnings, Operating EPS, Operating ROE, Operating Expense Ratio, Book Value Per Share and Free Cash Flow as a Percentage of Operating Earnings have been adjusted to exclude a non-cash charge of $792 million, net of income tax, related to an uncertain tax position comprised of a $557 million charge included in provision for income tax expense and a $362 million charge ($235 million net of income tax) included in other expenses. This non-cash charge is related to tax years 2000 to 2009 for a wholly-owned U.K. subsidiary of MLIC, as disclosed by the Company on Form 8-K on September 16, 2015. The charge was the result of the Company’s consideration of court decisions upholding the U.S. Internal Revenue Service’s disallowance of foreign tax credits claimed by corporate entities not affiliated with the Company. Resolution of the Company’s own foreign tax credits awaits filing of (and determinations regarding) refund claims. Unadjusted, these amounts would be $5,484 million, $4.86, 9.7%, 24.1%, $51.15 and 73%, respectively.

 

5 The percentages presented for the Business Plans are the mid-point of the Business Plans’ respective ranges.

The performance measures above are not calculated based on GAAP. They should be read in conjunction with the information in “Non-GAAP and Other Financial Disclosures” in Appendix B of this Proxy Statement, which includes non-GAAP financial information, definitions and/or reconciliations to the most directly comparable measures that are based on GAAP.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    46                 

 


Table of Contents

Compensation Discussion and Analysis

 

Highlights of Executive Performance and Compensation

MetLife maintained its commitment to its pay for performance philosophy for 2016. The Compensation Committee’s decisions on the active Named Executive Officers’ compensation reflected the Committee’s view of the Company’s overall strategic direction and financial performance, and each executive’s performance relative to his goals and other challenges and opportunities that arose in 2016. The Named Executive Officers in this Proxy Statement are:

 

  Chairman of the Board, President and Chief Executive Officer Steven A. Kandarian;

 

  Executive Vice President and Chief Financial Officer John C. R. Hele;

 

  Executive Vice President, Global Technology & Operations Martin J. Lippert;

 

  Executive Vice President and Chief Investment Officer Steven J. Goulart; and

 

  President, Asia Christopher G. Townsend.

Under the leadership of Mr. Kandarian and his Executive Group, the Company delivered on multiple important goals relating to the strategic transformation underway at MetLife. However, the Company did not meet all of its annual financial objectives. The anticipated Separation is the most significant strategic initiative the Company has undertaken since the acquisition of Alico more than six years ago. The Company’s 2016 shortfall relative to its Operating Earnings target was influenced by steps taken to effect the Separation, which the Company believes is essential to creating long-term shareholder value.

The Committee approved an Annual Variable Incentive Plan (AVIP) Performance Funding Level of 87% of target as described on page A-2. The aspects of individual performance the Committee considered in making individual incentive decisions are discussed below. The Committee also approved a performance factor of 44.4% for the 2014 - 2016 Performance Shares and Performance Units that vested at the end of 2016. This below target payout resulted largely from Total Shareholder Return relative to the Company’s peers, a measure which demonstrates continued alignment with shareholders. The Company’s performance for 2016 reflects multiple strategic actions that impacted financial performance in the short-term. The Committee is confident that the bold decisions in 2016 provide a solid foundation for value creation and superior shareholder returns in the future.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    47                 

 


Table of Contents

Compensation Discussion and Analysis

 

Aspects of Individual Performance

The Compensation Committee determined the Executive Group members’ 2016 AVIP awards and stock-based long-term incentive awards by considering the Company’s key financial performance goals and results as discussed in “Highlights of 2016 Business Results” beginning on page 43. The Compensation Committee also considered aspects of each executive’s performance in relation to the executive’s and the Company’s strategic goals.

Steven A. Kandarian, Chairman of the Board, President and Chief Executive Officer

2016 was one of the most transformative years in the history of MetLife. Mr. Kandarian is leading strategic changes to forge a clear path to the enterprise MetLife intends to become: a simpler company with less market sensitivity and higher, sustainable Free Cash Flow.

In early 2016, the Company announced its intention to separate a substantial portion of its U.S. retail business. In 2016, the Company took risk-management actions to safeguard its ability to execute the anticipated Separation regardless of the asymmetrical and non-economic accounting losses the interest rate environment generated. These accounting losses were the result of actions necessary to ensure MetLife’s transformation into a company with higher, sustained Free Cash Flow generation.

The Company believes Free Cash Flow is the most important metric to driving shareholder value over time. Each dollar of Free Cash Flow is available for dividends, Share repurchases, and acquisitions. In terms of Free Cash flow, 2016 was a strong year. The Company’s ratio of Free Cash Flow to Operating Earnings in 2016 was 77% (after adjusting for Notable Items and excluding the impact of related items and costs associated with the anticipated Separation), up from 63% in 2015 (after adjusting for a non-cash charge related to uncertain tax positions) and well above the mid-point of the Business Plan range of 55-65%. In 2012, Mr. Kandarian’s first full year as CEO, the Free Cash Flow ratio was only 26%.

2016 Key Achievements include:

 

  Introduced refreshed enterprise strategy to transform MetLife into a company where capital allocation decisions drive lower market sensitivity, higher internal rates of return, shorter payback periods, and higher, sustainable Free Cash Flow.

 

  Announced the largest share repurchase program in Company history at $3 billion.

 

  Initiated an ambitious expense management program which has already moved higher so the Company can deliver $800 million in pre-tax annual run-rate savings to the bottom line by 2020, net of stranded overhead costs.

 

  Succeeded in U.S. District Court litigation to rescind MetLife’s designation as a systemically important financial institution (SIFI); as of the date of this Proxy Statement, the Company awaited a decision on the government’s appeal.

 

  Sold the U.S. retail advisor force, the MetLife Premier Client Group, to MassMutual to generate significant savings and substantially reduce the Company’s potential regulatory risk from current or future efforts to impose fiduciary liability in the sale of financial products to consumers.

 

  Launched a refreshed brand that positions MetLife as a trusted partner to our business and consumer clients across the globe.

 

  Earned Company recognition in the Dow Jones Sustainability Index — North America, which recognizes the top 20% of sustainability performers across large U.S. and Canadian companies, and also in Newsweek magazine’s 2016 Green Rankings, which named MetLife the number 1 insurance company in the world and the number 1 financial services company in the U.S. for environmental performance.

 

  Earned Company recognition for its commitment to gender equality, appearing on Bloomberg’s inaugural “Financial Services Gender-Equality Index” and being named one of the “Top 50 Companies for Executive Women” by the U.S. National Association for Female Executives (NAFE).
 

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    48                 

 


Table of Contents

Compensation Discussion and Analysis

 

Compensation:

The Committee reviewed Mr. Kandarian’s achievements as well as market data and approved an AVIP award for 2016 that was down 11% from last year (decrease of $500,000), reflecting the Company’s financial performance. This is the second year of declining AVIP awards aligned with short-term Company performance; Mr. Kandarian’s award for 2015 performance was also $500,000 less than for 2014, making his 2016 award $1,000,000 less than for 2014. His stock-based long-term incentive award value for 2016 was the same as it was for 2015, reflecting progress toward long-term strategic objectives. The Committee approved no base salary increase for Mr. Kandarian for 2017.

The Committee believes Mr. Kandarian’s total compensation appropriately reflects the Company’s performance at this point in the Company’s transformation which is laying the foundation for significant improvement in future financial performance.

 

LOGO

John C.R. Hele, Executive Vice President and Chief Financial Officer

2016 Key Achievements:

 

  Maintained key capital adequacy ratios above minimum targets based on current regulations, exceeded Free Cash Flow goals (adjusted as described on page 45), and achieved Operating Expense Ratio within Business Plan Range. Mr. Hele enhanced the capital budgeting process to give priority to businesses with high risk-adjusted internal
   

rates of return, lower capital intensity, and maximum cash generation.

 

  Created the Separation Management Office to oversee the Separation of Brighthouse Financial. He co-lead the Company’s Accelerating Value strategy initiative, leading a work stream to focus on businesses with high risk-adjusted internal rates of return, lower capital intensity and maximum cash generation.

 

  Established a Unit Cost Office and created an enterprise expense savings plan to drive savings through 2020.

 

  Drove the Company’s largest-ever share repurchase program at $3 billion.

 

  Recognized as Institutional Investor Magazine’s 2017 Top Chief Financial Officer for buy-side for the third year in a row. Investor Relations team was recognized as 2017’s Number 1 for the Best Analyst Days and 2nd Best Insurance Investor Relations Program overall.

Compensation:

Mr. Kandarian recommended, and the Committee approved, an AVIP award for 2016 that was down 9% from last year (decrease of $200,000) to reflect the Company’s financial performance. Mr. Hele’s stock-based long-term incentive award for 2016 is the same as for last year, reflecting progress toward long-term strategic objectives.

 

LOGO

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    49                 

 


Table of Contents

Compensation Discussion and Analysis

 

Martin J. Lippert, Executive Vice President, Global Technology & Operations

2016 Key Achievements:

 

  Exceeded goals across all cost savings initiatives through prudent expense management by consolidating operations and real estate around the world, streamlining processes, and re-negotiating information technology vendor contracts.

 

  Drove MetLife’s enterprise digital strategy across all regions for consistent digital standards across marketing, sales, and service. Launched the industry’s first fully Digital end-to-end platform for U.S. Auto and configurable sales platform for the Japan business.

 

  Achieved top quartile performance for U.S. call centers’ Customer Satisfaction and Net Promoter Score metrics based on third-party benchmarks. MetLife’s Corporate Benefit Funding Customer Solutions Center team was recognized by J.D. Power for Outstanding Customer Service following third-party audit of 100+ customer practices. Completed the consolidation of over 93 data facilities into 3 regional data centers to improve MetLife’s underlying risk profile.

 

  Delivered new capabilities on the MetLife Investment Management platform to support over 70 institutional clients.

Compensation:

Mr. Kandarian recommended, and the Committee approved, an AVIP award for 2016 that was down 9% from last year (decrease of $200,000) to reflect the Company’s financial performance. Mr. Lippert’s stock-based long-term incentive award value for 2016 was higher than it was for 2015, reflecting significant progress advancing the Company’s global digital strategy, which provides the foundation for the Company’s strategy refresh.

 

LOGO

Steven J. Goulart, Executive Vice President and Chief Investment Officer

2016 Key Achievements:

 

  Achieved 2016 Plan Net Investment Income, implementing initiatives to counter low interest rates and lower variable investment income; remained on schedule to reduce hedge fund investments; and took thoughtful credit actions to reduce risk in MetLife’s portfolio.

 

  Continued growth in MetLife Investment Management (MIM) assets under management and pre-tax profit; completed Accelerating Value analysis for MIM, showing attractive Value of New Business and Internal Rates of Return.

 

  Implemented regional portfolio optimizations to reduce regulatory capital use as well as improve cash flow and Net Investment Income.

 

  Enhanced the Company’s corporate social responsibility report (“Global Impact”) outlining a vigorous risk management discipline to address Environmental, Social and Governance (ESG) risks and opportunities for investments that provide social and/or environmental benefits along with economic returns.

Compensation:

Mr. Kandarian recommended, and the Committee approved, an AVIP award for 2016 that was up 7% from last year (increase of $100,000). This reflected a promotion to recognize the criticality of Mr. Goulart’s role in leading the Company’s Investments organization and the growth in the MIM business. Mr. Goulart’s stock-based long-term incentive award value for 2016 was the same as it was for 2015, reflecting progress toward long-term strategic objectives.

 

LOGO

 

 

 

LOGO  

 

 

 

2017 Proxy Statement

 

 

 

    50                 

 


Table of Contents

Compensation Discussion and Analysis

 

Christopher G. Townsend, President, Asia

2016 Key Achievements:

 

  Led the Asia region to deliver Operating Earnings of $1.2 billion, down 10% as reported (down five percent excluding Notable Items, on a constant currency basis) versus 2015. Tangible ROE for Asia was 19.4% in 2016, compared to 20.6% in 2015. These results reflect trade-offs under the enterprise strategy, as sales of lower-value products are slowed to focus on higher-value products.

 

  Continued to lead the shift of products in Japan from interest rate sensitive products to higher margin foreign currency denominated life products, sales of which increased 48% over the prior year. Those changes, coupled with similar actions in other markets such as improving product mix in Korea, are integral to the new strategy.

 

  Continued to expand MetLife’s capabilities in health, digital, data analytics, and innovation to drive differentiation and enhance long-term competitiveness in Asia.

 

Compensation:

Mr. Kandarian recommended, and the Committee approved, an AVIP award for 2016 that was down 9% from last year (decrease of $100,000) to reflect the Company’s financial performance. Mr. Townsend’s stock-based long-term incentive award value for 2016 was the same as it was for 2015, reflecting progress towards long-term strategic objectives.

 

LOGO

The amounts in the chart above, and in the charts for the other NEOs in this section entitled “Aspects of Individual Performance” reflect the base salary earned in 2016 as reported in the Summary Compensation Table on page 72 and the incentive compensation award amounts reported for performance year 2016 in the Compensation Committee Incentive Decisions table on page 52.

Some of the performance measures in this section entitled “Aspects of Individual Performance” are not calculated based on GAAP. They should be read in conjunction with the information in “Non-GAAP and Other Financial Disclosures” in Appendix B of this Proxy Statement, which includes non-GAAP financial information, definitions and/or reconciliations to the most directly comparable measures that are based on GAAP.

 

 

 

LOGO  

 

 

 

2017 Proxy Statement

 

 

 

    51                 

 


Table of Contents

Compensation Discussion and Analysis

 

Incentive Compensation Decisions for 2016 Performance

The following table reflects the incentive compensation decisions (AVIP and stock-based long-term incentive (LTI) awards) the Compensation Committee approved for each NEO in February 2017 based on 2016 performance. For additional detail on the specific performance criteria used to determine these awards, see pages 48-51 and 58-60 for AVIP and 48-51 and 61-64 for LTI.

AVIP awards for all but one NEO were lower than last year, in alignment with 2016 Company performance. The exception was Mr. Goulart, whose AVIP award was seven percent higher to reflect a promotion to recognize the criticality of his role leading the Company’s Investments organization and the growth in the MetLife Investment Management business. LTI awards for all but one NEO were flat to last year to reflect sustained progress toward long-term shareholder value creation. The exception was Mr. Lippert whose LTI award value was seven percent higher than last year. This reflected strong progress across Mr. Lippert’s areas of responsibility, including cost savings initiatives, driving customer centricity, and advancing the Company’s global digital strategy, which is core to the strategy refresh.

 

                           
                    Compensation Committee Performance-Year Incentive Decisions        
                                                                                 
                   

 

2016

 

               

2016 versus 2015(3)

 

       
                                                                                 
    Name              

AVIP Award(1)

                LTI(2)                 AVIP Award               LTI        
                                                                                 
 

Steven A. Kandarian

        $4,000,000           $10,500,000        

(11)%

        0  
 

John C.R. Hele

        $2,000,000           $3,000,000           (9)%         0  
 

Martin J. Lippert

        $2,100,000           $3,000,000           (9)%         7  
 

Steven J. Goulart

        $1,500,000           $2,500,000           7%         0  
 

Christopher G. Townsend

        $1,000,000           $1,800,000        

  (9)%

        0  
                           

 

1 Reflects the 2016 AVIP award paid in 2017. Each is as reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 72, except that the award to Mr. Townsend reported in the Summary Compensation Table differs because it reflects local currency conversion rate.
2 Reflects the 2017 LTI award value, not the grant date fair value calculated in accordance with the applicable accounting standard, ASC 718. The grant date fair values will be disclosed for Named Executive Officers reported in the Grants of Plan-Based Awards Table in the Company’s 2018 Proxy Statement. This table is not a substitute for the Summary Compensation Table on page 72, but provides a holistic view of incentive compensation decisions for performance year 2016.
3 Reflects AVIP Award and LTI as described in notes 1 and 2 compared to amounts for 2015 determined in the same manner.

In addition to each executive’s accomplishments against individual goals for the year, all compensation decisions were made within the context of MetLife’s executive compensation programs and framework and internal equity considerations, as well as alignment and appropriate competitive positioning against external market peers. LTI awards reflect individual performance as well as expectations of contributions to future performance.

Additional details on individual performance and 2016 incentive decisions are provided under “Aspects of Individual Performance” on page 48.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    52                 

 


Table of Contents

Compensation Discussion and Analysis

 

Most of the Total Compensation for 2016 performance for the CEO, and the other Named Executive Officers, was variable and depended on performance. In addition, the Committee allocated a greater portion of the Named Executive Officers’ variable compensation to stock-based LTI than to cash AVIP. These long-term incentives align executive and shareholder interests and encourage future contributions to performance. Ultimately, the value of LTI depends on future Company performance, including stock price performance.

The Company’s LTI awards are comprised of Performance Shares, Restricted Stock Units, Stock Options, and, in some cases with respect to Executive Group members outside the United States, cash payable equivalents. MetLife determines the number of Performance Shares and Restricted Stock Units (and cash payable equivalents) in each award by dividing that portion of the LTI award value by the Share closing price on the grant date. If the Share closing price on the grant date is outside a 15% range (higher or lower) of the average Share closing price for the year to date, MetLife uses that average closing price instead of the

closing price on the grant date. The number of Stock Options (and cash-payable equivalents) in the award is determined by dividing that portion of the LTI award value by one-third of the Share closing price on the grant date. The exercise price of Stock Options is the closing price on the grant date.

The Company’s long-term performance, including changes in the price of Shares, has a significant impact on the Named Executive Officers’ compensation. In early 2016, the Board of Directors approved payouts for Performance Share and Performance Unit awards for 2013-2015 that reflected a performance factor of 86.2%. The payout for Performance Share and Performance Unit awards for 2014-2016 reflected a performance factor of 44.4%, below target due primarily to Total Shareholder Return (TSR) performance relative to the Company’s global peer group. The Committee believes that the realized value of these awards — along with Share ownership requirements — appropriately aligns management with Company performance as well as shareholder interests over time.

 

 

CEO Value Realized From Performance Shares Vested in 2016

The table below illustrates that Company performance below target resulted in the CEO realizing 54% (almost $2.4 million) less than the LTI award value at grant from the 2014-2016 Performance Share award, resulting from below threshold TSR performance combined with modest increases in Share price.

 

                                             
    2014-2016 Performance Shares (Granted February 25, 2014)    
     Target Award
 Value at Grant(1)
         

 

Company Performance

         

Realized Value
at Distribution 

         

Change in Value

from Target to Realized

   
             

Operating ROE Goal

(Versus Business Plan)

           

TSR Goal

(Relative to Peers)

           

Performance

Factor(2)

           

Share Price

Appreciation(3)

                       

($)

 

           

 (%) 

 

    
  $4,396,110        

97%

        <25th percentible        

 

44.4%

(average of  components) 

        3.8%           $2,025,652            $(2,370,458)          (54)%  
                                                     
 

Performance Factor Components

       

88.8%

        0%                                    
                                                                                             

 

1 Reflects the LTI award value using target performance, not the grant date fair value calculated in accordance with the applicable accounting standard, ASC 718. The grant date fair value was disclosed in the Grants of Plan-Based Awards Table in the Company’s 2015 Proxy Statement.

 

2 See “Performance Shares” on pages 61-64 for how the performance factor is tied to Company performance.

 

3 Reflects change in Share price from grant on February 25, 2014 to distribution at February 28, 2017.

The CEO’s 2015 and later Performance Share awards continue to vest, subject to the same performance metrics. In addition, the CEO exceeds his Share ownership requirement of 7 times his annual base salary rate, further ensuring shareholder alignment.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    53                 

 


Table of Contents

Compensation Discussion and Analysis

 

LOGO

Compensation Philosophy and Objectives

 

          
       LOGO      

Provide competitive Total Compensation opportunities to attract, retain, engage, and motivate high-performing executives

 

   
    LOGO   

Align compensation plans with short- and long-term business strategies

 

   
          
          
       LOGO      

Align the financial interests of executives with shareholders’ through stock-based incentives and Share ownership requirements

 

   
    LOGO   

Make a significant portion of Total Compensation variable and subject to Company and individual performance.

 

   
          
 

 

Key Features of MetLife’s Executive Compensation Program

 

              
   

 

MetLife’s compensation program has multiple features

that promote the Company’s success, including:

 

   
      
     LOGO      

paying for performance: most compensation is variable without guarantee, and dependent on achievement of business results.

 

 
  LOGO   

aligning executives’ interests with those of shareholders: most incentive compensation is stock-based, and executives are expected to meet Share ownership requirements.

 

 
  LOGO   

encouraging long-term decision-making: Stock Options and Restricted Stock Units vest over three years, Stock Options may normally be exercised over 10 years, and the ultimate value of Performance Shares is determined by the Company’s performance over three years.

 

 
  LOGO   

rewarding achievement of the Company’s business goals: amounts available for annual incentive awards are based on Company performance compared to its Business Plan; individual awards take account of individual performance relative to individual goals.

 

 
  LOGO   

avoiding incentives to take excessive risk: the Company does not make formulaic awards as part of its normal program, uses Operating Earnings (which excludes net investment gains and losses and net derivative gains and losses) as a key performance indicator, and uses multi-year performance to determine the ultimate value of stock-based awards.

 

 
  LOGO   

maintaining a performance-based compensation recoupment (clawback) policy: the Company may seek recovery for employee fraudulent or other wrongful conduct that harmed MetLife.

 

 
              

 

              
   

 

The Company’s compensation program excludes practices

that would be contrary to the Company’s compensation

philosophy and contrary to shareholders’ interests.

For example, the Company:

 

   
      
     LOGO      

does not offer Executive Group members a supplemental executive retirement plan that provides benefits under a different formula than the generally-applicable pension plan, or that adds to years of service or includes long-term incentive compensation in the benefits formula.

 

 
  LOGO   

does not provide excessive perquisites.

 

 
  LOGO   

does not allow repricing or replacing of Stock Options without prior shareholder approval.

 

 
  LOGO   

does not provide any “single trigger” change-in-control severance pay, or “single trigger” vesting of stock-based awards upon a change-in-control without the opportunity for the Company or a successor to substitute alternative awards that remain subject to vesting.

 

 
  LOGO   

does not provide any change-in-control severance pay beyond two times average pay.

 

 
  LOGO   

does not provide for any excise tax payment or tax gross-up for change-in-control related payments, or for tax gross-up for any perquisites or benefits, other than in connection with relocation or other transitionary arrangements when an Executive Group member begins employment.

 

 
  LOGO   

does not allow directors, executives, or other associates, to engage in pledging, hedging, short sales, or trading in put and call options with respect to the Company’s securities.

 

 
  LOGO   

does not offer employment contracts to U.S.-based Executive Group members.

 

 
              
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    54                 

 


Table of Contents

Compensation Discussion and Analysis

 

Overview of Compensation Program

MetLife uses a competitive total compensation framework that consists of base salary, annual incentive awards and stock-based long-term incentive award opportunities. The Compensation Committee considers and recommends the amount of each of these three elements together. It submits its recommendations for the Company’s Chief Executive Officer for approval by the Independent Directors, and for each of the other Executive Group members for approval by the Board of Directors. For purposes of this discussion and MetLife’s compensation program, Total Compensation for an Executive Group member means the total of only these three elements. Items such as sign-on payments and others that are not determined under the Company’s general executive compensation framework are approved by the Committee, but are generally not included in descriptions of Total Compensation.

The Committee’s Total Compensation decisions are driven by performance. Each Executive Group member’s Total Compensation reflects the Committee’s assessment of the Company’s and the executive’s performance as well as competitive market data based on peer compensation comparisons. Decisions on the award or payment amount of one element of Total Compensation impact the decisions on the amount of other elements. The Committee’s Total Compensation approach means that it does not structure particular elements of Total Compensation to relate to separate individual goals or performance.

The Committee allocates a greater portion of the Executive Group members’ Total Compensation to variable components that depend on performance or the value of Shares rather than a fixed component. It also allocates a greater portion of the

Executive Group members’ variable compensation to stock-based long-term incentives than it allocates to annual cash incentives. Given this mix of pay and other features of MetLife’s compensation programs, Executive Group members’ interests are aligned with those of shareholders. The Company’s Share ownership requirements further align executives’ interests with those of shareholders and reinforce the focus on long-term shareholder value.

The Committee also reviews annually the other compensation and benefit programs, such as retirement benefits and potential payments that would be made if an Executive Group member’s employment were to end. However, benefits such as retirement and medical programs do not impact Total Compensation decisions since they apply to substantially all employees. Decisions about those benefits do not vary based on decisions about an Executive Group member’s base salary or annual or stock-based awards, or the amount realizable from prior awards.

The Committee’s independent executive compensation consultant, Meridian, assisted it in its design and review of the Company’s compensation program. For more information on the role of Meridian regarding the Company’s executive compensation program, see “Corporate Governance —Board and Committee Information — Compensation Committee” beginning on page 28.

Generally, the forms of compensation and benefits provided to Executive Group members in the United States are similar to those provided to other U.S.-based officer-level employees. None of the Executive Group members based in the United States is a party to any agreement with the Company that governs the executive’s employment.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    55                 

 


Table of Contents

Compensation Discussion and Analysis

 

Components of Compensation and Benefits

The primary components of the Company’s regular executive compensation and benefits program play various strategic roles:

 

         
   

 

Description

 

         

 

Strategic Role

 

   
         
   

 

Total Compensation

 

   
         
 

Base Salary is determined based on position, scope of responsibilities, individual performance, and competitive data.

 

      Provides fixed compensation for services during the year.  
 

Annual Incentive Awards are:

•  variable based on performance relative to Company and individual goals and additional business challenges or opportunities that arose during the year.

•  determined through the Compensation Committee assessment of all of these factors as a whole.

 

     

•  Serve as the primary compensation vehicle for recognizing and differentiating individual performance each year.

•  Motivate Executive Group members and other employees to achieve strong annual business results that will contribute to the Company’s long-term success, without creating an incentive to take excessive risk.

 
 

Stock-Based Long-Term Incentive Awards are:

•  based on the Compensation Committee’s assessment of individual responsibility, performance, relative contribution, and potential for assuming increased responsibilities and future contributions.

•  dependent on the value of Shares (Restricted Stock Units), increases in the price of Shares (Stock Options), or a combination of MetLife’s performance as well as the value of Shares (Performance Shares). Cash-paid equivalents are used outside the U.S.

•  granted each year to provide overlapping vesting and performance cycles.

•  for awards to Executive Group members made as part of Total Compensation for prior year performance and in expectation of contributions to future performance granted in these proportions:

     

•  Ensure that Executive Group members have a significant continuing stake in the long-term financial success of the Company (see “Executive Share Ownership” on page 71).

•  Align executives’ interests with those of shareholders.

•  Encourage decisions and reward performance that contribute to the long- term growth of the Company’s business and enhance shareholder value.

•  Motivate Executive Group members to outperform MetLife’s competition.

•  Encourage executives to remain with MetLife.

 
 

 

Stock-Based Long-Term

Incentive Mix for Executive Group Members

LOGO

       
         
   

 

Benefits

 

   
         
 

Retirement Program and Other Benefits include post-retirement income (pension) or the opportunity to save a portion of current compensation for retirement and other future needs (savings and investment program and nonqualified deferred compensation).

 

      Attract and retain executives and other employees.  
         
   

 

Potential Payments

 

   
 

 

Severance Pay and Related Benefits include transition assistance if employment ends due to job elimination or, in limited circumstances, performance.

 

     

Encourage focus on transition to other opportunities and allow the Company to obtain a release of employment-related claims.

 

 
 

Change-in-Control Benefits include:

•  double-trigger severance pay and related benefits, if the Executive Group member’s employment is terminated without cause or the Executive Group member resigns with good reason following a change-in-control.

•  replacement or vesting of stock-based long-term incentive awards.

 

     

•  Retain Executive Group members during a change-in-control.

•  Promote the unbiased efforts of the Executive Group members to maximize shareholder value during and after a change-in-control.

•  Keep executives whole in situations where Shares may no longer exist or awards otherwise cannot or will not be replaced.

 
         

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    56                 

 


Table of Contents

Compensation Discussion and Analysis

 

Determining Total Compensation for 2016 Performance

In determining executive compensation for performance year 2016, the Compensation Committee considered the Executive Group’s performance both as a whole and individually. The Committee also reviewed reports and analyses on competitive compensation for comparable positions at peer companies and in the broader market where the Company competes for executive talent.

A description of the process for determining Total Compensation follows.

Process for Determining Chief Executive Officer Compensation

Early in 2016, Mr. Kandarian and the Committee established goals and objectives that were designed to drive Company performance. The Committee assessed Mr. Kandarian’s 2016 performance against these goals in early 2017. The Committee approved Mr. Kandarian’s Total Compensation, including annual and stock-based long-term incentives, based on this assessment, and recommended it to the Independent Directors for their approval. For a description of these goals, and the performance the Committee and Board reviewed, see “Highlights of 2016 Business Results” beginning on page 43 and “Aspects of Individual Performance” beginning on page 48.

Mr. Kandarian’s compensation is higher than other Executive Group members due to Mr. Kandarian’s broader responsibilities and higher levels of accountability as the most senior executive in the Company, as well as competitive market data.

Process for Determining Compensation of Other Executive Group Members

Early in 2016, Mr. Kandarian and each Executive Group member agreed on the respective executive’s goals for 2016. In early 2017, Mr. Kandarian provided to the Committee an assessment of each of the Executive Group members’ performance during 2016 relative to their goals and the additional business challenges and opportunities that arose during the year. He also recommended Total Compensation amounts for each Executive Group member, other than himself. The Committee reviewed these recommendations. It approved and endorsed the components of each Executive

Group member’s Total Compensation for the Board of Directors’ approval. In each case, Mr. Kandarian and the Committee considered the executive’s performance, future potential, available competitive data, compensation opportunities for each position, retention needs, and fit within the executive talent market, aligned with MetLife’s compensation philosophy and objectives.

The Executive Vice President and Chief Human Resources Officer of the Company (the CHRO) provided the Committee with advice and recommendations on the form and overall level of executive compensation. He also provided guidance and information to Mr. Kandarian to assist him in this process, other than with respect to the CHRO’s own compensation. The CHRO also provided guidance to the Committee on its general administration of the programs and plans in which Executive Group members, as well as other employees, participate.

Other than as described above, no Executive Group member played a role in determining the compensation of any of the other Executive Group members. No Executive Group member took part in the Board’s consideration of his or her own compensation. The Chief Executive Officer does not have any authority to grant Share-based awards of any kind to any Executive Group members, the Chief Accounting Officer, the Chief Risk Officer, or Directors of the Company.

2016 Say-on-Pay Vote and Shareholder Engagement

In 2016, the Company’s shareholders voted by over 97% to approve the Company’s executive compensation programs and policies and the resulting compensation described in the 2016 Proxy Statement. The prior two years’ results were 98% and 97% positive.

Because the vote was advisory, the result was not binding on the Compensation Committee. However, the Committee considered the vote to be an endorsement of the Company’s executive compensation programs and policies, and took into account that support in reviewing those programs and policies. The Company has also discussed the vote, along with aspects of its executive compensation and corporate governance practices, with a number of shareholders to gain a deeper understanding of their perspectives. None of these discussions raised shareholder concerns about the Company’s current compensation practices.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    57                 

 


Table of Contents

Compensation Discussion and Analysis

 

LOGO

 

Base Salary

The base salaries earned by the Named Executive Officers in 2016 are reported in the Summary Compensation Table on page 72. The Compensation Committee approved annual base salary rate increases of $100,000 for each of Mr. Kandarian and Mr. Goulart, $75,000 for each of Mr. Hele and Mr. Lippert, and the equivalent of approximately $75,000 for Mr. Townsend. See footnote 1 on page 72 regarding currency exchange rate. Each increase was effective April 1, 2016. These adjustments were made to bring each executive’s salary in line with competitive market data for our peers (described on page 68) and the executive’s level of sustained relative contribution to the Company.

Annual Incentive Awards

The MetLife Annual Variable Incentive Plan (AVIP) provides eligible employees, including the Executive Group members, the opportunity to earn annual cash incentive awards. For awards for 2016 performance, AVIP was administered as a Cash-Based Awards program under the MetLife, Inc. 2015 Stock and Incentive Compensation Plan (2015 Stock and Incentive Plan). The 2016 AVIP awards are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 72.

AVIP Performance Funding

Each year, the Committee approves the maximum aggregate amount available for all AVIP awards for substantially all

administrative (non-sales) employees around the world, approximately 31,000 employees for 2016.

Consistent with past practice, this approach uses an AVIP Performance Funding Level, based on the Company’s Operating Earnings compared to the Company’s 2016 Business Plan, multiplied by the total annual incentive compensation planning targets for all eligible employees, subject to the Committee’s assessment of overall performance and other relevant factors.

The Committee uses Operating Earnings as a key metric because doing so allows it to analyze the Company’s performance relative to its Business Plan. That aligns compensation with bottom-line performance that generates shareholder value over time. Using Operating Earnings, rather than GAAP net income, focuses on the Company’s primary businesses excluding the impact of market volatility, which could distort results, and revenues and costs related to areas such as non-core products, divested businesses, and discontinued operations. Operating Earnings excludes the impact of net investment gains and losses and net derivative gains and losses, which helps mitigate the potential for excessive risk-taking.

For purposes of determining the AVIP Performance Funding Level, the Company’s Operating Earnings is adjusted to eliminate the impact (if any) of variable investment income on an after-tax basis that was higher or lower than the Business Plan goal by 10% or more (Adjusted AVIP Operating Earnings).

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    58                 

 


Table of Contents

Compensation Discussion and Analysis

 

The Committee’s methodology to determine the AVIP Performance Funding Level is outlined in the following chart, indicating how the Performance Funding Level changes relative to Adjusted Operating Earnings performance:

 

Total AVIP Funding for Awards to All Eligible Employees

 

LOGO

 

See Appendix A for further details.

This approach avoids providing incentives for employees to take excessive risk through several of its features. Operating Earnings excludes net investment gains and losses and net derivative gains and losses. The exclusion of after-tax variable investment income outside the 10% range higher or lower than the Business Plan goal also avoids providing rewards or penalties for volatile investment returns. As a result, this approach does not provide an incentive to take excessive risk in the Company’s investment portfolio and so facilitates prudent risk management. Nor is this approach an unlimited function of revenues. Rather, this approach caps the amount that can be generated for AVIP awards, and is a function of financial measures that account for the Company’s costs and liabilities.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    59                 

 


Table of Contents

Compensation Discussion and Analysis

 

For 2016 AVIP, the Committee excluded certain items from Operating Earnings:

 

                     ($ in millions)       
 
  Costs related to the anticipated Separation          $ 232     
  Non-cash charges:            
 

Reserve charges:

           
 

Reserve system enhancements

           257     
 

Actuarial assumption update for variable annuities

           168     
 

Australia reinsurance claim

           44     
  Total          $ 701     
          

 

 

    

 

The Committee excluded Separation costs because the plan for the anticipated Separation was still in development when the 2016 Business Plan was devised. As a result, the costs were not included in the 2016 Business Plan as they were not contemplated or known at the time the Business Plan was established. The Separation is a unique event in which the Company anticipates spinning-off approximately one-fifth of its business (based on Operating Earnings). Further, the Committee and Board believe that the Separation will produce significant benefits for Company shareholders, such as allowing MetLife to operate with greater focus, increasing MetLife’s ability to generate distributable cash flows while reducing its balance sheet and income statement volatility, and making MetLife more globally diversified. The Separation may also improve MetLife’s operating return on equity, after the costs of the Separation are eliminated, and reduce MetLife’s cost of capital and exposure to market risk. Because of these many benefits, the Committee concluded that it was not appropriate to penalize all 31,000 employees covered under this plan for taking the necessary steps to effect the change.

The Committee also excluded three non-cash items, two of which were excluded because they were not the consequence of current management decisions and management did not meaningfully benefit from earlier related outcomes. The other item was excluded because the outcome of a past reinsurance claim was not yet certain. All of these adjustments represent events that were not known or anticipated at the time the 2016 Business Plan was approved. In addition, the Committee believes that adjusting for these items provides a more accurate view of management’s performance in 2016. Further details on these three items follow.

First, the Committee excluded a non-cash charge to increase reserves for products introduced more than 10 years ago, primarily resulting from modeling improvements in the reserving process for universal life products with secondary guarantees. The Company’s reserve charges in prior years were consistent

with its Business Plans and actuarial and accounting practices at the time. As a result, those outcomes did not benefit management’s incentive compensation in those prior years.

Second, the Committee excluded a non-cash charge related to the actuarial assumption review for variable annuities. This reserve increase reflects changes to policyholder behavior and long-term economic assumptions relating to guaranteed minimum income benefits in certain variable annuity policies. The Company could not previously update assumptions for the related products, which were first offered over 10 years ago. Accounting rules prohibited the Company from updating these assumptions until 2016, when management had sufficient and credible data. As a result, management could not anticipate these charges when establishing the 2016 Business Plan.

The Committee concluded that adjustments for these two non-cash charges were appropriate in light of the circumstances. Over a decade ago, management had used its best judgment, utilizing relevant experience, to set appropriate reserves for the (now discontinued) products at issue. The Committee concluded that, in order to encourage strong risk management, it should not penalize executives for these reserve-setting decisions made years before.

Third, the Committee excluded a non-cash charge related to a Company reinsurance claim in Australia for a policy last renewed in 2011. The Company incurred a charge for the entire amount in dispute after the initial court determination on some of its claims. The Committee determined to defer reflecting the initial court determination until after there was a final resolution of the dispute.

 

Individual Annual Incentive Awards

The Committee determined the Executive Group members’ 2016 AVIP awards in consideration of the Company’s key financial performance goals and results described on pages 44-46 and key aspects of each of the Named Executive Officers’ performance relative to their objectives as discussed on pages 48-51.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    60                 

 


Table of Contents

Compensation Discussion and Analysis

 

Stock-Based Long-Term Incentive Awards

The Company awards Performance Shares, Restricted Stock Units, Stock Options and, in some cases outside the United States, cash-payable equivalents. The Committee determines the amount of such awards in consideration of the Company’s key financial performance goals and results as part of MetLife’s Total Compensation program. For information about the specific grants of stock-based long-term incentive awards to the Named Executive Officers in 2016, see the table entitled “Grants of Plan-Based Awards in 2016” on page 78.

Stock Options

The Company grants Stock Options with an exercise price equal to the closing price of Shares on the grant date. The value of Stock Options depends exclusively on increases in the price of Shares. One-third of each award of Stock Options becomes exercisable on each of the first three anniversaries of the date of grant.

Restricted Stock Units

The Company delivers Shares for Restricted Stock Units after the end of a predetermined vesting period. Awards generally vest in thirds, and Shares are delivered, after each of the first three anniversaries of the grant date, assuming that the Company meets goals set for purposes related to Section 162(m) of the United States Internal Revenue Code (Section 162(m)) (see “Tax Considerations” on page 71).

From time to time, the Company grants Restricted Stock Units that vest in their entirety on the third or later anniversary of their grant date. It does so in order to encourage a candidate to begin employment with MetLife (especially where the candidate would forfeit long-term compensation awards from another employer by doing so) or as a means of reinforcing retention efforts, particularly in cases of exceptional performance, critical skills, or talent.

Performance Shares

The Company delivers Shares for Performance Shares after the end of a three-year performance period. The number of Shares depends on Company performance.

The Compensation Committee approves performance metrics for Performance Share awards based on:

 

  the Company’s Operating ROE compared to its Business Plan goals; and

 

  Total shareholder return (TSR), which reflects total return on Shares including change in Share price and imputed reinvested dividends, compared to the custom group of competitors listed on page 62.

The Committee chose Operating ROE because it directly supports the Company’s strategy to achieve superior shareholder returns. Operating ROE focuses employees on the efficient use of capital, which will drive TSR over time. The use of TSR ensures that final awards are aligned with our shareholder’s experience. The metrics include one absolute measure (Operating ROE) to directly link to the Company’s Business Plan and one relative measure (TSR) based on a peer group that reflects our business model and global reach.

Each of these two factors is measured over the three-year performance period and each is weighted equally. Payment is subject to the satisfaction of the applicable Section 162(m) goals and the overall limit of 175% as the maximum performance factor.

The performance factor scales for these measures are shown below. The performance goal for Operating ROE is established at the beginning of each three-year performance period and is based on a rigorous long-range business plan vetted and approved by the Board of Directors. This Business Plan is informed by macro-economic forecasts as well as industry and peer performance.

The goal for 2016-2018 Performance Share awards will be disclosed after the end of that performance period. Importantly, the Committee set a rigorous goal that requires a meaningful stretch above current levels of performance. In addition, as an overall safeguard to ensure alignment with shareholders, the Committee intends to cap the Performance Factor at 100% if the Company’s TSR for the performance period is zero or negative. This applies even if the Company’s Operating ROE exceeds the performance goal and the Company’s TSR outperforms its peers.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    61                 

 


Table of Contents

Compensation Discussion and Analysis

 

The goal for the 2014-2016 Performance Shares is included at the bottom of the performance factor chart below.

With respect to the TSR component of the Performance Factor, the Committee assesses the Company’s performance against competitors around the world. As a result, the TSR metric reflects a group of competitors that is more globally diverse than the Comparator Group the Committee uses for peer Total Compensation purposes.

 

LOGO

 

See Appendix A for further details.

The Committee may consider how events such as significant unplanned acquisitions or dispositions, unplanned tax, accounting and accounting presentation changes, and unplanned restructuring or reorganization costs affect the Company’s Operating ROE.

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    62                 

 


Table of Contents

Compensation Discussion and Analysis

 

The following charts show the metrics the Committee uses to determine the Performance Factor, and how the outcome is tied to Company performance. The charts also reflect the Committee’s determination of the Performance Factor for the 2014-2016 performance period; this award vested at the end of 2016.

 

Operating ROE: 50% Component of

Performance Factor

 

  

TSR: 50% Component of  

Performance Factor  

LOGO

 

 

For this purpose the Committee excluded from Operating ROE the same items as it did for purposes of determining the total funding for 2016 AVIP awards, and for the same reasons. See “Annual Incentive Awards,” beginning on page 58.

The Committee also excluded the same items from Operating ROE as it has in the past.

For 2015, the Company recorded a non-cash charge of $792 million, net of income tax, related to tax years 2000 to 2009 for a wholly-owned U.K. subsidiary of MLIC. The charge resulted from the Company’s consideration of court decisions upholding the U.S. Internal Revenue Service’s disallowance of foreign tax credits claimed by corporate entities not affiliated with the Company. The Compensation Committee chose to exclude this

item because it did not relate to the consequences of any current

management decisions and management did not meaningfully benefit from the tax credit in past compensation determinations. Resolution of the Company’s own foreign tax credits awaits filing of (and determinations regarding) refund claims. The Company expects that, if the charge is later reversed, it will exclude that reversal from its determination of Operating Earnings for applicable executive compensation purposes so that executives do not benefit.

In 2014, the Company increased its reserves for asbestos litigation. The litigation relates to alleged activities in the 1920’s through the 1950’s, and the reserve increase of $117 million, net of income tax, reflected the fact that the frequency and severity of claims against MLIC relating to asbestos increased. MLIC is named as a defendant in asbestos litigation. MLIC has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    63                 

 


Table of Contents

Compensation Discussion and Analysis

 

Nor has MLIC issued liability or workers’ compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities during the period from the 1920’s through approximately the 1950’s and allege that MLIC learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. MLIC believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain.

Finally, the Company did not engage in as much merger and acquisition activity in 2015 or 2016 as anticipated for the Business Plan Operating ROE goal. The Committee determined that management had exercised appropriate restraint in pursuing only those acquisitions that were likely to result in profitable growth.

See Appendix A for further details.

For more information, see the table entitled “Option Exercises and Stock Vested in 2016” on page 83.

Phantom Stock-Based Awards

The Company grants cash-settled stock-based awards (Phantom Awards) to employees outside the United States, if paying cash is more appropriate than delivering Shares in light of tax and other regulatory circumstances. Each vehicle has the same LTI award value, performance metrics, and vesting requirements as its Share-payable equivalent.

 

  Each Unit Option represents the right to receive a cash payment equal to the closing price of a Share on the surrender date chosen by the employee, less the closing price on the grant date. One-third of each award of Unit Options becomes exercisable on each of the first three anniversaries of the date of grant.

 

  Performance Units are units that, if they vest, are multiplied by the same performance factor used for Performance Shares for the applicable period and payable in cash equal to the closing price of a Share. Payment for Performance Units is contingent on Company achievement of goals set for Section 162(m) purposes.

 

  Restricted Units are units that vest on the same schedules as Restricted Stock Units and, if they vest, each is payable in cash equal to the closing price of a Share on the vesting date. Payment for Restricted Units that vest and pay out in three annual installments is contingent on Company achievement of goals set for Section 162(m) purposes.

Vesting

For awards granted in 2015 and later, the Company has used an approach that is simpler and more global than for previous awards. Employees whose combined age and years of MetLife employment is 65 or more, with at least 5 years of MetLife employment (the Rule of 65), will retain their awards following the end of their employment. For awards granted through 2014, employees had to meet age and service criteria related to the U.S. pension program or to U.S. post-retirement medical benefits eligibility to retain their awards following employment.

Restrictive Covenants

In order to protect the Company, stock-based long-term incentive awards provide that Executive Group members who leave MetLife and provide services to a competitor, or any employee who violates MetLife’s agreement to protect corporate property, may lose those awards. The agreement to protect corporate property protects MetLife’s ownership of its property and information (including intellectual property) and prohibits the employee from interfering with MetLife’s business or soliciting MetLife’s employees or certain of its agents to leave MetLife until 18 months following the end of employment.

Retirement and Other Benefits

MetLife recognizes the importance of providing comprehensive, cost-effective benefits to attract, retain, engage, and motivate talented employees. The Company reviews its benefits program from time to time and makes adjustments to the design of the program to meet these objectives and to remain competitive with other employers.

Pension Program for U.S.-Based Executives

The Company sponsors a pension program in which all eligible U.S. employees, including the Executive Group members employed in the U.S., participate after one year of service. The program rewards employees for the length of their service and, indirectly, for their job performance, because the amount of benefits increases with the length of employees’ service with the Company and the salary and annual incentive awards they earn.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    64                 

 


Table of Contents

Compensation Discussion and Analysis

 

The program includes the Metropolitan Life Retirement Plan for United States Employees (the Retirement Plan) and the MetLife Auxiliary Pension Plan (Auxiliary Pension Plan), an unfunded nonqualified plan. The Auxiliary Pension Plan provides pension benefits for any Executive Group members that would apply under the (qualified) Retirement Plan if U.S. tax limits on eligible compensation did not apply. It provides no additional or special benefits for Executive Group members. The same compensation formulae were used for benefits accrued in both plans in 2016.

For additional information about pension benefits for the Named Executive Officers, see the table entitled “Pension Benefits at 2016 Fiscal Year-End” on page 84.

Mr. Townsend did not participate in a defined benefit pension plan in 2016.

Mandatory Provident Fund Applicable to Mr. Townsend

Mr. Townsend participates in the Mandatory Provident Fund program for employees in Hong Kong. Applicable law requires employers and employees to contribute a fixed portion of employees’ earnings to the program, and allows employer and employees to make additional contributions. Because the rate and vesting of employer contributions are based on length of service, the program encourages employees to remain with the Company.

Savings and Investment Program for U.S.-Based Executives

The Company sponsors a savings and investment program for U.S. employees in which each Executive Group member employed in the U.S. is eligible to contribute a portion of eligible compensation. U.S. employees are also eligible for Company contributions after one year of employee service in order to encourage and reward such savings.

The program includes the Savings and Investment Plan for Employees of Metropolitan Life and Participating Affiliates (Savings and Investment Plan), a tax-qualified defined contribution plan that includes pre-tax deferrals under Internal Revenue Code Section 401(k), and the Metropolitan Life Auxiliary Savings and Investment Plan (Auxiliary Savings and Investment Plan), an unfunded nonqualified deferred compensation plan. The Auxiliary Savings and Investment Plan provides Company contributions for employees who elect to

contribute to the Savings and Investment Plan and who have compensation beyond Internal Revenue Code limits.

Company contributions for the Named Executive Officers are included in the “All Other Compensation” column of the Summary Compensation Table on page 72. Because the Auxiliary Savings and Investment Plan is a nonqualified deferred

compensation plan, the Company’s contributions to the Named Executive Officers’ accounts, and the Named Executive Officers’ accumulated account balances and any payouts made during 2016, are reported in the table entitled “Nonqualified Deferred Compensation at 2016 Fiscal Year-End” on page 86.

Nonqualified Deferred Compensation Program for U.S.-Based Executives

The Company sponsors a nonqualified deferred compensation program for employees at the Assistant Vice-President level and above in the United States, including the Executive Group members employed in the U.S. The continued deferral of income taxation and pre-tax simulated investment earnings credited to participants through the employee’s chosen payment dates encourage employees to remain with the Company.

See the table entitled “Nonqualified Deferred Compensation at 2016 Fiscal Year-End” on page 86 for amounts of nonqualified deferred compensation reported for the Named Executive Officers.

Perquisites

The Company provides its Executive Group members with limited perquisites.

 

  To maximize the accessibility of Executive Group members, the Company makes leased vehicles and drivers and outside car services available to U.S.-based executives for commuting and personal use.

 

  The Company leases an aircraft for purposes of efficient business travel by the Company’s executives. While the Chief Executive Officer may occasionally use the Company’s aircraft for personal travel, Company policy does not require him to use the Company’s aircraft for all personal and business travel. The Company also does not pay, or gross-up any compensation to cover, the CEO’s income taxes on this or other perquisites.

 

  For recordkeeping and administrative convenience of the Company, the Company pays certain other costs, such as those for travel and meals for family members accompanying Executive Group members on business functions.
 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    65                 

 


Table of Contents

Compensation Discussion and Analysis

 

  The Company holds events to facilitate and strengthen its relationship with customers, potential customers, and other business partners, such as events at MetLife Stadium. The Company occasionally allows employees, including the Executive Group members, and their family members, personal use of its facilities at MetLife Stadium, to the extent space at such events is available or the facilities are not in use for business purposes.

• The Company provides benefits to Mr. Townsend in connection with his overseas assignment that are common for senior management in such circumstances, such as a subsidy of children’s education expenses, tax return preparation assistance, and benefits related to housing.

Aside from limited business travel tax equalization for Executive Group members based outside the United States, each Executive Group member is responsible for any personal income taxes due as a result of receiving these benefits.

The incremental cost of perquisites provided to the Named Executive Officers in respect of 2016 is included in the “All Other Compensation” column of the Summary Compensation Table on page 72, if the total cost of those perquisites for that executive exceeded $10,000.

Sign-On Payments

From time to time, the Company offers newly-hired Executive Group members sign-on payments and/or relocation benefits in order to encourage them to come to MetLife. On such occasions, the Company typically either delays the date the payment is earned and paid or requires repayment if the executive leaves MetLife before the first anniversary (or, in some cases, second or third anniversary) of beginning employment.

Business Travel Income Tax Equalization

As executives of a global enterprise, MetLife Executive Group members are engaged in international business travel. Some executives are required by the demands of their roles to travel to jurisdictions that impose additional taxes on them beyond what they owe in their home jurisdiction. MetLife has established business travel income tax equalization arrangements with its Executive Group members based outside the United States. Providing such executives with “income tax equalization” to

their home jurisdiction, by paying or reimbursing the executive for any excess income taxes the executive owes in other jurisdictions as a result of business travel, is a prevalent business practice. Doing so allows the executive to engage in business travel that is necessary to lead MetLife’s business efforts and perform job responsibilities without being financially penalized. It also prevents the additional personal income tax liability from being a disincentive to engage with employees, customers, or others outside of the executive’s home jurisdiction. The arrangements do not provide for equalizing taxes the executive owes as a result of travel taken solely for personal purposes. Mr. Townsend had such an agreement in 2016.

Potential Payments

Severance Pay and Related Benefits

The following describes the Company’s standard severance program and how it was applied in 2016. The Company may, in the future, enter into severance agreements that differ from the general terms of the program where business circumstances warrant.

If the employment of a U.S.-based Executive Group member ends involuntarily due to job elimination or, in limited circumstances, due to performance, he or she may be eligible for the severance program available to substantially all salaried employees. The program generally provides employees with severance pay, outplacement services and other benefits. Employees terminated for cause, as defined under the program, are not eligible. The amount of severance pay reflects the employees’ salary grade, base salary rate, and length of service. The severance pay formula for officer-level employees is potentially higher than that for other employees. Longer-service employees receive greater payments and benefits than shorter-service employees, given the same salary grade and base salary. Depending on the terms of the particular award, employees who meet the Rule of 65 or other applicable age and service criteria, retain their outstanding stock-based long-term incentive awards. Otherwise, employees who receive severance pay also receive a pro rata cash payment in consideration of certain unretained Performance Shares, Performance Units, Restricted Stock Units, and Restricted Units (generally, those awards granted at least one year earlier).

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    66                 

 


Table of Contents

Compensation Discussion and Analysis

 

 

Change-in-Control Arrangements

The Company has adopted arrangements that would impact the Executive Group members’ compensation and benefits upon a change-in-control of MetLife. None of the Executive Group members is entitled to any excise tax gross-up either on severance pay or on any other benefits payable in connection with a change-in-control of the Company.

The Company established the MetLife Executive Severance Plan (Executive Severance Plan) in 2007 to apply to all Executive Group members and replace individual change-in-control agreements.

The Compensation Committee determined the terms of the plan based on its judgment of what is necessary to maximize shareholder value should a change-in-control occur. The Company designed the elements of its change-in-control definition to include circumstances where effective control over the Company would be captured by interests that differ substantially from those of the broad shareholder base the Company now has, without impinging on the Company’s flexibility to engage in transactions that are unlikely to involve such a transformation. An Executive Group member who receives benefits under the Executive Severance Plan would not

also be eligible to receive severance pay under the Company’s severance plan that is available to substantially all salaried employees.

The Executive Severance Plan does not provide for any payments or benefits based solely on a change-in-control of MetLife.

Rather, the Plan provides for severance pay and related benefits only if the executive’s employment also ends under certain circumstances.

The Company’s stock-based long-term agreements also include change-in-control arrangements. Under these arrangements, MetLife or its successor may substitute an alternative award of equivalent value and vesting provisions no less favorable than the award being replaced. Only if such substitution does not occur would the awards vest immediately upon a change-in-control.

For additional information about change-in-control arrangements, including the Company’s definition of change-in-control for these purposes, see “Potential Payments upon Termination or Change-in-Control at 2016 Fiscal Year-End” beginning on page 91.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    67                 

 


Table of Contents

Compensation Discussion and Analysis

 

LOGO

The Compensation Committee periodically reviews the competitiveness of MetLife’s Total Compensation framework using data reflecting a comparator group of companies in the insurance and broader financial services industries with which MetLife competes for executive talent (the Comparator Group).

The Committee chose the members of the Comparator Group based on the size of the firms relative to MetLife and the extent of their global presence or their similarity to MetLife in the importance of investment and risk management to their businesses, as well as their being competitors for executive talent. It reviews the composition of the Comparator Group from time to time to ensure that the group remains an appropriate comparator group for the Company. The Committee changed the group in 2016, eliminating ING Groep and Aegon because regulatory requirements in the Netherlands make these companies no longer representative of the competitive market for MetLife’s executives. The resulting Comparator Group consists of the 17 financial services companies shown below.

 

LOGO

 

 

LOGO

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    68                 

 


Table of Contents

Compensation Discussion and Analysis

 

 

 

LOGO

1 MetLife is excluded from the Comparator Group when determining its percentile rank.

See Appendix A for further details.

 

In determining the Executive Group member’s Total Compensation for 2016, the Committee considered the increasingly global nature of the Company’s business and the Company’s size, scope, and complexity relative to its peers, the challenges the Executive Group faces, and the Committee’s expectations for the executive’s and the Company’s performance. MetLife’s competitive compensation philosophy is generally to provide Total Compensation around the size-adjusted median for like positions at Comparator Group companies, taking into account MetLife’s assets, revenue, and market capitalization relative to other companies in the Comparator Group. As a result, the Committee considered an Executive Group member’s Total Compensation to be

competitive if it fell within a reasonable range of that size-adjusted median. The Committee reviewed individual elements of the Executive Group members’ Total Compensation in comparison to available Comparator Group data, with a primary focus on Total Compensation. For 2016 performance, each Named Executive Officer’s Total Compensation fell between 80% and 120% of the point representing the size-adjusted median for his position. While the comparison to the range is a part of the compensation framework, the ultimate determinations vary based on individual factors such as performance, expectations of contributions to future performance, experience, and retention considerations.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    69                 

 


Table of Contents

Compensation Discussion and Analysis

 

LOGO

Risk Management

MetLife’s compensation program leverages best practices and has a number of features that contribute to prudent decision making and do not incent executives to take excessive risks.

 

                  
 

Incentive compensation aligned with risk management

    

 

  Operating Earnings – an important incentive compensation metric – excludes net investment gains and losses and net derivative gains and losses

 

  Removes incentives not to hedge exposures to various risks inherent in a number of products, or to harvest capital gains for the sole purpose of enhancing incentive compensation

 

  Aligned with Company policy not to use derivatives for speculative purposes

 

  Company assesses Executives’ performance in risk management and governance practices

 
        
                

 

 

Long-term focus

    

 

  Three-year overlapping performance periods and vesting for long-term incentive compensation

 

  Time horizons for compensation reflect the extended time horizons for the results of many business decisions.

 
        
                

 

 

Performance-based compensation recoupment  

policy

    

 

  Applies to all employees, including Executive Group members

 

  Company may seek recovery of performance-based compensation with respect to period of misconduct

 

  Misconduct is fraudulent or other wrongful conduct that causes the Company or its business financial or reputational harm

 

  Reinforces the Company intent to consider recovering compensation where the policy applies

 
        
                

 

 

Hedging and pledging policies

    

 

  Directors and employees, including Executive Group members, may not short-sell, hedge, trade in put and call options in, or pledge their Company securities

 

  Intended to prevent a misalignment, or appearance of misalignment, of interests with shareholders

 

 
        
                

 

 

Annual risk-review of incentive compensation programs

    

 

  Chief Risk Officer reviews programs and reports to the Compensation Committee

 

  Intended to ensure that programs do not encourage excessive risk-taking

 

  Analyzes performance measures, performance periods, payment determination processes, management controls, and risk management processes

 

  Chief Risk Officer concluded that compensation programs did not encourage excessive risk-taking and, as a result, are not reasonably likely to have a material adverse effect on the Company

 

 
        
                

 

 

Share ownership

requirements

    

 

  Ensure that executives’ interests are aligned with those of shareholders

 

  Encourages prudent risk-taking to the long-term benefit of shareholders

 

  Applies to employees at Senior Vice-President level and above, including Executive Group members

 

  Requires retention of all net Shares acquired from compensation awards, unless the employee’s ownership is above the requirement

 
                  

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    70                 

 


Table of Contents

Compensation Discussion and Analysis

 

Executive Share Ownership

The Share ownership of the Named Executive Officers as of December 31, 2016 was:

 

                                                                            
    Name                     

 

         Requirement  

 

             

 

     Ownership

     at or Above

     Requirement

 

             

 

     Compliant with

     100% Net

     Share Retention
     Requirements

 

               
                                  
 

Steven A. Kandarian

                7                                    
 

John C. R. Hele

                4                              
 

Martin J. Lippert

                4                              
 

Steven J. Goulart

                4                              
 

Christopher G. Townsend

                3                              
                                                                            

 

The Company does not allow employees to count outstanding Share awards toward these requirements. Employees may count the value of Shares they or their immediate family members own directly or in trust. They may also count Shares held in the Company’s savings and investment program, Shares deferred under the Company’s nonqualified deferred compensation program and deferred cash compensation or auxiliary benefits measured in Share value. Mr. Lippert joined the Company in 2011, and Mr. Hele and Mr. Townsend joined the Company in 2012. Each of them, and each of the other Named Executive Officers, also has significant outstanding awards deliverable in Shares (or payment in cash equivalent to Share value) that align his interests with those of shareholders.

Stock-Based Award Timing Practices

The Compensation Committee grants stock-based long-term incentive awards to the Executive Group members at its regularly scheduled meeting in February of each year. The exercise price of Stock Options or Unit Options is the closing price of a Share on the grant date. On the rare occasions when the Committee grants awards in connection with the hiring or change in responsibilities of an Executive Group member, or in order to encourage the executive to remain employed, it does so coincident with (or shortly after) the hiring, change in responsibilities, or other related changes. The Company has never granted, and has no plans to grant, any stock-based awards to current or new employees in anticipation of the release of non-public information about the Company or any other company.

Tax Considerations

Section 162(m) of the United States Internal Revenue Code limits the deductibility of compensation paid to certain executives, but exempts certain “performance-based” compensation from those limits. For 2016, the Compensation Committee established limits and performance goals in order for AVIP awards to the Company’s Executive Group members to be eligible for this exemption. As part of the Section 162(m) goal-setting process for 2016, the Committee set the maximum amount that any Executive Group member could be paid as an AVIP award at $10 million. See “Non-Equity Incentive Plan Awards” on page 78 for more information about the individual maximums set for 2016 AVIP awards. The Company has also designed Performance Shares, Stock Options and (with respect to regular awards to Executive Group members) Restricted Stock Units with the intention of making them eligible for the “performance-based compensation” exemption from Section 162(m) limits. However, the Committee reserves the right to grant compensation that does not meet Section 162(m) requirements if it determines it is appropriate to do so.

Accounting Considerations

Stock Options and Restricted Stock Units qualify as equity-classified instruments whose fair value for determining compensation expense under current accounting rules is fixed on the date of grant. The Compensation Committee approved metrics to determine the performance factor applicable to Performance Shares granted in 2013 and later, and retained the ability to adjust them, or to consider other factors, should it find that it is appropriate to do so. As a result, these awards qualify for expense reporting on a variable basis. Phantom Awards qualify for expense reporting on a liability basis because they are paid in cash.

 

 

 

LOGO

 

 

 

2017 Proxy Statement

 

 

 

    71                 

 


Table of Contents

Summary Compensation Table

 

Summary Compensation Table