DEF 14A 1 tm2031344-1_def14a.htm DEF14A tm2031344-1_def14a - none - 11.6406814s
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 (Amendment No.       )

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 Under Rule 14a-12
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Anthem, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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:

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2021 Notice of Annual Meeting of
Shareholders and Proxy Statement
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May 26, 2021
Indianapolis, IN

About Anthem, Inc.
Anthem is a leading health benefits company, striving to improve the health of humanity, and dedicated to improving lives and communities, and making healthcare simpler. Through its affiliated companies, Anthem serves more than 110 million people, including 42.9 million within its family of health plans. We aim to be the most innovative, valuable and inclusive partner. For more information, please visit www.antheminc.com or follow @AnthemInc on Twitter.
   
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Our Subsidiaries Include
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Letter from Our President and
Chief Executive Officer
April 9, 2021
Dear Fellow Shareholders,
We look forward to welcoming you to Anthem’s 2021 Annual Meeting, to be held virtually via webcast on May 26, 2021 at 9 a.m. Eastern Daylight Time. Our Annual Meeting is an opportunity to look back on our 2020 performance as well as our growth plans for 2021.
Over the past year, we’ve grown and adapted, and the efforts we’ve made to simplify our business and transform our products and solutions have only accelerated in the context of COVID-19. As part of our ongoing evolution, we’ve also embraced our new purpose of Improving the Health of Humanity. Our purpose serves as our North Star and is foundational to driving business results in a socially responsible manner.
At the onset of the pandemic, Anthem responded quickly and took bold steps to meet the needs of our associates, consumers and communities. Given the challenges we witnessed in 2020, we knew it was the right time to amplify our actions to focus on the ‘social’ component of our ESG sustainability principles and practices. We’re committed to eradicating health disparities and racial inequities across our local markets with a focus on social drivers of health. Our focus on community health will continue to be a strategic priority for us and an important part of our overall long-term success.
From a financial perspective this past year, Anthem delivered solid performance with growth across all of our businesses. Year-over-year, our operating revenue grew by 17% to $120.8 billion, income before income tax expense grew by 4.2% to $6.2 billion and operating gain grew by 6% to $6.4 billion. Our medical membership increased by 1.9 million members to 42.9 million members as of year-end.
Looking ahead, we are focused on delivering on consumer demands for simplicity and affordability, while creating positive and sustainable change in our local communities. We move into 2021 with a bold agenda to grow and transform our business and fundamentally improve the healthcare experience for those we serve.
Included in this proxy statement you will find details for attending the Annual Meeting webcast. Also enclosed are details for how and when to vote. We encourage you to vote either online, by mail or by telephone to ensure your shares are represented.
Thank you for your continued investment in our Company.
Sincerely,
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Gail K. Boudreaux
President and Chief Executive Officer
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“Our focus on community health will continue to be a strategic priority for us and an important part of our overall long-term success.”
 
www.antheminc.com      1

Letter from Independent Chair of the Board
April 9, 2021
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“The Board worked collaboratively with management to adopt a new purpose statement in 2020 of Improving the Health of Humanity.”
Dear Fellow Shareholders,
As your Board of Directors, we take our responsibilities very seriously and are committed to representing your interests in the long-term. We believe our shareholders are best served when the Company achieves sustainable results in a responsible manner. We are pleased with the Company’s performance and are proud to share specific actions that the Board has taken in the past year.
Purpose & Culture. The Board worked collaboratively with management to adopt a new purpose statement in 2020 of Improving the Health of Humanity. Against the backdrop of the COVID-19 pandemic, we oversaw the Company’s focus on whole person care and community health. The Company undertook numerous actions to support our associates, consumers and communities to combat the pandemic and address health disparities and social inequities. As part of our strategic oversight, we ensure that the Company’s purpose, as well as its mission, vision and values, are embedded in the Company’s strategy and business plans.
The Board recognizes the importance of culture in achieving long-term success and is supporting management in the shaping, changing and guarding of the Company’s culture. We are updated regularly on initiatives in this area and monitor our progress toward our goals. In addition, we focus on the “tone at the top” to ensure that management sets appropriate ethical standards taking into account all of our constituents, and that all associates feel engaged and part of the effort to better meet the health needs of our consumers. We are proud that the Company was included in the Forbes JUST 100 for a second consecutive year and ranked first for healthcare providers and services.
Board Skills, Diversity & Refreshment. Board succession planning is also essential to the Company’s success. As Chair, I have the privilege to work with a highly qualified and diverse group of board colleagues who bring thought leadership, perspective and accountability to their roles in overseeing the talented executive team at Anthem. Your Board is highly diverse in terms of background, expertise, ethnicity, age and gender, and includes four women directors and four ethnically diverse directors. The key leadership positions of Chair of the Board, Chair of the Compensation and Talent Committee, Chair of the Governance Committee and President and CEO are held by diverse directors. We believe that having leaders and decision makers who represent the breadth of our communities is important for the Company’s success.
Refreshing your Board with new perspectives and ideas is critical to ensuring that it remains strategic, inclusive and forward-looking. Each year, we conduct a rigorous evaluation process, including board and individual director evaluations facilitated by an external party. Over the past couple of years, two new directors have joined the Board and two directors have retired. In addition, our long-term, valued director Julie Hill will be retiring at the Annual Meeting. The Board recognizes Julie for her significant contributions to the Company’s success and her exemplary service to the Board in many roles, including most recently Chair of the Governance Committee.
Environmental, Social & Governance (ESG). We believe our ESG practices promote the long-term interests of our shareholders and strengthen Board and management accountability. As overseers of risk and stewards of long-term enterprise value, we play a vital role in overseeing the ESG impacts and related risks on the Company’s operating model, long-term performance and stakeholders.
The Board’s Governance Committee is responsible for establishing the Company’s corporate governance practices, as well as monitoring the Company’s social responsibility and environmental sustainability initiatives. In recognition of the importance of diversity and inclusion, we recently expanded the responsibilities of the Board’s Compensation and Talent Committee to include monitoring the Company’s programs and practices related to workforce diversity and inclusion. We are proud that the Company joined the UN Global Compact this past year and was named to the 2020 Dow Jones Sustainability North America and World Indices for a third consecutive year in recognition of our ESG practices.
On behalf of the Board, thank you for investing in Anthem.
Sincerely,
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Elizabeth E. Tallett
Independent Chair of the Board
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Anthem, Inc.
Notice of Annual Meeting of Shareholders
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Date and Time
Wednesday, May 26, 2021
9:00 a.m. Eastern Daylight Time
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Virtual Meeting
Virtual-only meeting format, via live audio webcast at:
www.meetingcenter.io/267442224
Meeting Password: ANTM2021
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Record Date
Shareholders of record on
March 22, 2021 are entitled
to vote.
Voting Items
Proposals
Board Vote Recommendation
For Further Details
1.
Election of Three Directors
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“FOR” each
director nominee
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2.
Advisory vote to approve the compensation of our Named Executive Officers
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“FOR”
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3.
Ratification of Ernst & Young LLP as Auditors for 2021
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“FOR”
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Shareholders will also act on other business properly presented at the Annual Meeting.
Due to the ongoing public health impact of the COVID-19 pandemic, the Annual Meeting will be held in a virtual format only, via live audio webcast, to provide a safe experience for our shareholders, associates and the community. Shareholders who participate in the virtual Annual Meeting may vote, submit questions and view the list of our shareholders of record during the Annual Meeting. Please see additional information on the Annual Meeting beginning on page 77.
It is important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to participate in the Annual Meeting, we urge you to vote your shares as described below and in the accompanying materials.
By Order of the Board of Directors,
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Kathleen S. Kiefer
Corporate Secretary
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You can vote in any of the following ways:
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Scan the QR code that is located on your proxy card, E-Proxy Notice or voting instruction form to vote
WITH YOUR SMARTPHONE
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Visit the website listed on your proxy card, E-Proxy Notice or voting instruction form to vote
VIA THE INTERNET
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Call the telephone number on your proxy card or voting instruction form to vote
BY TELEPHONE
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If you received printed proxy materials, sign, date and return your proxy card or voting instruction form in the envelope provided to vote BY MAIL
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Log in to the live audio webcast with your control number to vote ONLINE during the Annual Meeting
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 26, 2021. The Notice of Annual Meeting of Shareholders, Proxy Statement and 2020 Annual Report on Form 10-K are available at: www.envisionreports.com/antm.
www.antheminc.com      3

Table of Contents
1
2
3
Anthem, Inc. Notice of Annual Meeting of Shareholders
5
Proxy Statement Summary
11
Corporate Governance
11
 12 The Board of Directors
 12
 12
 13
 13
 14
 21 The Board’s Role and Responsibilities
 21
 23
 29
 30
 30 Board Structure
 30
 30
 30
 31
 34 Board Practices, Processes and Policies
 34
 35
 35
 36
 36
 38
39
Executive Officers of the Company
41
Executive Compensation
41
 42 Compensation Discussion & Analysis
 42
 45
 48
 49
 58
 59 Compensation and Talent Committee Report
 60 Compensation Tables
 60
 62
 63
 65
 66
 67
 68
 71 CEO Pay Ratio
Audit Committee Matters
 73 The Audit Committee’s Consideration of Independence of Independent Registered Public Accounting Firm
 73 Independent Registered Public Accounting Firm’s Fees
 73 Audit Committee Pre-Approval Policy
 74 Audit Committee Report
 75 Stock Held by 5% or More Beneficial Owners
 76 Stock Held by Directors, Nominees and Executive Officers
77
Information on Voting and the Annual Meeting
A-1 Annex A – Anthem, Inc. GAAP Reconciliation
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Proxy Statement Summary
This proxy statement and our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report on Form 10‑K”) are being made available to shareholders on or about April 9, 2021. On or about April 9, 2021, we mailed a printed copy of our proxy materials to our shareholders who had requested them and mailed a notice of internet availability of proxy materials, which contains instructions on how to access and review these materials and vote online, to all of our other shareholders. The following is a summary of certain key disclosures in this proxy statement. This is only a summary, and it may not contain all of the information that is important to you. For more complete information, please review the entire proxy statement as well as our 2020 Annual Report on Form 10-K.
Proposal 1
Election of Directors
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The Board recommends a vote FOR each director nominee.
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Three directors have been nominated for election to hold office for a term to expire at the 2024 annual meeting:

Lewis Hay, III

Antonio F. Neri

Ramiro G. Peru
Proposal 2
Advisory Vote to Approve the Compensation of Our Named Executive Officers
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The Board recommends a vote FOR this proposal.
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Our executive compensation program (the “Total Rewards” program) is designed to attract, engage, motivate and retain a talented team of executive officers and to appropriately reward those executive officers for their contribution to our business, our consumers and our shareholders. This proposal gives our shareholders the opportunity to express their views on the compensation of our Named Executive Officers (“Say-on-Pay”).
Proposal 3
Ratification of the Appointment of Independent Registered Public Accounting Firm
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The Board recommends a vote FOR this proposal.
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The Audit Committee has selected Ernst & Young LLP to continue serving as our independent registered public accounting firm for the year ending December 31, 2021.
www.antheminc.com      5

 
Our Culture is Our Foundation
Our Purpose
Improving the Health of Humanity.
Our Mission
Improving Lives and Communities. Simplifying Healthcare. Expecting More.
Our Vision
Be the most innovative, valuable and inclusive partner.
Our Values
Leadership
Redefine
what’s possible.
Community
Committed,
connected, invested.
Integrity
Do the right thing, with
a spirit of excellence.
Agility
Deliver today —
transform tomorrow.
Diversity
Open your hearts
and minds.
2020 Performance Highlights
Total Operating
Revenue
($ in billions)
Net Income Per
Diluted Share
Adjusted Net Income
Per Diluted Share*
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*
Please refer to the GAAP reconciliation table in Annex A for information on Adjusted Net Income Per Diluted Share.

Medical membership grew by 1.9 million members to 42.9 million members as of December 31, 2020.

Total Operating Revenue growth of 17.1% was driven by growth across all of our businesses.

Income before income tax expense increased by 4.2% to $6.2 billion for 2020, as compared to $6.0 billion in 2019, while Operating Gain increased by 6.0% to $6.4 billion for 2020, as compared to $6.0 billion for 2019. Please refer to the GAAP reconciliation table in Annex A for information on Operating Gain.

Our closing stock price increased by approximately 6.3% from $302.03 on December 31, 2019 to $321.09 on December 31, 2020. In addition, the Company paid cash dividends totaling $3.80 per share in 2020.

We committed more than $2.5 billion in direct support and assistance in 2020 to ease the burden of the COVID-19 pandemic among our customers, care providers, associates and nonprofit partners. These efforts included extended cost-share waivers, premium credits, provider grants and community relief and supports.

We acquired Beacon Health Options, Inc., which was the largest independently held behavioral health organization in the country, in February 2020.

Anthem was named to the 2020 Dow Jones Sustainability North America and World Indices for the third consecutive year and was included on the Forbes JUST 100 list for a second consecutive year, continuing to rank first in the healthcare providers and services category.

Our solid performance is reflected in the compensation that our Named Executive Officers (“NEOs”) earned for 2020.
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Board Commitment to Diversity
Diversity is a cornerstone value and priority for our Board.
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Female Leadership in
Key Roles
Ethnically Diverse Leadership
9 of 10 Independent Directors
7 of 10
Independent Board Chair
President and CEO
Governance Committee Chair
Compensation and Talent
Committee Chair
including 2
added since 2018
Directors are
Diverse based on
Gender and/or
Ethnicity
Director Skills, Experiences and Attributes
The following matrix provides summary information about our directors’ skills, experiences and attributes. More detailed information is provided under “Corporate Governance — The Board of Directors — Desired Skills, Experiences and Attributes” beginning on page 13 and in each director’s biography beginning on page 15.
Skills, Experiences and Attributes
Boudreaux
Clark
Dixon
Hay
Hill
Jallal
Neri
Peru
Schneider
Tallett
CEO
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COO / Executive Leadership
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Insurance Industry
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Finance / Capital Markets
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Healthcare Industry
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Marketing / Consumer Insights
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Technology
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Regulatory / Public Policy
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ESG
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Diversity
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www.antheminc.com      7

 
Corporate Governance Highlights
Our corporate governance policies and practices reflect our commitment to effective corporate governance and high ethical standards:
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Board / Committee
Independence
Board Practices
Accountability

Separate CEO and Independent Board Chair

Independent Board –
9 of 10 directors

Fully independent Audit, Compensation and Talent,
Finance and Governance Committees

Annual Board, committee and individual director performance evaluations facilitated by an external party

Independent directors hold executive sessions

Board oversees Enterprise Risk Management activities

Majority voting for uncontested director elections

Proxy access for shareholder-nominated director nominees

Commitment to declassify the Board if the Blue Cross and Blue Shield Association requirement for a classified board is no longer applicable
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Stock Ownership / Compensation

Significant director and executive stock ownership requirements and holding restrictions

Clawback policy for executive officers’ incentive compensation, including for reputational harm

Policy against short sales, hedging and pledging stock for directors and all associates, including our executive officers

Rigorous establishment and oversight of incentive measures, goals and pay / performance relationship

Say-on-Pay advisory vote conducted annually

Pre-established grant dates for equity awards to executive officers

Limited executive perquisites

Double-trigger change-in-control provisions

No re-pricing of stock options or stock appreciation rights without shareholder approval

No change-in-control excise tax gross-ups

No guaranteed annual salary increases or bonuses

No compensation plans which encourage excessive risk taking

Independent compensation consultant
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

 
 
Corporate Responsibility Highlights
We are committed to the health and well-being of the world around us and are proud of our many corporate responsibility initiatives and recognitions. Our Governance Committee monitors our corporate social responsibility and environmental sustainability initiatives and performance. Areas of focus include our consumers, our communities, our associates and our environment, as briefly described below.
More information about our sustainability practices is in our Corporate Responsibility Report, which is prepared in accordance with the Global Reporting Initiative (“GRI”) Core Reporting Guidelines and includes Sustainability Accounting Standards Board (“SASB”) metrics. The report can be found at www.anthemcorporateresponsibility.com/gri-index.
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Our
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60% of our healthcare spending in 2020 was in value-based care models
Acquired Beacon Health, a behavioral health company, in 2020
Use of Live Health Online, our telehealth solution, and other telehealth services grew exponentially in 2020
$100 million pledged, with half to respond to COVID-19 and half to focus on social injustice and health inequities
Over $45 million in active grants and sponsorships supporting over 500 nonprofit organizations
Nearly 110,000 volunteer hours by our associates and $6.7 million donated through Associate Engagement Programs
Over 90% of our associates participated in monthly “Culture Conversations”
Our managers are diverse, with 63% being women and 35% being ethnically diverse in the U.S.
Over 11,500 associates participate in our nine associate resource groups
Commitment to 100% renewable energy by 2025
Over 40% reduction of our scope I and II greenhouse gas intensity since baseline 2013, achieving our first generation target
Over 50% of our real estate is certified under third party sustainability programs
Corporate Responsibility Recognition
We are proud to have been recognized for our corporate responsibility efforts. We have included some examples below, and you can find additional information on the inside back cover of this proxy statement.
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Anthem, Inc. was named to the 2020 Dow Jones Sustainability North America and World Indices (DJSI). This marks the third consecutive year Anthem has been recognized by the DJSI for leadership in sustainability.
Anthem, Inc. was included in the Forbes JUST 100 list for a second consecutive year, continuing to rank first in the health care providers and services category.
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Anthem, Inc. has a perfect 1/1/1 QualityScore from Institutional Shareholder Services (ISS), ranking first in the managed healthcare sector (as of February 2021).
Anthem, Inc. has been named a 2021 ESG Industry Top-Rated Company by Sustainalytics. In addition, Anthem is ranked first in the managed healthcare subindustry for lowest ESG risk and second out of nearly 500 global companies in the healthcare industry (as of February 2021).
www.antheminc.com      9

 
Compensation Highlights
Pay-for-performance - Our Total Rewards program emphasizes performance-based compensation in the form of our Annual Incentive Plan (“AIP”) and annual grants of long-term, equity-based incentives under the shareholder-approved 2017 Anthem Incentive Compensation Plan (the “Incentive Plan” or “LTIP”). As such, our pay-for-performance philosophy seeks to align the interests and rewards of our NEOs with the long-term interests of our shareholders and drives the achievement of our purpose, vision and mission, while operating within our values.
Balanced mix of financial and operational measures - The Compensation and Talent Committee used a balanced scorecard for the AIP for our executive officers with a 50% weighting for Adjusted Net Income, a 20% weighting for Operating Revenue and a total of 30% weightings for operational performance measures, namely, Provider Collaboration (10%), Star Ratings (10%) and Consumer Effort (10%). Our performance stock units granted under the Incentive Plan in 2020 use Operating Revenue and Adjusted Net Income as performance measures. Please refer to the GAAP reconciliation table in Annex A for information on Adjusted Net Income.
Reward long-term growth and sustained success - The majority of our executive officers’ compensation is in equity awards, which encourages long-term growth and sustained success.
Primary Components of 2020 Target Compensation
The pay mix for our CEO and our other NEOs during 2020 reflects our executive compensation philosophy that emphasizes performance-based compensation over fixed compensation. As reflected in the charts below, the mix of total target compensation granted in 2020 to our NEOs was heavily weighted toward performance-based and long-term incentive compensation, with long-term incentive awards making up approximately 75% of 2020 total target compensation for our CEO and an average of 66% of 2020 total target compensation for our other NEOs.
CEO
Other NEOs
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Corporate Governance
PROPOSAL 1
Election of Directors
We are asking our shareholders to elect Lewis Hay, III, Antonio F. Neri and Ramiro G. Peru to the Board, each for a three-year term to expire at our 2024 annual meeting. Julie A. Hill will continue to serve as a director through the date of the Annual Meeting, but she is not eligible for election due to our mandatory retirement age policy. Each of the nominees for director is presently a director, and each has consented to being named as a nominee in this proxy statement and has indicated a willingness to serve if elected. As more fully described in the following pages, we believe each nominee is qualified with unique skills, experiences and attributes that are beneficial to our Company.
The Board currently consists of ten directors divided into three classes. Our Articles of Incorporation provide that the total number of directors should be divided into three classes with each class containing approximately one-third of the total directors. Currently, the class of 2021 contains four directors, including Ms. Hill whose term expires at the Annual Meeting, and the classes of 2022 and 2023 contain three directors each. This classified Board structure is one of the specific requirements imposed by the Blue Cross and Blue Shield Association (“BCBSA”) in license agreements with all Blue Cross Blue Shield licensees, including us. However, our Articles of Incorporation provide that we will declassify the Board if the BCBSA requirement for a classified board is no longer applicable to us. The term of one class of directors expires each year. Generally, each director serves until the annual meeting of shareholders held in the year that is three years after such director’s election and until such director’s successor is elected and has qualified. In addition, directors are no longer eligible for election after reaching 72 years of age.
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The Board of Directors unanimously recommends a vote FOR Proposal 1, the election as directors of
Lewis Hay, III, Antonio F. Neri and Ramiro G. Peru.
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Corporate Governance
The Board of Directors
Identifying and Evaluating Nominees for Directors
The Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Governance Committee assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Governance Committee considers, subject to the restrictions in our Bylaws, whether the vacancy should be filled and if so, various potential candidates for director. Candidates may come to the attention of the Governance Committee through current Board members, management, professional search firms, shareholders or other persons. These candidates are evaluated at regular or special meetings of the Governance Committee and may be considered at any point during the year.
Shareholder Recommendations of Director Candidates
The Governance Committee considers and recommends candidates for the Board. It reviews all nominations submitted to the Company as described above under “Identifying and Evaluating Nominees for Directors,” including individuals nominated by shareholders to be included in our proxy statement. In evaluating such nominations, the Governance Committee seeks to achieve a balance of skills, experiences, qualifications and attributes on the Board and to address the membership criteria set forth below under “Director Qualifications.” Any shareholder recommendations proposed for consideration by the Governance Committee must include the nominee’s name and qualifications for Board membership and must be addressed to our Secretary at Anthem, Inc., 220 Virginia Avenue, Mail No. IN0204-A381, Indianapolis, Indiana 46204. Following verification that the persons recommending director candidates are shareholders and verification that any other required information has been properly submitted by such persons, recommendations are aggregated and considered by the Governance Committee at a regularly scheduled meeting. If any materials are provided by shareholders in connection with the recommendation of a director candidate, such materials are forwarded to the Governance Committee.
In addition, any shareholder who wishes to nominate a director candidate at our annual meeting or for inclusion in our proxy statement may do so by following the procedures and providing the information set forth in “Information on Voting and the Annual Meeting — Shareholder Proposals and Nominations for Next Year’s Annual Meeting” on page 81 and in Sections 1.5, 1.6 and 1.16 of our Bylaws. Our Bylaws are available on our website at https://ir.antheminc.com/governance-corporate-documents.
Director Qualifications
The Governance Committee periodically evaluates the size and composition of the Board to assess the skills, experiences and attributes of Board members, and compares them with those skills, experiences and attributes that might prove valuable in the future, considering the circumstances of the Company and the then-current Board membership. On an ongoing basis, the Governance Committee will evaluate candidates who meet our strategic needs and have diverse experiences in key business, financial and other challenges that face a publicly-held health benefits company. We believe that an effective board consists of a diverse group of individuals who bring a variety of complementary skills and a range of tenures.
The Governance Committee developed and maintains a skills matrix to assist it in considering the characteristics required of each director along with the appropriate balance of skills, experiences and attributes that should be represented on the Board as a whole.
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Corporate Governance
Required Characteristics
The following are the required characteristics that should be satisfied by each director or nominee:

Integrity and Accountability

Financial Literacy

Informed Judgment

Risk Oversight Ability

Mature Confidence

High Performance Standards
Desired Skills, Experiences and Attributes
The following matrix summarizes the desired skills, experiences and attributes to be represented collectively on the Board and the most significant skills, experiences and attributes that each director possesses. Additional information is provided in each director’s biography beginning on page 15.
CEO
Contributes to the Board’s understanding of complex operations, business strategy and risk management and demonstrated leadership ability at the highest level
COO / Executive
Leadership
Contributes to the Board’s understanding of complex operations, business strategy and risk management and demonstrated leadership ability
Insurance Industry
Contributes to the Board’s understanding of insurance operations and the industry’s complex regulatory requirements, as well as the competitive environment
Finance / Capital
Markets
Valuable for evaluating our financial reporting process, financial management and capital allocations (dividends / share repurchases / financings)
Healthcare Industry
Contributes to the Board’s understanding of the providers of healthcare services and products and issues related to simplifying healthcare
Marketing /​
Consumer Insights
Contributes to the Board’s understanding of changing market conditions and consumer trends and expectations
Technology
Contributes to the Board’s understanding of technology, including the use of new technologies in providing our products and services, as well as cybersecurity risks
Regulatory /​
Public Policy
Contributes to the Board’s understanding of complex regulatory and public policy issues facing us as a highly-regulated entity
ESG
Contributes to the Board’s understanding of leading corporate governance practices and environmental and social sustainability initiatives
Diversity
Gender and ethnic diversity provide different perspectives to the Board to foster innovation and inclusion
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Skills, Experiences and Attributes
Boudreaux
Clark
Dixon
Hay
Hill
Jallal
Neri
Peru
Schneider
Tallett
CEO
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COO / Executive Leadership
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Insurance Industry
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Finance / Capital Markets
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Healthcare Industry
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Marketing / Consumer Insights
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Technology
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Regulatory / Public Policy
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ESG
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Diversity
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Corporate Governance
Our Corporate Governance Guidelines provide that our Governance Committee is to take into account the overall diversity of the Board when identifying possible nominees for director, including gender, ethnicity, age, tenure and geographic location. The Governance Committee implements that policy, and assesses its effectiveness, by examining the diversity of all of the directors on the Board when it selects nominees for directors. Currently, the Board has four women directors, one African American director, one Hispanic director, one Latino director and one North African director. In total, 70% of our directors are diverse based on gender and/or ethnicity. In addition, the diverse directors currently hold key leadership positions with each of the Chair of the Board, Chair of the Governance Committee, and President and CEO being a woman, and the Chair of the Compensation and Talent Committee being Hispanic.
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The Governance Committee, in recommending the nominees for election as directors and in concluding that the continuing directors should serve as directors, considered the items set forth above. The Governance Committee believes that each director and director nominee satisfies the criteria indicated for such director in the skills matrix and brings his or her own particular skills, experiences and attributes, giving the Board, as a whole, competence and experience in a wide variety of areas. Additional biographical and other information concerning the qualifications, skills and experience of the directors and nominees for director can be found below under “Biographical Information on Director Nominees and Continuing Directors.”
Biographical Information on Director Nominees and Continuing Directors
The biographies of each of the nominees and continuing directors contain information regarding the person’s service as a director, business experience, director positions at publicly-held corporations or investment companies registered under the Investment Company Act of 1940 held currently or at any time during the last five years, and the skills, experiences, qualifications and attributes that caused the Governance Committee and the Board to recommend each of the director nominees and to conclude that the continuing directors should serve as members of our Board. Unless otherwise indicated, the principal occupation of each director or nominee has been the same for the last five years. There is no family relationship between any of our directors or executive officers. The ages listed for each director or nominee are as of April 1, 2021.
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Corporate Governance
Nominees for Director
Three-Year Term to Expire at the 2024 Annual Meeting of Shareholders
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Age: 65
Director Since: 2013
Committees:
Audit (Chair)
Finance
Skills, Experiences
and Attributes

CEO

COO / Executive Leadership

Finance / Capital Markets

Marketing / Consumer Insights

Technology

Regulatory / Public Policy

ESG
Lewis Hay, III
Background
Lewis Hay, III has been a director of the Company since July 2013. Mr. Hay has served as an operating advisor at Clayton, Dubilier & Rice, LLC (private equity investment firm) since 2013. Mr. Hay retired as Executive Chairman of NextEra Energy, Inc. (“NextEra Energy”) (electricity-related services and renewable energy generator) in 2013, having served in that position since 2012. At NextEra Energy, he served as Chief Executive Officer from 2001 to 2012, Chairman from 2002 to 2012, and President from 2001 to 2006. He also served as Chief Executive Officer of Florida Power & Light Company from 2002 to 2008. Mr. Hay has served as a director of L3Harris Technologies, Inc. (global aerospace and defense technology firm) since June 2019 (and its predecessor company, Harris Corporation, from 2002 until June 2019) and Artera Services, LLC (provider of integrated infrastructure services to natural gas and electric industries) since August 2020 (and its predecessor company, PowerTeam Services, LLC, from 2018 until August 2020). Mr. Hay served as director of Capital One Financial Corporation (financial services) from 2013 until May 2019 and was a director and chairman of both the Institute of Nuclear Power Operations and the Edison Electric Institute until 2013. He also served on the Board of Business Advisors for the Tepper School of Business at Carnegie Mellon University and on the Advisory Council of Carnegie Mellon University’s Scott Institute for Energy Innovation until 2017.
Director Qualifications
Mr. Hay brings extensive CEO, finance and regulatory and public policy experience to the Board through his positions as CEO, Chairman and CFO of a large utility company which was subject to significant regulation and oversight. He also has environmental, social and governance experience with his management of the utility’s expansion of renewable energy sources. In addition, Mr. Hay has marketing and consumer insights experience from his service as an officer of a large utility company and a director of a financial services company, and technology experience from his service as a director of an information technology company. Mr. Hay qualifies as an “audit committee financial expert” under the rules of the Securities and Exchange Commission (“SEC”).
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Corporate Governance
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Age: 53
Director Since: 2017
Committees:
Audit
Governance
Skills, Experiences
and Attributes

CEO

COO / Executive Leadership

Finance / Capital Markets

Marketing / Consumer Insights

Technology

Diversity
Antonio F. Neri
Background
Antonio F. Neri has been a director of the Company since December 2017. Mr. Neri has served as President and Chief Executive Officer of Hewlett Packard Enterprise Company (“Hewlett Packard Enterprise”) (technology company) since 2018. At Hewlett Packard Enterprise, he also served as President from 2017 to 2018 and Executive Vice President and General Manager, Enterprise Group from 2015 to 2017. Prior to Hewlett Packard Enterprise’s spinoff from HP Inc. (technology company), Mr. Neri held a variety of leadership roles at HP Inc. since 1995, including Senior Vice President and General Manager, Enterprise Group from 2014 to 2015, Senior Vice President and General Manager, HP Servers from 2013 to 2014 and Senior Vice President and General Manager, HP Technology Services from 2011 to 2013. Mr. Neri has served as a director of Hewlett Packard Enterprise since 2018. He was a director of H3C Technologies Co., LTD (information technology company), from 2016 to 2017.
Director Qualifications
Mr. Neri has significant technology and marketing and consumer insights experience, having held several leadership positions at firms that provide technology solutions to the business and public sectors, including his current position of President and CEO of a large, multinational enterprise information technology company. In addition, Mr. Neri brings CEO and finance experience to the Board gained through his positions with Hewlett Packard Enterprise. Mr. Neri qualifies as an “audit committee financial expert” under the SEC’s rules.
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Age: 65
Director Since: 2004
Committees:
Compensation and Talent (Chair)
Finance
Skills, Experiences
and Attributes

COO / Executive Leadership

Finance / Capital Markets

Technology

Diversity
Ramiro G. Peru
Background
Ramiro G. Peru has been a director of the Company since November 2004. Mr. Peru served on the former WellPoint Health Networks, Inc. board of directors from May 2003 until its merger with us in November 2004. During the second half of 2007, Mr. Peru was Executive Vice President and Chief Financial Officer of Swift Corporation (transportation) and prior thereto was Executive Vice President and Chief Financial Officer of Phelps Dodge Corporation (mining and manufacturing) from 1999 to 2007 (“Phelps Dodge”). Mr. Peru joined Phelps Dodge in 1979 and held various finance and accounting positions with Phelps Dodge and its affiliates. Mr. Peru has served as a director of SM Energy Company (oil and gas exploration and production company) since 2014, UNS Energy Corporation (electric and gas utility holding company), a subsidiary of Fortis Inc. (utility holding company), since 2007 and Bluemedia, Inc. (large format printer) since 2018.
Director Qualifications
Mr. Peru brings significant finance experience to the Board as a former chief financial officer of two public companies. Mr. Peru’s positions also included technology experience as Senior Vice President at Phelps Dodge with responsibility for managing both information systems and technology and human resources.
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Corporate Governance
Directors Continuing in Office
Terms Expiring at the 2022 Annual Meeting of Shareholders
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Age: 59
Director Since: 2018
Committees:
Compensation and Talent
Governance
Skills, Experiences
and Attributes

CEO

COO / Executive Leadership

Finance / Capital Markets

Healthcare Industry

Diversity
Bahija Jallal
Background
Bahija Jallal has been a director of the Company since February 2018. Ms. Jallal has served as the Chief Executive Officer of Immunocore Limited (T cell receptor biotechnology company) since January 2019. Prior to that, she served as Executive Vice President of AstraZeneca PLC (“AstraZeneca”) (pharmaceutical and biopharmaceutical business) and President of MedImmune (biotechnology business), a subsidiary of AstraZeneca, since 2013. She joined MedImmune in 2006 and held various research and development positions, including Executive Vice President, Research and Development, from 2010 to 2013. Ms. Jallal has been a director of Immunocore Limited since January 2019 and Guardant Health, Inc. (precision oncology company) since April 2019. She is a member of the Board of Trustees of Johns Hopkins University, and a director of the University of Maryland Health Sciences Research Park Corporation. Ms. Jallal also served as director and past president of the Association for Women in Science from 2016 until 2018.
Director Qualifications
Ms. Jallal brings extensive healthcare industry experience to the Board gained through her several leadership positions at biopharmaceutical companies that provide new medicines to patients, including her current position of CEO at a multinational biotechnology company. In addition, Ms. Jallal has CEO and finance experience through her current position as CEO of a biotechnology company and her former position of President at a biologic research and development subsidiary of a large public company.
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Age: 51
Director Since: 2019
Committees:
Compensation and Talent
Finance
Skills, Experiences
and Attributes

CEO

COO / Executive Leadership

Insurance Industry

Finance / Capital Markets

Marketing / Consumer Insights

Technology

Regulatory / Public Policy
Ryan M. Schneider
Background
Ryan M. Schneider has been a director of the Company since October 2019. Mr. Schneider has served as the Chief Executive Officer and President of Realogy Holdings Corp. (“Realogy”) (residential real estate services) since December 2017 and previously served as President and Chief Operating Officer of Realogy from October 2017 to December 2017. Prior to that, Mr. Schneider was a Senior Advisor at McKinsey & Company (consulting firm) from May 2017 until October 2017. From 2001 to 2017, Mr. Schneider held various positions with Capital One Financial Corporation (financial services), including President, Card Business from 2007 until 2016 and Senior Advisor from 2016 until 2017. Mr. Schneider has served as a director of Realogy since 2017. He previously served as a director of Capital One Bank (USA) N.A. from 2007 to 2016.
Director Qualifications
Mr. Schneider brings significant CEO, COO, insurance industry, finance, marketing and consumer insights, and technology experience to the Board from his current chief executive officer and past leadership positions in real estate and financial services organizations. These positions also provided him with regulatory and public policy experience due to the highly-regulated nature of the banking industry.
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Corporate Governance
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Age: 71
Director Since: 2013
Independent Chair of the Board Since: 2018
Committees:
Audit
Governance
Skills, Experiences
and Attributes

CEO

COO / Executive Leadership

Insurance Industry

Finance / Capital Markets

Healthcare Industry

Marketing / Consumer Insights

Regulatory / Public Policy

ESG

Diversity
Elizabeth E. Tallett
Background
Elizabeth E. Tallett has been a director of the Company since October 2013 and became independent Chair of the Board in May 2018. She was a principal of Hunter Partners, LLC (healthcare consulting) from 2002 to 2015. Ms. Tallett continues to operate as a consultant to healthcare companies. Previously, Ms. Tallett was President and Chief Executive Officer of Transcell Technologies, Inc. (specialty pharmaceuticals), President of Centocor Pharmaceuticals (biotechnology), member of the Parke-Davis (pharmaceuticals) Executive Committee and Director of Worldwide Strategic Planning for Warner-Lambert Company (pharmaceuticals). Ms. Tallett has served as a director of Meredith Corporation (media) since 2008, Qiagen, N.V. (molecular diagnostics and life sciences) since 2011 and Moderna, Inc. (biotechnology) since July 2020. Ms. Tallett has also served as a director of Principal Financial Group, Inc. (financial services) since 1992 (as lead director from 2007 until December 2019) and will be retiring from this board at its May 2021 annual shareholders meeting. She previously served as a director of Coventry Health Care, Inc. (health insurance) from 1998 to 2013 (including serving as lead director).
Director Qualifications
Ms. Tallett brings significant CEO, finance, healthcare industry, insurance industry and marketing and consumer insights experience to the Board from her chief executive, other management and board positions in several healthcare, insurance and pharmaceutical organizations. These positions also provided her with regulatory and public policy experience due to the highly-regulated nature of these organizations. She also has environmental, social and governance experience, having served as a lead director and as a member of the governance committees of several public companies. Ms. Tallett qualifies as an “audit committee financial expert” under the SEC’s rules.
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Corporate Governance
Terms Expiring at the 2023 Annual Meeting of Shareholders
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Age: 60
Director Since: 2017
Committees:
None
Skills, Experiences
and Attributes

CEO

COO / Executive Leadership

Insurance Industry

Finance / Capital Markets

Healthcare Industry

Technology

Regulatory / Public Policy

Diversity
Gail K. Boudreaux
Background
Gail K. Boudreaux has been a director of the Company since November 2017 when she was appointed our President and Chief Executive Officer. Prior to joining the Company, she served as Chief Executive Officer of GKB Global Health, LLC (healthcare strategy and business advisory firm) from July 2015 to November 2017. Prior thereto, Ms. Boudreaux was Executive Vice President of UnitedHealth Group Incorporated (diversified healthcare company) from May 2008 to February 2015, including roles as President of United HealthCare (managed healthcare company), a subsidiary of UnitedHealth Group Incorporated, from May 2008 to January 2011 and Chief Executive Officer of United HealthCare from January 2011 to November 2014. Before joining United HealthCare, she worked at Health Care Services Corporation (“HCSC”) (health insurance company) as President of Blue Cross Blue Shield of Illinois from July 2002 to December 2005 and as Executive Vice President of External Operations from December 2005 to April 2008. Before joining HCSC, Ms. Boudreaux held various positions at Aetna Inc. (managed healthcare company), including Senior Vice President, Group Insurance. Ms. Boudreaux has served as a director of Zimmer Biomet Holdings, Inc. (medical device company) since 2012. She also serves as a director of the BCBSA, the National Institute for Health Care Management, Health Services Foundation, and the Central Indiana Corporate Partnership, and as a member of the Business Roundtable. She previously served as a director of Xcel Energy, Inc. (utility holding company) from 2012 to 2017, Novavax, Inc. (biotechnology company) from 2015 to 2017 and Genzyme Corporation (biotechnology company) from 2004 to 2011.
Director Qualifications
Ms. Boudreaux brings significant CEO, healthcare industry, insurance, finance and technology experience to the Board from her chief executive and other executive positions with several healthcare and insurance organizations and participation in numerous associations in the healthcare industry. Ms. Boudreaux’s positions also provided her with regulatory and public policy experience due to the highly-regulated nature of these organizations. She also gained financial and technology experience through her service as a director and as a member of the audit committee and technology operations committee of several public companies, including a medical device company and a biotechnology company.
www.antheminc.com      19

Corporate Governance
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Age: 68
Director Since: 2014
Committees:
Finance (Chair)
Audit
Skills, Experiences
and Attributes

CEO

COO / Executive Leadership

Finance / Capital Markets

Healthcare Industry

Marketing / Consumer Insights

ESG
R. Kerry Clark
Background
R. Kerry Clark has been a director of the Company since May 2014. Mr. Clark served as Chairman and Chief Executive Officer of Cardinal Health, Inc. (healthcare products and services), until his retirement in 2009. Mr. Clark joined Cardinal Health, Inc. (“Cardinal Health”) in 2006 as President and Chief Executive Officer and became Chairman in 2007. Prior to joining Cardinal Health, he held various positions at The Procter & Gamble Company (consumer products), including President of P&G Asia; President, Global Market Development and Business Operations; and Vice Chairman of the Board, President Global Family Health. He has served as a director of General Mills, Inc. (consumer food products) since 2009 and Textron, Inc. (aircraft, defense and industrial products) since 2003. He previously served as a director of Avnet, Inc. (industrial distributors of electronic components, enterprise computer and storage products) from 2012 until November 2019. He is also a director of The Christ Hospital in Cincinnati, Ohio (hospital).
Director Qualifications
Mr. Clark brings to the Board extensive CEO, healthcare industry, marketing and consumer insights, and finance experience through his positions as Chairman and CEO of a major healthcare services organization, and as a senior executive at an international consumer products company, where he served in several positions involving marketing, advertising and product development of healthcare and other consumer products. Also, he has healthcare experience through his service on a hospital’s board of directors and environmental, social and governance experience through his roles as lead director and chair of the governance committee of a public company. Mr. Clark qualifies as an “audit committee financial expert” under the SEC’s rules.
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Age: 65
Director Since: 2011
Committees:
Audit
Finance
Skills, Experiences
and Attributes

COO / Executive Leadership

Marketing / Consumer Insights

Technology

ESG

Diversity
Robert L. Dixon, Jr.
Background
Robert L. Dixon, Jr. has been a director of the Company since July 2011. Mr. Dixon has been the owner of The RD Factor, Inc., a digital and information technology consulting business, since 2016. Prior thereto, he served as Global Chief Information Officer and Senior Vice President of PepsiCo, Inc. (“PepsiCo”) (food and beverages) from 2007 until April 2016 and as Senior Vice President until December 2016. Before joining PepsiCo, Mr. Dixon held various positions with The Procter & Gamble Company (consumer household products) since 1977, including Vice President of Global Business Services from 2005 until 2007. He has served as a director of Build-A-Bear Workshop, Inc. (specialty retailer) since 2018 and Okta, Inc. (identity management platform) since June 2019. At the Georgia Institute of Technology, Mr. Dixon serves on the President’s Advisory Board, the College of Computing Advisory Board and the Foundation. He previously served on the CIO Advisory Board for International Business Machines Corporation (a technology and consulting company).
Director Qualifications
Mr. Dixon has extensive technology experience through his position as Global Chief Information Officer of a large public company, his ownership of a digital and information technology consulting business, and his service on the CIO advisory board for another large public company. He also has significant marketing and consumer insights experience through his senior positions at two large public companies, both of which have global retail consumer product focus. Mr. Dixon has environmental, social and governance experience through his role as chair of the governance committee of a public company, as well as his several executive and academic board positions.
20
[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Corporate Governance
The Board’s Role and Responsibilities
Our business is managed under the direction of the Board. The Board has responsibility for establishing broad corporate policies and for our overall performance. We believe the only results worth achieving are those achieved with integrity and a commitment to excellence. Accordingly, we have long recognized the importance of, and have placed a high priority upon, having good corporate governance measures in place.
Board Role in Risk Oversight
Our management is responsible for the day-to-day management of the risks facing the Company, and the Board as a whole has responsibility for risk oversight. We have an Enterprise Risk Council to oversee our enterprise risk management program execution and activities. The Enterprise Risk Council is comprised of members of our leadership team and the Chief Risk Officer, who serves as the head of the internal enterprise risk management function and reports to the Audit Committee of the Board.
Board

Oversees management’s processes by which they identify, assess, monitor and manage the Company’s exposure to major risks to determine whether these processes are functioning as intended and are consistent with our business and strategy.

Reviews certain risk tolerance levels and action plans regarding major risks.

Reviews the Own Risk and Solvency Assessment Summary Report, which is filed annually with state insurance departments.

Receives periodic reports from management on various risks, including risks facing our businesses or developments that could affect our risk profile.

Delegates to its committees responsibility for assisting in the oversight of categories of risk within their areas of responsibility.
   
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Audit Committee
Compensation and Talent Committee
Governance Committee
Finance Committee

Receives quarterly reports from our Chief Risk Officer and reviews and discusses our enterprise risk management framework, processes and governance structure.

Reviews and approves the annual audit plan for our internal audit function, with a priority on areas based on their potential risk.

Reviews and discusses with management and the independent auditor our accounting, financial reporting and internal controls and procedures, our financial statements and the independent audit thereof.

Oversees our compliance activities and receives quarterly reports from our Chief Compliance Officer.

Reviews and discusses our major risks associated with our financials, strategy, information technology and security, compliance, privacy, ethics, litigation and reputation and other operational risks.

Regularly meets separately with representatives from our independent auditor, our Chief Risk Officer, our Chief Internal Audit Executive, our Chief Compliance Officer, our Chief Financial Officer and our Chief Legal Officer.

Oversees the risks associated with our compensation policies, practices and plans.

Reviews and discusses performance evaluations of the CEO and other executive officers.

Reviews and discusses talent acquisition and talent retention, including our inclusion and diversity efforts.

Oversees Board processes and corporate governance-related risks.

Monitors our corporate social responsibility and environmental sustainability initiatives and performance.

Reviews, at least annually, our political strategy, contributions and activities, and oversees compliance with our policies and procedures regarding political contributions and activities.

Oversees the risks associated with our capital structure, financial policies, financing strategies and financial condition.

Reviews the issuance and retirement of debt and other securities and our credit facilities.

Monitors investment and financial risk management strategies, including the use of derivatives.

Reviews proposed material mergers, acquisitions and divestitures.

Reviews our external insurance risk management program and insurance coverage.
   
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Management

Management, together with the Enterprise Risk Council, designs and implements processes by which they identify, assess, monitor and manage the Company’s exposure to major risks.
www.antheminc.com      21

Corporate Governance
For those areas for which committees have risk oversight responsibilities, the chairs of the committees regularly report to the full Board regarding the significant risks facing the Company, as identified by management, and the measures undertaken by management to monitor, control and mitigate those risks. A description of the enterprise risks facing us is included in Part I, Item 1A “Risk Factors” in our 2020 Annual Report on Form 10-K.
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Assessment of Compensation-Related Risks
Annually, members of our management team conduct an assessment of the risks related to or arising from our compensation policies and practices. The management team reviews and discusses the design of various incentives, plan governance, performance measures and approval mechanisms of all Total Rewards programs for all associates.
In February 2021, the Compensation and Talent Committee reviewed and discussed the management team’s comprehensive assessment of the potential risks related to or arising from our Company-wide compensation programs, policies and practices. As part of its review, the Compensation and Talent Committee also noted the following factors that reduce the likelihood of excessive risk-taking:

Our overall compensation levels are competitive with the market and structured to deliver a balanced mix of both fixed and variable forms of compensation and long-term and short-term plans.

Annual and long-term performance measures used to determine performance-based payouts are directly linked to the financial performance of the Company and aligned with the long-term interests of our shareholders.

Awards under our annual incentive plans and performance stock units are capped and are paid on a sliding scale, with the amount earned interpolated for results between threshold and target, and target and maximum. The Compensation and Talent Committee has discretion to adjust performance-based awards when it determines that such adjustments would be appropriate based on our interests and the interests of our shareholders. Additionally, the Board maintains a recoupment policy for the clawback of both cash and equity-based incentives in the event of misconduct.

Executive officers are subject to significant stock ownership guidelines and holding requirements and are prohibited from hedging and pledging stock and short sales.
Based on its review and discussion of the assessment, the Compensation and Talent Committee has concluded that our compensation programs do not create risks that would be reasonably likely to have a material adverse effect on the Company.
Oversight of Cybersecurity and Data Privacy
Information security and privacy are of significant importance to our stakeholders. We operate in a highly-regulated industry. Federal and state laws and contractual commitments regulate our collection, use and disclosure of confidential information such as protected health information and personally identifiable information. Our success depends on maintaining a high level of trust among consumers, clients, providers, regulators and our associates. Protecting this information is crucial and is reflected in our Code of Conduct and privacy policies.
Our Board monitors cybersecurity risk along with system migrations, conversions and development. Our Board receives a report at least quarterly from our Chief Information Security Officer regarding our Information Security Program, including cybersecurity risks. Also, the Board periodically receives third-party assessments of our information security. In addition, the Audit Committee receives regular updates on both information security and data privacy, and oversees data privacy, integrity, incident and breach risks.
In addition to Board and committee oversight and management assessment and monitoring of these risks, we make it a priority to equip associates with the tools and skills needed to support our Information Security Program. We provide annual security-awareness training, which covers timely and relevant topics, including social engineering, phishing, password protection, confidential data protection, asset use and mobile security. Our comprehensive privacy-incident response and prevention program educates associates on the importance of reporting all incidents immediately. Each incident is reviewed and action is taken to address issues identified, mitigate any potential impact and assess our obligations to notify consumers, clients, regulators, the media and others.
Detailed information regarding how we implement our Privacy Policy, including our Personal Information Privacy Protection Policy, HIPAA Notice of Privacy Practices and Web Privacy Statement are available at www.anthem.com/privacy.
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Corporate Governance
Corporate Responsibility
Our purpose is to improve the health of humanity. Our focus on community health and environmental sustainability is demonstrated by our ability to make a positive difference in the health and well-being of our consumers, the communities we serve, our associates and the environment around us. In 2020, we joined the United Nations Global Compact, the world’s largest corporate sustainability initiative, as a further reflection of our corporate responsibility commitment.
Our
Consumers
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Our
Communities
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Our
Associates
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Our
Environment
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Focus on care that delivers better health outcomes
Focus on closing healthcare gaps in the diverse communities we serve
Foster an inclusive and trusting environment where all associates have the opportunity to succeed
Focus on the future well-being of the world around us
Corporate Responsibility Report
Our Corporate Responsibility Report provides information on our environmental, social and governance practices and performance related to our governance, our workplace, community health and the environment. It is prepared in accordance with the GRI Core Reporting Guidelines and includes SASB metrics and is available at www.anthemcorporateresponsibility.com/gri-index. Our Governance Committee monitors our corporate social responsibility and environmental sustainability initiatives and performance.
[MISSING IMAGE: tm2031344d1-icon_consupn.jpg] Our Consumers
We are focused on whole person care and are committed to creating a simpler, more accessible and more affordable healthcare experience for our consumers. We advance innovative solutions that improve the everyday lives of our diverse consumer population.
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60% of our healthcare spending in
2020 was in value-based
care models
Acquired Beacon Health, a behavioral health company, in 2020
Use of Live Health Online, our telehealth
solution, and other telehealth
services grew exponentially in
2020

Improve Quality
We are partnering with healthcare providers to improve the quality and affordability of healthcare through value-based care models, with 60% of our 2020 healthcare spend being in value-based arrangements. We increased the amount we paid healthcare providers through value-based payments by over 20% in 2020 to reward them for reducing the cost of care and improving healthcare outcomes for our customers. We are also focused on increasing the percentage of our customers seeing a high-performing primary care provider to ensure strong cost and quality performance. At the end of 2020, we saw a 150 basis point improvement year-over-year in customers attributed to high-performing practices.

Drive Whole Person Care
In 2020, we acquired Beacon Health Options, Inc., which was the largest independently held behavioral health organization in the country. This acquisition is key to our strategy to integrate behavioral health as part of whole person care.

Increase Accessibility
We are working to improve the ease and accessibility of healthcare via digital capabilities including telehealth. Our consumers’ use of Live Health Online, our telehealth solution, and other telehealth services grew exponentially in 2020 compared to previous years. Our Sydney Health mobile application, which provides wellness incentive packages, health and wellness content, telehealth services and full integration with our electronic health record, has had nearly three million downloads since its launch in September 2019.
www.antheminc.com      23

Corporate Governance

Address Drivers of Health
We are working to address the social drivers of health for our members and associates. For example, in our Medicare business, we offer members a choice of value-added benefits that suit their individual needs, such as healthy food delivery, transportation, over-the-counter benefits and assistive devices. In our Medicaid business, for example, we are partnering with ride-sharing organizations to provide our members transportation for doctor visits and vaccines. For our associates, we are piloting programs to address food insecurity, transportation and dependent care.
In response to the COVID-19 pandemic, we have taken numerous actions to help our consumers, including the following:

Waived all cost-sharing for COVID-19 diagnostic tests and treatment

Provided expanded telehealth coverage for our members and waived cost-sharing for in-network telehealth visits, including telephonic visits and those for mental health

Relaxed early prescription refill policies for maintenance and specialty medications

Provided a one-month premium credit to individuals and fully insured employer group customers enrolled in select Commercial and Specialty plans

Working with providers to accelerate claims processing, resolve claims, and accelerate payments to support state-specific Medicaid programs

Providing financial assistance to care provider partners facing undue financial pressure and to support ramping up telehealth capabilities and the cost of personal protective equipment (“PPE”)

Offered in-network dental providers a $10 PPE credit per patient, per visit

Suspended select prior authorization requirements

Partnering with our states in the distribution of COVID-19 vaccines

Launched the COVID-19 Vaccine tool to provide personalized vaccination insights for our members

Launched Sydney Care Daily COVID-19 Check-In to help employers and their employees quickly and safely return to work and make informed decisions about keeping their workforce safe

Analyzed vaccine availability, along with community demographic and consumer risk factor data, to support messages and intervention targeting consumers requiring priority focus

Pushed timely and relevant content to our consumers by our marketing teams to increase adoption of digital tools and encourage vaccination

Deployed Cl9 Explorer, a digital tool that aggregates real-time COVID-19 data to present trends and predictions for communities across the nation to assess readiness to reopen, plan next steps and respond to potential changes

Deployed Cl9 Navigator, a dashboard solution designed for Anthem employer customers to help inform workplace decisions and resource planning with employee-level data

Opened hundreds of digital solutions kiosks in health centers across California to provide real-time video interpretation services and access to telehealth

Deployed a Coronavirus Assessment tool within our Sydney Care app to help people quickly and safely evaluate symptoms, assess their risk of having COVID-19, and connect directly to a board-certified doctor via text or video

Introduced the Anthem Skill to members of our commercial medical and dental health plans. Through an Alexa-enabled device, members can use the Anthem Skill to take actions such as order prescriptions and quickly access some of their health and dental plan benefit information

Facilitating connections with Medicaid beneficiaries and state and social services, helping newly eligible and at risk members enroll in the Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

Conducted outreach to Medicare Advantage and Medicaid consumers to make sure they have necessary medications on hand, their nutritional needs are being met, and critical health needs are addressed

Recruited and expedited the onboarding of care providers interested in providing telehealth services to members

Provided resources to support the whole health needs of members, including resources to manage social isolation, job loss, food insecurity and stress
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Corporate Governance
[MISSING IMAGE: tm2031344d1-icon_communpn.jpg] Our Communities
We are committed to improving lives and communities. Anthem and its over 80,000 associates have deep roots in the communities where we live and work. In 2020, we came together and found new ways to make a positive difference for those in need. Through strategic partnerships and collaboration, we are addressing social injustice and health inequities in the diverse communities we serve. The Anthem Foundation (“our Foundation”) assists in carrying out several of these initiatives.
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$100 million pledged, with half to respond to COVID-19 and half to focus on social injustice and health inequities
Over $45 million in active grants and sponsorships supporting over
500 nonprofit organizations
Nearly 110,000
volunteer hours by our
associates and $6.7 million donated through Associate Engagement Programs
We have pledged $50 million over five years to focus on social injustice and health inequities. Furthermore, through our Foundation’s active grants and sponsorships, which totaled $45 million in 2020, and our associates’ volunteer efforts, we are working to address not only the physical and mental challenges of a major pandemic, but also to help reduce food insecurity, economic insecurity and health disparities and to improve behavioral health. Highlights of these initiatives include:

Food Insecurity
In 2020, we provided $16 million to over 200 nonprofit organizations addressing food insecurity, reaching millions of families across the country. Designated as a Leadership Partner by Feeding America, the country’s largest domestic hunger-relief organization, we are supporting the “Food is Medicine” program through a $1 million grant. In collaboration with Gleaners Food Bank, we have already provided more than 14 million meals in our home city of Indianapolis and surrounding areas through a $1 million matching grant to fight food insecurity and expand access to nutritious food. Additionally, we are partnering with the Food Trust, bringing the Healthy Food Retail Initiative to key communities to ensure residents have access to nutritious foods.

Economic Insecurity
U.S. jobless claims have spiked due to the COVID-19 pandemic, with people of color in particular experiencing significant job losses, creating greater health risks for them as well. We provided $3 million to nonprofit organizations across the country focused on workforce development with an emphasis on programs that are working to create equity, improve communities and address racial disparities through employment and training.

Behavioral Health
We provided a grant to Mental Health America for the “Screening to Supports” program, an online platform offering free, anonymous mental health screens to nearly 1 million people per year, with analysis of results and customized recommendations for next steps. With the help of this grant, over 2 million Americans have been supported in their mental health journey through the COVID-19 related challenges of loneliness, isolation and anxiety. Additionally, in partnership with the National Alliance on Mental Illness, we engaged our consumers, employers, providers, advocates and associates to encourage conversations about mental health through the “You are Not Alone” awareness campaign.

Health Disparities
Partnering with March of Dimes in 16 states and Washington D.C., we are working to close the health equity gap by addressing racial disparities that have disproportionally impacted Black mothers who are more likely to die from pregnancy-related causes and have premature babies compared to all other women. The grant focuses on partnerships with more than 20 hospitals and includes “Breaking Through Implicit Bias in Maternal Health Care” training.
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Corporate Governance
In response to the COVID-19 pandemic, we have taken numerous actions to help our communities, including the following:

Committed $50 million from our Foundation for COVID-19 response and recovery efforts to help areas of greatest need, including care provider safety, food insecurity and behavioral health resources

Partnering with Lyft and others to provide transportation for at-risk communities to support universal access to the COVID-19 vaccine, with a goal of providing 60 million free rides

As communities across the country began to experience school closures, we provided $2 million to local Boys and Girls Clubs to help distribute meals to children and families who rely on school and Club meals and, at some Clubs, to support virtual programming to improve the physical and mental health of young people during this time

Partnered with New York City-based Coalition of Asian-American IPA, an independent practice association with over 1,000 private practice providers, to provide free mobile testing across New York City while increasing access to testing in many other markets across the U.S.

Through emergency relief funding to Americares and Direct Relief, our funding has enabled 38 million units of lifesaving PPE to get distributed to help safeguard frontline healthcare workers and protect the most vulnerable populations

In collaboration with Gleaners Food Bank, we are working to provide more than 10 million meals in our home city of Indianapolis by providing a $1 million matching grant to fight food insecurity and expand access to nutritious food

Collaborating with leading nonprofit partners and others to provide no-cost pop-up flu clinics in vulnerable communities across our markets to make it easier for people to get vaccinated and to increase health equity

Providing virtual volunteer opportunities, such as remote teaching or mailing cards to seniors facing loneliness, to help associates safely give back to communities

Anthem and our Foundation are founding anchor partners of XPRIZE Rapid COVID Testing, a collaboration with XPRIZE, OpenCovidScreen, and other Blue Cross and Blue Shield plans and innovative organizations to launch a $5 million competition to accelerate the development of high-quality COVID-19 testing that is low cost, easy to use and quick reporting, paving the way for more frequent testing

Managing a new study via our HealthCore subsidiary to help understand and combat Multisystem Inflammatory Syndrome in children, or MIS-C, arising from the COVID-19 pandemic

Anthem’s associates donated more than 25,000 pounds of food to food banks in communities across the country through virtual food drives and volunteered at more than 50 events as part of our Associate Volunteer Day

Launched the Pandemic Response Innovation Challenge with MATTER and Blue Cross and Blue Shield of Illinois to call on global innovators to develop creative solutions aimed at supporting the healthcare needs of those impacted by the COVID-19 pandemic
[MISSING IMAGE: tm2031344d1-icon_assocpn.jpg] Our Associates
We are committed to fostering an inclusive and trusting environment where all associates have the opportunity to succeed. We believe the highest level of performance is achieved when strategy and culture are aligned. Therefore, shaping culture is a foundational element of our long-term strategy.
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Over 90% of our associates participated in monthly “Culture Conversations”
Our managers are diverse, with 63%
being women and 35% being ethnically diverse in the U.S.
Over 11,500 associates participate in our nine associate resource groups

Culture
In 2019, over 61,000 associates participated in Strategy Map sessions that covered our Mission, Vision and Values through in-person and digital events. Beginning in 2019 and running throughout 2020, we rolled out culture concepts and associate engagement tools to further evolve and strengthen our culture, with over 90% of our associates participating in monthly “Culture Conversations.” We leverage our associate engagement surveys and listening strategy to monitor and take action on feedback, and associates actively participate through online tools.
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Corporate Governance

Diversity, Equity and Inclusion
Our commitment to a diverse workforce begins with our Board of Directors. Our Board is diverse in both gender and ethnicity, as 40% of our directors are women and 40% are ethnically diverse. Across our U.S. workforce, 76% of our associates are women and 49% are ethnically diverse, while 63% of our managers are women and 35% are ethnically diverse. Our associates’ diversity provides valuable cultural insights, perspectives and experiences that help us as we seek to ensure access to high-quality, affordable healthcare for those we serve. Furthermore, we foster an inclusive and trusting environment through our associate resource groups, unconscious-bias education, culture conversations, associate listening sessions and cultural competency training.
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*
Information based on EEO-1 Report data as of December 31, 2020 and includes Anthem associates in the U.S. only.
As social unrest unfolded across the nation, we announced a five-year, $50 million commitment in support of efforts to combat racial injustice, strengthen communities and address health inequities. At the height of the unrest, we conducted over 40 “Leading and Listening” sessions internally across various markets and teams to create a safe space where over 6,000 leaders and associates shared their concerns and feelings about what they were witnessing and experiencing. Feedback from our associate resource groups helped ensure our efforts best reflected the needs of our associates and the communities where they live.
We are also committed to pay equity for all associates. In 2020, we partnered with a third party to conduct a complex gender and race pay equity analysis, which confirmed that the roles our associates play and their performance, experience and geographic location are the main predictors of pay. After accounting for factors such as age, performance rating and level of education, the analysis found that base pay for females and people of color is within one percentage point of their male and white counterparts. To prevent unexplained pay gaps and ensure that we remain a champion of pay equity for all associates, we will continue to monitor our pay practices and diligently address cases that cannot be explained by objective factors.

Development and Engagement
From an associate development perspective, we offer individual, career and leadership development opportunities so our associates can strengthen their skills and prepare for future growth, including a partnership with College for America that allows our associates to earn a college degree at no cost to them. In 2020, we invested a significant amount in human capital development, averaging 26 hours of training and development per associate. Over 11,500 associates participated in our nine associate resource groups, which provide associates meaningful opportunities to connect, collaborate and grow.
Our sustained commitment to these values has garnered external recognition that highlights our accomplishments in such areas as employment of veterans and people with disabilities, inclusive environments for LGBTQ associates and advancement opportunities for women and people of color.
www.antheminc.com      27

Corporate Governance
In response to the COVID-19 pandemic, we have taken numerous actions to help our associates, including the following:

Expanded associate benefits to provide additional support, including providing up to 80 hours of additional paid leave for COVID-19 related issues and offering virtual well-being resources

Deployed business continuity plans and transitioned nearly all associates to work from home while maintaining service levels and regular operations

Waived one month of premium costs for associates enrolled in an Anthem health plan

Created an online site for our associates to access all resources related to COVID-19

Provided all associates with an extra paid day off as a “Wellness Holiday”

Provided resources and support to manage the complexities of working from home and handling caregiver and family needs

Ensuring our frontline medical staff are following CDC guidelines and are provided with the proper equipment and supplies to minimize risk to themselves and patients

Launched the confidential Associate CARE Service, a 24/7 hotline for emergencies such as food insecurity, childcare and caregiver needs and support for other needs
[MISSING IMAGE: tm2031344d1-icon_environpn.jpg]Our Environment
As a health benefits company, we recognize the link between environmental health and the health of our consumers and communities. We are committed to continually improving the environmental sustainability of our operations and business activities and are focused on the future well-being of the world around us.
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Commitment to 100%
renewable energy by 2025
Over 40% reduction of our scope I and II greenhouse gas intensity since baseline 2013, achieving our first generation target
Over 50% of our real estate is
certified under third party sustainability programs

Renewable Energy
We are the first U.S. health benefits company to join RE100, committing to 100% renewable electricity by 2025. We have secured offsite solar power purchase agreements in Virginia and North Carolina that are capable of producing over 225,000 megawatt hours of electricity — enough to power all of our offices and data centers. The developments are operational and consist of over 1,000 acres of solar panels.

Greenhouse Gas Mitigation
We continue to assess our greenhouse gas (“GHG”) footprint and evaluate potential enterprise risks associated with climate change. In 2020, we met our first generation GHG target by reducing direct emissions intensity over 40% since baseline 2013.
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[MISSING IMAGE: lg_anthem-pn.gif]  | 2021 Proxy Statement

Corporate Governance
Our new, second generation targets include:

Engage with strategic suppliers on setting their own, science-based scope I and II GHG emissions targets by 2023; and

Reduce our absolute scope I and II GHG emissions by 46% by 2030 compared to a 2019 baseline.

Sustainable Workplace
We leverage LEED, Fitwel and Energy Star certification programs to ensure our offices and data centers have reduced environmental impacts while improving occupant health. Over 50% of our real estate portfolio is LEED, Energy Star or Fitwel certified and our Indianapolis headquarters is one of the largest LEED Gold certified buildings in Indiana.
Code of Conduct
We have adopted a Code of Conduct (the “Code”) for our directors, executive officers and other associates. The purpose of the Code is to focus on areas of ethical risk, provide guidance in recognizing and dealing with ethical issues, provide mechanisms to report unethical conduct and help foster a culture of honesty and integrity. By understanding and following the Code, our associates help safeguard our integrity and reputation as an ethical, caring company. The Code is posted on our website at https://ir.antheminc.com/governance-corporate-documents.
Everyone is required to act in accordance with the requirements of the Code. Waivers of the Code for any director, our Chair, our President and CEO, our Chief Financial Officer and our other executive officers may only be made by the Board or by a Board committee composed of independent directors. Any such waiver and any amendment to the Code will be posted on our website at https://ir.antheminc.com/governance-corporate-documents. During 2020, there were no waivers of the Code for any of our directors, our Chair, our President and CEO, our Chief Financial Officer or any of our other executive officers.
Shareholder Engagement
Building positive relationships with our shareholders is critical to our long-term success. For this reason, we spend significant time meeting with our shareholders, listening to their concerns and responding to their feedback. As described below, we engaged with our largest shareholders, representing a majority of our outstanding shares of common stock in the aggregate, through our robust outreach and engagement program in 2020.
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In addition, our management team regularly meets with shareholders to discuss our strategic plan, consolidated business results and capital structure, and other topics of interest to shareholders. We also participate in numerous investor conferences throughout the year and host a biennial investor day. We value our relationship with our shareholders and believe that we strengthen our ability to lead the Company by constructively discussing our business and strategy.
We were pleased that our shareholders overwhelmingly approved the non-binding advisory vote on our executive compensation in 2020, as approximately 94% of votes cast were voted in favor of the proposal. Nevertheless, we continue to examine our executive compensation program to assure alignment between the interests of our executive officers and our shareholders.
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Corporate Governance
Communications with the Board
Individuals may communicate with the Board by submitting an email to our Board at this address: boardofdirectors@anthem.com. Communications that are intended specifically for non-management directors or any individual director should be sent to the email address above to the attention of the Board Chair. Individuals may also communicate with the Board by submitting a letter to our Secretary at Anthem, Inc., 220 Virginia Avenue, Mail No. IN0204-A381, Indianapolis, Indiana 46204.
The process for collecting and organizing communications, as well as similar or related activities, has been approved by our independent directors. Communications are distributed to the Board, or to any individual directors as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, the Board has requested that certain items which are unrelated to the duties and responsibilities of the Board should be excluded, such as spam, junk mail and mass mailings, medical claims inquiries, new product suggestions, resumes and other forms of job inquiries, surveys and business solicitations or advertisements. In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be excluded, with the provision that any such unsuitable communication is made available to any director upon request.
Board Structure
Board Leadership Structure
Elizabeth E. Tallett currently serves as the independent Chair of the Board and has held that position since May 2018. The Board has the flexibility to establish a leadership structure that works best for the Company at a particular time and reviews that structure periodically. Currently, the positions of Chair of the Board and CEO are held by two different people. Our Corporate Governance Guidelines require that our independent directors elect a Lead Director annually when the positions of Chair and CEO are filled by the same person or when the Chair is not an independent director. There is currently no Lead Director because we have an independent Chair. The Board also recognizes the important leadership roles played by the Chair of each of the committees of the Board. The Board evaluates its leadership structure from time to time and changes it as circumstances warrant.
Director Independence
Our Board has adopted standards to assist it in making determinations of independence and determining whether or not a director or director nominee has a material relationship with us. These standards are available on our website at https://ir.antheminc.com/governance-corporate-documents. Our Board has determined that all of our directors and director nominees, other than Ms. Boudreaux, meet these standards, have no material relationship with us and are “independent” as defined by the New York Stock Exchange (“NYSE”) listing standards and the rules of the SEC.
Board Meetings, Executive Sessions and Attendance
During 2020, the Board held seven meetings. The independent directors generally meet in an executive session at both the beginning and end of each regularly scheduled Board meeting, with the Chair of the Board presiding over the sessions. Our Board committees also conduct executive sessions that are presided over by the Chair of the respective committee. Each director attended at least 75% of the total meetings of the Board and each committee on which he or she served that were held when he or she was a director or committee member.
Our policy is that Board members are expected to attend each annual meeting of shareholders. All members of the Board attended our 2020 annual meeting of shareholders.
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Corporate Governance
Standing Committees of the Board
There are four standing committees of the Board. From time to time, the Board, in its discretion, may form other committees. The following table provides membership information for each of the Board standing committees as of April 9, 2021, including each independent Chair.
Directors
Audit
Committee
Compensation and Talent
Committee
Governance
Committee
Finance
Committee
Gail K. Boudreaux
R. Kerry Clark
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Chair
Robert L. Dixon, Jr.
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Lewis Hay, III
Chair
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Julie A. Hill
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Chair
Bahija Jallal
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Antonio F. Neri
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Ramiro G. Peru
Chair
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Ryan M. Schneider
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Elizabeth E. Tallett
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Set forth below are the primary responsibilities of each of the standing committees as described more fully in their charters, which are available on our website at https://ir.antheminc.com/governance-corporate-documents.
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Audit Committee
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Principal Responsibilities:

The Audit Committee represents and assists the Board in its oversight of our accounting, financial reporting and internal controls over financial reporting.

In its oversight of our financial statements and the independent audit thereof, the Audit Committee is responsible for the selection, evaluation and, where deemed appropriate, replacement of the independent registered public accounting firm, and for the evaluation of the independence of the independent registered public accounting firm.

The Audit Committee is directly involved in the selection of the auditor’s lead engagement partner.

The Audit Committee is also responsible for the oversight of our compliance program and Code of Conduct, as well as assisting the Board in overseeing the processes by which we identify, assess, monitor and manage our exposure to major risks. The Chief Compliance Officer facilitates our compliance program and reports independently to the Audit Committee. The Audit Committee regularly receives a detailed report from the Chief Compliance Officer regarding our compliance program activities.
See “Audit Committee Matters — Audit Committee Report” and “Corporate Governance — The Board’s Role and Responsibilities — Board Role in Risk Oversight.”
The Audit Committee met separately at several meetings during 2020 with executive management (including the Chief Financial Officer and the Chief Legal Officer), the Chief Internal Audit Executive, the Chief Risk Officer, the Chief Compliance Officer and the independent registered public accounting firm.
The Board has determined that each of the members of the Audit Committee is “independent” as defined by the rules of the SEC and the NYSE listing standards. The Board has determined that, with the exception of Mr. Dixon, each of the Audit Committee members is an “audit committee financial expert” as defined by the SEC’s rules.
Lewis Hay, III – Chair
Members:
R. Kerry Clark
Robert L. Dixon, Jr.
Antonio F. Neri
Elizabeth E. Tallett
Meetings in 2020: 8
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Corporate Governance
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Compensation and Talent Committee
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Principal Responsibilities:

The Compensation and Talent Committee assists the Board in discharging its responsibilities relating to compensation and benefits provided to our executive officers (which are determined by the Compensation and Talent Committee in its sole discretion), including overseeing an assessment of the risks related to our compensation policies and practices. See “Corporate Governance — The Board’s Role and Responsibilities — Board Role in Risk Oversight — Assessment of Compensation-Related Risks.”

The Compensation and Talent Committee sets the compensation level of our CEO and other executive officers based on an evaluation of the executive’s performance in light of our goals and objectives.

The Compensation and Talent Committee may take into consideration when setting the compensation levels of the executive officers (other than the CEO) any recommendations of the CEO with respect to the other executive officers.

In addition, the Compensation and Talent Committee has directly engaged Semler Brossy Consulting Group LLC (“Semler Brossy”), an outside compensation consultant, to assist in the evaluation of CEO and executive officer compensation, as authorized under its charter. Semler Brossy reports directly to the Compensation and Talent Committee, participates regularly in Compensation and Talent Committee meetings and advises the Compensation and Talent Committee with respect to compensation trends and best practices, plan design and the reasonableness of individual compensation awards. Semler Brossy does not provide any other services to the Company. The Compensation and Talent Committee assessed the independence of Semler Brossy pursuant to, and based on the factors set forth in, the SEC’s and NYSE’s rules and concluded that no conflict of interest exists that would prevent Semler Brossy from independently advising the Compensation and Talent Committee.

The Compensation and Talent Committee reviews and discusses talent acquisition and talent retention, and also monitors our programs and practices related to workforce diversity and inclusion.
All members of the Compensation and Talent Committee are “non-employee directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “independent” within the meaning of the NYSE listing standards. None of the Compensation and Talent Committee members is or has been an officer or employee of the Company or was involved in a relationship requiring disclosure as an interlocking director or under Item 404 of Regulation S-K.
Ramiro G. Peru – Chair
Members:
Julie A. Hill
Bahija Jallal
Ryan M. Schneider
Meetings in 2020: 5
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Corporate Governance
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Governance Committee
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Principal Responsibilities:

The Governance Committee assists the Board in discharging its responsibilities relating to Board composition and evaluations, non-employee director compensation and corporate governance by identifying and recommending individuals for nomination as members of the Board, recommending to the Board the overall non-employee director compensation policy and developing and recommending to the Board a set of corporate governance guidelines.

The Governance Committee also is responsible for reviewing, at least annually, our political strategy, contributions and activities, including our Annual Report on Political Contributions and Related Activities, and overseeing compliance with our policies and procedures regarding political contributions and activities.

In addition, the Governance Committee monitors our corporate social responsibility and environmental sustainability initiatives, including our Corporate Responsibility Report, which is prepared in accordance with the GRI Core Reporting Guidelines and includes SASB metrics.

The Governance Committee has directly engaged Compensation Advisory Partners LLC (“CAP”), an outside compensation consultant, to assist in the evaluation of director compensation, as authorized under its charter. CAP reports directly to the Governance Committee. During 2020, CAP advised the Governance Committee with respect to director compensation trends and best practices, plan design and the reasonableness of director compensation. CAP does not provide any other services to the Company. The Governance Committee assessed the independence of CAP pursuant to, and based on the factors set forth in, the SEC’s and NYSE’s rules and concluded that no conflict of interest exists that would prevent CAP from independently advising the Governance Committee.
The Board has determined that each of the members of the Governance Committee is “independent” as defined by the NYSE listing standards.
Julie A. Hill – Chair
Members:
Bahija Jallal
Antonio F. Neri
Elizabeth E. Tallett
Meetings in 2020: 4
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Finance Committee
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Principal Responsibilities:

The Finance Committee assists the Board in fulfilling its responsibilities related to our capital structure, financial policies, financing strategies and financial condition.

The Finance Committee is responsible for approving our annual capital plan and reviewing the issuance and retirement of debt and other securities and our credit facilities, as well as reviewing investment and financial risk management strategies.

The Finance Committee provides guidance to the Board on significant policies and matters of financial corporate governance, including our use of capital, dividend policy, share repurchase program and credit ratings.

The Finance Committee reviews our external insurance risk management program and insurance coverage.

The Finance Committee also reviews proposed material mergers, acquisitions and divestitures.
The Board has determined that each of the members of the Finance Committee is “independent” as defined by the NYSE listing standards.
R. Kerry Clark – Chair
Members:
Robert L. Dixon, Jr.
Lewis Hay, III
Ramiro G. Peru
Ryan M. Schneider
Meetings in 2020: 5
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Corporate Governance
Board Practices, Processes and Policies
Corporate Governance Policies and Practices
Our corporate governance policies reflect our goal of adopting leading governance practices to promote a high level of performance from the Board and management. We believe our corporate governance practices promote the long-term interests of our shareholders and strengthen Board and management accountability.
Among the practices we adhere to are the following:
Board Independence

Independent Chair of the Board

Nine out of ten directors are independent

Only independent directors serve on the Audit, Compensation and Talent, Governance and Finance Committees
Board Diversity

Four out of ten directors are women

Seven out of ten directors are gender and/or ethnically diverse

Balanced director tenure, with the average tenure being approximately 7.6 years

Board composition is also diverse in age, geographic location, skills and experiences
Shareholder
Rights

Proxy access for shareholder-nominated director nominees

Majority voting for uncontested director elections, with directors who fail to receive a majority vote required to tender their resignation for consideration by the Board

No supermajority voting requirements in our Articles of Incorporation

Opted out of the Indiana Control Share Acquisition Statute

Shareholders have the right to call a special meeting of shareholders

Shareholders can amend our Bylaws, except for those provisions required by our licenses with the BCBSA

Long-standing practice of shareholder engagement on governance, compensation and sustainability issues
Other Leading
Governance
Practices

Annual Board, committee and individual director performance evaluations, including evaluations led by an external party

Board oversees director refreshment and succession planning and executive officer succession planning, addressing both emergency and long-term succession

Directors are not eligible for election if 72 years of age or older

Directors may generally serve on no more than three other public company boards; however, the Board granted an exception for Ms. Tallett to join the board of Moderna, Inc., temporarily bringing her total other public company board service to four until her planned retirement from another public company board in May 2021

Our CEO may serve on no more than one other public company board

Rotation of lead partner of our independent registered public accounting firm at least every five years

The Board and its committees have the authority to engage consultants and advisors at our expense

Executive sessions of independent directors are generally held at each regularly scheduled Board meeting

Strong compensation governance practices as discussed in the Compensation Discussion & Analysis

Board and committee oversight of risk, including risks relating to financial reporting, compensation practices and cybersecurity

The Board encourages directors to participate in continuing education programs and reimburses directors for the expense of such participation

Several avenues for shareholders to communicate with the Board and management, including periodic investor days, earnings release conference calls and a dedicated email address for the Board
Due to our existing contractual obligations with the BCBSA, we are required to maintain a classified board structure. Our Articles of Incorporation provide that we will declassify the Board if the BCBSA requirement for a classified board is no longer applicable to us.
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Corporate Governance
Current versions of the following documents are available on our website at https://ir.antheminc.com/governance-corporate-documents and www.antheminc.com/AboutAnthemInc/PublicAffairs/PoliticalContributions/index.htm.
Governance
Documents at
www.antheminc.com

Articles of Incorporation

Bylaws

Corporate Governance Guidelines

Standards of Director Independence

Code of Conduct

Insider Trading Policy

Board Committee Charters

Annual Report on Political Contributions and Related Activities
We will continue to assess and refine our corporate governance practices and share them with you.
Director Evaluation Process
Board, committee and individual director evaluations play a critical role in ensuring the effective functioning of our Board. Each year our Board conducts a rigorous evaluation process, including an evaluation of the full Board, committee evaluations, director self-evaluations and peer evaluations. The evaluation process is multi-faceted and can be summarized as follows:
Solicitation
Board, committee and individual director performance evaluations:

Board evaluation is facilitated by the Chair of the Governance Committee and an external party

Individual director assessments are facilitated by an external party

Committee evaluations are conducted for each of the committees upon which directors serve
Evaluation
and Assessment
Directors provide feedback regarding the Board, committees and peers:

Evaluation of Board membership

Exploration of Board member behaviors as compared to those of effective boards

Assessment of meetings, materials and Board deliberations

Examinations of key functions, including those that maximize shareholder value
Board Review

Summary of Board and committee evaluations, in addition to individual director feedback, provided to the Board

Chairs of each of the committees lead a discussion of committee evaluation results

External party communicates the results of the individual director assessments to the Board, as well as the individual directors
Incorporation
of Feedback

Follow-up items are addressed at subsequent Board or committee meetings

As appropriate, Board and committee action plans are prepared to address issues
Director Orientation and Continuing Education
All new directors on our Board receive an orientation to the Company and training that is individually tailored, taking into account the director’s experience, background, education and committee assignments. Our new director orientation program is led by members of senior management, in consultation with the Chair of our Board, and covers a review of our business segments, strategic plans, financial statements and policies, risk management framework, regulatory matters, our internal and external auditors, corporate governance and key policies and practices (including our Code of Conduct), as well as the roles and responsibilities of our directors.
Continuing education occurs at Board and committee meetings, with specific topics of interest covered by management or outside experts. Information on director education programs that might be of interest on developments in our industry, corporate governance, regulatory requirements, the economic environment, and other matters relevant to their duties as a director of our Company are made available to directors. The Board encourages directors to participate in continuing education programs and reimburses directors for the expense of such participation.
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Corporate Governance
Review and Approval of Transactions with Related Persons
Policy
The Board has adopted a written policy and procedures for review, approval and monitoring of transactions involving us and “related persons” ​(directors and executive officers, shareholders owning five percent or greater of our outstanding common stock, or their immediate family members). The policy covers any transaction in which we are a participant that involves amounts exceeding $120,000 in any calendar year and in which a related person has or will have a direct or indirect interest (other than solely as a result of being a director or a less than ten percent beneficial owner of another entity).
Related person transactions must be approved or ratified by the Governance Committee of the Board. In considering the transaction, the Governance Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. The policy includes several categories of standing pre-approved transactions, including, but not limited to, transactions involving competitive bids, certain banking-related services and certain transactions involving amounts not in excess of the greater of $1 million or 2% of the other company’s total annual gross revenues. The Governance Committee periodically reviews and assesses ongoing transactions to confirm that the transactions comply with the Governance Committee’s guidelines and remain appropriate.
Current Transactions
Dr. William Long, the brother-in-law of R. Kerry Clark, one of our directors, is the physician owner of a medical provider that serves our members in New York. Anthem and its subsidiaries paid this provider approximately $311,000 for services provided to individuals covered by Anthem for the year ended December 31, 2020. Mr. Clark has no ownership interest in this provider and is not involved with the provider-payer arrangement between Anthem and the provider. In addition, the amounts paid to this provider are pursuant to a standard fee schedule for all similarly situated providers in New York. The Governance Committee approved and continues to monitor this arrangement consistent with the above policy.
In the ordinary course of business, we may, from time to time, engage in transactions with other companies whose officers or directors are also our directors. Transactions with such companies are conducted on an arm’s length basis, and in 2020, all of these transactions came within the pre-approval procedures of the Governance Committee consistent with the above policy or the Governance Committee determined that the director did not have a material direct or indirect interest in the transaction.
Compensation of Non-Employee Directors
Process
The compensation of our non-employee directors is paid in the form of annual retainers for Board members and committee chairs and annual stock awards. An annual retainer is also paid when the Chair of the Board is not an employee or there is a Lead Director. In addition, pro-rata stock awards are granted to non-employee directors who join the Board mid-year. Our 2020 compensation for non-employee directors was as follows:
Compensation Element
2020
Annual Retainer – Cash Portion $ 125,000
Annual Retainer – Company Stock Portion $ 195,000
Annual Committee Chair Retainers

Audit Committee
$ 30,000

Compensation and Talent, Governance and Finance Committees
$ 20,000
Annual Retainer for Non-Executive Chair of the Board, if any $ 240,000
Annual Retainer for Lead Director, if any $ 35,000
Ms. Boudreaux, as an employee director, does not receive any compensation for her service as a director. Ms. Boudreaux’s 2020 compensation is shown in the Summary Compensation Table.
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Corporate Governance
Directors’ Compensation Table
The compensation actually paid to our non-employee directors for service during 2020 was as follows:
Name
Fees Earned or
Paid in Cash ($)(1)
Stock
Awards ($)(2)
All Other
Compensation ($)(3)
Total ($)
R. Kerry Clark
      $ 137,480 $ 194,797 $ 10,000 $ 342,277
Robert L. Dixon, Jr.
$ 125,203 $ 194,797 $ 25,786 $ 345,786
Lewis Hay, III
$ 145,203 $ 194,797 $ 5,000 $ 345,000
Julie A. Hill
$ 145,203 $ 194,797 $ 25,786 $ 365,786
Bahija Jallal
$ 125,203(4) $ 194,797 $ 320,000
Antonio F. Neri
$ 125,203 $ 194,797 $ 5,000 $ 325,000
Ramiro G. Peru
$ 155,203 $ 194,797 $ 15,786 $ 365,786
Ryan M. Schneider
$ 125,203 $ 194,797 $ 320,000
Elizabeth E. Tallett
$ 365,203(4) $ 194,797 $ 10,000 $ 570,000
(1)
In addition to annual Board and committee retainer fees, amounts include $202.68 paid in cash to each non-employee director then serving or elected at the 2020 annual meeting of shareholders, which represents cash payments in lieu of issuing fractional shares in connection with the annual grant of phantom shares of our common stock received on the date of our annual meeting of shareholders.
(2)
The amounts in this column reflect the grant date fair value of stock awards issued to each non-employee director during the year ended December 31, 2020, in accordance with Accounting Standards Codification Topic 718, “Compensation — Stock Compensation” ​(“ASC Topic 718”). Each non-employee director received 699 deferred shares of our common stock for the annual retainer grant of shares of our common stock on the date of our annual meeting of shareholders (May 21, 2020). The deferred shares will be converted into common stock upon the lapse of the deferral period. See also “— Board Equity Compensation and Stock Ownership Guidelines.” The grant date fair value for the 2020 stock awards is calculated by multiplying the closing price of our common stock on the NYSE on the date of grant by the number of shares in the stock award. As of December 31, 2020, each non-employee director had the following number of deferred shares under our Board of Directors’ Deferred Compensation Plan (“Board Deferred Compensation Plan”) for all years of service as a director:
Director
Deferred Shares
(as of 12/31/20)
R. Kerry Clark
7,261
Robert L. Dixon, Jr.
4,503
Lewis Hay, III
9,128
Julie A. Hill
32,521
Bahija Jallal
2,409
Antonio F. Neri
2,546
Ramiro G. Peru
4,503
Ryan M. Schneider
1,221
Elizabeth E. Tallett
8,513
No non-employee directors currently have any stock options outstanding. The deferred shares for each director are included in the Security Ownership of Certain Beneficial Owners and Management — Stock Held by Directors, Nominees and Executive Officers table on page 76.
(3)
Includes: (i) matching charitable contributions made by our Foundation on behalf of Messrs. Clark, Dixon, Hay and Neri and Mses. Hill and Tallett (see “— Matching Gift Program”); and (ii) dividend equivalents paid on directors’ deferred shares that vested in 2020 of $15,786 each to Messrs. Dixon and Peru and Ms. Hill. This column does not include perquisites received by a director to the extent the amount of all such perquisites received by such director was less than $10,000.
(4)
All of Mses. Jallal’s and Tallett’s 2020 cash compensation was deferred by each pursuant to the Board Deferred Compensation Plan, other than amounts paid in cash in lieu of a fractional share.
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Corporate Governance
Anthem Board of Directors’ Deferred Compensation Plan
Cash fees paid to directors may be deferred under the Board Deferred Compensation Plan, which provides a method of deferring payment until a date selected by the director. Deferred cash fees accrue interest at a declared interest rate, which is determined on January 1 of each year and is the average of the 10-year U.S. Treasury Note monthly average rates for the 12-month period ending on September 30 of the previous year, plus 150 basis points, but not to exceed 120% of the applicable federal long-term rate, with compounding. Fees paid to non-employee directors in our common stock may also be deferred under the Board Deferred Compensation Plan for a period longer than the minimum deferral period discussed below, with the cash dividends accruing during the deferral period and paid in cash at the end of the deferral period. Fees paid in stock and deferred under the Board Deferred Compensation Plan are distributed in stock pursuant to their election under the Plan.
Matching Gift Program
Directors are eligible to participate in our Foundation matching gift program. Under this program, our Foundation matches 100% of charitable donations to qualified entities up to a maximum of $10,000 per year for each director.
Board Equity Compensation and Stock Ownership Guidelines
For 2020, each non-employee director received, subject to the deferral described below, an annual grant, on the date of our annual meeting of shareholders, of the number of shares of our common stock equal to $195,000, with the amount of any fractional share paid in cash. In 2020, each non-employee director received 699 deferred shares based on the market price of $278.68 per share pursuant to this grant. Each grant of common stock is deferred for a minimum of five years from the date of grant (or in the case of grants made after the annual meeting of shareholders, five years from the date of the annual meeting of shareholders that immediately precedes the date of grant). The shares of common stock, along with the cash dividends accrued thereon, will not be distributed until the earlier of the expiration of such deferral period or the date on which a director ceases to be a member of the Board.
In addition, each non-employee director has an obligation to own at least $625,000 of our common stock by no later than the fifth anniversary of the date such director became a member of the Board. For the purpose of this requirement, all shares directly owned and deferred shares are included in the calculation. Each of our non-employee directors owned sufficient shares to either meet, or be on track to meet, his or her ownership requirement as required under the guidelines, based on the average closing price of $278.91 during 2020.
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Executive Officers of the Company
The following is biographical information and ages for our executive officers and Chief Accounting Officer as of April 1, 2021:
Name and Position
Age
Gail K. Boudreaux
President and Chief
Executive Officer
60
See the biographical information under “Directors Continuing in Office — Terms Expiring at the 2023 Annual Meeting of Shareholders” on page 19.
Jeffrey D. Alter
EVP, IngenioRx and Anthem
Health Solutions
58
Mr. Alter has served as our Executive Vice President, IngenioRx and Anthem Health Solutions since September 2020. Prior to joining us, Mr. Alter was President (and Founder) of ArcturusOne Consulting, LLC (healthcare consulting) from July 2018 to September 2020. Prior to that, Mr. Alter spent 14 years at United HealthCare (managed healthcare company) in various roles, including as Chief Executive Officer of its Commercial Group from November 2014 until June 2018. Mr. Alter also served as Senior Vice President of Strategic Financial Planning for Oxford Health Plans, Inc. (health insurance) from December 2002 to April 2004.
John E. Gallina
EVP and Chief Financial Officer
61
Mr. Gallina has served as our Executive Vice President and Chief Financial Officer since June 2016. Mr. Gallina joined Anthem in 1994 and has held a variety of leadership roles across the organization. Prior to his current role, Mr. Gallina served as Anthem’s Chief Financial Officer for the Commercial and Specialty Business Division from December 2015 to June 2016, and as Senior Vice President and Chief Accounting Officer from December 2013 to December 2015. Other leadership positions held during his tenure include Senior Vice President, Chief Accounting Officer and Chief Risk Officer from May 2011 to December 2013, while also holding the title of Controller from May 2011 to August 2013. Before joining the Company, Mr. Gallina spent 12 years with Coopers & Lybrand in various positions, including as an Audit Senior Manager.
Peter D. Haytaian
EVP and President, Commercial and
Specialty Business Division
51
Mr. Haytaian has served as our Executive Vice President and President of the Commercial and Specialty Business Division since March 2018. From June 2014 until March 2018, Mr. Haytaian served as our Executive Vice President and President of the Government Business Division. Mr. Haytaian joined the Company in December 2012 with our acquisition of Amerigroup Corporation (“Amerigroup”) and served as President of our Medicaid business from August 2013 until June 2014. From 2005 to 2013, Mr. Haytaian held several leadership positions with Amerigroup, including serving as Chief Executive Officer of the North Region for Amerigroup’s Medicaid business from December 2012 until August 2013. Mr. Haytaian has extensive experience leading Medicare and Medicaid programs with Amerigroup and, prior thereto, with Oxford Health Plans, Inc.
Gloria M. McCarthy
EVP and Chief
Administrative Officer
68
Ms. McCarthy has served as our Executive Vice President and Chief Administrative Officer since 2013. She was Executive Vice President of Enterprise Execution and Efficiency from 2012 to 2013. Prior to that appointment, she served as Executive Vice President, Office of the CEO from February 2012 to October 2012, as Senior Vice President for Operational Excellence from 2008 to February 2012, as Senior Vice President of Service Operations from 2006 to 2008 and as Senior Vice President and Chief Operating Officer of our East Region from 2005 to 2006. Prior to our acquisition of WellChoice, Inc. (“WellChoice”) in 2005, Ms. McCarthy served as Executive Vice President and Chief Operating Officer of WellChoice.
Felicia F. Norwood
EVP and President, Government
Business Division
61
Ms. Norwood has served as our Executive Vice President and President of the Government Business Division since June 2018. Prior to joining us, she was Director of The Department of Healthcare and Family Services for the State of Illinois from January 2015 to June 2018. Prior to that appointment, Ms. Norwood served as President of the Mid-America Region for Aetna Inc. (health insurance) from January 2010 until May 2013.
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Executive Officers of the Company
Name and Position
Age
Prakash Patel, M.D.
EVP and President, Diversified
Business Group
54
Dr. Patel has served as our Executive Vice President and President, Diversified Business Group since August 2018. Prior to joining us, Dr. Patel was Chief Operating Officer and President, GuideWell Health for GuideWell Mutual Holding Corporation (not-for-profit mutual holding company) from January 2015 to August 2018. Prior to that, Dr. Patel was Chief Executive Officer of Access MediQuip (provider of surgical implant management solutions) from January 2011 to November 2014. From April 2005 to December 2010, Dr. Patel held various positions with Magellan Health Services (healthcare services), the most recent being Chief Corporate Development Officer.
Leah Stark
EVP and Chief Human
Resources Officer
44
Ms. Stark has served as our Executive Vice President and Chief Human Resources Officer since January 2019. From July 2016 to June 2018, she held the position of Chief Human Resources Officer and Head of Procurement of General Cable Corporation (telecom cable systems company). Prior to that, beginning in March 2006, Ms. Stark held a variety of leadership roles at Whirlpool Corporation (home appliance company), with her most recent roles as Senior Director, Global Human Resources from August 2015 until July 2016 and as Head of Human Resources, North Asia & Whirlpool China Co. Ltd from November 2013 until August 2015.
Blair W. Todt
EVP and Chief Legal Officer
53
Mr. Todt has served as our Executive Vice President and Chief Legal Officer since November 2020. Prior to joining us, Mr. Todt served as Senior Vice President, Legal, Compliance & Business Performance and Chief Legal Officer of HCSC from July 2016 to July 2020. Prior to joining HCSC, Mr. Todt held a variety of leadership roles at WellCare Health Plans, Inc. (health insurance company), with his most recent role as Senior Vice President, Chief Legal and Administrative Officer and Secretary from April 2010 until June 2016.
Ronald W. Penczek
SVP and Chief Accounting Officer
56
Mr. Penczek has served as our Senior Vice President and Controller since November 2015 and as our Chief Accounting Officer since December 2015. He served as our Vice President and Controller from August 2013 to November 2015. Prior to that appointment, Mr. Penczek served as Vice President and Assistant Controller from January 2008 to August 2013 and in various other roles in our finance department from February 2006 until January 2008. Before joining us, Mr. Penczek was a Staff Vice President with CNA Insurance from 2000 to 2005 and held various positions with PricewaterhouseCoopers LLP from 1992 to 2000, including as a Manager.
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Executive Compensation
PROPOSAL 2
Advisory Vote to Approve the Compensation of Our Named
Executive Officers
We are asking our shareholders to indicate their support for our NEOs’ compensation as described in this proxy statement and in compliance with Section 14A of the Exchange Act.
Our executive compensation program is designed to attract, engage, motivate and retain a talented team of executive officers and to appropriately reward those executive officers for their contributions to our business, our consumers and our shareholders. Our Total Rewards program emphasizes performance-based compensation, and the majority of our CEO’s and other NEOs’ compensation is variable based on overall long-term Company performance. Our Total Rewards program contains financial and strategic goals, and the value of equity-based awards will depend on our long-term stock price performance. In considering your vote, we invite you to read the “Compensation Discussion & Analysis,” along with the tables and narrative discussion, beginning on page 42 for additional details about our executive compensation program, including information about the fiscal year 2020 compensation of our NEOs.
This proposal gives our shareholders the opportunity to express their views on our NEOs’ compensation (“Say-on-Pay”). The Say-on-Pay vote is not intended to approve any specific item of compensation but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement. Accordingly, we recommend that our shareholders vote “for” the following resolution at the annual meeting:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2021 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion & Analysis, the compensation tables and the other related disclosures.”
The Say-on-Pay vote is advisory, and therefore not binding on the Company, our Compensation and Talent Committee or our Board. Our Board and our Compensation and Talent Committee value the opinions of our shareholders, and to the extent that there is any significant vote against the NEOs’ compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns and our Compensation and Talent Committee will evaluate whether any actions are necessary to address those concerns.
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The Board of Directors unanimously recommends a vote FOR Proposal 2, the advisory vote to approve the compensation of our Named Executive Officers.
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Executive Compensation
Compensation Discussion & Analysis
This Compensation Discussion & Analysis (“CD&A”) describes our executive compensation program, our pay-for-performance compensation philosophy, the emphasis on creating long-term shareholder value and the methodology and governance process the Compensation and Talent Committee (the “Committee”) used to align compensation-related actions to Company performance in 2020. Also included are highlights of changes we have made to select programs in 2021 that are consistent with our philosophy and executive compensation objectives.
The CD&A focuses on our CEO, our CFO and the three other most highly compensated executive officers for 2020 (our “NEOs”), who are:
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Executive Summary
Executive Compensation Philosophy and Program Objectives
The Committee oversees our compensation program for our executive officers, including our NEOs, and determines their compensation. Our executive compensation program, which we refer to as Total Rewards, is designed to:

Attract, engage, motivate, retain and appropriately reward executives for their contributions to our business, our consumers and our shareholders

Closely align executive interests and rewards with those of our shareholders

Recognize the need for a balance between executive rewards and the expectations of our stakeholders (customers, shareholders, providers and associates)

Drive the achievement of the Company’s purpose, mission, vision, values and strategy

Deliver compensation that is commensurate with Company and individual performance within the context of the external market
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Our programs are intended to be generally consistent in design and in aggregate size with market and good corporate governance practices
We consider both external competitiveness and internal equity in the operation and administration of these programs
These objectives are extended beyond the executive ranks to include all associates and are intended to promote the Company’s culture, as well as enhance teamwork and equitable treatment
A foundation of our strategy is to deliver on our commitments to those we serve. It is important that pay for our most senior leaders reflects their performance in delivering on those commitments.
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Executive Compensation
In order to achieve these objectives, we structure our compensation program in a manner that emphasizes the long-term performance of the Company by focusing on our purpose, our mission, our vision and our values:
Our Purpose
Improving the Health of Humanity.
Our Mission
Improving Lives and Communities. Simplifying Healthcare. Expecting More.
Our Vision
Be the most innovative, valuable and inclusive partner.
Our Values
Leadership
Redefine
what’s possible.
Community
Committed,
connected, invested.
Integrity
Do the right thing, with
a spirit of excellence.
Agility
Deliver today —
transform tomorrow.
Diversity
Open your hearts
and minds.
2020 Performance Highlights
Notable highlights for 2020 include solid financial and operational performance, as evidenced by the following results:
Total Operating
Revenue
($ in billions)
Net Income Per
Diluted Share
Adjusted Net Income
Per Diluted Share*
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*
Please refer to the GAAP reconciliation table in Annex A for information on Adjusted Net Income Per Diluted Share.

Medical membership grew by 1.9 million members to 42.9 million members as of December 31, 2020.

Total Operating Revenue Growth of 17.1% was driven by growth across all of our businesses.

Income before income tax expense increased by 4.2% to $6.2 billion for 2020, as compared to $6.0 billion for 2019, while Operating Gain increased by 6.0% to $6.4 billion for 2020, as compared to $6.0 billion for 2019. Please refer to the GAAP reconciliation table in Annex A for information on Operating Gain.

Our closing stock price increased by approximately 6.3% from $302.03 on December 31, 2019 to $321.09 on December 31, 2020. In addition, the Company paid cash dividends totaling $3.80 per share in 2020.

We committed more than $2.5 billion in direct support and assistance in 2020 to ease the burden of the COVID-19 pandemic among our customers, care providers, associates and nonprofit partners. These efforts included extended cost-share waivers, premium credits, provider grants and community relief and supports.

We acquired Beacon Health Options, Inc., which was the largest independently held behavioral health organization in the country, in February 2020.

Anthem was named to the 2020 Dow Jones Sustainability North America and World Indices for the third consecutive year and was included on the Forbes JUST 100 list for a second consecutive year, continuing to rank first in the healthcare providers and services category.

Our solid performance is reflected in the compensation that our NEOs earned for 2020.
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Executive Compensation
COVID-19 Impact on Our Compensation Programs
Compensation decisions for our NEOs for 2020, including annual base salaries and performance metrics, weightings and targets for our 2020 AIP and our 2020-2022 performance stock units (“PSUs”), were made in February 2020 prior to COVID-19 being declared a pandemic. Performance was monitored throughout the year, and no structural changes were made to the approved compensation actions or the weightings and metrics of our outstanding incentive programs due to the COVID-19 pandemic.
As a result of the unique challenges our customers and communities faced during the COVID-19 pandemic, our management made decisions to proactively provide over $2.5 billion in direct support and assistance to our customers, care providers, associates and nonprofit partners during this difficult time. These decisions were intentional and were done for the betterment of our members and communities and a portion were in addition to the mandated actions required as a result of the CARES Act and other mandates. After review of these decisions and their impact to our earnings and our revenue, the Committee made adjustments for a portion of the voluntary actions taken when calculating the amounts earned under the 2020 AIP and the 2018-2020 PSU awards so that they more appropriately reflected management’s performance for 2020. These adjustments exclude the financial impact of the voluntary actions listed below:

Provided a one-month premium credit to individuals and fully insured employer group customers enrolled in select Commercial and Specialty plans

Offered in-network dental providers a $10 PPE credit per patient, per visit

Provided expanded telehealth coverage for our members and waived cost-sharing for in-network telehealth visits, including telephonic visits, and those for mental health
Over the course of 2020, our management, the Committee and the Committee’s independent compensation consultant explored potential 2021 long-term incentive approaches, recognizing the inherent challenge in setting long-term goals in this environment. After a thorough review, there are no planned changes to our compensation programs for 2021 related to the COVID-19 pandemic.
Compensation Governance Practices
The Committee maintains what it believes are leading practices for executive compensation, each of which reinforces the Company’s compensation philosophy and objectives. Below is a summary of these practices:
What We Do
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Rigorous establishment and oversight of incentive measures, goals and pay / performance relationship
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Align executive compensation with shareholder returns through a mix of variable and fixed compensation that is heavily weighted toward variable, long-term performance- based compensation, with caps on AIP and PSU payouts
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Significant director and executive stock ownership requirements and holding restrictions
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Clawback policy for executive officers’ incentive compensation, including for reputational harm
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Double-trigger change-in-control provisions
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No dividends paid on stock units until they vest
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Limited executive perquisites
What We Do Not Do
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No backdating, re-pricing, discounting, reloading or replacing of stock options or stock appreciation rights without shareholder approval
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No change-in-control excise tax gross-ups
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No short sales, hedging or pledging of our stock is permitted by any director or associate, including our executive officers
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No compensation plans which encourage excessive risk taking
Shareholder Engagement and Recent Say-on-Pay Results
We have a longstanding practice of engaging with our shareholders on executive compensation matters. During 2020, our management engaged with our largest shareholders, representing a majority of our outstanding shares of common stock, and offered to discuss a broad range of topics, including executive compensation. The Committee considers comments and input provided by shareholders when determining the compensation of our NEOs. At the 2020 annual meeting of shareholders, approximately 94% of votes cast were voted in favor of the proposal on the advisory vote on the compensation of our NEOs, commonly referred to as the “Say-on-Pay” vote.
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Executive Compensation
In addition, the Committee annually reviews reports from our independent compensation consultant regarding:

market trends relating to the design of our Total Rewards program,