DEF 14A 1 d152193ddef14a.htm DEF 14A DEF 14A
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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.     )

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Preliminary Proxy Statement

 

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Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

    PRIMERICA, INC.    

 

 

(Name of Registrant as Specified In Its Charter)

 

 

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LOGO

March 31, 2021

To Our Fellow Stockholders:

During 2020, our Board of Directors continued to guide and oversee management in the creation of long-term stockholder value through effective and sustainable business strategies, performance-aligned compensation programs, a commitment to corporate ethics, valuing human capital and strong governance practices. Our purpose is to create financially independent families. We remain committed to serving middle-income households throughout the United States and Canada and have created a culture that aligns the needs of our stockholders, clients, the sales force and our employees. This letter provides an overview of the priorities of our Board of Directors and senior management, and we strongly encourage you to review the entire Proxy Statement.

Social Impact

For more than 40 years, our core business has centered on enabling access to financial information, products and services for traditionally underserved markets throughout the United States and Canada. By leveraging the sales force and our employees, we help middle-income families make informed financial decisions and provide them with a strategy and means to gain financial independence. The products we provide – primarily term life insurance and a range of investment and savings products – help meet critical needs and put families on the path toward financial security. When families are empowered to make informed financial decisions, their households and the communities around them are positively impacted. For more information on the social impact of our business, see our 2020 Corporate Sustainability Report, which can be found in the Governance section of our investor relations website at https://investors.primerica.com.

Business Strategy

We recognize that our Board’s engagement with management in setting the strategic direction of our Company is essential to our ability to create long-term value for our stockholders. Our Board is actively engaged in discussions about Primerica’s strategy and its execution. Through presentations and discussion at regular Board meetings and written senior management updates between meetings, our Board oversees Company strategy as well as events that bear upon those planned initiatives.

Continued Alignment of Compensation and Performance

Our compensation philosophy includes a strong commitment to provide compensation programs that link executive pay to Company performance. Further, the Compensation


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Committee of our Board reviews our executive compensation program with independent experts as part of its ongoing effort to appropriately align compensation with performance. As part of this effort, the Compensation Committee is focused on ensuring that our key executives are incentivized to execute on the strategic priorities of our Company. Please read a message from the Compensation Committee beginning on page 41 of the accompanying Proxy Statement.

Like so many, we faced unprecedented challenges as a result of the COVID-19 pandemic. Despite the extraordinary circumstances, we are proud of the results we delivered in 2020 – our total stockholder return, including dividends, for fiscal 2020 and the five-year period from fiscal 2016 through fiscal 2020 was 3.9% and 199.8%, respectively. Please read a message from Glenn J. Williams, Chief Executive Officer, in Primerica’s 2020 Annual Report to Stockholders that accompanies the Proxy Statement.

Cultivating a Strong Corporate Culture

Integrity and accountability are at the foundation of our culture, which contributes to Primerica’s long-term success. Senior management defines and shapes Primerica’s corporate culture and sets the expectations and tone for a work environment founded on integrity and a commitment to doing the right thing. As such, the Company is dedicated to promoting equality and an inclusive workplace that offers open lines of communication and attracts and develops talented employees, with a focus to increase diversity at the senior levels of our organization. Our Board shares this commitment and provides valuable oversight for the Company’s overall culture. Further, our Board collaborates with management to establish and communicate an ethical tone, which guides employee and sales force conduct and helps protect Primerica’s reputation.

Valuing Human Capital

Our people are essential to our ability to deliver for our stockholders. During the COVID-19 pandemic, Primerica took steps to ensure the health and safety of our employees. We moved the vast majority of employees to remote work and, for those employees coming into our corporate office, we are providing masks and other personal protection equipment and following guidelines of nationally recognized health organizations to ensure that we maintain a clean, safe and comfortable work environment. Contact tracing protocols are in place and we created a special paid sick leave policy providing new, additional benefits to employees affected by the pandemic. More information on the Company’s actions to protect its employees during the pandemic is found on page 13 of the accompanying Proxy Statement.

Employees remain highly satisfied with Primerica. We are proud that for eight consecutive years, Primerica has been named by the Atlanta Journal Constitution as a regional “Top Workplace” based on its annual top workplaces employee survey. In 2021, we were nationally recognized for the first time as a “Top Workplace USA” by the employee engagement service partner that conducted the regional survey.


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The diversity of experiences, backgrounds and ideas of Primerica’s employees enables us to develop solutions that address the financial needs of our customers. We strive to build an inclusive working environment where people feel accepted, their ideas are welcomed, and they can make a positive impact on our business and the communities we serve. In 2020, Forbes again named Primerica to its 2020 list of America’s Best Employers for Women and we were named to the Bloomberg Gender Equality Index in both 2020 and 2021. You can learn more about the Company’s efforts to promote diversity, equality and inclusion among its employees on page 13 of the accompanying Proxy Statement.

Leading Corporate Governance Practices

We are committed to strong governance practices, which we believe are important to our stockholders and protect the long-term vitality of Primerica. Our accountability to you is illustrated in many of the governance practices that are described in the accompanying Proxy Statement.

We strongly encourage all of our stockholders to vote promptly. We intend to hold the Annual Meeting in person and to provide a live webcast of the meeting at our investor relations website, https://investors.primerica.com. However, in light of the ongoing COVID-19 pandemic, we are sensitive to public health concerns and the protocols that may be imposed. In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. Please monitor our investor relations website at https://investors.primerica.com for updated information.

On behalf of our management and directors, we want to thank you for your continued support of, and confidence in, our Company.

Sincerely,

 

LOGO    LOGO
D. RICHARD WILLIAMS    P. GEORGE BENSON
Non-Executive Chairman of the Board    Lead Director

 


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NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

 

Date and Time

May 12, 2021, at 8:30 a.m., local time (the “Annual Meeting”)

 

Place

The Primerica Home Office located at 1 Primerica Parkway, Duluth, Georgia 30099

 

Items of Business

  To elect the eleven directors nominated by our Board of Directors and named in the accompanying Proxy Statement (Proposal 1);

 

   

To consider an advisory vote on executive compensation (Proposal 2);

 

   

To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2021 (Proposal 3); and

 

   

To transact such other business as may properly come before the Annual Meeting and any adjournments thereof.

 

Record Date

March 16, 2021. Only stockholders of record at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting.

 

Proxy Voting

Please vote your shares at your earliest convenience. This will ensure the presence of a quorum at the Annual Meeting. Promptly voting your shares will save the expense and burden of additional solicitation.

 

E-Proxy Process

We are taking advantage of the Securities and Exchange Commission rules allowing companies to furnish proxy materials to stockholders over the Internet. We believe that this “e-proxy” process expedites your receipt of proxy materials, while also lowering the costs and reducing the environmental impact of the Annual Meeting.

 

  On or about March 31, 2021, we will mail a Notice of Internet Availability of Proxy Materials to holders of our common stock as of March 16, 2021, other than those holders who previously requested electronic or paper delivery of communications from us. Please refer to the Notice of Internet Availability of Proxy Materials, proxy materials e-mail or proxy card you received for information on how to vote your shares and to ensure that your shares will be represented and voted at the Annual Meeting even if you cannot attend.

 

Live Meeting Webcast

We expect to make available a live webcast of the Annual Meeting at our investor relations website, https://investors.primerica.com

Possible Meeting by

Remote Communication

In light of the ongoing COVID-19 pandemic, we are sensitive to public health concerns and the protocols that may be imposed. In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. Please monitor our investor relations website at https://investors.primerica.com for updated information.

 

Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting of Stockholders to be Held on May 12, 2021. The Proxy Statement and the 2020 Annual Report to Stockholders are available free of charge at www.proxyvote.com.

By Order of Our Board of Directors,

 

LOGO

STACEY K. GEER

Executive Vice President, Chief Governance Officer

and Corporate Secretary

Duluth, Georgia

March 31, 2021


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PROXY SUMMARY

     1  

MATTERS TO BE VOTED ON

     6  

Proposal 1: Election of Directors

     6  

Proposal 2: Advisory Vote on Executive Compensation (Say-on-Pay)

     7  

Proposal 3: Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm

     8  

GOVERNANCE

     9  

Board Structure

     9  

Board Diversity

     10  

Board Evaluation Process

     10  

Board’s Role in Risk Oversight

     11  

Stockholder Engagement

     11  

Environmental, Social and Governance (ESG) Matters

     13  

Director Independence

     17  

Director Nomination Process

     18  

Proxy Access

     20  

Majority Voting Standard for Director Elections

     20  

Communicating with our Board of Directors

     20  

BOARD OF DIRECTORS

     22  

Board Members

     22  

Director Qualifications

     34  

Board Meetings

     35  

Board Committees

     35  

Director Compensation

     38  

EXECUTIVE COMPENSATION

     41  

Compensation Committee Message

     41  

Compensation Discussion and Analysis (“CD&A”)

     43  

Compensation Committee Interlocks and Insider Participation

     63  

Compensation Committee Report

     63  

Compensation Tables

     64  

Potential Payments and Other Benefits Upon Termination or Change of Control

     70  

Pay Ratio

     73  

Employee, Officer and Director Hedging

     74  

Employment Agreements

     75  

AUDIT MATTERS

     78  

Audit Committee Report

     78  

Fees and Services of KPMG

     79  

STOCK OWNERSHIP

     81  

Ownership of Our Common Stock

     81  

Delinquent Section 16(a) Reports

     84  

RELATED PARTY TRANSACTIONS

     85  

INFORMATION ABOUT VOTING AND THE ANNUAL MEETING

     86  

OTHER STOCKHOLDER INFORMATION

     92  

Other Information

     92  

Proposals Pursuant to Rule 14a-8

     92  

Proxy Access Director Nominees

     92  

Other Proposals and Director Nominees

     92  

Exhibit A – RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

     A-1  

Location for the 2021 Annual Meeting of Stockholders

     Back Cover  

 

   


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PROXY SUMMARY

This summary highlights selected information about Primerica, Inc. (the “Company”, “Primerica” or “we”); it does not contain all of the information you should consider. We urge you to read the entire Proxy Statement before you vote. You may also wish to review Primerica’s Annual Report on Form 10-K (the “2020 Annual Report”) for the fiscal year ended December 31, 2020 (“fiscal 2020”), which is available on our investor relations website at https://investors.primerica.com.

This Proxy Statement will be made available to stockholders on or about March 31, 2021.

Meeting Agenda and Voting Recommendations

See “Matters To Be Voted On” beginning on page 6 for more information.

 

Proposal    Vote Recommendation

1. Election of directors

   “FOR” each director nominee

2.  Advisory vote on executive compensation (“Say-on-Pay”)

   “FOR”

3.  Ratification of independent registered public accounting firm

   “FOR”

Annual Meeting of Stockholders

You are entitled to vote at the annual meeting of stockholders to be held on May 12, 2021 and any adjournment or postponement thereof (the “Annual Meeting”) if you were a holder of record of our common stock at the close of business on March 16, 2021. Please see page 86 for instructions on how to vote your shares and other important information.

Financial Accomplishments

We are proud of the results that we delivered in fiscal 2020, including:

 

   

Growth of 15.1% in diluted adjusted operating income per share compared with the fiscal year ended December 31, 2019 (“fiscal 2019”);

 

   

Adjusted net operating income return on adjusted stockholders’ equity (“ROAE”) of 24.7%;

 

   

Return to stockholders in the form of approximately $231 million in share repurchases; and

 

   

Increase of 17.6% in annual stockholder dividends to $1.60 per share.

In addition, our total stockholder return, including dividends, for fiscal 2020 and the five-year period from the fiscal year ended December 31, 2016 through fiscal 2020 was 3.9% and 199.8%, respectively. Total stockholder return for fiscal 2020 exceeded the S&P 500 Insurance Index but was lower than the S&P MidCap 400 Index.

 

  Primerica 2021 Proxy Statement   1


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PROXY SUMMARY

 

Distribution Results

Our business achieved multiple records in fiscal 2020. In particular:

 

   

The number of life-licensed sales representatives was 134,907 at December 31, 2020 (including temporary and extended licenses in place at year-end as a result of the novel coronavirus COVID-19 (“COVID-19”) pandemic) compared with 130,522 at December 31, 2019;

 

   

New life insurance licenses increased 8% to 48,106 compared with 44,739 in fiscal 2019;

 

   

Recruiting of new representatives increased 42% to 400,345 compared with 282,207 in fiscal 2019;

 

   

Issued term life insurance policies increased 22.6% to 352,868 compared with 287,809 in fiscal 2019, with $109 billion of face amount issued in fiscal 2020; and

 

   

Term life insurance claims paid to policy beneficiaries was nearly $1.7 billion.

 

   

Value of client assets at December 31, 2020 was $81.5 billion;

 

   

Investment and Savings Products (“ISP”) sales increased 4% to $7.8 billion compared with $7.5 billion in fiscal 2019;

 

   

The number of mutual fund-licensed sales representatives increased to 25,859 at December 31, 2020;

Corporate Strategy

Primerica is a leading provider of financial products to middle-income households in the United States and Canada with 134,907 licensed sales representatives as of December 31, 2020. These independent licensed representatives assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities, managed investments and other financial products, which we distribute primarily on behalf of third parties. We insured over 5.5 million lives and had approximately 2.6 million client investment accounts as of December 31, 2020. Our business model uniquely positions us to reach underserved middle-income consumers in a cost-effective manner and has proven itself in both favorable and challenging economic environments.

Our mission is to serve middle-income families by helping them make informed financial decisions and providing them with a strategy and tools to gain financial independence. We believe there is significant opportunity to meet the increasing array of financial services needs of our clients. We intend to leverage the sales force to meet such client needs, which will drive long-term value for all of our stakeholders. Our Board of Directors (the “Board” or our Board of Directors”) oversees strategy, which is organized across four primary areas:

 

   

Maximizing sales force growth, leadership and productivity;

 

   

Broadening and strengthening our protection product portfolio;

 

   

Providing offerings that enhance our ISP business; and

 

   

Developing digital capabilities to deepen our client relationships.

Corporate Performance

The bar graphs below depict our performance over the past five fiscal years for the four metrics that we use to measure annual corporate performance under our incentive compensation program. These metrics do not reflect financial results prepared in accordance with United States generally accepted accounting principles (“GAAP”). See “Reconciliation of GAAP and Non-GAAP Financial Measures” in Exhibit A to this

 

2    


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PROXY SUMMARY

 

Proxy Statement for a reconciliation to 2020 GAAP results. Reconciliations for earlier years are available through the Financials section of our investor relations website at https://investors.primerica.com.

 

LOGO       LOGO

 

(1)

Includes approximately 3,600 temporary licenses that were issued in response to the COVID-19 pandemic and approximately 2,500 licenses that were extended due to the COVID-19 pandemic.

 

LOGO       LOGO

Corporate Governance Highlights

See “Governance” beginning on page 9 for more information.

Our Board of Directors consists of eleven members. We are pleased that our Board reflects the diversity of the communities that we serve, with female directors comprising 27% of our director nominees and directors with racial or ethnic diversity comprising 27% of our director nominees.

 

  Primerica 2021 Proxy Statement   3


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PROXY SUMMARY

 

The highlights of our corporate governance program are set forth below:

 

Board Structure

   

73% of the Board Members are Independent

 

   

Independent Lead Director of the Board

 

   

Separate Non-Executive Chairman of the Board and Chief Executive Officer Roles

 

   

Independent Audit, Compensation and Corporate Governance Committees of the Board

 

   

Regular Executive Sessions of Independent Directors

 

   

Annual Board and Committee Self-Assessments

 

   

Significant Number of Directors that Demonstrate Gender, Racial and Ethnic Diversity

 

   

Limit on the Number of Boards on Which our Directors are Allowed to Serve

Stockholder Rights

   

Proxy Access

 

   

Annual Election of Directors

 

   

Regular Director Refreshment

 

   

Majority Voting for Directors in Uncontested Elections

 

   

No Poison Pill in Effect

 

   

Annual Stockholder Engagement to Discuss Corporate Governance, Executive Compensation and Environmental, Social and Governance (“ESG”) Matters

 

   

Multiple Avenues for Stockholders to Communicate with the Board

Other Highlights

   

Stock Ownership Guidelines for Directors and Senior Executives

 

   

Pay for Performance Philosophy

 

   

Broad Clawback Provisions in the Company’s 2020 Omnibus Incentive Plan

 

   

Policies Prohibiting Hedging, Pledging and Short Sales by Employees, Officers and Directors

 

   

No Tax Gross-Ups

 

   

Strong Ethics Program

 

   

Publication of an Annual Corporate Sustainability Report

 

   

Board Diversity Policy

 

   

Board Oversight of the Enterprise Risk Management Process

 

 

Executive Compensation Highlights

See “Executive Compensation” beginning on page 41 for more information.

The Compensation Committee of our Board of Directors (the “Compensation Committee”) has structured our executive compensation program to pay for performance and, over the long term, to provide compensation to our executive officers that is market competitive. Further, a meaningful percentage of compensation is tied to the achievement of challenging corporate performance objectives. Set forth below is a brief description of our executive compensation program for fiscal 2020.

 

   

Compensation components include base salary, annual cash incentive awards and long-term equity awards.

 

   

The Compensation Committee set cash incentive award targets for each of our named executive officers at the beginning of fiscal 2020.

 

4    


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PROXY SUMMARY

 

   

Cash incentive awards are based on the Company’s achievement of pre-determined performance goals related to adjusted operating revenues, adjusted net operating income, ROAE and size of life-licensed sales force at year end and can be increased or decreased by the Compensation Committee by up to 20% for personal performance.

 

   

The corporate performance award was equal to 110.3% of the target award (reflecting a downward adjustment to the size of the life-licensed sales force due to temporary and extended licenses in place at year-end as a result of the COVID-19 pandemic).

 

   

The Compensation Committee elected not to make any personal performance adjustments.

 

   

The grant values of long-term equity awards granted to our named executive officers in February 2021 were fixed at the beginning of fiscal 2020. This means that the Compensation Committee expected no changes to the values of the awards prior to their grant in February 2021.

 

   

Equity award value is split equally between time-based restricted stock units (“RSUs”) and performance stock units (“PSUs”).

 

   

The RSUs vest in equal installments over three years.

 

   

The PSUs will be earned based equally on the Company’s ROAE and average annual earnings per share (“EPS”) growth over a three-year performance period of 2021 through 2023, and the executives will receive between 0% and 150% of the awarded shares in March 2024.

 

   

Each of our named executive officers has an employment agreement that provides for severance payments upon a termination of employment without cause or a resignation for good reason.

The Company provides only limited perquisites, and the Compensation Committee has adopted an Executive and Director Perquisites Policy. This policy provides that all perquisites paid to directors and senior executives must be approved by the Compensation Committee and it lists certain categories of perquisites that have been pre-approved.

The table below highlights the fiscal 2020 compensation for our named executive officers as disclosed in the “Summary Compensation Table” on page 64.

Summary Compensation Table Elements

 

      Salary     Equity
Awards
   

Short-Term

Cash Bonus

    Other
Compensation
    Total  

Chief Executive Officer

                                        

Compensation

   $ 750,000     $ 2,749,920     $ 1,654,500     $ 125,447     $ 5,279,867  

% of Total

     14     52     31     3     100

President

                                        

Compensation

   $ 550,000     $ 1,499,780     $ 937,550     $ 67,587     $ 3,058,303  

% of Total

     18     49     31     2     100

Chief Financial Officer

                                        

Compensation

   $ 500,000     $ 999,772     $ 551,500     $ 58,076     $ 2,109,348  

% of Total

     24     47     26     3     100

Chief Operating Officer

                                        

Compensation

   $ 500,000     $ 999,772     $ 551,500     $ 54,376     $ 2,105,648  

% of Total

     24     47     26     3     100

 

  Primerica 2021 Proxy Statement   5


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MATTERS TO BE VOTED ON

 

Proposal 1:

Election of Directors

 

   

What am I voting on? The Board is asking our stockholders to elect each of the eleven director nominees named in this Proxy Statement to hold office until the annual meeting of stockholders in 2022 (the “2022 Annual Meeting) and until his or her successor is elected and qualified.

 

   

Voting Recommendation: “FOR” the election of the eleven director nominees.

 

   

Vote Required: A director will be elected if the number of shares voted “FOR” that director exceeds the number of votes “AGAINST” that director.

See “Board of Directors” beginning on page 22 for more information.

We ask that our stockholders elect the eleven director nominees named below to our Board of Directors to serve a one-year term commencing at the Annual Meeting. Our Board of Directors has adopted majority voting for directors in uncontested elections. As a result, each director

will be elected by a majority of the votes cast, meaning that each director nominee must receive a greater number of shares voted “FOR” such director than the shares voted “AGAINST” such director. If an incumbent director does not receive a greater number of shares voted “FOR” such director than shares voted “AGAINST” such director, then such director must tender his or her resignation to the Board. In that situation, the Corporate Governance Committee of our Board (the “Corporate Governance Committee”) would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. Within 90 days from the date the election results are certified, the Board will act on the Corporate Governance Committee’s recommendation and will publicly disclose its decision and the rationale behind its decision. In a contested election – a circumstance we do not anticipate at the Annual Meeting – director nominees are elected by a plurality vote. Any shares that are not voted (whether by abstention or otherwise) will have no impact on the outcome of the vote. The following table provides summary information about each director nominee, all of whom currently serve on our Board.

 

 

Name   Age     Occupation   Independent   Date Joined Our Board

John A. Addison, Jr.

    63     CEO, Addison Leadership Group and Former Co-Chief Executive Officer, Primerica   No   October 2009

Joel M. Babbit

    67     Co-Founder and Chief Executive Officer, Narrative Content Group, LLC   Yes   August 2011

P. George Benson

    74     Former President, The College of Charleston   Yes   April 2010

C. Saxby Chambliss

    77 (1)     Partner, DLA Piper LLP (“DLA Piper”)   Yes   June 2017

Gary L. Crittenden

    67     Private Investor   Yes   July 2013

Cynthia N. Day

    55     President and Chief Executive Officer, Citizens Bancshares Corporation and Citizens Trust Bank   Yes   January 2014

Sanjeev Dheer

    61     Founder and Chief Executive Officer, CENTRL Inc.   Yes   October 2019

Beatriz R. Perez

    51     SVP and Chief Communications, Sustainability and Strategic Partnerships Officer, The Coca-Cola Company   Yes   May 2014

D. Richard Williams

    64     Non-Executive Chairman of the Board and Former Co-Chief Executive Officer, Primerica   No   October 2009

Glenn J. Williams

    61     Chief Executive Officer, Primerica   No   April 2015

Barbara A. Yastine

    61     Former Chairman, President and CEO, Ally Bank   Yes   December 2010

 

(1)

For a description of the factors that caused the Board of Directors to waive the Company’s director retirement age for Senator Chambliss, see “Board of Directors – Board Members – C. Saxby Chambliss.”

 

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MATTERS TO BE VOTED ON

 

Each director nominee attended more than 81% of the aggregate of all meetings of our Board of Directors and each committee of which he or she was a member during fiscal 2020.

Mr. Dheer was elected to our Board in October 2019. Senator C. Saxby Chambliss was elected to our Board in June 2017. Mr. G. Williams was elected to our Board and promoted to Chief Executive Officer as of April 1, 2015. The remaining eight director nominees have served at least since our Annual Meeting of Stockholders held in 2014. Unless otherwise instructed, the members of the Proxy Committee (as defined in “Information About Voting and the Annual Meeting”) will vote the proxies held by them “FOR” the election to our Board of Directors of the nominees named above.

Proposal 2:

Advisory Vote on Executive Compensation (Say-on-Pay)

 

   

What am I voting on? The Board is asking our stockholders to approve, on an advisory basis, the compensation of the named executive officers as disclosed in this Proxy Statement.

 

   

Voting Recommendation: “FOR” the proposal.

 

   

Vote Required: Approval requires a “FOR” vote by at least a majority of the shares represented at the Annual Meeting, by valid proxy or otherwise, and entitled to vote.

See “Executive Compensation” beginning on page 41 for more information.

We most recently sought stockholder approval of the compensation of the executive officers named in this Proxy Statement (referred to as our named executive officers) at our Annual Meeting of Stockholders held on May 13, 2020 (“2020 Annual Meeting”), at which time over 97.7% of votes were cast in favor thereof. In addition, in May 2017 our stockholders supported the Board’s recommendation to hold an annual Say-on-Pay vote. As a result, the next Say-on-Pay vote (after that taken at the upcoming Annual Meeting) will take place at the 2022 Annual Meeting. The Say-on-Pay vote is not binding on the Company,

our Board of Directors or the Compensation Committee. Our Board and the Compensation Committee value the opinions of our stockholders and, to the extent there is any significant vote against the compensation of our named executive officers as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

As described in detail under “Executive Compensation — Compensation Discussion and Analysis (“CD&A”)”, our executive compensation program is designed to attract, motivate, and retain our named executive officers, each of whom is critical to our success. Under this program, our named executive officers are rewarded for the achievement of specific annual, long-term, strategic and corporate goals as well as the realization of increased stockholder value. The Compensation Committee continually reviews and modifies our executive compensation program to ensure that it achieves the desired goals of aligning executive compensation with our stockholders’ interests and current market practices. Please read the CD&A section for additional details about our executive compensation program, including information about the compensation of our named executive officers for fiscal 2020.

The advisory vote in this resolution is not intended to address any specific element of compensation; rather, it relates to the overall compensation of our named executive officers, as well as the philosophy, policies and practices described in this Proxy Statement. Our stockholders may vote for or against, or abstain from voting on, the following resolution:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and any related material disclosed in such proxy statement.”

 

 

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MATTERS TO BE VOTED ON

 

Proposal 3:

Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm

 

   

What am I voting on? The Board is asking our stockholders to ratify the appointment by the Audit Committee of our Board (the “Audit Committee”) of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2021 (“fiscal 2021”).

 

   

Voting Recommendation: “FOR” the proposal.

 

   

Vote Required: Approval requires a “FOR” vote by at least a majority of the shares represented at the Annual Meeting, by valid proxy or otherwise, and entitled to vote.

See “Audit Matters” beginning on page 78 for more information.

We ask that our stockholders ratify the appointment of KPMG as our independent registered public accounting firm for fiscal 2021.

The Audit Committee has authority to retain and terminate the Company’s independent registered public accounting firm. The Audit Committee has appointed KPMG as our independent registered public accounting firm to audit the consolidated financial statements of the Company and its subsidiaries for fiscal 2021, as well as the Company’s internal control over financial reporting. Although stockholder ratification of the appointment of KPMG is not required, our Board of Directors believes that submitting the appointment to our stockholders for ratification is a matter of good corporate governance. If our stockholders do not ratify the appointment of KPMG, then the Audit Committee will reconsider the appointment. We paid KPMG an aggregate of $3.4 million in fiscal 2020 and $3.1 million in fiscal 2019.

One or more representatives of KPMG are expected to be present at the Annual Meeting. The representatives will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate stockholder questions.

 

 

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Our Board oversees the business and affairs of the Company, aligns management and stockholder interests and is driven by the directors’ belief that good corporate governance is a critical factor in our continued success. Through the Governance section of our investor relations website at https://investors.primerica.com, our stockholders have access to key governing documents such as our Code of Conduct, Corporate Governance Guidelines and charters of each committee of the Board.

Board Structure

Our Board currently consists of eleven directors. The Company’s governance documents provide our Board with flexibility to select the appropriate leadership structure for the Company. The Company has a non-executive Chairman of the Board and an independent Lead Director. Our Board believes that this structure is the most appropriate leadership structure for the Company at this time and is in the best interests of our stockholders because it provides decisive and effective leadership and, when combined with the

Company’s other governance policies and procedures, provides appropriate opportunities for oversight, discussion and evaluation of decisions and direction by our Board.

Mr. R. Williams has served as non-executive Chairman of the Board since April 2015. He previously served as Chairman of the Board and Co-Chief Executive Officer. Mr. G. Williams has served as Chief Executive Officer since April 2015. He previously served as President since 2005. Mr. Benson, one of our independent directors and Chairman of the Corporate Governance Committee, has served as the Lead Director of our Board since February 2014, and he joined our Board in April 2010. As the primary interface between management and our independent directors, the Lead Director provides a valuable supplement to the non-executive Chairman and the Chief Executive Officer roles and serves as a key contact for the non-employee directors, thereby enhancing our Board’s independence from management. The responsibilities of our Chairman of the Board and our Lead Director are set forth below.

 

 

Duties and Responsibilities of Chairman of the Board    Duties and Responsibilities of Lead Director

•     Preside over Board meetings and meetings of non-employee directors

 

•     Call special meetings of our Board

 

•     Solicit feedback from the Lead Director and approve agendas for Board meetings

 

•     Review advance copies of Board meeting materials

 

•     Preside over stockholder meetings

 

•     Facilitate and participate in formal and informal communications with and among directors

 

•     Review interested party communications directed to our Board and take appropriate action

  

•     Preside at all Board meetings at which the Chairman of the Board is not present

 

•     Call meetings of independent directors and set the agenda for such meetings

 

•     Preside at all meetings of independent directors and at all executive sessions of independent directors

 

•     Review Board meeting agendas and provide input to the Chairman of the Board

 

•     Communicate with management on behalf of the independent directors when appropriate

 

•     Act as liaison between the Chairman of the Board, the Chief Executive Officer and members of the Board

 

•     Lead the annual Board self-assessment

 

•     Lead the annual Chief Executive Officer evaluation

 

•     Lead the Chief Executive Officer succession process

 

 

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All directors play an active role in overseeing the Company’s business both at our Board and committee levels. In addition, directors have full and free access to members of management, and our Board and each committee has authority to retain independent financial, legal or other advisors as they deem necessary without consulting, or obtaining the approval of, any member of management. Our Board holds separate executive sessions of its non-employee directors and of its independent directors at least annually.

Board Diversity

Diversity is very important to us. We strive to offer an inclusive business environment that benefits from diversity of people, thought and experience. This also holds true for our Board. As of December 31, 2020, 27% of our Board members were racially or ethnically diverse and 27% of our Board members were women. Page 35 provides more information on the diversity of our Board.

Pursuant to our Corporate Governance Guidelines, our Board annually reviews the appropriate skills and characteristics of its members in light of the current composition of our Board, and diversity is one of the factors used in this review. In August 2020, our Board adopted a Board Diversity Policy that requires the Board to consider Board candidates based on merit against objective criteria tied to the needs of the Board and the Company while giving due regard to diverse characteristics such as gender, race, ethnicity, country of origin, nationality or cultural background and other personal characteristics. In addition, in identifying a director candidate, the Corporate Governance Committee and our Board consider and discuss diversity, among the other factors discussed under “— Director Nomination Process,” with a view toward the role and needs of our Board as a whole. Further, pursuant to the Board Diversity Policy, diverse Board candidates are required to be considered whenever the Board commences a director search.

Board Evaluation Process

Our Corporate Governance Guidelines require that the Corporate Governance Committee

conduct an annual review of Board performance and further requires that each standing committee conduct an annual evaluation of its own performance. To facilitate those evaluations, each independent committee prepares a written self-assessment questionnaire that is completed by the members of the committee. In addition, the Corporate Governance Committee prepares a written Board assessment questionnaire that is completed by all members of the Board. The questions are designed to gather suggestions to improve Board and committee effectiveness and solicit additional feedback. The Board self-assessment is conducted at a different time during the year than the committee self-assessments, so that the directors have adequate time to reflect on the functioning of the Board as a whole. The Company’s Corporate Secretary compiles the results of each self-assessment and shares those results with all directors. The committee chairs lead discussions during their committee meetings of the results of the self-assessments, highlighting areas that require additional attention. The Corporate Governance Committee discusses the Board self-assessment and the Lead Director leads a discussion of the self-assessment among the full Board. Management then discusses with the Lead Director any specific items that require additional attention and a plan is developed to address such action items.

In fiscal 2021, the Corporate Governance Committee expects to retain a third party to facilitate an in-depth Board self-assessment, consistent with the process it followed during fiscal 2019. The third party will meet in person with each director individually and solicit feedback on Board function and meetings, composition, leadership, as well as other matters. The facilitator will then compile results from the interviews and provide an in-person oral report to each of the Corporate Governance Committee and the Board of Directors with recommendations for improvement. The Corporate Governance Committee expects to use a third- party facilitator to conduct the Board self-assessment on a bi-annual basis.

 

 

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Board’s Role in Risk Oversight

Our Board is ultimately responsible for overseeing the Company’s management of the various risks facing the Company as well as the Company’s compliance culture and overall risk tolerance. The Board has delegated to the Audit Committee responsibility for regularly monitoring the

oversight of our enterprise risk management (“ERM”) program. The Board and each Board committee actively oversee and monitor the management of risks that could impact the Company’s operations in connection with their respective subject matter areas:

 

 

LOGO

 

Management identifies, assesses and assigns responsibility for risk management through our enterprise risk assessment process and internal control environment. In fiscal 2020, management’s Business Risk and Control Committee regularly monitored the major risks facing the Company and assessed the risk heatmap and watch list at least quarterly. Our Chief Risk Officer presented a risk profile and quarterly status updates to the Board and each Board committee that has oversight responsibility for one or more key risks. Management re-evaluates the Company’s key risks annually, and the risks are shared with the Audit Committee and the Board of Directors. In addition, at the Board’s request, a cross-functional group of management-level employees provides a quarterly update on significant risk areas, which includes an assessment of cybersecurity risks and an overview of legal and regulatory matters. At least annually, this presentation also includes information on system readiness and protection, our incident response plan, recent internal training exercises and recovery plans.

Further, our Chief Internal Auditor reports directly to the Audit Committee. Our Chief Internal Auditor presents quarterly to the Audit Committee with respect to internal audit findings and recommendations and meets in executive session with the Audit Committee at least quarterly. The Audit Committee uses the results of its discussions with our Chief Internal Auditor to monitor the Company’s internal audit plan.

Stockholder Engagement

In late fiscal 2020, we invited the Company’s largest stockholders, which together represented over 75% of our outstanding shares, to speak with management and, if requested, the Lead Director about topics important to them. Specific topics covered during these conversations included Board diversity, the impact of and our response to the COVID-19 pandemic, and other governance matters, executive compensation, and ESG matters including human capital management and data privacy. We were pleased with the stockholder feedback, which indicated that our stockholders

 

 

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are generally satisfied with the Company’s corporate governance and executive compensation practices as well as the format and content of the Company’s proxy statement and Corporate Sustainability Report. To enable the Board, the Compensation Committee and the

Corporate Governance Committee to consider direct stockholder feedback, information about these investor conversations is shared with the Board. The table below describes requests received during these conversations and our responses to those suggestions.

 

 

What We Heard    What We Did
Pleased with the addition of a director with digital technology expertise but encouraged us to continue to review and enhance overall skills represented.    Pursuant to its director nomination process, the Board continues to consider the Company’s current needs and long-term and strategic plans to determine the skills and expertise needed by our Board.
Consider adding an ESG metric to the executive compensation program.    The Compensation Committee continues to consider which metrics are appropriate for the incentive compensation program. It views the size of the life-licensed sales force performance metric as a “Social” factor under the Company’s ESG program because it is directly tied to the Company’s socially driven mission to help middle-income families become financially independent. The Compensation Committee annually meets in a joint session with the Corporate Governance Committee to ensure that ESG and/or corporate strategy are considered in developing the annual compensation metrics. Further, the Compensation Committee has discretion to make certain compensation adjustments, which could include additional ESG-related matters.
Expand the discussion of human capital management matters in the proxy statement and the 2020 Annual Report.    See expanded disclosure of relevant human capital management matters in this Proxy Statement, our 2020 Annual Report, and our updated annual Corporate Sustainability Report, which was released on our investor relations website in August 2020.
Consider adding ESG frameworks such as the Task Force on Climate-Related Financial Disclosure.    We added Sustainability Accounting Standards Board (“SASB”) disclosure a few years ago and we continue to assess the relevance to Primerica of additional ESG frameworks.
Add a right for stockholders to call a special meeting and reduce the supermajority thresholds currently required to amend the Company’s Charter and/or By-laws.    The Board will consider these provisions during its annual review of the Company’s Charter and By-laws.

 

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Environmental, Social and Governance (ESG) Matters

 

Oversight of ESG Matters

The Board of Directors has delegated to the Corporate Governance Committee responsibility for oversight of the Company’s social, environmental and sustainability initiatives. As a result, the Corporate Governance Committee meets regularly with those members of management who have responsibility for such initiatives. Further, the Corporate Governance Committee receives regular updates on the Company’s efforts with respect to employee engagement and wellness and improving diversity, equality and inclusion among its employees and the sales force.

In August 2020, the Company published its annual Corporate Sustainability Report, which has been posted on the Governance section of our investor relations website at https://investors.primerica.com. This report contains the SASB disclosure metrics that we believe are most relevant to our industry and business model. We elected to use the SASB metrics over other available frameworks because of its focus on certain areas that we believe are material to our business.

Human Capital Management

Employee Engagement and Wellness

For eight consecutive years, Primerica has been named by the Atlanta Journal Constitution as a regional “Top Workplace” based on its annual top workplaces employee survey. In 2021, we were nationally recognized for the first time as a “Top Workplace USA” by the employee engagement service partner that conducted the regional survey. Further, the Company ranked fifth in the “Financial Services” category and third in the “Top Leader” category for our Company size.

In order to monitor employee satisfaction, we conduct annual employee engagement surveys and provide detailed results to management and our Board. Changes to policies, programs, and benefits packages are made based on this feedback. Our annual Town Hall meeting series,

normally held in-person at our U.S. and Canadian headquarters, provides an opportunity to employees to hear Company updates and ask questions of senior management. Throughout the COVID-19 pandemic, our Chief Executive Officer has shared a weekly video message with all employees and, together with our President, he converted our annual Town Hall employee meetings into a company-wide virtual Town Hall meeting with all employees. It is anticipated the weekly video messages and a virtual Town Hall meeting will continue until it is safe to resume in-person engagement practices.

Beginning in March 2020, we moved the vast majority of employees to remote work and developed a four-stage plan to gradually repopulate our facilities as the risk of the pandemic declines. The Company has been in stage two of its re-opening plan since July 2020, and management will assess in the second quarter of 2021 when to move to stage three. For those employees coming into our corporate offices, we followed guidelines of nationally recognized health organizations to ensure we maintain a clean, safe and comfortable working environment. In addition, we provided masks for employees and conducted temperature checks as warranted. Contact tracing protocols are in place and are activated upon learning that any employee has contracted COVID-19. Further, we created a special paid sick leave policy providing new, additional benefits to employees affected by the pandemic.

Early in the pandemic, our Chairman and Lead Director held weekly meetings with our Chief Executive Officer and President to remain informed about, among other things, the Company’s actions to keep employees safe and engaged as we transitioned to and operated from a predominately remote work environment. Those meetings have continued on a bi-weekly basis through the date of this Proxy Statement.

Diversity, Equality and Inclusion

We strive to create a workplace that offers a wide range of opportunities for employees and is open, collaborative and inclusive. In 2019 and

 

 

 

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2020, we were recognized by Forbes as a “Best Employer for Women” and we were named to the Bloomberg Gender Equality Index in both 2020 and 2021.

Because management recognized that racial diversity at senior management levels lags other employee levels, we engaged a diversity consulting firm in late 2019 to review the racial and ethnic diversity of our employee workforce and provide recommendations to enhance the pipeline of racially diverse talent within the Company. Further, in the fourth quarter of 2020, we enhanced our senior executive management team with a seasoned leader who brings deep experience in employee and leadership development to, among other things, serve as our Chief Administrative Officer, and lead efforts to create and implement programs, processes and protocols that focus on diversity, equality and inclusion.

The sales force is extremely diverse, as it reflects the communities in which the sales representatives live and work. Further, the sales force utilizes strategic market groups to encourage professional and personal growth and development, including “Women in Primerica”, the “African American Leadership Council” and the “Hispanic American Leadership Council”, which we refer to as our Strategic Markets. These groups provide opportunities for networking and mentorship, sales and business management training and deep learning opportunities customized for these respective market segments. Additional information about sales force initiatives is available in the 2020 Corporate Sustainability Report on the Governance section of our investor relations website at https://investors.primerica.com.

Talent Development and Succession Planning

We believe employees are highly satisfied with Primerica, as reflected by our employee retention rate in 2020 of 92%. For more information about the tenure of our management team, including our named executive officers, see “Executive Compensation

— Company Tenure”. Many employees have been with Primerica for over 20 years, a result of a continued high employee retention rate. The result of this longevity and loyalty is that many employees will reach retirement age over the coming years. Management is committed to a strong culture that reflects diversity, equality and inclusion while ensuring that our succession planning, internal and external talent pipeline identification processes incorporate these values. We have become increasingly intentional in our effort to increase diversity at the management level. Additional information about our talent development initiatives can be found in the 2020 Corporate Sustainability Report on the Governance section of our investor relations website at https://investors.primerica.com.

The Board of Directors maintains a succession plan for the Chief Executive Officer and other key members of management, which includes a contingency plan if the Chief Executive Officer were to depart unexpectedly. At least annually, the Corporate Governance Committee reviews the succession plan and leadership pipeline for these key roles, taking into account the Company’s long-term corporate strategy.

The Corporate Governance Committee oversees the Company’s talent development initiatives. Board members also engage and spend time with our high potential leaders at regular Board meetings and other events.

Our Corporate Culture

We recognize the importance of doing business the right way. Further, we believe corporate culture influences employee actions and decision-making. This is why we dedicate resources to:

 

   

Promote a vibrant, inclusive workplace;

 

   

Attract, develop and retain talented, diverse employees;

 

   

Promote a culture of compliance and integrity; and

 

   

Reward and recognize employees for growing people and teams and delivering winning results.

 

 

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The Company has a Code of Conduct, which applies to all employees, directors, and officers of the Company and its subsidiaries. The Code of Conduct is posted on the Governance section of our investor relations website at https://investors.primerica.com and is available in print, free of charge, to our stockholders who request a copy. As independent contractors, members of the sales force are not subject to the Code of Conduct but they must comply with a number of policies and procedures that are similar to standards set forth in the Code of Conduct. The Company also has made available to our employees and the sales force an Ethics Hotline, which can be accessed by phone or email and permits employees to anonymously report a violation of the Code of Conduct. Any changes to the Code of Conduct will be posted on our investor relations website.

Documenting and bolstering certain aspects of our Code of Conduct is our Equal Employment Opportunity and Anti-Harassment Policy, which includes information about complaint and investigation procedures relating to alleged discrimination incidents. The policy also defines the role of the Board of Directors with respect to alleged violations of such policy.

Our employees consistently give the Company high scores for “operating by strong values”. We are proud of our corporate culture and we work hard to instill upon our representatives and employees the importance of doing the right thing — for our clients as well as our other stakeholders.

Environmental Responsibility

Our business as a life insurance and financial services company, by its nature, does not have a significant impact on the environment. Nevertheless, we recognize the significant challenges presented by climate change and the growing importance of this issue to investors and the communities we serve. We will continue our efforts, such as electronic document delivery to our clients, energy efficiency at our corporate headquarters, robust recycling initiatives and promotion of transportation alternatives and flexible working options, that reduce our impact on the Earth’s resources. Further, we will continue to consider the potential impacts of climate change on our business.

 

 

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Upholding Strong Governance

The Company complies with the Corporate Governance Principles published by the Investor Stewardship Group (“ISG”), as described below. ISG is an investor-led effort of more than 70 organizations that includes some of the largest U.S.-based institutional investors and global asset managers, along with several of their international counterparts.

 

ISG Principle    Primerica Practice

Principle 1:

Boards are accountable to shareholders

  

• All directors stand for election annually

 

• Proxy access with market terms

 

• Independent Lead Director available to speak with investors if requested

Principle 2:

Shareholders should be entitled to voting rights in proportion to their economic interest

  

• Majority voting in uncontested director elections, and directors not receiving majority support must tender their resignation for consideration by the Board

Principle 3:

Boards should be responsive to shareholders and be proactive in order to understand their perspectives

  

• Management offered to meet with investors that together represented in excess of 75% shares outstanding

 

• Engagement topics included Board composition, executive compensation program, human capital management and other

 

• ESG-related matters, strategy and sustainability

Principle 4:

Boards should have a strong, independent leadership structure

  

• Strong independent Lead Director with clearly defined duties that are disclosed to stockholders

 

• Strong independent committee chairs

 

• Proxy Statement discloses why Board believes current leadership structure is appropriate

Principle 5:

Boards should adopt structures and practices that enhance their effectiveness

  

• 73% of Board members are independent

 

• 27% of Board members are racially or ethnically diverse; 27% of Board members are women

 

• Annual Board evaluation, bi-annually conducted by a third party, and results and next steps disclosed in subsequent proxy statement

 

• Active Board refreshment with 27.3% refreshment in last five years

 

• Each director attended more than 81% of the Board and applicable committee meetings in fiscal 2020, and all directors attended the 2020 Annual Meeting

Principle 6:

Boards should develop management incentive structures that are aligned with the long-term strategy of the company

  

• Executive compensation program received over 97.7% support at the 2020 Annual Meeting

 

• Compensation Committee annually reviews and approves incentive program design, goals and objectives for alignment with compensation and business strategies

 

• Annual and long-term incentive programs are designed to reward financial and operational performance that furthers short- and long-term strategic objectives

 

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Director Independence

Independence Determinations

Mr. R. Williams and Mr. Addison served as the Company’s Co-Chief Executive Officers from 1999 through March 2015 and are independent under the standards set forth by the New York Stock Exchange (“NYSE”) and the Company’s Corporate Governance Guidelines. However, certain proxy advisory firms view former chief executive officers as permanently affiliated with the company they led and therefore never independent. As a result, the Board has elected to designate Mr. R. Williams and Mr. Addison as not independent. Mr. G. Williams, our Chief Executive Officer, is not independent because he is a member of management and an employee of the Company.

Our Board annually assesses the outside affiliations of each director to determine if any of these affiliations could cause a potential conflict of interest or could interfere with the independence of the director. Based on information furnished by all directors regarding their relationships with Primerica and its subsidiaries and research conducted by management and discussed with our Board with respect to outside affiliations, our Board has determined that none of the remaining directors who served on our Board during fiscal 2020 has or had a material relationship with Primerica other than through his or her role as director and, except as set forth above, each is independent because he or she satisfies:

 

   

The categorical standards set forth below;

 

   

The independence standards set forth in Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

 

   

The criteria for independence set forth in Section 303A.02(b) of the NYSE Listed Company Manual.

A determination of independence under these standards does not mean that a director is disinterested under Section 144 of the Delaware General Corporation Law. Each director, relevant committee and our full Board may also consider whether any director is interested in any transaction brought before our Board or any of its committees for consideration.

Independence of Committee Members

Throughout fiscal 2020, the Audit, Compensation and Corporate Governance Committees have been fully independent in accordance with the NYSE Listed Company Manual and our Board’s director independence standards described above. In fiscal 2020, no member of these committees received any compensation from Primerica other than directors’ fees, and no member of the Audit Committee was or is an affiliated person of Primerica (other than by virtue of his or her directorship). Members of the Audit Committee meet the additional standards of audit committee members of publicly traded companies required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). Throughout fiscal 2020, members of the Compensation Committee qualified as non-employee directors as defined in Rule 16b-3 under the Exchange Act.

Categorical Standards of Independence

The Company has established categorical standards of independence for our Board, which are described in our Corporate Governance Guidelines. To be considered independent for purposes of the director qualification standards, (i) the director must meet independence standards under the NYSE Listed Company Manual and (ii) our Board must affirmatively determine that the director otherwise has no material relationship with the Company, directly or as an officer, shareowner or partner of an organization that has a relationship with the Company.

To assist it in determining each director’s independence in accordance with the NYSE’s rules, our Board has established guidelines, which provide that a director will be deemed independent unless:

 

(a)

(1) the director is an employee, or an immediate family member of the director is an executive officer, of the Company or any of its affiliates, or (2) the director was an employee, or the director’s immediate family member was an executive officer, of the Company or any of its affiliates during the immediately preceding three years;

 

 

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(b)

(1) the director presently receives during any consecutive 12-month period more than $120,000 in direct compensation from the Company or any of its affiliates, or an immediate family member of the director presently receives during any consecutive 12-month period more than $120,000 in direct compensation for services as an executive officer of the Company or any of its affiliates, excluding director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), or (2) the director or the director’s immediate family member had received such compensation during any consecutive 12-month period within the immediately preceding three years;

 

(c)

(1) the director is a current partner or employee of a firm that is the Company’s internal or independent auditor, (2) an immediate family member of the director is a current partner of such a firm, (3) an immediate family member of the director is a current employee of such a firm and personally works on the Company’s audit, or (4) the director or an immediate family member of the director was, within the last three years, a partner or employee of such a firm and personally worked on the Company’s audit within that time period;

 

(d)

(1) an executive officer of the Company serves on the board of directors of a company that, at the same time, employs the director, or an immediate family member of the director, as an executive officer, or (2) Primerica and the company of which the director or his or her immediate family member is an executive officer had such relationship within the immediately preceding three years;

 

(e)

(1) the director is a current executive officer or employee, or an immediate family member of the director is a current executive officer, of another company that makes payments to or receives payments from the Company for property or services

  in an amount which, in any single fiscal year, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues, or (2) Primerica and the company of which the director is an executive officer or employee or his or her immediate family member is an executive officer had such relationship within the immediately preceding three years;

 

(f)

the director serves as an executive officer, director or trustee, or his or her immediate family member who shares the director’s household serves as an executive officer, director or trustee, of a charitable organization, and within the last three years, discretionary charitable contributions by the Company to such organization, in the aggregate in any one year, exceed the greater of $1 million or 2% of that organization’s total annual charitable receipts;

 

(g)

the director has any interest in an investment that the director jointly acquired in conjunction with the Company;

 

(h)

the director has, or his or her immediate family member has, a personal services contract with the Company; or

 

(i)

the director is affiliated with, or his or her immediate family member is affiliated with, a paid advisor or consultant to the Company.

Director Nomination Process

Our Board maintains a robust process in which the members focus on identifying, considering and evaluating potential Board candidates. Our Corporate Governance Committee leads this process, considering the Company’s current needs and long-term and strategic plans to determine the skills, experience and characteristics needed by our Board. The Corporate Governance Committee seeks input from other Board members and senior management, and also considers and evaluates any candidates recommended by our stockholders.

Our Board has determined that its members should bring to the Company a broad range of

 

 

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experience, knowledge and judgment. A successful Board candidate must be prepared to represent the interests of the Company and all of its stockholders. The factors considered by the Corporate Governance Committee and our Board in their review of potential candidates include whether:

 

   

The candidate has exhibited behavior that indicates he or she is committed to the highest ethical standards;

 

   

The candidate has had business, governmental, non-profit or professional experience at the Chairman, Chief Executive Officer, Chief Operating Officer or equivalent policy-making and operational level of a large organization that indicates that the candidate will be able to make a meaningful and immediate contribution to our Board;

 

   

The candidate has special skills, expertise and background that would complement the attributes of the existing directors, taking into consideration the diverse communities and geographies in which the Company operates;

 

   

The candidate has financial expertise;

 

   

The candidate will effectively, consistently and appropriately take into account and balance the legitimate interests and concerns of all of our stockholders and our other stakeholders in reaching decisions, rather than advancing the interests of a particular constituency;

 

   

The candidate possesses a willingness to challenge management while working constructively as part of a team in an environment of collegiality and trust;

 

   

The candidate will be able to devote sufficient time and energy to the performance of his or her duties as a director;

 

   

The candidate enhances the diversity of our Board from a gender, racial, ethnicity, country of origin, nationality and/or cultural perspective; and

   

The candidate brings desired skills that are not otherwise represented by current members of our Board.

The Corporate Governance Committee carefully reviews all current directors and director candidates in light of these factors based on the context of the current and anticipated composition of our Board, the current and anticipated operating requirements of the Company and the long-term interests of our stockholders. In reviewing a candidate, the Corporate Governance Committee considers the integrity of the candidate and whether the candidate would be independent as defined in our Corporate Governance Guidelines and the NYSE Listed Company Manual. The Corporate Governance Committee expects a high level of involvement from our directors and, if applicable, reviews a candidate’s service on other boards to assess whether the candidate has sufficient time to devote to Board duties.

The Corporate Governance Committee decides whether to further evaluate each candidate, which would include a thorough reference check, interviews, and discussions about the candidate’s qualifications, availability and commitment. Upon the completion of such evaluation, the Corporate Governance Committee makes a recommendation to our Board with respect to the election of a potential candidate to our Board. Our Board expects that all candidates recommended to our Board will have received the approval of all members of the Corporate Governance Committee.

Any stockholder who wishes to have the Corporate Governance Committee consider a candidate for election to our Board is required to give written notice of his or her intention to make such a nomination. For a description of the procedures required to be followed for a stockholder to nominate a director, see “Other Stockholder Information — Proxy Access Director Nominees” and “Other Stockholder Information — Other Proposals and Director Nominees.” A proposed nomination that does not comply with these requirements will not be considered by the Corporate Governance Committee. There are no differences in the manner in which the Corporate

 

 

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GOVERNANCE

 

Governance Committee considers or evaluates director candidates it identifies and director candidates who are recommended by our stockholders.

Proxy Access

A stockholder or group of no more than 20 stockholders that has owned at least 3% of our common stock for at least three years may nominate directors to our Board and have the nominees included in our proxy materials to be voted on at our Annual Meeting of Stockholders. The maximum number of stockholder nominees that will be included in our proxy materials with respect to any such annual meeting is the greater of (i) two or (ii) 20% of directors to be elected. A stockholder who seeks to nominate a director or directors to our Board must provide proper notice to the Company’s Corporate Secretary under our By-Laws. See “Other Stockholder Information — Proxy Access Director Nominees” and “Other Stockholder Information — Other Proposals and Director Nominees.”

Majority Voting Standard for Director Elections

In an uncontested election, directors are elected by a majority of “FOR” votes cast by stockholders. (An uncontested election is an election where the number of nominees is the same as the number of directors to be elected.) If an incumbent director does not receive a greater number of shares voted “FOR” such director than shares voted “AGAINST” such director, then such director must tender his or her resignation to the Board. In that situation, the Corporate Governance Committee would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. Within 90 days from the date the election results are certified, the Board will act on the Corporate Governance Committee’s recommendation and will publicly disclose its decision and the rationale behind its decision. In a contested election, director nominees are elected by a plurality vote. Under the plurality standard, the number of persons equal to the number of vacancies to be filled

who receive more votes than other nominees are elected to the Board, regardless of whether they receive a majority of votes cast. An election is considered contested under our By-Laws if, outside of the proxy access process, a stockholder has submitted notice of a director nomination to the Company’s Corporate Secretary.

Communicating With Our Board of Directors

Our stockholders and other interested persons may communicate with our directors, or any specified individual director, by addressing such communications to them in care of the Company’s Corporate Secretary, at the Company’s principal executive office located at One Primerica Parkway, Duluth, Georgia 30099. Our stockholders and other interested persons may also communicate with our directors by sending an e-mail message as follows:

 

   

With our Board, to boardofdirectors@primerica.com;

 

   

With the Audit Committee, to auditcommittee@primerica.com;

 

   

With the non-employee directors, to nonemployeedirectors@primerica.com; or

 

   

With the Chairman of the Board, to chairman@primerica.com.

In accordance with a policy approved by the Audit Committee, the Company’s Corporate Secretary (or, solely with respect to matters that are not reasonably likely to have legal implications for the Company, the Company’s Chief Compliance and Risk Officer) is required to:

 

   

Report communications of concerns relating to accounting, finance, internal controls or auditing matters to the Audit Committee;

 

   

Investigate communications of concerns relating to conduct of employees, including concerns related to internal policies;

 

   

Report communications of concerns relating to non-compliant behavior, such as

 

 

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GOVERNANCE

 

   

allegations of violations of the Company’s Code of Conduct or antitrust violations, to the Audit Committee; and

 

   

Determine whether to maintain or discard certain communications received.

If the correspondence is specifically marked as a private communication to our Board (or a specific member or members of our Board), then

the Company’s Corporate Secretary will not open or read the correspondence and will forward it to the addressee. These procedures may change from time to time, and you are encouraged to visit our investor relations website at https://investors.primerica.com for the most current means of communicating with our directors.

 

 

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BOARD OF DIRECTORS

Board Members

The following information about each nominee for our Board of Directors includes their business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications attributes or skills that caused the Corporate Governance Committee and our Board of Directors to determine that each individual should be elected to serve as a director.

 

 

JOHN A. ADDISON, JR.

 

LOGO   

Board Committees:

 

None

  

Public Directorships:

 

None

Chief Executive Officer of Addison Leadership Group

 

Age: 63

 

Director Since October 2009

 

Mr. Addison has been the Chief Executive Officer of Addison Leadership Group, a company that provides leadership training and consulting, since April 2015. He also serves as Non-Executive Chairman of Primerica Distribution. Mr. Addison served as the Company’s Co-Chief Executive Officer from 1999 through March 2015 and served the Company in various capacities since 1982 when he joined us as a business systems analyst. He has served in numerous officer roles with Primerica Life Insurance Company (“Primerica Life”), a life insurance underwriter, and Primerica Financial Services, LLC, a general agent, both of which are subsidiaries of Primerica. He served as Vice President and Senior Vice President of Primerica Life, as well as Executive Vice President and Group Executive Vice President of Marketing. In 1995, he became President of the Primerica operating unit of Citigroup Inc. (“Citigroup”) and was promoted to Co-Chief Executive Officer in 1999. Mr. Addison serves on the board of the National Monuments Foundation. Mr. Addison received his B.A. in Economics from the University of Georgia and his M.B.A. from Georgia State University.

 

Mr. Addison brings to our Board his 15 years of experience as our Co-Chief Executive Officer and over 30 years of understanding the Company, the sales force and our business, along with general management and sales and marketing expertise.

 

 

 

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BOARD OF DIRECTORS

 

 

JOEL M. BABBIT

 

LOGO   

Board Committees:

 

Corporate Governance

  

Public Directorships:

 

Greensky, Inc.

Co-Founder and Chief Executive Officer
of Narrative Content Group, LLC

 

Age: 67

 

Director Since August 2011

 

Mr. Babbit is the Co-Founder and Chief Executive Officer of Narrative Content Group, LLC (“NCG”), one of the nation’s leading resources for the production and distribution of digital content. Prior to launching NCG in 2009, Mr. Babbit spent more than 20 years in the advertising and public relations industry, creating two of the largest advertising agencies in the Southeastern US – Babbit and Reiman (acquired by London-based GGT) and 360 (acquired by WPP’s Grey Global Group). Following the acquisition of 360 by Grey Global Group in 2002, Mr. Babbit served as President and Chief Creative Officer of the resulting entity, Grey Atlanta, until 2009. He also previously served as President of WPP’s GCI Group, one of the world’s ten largest public relations firms, and as Executive Vice President and General Manager for the New York office of advertising agency Chiat/Day Inc. Following his hometown of Atlanta being awarded the 1996 Summer Olympics, and at the request of Mayor Maynard Jackson, Mr. Babbit took a leave of absence from the private sector to serve as Chief Marketing and Communications Officer for the City of Atlanta and as a member of the Mayor’s cabinet. Mr. Babbit also serves on the board of directors of Greensky, Inc. He received a B.A. in Journalism from the University of Georgia and was awarded the Henry Grady School of Journalism Lifetime Achievement Award in 2015.

 

Mr. Babbit brings to our Board over 35 years of experience in marketing and advertising, his management experience, his expertise in social media, environmental, social and governance issues and his experience as an entrepreneur.

 

 

 

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BOARD OF DIRECTORS

 

 

P. GEORGE BENSON

 

LOGO

  

Lead Director

 

Board Committees:

 

Corporate Governance (Chair)

 

Audit

 

Executive

  

Public Directorships:

 

AGCO Corporation

 

Former Public Directorships:

 

Crawford & Company

 

Nutrition 21, Inc.

 

Professor of Decision Sciences and
Former President of the College of
Charleston

 

Age: 74

 

Director Since April 2010

 

Since July 2014, Mr. Benson has been Professor of Decision Sciences at the College of Charleston in Charleston, South Carolina. He served as the President of the College of Charleston from February 2007 through June 2014. From June 1998 until January 2007, he was Dean of the Terry College of Business at the University of Georgia. From July 1993 to June 1998, Mr. Benson served as Dean of the Rutgers Business School at Rutgers University and, prior to that, Mr. Benson was on the faculty of the Carlson School of Management at the University of Minnesota. Mr. Benson currently serves as Past Chairman of the board of directors for the Foundation for the Malcolm Baldrige National Quality Award, having chaired such board from 2013 to 2019. He was Chairman of the board of overseers for the Baldrige Award Program from 2004 to 2007 and was a national judge for the Baldrige Award from 1997 to 2000. Mr. Benson also serves on the board of directors of AGCO Corporation and served on the board of directors of Crawford & Company from July 2005 to May 2019. Mr. Benson received a B.S. degree in Mathematics from Bucknell University, completed graduate work in operations research in the Engineering School of New York University and earned a Ph.D. in business from the University of Florida.

 

Mr. Benson brings to our Board significant expertise in academics, senior management, corporate governance, strategic planning, and enterprise risk management. In particular, our Board considered his experience managing the College of Charleston’s staff of more than 2,000, budget of more than $250 million and endowment of more than $80 million, as well as his service on the boards of directors of other public companies and as a member of their audit and corporate governance committees.

 

 

 

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BOARD OF DIRECTORS

 

 

C. SAXBY CHAMBLISS

 

LOGO   

Board Committees:

 

None

  

Public Directorships:

 

None

Partner, DLA Piper

 

Age: 77

 

Director Since June 2017

 

Senator Chambliss has been a partner with the law firm of DLA Piper since January 2015, where he is a member of the firm’s government relations and cybersecurity teams. Prior to that, he served as a U.S. Senator for Georgia from 2003 to 2015 and a U.S. Representative for Georgia from 1995 to 2003. During his tenure in the Senate, he served on the Senate Select Committee on Intelligence, where he was vice chairman from 2011 to 2014. While serving in that role, Senator Chambliss advocated for improved information sharing and human intelligence-gathering capabilities, and he is one of the leading congressional experts on those issues. Senator Chambliss is also a legal expert with respect to cybersecurity matters. Before entering Congress, he practiced general corporate law in Moultrie, Georgia. Senator Chambliss earned a B.B.A. degree from the University of Georgia and a J.D. from the University of Tennessee at Knoxville.

 

Senator Chambliss brings to our Board legal and cybersecurity expertise as well as years of government experience at the state and federal levels.

Waiver of Director Retirement Age

The Company’s Corporate Governance Guidelines provide that a director may serve on the Board until the Annual Meeting of the Stockholders of the Company next following his or her 75th birthday, and may not be reelected after reaching 75, unless this requirement has been waived by the Board. Senator Chambliss reached age 75 in late 2018. The Corporate Governance Committee waived this requirement for his election at the 2019 and 2020 Annual Meetings and has determined to waive this requirement for Senator Chambliss again for his election at the Annual Meeting. The Corporate Governance Committee believes it is important to exercise judgment when considering whether to grant such a waiver in order to retain existing Board members who otherwise possess the requisite expertise, engagement and abilities to fulfill their duties while providing for regular Board refreshment. The Corporate Governance Committee also believes consideration should be given with respect to the overall composition of the Board to ensure it has the right balance of skills and experience.

In reviewing a potential waiver for Senator Chambliss, the Corporate Governance Committee considered several factors:

 

   

Senator Chambliss brings to our Board years of legal knowledge and experience as well as governmental expertise at the state and federal levels;

 

   

Our Board recognizes the importance of maintaining the trust and confidence of our customers, clients, and employees, and devotes significant attention to oversight of cybersecurity risk. As an expert on cybersecurity, Senator Chambliss has been particularly valuable in the Board’s oversight responsibilities in this area;

 

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Senator Chambliss remains an active and engaged Board member;

 

   

Senator Chambliss was elected to the Board of Directors in June 2017, has served on our Board for less than four years and continues to add value to the Company both in and out of the boardroom; and

 

   

The Board has no prior history of waiving the retirement requirement for any other director. In fact, a director retired from the Board in May 2018 as a result of the director retirement age.

The Corporate Governance Committee recommended that the Board waive for fiscal 2021 the retirement requirement for Senator Chambliss. Upon the recommendation of the Corporate Governance Committee, the Board concluded that Senator Chambliss’ experience, expertise, and engagement as a Board member warranted such a waiver. Therefore, in February 2021, the Board granted a one-year waiver of the retirement requirement and re-nominated Senator Chambliss to be considered for election at the Annual Meeting. Absent unforeseen circumstances, the Board does not expect to seek a waiver to nominate Senate Chambliss for election at the 2022 Annual Meeting.

 

 

 

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BOARD OF DIRECTORS

 

 

GARY L. CRITTENDEN

 

LOGO

Private Investor

 

Age: 67

 

Director Since July 2013

  

Board Committees:

 

Audit (Chair)

 

Compensation

 

Executive

  

Public Directorships

 

Extra Space Storage Inc.

 

Pluralsight, Inc.

 

Zions Bancorporation

 

Former Public Directorships:

 

Staples Inc.

 

Ryerson Inc.

 

TJX Companies

  

Mr. Crittenden has been a private investor and has served as a non-employee Executive Director of HGGC, LLC (“HGGC”), a California-based middle-market private equity firm, since January 2017. He previously served as a Managing Partner of HGGC from July 2009 to January 2017, Chairman of HGGC from August 2013 to January 2017 and Chief Executive Officer of HGGC from April 2012 to August 2013. From March 2009 to July 2009, Mr. Crittenden was Chairman of Citi Holdings, an operating segment of Citigroup that comprises financial services company Citi Brokerage and Asset Management, Global Consumer Finance and Special Assets Portfolios, and from March 2007 to March 2009 he served as Chief Financial Officer of Citigroup. He served as the Chief Financial Officer of the American Express Company from 2000 to 2007. Prior to American Express, he was the Chief Financial Officer of Monsanto, Sears Roebuck and Company, Melville Corporation and Filene’s Basement. On three separate occasions, the readers of Institutional Investor Magazine named Mr. Crittenden one of the “Best CFOs in America.” Mr. Crittenden spent the first twelve years of his career at Bain & Company, an international management consulting firm, where he became a partner. Mr. Crittenden also serves on the boards of directors of Extra Space Storage Inc., Pluralsight, Inc. and Zions Bancorporation. He received a B.S. degree from Brigham Young University and an M.B.A. from Harvard Business School.

Mr. Crittenden brings to our Board expertise in general management, finance and accounting, strategic planning, enterprise risk management, human capital management, investment banking and capital markets, as well as experience serving on the boards of directors of several large public companies.

 

 

 

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BOARD OF DIRECTORS

 

 

CYNTHIA N. DAY

 

LOGO   

Board Committees:

 

Audit

 

Corporate Governance

  

Public Directorships:

 

PROG Holdings, Inc.

 

Former Public Directorships:

 

Aaron’s Holdings, Inc.

President and Chief Executive Officer

of Citizens Bancshares Corporation

and Citizens Trust Bank

 

Age: 55

 

Director Since January 2014

 

Ms. Day has been the President and Chief Executive Officer of Citizens Bancshares Corporation and Citizens Trust Bank since February 2012. Citizens Bancshares Corporation was a publicly held corporation until it completed a going private transaction in January 2017. She served as Chief Operating Officer and Senior Executive Vice President of Citizens Trust Bank from February 2003 to January 2012 and served as its acting President and Chief Executive Officer from January 2012 to February 2012. She previously served as the Executive Vice President and Chief Operating Officer and in other capacities of Citizens Federal Savings Bank of Birmingham from 1993 until its acquisition by Citizens Trust Bank in 2003. She served as an audit manager for KPMG until joining Citizens Trust Bank in 1993. Ms. Day also serves on the board of directors of PROG Holdings, Inc., the National and Georgia Banker’s Associations and the Georgia Bankers Association and served on the board of directors of Aaron’s Holdings, Inc. from October 2011 until its spin-off of PROG Holdings, Inc. in December 2020. She is a member of the Georgia Society of CPAs and a member of the Rotary Club of Atlanta. Ms. Day received a B.S. degree from the University of Alabama.

Ms. Day brings to our Board experience as the chief executive officer of a previously publicly held company as well as expertise in general management, finance and accounting, strategic planning, and enterprise risk management. She also has experience serving on the boards of directors of several public companies. In addition, the customer base served by Citizens Bancshares Corporation is very similar to that served by the Company, giving her a great understanding of their buying habits, the products they purchase and effective marketing and communication methods.

 

 

 

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BOARD OF DIRECTORS

 

 

SANJEEV DHEER

 

LOGO   

Board Committees:

 

Corporate Governance

  

Public Directorships:

 

None

President and Chief Executive Officer
of CENTRL, Inc.

 

Age: 61

 

Director Since October 2019

 

  

Mr. Dheer has been the Founder and Chief Executive Officer of CENTRL, Inc., a privacy management and risk platform for enterprises, since September 2015. He previously served as a consultant to Apple Inc. in the payments area from July 2014 to August 2015. In November 1999, Mr. Dheer founded CashEdge, a pioneer in developing innovative payments products for banks, which was acquired by Fiserv, a global leader in fintech and payments, in 2011. He led the CashEdge business division at Fiserv from September 2011 to June 2013. In addition, Mr. Dheer served as a Principal at McKinsey & Co., where he worked from September 1992 to October 1999. Mr. Dheer received an M.B.A. from the Stanford Graduate School of Business where he was an Arjay Miller Scholar, an M.A. in Computer Science from Queens College, City University of New York, an M.A. in Economics from Washington State University, and a B.A. and M.A. in History from Delhi University. He has authored over 14 patents.

Mr. Dheer brings to our Board experience as the chief executive officer of a start-up technology company, as well as expertise in client-facing digital technology, general management, management consulting and strategic planning.

 

 

 

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BOARD OF DIRECTORS

 

 

BEATRIZ R. PEREZ

 

LOGO   

Board Committees:

 

Compensation

  

Public Directorships:

 

W.W. Grainger, Inc.

 

Former Public Directorships:

 

HSBC Finance Corporation

SVP and Chief Communications,

Sustainability and Strategic Partnerships Officer for The

Coca-Cola Company

 

Age: 51

 

Director Since May 2014

  

Beatriz “Bea” Perez has been the SVP and Chief Communications, Sustainability and Strategic Partnerships Officer for The Coca-Cola Company since May 2017. In this role, she leads an integrated team across public affairs and communications, sustainability and strategic partnerships to support The Coca-Cola Company’s new growth model and path to become a total beverage company. She also oversees The Coca-Cola Company’s strategic partnerships and operational efforts for The Coca-Cola Company’s Retail, Licensing and Attractions portfolio of assets. Ms. Perez has served as The Coca-Cola Company’s first Chief Sustainability Officer since 2011, where she developed and led progress against comprehensive global sustainability commitments with a focus on water stewardship and women’s economic empowerment. She previously served as Chief Marketing Officer for Coca-Cola North America. Ms. Perez began her career at The Coca-Cola Company in 1996 and held various roles in brand management and field operations before becoming Chief Marketing Officer. Ms. Perez also serves on the board of directors of W.W. Grainger, Inc. She received a B.S. degree from the University of Maryland.    

Among Ms. Perez’ recognitions are membership in the American Advertising Hall of Achievement and the Sports Business Journal’s Hall of Fame. The Association of Latino Professionals for America named Ms. Perez to its 2017 “50 Most Powerful Latinas” ranking. She has been recognized as a “Conservation Trailblazer” by The Trust for the Public Land. She was on Hispanic Executive magazine’s list of “Top 10 Leaders”, and she was featured as one of the “25 Most Powerful Latinas” on CNN and in People en Español. In 2020, Ms. Perez was named to Latino Leaders Magazine’s 2020 list of “Latinos on Boards” and named to the magazine’s 2020 “Top 100 Most Influential Latinas” across all industries.

Ms. Perez brings to our Board expertise in environmental, social and governance issues and human capital management. In particular, our Board considered her significant current and past experience serving in several senior management positions at The Coca-Cola Company.

 

 

 

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BOARD OF DIRECTORS

 

 

D. RICHARD WILLIAMS

 

LOGO   

Board Committees:

 

Executive (Chair)

  

Public Directorships:

 

Crawford & Company

 

Former Public Directorships:

 

Usana Health Services, Inc.

Chairman of the Board

 

Age: 64

 

Director Since October 2009

  

Mr. Williams has served as non-executive Chairman of the Board of Primerica since April 2015 and as Chairman from October 2009 through March 2015. He served as our Co-Chief Executive Officer from 1999 through March 2015 and has served the Company since 1989 in various capacities, including as the Chief Financial Officer and Chief Operating Officer of the Primerica operating unit of Citigroup. Mr. Williams also serves on the board of directors of Crawford & Company and the Charles Stark Draper Laboratory Inc., a not-for-profit research and development company. Mr. Williams served on the board of directors of Usana Health Sciences, Inc. from March 2016 to May 2018. Mr. Williams received both his B.S. degree and his M.B.A. from the Wharton School of the University of Pennsylvania.

Mr. Williams led the Company as Co-Chief Executive Officer for 15 years and brings to our Board more than 20 years of knowledge of the Company’s business, finances and operations along with expertise in senior management, finance, strategic planning, and enterprise risk management.

 

 

 

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BOARD OF DIRECTORS

 

 

GLENN J. WILLIAMS

 

LOGO   

Board Committees:

 

Executive

  

Public Directorships:

 

None

Chief Executive Officer

 

Age: 61

 

Director Since April 2015

     

Mr. Williams has served as our Chief Executive Officer since April 2015. He served as the Company’s President from 2005 through March 2015. Previously, he served as Executive Vice President of Field and Product Marketing for our international operations from 2000 to 2005, as President and Chief Executive Officer of Primerica Canada from 1996 to 2000, and in roles of increasing responsibility as part of Primerica’s international expansion team in Canada from 1985 to 2000. He began his career with Primerica in 1981 as a member of the Company’s sales force and joined the home office team in 1983. Mr. Williams received his B.S. degree in Education from Baptist University of America.

Mr. Williams brings to our Board more than 30 years of experience with the Company, including time in the field as a sales representative, as well as expertise in general management, sales and marketing.

 

 

 

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BOARD OF DIRECTORS

 

 

BARBARA A. YASTINE

 

LOGO   

Board Committees:

 

Compensation (Chair)

 

Audit

 

Executive

  

Public Directorships:

 

AXIS Capital Holdings Limited

 

Zions Bancorporation

 

Former Public Directorships:

 

First Data Corporation

Former Chairman, President and CEO, Ally Bank

 

Age: 61

 

Director Since December 2010

Ms. Yastine served as Co-Chief Executive Officer of Lebenthal Holdings LLC, a private asset management firm, from September 2015 to June 2016. She previously served as Chair, President and Chief Executive Officer of Ally Bank from March 2012 to September 2015 and as Chair of Ally Bank and Chief Administrative Officer of Ally Financial Inc. (“Ally Financial”) from May 2010 to March 2012. Prior to joining Ally Financial, she served as a Principal of Southgate Alternative Investments beginning in June 2007. She served as Chief Financial Officer for investment bank Credit Suisse First Boston from October 2002 to August 2004. From 1987 through 2002, Ms. Yastine worked at Citigroup and its predecessor companies. Ms. Yastine also serves on the board of directors of AXIS Capital Holdings Limited, Zions Bancorporation and the Charles Stark Draper Laboratory Inc., a not-for-profit research and development company. She served on the Board of Directors of First Data Corporation from September 2016 to July 2019. She received a B.A. in Journalism and an M.B.A. from New York University.

Ms. Yastine brings to our Board expertise in general management, enterprise risk management, finance, human capital management, strategic planning, and direct to consumer digital strategies. In particular, our Board considered her significant experience in a broad range of consumer financial services companies and her consumer facing digital experience.

 

 

 

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BOARD OF DIRECTORS

 

Director Qualifications

Set forth below is a chart that highlights certain skills and experiences of the director nominees, along with the reasons such expertise is desired for our Board.

 

Area of Expertise   Business Rationale for Expertise   John A.
Addison
  Joel M.
Babbit
  P.
George
Benson
  C. Saxby
Chambliss
  Gary L.
Crittenden
  Cynthia
N. Day
  Sanjeev
Dheer
  Beatriz
R.
Perez
  Glenn J.
Williams
  D. Richard
Williams
  Barbara
A.
Yastine
C-Suite Leadership   Ensures that directors have experience executing strategy while understanding the multitude of competing priorities                        
Regulated Industry   Integral to understanding the special issues facing companies in highly regulated industries                              
Financial Literacy   Provides strong oversight of the Company’s financial performance and reporting and related internal controls                      
Sales & Marketing   Key component of the Company’s business model and integral to the execution of its mission                                
Strategic Planning   Critical to drive the strategic direction and growth of the Company.                        
Technology   Integral to the execution of the Company’s mission and a key strategic enabler                                        
ESG / Sustainability   Expertise in managing ESG/Sustainability initiatives is integral to the long-term execution of the Company’s business.                                        
Human Capital Management   Expertise in compensation, attracting and retaining top talent, development and succession planning is integral to the Company’s long-term success. This skill also ensures compensation and benefits discourage imprudent risk taking and are aligned with stockholder interests.                                
Public Company Board (other than Primerica)   Provides an understanding of corporate governance practices and the dynamics and operation of a corporate board, management accountability and protecting stockholder interests                              
Enterprise Risk Management   Integral to overseeing the Company’s ERM framework and understanding the inherent and residual risks facing the Company.                                  
Government/ Regulatory Affairs   Integral to the Company’s ability to navigate and influence pending regulation                                        

 

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Tenure/Age/Gender

  Addison   Babbit   Benson   Chambliss   Crittenden   Day   Dheer   Perez   G.
Williams
  D.
Williams
  Yastine

Years on the Board

  11   9   10   3   7   7   1   6   5   11   10

Age

  63   67   74   77   67   55   61   51   61   64   61

Gender

  M   M   M   M   M   F   M   F   M   M   F

Race/Ethnicity

                                           

African American/Black

                                         

Hispanic, Latinx or Spanish Origin

                                         

White/Caucasian

                           

Asian/South Asian

                                         

American Indian/Native American

                                           

 

 

LOGO

 

Board Meetings

During fiscal 2020, our Board held five meetings. Each director attended more than 81%, collectively, of the meetings of our Board and its committees on which he or she served during fiscal 2020. We expect our directors to attend each Annual Meeting of Stockholders absent extraordinary circumstances, and each director attended the 2020 Annual Meeting.

Board Committees

Our Board has four standing committees that assist it in carrying out its duties — the Audit Committee, the Compensation Committee, the Corporate Governance Committee and the Executive Committee. The charter of each committee is available through the Governance section of our investor relations website at https://investors.primerica.com and may be obtained, without charge, by contacting the Corporate Secretary, Primerica, Inc., One Primerica Parkway Duluth, Georgia 30099.

 

 

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BOARD OF DIRECTORS

 

The following chart shows the membership of each of our Board’s standing committees as of December 31, 2020.

 

Name    Audit    Compensation   

Corporate

Governance

   Executive

John A. Addison, Jr.

                   

Joel M. Babbit (I)

                 

P. George Benson (LD) (I)

           Chair   

C. Saxby Chambliss (I)

                   

Gary L. Crittenden (I)

   Chair (F)           

Cynthia N. Day (I)

   (F)             

Sanjeev Dheer (I)

                 

Beatriz R. Perez (I)

                 

D. Richard Williams (*)

                  Chair

Glenn J. Williams

                 

Barbara A. Yastine (I)

      Chair        

Number of meetings in fiscal 2020

   8    6    7    1

*- Chairman of the Board

LD – Lead Director

I – Independent Director

F – Audit Committee Financial Expert

 

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The key responsibilities of each of the Board’s standing committees are described below:

 

Committee   Key Responsibilities
Audit Committee  

•     Retains and terminates the Company’s independent registered public accounting firm and approves its services and fees

 

•     Assists our Board in fulfilling its responsibility to our stockholders relating to the financial reporting process and systems of internal control

 

•     Determines whether the Company’s financial systems and reporting practices were established in accordance with applicable requirements

 

•     Oversees the Company’s internal audit and risk functions

 

See “Audit Matters – Audit Committee Report.”

Compensation Committee  

•     Approves and oversees the administration of the Company’s material benefit plans, policies and programs, including all of the Company’s equity plans and employee incentive plans

 

•     Reviews and approves principal elements of total compensation for certain of the Company’s executive officers and approves employment agreements, as applicable

 

•     Reviews and recommends the compensation of non-employee directors to the full Board

 

•     Discusses, evaluates and reviews the Company’s policies and practices of compensating its employees, including non-executive officers, as they relate to risk management practices and risk-taking incentives

 

•      Delegates to the Chief Executive Officer and President the authority to issue equity awards to the sales force and certain employees, subject to applicable limits

 

See “Executive Compensation.”

Corporate Governance Committee  

•     Shapes corporate governance policies and practices, including recommending to our Board the Corporate Governance Guidelines applicable to the Company and monitoring the Company’s compliance with such policies, practices and guidelines

 

•     Identifies individuals qualified to become Board members and recommends to our Board the director nominees to be considered for election at the next Annual Meeting of Stockholders

 

•     Leads our Board and all committees in their annual self-assessments of their performance and oversees third party director peer reviews

 

•     Oversees executive succession planning and talent development, our political action committee, and our government relations strategy

 

•     Oversees the Company’s social, environmental and sustainability initiatives, including diversity, equality and inclusion programs

 

See “Governance.”

Executive Committee  

•     Exercises all powers and authority of the Board during the intervals between regularly scheduled Board meetings on time-sensitive matters or matters that do not merit the calling of a special meeting of the Board

 

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Director Compensation

The Compensation Committee is responsible for reviewing and considering any revisions to director compensation. The Compensation Committee reviews a competitive market analysis of director compensation prepared by its independent compensation consultant at least bi-annually as part of its process of evaluating and setting compensation for non-employee directors. The next such review will occur in fiscal 2021. See “Executive Compensation – Compensation Discussion and Analysis (“CD&A”) – the Compensation Setting Process – Compensation Consultant” for a discussion of the role of the Committee’s compensation consultant and its evaluation of potential conflicts of interest.

The Compensation Committee does not seek to benchmark or set compensation at any specific level relative to the peer data. Instead, the Compensation Committee uses this information primarily as background with respect to compensation plan design decisions and as a general reference point for pay levels. For a list of the peer companies and a description of how they were selected, see “Executive Compensation – Compensation

Discussion and Analysis (“CD&A”) – Fiscal 2020 Executive Compensation – The Compensation Setting Process – Use of a Peer Group.”

Our Board reviews the Compensation Committee’s recommendations and determines the amount of director compensation annually. Executive officers have no role in determining or recommending director compensation. Our Board has determined that compensation for non-employee directors should be a mix of cash and equity-based compensation, with a higher portion of compensation in the form of equity. This ensures that the interests of our non-employee directors are aligned with the interests of our stockholders. In addition, non-employee directors are subject to stock ownership guidelines. See “– Director Stock Ownership Guidelines”.

Directors who are employees of Primerica do not receive any fees or additional compensation for their service on our Board.

The Board approved the following compensation program for directors in fiscal 2020:

 

 

Board/Committee    2020 Non-Employee Director Compensation (1)  

Board

   Annual Cash Retainer    $ 90,000      Annual RSU Award (2)    $ 130,000  

Audit

   Annual Chair Cash Fee    $ 25,000      Annual Member Cash Fee    $ 10,000  

Compensation

   Annual Chair Cash Fee    $ 15,000      Annual Member Cash Fee    $ 10,000  

Corporate Governance

   Annual Chair Cash Fee    $ 15,000      Annual Member Cash Fee    $ 10,000  

 

(1)

All cash retainers and cash fees are paid in quarterly installments.

(2)

Unless otherwise specified, the RSUs vest in four quarterly installments and delivery of the shares underlying the RSUs is made on the applicable vesting date.

 

In addition, the Lead Director receives an annual cash fee of $25,000 and the Chairman of the Board receives an annual cash fee of $100,000. The Company reimburses all directors

for travel and other related expenses in connection with attending Board and committee meetings and Board-related activities.

 

 

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Director Compensation Table

The following table shows fiscal 2020 compensation for our non-employee directors:

 

Name    Fees
Earned or
Paid in
Cash (1)
     Stock
Awards (2)
   

All Other

Compensation (3)

     Total  

John A. Addison, Jr.

   $ 90,000      $ 129,958     $ 101,236      $ 321,194  

Joel M. Babbit

   $ 100,000      $ 129,958     $ 1,236      $ 231,194  

P. George Benson

   $ 140,000      $ 129,958     $ 1,236      $ 271,194  

C. Saxby Chambliss

   $ 90,000      $ 129,958 (4)     $ 1,221      $ 221,180  

Gary L. Crittenden

   $ 125,000      $ 129,958 (4)     $ 1,236      $ 256,194  

Cynthia N. Day

   $ 110,000      $ 129,958 (4)     $ 1,236      $ 241,194  

Sanjeev Dheer

   $ 100,000      $ 129,958     $ 1,236      $ 231,194  

Beatriz R. Perez

   $ 100,000      $ 129,958 (4)     $ 1,236      $ 231,194  

D. Rick Williams

   $ 190,000      $ 129,958 (4)     $ 1,236      $ 321,194  

Barbara A. Yastine

   $ 111,319      $ 129,958     $ 1,236      $ 242,513  

 

(1)

Includes the cash portion of the annual retainer as well as fees for Lead Director and Chairman roles and committee service.

(2)

Each non-employee director was granted 1,256 RSUs, representing the number of whole shares of our common stock (or, at the director’s election, deferred stock units) equal to $130,000 divided by $103.47 (the closing market price per share of our common stock on the NYSE on the trading day immediately preceding the grant date of May 13, 2020). At December 31, 2020, each such non-employee director had 628 unvested RSUs (or, if he or she so elected, deferred stock units). For the valuation assumptions underlying the awards, see Note 1 to the Company’s audited financial statements for fiscal 2020 included in the Company’s 2020 Annual Report.

(3)

Represents dividends paid on unvested equity awards and, for Mr. Addison, consulting fees. Omits perquisites and other personal benefits as these amounts did not exceed $10,000 for any director.

(4)

Elected to receive equity compensation in the form of deferred stock units under the Nonemployee Directors’ Deferred Compensation Plan. See “— Deferred Compensation.”

 

At December 31, 2020, our non-employee directors each held 628 unvested equity awards that had been granted on May 13, 2020. As of December 31, 2020, these awards had a market value of $84,108 based on the closing price per share of our common stock on the NYSE on that date of $133.93. All RSUs and deferred stock units granted in fiscal 2020 vest in equal installments on the three-month, six-month, nine-month and twelve-month anniversary of the grant date (or, if earlier, the final tranche vests on the date of the Annual Meeting of Stockholders in the year following the year of grant).

Deferred Compensation

Our Board adopted the Nonemployee Directors’ Deferred Compensation Plan in November 2010,

under which non-employee directors may elect to defer all or a portion of their directors’ fees. At the director’s option, we convert all or a portion of his or her cash fees otherwise payable during a calendar quarter to deferred stock units equal in number to the maximum number of shares of our common stock, or fraction thereof (to the nearest one hundredth (1/100) of one share), which could be purchased with the dollar amount of such fees at the closing market price of our common stock on the last trading day of the calendar quarter. These deferred stock units will be fully vested on such date.

At the director’s option, we credit his or her deferral account with deferred stock units equal in number to the number of equity awards to which the director was otherwise entitled. Any deferred stock units that are issued upon deferral

 

 

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of equity awards are subject to the same vesting provisions as the equity awards themselves. We also credit the deferral account with deferred stock units equal in number to the maximum number of shares of our common stock, or fraction thereof (to the nearest one hundredth (1/100) of one share), which could have been purchased with the cash dividend, if any, which would have been payable had the participant received restricted stock awards to which he or she was otherwise entitled. The deferred stock units credited in lieu of the payment of dividends on equity awards are fully vested on the dividend payment date.

We pay all deferred compensation in the form of our common stock, at the director’s election, within 60 days of termination of Board service or, in the case of an installment election, within 60 days of termination of Board service and up to five anniversaries of such date.

During fiscal 2020, Messrs. Chambliss, Crittenden, and R. Williams, and Ms. Day and Ms. Perez, deferred director compensation into the Nonemployee Directors’ Deferred Compensation Plan.

Director Stock Ownership Guidelines

Our non-employee directors are required to own shares with a value at least equal to five times their annual cash retainer. In determining compliance with these guidelines, stock ownership includes shares beneficially owned by the director (or by immediate family members) and unvested RSUs and deferred stock units. The participants have five years from the date of their initial election to our Board to achieve the targeted level of stock ownership. The stock ownership of each of our non-employee directors exceeds the required ownership guidelines.

 

 

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Compensation Committee Message

To Our Fellow Stockholders,

Your Board of Directors is very proud of the Company’s performance during the extraordinary circumstances of 2020, and we are impressed with the resilience and adaptability of our clients, sales representatives, employees and leadership team.

The Company exceeded the targets set at the beginning of the year for the short-term incentive plan with respect to operating revenues, net operating income and return on average equity (ROAE). While the total number of licensed insurance sales representatives exceeded the target, the adjusted number used for incentive compensation purposes fell modestly short. (This adjustment is discussed below and on page 51.) All in, this performance earned our executives and officers* a short-term incentive corporate performance payout of 110.3%.

No adjustments were made to the performance targets set at the beginning of 2020, nor were there any adjustments or overrides to corporate performance targets or payouts for our executives or officers. While the pandemic certainly brought challenges, the Board of Directors determined that Primerica was neither significantly disadvantaged nor significantly advantaged and that our compensation plans would suitably address the year’s results.

Total stockholder return for 2020 was 3.9%, which compares to (0.4)% for the S&P 500 Insurance Index and 13.7% for the S&P Mid-Cap 400 Index. Broadly speaking, it was a difficult year for many insurers because of the very low interest rate environment and the resulting reductions in net investment income. While Primerica also felt the negative effect of lower interest rates, the Company’s results were more impacted by the $33 million in COVID-related death claims. However, both of these negative business impacts were more than offset by stronger sales and persistency.

Given the financial health of the Company throughout the year, Primerica also raised its dividend by 17.6%, the 14th increase in 10 years, and repurchased $231.4 million of our common stock.

Short-Term Incentives

In the Compensation Committee’s messages in the Company’s 2019 and 2020 proxy statements, we discussed in detail the design of the short-term incentive plan, which uses solely corporate performance metrics for our named executive officers and a blend of the corporate performance metrics and individual performance for other officers.

The plan is designed for payouts to rise or fall with the Company’s financial and production results, as represented by the corporate performance metrics. While not completely correlated with stock price in the short run, we believe that economic value creation will drive stock performance over the long term.

As described on page 51, we did make a downward adjustment in the number of licensed life insurance agents at year-end 2020, which is one of four corporate performance metrics used in the short-term incentive plan. In 2020, many states temporarily liberalized certain licensing requirements in response to their inability to continue their traditional in-person testing as a result of the COVID-19 pandemic. At December 31, 2020, our sales force included approximately 6,100 agents licensed under these modifications. The Compensation Committee determined it was appropriate to make a downward adjustment of approximately 4,200 to the total sales force size used for incentive compensation purposes to reflect the expectation that many of these agents will never get permanent licenses.

The Compensation Committee has regularly discussed the merits of using a relative total stockholder return metric (TSR). We have decided against relative TSR for two reasons: (1) there is no peer group of companies with

 

 

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reasonably similar business mix, which is why our peer group (as presented on page 58) is an amalgam of companies with varying business focus, go-to-market strategies and size; and (2) creating an index of these peer group companies would require a significant degree of mathematical manipulation, which would undermine the goal of a straightforward yardstick.

We assess the metrics we use regularly and will continue to do so. For now, we believe we have chosen the metrics that best reflect the health of our business.

Long-Term Incentives

Each of our named executive officers also receives long-term incentives in the form of annual equity awards of restricted stock units (RSUs) and performance stock units (PSUs), each constituting 50% of the total. The RSUs are time-vested ratably over three years, while the PSUs have a three-year cliff vest tied to performance. Beginning with the 2020 grant, there are two equally-weighted metrics used to measure performance for the PSUs: ROAE and Average Annual Earnings Per Share (EPS) Growth. Previously, beginning with the introduction of PSUs in 2016, ROAE was the single performance metric used.

The ultimate payout value of both RSUs and PSUs is heavily dependent on stock price and, therefore, highly aligned with total stockholder return.

The performance period for the February 2018 PSU awards to our named executive officers ended on December 31, 2020 and the awards were paid out on March 1, 2021. The number of shares of our common stock ultimately delivered represented 109.9% of the number of originally granted shares, as actual ROAE during the 2018-2020 performance period of 23.7% exceeded the original target ROAE of 22.8%. In addition, the total economic payout of the 2018 PSUs benefited meaningfully from the increase in our

stock price from $100.55 on February 23, 2018 (the trading day immediately preceding the grant date) to $133.93 on December 31, 2020. Thus, the total payout of the 2018 awards was 46.4% higher than the original grant value. This compares to a return of 36.3% realized by stockholders over the same period (including the reinvestment of dividends).

We hope our fellow stockholders join us in congratulating and thanking our named executive officers for their leadership in 2020. While we believe our executive compensation plans are producing the desired results, we always welcome input from our fellow stockholders.

COMPENSATION COMMITTEE:

 

LOGO

 

LOGO

 

LOGO

*The short-term incentive plan for officers also includes assistant vice presidents.

The subsections within this Executive Compensation section are intended to be read together, and each section provides information not included in the others. For background information on the Compensation Committee and its responsibilities, see “Board of Directors — Board Committees — Compensation Committee.”

In this Executive Compensation section, the terms “we,” “our,” and “us” refer to management, the Company and, as applicable, the Compensation Committee.

 

 

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Compensation Discussion and Analysis (“CD&A”)

Named Executive Officers

Our named executive officers during fiscal 2020 were:

 

      Name    Title   

Years in

Current Role

  

Company

Tenure

LOGO

   Glenn J. Williams    Chief Executive Officer    6 years    40 years
LOGO    Peter W. Schneider    President    6 years    20 years

LOGO

   Alison S. Rand    Executive Vice President and Chief Financial Officer    21 years    25 years
LOGO    Gregory C. Pitts    Executive Vice President and Chief Operating Officer    12 years    35 years

Messrs. G. Williams, Schneider and Pitts and Ms. Rand are collectively referred to as the “Executive Team,” a management committee that consists of our four highest ranking executives. These individuals constituted all of the Company’s executive officers during fiscal 2020 and, as a result, a fifth executive is not listed.

 

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Timeline of Executive Compensation Process

Our executive compensation process begins in the fall, with preparations for the next compensation season. Following the conclusion of our fiscal year at the end of December, the Compensation Committee reviews proposed payouts under previously-established compensation programs in January and finalizes such payouts in February. Some of these compensation awards are based on results for the fiscal year just ended and some of them are tied to multi-year performance periods. In February, the Compensation Committee also reviews and establishes compensation programs for the new fiscal year or for the commencement of new multi-year performance periods.

Compensation Program Changes

In February 2020, the Compensation Committee added average EPS growth as a second metric to the PSU plan for the 2020 to 2022 performance period. See “ — Compensation Elements: Performance-Based Awards.

In February 2021, the Compensation Committee granted PSUs to our named executive officers for the 2021-2023 performance period. While

the PSUs continue to be tied to ROAE and average EPS growth, the Compensation Committee narrowed the performance range for ROAE to 90% to 110% of target and expanded the performance range for average EPS growth to 70% to 130% of target. The Company has significantly increased its ROAE since PSUs were first awarded in 2017 and, as a result, the ability to outperform ROAE targets has been greatly diminished. Narrowing the relevant performance range or ROAE makes incremental progress more relevant. On the other hand, the EPS growth metric is sensitive to not only net operating income but also the number and timing of share repurchases. Expanding the EPS performance range lessens the impact of these sensitivities. Taken together, the Compensation Committee believes these changes to the performance ranges help to better balance the impacts of the two metrics.

In addition, the Compensation Committee increased the short-term incentive targets for the 2021 performance year for our President, Chief Financial Officer and Chief Operating Officer by $150,000, $100,000 and $100,000, respectively.

The following table sets forth the short-term and long-term incentive award targets or fixed award values for fiscal 2020 and fiscal 2019:

 

 

Name   

2020 Short-

Term Target

    

2019 Short-

Term Target

    

2020

Long-Term

Fixed Incentive

Compensation (1)

    

2019

Long-Term

Fixed Incentive

Compensation (2)

 
   

Glenn J. Williams

   $ 1,500,000      $ 1,500,000      $ 2,750,000      $ 2,750,000  
   

Peter W. Schneider

   $ 850,000      $ 850,000      $ 1,500,000      $ 1,500,000  
   

Alison S. Rand

   $ 500,000      $ 500,000      $ 1,000,000      $ 1,000,000  
   

Gregory C. Pitts

   $ 500,000      $ 500,000      $ 1,000,000      $ 1,000,000  

 

(1)

Fixed value set in February 2020 and awarded in February 2021.

(2)

Fixed value set in February 2019 and awarded in February 2020.

 

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Total Stockholder Return

As shown in the tables below, the Company has delivered positive return to stockholders and has consistently paid stockholder dividends and repurchased shares of our common stock. In 2020, over $295 million was returned in the form of dividends and share repurchases.

 

 

LOGO

The following graph compares the performance of our common stock to the S&P MidCap 400 Index and the S&P 500 Insurance Index by assuming $100 was invested in each investment option as of December 31, 2015. The S&P MidCap 400 Index measures the performance of the United States middle-market capitalization equities sector. The S&P 500 Insurance Index is a capitalization-weighted index of domestic equities of insurance companies traded on the NYSE and NASDAQ. Our common stock is included in the S&P MidCap 400 index.

 

LOGO

 

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Fiscal 2020 Operating and Financial Results (1)

During fiscal 2020, the Company’s operating results were marked by strong performance. The following table illustrates the Company’s performance in fiscal 2020 relative to its performance in fiscal 2019.

 

      Fiscal 2020     Fiscal 2019     Change  

Operating Revenues (1)

   $ 2,224.5     $ 2,042.2       8.9

Net Operating Income (1)

   $ 391.6     $ 358.4       9.3

Adjusted Net Operating Income Return on Adjusted Stockholders’ Equity (ROAE) (1)

     24.7     23.5     *  

Diluted Adjusted Operating Income Per Share (1)

   $ 9.70     $ 8.43       15.1 %(2)  

Size of Life-Licensed Sales Force at Fiscal Year End

     134,907 (3)       130,522       3.4

Market Price Per Share at Fiscal Year End

   $ 133.93     $ 130.56       2.6

Total Stockholder Return

     3.9     35.1        

 

*

Not applicable

(1)

Includes financial results that were not prepared in accordance with GAAP. See “Reconciliation of GAAP and Non-GAAP Financial Measures” in Exhibit A to this Proxy Statement for a reconciliation to GAAP results.

(2)

Percentage change is calculated prior to rounding per share amounts.

(3)

Includes approximately 3,600 temporary licenses that were issued in response to the COVID-19 pandemic and approximately 2,500 licenses that were extended due to the COVID-19 pandemic. See “— Adjustments to Compensation Targets” for a description of the downward adjustment applied to this metric for incentive compensation purposes.

Fiscal 2020 Executive Compensation

The total compensation paid to our named executive officers for fiscal 2020, as set forth under “— Compensation Tables – Summary Compensation Table”, is shown below. The Compensation Committee believes that historical compensation trends demonstrate its focus on the alignment of pay and performance. The Chief Executive Officer’s 2020 total compensation was virtually unchanged compared to his 2019 total compensation.

 

Name    Title   

Total Fiscal 2020

Compensation

 

Glenn J. Williams

   Chief Executive Officer    $ 5,279,867  

Peter W. Schneider

   President    $ 3,058,303  

Alison S. Rand

   Executive Vice President and Chief Financial Officer    $ 2,109,348  

Gregory C. Pitts

   Executive Vice President and Chief Operating Officer    $ 2,105,648  

 

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Executive Compensation Practices

The chart below indicates certain highlights of our executive compensation program:

 

We Do    We Do Not

Base a majority of total compensation on performance

 

Set annual corporate performance targets based on objective performance measures

 

Vest equity awards over time to promote retention

 

Vest certain equity awards only upon the achievement of objective performance measures

 

Require Executive Team members and non-employee directors to hold our common stock through published stock ownership guidelines

 

Provide only double trigger change-of-control equity acceleration to executives who have change-of-control provisions

 

Prohibit pledging of our common stock

 

Make equity awards broadly throughout the organization, including on a performance basis to members of our independent contractor sales force

 

Mitigate potential dilutive effect of equity awards through a corporate share repurchase program

  

Ò  Permit hedging transactions or short sales by employees, officers or directors

 

Ò  Provide significant perquisites

 

Ò  Provide tax gross-ups for perquisites

 

Ò  Offer a pension or supplemental executive retirement plan (SERP)

 

Ò  Provide single trigger payments upon change-of-control

 

Ò  Provide excise tax gross-ups upon change-of-control

Pay-for-Performance

The Compensation Committee structured our 2020 executive compensation program so that a meaningful percentage of compensation is tied to the achievement of challenging levels of both short-term and long-term corporate performance as well as meeting strategic objectives. More than half of the compensation paid to members of our Executive Team is in the form of long-term incentive equity compensation.

 

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The pie charts below reflect the mix of salary, target short-term bonus, RSUs and PSUs (based on the fixed award value) as a percentage of total compensation for fiscal 2020 for our Chief Executive Officer and other Executive Team members (based on their aggregate compensation).

 

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LOGO      LOGO

 

Corporate Strategy

The Company is a leading provider of financial products to middle-income households in the United States and Canada with 134,907 licensed sales representatives as of December 31, 2020 (including temporary and extended licenses as a result of the COVID-19 pandemic). These independent licensed representatives assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities, managed investments and other financial products, which we distribute primarily on behalf of third parties. We insured over 5.5 million lives and had approximately 2.6 million client investment accounts at December 31, 2020. Our business model uniquely positions us to reach underserved middle-income consumers in a cost-effective manner and has proven itself in both favorable and challenging economic environments.

Our mission is to serve middle-income families by helping them make informed financial decisions and providing them with a strategy and tools to gain financial independence. We believe there is significant opportunity to meet the increasing array of financial services needs of our clients. We intend to leverage the sales force to meet such client needs, which will drive long-term value for all of our stakeholders. Our strategy is organized across four primary areas:

 

   

Maximizing sales force growth, leadership and productivity;

 

   

Broadening and strengthening our protection product portfolio;

 

   

Providing offerings that enhance our ISP business; and

 

   

Developing digital capabilities to deepen our client relationships.

 

 

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Short-Term Corporate Performance Objectives

 

For purposes of short-term incentive compensation, corporate performance for fiscal 2020 was measured based on four separate objectives, which were derived from the

Company’s 2020 business plan and corporate strategy. The following table describes the performance metrics and links each metric to the relevant components of the Company’s strategy.

 

 

        Strategic Objectives  
Corporate Objective   Rationale  

Maximize

Sales Force

Growth,

Leadership

and

Productivity

   

Broaden and

Strengthen

our

Protection

Product

Portfolio

   

Provide Offerings

that Enhance our
ISP Business

   

Develop

Digital

Capabilities

to Deepen

our Client
Relationships

 

Operating Revenues

  Reflects life and securities sales as well as the performance of our insurance in force and assets under management.                

Net Operating Income

  Reflects the overall success of the Company and is not impacted by management decisions on share repurchases.                

Adjusted Net Operating Income Return on Adjusted Stockholders’ Equity (ROAE)

  Reflects net operating income performance, as well as the effectiveness of capital management strategies.                

Size of Life-Licensed Sales Force at Fiscal Year End

  Represents recruiting, licensing efficiency, turnover rates and long-term sustainability.                            

 

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The Board of Directors approves an annual business plan with financial and operational targets. The Compensation Committee typically ties the annual corporate performance targets to the metrics contained in that business plan. The 2020 corporate performance targets were set at levels that were intended to be challenging but achievable. Each of the fiscal 2020 performance objectives reflected values that exceeded actual fiscal 2019 performance.

The weighting of each objective was intended to emphasize areas on which our Compensation Committee expected the management team to focus its attention. Specifically, the size of the life-licensed sales force was given the highest weighting because the Compensation Committee believes that this metric has historically driven the success of the business and it sought to incentivize management to focus on initiatives to grow the sales force. The Compensation Committee believes that this metric, which is at the heart of the Company’s mission to help families become financially independent, reflects a “social” factor under the Company’s ESG program.

For all corporate performance metrics, payout levels at various levels of performance are:

 

      Threshold
Performance (1)
   Target
Performance
  Maximum
Performance (2)

Payout Level

   50%
of
Target
   100%   200%
of
Target

 

(1)

Represents performance at 85% of target, or 90% for the size of the life-licensed sales force.

(2)

Represents performance at 115% of target, or 110% for the size of the life-licensed sales force.

The payout is zero for results below threshold performance and, for results between threshold and maximum levels, the actual payout factor is interpolated. The Compensation Committee intentionally narrowed the performance band for the size of the life-licensed sales force metric compared to the other metrics because it believes that performance in only the narrower band would justify an incentive payout.

The graph below shows the actual results for the fiscal 2020 corporate performance metric at 110.3% of target and shows the corporate performance and targeted goal for each metric for fiscal 2020. As described below, the size of the sales force for incentive compensation purposes was reduced to 130,670 to reflect certain temporary and extended licenses that we expect will fail to become permanent licenses. See “— Adjustments to Compensation Targets”.

 

 

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Targets for fiscal 2020 compared with fiscal 2019 targets and fiscal 2019 actual performance is shown below.

 

     

2020 Target

(dollars in
millions)

   

2019 Target

(dollars in
millions)

    % Change    

2019 Actual

(dollars in
millions)

   

%

Change

 

Operating Revenues

   $ 2,191.0     $ 2,035.9       7.6   $ 2,042.2       7.3

Net Operating Income

   $ 383.2     $ 342.0       12.0   $ 358.4       6.9

ROAE

     23.6     22.6     4.4     23.5     0.4

Life-Licensed Sales Force

     133,460       135,515       -1.5     130,522       2.3

 

Adjustments to Compensation Targets

Financial measures for the short-term and long-term equity incentive programs are developed based on expectations about our planned activities and reasonable assumptions about the performance of our key business drivers for the applicable period. The Compensation Committee spends considerable time determining appropriate targets for these programs and, because both the Compensation Committee and the Board of Directors believe that management is tasked with reacting appropriately to external challenges, the Compensation Committee is reluctant to change the measures of success during a performance period. As a result, the Compensation Committee does not expect to modify corporate performance targets absent extraordinary circumstances.

From time to time, however, discrete items or events may arise that were not contemplated by these plans or assumptions and that would result in inappropriate executive compensation payouts if such items or events were not given special consideration. Such items or events could include items such as changes in generally accepted accounting principles, restructuring and write-off charges, and the impact of significant unplanned acquisitions or dispositions.

Under the Compensation Committee’s adjustment guidelines, the Compensation Committee may adjust the calculation of financial results for incentive programs to eliminate the effect of the types of items or events described above. In making these

adjustments, the Compensation Committee’s policy is to seek to neutralize the impact of the unexpected or unplanned items or events, whether positive or negative, in order to provide consistent and equitable incentive payments that the Compensation Committee believes are reflective of Company performance. In considering whether to make a particular adjustment under its guidelines, the Compensation Committee will review whether the item or event was one for which management was responsible and accountable, treatment of similar items in prior periods, the extent of the item’s or event’s impact on the financial measure, and the item’s or event’s characteristics relative to normal and customary business practices.

The size of the Company’s life-insurance licensed sales force at December 31, 2020 was 134,907. This number included 3,597 temporary licenses and 2,508 extended licenses related to certain licensing modifications made by state departments of insurance in response to the COVID-19 pandemic. Because it is unlikely that all of these temporary and extended licenses will become permanent licenses, the Compensation Committee adjusted the size of the life-licensed sales force downward for incentive compensation purposes. Management expects 90% of the 3,597 temporary licenses (or 3,237) and 40% of the 2,508 extended licenses (or 1,000) to fail to become permanent licenses and, as a result, for incentive compensation purposes the Compensation Committee adjusted the size of the life-licensed sales force downward from 134,907 to 130,670.

 

 

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Personal Performance Objectives

Each named executive officer had personal performance objectives for fiscal 2020 that were approved by our Board of Directors. The goals support the Company’s strategic objectives and include matters such as leadership development, the introduction of new products and technology initiatives, strategic projects and human capital management. For fiscal 2020, the Compensation Committee did not make any personal performance adjustments to the cash incentive award for any named executive officer.

Payout of Performance Stock Units

Payouts for the 2018-2020 PSU cycle were based on actual ROAE compared to target ROAE during that three-year period. The performance achieved against the threshold, target and maximum payouts for the 2018-2020 PSU cycle, and the resulting percentage earned by our named executive officers, are set forth below.

 

      Threshold   Target   Maximum   ACTUAL  

Payout Factor

   50%   100%   150%     109.9

Performance Range

   80% of Target   100% of Target   120% of Target        

Average Operating ROAE from 2018-2020

   18.2%   22.8%   27.4%     23.7

The value of the PSU payouts reflects two factors: (i) the number of PSUs earned is based on the Company’s performance compared to the targeted ROAE; and (ii) the value of each PSU earned is based on the closing price of our common stock at the end of the performance period. In addition, dividends on the PSU awards accrue during the performance period and are paid in a lump sum following the vesting date. The table below shows the PSU awards granted in 2018 and associated payouts to each executive in terms of both units and value.

 

          2018-2020 Units      2018-2020 Value  
Name    Title    Original
Award
     Units
Earned
     Original
Award
     Final
Payout (1)
 

Glenn J. Williams

   Chief Executive Officer      13,674        15,027      $ 1,375,000      $ 2,012,566  

Peter W. Schneider

   President      7,458        8,196      $ 750,000      $ 1,097,690  

Alison S. Rand

   EVP and CFO      4,972        5,464      $ 500,000      $ 731,794  

Gregory C. Pitts

   EVP and COO      4,475        4,918      $ 450,000      $ 658,668  

 

(1)

The closing price of our common stock on the date of the PSU award in 2018 was $100.55. On December 31, 2020, the end of the performance period, the closing price of our common stock was $133.93.

 

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The chart below shows our Chief Executive Officer’s 2018-2020 PSU award from the grant date value, as adjusted by the Company’s performance against the metric set by the Compensation Committee, to realized value, which reflects the increase in the closing price of our common stock during the performance period.

 

 

LOGO

 

Say-on-Pay

In 2017, our stockholders approved an annual Say-on-Pay vote. The Company’s most recent advisory vote on executive compensation occurred at the 2020 Annual Meeting. Approximately 97.7% of votes cast approved our executive compensation program as described in our proxy statement for the 2020 Annual Meeting, and the Compensation Committee has not taken any action in response to that Say-on-Pay vote.

Tax Implications

The ultimate goal of the Compensation Committee is to provide compensation that is in the best interests of the Company. Therefore, to maintain flexibility to compensate our executives in a manner designed to promote long-term corporate goals and objectives, the Compensation Committee has not adopted a policy with respect to the deductibility of executive compensation or requiring that executive compensation have favorable accounting treatment to the Company.

 

 

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Compensation Program Objectives

Our executive compensation program was designed to achieve the following four primary objectives:

 

Compensation Program Objective    How Objective is Achieved
Motivate and reward executives when they deliver desired business results and stockholder value    Incentive compensation is tied directly to corporate performance and the achievement of strategic objectives.
Align executive and stockholder interests over the long-term    Equity-based incentive awards are tied to performance and their value increases with stock price appreciation. All named executive officers receive time-based RSUs. Fifty percent of the value of equity grants to named executive officers is awarded in the form of PSUs, which are delivered following completion of the three-year performance period only upon achievement of one or more performance goals. All members of the Executive Team are also subject to mandatory stock ownership guidelines. This further links executive performance with stockholder interests.
Avoid pay programs that may encourage excessive or unreasonable risk-taking, misalign the timing of rewards and performance, or otherwise fail to promote the creation of long-term stockholder value    The ranges of performance and payout levels are structured on a pro rata basis, rather than rewarding executives in lockstep fashion as performance increases, so that management is not encouraged to take excessive risk to reach the next level of incentive compensation. In addition, there is a cap for the maximum performance at each level.
Attract and retain the very best executive talent    Executive pay is designed to be competitive and performance-based. Executives are held accountable for results and rewarded above target levels when goals are exceeded. When goals are not met, incentive compensation awards are below target levels.

Company Tenure

Most of the members of the Company’s management team have been with the Company for many years, and the tenure of the Company’s named executive officers ranges from 20 years to 40 years, with an average tenure of 30 years. The Company’s management and the Compensation Committee both believe that the long tenure of a talented executive management team has been an important element in the Company consistently achieving its production and financial goals. In addition, long tenure has enabled the Company to avoid the costs of turnover. Further, we believe that tenure is an important factor in the Company’s successful implementation of its business strategies. The Company’s distribution model is unique and understanding the nuances of a large and diverse sales force can take many years. The Company’s compensation policies are designed to promote this long tenure, which the Compensation Committee believes benefits the Company’s stockholders. At the same time, the Corporate Governance Committee oversees succession planning and talent development, and the Corporate Governance Committee receives regular updates from management to ensure that the Company is growing future leaders.

 

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Compensation Elements

The elements of the fiscal 2020 executive compensation program for our named executive officers are described below.

 

Pay Element   Base Salary   Bonus   RSUs   PSUs
           

Type of

Performance

  Short-term emphasis   Hybrid of short-term and long-term emphasis   Long-term emphasis
                 
           
When Awarded  

Reviewed

annually

 

February 2021

for 2020 performance

  February 2021   February 2021
                 
           
How Value is Determined   N/A  

• Adjusted operating revenues

• Adjusted net operating income

• ROAE

• Life sales force

  Fixed grant values were set in February 2020   Fixed grant values were set in February 2020
                 
           

Performance

Period

  Ongoing   One year   Vest over three years   2021-2023
                 
           
How Payout Determined   Compensation Committee judgment (based on a bi-annual competitive market analysis)   Based on performance vs. corporate targets   N/A  

• ROAE

• Average EPS Growth

                 
           
When Delivered   Semi-monthly   March 2021   Annually on March 1   In March 2024 after completion of the three-year performance period
                 
           
Form of Delivery  

 

Cash

 

 

Equity

 

 

 

Equity

 

                 

 

Compensation Elements: Base Salary

Base salary is a fixed amount based on an individual’s skills, responsibilities and experience. The Compensation Committee generally reviews these amounts in February of each year and intends for them to provide a competitive fixed rate of pay recognizing different levels of responsibility. The annual salaries of our named executive officers have been unchanged since 2015. See “— Fiscal 2020 Executive Compensation.”

Compensation Elements: Performance-Based Awards

Incentive awards are granted to reward executives for achieving critical corporate and strategic goals. A portion of the incentive awards are equity-based to motivate executives to create long-term stockholder value. Together, cash and equity incentive awards represent the majority of the compensation paid to our named executive officers.

 

 

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The executive compensation program is divided into a short-term cash incentive program and a long-term equity incentive program. Cash incentive targets for fiscal 2020 performance were set by the Compensation Committee in February 2020. In February 2021, the Compensation Committee determined the cash incentive award to each named executive officer based on the achievement of the Company’s previously established fiscal 2020 corporate performance objectives, with an adjustment of up to 20% (upward or downward) based on personal performance. For fiscal 2020, the Compensation Committee did not make any personal performance adjustments to the cash incentive award for any named executive officer.

The value of the long-term equity incentive award granted to each named executive officer in February 2021 was based on fixed award values that were set by the Compensation Committee in February 2020. Going forward, the Compensation Committee will instead determine a fixed award value that will be in effect until modified by the Compensation Committee at the time of grant; the award values will not be formally set one year in advance.

The long-term equity incentive award is granted 50% in the form of RSUs and 50% in the form of PSUs. The value of the PSUs will only be recognized if the Company achieves specified levels of ROAE and average EPS growth over the

years 2021 through 2023, with 50% of the PSU payout tied to each metric. Upon payout of the PSUs, the participants also receive any dividends that would have been paid on the earned shares during the performance period if the shares had been outstanding.

The Compensation Committee selected ROAE as a performance metric because it incorporates both earnings performance and the effective use of capital, and management believes it is the single measure by which the Company is most assessed by major investors. The use of this metric allows our stockholders to evaluate our financial achievements relative to other organizations. We believe this metric has a significant influence on the value our stockholders place on the Company.

The Compensation Committee added average EPS growth as a second performance metric beginning in 2020 because consistent earnings growth is a meaningful factor in how investors value the Company. The Compensation Committee intends to reevaluate the performance metric(s) used for PSUs every grant year.

A visual depiction of our incentive award formula is set forth below (with the Chief Executive Officer’s short-term award for fiscal 2020 performance and long-term award granted in February 2021 in italics as an example).

 

 

                                 
SHORT-TERM            

Target Cash Award

 

$1,500,000

  x   % Achievement
of Corporate Performance
Objectives
110.3%
  =  

Preliminary
Cash
Payout

 

$1,654,500

  X   +/- 20%
adjustment for
personal
performance
0%
  =  

Final Cash Payout

 

$1,654,500

 

 

               
LONG-TERM              
  x   50% of award
value granted in the
form of RSUs
  /   Closing price on
date of grant
    =     # of RSUs
Granted
     
    $1,375,000     $143.04     9,612      
                 
Fixed Equity Award   x   50% of award
value granted in the
form of PSUs
  /   Closing price on
date of grant
    =     # of PSUs
Granted
     
$2,750,000     $1,375,000     $143.04     9,612      
                                         

 

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The table below sets forth the value of the fiscal 2020 shot-term target awards, the February 2021 long-term equity awards, as well as each executive’s total target incentive award as a percentage of salary.    

 

Name   

Annual

Salary

    

Fiscal 2020
Target Cash

Award (1)

    

February
2021

Equity

Award

   

Total Target

Incentive

Award

    

Total Target

Incentive Award

as a Percentage

of Salary

 

Glenn J. Williams

  

$

750,000

 

  

$

1,500,000

 

  

$

2,750,000

(2)  

 

$

4,250,000

 

  

 

566.7

Peter W. Schneider

  

$

550,000

 

  

$

850,000

 

  

$

1,500,000

(2)  

 

$

2,350,000

 

  

 

427.3

Alison S. Rand

  

$

500,000

 

  

$

500,000

 

  

$

1,000,000

(2)  

 

$

1,500,000

 

  

 

300.0

Gregory C. Pitts

  

$

500,000

 

  

$

500,000

 

  

$

1,000,000

(2)  

 

$

1,500,000

 

  

 

300.0

(1)

Paid in February 2021 based on corporate performance in 2020.

(2)

Fixed award values were set in February 2020 and the awards were granted in February 2021. The award value was granted 50% in PSUs, of which between 0% and 150% will be delivered to the named executive officer after the completion of the 2021-2023 performance period.

 

The grant date of each stock award is the date the final award (as opposed to the fixed value of the award) is approved by the Compensation Committee and the number of equity awards to be granted is determined. We do not coordinate equity grants with the release of material information. Further, we do not accelerate or delay equity grants in response to material information, nor does the Company delay the release of material information for any reason related to the granting of equity awards. All incentive compensation awards granted prior to April 1, 2020 were made under the Primerica, Inc. Second Amended and Restated 2010 Omnibus Incentive Plan (the “2010 Plan”), which was approved by our stockholders on May 17, 2017. That plan expired on April 1, 2020 in accordance with its terms, and all subsequent grants have been made under the Primerica, Inc. 2020 Omnibus Incentive Plan (the “2020 Plan” and, together with the 2010 Plan, the “Incentive Plans”).

Compensation Elements: Benefits

As with other employees, our named executive officers are eligible to participate in our employee health benefit programs, including health and dental insurance plans and a life insurance program, on the same terms as other regular employees. In addition, all regular employees, including our named executive officers, receive dividends on unvested RSUs and

are entitled to a Company match of employee contributions to our 401(k) plan.

Compensation Elements: Perquisites

The Company provides only limited perquisites to our executive officers. The Compensation Committee has adopted a Director and Executive Perquisites Policy. This policy outlines the items that the Company is required to disclose as perquisites in its proxy statement, requires Compensation Committee approval of all perquisites paid to directors and senior executives and provides for pre-approval of certain categories of perquisites, including spousal travel to company events, executive physicals for senior executives, and entertainment and gifts provided during Company-sponsored events. During fiscal 2020, perquisites primarily included items that had been pre-approved by the Compensation Committee.

The Compensation Setting Process

Historical Compensation

The Compensation Committee reviews historical compensation for the named executive officers at least annually. The Compensation Committee uses this information, which sets forth the components of executive compensation over time, as a basis for understanding the history of

 

 

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our executive compensation and the potential impact of recommended changes to the elements of our executive compensation program.

Use of a Peer Group

The Compensation Committee reviews executive compensation at peer companies at least bi-annually as part of its process of evaluating and setting compensation for members of our Executive Team. The Compensation Committee does not seek to benchmark or set compensation at any specific level relative to the peer data. Instead, the Compensation Committee uses this information primarily as background with respect to compensation plan design decisions and as a general reference point for pay levels.

In selecting peer companies, the Compensation Committee seeks companies operating in similar industries (life insurers, insurance brokers, and wealth advisors), with a similar business model (target customer, independent sales force and profitability) and similar size (revenue and market capitalization) as well as the marketplace for certain skills needed by our executives (direct marketing). This approach reflects the uniqueness and complexity of Primerica’s product and service mix, as opposed to focusing on a more narrow view of Primerica as a traditional life insurance company, and it enables the Compensation Committee to make judgments based on the type of business in which the Company is engaged. Because of the

unique nature of our business model, not all selected peer companies fit all identified criteria.

During fiscal 2019, the Compensation Committee did a comprehensive analysis of the peer group and it made a number of changes to ensure that companies in the peer group were representative of the Company’s overall business. The peer group for fiscal 2020 executive compensation is unchanged from that used in fiscal 2019.

Although used as a primary basis for developing a peer group by certain proxy advisory firms, the Compensation Committee did not consider the Global Industry Classification Standard (“GICS”) code of potential peer companies. Although the Company’s GICS code characterizes it as a life or health insurance company, the GICS code of many of the peers classifies them as diversified financial services companies. As a result, the peer group considered by the Compensation Committee may differ from the peer group considered by certain proxy advisory firms.

In fiscal 2019, the Compensation Committee completed its bi-annual peer group compensation analysis based on individual executive comparisons. The Compensation Committee considered these analyses and findings as part of its overall decision-making process regarding fiscal 2019 executive compensation. The peer group compensation analysis will next be completed during fiscal 2021.

The compensation peer group for fiscal 2020 is set forth below:

 

 

Life and Health Insurers    Insurance Brokers   Wealth Advisors   Direct Marketing

American Equity

Investment Life Holding

Co.

   Arthur J. Gallagher & Co.(1)  

Ameriprise Financial,

Inc.

 

Nu Skin Enterprises

Inc.

CNO Financial Group, Inc.(1)    Brown & Brown(1)  

LPL Financial Holdings

Inc.

 

Tupperware Brands

Corporation

FBL Financial Group Inc.       

Raymond James

Financial, Inc.

   
Global Life Inc.(1)             

Horace Mann Educators Corporation(1)

            

 

(1)

Added to peer group in fiscal 2019.

 

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Insurance Survey

The Compensation Committee annually reviews an aggregated insurance industry compensation survey that shows compensation levels for insurance companies of various sizes. The Compensation Committee uses this information as additional background data and as a general reference point for pay levels.

Compensation Consultant

The Compensation Committee’s Charter authorizes it to retain advisors, including compensation consultants, to assist it in its work. The Compensation Committee believes that compensation consultants can provide important market information and perspectives that can help it establish executive and director compensation programs that best meet the objectives of our compensation policies.

The Compensation Committee retained Pearl Meyer & Partners (“Pearl Meyer”) as its independent compensation consultant for fiscal 2020. Pearl Meyer’s responsibilities included:

 

   

Reviewing drafts of Compensation Committee meeting agendas, materials, and minutes, as requested;

 

   

Reviewing major management proposals;

 

   

Bringing any concerns or issues to the attention of the Compensation Committee Chair;

 

   

Evaluating the competitiveness of executive and director pay;

 

   

Preparing materials for the Compensation Committee in advance of meetings;

 

   

Attending Compensation Committee meetings;

 

   

Reviewing and commenting on compensation-related proxy disclosures;

 

   

Reviewing the Compensation Committee’s Charter;

 

   

Reviewing executive compensation tally sheets;

   

Being available to the Compensation Committee Chair for additional consultation; and

 

   

Undertaking special projects at the request of the Compensation Committee Chair.

Pearl Meyer does not provide services to management or the Company, but management works closely with Pearl Meyer as requested by and on behalf of the Compensation Committee. Further, the Compensation Committee has determined that the Company would not retain Pearl Meyer for any projects without the prior consideration and consent of the Compensation Committee.

In accordance with requirements of the Securities and Exchange Commission (the “SEC”), the Compensation Committee has affirmatively determined that no conflicts of interest exist between the Company and Pearl Meyer (or any individuals working on the Company’s account on Pearl Meyer’s behalf). In reaching such determination, the Company considered the following enumerated factors, all of which were attested to or affirmed by Pearl Meyer:

 

   

During fiscal 2020, Pearl Meyer provided no services to, and received no fees from, the Company other than in connection with the engagement;

 

   

The amount of fees paid or payable by the Company to Pearl Meyer in respect of the engagement represented (or are reasonably certain to represent) less than 0.5% of Pearl Meyer’s total revenue for fiscal 2020;

 

   

Pearl Meyer has adopted and put in place adequate policies and procedures designed to prevent conflicts of interest, which policies and procedures were provided to the Company;

 

   

There are no business or personal relationships between Pearl Meyer or any of the individuals on the team working with the Company, on the one hand, and any member of the Compensation Committee or any executive officer of the Company (in either case other than in respect of the engagement), on the other; and

 

 

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Neither Pearl Meyer nor any of the individuals on the team working with the Company owns our common stock.

Management’s Role in Setting Executive Compensation

Our Chief Executive Officer participated in setting the compensation of our other named executive officers for fiscal 2020 by providing feedback on each individual’s personal performance and making compensation recommendations to the Compensation Committee. Our named executive officers do not directly participate in determining their compensation, although they provide the Compensation Committee, and the Chief Executive Officer, as appropriate, with detailed reports on their personal achievements during the year. In making his recommendations, our Chief Executive Officer considered: (i) the individual’s performance and past contributions to the Company and the achievement of the Company’s strategic objectives; (ii) the potential future contribution of the individual to the Company; and (iii) achievement of the Company’s business and financial goals, including the potential for the individual to make even greater contributions to the Company in the future than he or she has in the past, the risk that the individual may be recruited by a competitor, and market compensation data. The Compensation Committee discussed these recommendations with our Chief Executive Officer and in executive session with its independent compensation consultant.

In addition, the Compensation Committee has delegated to our Chief Executive Officer and President authority to approve, within defined maximum award limits and outside of the annual equity award process, grants of equity awards to employees other than our named executive officers.

Post-Employment Compensation

The Company has no executive deferred compensation plan or defined pension plan and has no agreements that trigger payouts solely due to a change in control of the Company. The Compensation Committee has approved

employment agreements with each member of our Executive Team that provide for severance and, in some cases, change of control benefits if the officer’s employment terminates upon a qualifying event or circumstance, such as being terminated without cause or leaving employment for good reason. Additional information regarding the employment agreements is found under “— Employment Agreements” below, and a quantification of benefits that would have been received by our named executive officers had termination occurred on December 31, 2020 is found under “— Potential Payments and Other Benefits Upon Termination or Change of Control.”

The Compensation Committee believes that severance benefits are an important part of a competitive overall compensation arrangement for our Executive Team members and are consistent with the objective of attracting, motivating and retaining highly talented executives. The Compensation Committee also believes that such benefits will help to secure the continued employment and dedication of our Executive Team members, mitigate concern that they might have regarding their continued employment prior to or following a change of control, and encourage independence and objectivity when considering possible transactions that may be in the best interests of our stockholders but may possibly result in the termination of their employment. Finally, the Compensation Committee believes that post-employment non-disclosure, non-competition and non-solicitation covenants to which our Executive Team members have agreed in consideration for the Company providing these severance benefits are highly beneficial to the Company.

Compensation Policies

Compensation Clawbacks

The 2020 Plan provides that the Compensation Committee may require the reimbursement of cash or forfeiture of equity awards if it determines that an award that was granted, vested or paid based on the achievement of performance criteria would not have been granted, vested or paid

 

 

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absent fraud or misconduct, an event giving rise to a restatement of the Company’s financial statements or a significant write-off not in the ordinary course affecting the Company’s financial statements. Further, it provides that the Board or a committee of the Board may adopt a forfeiture, clawback or recoupment policy that covers additional circumstances, such as actions, failures to act, events or other activities that it considers detrimental to the Company. The Compensation Committee is considering the adoption of such a policy.

Stock Ownership

Stock Ownership Guidelines

The Compensation Committee recognizes the critical role that executive stock ownership has in aligning the interests of management with those of our stockholders. As such, we maintain stock ownership guidelines under which our Executive Team members are required to acquire and hold our common stock in an amount representing a multiple of base salary. In determining compliance with these guidelines, stock ownership includes shares beneficially owned by the participant (or by immediate family members) as well as unvested RSUs. Until the ownership guidelines are satisfied, our Executive Team members are required to hold 75% of the net shares received under the Company’s equity-based incentive compensation program (after having shares withheld to satisfy taxes associated with the vesting of RSUs and PSUs). The Compensation Committee reviews compliance with our stock ownership guidelines at least annually.

PSUs, which represent 50% of the annual equity award to members of our Executive Team, and stock options do not count towards satisfaction of the guidelines. The Compensation Committee believes that it is general industry practice to exclude PSUs and stock options from the calculation of stock ownership for purposes of the guidelines, since their dependency on stock price and/or future performance makes their realization, and the amount that may be realized, highly uncertain. As a result, the current holdings reflected below do not represent actual interests in our common stock.

The following table sets forth the minimum stock ownership requirements and current holdings for our Executive Team members as of March 1, 2021.

 

     

Ownership

Guideline

(as a multiple

of base salary)

    

Status as of

March 1, 2021

 

Glenn J. Williams

  

 

5.0x

 

  

 

18.7x

 

Peter W. Schneider

  

 

3.5x

 

  

 

10.8x

 

Alison S. Rand

  

 

2.5x

 

  

 

7.2x

 

Gregory C. Pitts

  

 

2.5x

 

  

 

7.7x

 

The stock ownership of each of our Executive Team members exceeds the required ownership guidelines. Our non-employee directors are also subject to stock ownership guidelines, which are described under “Board of Directors – Director Compensation – Director Stock Ownership Guidelines.”

Hedging, Pledging and Insider Trading Policy

Our insider trading policy expressly bars ownership by all employees and directors of financial instruments or participation in investment strategies that hedge the economic risk of owning our common stock. We also prohibit officers and directors from pledging Primerica securities as collateral for loans. In addition, we prohibit our officers, directors and employees from purchasing or selling Primerica securities while in possession of material, non-public information, or otherwise using such information for their personal benefit. See “– Employee, Officer and Director Hedging”.

Pre-Set Trading Plans

Our executives and directors are permitted to enter into trading plans that are intended to comply with the requirements of Rule 10b5-1 of the Exchange Act so that they can prudently diversify their asset portfolios. During fiscal 2020, certain of our named executive officers were parties to Rule 10b5-1 trading plans that provided for the sale of shares at certain designated prices or on certain designated

 

 

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dates. The purpose of such plans was to enable our executive officers to recognize the value of their compensation and diversify their holdings of our common stock during periods in which they would otherwise be unable to buy or sell such stock because important information about Primerica had not been publicly released.

Equity Awards to Sales Representatives

The Compensation Committee has delegated to our Chief Executive Officer authority to approve, within defined maximum award limits, widespread performance-based grants to members of the sales force, who are independent contractors of the Company. The sales force awards are determined based on specific formulas that are intended to motivate performance, and factors include successful life insurance policy acquisitions and sales of investment and savings products. The following chart details all equity awards, including awards to the sales force, granted in fiscal 2020.

 

Number of Equity

Awards

 

Type of Equity

Award

  Recipient Group

125,933

  Stock Payment Awards   Sales Force

56,114

  RSUs  

Management

Employees,

Other Than

Named

Executive

Officers

25,734

  RSUs  

Named

Executive

Officers

25,734

  PSUs  

Named

Executive

Officers

12,560(1)

 

RSUs (or

Deferred

Stock Units in

lieu thereof)

 

Board of

Directors

 

(1)

Excludes deferred stock units granted pursuant to dividend reinvestment.

Risks Related to Compensation Policies and Practices

The Compensation Committee has assessed our compensation programs for all employees, including our named executive officers, and concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. As part of its review, the Compensation Committee discussed with management the ways in which risk is effectively managed or mitigated as it relates to our compensation programs and policies. The following factors supported the Compensation Committee’s conclusion:

 

   

Oversight of programs (or components of programs) by independent committees of our Board, including the Compensation Committee;

 

   

Internal controls that are designed to keep our financial and operating results from being susceptible to manipulation by any employee, including our named executive officers;

 

   

Discretion provided to our Board and the Compensation Committee to set targets, monitor performance and determine final payouts;

 

   

Oversight of Company activities by a broad-based group of functions within the organization, including Human Resources, Finance and Legal and at multiple levels within the organization (both corporate and business unit/region);

 

   

A mixture of programs that provide focus on both short- and long-term goals and that provide a mixture of cash and stock-based compensation;

 

   

Multiple measures in the short-term incentive plan, and multiple award types in the long-term incentive plan;

 

   

Incentive awards focused primarily on the use of reportable and broad-based financial metrics, with no one factor receiving an excessive weighting;

 

 

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Capped incentive payouts;

 

   

Time-based and, with respect to Executive Team members, performance-based vesting conditions with respect to equity awards;

 

   

Executive stock ownership requirements;

 

   

Clawback provisions in the 2020 Plan; and

 

   

The long-term ownership interests in the Company held by certain of our key executive officers.

The Compensation Committee has determined that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

Compensation Committee Interlocks and Insider Participation

Each of Mr. Crittenden, Ms. Perez and Ms. Yastine has served as a member of the Compensation

Committee during all of fiscal 2020. None of the members of the Compensation Committee is a former or current officer or employee of the Company or any of its subsidiaries.

Compensation Committee Report (1)

The Compensation Committee participated in the preparation of the CD&A and reviewed and discussed successive drafts with management. Following completion of this process and based upon such review and discussion, the Compensation Committee recommended to our Board of Directors that the CD&A be included in the 2020 Annual Report and this Proxy Statement.

COMPENSATION COMMITTEE:

Barbara A. Yastine, Chair

Gary Crittenden

Beatriz R. Perez

 

 

(1)

The material in the Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement or any portion hereof into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.

 

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Compensation Tables

Summary Compensation Table

The following table describes total compensation earned during fiscal 2020, fiscal 2019 and fiscal 2018 for our named executive officers.    

 

Name and Principal Position   Year    

Salary

($)

   

Bonus

($)

   

Stock

Awards

($)

   

Option

Awards

($)

   

Non-Equity

Incentive Plan

Compensation

($)

   

Change in

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings

($)

   

All Other

Compensation

($)

   

Total

($)

 
(A)   (B)     (C)     (D)     (E)     (F)     (G)     (H)     (I)     (J)  

Glenn J. Williams

    2020     $ 750,000       —       $ 2,749,920 (1)      —       $ 1,654,500 (2)      —       $ 125,447 (4)    $ 5,279,867  

Chief Executive Officer

    2019     $ 750,000       —       $ 2,749,876 (5)      —       $ 1,642,500 (6)    $ 5,870 (3)    $ 130,982     $ 5,279,288  
      2018     $ 750,000       —       $ 2,749,942 (7)      —       $ 1,588,500 (8)    $ 3,128 (3)    $ 53,848     $ 5,145,317  

Peter W. Schneider

    2020     $ 550,000       —       $ 1,499,780 (1)      —       $ 937,550 (2)    $ 3,386 (3)    $ 67,587 (4)    $ 3,058,303  

President

    2019     $ 550,000       —       $ 1,499,888 (5)      —       $ 930,750 (6)    $ 4,176 (3)    $ 74,749     $ 3,059,563  
      2018     $ 550,000       —       $ 1,499,804 (7)      —       $ 900,150 (8)    $ 3,860 (3)    $ 43,816     $ 2,997,630  

Alison S. Rand

    2020     $ 500,000       —       $ 999,772 (1)      —       $ 551,500 (2)      —       $ 58,076 (4)    $ 2,109,348  

Executive Vice President and Chief Financial Officer

    2019     $ 500,000       —       $ 999,843 (5)      —       $ 547,500 (6)      —       $ 56,459     $ 2,108,802  
    2018     $ 500,000       —       $ 998,869 (7)      —       $ 529,500 (8)      —       $ 35,524     $ 2,064,893  

Gregory C. Pitts

    2020     $ 500,000       —       $ 999,772 (1)      —       $ 551,500 (2)      —       $ 54,376 (4)    $ 2,105,648  

Executive Vice President and

    2019     $ 500,000       —       $ 999,843 (5)      —       $ 547,500 (6)      —       $ 58,395     $ 2,105,738  

Chief Operating Officer

    2018     $ 500,000       —       $ 899,923 (7)      —       $ 529,500 (8)      —       $ 37,941     $ 1,967,364  

 

(1)

Represents a fixed value of time-based RSUs and PSUs granted in February 2020. The fixed value is split equally between time-based RSUs and PSUs. If maximum performance is achieved over the three-year performance period, then the executive would receive shares of our common stock representing 150% of the PSU awards. This results in PSUs with a grant date value of a maximum of $2.1 million for Mr. Williams, $1.1 million for Mr. Schneider, and $750,000 for each of Ms. Rand and Mr. Pitts. In all cases, the per share value of each RSU and PSU was the closing price of our common stock on the trading day immediately preceding the grant date. For the valuation assumptions underlying the awards, see Note 1 to the Company’s audited financial statements for fiscal 2020 included in the 2020 Annual Report.

(2)

Represents incentive awards paid in cash in March 2021 for performance in fiscal 2020.

(3)

Represents the positive changes in the present value of the pension benefits for each named executive officer under The Citigroup Pension Plan and The Travelers Retirement Benefits Equalization Plan (the “Travelers Nonqualified Plan”). The amount of each named executive officer’s above-market or preferential earnings on compensation that was deferred on a basis that was not tax-qualified was $0.

(4)

Perquisites and personal benefits included executive healthcare benefits, spousal travel and entertainment and gifts provided in connection with Company-sponsored agent meetings, none of which exceeded the greater of $25,000 or 10% of the total. All Other Compensation also includes dividends paid on unvested equity awards and PSUs awards at delivery and the Company’s 401(k) plan matching contribution for fiscal 2020 as set forth below.

 

Name   

Dividends on

Unvested

Equity Awards

    

Dividends on

PSU Awards
at Delivery

    

401(k)

Match

 

Glenn J. Williams

  

$

38,440

 

  

$

69,093

 

  

$

14,250

 

Peter W. Schneider

  

$

20,676

 

  

$

28,893

 

  

$

14,250

 

Alison S. Rand

  

$

13,997

 

  

$

25,125

 

  

$

14,250

 

Gregory C. Pitts

  

$

13,563

 

  

$

22,611

 

  

$

14,250

 

 

(5)

Represents a fixed value of time-based RSUs and PSUs granted in February 2019. The fixed value is split equally between time-based RSUs and PSUs. If maximum performance is achieved over the three-year performance period, then the executive would receive shares of our common stock representing 150% of the PSU awards. This results in PSUs with a grant date value of a maximum of $2.1 million for Mr. Williams, $1.1 million for Mr. Schneider, and $750,000 for each of Ms. Rand and Mr. Pitts. In all cases, the per share value of each RSU and PSU was the closing price of our common stock on the trading day immediately preceding the grant date. For the valuation assumptions underlying the awards, see Note 1 to the Company’s audited financial statements for fiscal 2019 included in the Company’s Annual Report on Form 10-K for fiscal 2019.

 

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(6)

Represents incentive awards paid in cash in March 2020 for performance in fiscal 2019. For Mr. Williams, reflects the amount approved by the Compensation Committee; Mr. Williams waived $500,000 of short-term incentive bonus to fund a senior field leader incentive program.

(7)

Represents a fixed value of time-based RSUs and PSUs granted in February 2018. The fixed value is split equally between time-based RSUs and PSUs. If maximum performance is achieved over the three-year performance period, then the executive would receive shares of our common stock representing 150% of the PSU awards. This results in PSUs with a grant date value of a maximum of $2.1 million for Mr. Williams, $1.1 million for Mr. Schneider, $750,000 for Ms. Rand and $675,000 for Mr. Pitts. In all cases, the per share value of each RSU and PSU was the closing price of our common stock on the trading day immediately preceding the grant date. For the valuation assumptions underlying the awards, see Note 1 to the Company’s audited financial statements for fiscal 2018 included in the Company’s Annual Report on Form 10-K for fiscal 2018.

(8)

Represents incentive awards paid in cash in March 2019 for performance in fiscal 2018. For Mr. Williams, reflects the amount approved by the Compensation Committee; Mr. Williams waived $500,000 of short-term incentive bonus to fund a new senior field leader incentive program.

 

Salary (Column C)

Reflects base salary earned by our named executive officers.

Bonus (Column D)

Primerica has not awarded any non-incentive compensation (other than salary) to our named executive officers.

Stock Awards (Column E)

The dollar amounts for the awards represent the grant date fair value computed in accordance with GAAP, which is consistent with the value that the Compensation Committee considered when they determined the size of the awards except for minor discrepancies due to the inability to issue a fractional stock award. The ultimate value of the award will depend on the price of our common stock on the date that the award vests. Details about fiscal 2020 awards are included in the “Fiscal 2020 Grant of Plan-Based Awards Table.” Time-based RSUs are generally scheduled to vest ratably over three years.

Option Awards (Column F)

The Compensation Committee last granted stock option awards in February 2016.

Non-Equity Incentive Plan Compensation (Column G)

These amounts reflect non-equity incentive plan compensation awards, which were earned by our named executive officers under the Incentive Plans based on corporate and personal performance during fiscal 2020, fiscal 2019 and fiscal 2018 and approved by the Compensation Committee in February 2021, February 2020 and February 2019, respectively.

Change in Pension Value and Nonqualified Deferred Compensation Earnings (Column H)

These amounts represent the positive changes in the present value of the pension benefits for each named executive officer under The Citigroup Pension Plan and the Travelers Nonqualified Plan, which the executives participated in prior to our initial public offering in April 2010 (the “IPO”). These benefits are all provided under Citigroup plans; Primerica does not have a pension plan or a deferred compensation plan.

All Other Compensation (Column I)

These amounts reflect the combined value of each named executive officer’s perquisites, personal benefits and compensation that is not otherwise reflected in the table.

 

 

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Fiscal 2020 Grants of Plan-Based Awards Table

The following table provides information about each grant of plan-based awards made to our named executive officers during fiscal 2020. Each of the incentive awards was granted under, and is subject to the terms of, the Incentive Plans. Awards granted under the Incentive Plans are transferable only to trusts established solely for the benefit of the grantee’s family members or to a beneficiary of a named executive officer upon his or her death. For a description of the material terms of the awards, see “– Compensation Discussion and Analysis (“CD&A”) – Fiscal 2020 Executive Compensation.”

 

        

 

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards (1)

    

 

Estimated Future Payouts
Under Equity Incentive
Plan Awards (2)

     All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or  Units
(#) (3)
     Grant
Date
Fair
Value
of  Stock
Awards
 
Name  

Grant

Date

  

Threshold

($)

    

Target

($)

    

Maximum

($)

    

Threshold

(#)

    

Target

(#)

    

Maximum

(#)

 
(A)   (B)    (C)      (D)      (E)      (F)      (G)      (H)      (I)      (J)  

Glenn J. Williams

                         

•  Short-Term Incentive Plan

 

(4) 

  

 

N/A

 

  

$

1,500,000

 

  

$

3,000,000

 

              

• PSUs

 

2/26/20

           

 

5,662

 

  

 

11,324

 

  

 

16,986

 

     

$

1,374,960

 

•  Time-Based RSUs

 

2/26/20

                                                        

 

11,324

 

  

$

1,374,960

 

Peter W. Schneider

                         

•  Short-Term Incentive Plan

 

(4) 

  

 

N/A

 

  

$

850,000

 

  

$

1,700,000

 

              

•  PSUs

 

2/26/20

           

 

3,088

 

  

 

6,176

 

  

 

9,264

 

     

$

749,890

 

•  Time-Based RSUs

 

2/26/20

                                                        

 

6,176

 

  

$

749,890

 

Alison S. Rand

                         

•  Short-Term Incentive Plan

 

(4) 

  

 

N/A

 

  

$

500,000

 

  

$

1,000,000

 

              

•  PSUs

 

2/26/20

           

 

2,058

 

  

 

4,117

 

  

 

6,175

 

     

$

499,886

 

•  Time-Based RSUs

 

2/26/20

                                                        

 

4,117

 

  

$

499,886

 

Gregory C. Pitts

                         

•  Short-Term Incentive Plan

 

(4) 

  

 

N/A

 

  

$

500,000

 

  

$

1,000,000

 

              

•  PSUs

 

2/26/20

           

 

2,058

 

  

 

4,117

 

  

 

6,175

 

     

$

499,886

 

•  Time-Based RSUs

 

2/26/20

                                                        

 

4,117

 

  

$

499,886

 

 

(1)

Represents cash incentive award amounts for each named executive officer for performance in fiscal 2020 that were paid in March 2021.

(2)

Represents PSUs that will be paid out in 2023 based on the Company’s ROAE and EPS growth for the performance period of 2020 through 2022.

(3)

Represents time-based RSUs granted under the incentive compensation plan in February 2020.

(4)

The annual cash incentive compensation earned for fiscal 2020 performance was approved by the Compensation Committee in February 2021 and paid in March 2021.

 

Estimated Future Payouts Under Non-Equity Incentive Plan Awards (Columns C, D and E)

These amounts reflect the annual incentive compensation amounts that could have been earned during fiscal 2020 based upon the achievement of performance goals. The target and maximum levels for our named executive

officers are set annually by the Compensation Committee, and no cash incentive award is paid if threshold levels of corporate performance are not met. The annual cash incentive compensation earned for fiscal 2020 by our named executive officers was approved by the Compensation Committee in February 2021 and paid in March 2021. These amounts are reflected in column (G) of the “Summary Compensation Table.”

 

 

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Estimated Future Payouts Under Equity Incentive Plan Awards (Columns F, G and H)

These amounts reflect the PSUs that were granted in February 2020. Shares of our common stock underlying those awards will be delivered in March 2023 only if pre-established performance goals are satisfied over the three-year performance period of 2020 through 2022. The number of shares of our common stock ultimately delivered will range from 0% to 150% of the number of PSUs, depending on performance.

All Other Stock Awards (Column I)

This column represents time-based RSUs granted in February 2020. The restrictions on these RSUs lapse in equal installments on March 1 of each of the subsequent three years. Further, the restrictions on the RSUs lapse automatically upon the death of the grantee and

upon the retirement of any employee so long as he or she is at least 55 years of age and his or her age plus years of service equals at least 75. Upon disability of the grantee, the RSU continues to vest for 12 months and, if the grantee remains on approved disability leave, then the unvested portion vests as of the first anniversary of the commencement of such disability leave. Holders of RSUs do not have the right to vote or dispose of their RSUs, but the awards do receive dividend equivalents.

Grant Date Fair Value of Stock Awards (Column J)

The grant date fair value of RSUs and PSUs in this table is equal to the number of time-based RSUs and performance-based PSUs awarded multiplied by the closing price of our common stock on the trading day immediately preceding the grant date.

 

 

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Outstanding Equity Awards at Fiscal Year-End Table

The following table sets forth information regarding equity awards outstanding as of December 31, 2020 based on the closing price of our common stock on that date of $133.93 per share.

 

          Option Awards     Stock Awards  
                                              Equity Incentive Plan
Awards
 
         

 

Number of Securities
Underlying Unexercised
Options (#)

    Option
Exercise
Price

($)
    Option
Expiration

Date
    Number of
Shares or
Units of
Stock  That
Have Not

Vested (#)
    Market
Value of
Shares or
Units  of
Stock That
Have Not

Vested ($)
    Number of
Unearned
Shares, Units
or  Other
Rights
That Have
Not

Vested (#)
    Market or
Payout

Value of
Unearned
Shares,

Units or
Other
Rights
That Have
Not

Vested ($)
 
Name   Grant Date     Exercisable     Unexercisable  

Glenn J. Williams

    02/24/16       16,715       —       $ 41.88       2/24/2026       —         —         —         —    
    02/26/18       —         —         —         —         4,558 (1)    $ 610,453       15,027 (4)    $ 2,012,566 (7) 
    02/26/19       —         —         —         —         7,476 (2)    $ 1,001,261       11,213 (5)    $ 1,501,757 (7) 
    02/26/20       —         —         —         —         11,324 (3)    $ 1,516,623       11,324 (6)    $ 1,516,623 (7) 
           

 

 

   

 

 

   

 

 

   

 

 

 
                                              23,358     $ 3,128,337       3,7564     $ 5,030,946  

Peter W. Schneider

    02/24/16       15,222       —       $ 41.88       2/24/2026       —         —         —         —    
    02/26/18       —         —         —         —         2,486 (1)    $ 332,950       8,196 (4)    $ 1,097,690 (7) 
    02/26/19       —         —         —         —         4,078 (2)    $ 546,167       6,116 (5)    $ 819,116 (7) 
    02/26/20       —         —         —         —         6,176 (3)    $ 827,152       6,176 (6)    $ 827,152 (7) 
           

 

 

   

 

 

   

 

 

   

 

 

 
                                              12,740     $ 1,706,269       20,488     $ 2,743,958  

Alison S. Rand

    02/11/14       3,348       —       $ 41.20       2/11/2024       —         —         —         —    
    02/23/15       5,732       —       $ 53.50       2/23/2025       —         —         —         —    
    02/24/16       12,571       —       $ 41.88