DEF 14A 1 nc10005480x1_def14a.htm DEF 14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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March 13, 2020

900 Cottage Grove Road
Bloomfield, Connecticut 06002

Dear Cigna Shareholder:

On behalf of the Cigna Corporation Board of Directors, we invite you to attend our 2020 Annual Meeting of Shareholders to be held April 22, 2020. The attached Notice of 2020 Annual Meeting of Shareholders and Proxy Statement contains important information about the business to be conducted at the Annual Meeting.

We achieved exceptional growth for our company in 2019. Combining with Express Scripts enabled us to accelerate our strategy and focus on building a sustainable health care system for the next generation, and beyond. One year into our combination, we now have industry-leading capabilities in behavioral, pharmacy and medical services. Together, they fueled our growth in 2019.

In Health Services, we delivered market-leading customer and client retention, including 97% retention for the 2020 selling season, and we saved our clients and customers $50 billion on annual prescription costs. In our Commercial business, we again delivered the lowest medical cost trend in the industry, and we grew our commercial medical customers for the 10th consecutive year. And, in our Government business, the Centers for Medicare and Medicaid Services’ most recent Star ratings position us to have 87% of our Medicare Advantage customers in 4-Star or higher plans for 2021 – a reinforcement of our strong customer satisfaction and high levels of clinical quality.

Cigna also continued to accelerate marketplace innovations to improve affordability, predictability, and simplicity. In the first 100 days of our combination, we re-engineered the supply chain to create the Patient Assurance Program, capping out-of-pocket costs at $25 per month for people with diabetes who rely on insulin. Our Embarc Patient Protection Program helps families access life-changing gene and cell therapies, and shields our clients from the cost shocks of these one-time potential cures. And, we launched our Digital Health Formulary, a tool that reviews, recommends and supports the best of over 300,000 digital health solutions on the market, to ensure that our clients, customers and patients can affordably and simply get the best value from their digital health program.

We were also able to do even more for the communities in which we live and work. In early 2019, through a five-year, $25 million global initiative called Healthier Kids for Our Future, we began fighting childhood hunger and food insecurity to help today’s children grow into tomorrow’s healthy adults. We recently extended our efforts by addressing the emerging challenge of mental illness among children. Cigna’s latest research shows that loneliness – in addition to stress and depression – is taking a toll on people of all ages, but is having a particularly profound impact on our young people.

By delivering on and advancing our key priorities throughout the year – and focusing on our customers, patients and communities – we generated outstanding financial results for the benefit of our shareholders. In 2019, we delivered consolidated adjusted revenues of $140 billion, and grew adjusted income from operations per share by 20% to $17.05.* As a result, we exceeded the guidance that we had already raised each quarter during 2019 for revenue, earnings, earnings per share and cash flow from operations.

In 2020, we will continue to challenge ourselves to advance our mission and meet our performance goals – including by completing the sale of our Group Disability and Life business to New York Life. We will also continue to serve as the partner of choice in health care, to accelerate innovation to the market and further expand our distribution reach and societal impact. Our recent transactions – with Prime Therapeutics to make pharmacy care more affordable for its 28 million members, and with Oscar Health to deliver new and innovative solutions for small businesses – serve as excellent examples of our partnership orientation.

Our growth, and our ability to deliver outstanding results for the benefit of our clients, customers, patients and thereby, our shareholders, is driven by our more than 70,000 colleagues around the world. The rewards and compensation actions described in this Proxy Statement are designed to maintain a high level of retention for our key talent and reward our teams for the results that we were able to achieve in 2019 in a highly dynamic marketplace.

We look forward to hearing your feedback, as reflected in your votes and at the 2020 Annual Meeting of Shareholders. As always, thank you for your interest in Cigna.

Sincerely,

   
 
/s/ David M. Cordani
David M. Cordani
President and Chief Executive Officer
/s/ Isaiah Harris, Jr.
Isaiah Harris, Jr.
Chairman of the Board
* Consolidated adjusted revenues and adjusted income from operations per share are non-GAAP measures. See Annex A to the proxy statement.

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NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS
   
   

   


   

DATE AND TIME:
Wednesday, April 22, 2020 at 8:00 a.m.
   
 
PLACE:
Windsor Marriott Hotel, Ballroom IV
28 Day Hill Road
Windsor, Connecticut 06095*
   
 
ITEMS OF BUSINESS:
Proposal 1: Election of twelve director nominees named in this Proxy Statement for one-year terms to expire at the next annual meeting of shareholders.
   
 
 
Proposal 2: Advisory approval of executive compensation.
   
 
Proposal 3: Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020.
   
 
 
Proposal 4: Shareholder Proposal − Shareholder right to call a special meeting, if properly presented.
   
 
 
Proposal 5: Shareholder Proposal − Gender pay gap report, if properly presented.
   
 
 
Consideration of any other business properly brought before the meeting.
   
 
RECORD DATE:
You may vote on the matters presented at the Annual Meeting if you were a shareholder of record at the close of business on February 24, 2020.
   
 
PROXY VOTING:
Your vote is very important, regardless of the number of shares you own. We urge you to promptly vote by telephone, by using the internet, or, if you received a proxy card or instruction form, by completing, dating, signing and returning it by mail.
   
 
March 13, 2020
By order of the Board of Directors,
   
/s/ Julia Brncic
Julia Brncic
Corporate Secretary
* As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the meeting may be held virtually over the Internet. If we take this step, we will announce the decision to do so by April 8, 2020 via a press release and posting details on our website that will also be filed with the SEC as proxy material. As always, we encourage you to vote your shares prior to the Annual Meeting.

   

   
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting of Shareholders To Be Held on April 22, 2020
   
The Notice of Annual Meeting, Proxy Statement and Annual Report for
the fiscal year ended December 31, 2019 are available at www.envisionreports.com/ci.
   

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PROXY STATEMENT SUMMARY

   

Mission, Strategy and Values
   
Cigna employees are dedicated to delivering results every day towards the advancement of health care by creating solutions that are affordable, predictable and simple – and treat the whole person – both mind and body. Guided by our mission, strategy and values, and rooted in a strong, complementary set of growth businesses, Cigna is well positioned for future success. With our unique collection of assets, we create new opportunities every day to serve more people, invest in industry-leading innovation, and grow for the long term.
   
Our Mission
   
To improve the health, well-being and peace of mind of those we serve
 
   
   
 
   
Our Strategy
   
 
Go Deeper
To expand and deepen our customer, client and partner relationships and create depth in targeted sub-segments and geographies
 
   
 
Go Local
To ensure our solutions and services meet customer, client and partner needs at a local market level
 
 
 
Go Beyond
To innovate and further differentiate our businesses, the experiences we deliver and our overall social impact
 
 
   
   
 
   
Our Values


Our Growth Businesses

   





HEALTH SERVICES
COMMERICAL
GOVERNMENT
INTERNATIONAL
•   Coordinated services,
     anchored by industry
     leading pharmacy
     capabilities
•   Innovative solutions
•   Flexible, choice based
     framework
•   Integrated medical
     solutions
•   Consultative approach
•   Leading consumer
     engagement capabilities
•   High customer
     satisfaction ratings
•   Deep value-based care
     relationships with health
     care professionals
•   Outstanding clinical
     quality
•   Worldwide reach – the
     largest global network of
     health careprofessionals
•   Deep data analytics and
     customer insights
•   Locally relevant solutions
 
Cigna 2020 Notice of Annual Meeting of Shareholders and Proxy Statement         1

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PROXY STATEMENT SUMMARY

   

2019 Performance and Accomplishments
   
Throughout 2019, the first full year of our combination with Express Scripts, we drew upon our mission, our strategy and our values in order to meaningfully advance our five integration priorities: (1) keep our promises in the marketplace; (2) generate significant savings for the benefit of clients and customers; (3) retain our key talent; (4) advance our organizational efficiency plan; and (5) keep our vision top of mind. By meaningfully delivering on these priorities, we were able to deliver outstanding financial results for the benefit of our shareholders.
   
Cigna delivered strong financial results in 2019, highlighted by:
   
 
Consolidated Adjusted Income from Operations. Cigna's adjusted income from operations* for 2019 was $6.5 billion, or $17.05 per share. This represented per share growth of 20% over 2018.
   
 
 
Consolidated Adjusted Revenue. Consolidated adjusted revenues* of $140.2 billion.
   
 
 
Cash Flow from Operations. Cash flow from operations of $9.5 billion, more than double 2018 cash flow from operations of $3.8 billion.
   
 
 
Medical Customers. Total medical customer base at the end of 2019 grew to 17.1 million, an organic increase of 184,000 customers over the end of 2018.
   
 
 
Pharmacy Customers. The pharmacy customer base at the end of 2019 grew to 75.9 million, an organic increase of 2.7 million customers compared to year-end 2018.
   
 
 
Medical Cost Trend.  Delivered industry leading medical cost trend of approximately 4%.   
 
Our financial performance was fueled by the successful and meaningful advancement of our integration priorities.
 
 
Keep our Promises in the Marketplace. Each of our four growth businesses – Health Services, Commercial, Government and International – played to its key strengths to deliver for our customers and patients. As a result, our more than 170 million customer relationships around the world experienced ongoing, high quality service throughout the year and our client relationships deepened.
   
 
 
Generate Significant Savings. We generated significant savings for the benefit of our customers and clients – by delivering the lowest medical trend for the seventh consecutive year and aggregate pharmacy savings of $50 billion on prescription drugs.
   
 
 
Retain Talent. We retained our key talent. In fact, our retention and engagement levels today – one year into our combination – are above our already-strong pre-transaction levels.
   
 
 
Organizational Efficiency Plan. We made significant progress in advancing our organizational efficiency plan – and earlier this year announced that we are taking an additional $200 million, pre-tax, of costs out of our company.
   
 
 
Keep Vision Top of Mind. We kept our vision top of mind by accelerating marketplace innovations that improve affordability, predictability and simplicity.
   
 
 
•   Embarc Benefit Protection. Breakthrough, potentially life-changing medicines offer great promise for patients and their families. However, the high prices of the medicines – millions of dollars in some cases – threaten coverage and access by patients who may benefit. We launched a new offering that brings together the health services, medical management and specialty pharmacy expertise to make breakthrough medicines more affordable and ensure access for those who need it, while protecting clients from the shock of high priced one-time treatments they might not otherwise anticipate.
   
 
 
•   Patient Assurance Program. Addressing the need for greater affordability and access to insulin, we launched the Patient Assurance ProgramSM, to ensure eligible people with diabetes in participating plans pay no more than $25 for a 30-day supply of insulin.
   
 
 
•   Digital Health Formulary. To make it simpler for consumers and payers to navigate the hundreds of thousands of currently available personal health technologies and interventions, we introduced the industry's first, stand-alone digital health formulary.
   
 
 
 
 
We set a strong foundation for 2020. Our 2019 performance gives us considerable momentum going into 2020. We are well positioned to continue to advance our mission and meet our performance goals – including by completing the sale of our Group Disability and Life business to New York Life. We have also entered a number of partnerships that serve to accelerate innovation to the market, further expand our distribution reach and societal impact, and improve affordability, predictability and simplicity. For example, Prime Therapeutics selected us as its partner to serve 28 million more Americans starting in 2020, and deliver greater pharmacy value and clinical care. And Oscar Health, a tech-driven health insurance company, is working with us to provide commercial health solutions to small businesses, which accounted for more than 40% of net job creation in 2018.
 
*
We encourage you to review our Annual Report on Form 10-K for the year ended December 31, 2019 for more complete financial information. Consolidated adjusted income from operations and consolidated adjusted revenue are not determined in accordance with accounting principles generally accepted in the United States (GAAP) and should not be viewed as a substitute for the most directly comparable GAAP measures, shareholders’ net income and total revenues, respectively. Shareholders’ net income was $5.1 billion and total revenues were $153.6 billion for the year ended December 31, 2019. Additional information regarding our use of non-GAAP measures and reconciliations to the most directly comparable GAAP measure can be found on Annex A.
2         Cigna 2020 Notice of Annual Meeting of Shareholders and Proxy Statement
   

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PROXY STATEMENT SUMMARY

   

Board of Directors
 

   

 
NAME AND TITLE
DIRECTOR
SINCE
INDEPENDENT
COMMITTEE MEMBERSHIP
 
Audit
Corporate
Governance
Compliance
Finance
People
Resources
Executive
 
 
David M. Cordani
President and Chief Executive Officer of Cigna
2009
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
William J. DeLaney
Former Chief Executive Officer of Sysco Corporation
2018
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Eric J. Foss
Former Chairman, President and Chief Executive Officer of Aramark
2011
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Elder Granger, MD, MG, USA (Retired)
President and Chief Executive Officer of The 5Ps, LLC
2018
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Isaiah Harris, Jr.
Former President and Chief Executive Officer of AT&T Advertising & Publishing – East
2005
 
 
 
 
 
Chair
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Roman Martinez IV
Private Investor
2005
Chair
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Kathleen M. Mazzarella
Chairman, President and Chief Executive Officer of Graybar Electric Company, Inc.
2018
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Mark B. McClellan, MD, PhD Director, Duke-Robert J. Margolis, MD, Center for Health Policy
2018
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
John M. Partridge
Former President of Visa, Inc.
2009
 
 
Chair
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
William L. Roper, MD, MPH
Interim President of The University of North Carolina System
2018
 
 
Chair
 
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Eric C. Wiseman
Former Executive Chairman, President and Chief Executive Officer of VF Corporation
2007
 
 
 
Chair
 
   
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
Donna F. Zarcone
President and Chief Executive Officer of The Economic Club of Chicago
2005
 
Chair
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
Our Board is composed of individuals with expertise in fields relevant to Cigna’s business, experience from different professions and industries, a diversity of age, ethnicity, gender and global experience and a range of tenures. Together, this diverse mix of skills and experience effectively supports our strategy.
   
In addition to our director nominees listed above, in October 2019, our Board appointed Ms. Kimberly Ross to the Board effective June 1, 2020. Ms. Ross brings experience from a variety of industries and significant finance, international and public company experience.

 
 
Cigna 2020 Notice of Annual Meeting of Shareholders and Proxy Statement         3

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PROXY STATEMENT SUMMARY

   

   
Corporate Governance
 
Cigna is committed to ensuring strong corporate governance practices on behalf of our shareholders. We believe that strong corporate governance provides the foundation for financial integrity and shareholder confidence. Cigna's Board of Directors and management engage with shareholders on issues related to corporate governance, executive compensation, social responsibility, business strategy, Company performance and other areas of focus for shareholders.

 
SHAREHOLDER ENGAGEMENT
 
 
We have engaged with shareholders on a number of occasions.
 
 
Leading up to the 2019 annual meeting of shareholders, we invited holders of 64% of our outstanding
stock to engage with us. Holders of 27% of
our outstanding stock engaged with us.
   
Topics discussed
Corporate governance and shareholder rights
Board composition
Corporate social responsibility initiatives
Executive compensation and human capital matters
Business strategy, particularly in light of the combination
with Express Scripts
After the 2019 annual meeting, we invited
holders of 74% of our outstanding stock to engage with us. Holders of 55% of our outstanding stock discussed with us their vote on the 2019 shareholder
proposal to adopt a right for shareholders to act by written
consent and their views on potential responses
by the Board.
   
For additional information regarding shareholder
engagement related to the Board’s adoption of a special
meeting right, see “Corporate Governance Policies and
Practices – Adoption of Special Meeting Right in
Response to 2019 Written Consent Shareholder
Proposal.”
 

   


Recent Governance Highlights
Adoption of Special Meeting Right. As more fully described in “Corporate Governance Policies and Practices – Adoption of Special Meeting Right in Response to 2019 Written Consent Shareholder Proposal,” following outreach to holders of 74% of our outstanding shares and engagement with holders of 55% of our outstanding shares, the Board adopted a right for shareholders to call a special meeting with a 25% threshold.
 
Appointment of Kimberly Ross to the Board. In October 2019, the Board appointed Ms. Kimberly Ross to the Board effective June 1, 2020. Ms. Ross’s appointment was the result of the Board’s ongoing refreshment work. Ms. Ross, 54, will serve as the Chief Financial Officer of WeWork (The We Company) beginning March 2020 and previously served as Senior Vice President and Chief Financial Officer of Baker Hughes Company. Ms. Ross has significant finance experience, as well as international and public company experience. Ms. Ross further enhances the Board’s diversity, which is of high importance to the Board.
 
Board Evaluation. The Board engaged an independent third party, with substantial experience in board evaluations and organizational effectiveness, to lead the 2019 Board evaluation.

   

 
 
 
 
 
 
 
KEY GOVERNANCE PRACTICES
 
 
Independence
Best Practices
Accountability
Shareholder Rights
 
 
 
 
 
 
 
 
•  Independent board of
   directors
   
•  Independent Chairman
   of the Board with clearly
   defined responsibilities
   
•  Independent Audit,
   Compliance, Corporate
   Governance, Finance and
   People Resources
   Committees
   
•  Regular executive
   sessions of the Board and
   its committees, without
   management present
   
•  Board and Committees
   may hire outside advisors
   independently of
   management
   
•  Active shareholder
   engagement
   
•  Diverse Board in terms
   of gender, ethnicity,
   experiences, and specific
   skills and qualifications
   
•  Adoption of the Rooney
   Rule
   
•  Separate Code of
   Business Conduct and
   Ethics for the Board
   
•  Majority of director
   compensation delivered
   in Cigna common stock
   
•  Meaningful stock
   ownership guidelines for
   directors
   •  Annual election of all
      directors
   
   •  Directors elected by
      majority voting
   
   •  Annual self-evaluations of
      the Board, its committees
      and individual directors,
      including periodic
      independent third party
      assessments
   
   •  Annual evaluation of CEO
      (including compensation)
      by independent directors
   
   •  Clawback policy that
      applies to our short- and
      long-term incentive plans
   
   •  Shareholder right to call a
      special meeting
   
   •  Proxy access right for
      shareholders
   
   •  No supermajority vote
      provisions in our
      Certificate of
      Incorporation or By-Laws
   
   •  No shareholder rights
      plan, or poison pill
 
   
 
 
 
 
 
 
4         Cigna 2020 Notice of Annual Meeting of Shareholders and Proxy Statement
   

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PROXY STATEMENT SUMMARY

   

 
Executive Compensation
   
We believe executive pay should be aligned with our ability to deliver on our commitments to those we serve. Additionally, we believe that aligning executive compensation to the achievement of enterprise goals that support our business strategy and drive our innovation will result in the creation of meaningful and sustained long-term value for our shareholders.
   
The Committee and the Board consider the results of the annual shareholder executive compensation “say-on-pay” vote in determining the ongoing design and administration of the Company’s executive compensation programs. The Committee considers feedback on our executive compensation program received as part of our ongoing communications with shareholders. Management and the Board engage with shareholders throughout the year on a variety of topics, including executive compensation matters. During 2019, we again engaged with governance professionals representing our shareholders. Shareholders have expressed their strong support for our executive compensation program, with approximately 93% of votes cast at the 2019 annual meeting of shareholders of Cigna in favor of the advisory vote on executive compensation.
   

   

 
WHAT WE DO
 
 
✔   Strong alignment between pay and performance.
✔   “Double trigger” requirement for change of control benefits.
✔   Regular review of executive compensation governance
      market practices, particularly when considering the
      adoption of new practices or changes to existing programs
      or policies.
✔   Robust stock ownership guidelines and shareholding
      requirements for equity awards to align executives’ interests
      with shareholders.
✔   A disgorgement of awards (clawback) policy beyond the
      mandates of Sarbanes-Oxley.
✔   Management of LTIP annual share usage (or burn rate) and
      total dilution through the People Resources Committee
      establishment of an annual share usage limit, which is below
      the maximum permitted under the plan.
✔   Oversight of people development policies and processes,
      including consideration of assessments of executive officers
      and key senior management.
✔   CEO and executive officer succession plans overseen by the
      Board of Directors, with leadership from the People
      Resources Committee.
✔   An annual assessment by the People Resources Committee
      of potential risks in our incentive compensation programs
      and policies.
✔   Minimum level of financial performance required in order for
      any payments to be made under the annual incentive plan.
✔   All long-term awards are denominated and settled in equity.
✔   Approximately 92% of our CEO’s total direct compensation
      is performance-based.
 
 
WHAT WE DON’T DO
 
 
✘   No excessive perquisites and no gross ups on perquisites.
 
 
✘   No redundancy between short- and long-term incentive
      plan performance measures.
 
 
✘   No hedging of Cigna stock by any directors, executive
      officers or employees, and no pledging of Cigna stock by
      directors or Section 16 officers unless approved in limited
      circumstances.
 
 
✘   No discounting, reloading or repricing of stock options
      without shareholder approval.
✘   No payment of dividends on restricted stock prior to
      vesting. Unvested SPS awards do not accrue dividends.
 

Emphasis on Performance Based Compensation
 
As illustrated in the charts below, performance-based compensation represented approximately 92% of Mr. Cordani’s total direct compensation for 2019, including 73% in long-term incentives and 19% in annual incentives. On average, performance-based compensation, reflecting 2019 EIP awards and 2019 annual LTI awards, represented 85% of total direct compensation for our other NEOs that served as executive officers at the end of 2019, including an average of 61% in long-term incentives and 24% in annual incentives.
 

 
 

Cigna 2020 Notice of Annual Meeting of Shareholders and Proxy Statement         5

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PROXY STATEMENT SUMMARY

   

 
Voting Matters and Board Recommendations
   

   

 
MANAGEMENT PROPOSALS
MORE
INFORMATION
 
 
For the reasons set forth below and as further detailed throughout this Proxy Statement, the Board of Directors unanimously
recommends that you vote FOR each of the management proposals.
 
 
   
Proposal 1. Election of Directors.
   
The Board and the Corporate Governance Committee believe that the twelve director nominees named in this Proxy Statement bring a combination of diverse qualifications, skills and experiences that contribute to a well-functioning Board. As determined by the Board and Corporate Governance Committee, each director nominee has proven leadership ability, has demonstrated good judgment and is a valued participant on the Board.
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Proposal 2. Advisory Approval of Executive Compensation.
   
Our executive compensation program design aligns the interests of our executive officers with those of our shareholders by basing the substantial majority of their compensation on Cigna’s performance and rewarding our executive officers for the creation of long-term shareholder value. Because your vote is advisory, it will not be binding upon the Board. However, the Board and the People Resources Committee value your opinion and will review and consider the voting results when making future executive compensation decisions.
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Proposal 3. Ratification of the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for 2020.
   
The Audit Committee approved the appointment of PricewaterhouseCoopers LLP as Cigna’s independent registered public accounting firm for 2020. The Audit Committee and the Board believe that the continued retention of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders. As a matter of good corporate governance, the Board is seeking shareholder ratification of the appointment.
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SHAREHOLDER PROPOSALS
MORE
INFORMATION
 
 
For the reasons set forth below and as further detailed throughout this Proxy Statement, the Board of Directors unanimously
recommends that you vote AGAINST each of the shareholder proposals.
 
 
   
Proposal 4. Shareholder Right to Call a Special Meeting.
   
Our Board believes that the implementation of this proposal is not in the best interests of Cigna or our shareholders and it is unnecessary given the current special meeting right that strikes the right balance of protecting shareholder rights and mitigating risk of abuse. Our Board believes that Cigna’s strong corporate governance practices, including Cigna’s commitment to ongoing dialogue with its shareholders and the current special meeting right, provide shareholders with the significant ability to raise important matters with our Board and management in a manner mindful of Cigna’s particular ownership composition without the potential expense and risk associated with a lower special meeting threshold.
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Proposal 5. Gender Pay Gap Report.
   
We are committed to compensating our employees equitably and competitively, regardless of gender. Our continued success depends on the collective strengths of our employees and we are dedicated to attracting, retaining and rewarding the performance of our diverse workforce to best meet the needs of our clients and customers. We proactively monitor our compensation programs for potential disparities, including by conducting a regular annual review of pay equity, taking action as warranted and diligently addressing disparities that may not be explained by objective factors. While that review is a key component of our commitment, it is only one of many initiatives Cigna has undertaken to ensure all employees are paid equitably and to develop and support a diverse and inclusive workforce. Given the Company’s strong programs and practices, the Board believes that the adoption of this proposal is unnecessary as its implementation would not enhance Cigna’s already established commitment to pay equity and diversity and inclusion.
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2020 Annual Meeting of Shareholders
Wednesday, April 22, 2020
8:00 a.m.
 

6         Cigna 2020 Notice of Annual Meeting of Shareholders and Proxy Statement
   

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CORPORATE GOVERNANCE MATTERS
   
   

   

Election of Directors (Proposal 1)

 

   

Our Board has nominated the twelve directors named in this Proxy Statement for election at the Annual Meeting. Our Board is composed of individuals with expertise in fields relevant to Cigna’s business, experience from different professions and industries, a diversity of age, ethnicity, gender and global experience and a range of tenures. Together, this diverse mix of skills and experience effectively supports our strategy.

The role of the Board, its leadership structure and governance practices are described in “Corporate Governance Policies and Practices.” This section identifies the director expectations and qualifications considered by the Board and the Corporate Governance Committee in selecting and nominating directors, describes the process for director nominations and elections, discusses recent board composition developments, details our commitment to diversity and presents the biographies, skills and qualifications of the director nominees.

DIRECTOR EXPECTATIONS AND QUALIFICATIONS

The Corporate Governance Committee, in consultation with the Board, has identified individual director expectations and qualifications, characteristics, skills and experience that it believes every member of the Board should have. In addition, the Corporate Governance Committee has identified areas of expertise that are directly relevant to Cigna’s business strategy in the short- and long-term, enable the Board to exercise its oversight function and contribute to a well-functioning Board. In developing these areas of expertise, the Board also considered best practices among other large companies. The Board regularly reviews these identified areas of expertise to ensure they support the evolution of the Company’s strategy and the Board’s needs. The Corporate Governance Committee and the Board take into consideration these criteria and the mix of skills and experience as part of the director recruitment, selection, evaluation and nomination process.

   
Expectations of Every Director
   
 
•   Commitment to Cigna’s values and mission
   
•   Understand Cigna’s businesses and the importance
     of the creation of shareholder value
   
•   Contribute effectively to the Board’s assessment of
     strategy and oversight of risk
   
•   Contribute effectively to the Board’s evaluation of
     executive talent, compensation and succession
     planning
•   Share expertise, experience, knowledge and insights
     on matters before the Board
   
•   Advance Cigna’s business objectives and reputation
   
•   Demonstrate an ongoing commitment to consult
     and engage with the CEO and senior management
     outside of Board and committee meetings on
     matters impacting Cigna
   
•   Strong commitment to ethics and integrity
   
 

   

   
Qualifications, Characteristics, Skills and Experience of Every Director
   
 
   
 
•   Ability to analyze complex business and public
     policy issues and provide relevant input concerning
     the Company’s business strategy and risk oversight
   
•   Free from conflicts of interest
•   Ability to assess different risks and their impact on
     shareholder value
   
•   Contribution to the Board’s overall diversity of
     thought
   
•   High degree of achievement in their respective
     fields
   
 

   

   
Areas of Expertise Reflected on Our Board of Directors
   
 
   
 
•   Business Leader
   
•   Finance
   
•   Health Services and Delivery Systems
   
•   Global Operations
•   Marketing and Consumer Insights
   
•   Regulated Industry/Public Policy
   
•   Technology Operations
   
 
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NOMINATION PROCESS

The Corporate Governance Committee assesses the Board’s composition as part of the annual self-evaluation of the Board (described in “Corporate Governance Policies and Practices – Board Evaluations and Board Effectiveness”). On an ongoing basis, the Corporate Governance Committee engages in Board succession planning, taking into account input from Board discussions and from the Board and committee evaluation process.

Renomination of Current Directors

When considering whether to nominate current directors for re-election, the Corporate Governance Committee and the Board review individual directors’ performance against the expectations for Board membership, as well as how the directors’ skills and experiences support the Company’s mission, values and strategy and the Board’s needs.

Identification of New Directors

Needs assessment
Identification of potential candidates
Candidate review process
Recommendation
The Corporate Governance Committee considers the diversity of skills represented on the Board and focuses on identifying candidates that possess skills and qualifications that are complementary to the existing Board members’ skills and will support the Company’s short- and long-term strategy.
The Corporate Governance Committee may retain a third party search firm to assist in identifying and evaluating candidates for Board membership.
   
The Corporate Governance Committee also considers suggestions for Board nominees submitted by shareholders, who are evaluated using the same criteria as new director candidates and current director nominees.
Once identified, the Corporate Governance Committee reviews the candidate’s background, experiences, skills and/or prior board and committee service, and considers how the candidate’s background would complement the Board’s composition, including the diversity of the Board.
   
Candidates interview with the Chief Executive Officer, the Chair of the Corporate Governance Committee and the Chairman of the Board, as well as other members of the Board, as appropriate.
Following a thorough review process, the Corporate Governance Committee will recommend a candidate to the Board for consideration.

PROCESS FOR DIRECTOR ELECTIONS

Directors are elected for one-year terms, expiring at the next annual meeting of shareholders. Cigna has adopted a majority voting standard for the election of directors in uncontested elections. Under this standard, each director must receive a majority of the votes cast for him or her. This means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against” that nominee for the director to be elected. Each director has agreed to tender, and not withdraw, his or her resignation if he or she does not receive a majority of the votes cast at the Annual Meeting. The Corporate Governance Committee will make a recommendation to the Board on whether to accept the resignation. The Board has discretion to accept or reject the resignation. A director whose resignation is under consideration will not participate in the decisions of the Corporate Governance Committee or the Board concerning his or her resignation. In a contested election, where the number of director nominees exceeds the number of directors to be elected, the voting standard is a plurality of votes cast.

BOARD COMPOSITION DEVELOPMENTS

In October 2019, the Board appointed Ms. Kimberly Ross to the Board effective June 1, 2020. Ms. Ross’s appointment was the result of the Board’s ongoing refreshment work. Ms. Ross, 54, will serve as the Chief Financial Officer of WeWork (The We Company), beginning March 2020. She served as Senior Vice President and Chief Financial Officer of Baker Hughes Company from September 2014 to July 2017. Prior to that, Ms. Ross was Executive Vice President and Chief Financial Officer of Avon Products Incorporated from November 2011 until September 2014. Ms. Ross serves on the boards of Nestlé S.A. (2018 – present),

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PQ Group Holdings Inc. (2017 – April 2020) and Chubb Limited (2014 – May 2020). When considering Ms. Ross’s appointment, the Board considered, among other factors, the significant extent of her finance experience, as well as her international and public company experience. Ms. Ross further enhances the Board’s diversity, which is of high importance to the Board.

The Board has approved a waiver for one year of the expected retirement age outlined in the Corporate Governance Guidelines for Mr. Martinez, who is currently 72. The Board believes his continued service on the Audit Committee, as well as deep expertise in capital management, continue to be critically important during the post-merger integration period.

Mr. Zollars, who served on the Board since 2005, retired in November 2019. Mr. Zollars’ retirement was consistent with the Board’s retirement age guideline and aligned with the Board’s ongoing refreshment plans.

COMMITMENT TO BOARD DIVERSITY

 

The Board remains committed to diversity at the Board level and the Corporate Governance Committee works to ensure that the Board is composed of individuals with expertise in fields relevant to Cigna’s business, experience from different professions and industries, a diversity of age, ethnicity, gender and global experience and a range of tenures. This approach has proven beneficial given the complex and dynamic nature of the health service industry. The Board’s Governance Guidelines require the Corporate Governance Committee, and any search firm it engages, to include women and minority candidates in the pool from which the Committee selects director candidates.

OTHER PRACTICES

In addition to working to ensure that the Board is composed of diverse and qualified individuals, the Board has adopted the following governance policies and practices that contribute to a well-functioning Board.

Limits on Public Company
Directorships
To ensure each director is able to devote sufficient time and attention to his or her responsibilities as a board member, the Board has established the following limits on outside directorships:
Each director who also is a chief executive officer of a public company may not serve on more than one other public company board in addition to Cigna’s Board and the board of his or her employer (for a total of three public company directorships); and
Each director who is not a chief executive officer of a public company may serve on no more than four boards of other public companies (for a total of five such directorships).
All of our directors are in compliance with these limits on outside directorships.
Change in Director’s Principal
Position
If a director changes his or her principal employment position, that director tenders his or her resignation from the Board to the Corporate Governance Committee. The Committee will then recommend to the Board whether to accept or decline the resignation.
Retirement Age
Our Corporate Governance Guidelines provide that directors are expected to retire by the annual meeting of shareholders coinciding with or following his or her 72nd birthday. The Board may exercise discretion to waive the expected retirement age in individual cases.
Continuing Education for Directors
The Board is regularly updated on Cigna’s businesses, strategies, customers, operations and employee matters, as well as external trends and issues that affect the Company. Directors also are encouraged to attend continuing education courses relevant to their service on Cigna’s Board. The Corporate Governance Committee oversees the continuing education practices and the Company is kept apprised of director participation.
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BOARD OF DIRECTORS’ NOMINEES

Upon the recommendation of the Corporate Governance Committee, the Board is nominating the twelve directors listed below for election to one-year terms to expire at the next annual meeting of shareholders. All nominees have consented to serve, and the Board does not know of any reason why any nominee would be unable to serve. If a nominee becomes unavailable or unable to serve before the Annual Meeting, the Board may either reduce its size or designate another nominee. If the Board designates a substitute nominee, your proxy will be voted for the substitute nominee.

Below are biographies, skills and qualifications for each of the nominees. Each of the director nominees currently serves on the Board. The Board believes that the combination of the various experiences, skills and qualifications represented contribute to an effective and well-functioning Board and that the nominees possess the qualifications, based on the criteria described above, to provide meaningful oversight of Cigna’s business and strategy.


The Board of Directors
unanimously recommends
that shareholders vote
FOR each of the nominees. 


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DAVID M. CORDANI
President, Chief Executive Officer and Director of Cigna
   
AGE: 54
   
DIRECTOR SINCE: 2009            
   
COMMITTEES: Executive
   
   

David Cordani has served as Cigna’s Chief Executive Officer since 2009, as President since 2008 and as a Director since 2009. He served as Chief Operating Officer from June 2008 until December 2009; President, Cigna HealthCare from 2005 until 2008; and Senior Vice President, Customer Segments & Marketing, Cigna HealthCare from 2004 until 2005. He has been employed by Cigna since 1991. He was elected Chair of the Board of America’s Health Insurance Plans (AHIP) for 2019 and 2020. In 2018, he was named Chairman of the U.S. Chamber of Commerce’s U.S.-Korea Business Council and he served on the U.S.-India Business Council Board of Directors from 2015-2017. He is also a member of the Business Roundtable. Mr. Cordani actively works with the Achilles International Freedom Team of Wounded Veterans. In 2016, Mr. Cordani received the Leadership in the Nation’s Interest award from the Committee for Economic Development, a nonprofit, nonpartisan, business-led public policy organization. Mr. Cordani was named one of Fortune Magazine’s Top Business Persons of the Year in 2015. Mr. Cordani received his Bachelor of Business Administration from Texas A&M University and his MBA from the University of Hartford.

Other Public Company Directorships: General Mills, Inc. (2014-Present)

Business Leader. Mr. Cordani has extensive executive leadership and management experience, including through his current role as President and Chief Executive Officer of Cigna, as well as his prior role as Chief Operating Officer which also encompassed broad responsibility for Cigna’s global business and corporate functions. Mr. Cordani has spearheaded Cigna’s transformation into a leading global health service company and has:

Delivered strong financial performance, including compound annual adjusted income from operations per share growth of 17% since 2014;
Consistently driven significant organic growth, completed multiple acquisitions, and significantly expanded Cigna’s global portfolio; and
Driven Cigna’s performance as a partner-of-choice for collaboration with health service professionals and growing value-based care arrangements.

Finance. Mr. Cordani served as Business Financial Officer for Cigna’s healthcare division and as the Controller for Cigna Corporation. He was formerly a CPA with public accounting experience at Coopers & Lybrand.

Global Operations. Mr. Cordani has overseen the growth and expansion of the international business in Cigna’s portfolio, with sales capability in over 30 countries and jurisdictions.

Health Services and Delivery Systems. Mr. Cordani’s long tenure with Cigna, as President and Chief Executive Officer and previously as President of the Cigna HealthCare business segment, provides him with unique perspective on the evolution of the health service industry and the innovation of health delivery models.

Marketing and Consumer Insights. As Chief Executive Officer, he leads the development and execution of Cigna’s strategy to deliver value to approximately 170 million customer and patient relationships around the world.

Regulated Industry/Public Policy. Mr. Cordani is actively engaged in public policy related to the highly regulated health service industry and other global business markets.

Technology Operations. As CEO, Mr. Cordani oversees Cigna’s technology and innovation in support of business and strategic objectives, including data analytics and digital capabilities.

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WILLIAM J. DELANEY
Former Chief Executive Officer of Sysco Corporation
   
AGE: 64
   
DIRECTOR SINCE: 2018            
   
COMMITTEES: Audit, Corporate Governance

William DeLaney served as Chief Executive Officer of Sysco Corporation (Sysco), a publicly traded food marketing and distribution company, from March 2009 until his retirement in December 2017. Previously, Mr. DeLaney served as President of Sysco from March 2010 to January 2016, as Executive Vice President and Chief Financial Officer from July 2007 to October 2009 and held positions of increasing responsibility at Sysco and its subsidiaries for more than 20 years. Mr. DeLaney served as a director of Sysco from 2009 to 2017. He received his Bachelor degree from the University of Notre Dame and his Master’s in Business Administration from the University of Pennsylvania, Wharton Graduate Division.

Other Public Company Directorships: Sanmina Corporation (2018-2019), Express Scripts Holding Company (2011-2018), Sysco Corporation (2009-2017), Union Pacific Corporation (2018-Present)

Business Leader. Mr. DeLaney has extensive senior leadership experience throughout his career with Sysco, including merger and acquisition activities and corporate restructurings. During his tenure with Sysco, Mr. DeLaney also oversaw international operations.

Finance. As former CEO, and previously as CFO of Sysco, Mr. DeLaney has over 25 years of experience and oversight of accounting, financial operations and financial reporting.

Global Operations. Sysco is a global foodservice leader. As CEO, Mr. DeLaney oversaw an international network that supports customers in 90 different countries around the world through more than 300 distribution facilities worldwide.

Technology Operations. As CEO of Sysco, Mr. DeLaney had oversight of Sysco’s complex global technology platforms.


ERIC J. FOSS
Former Chairman, President and Chief Executive Officer of Aramark
   
AGE: 61
   
DIRECTOR SINCE: 2011            
   
COMMITTEES: Compliance, Corporate Governance

Eric Foss served as Chairman of the Board of Aramark, a publicly traded provider of food services, facilities management and uniform services, beginning February 2015, and served as President and Chief Executive Officer from May 2012, until his retirement in August 2019. He served as Chief Executive Officer of Pepsi Beverages Company, a beverage manufacturer, seller and distributor and a division of PepsiCo, Inc., from 2010 until December 2011. He was the Chairman and Chief Executive Officer of The Pepsi Bottling Group, Inc. (The Pepsi Bottling Group) from 2008 until 2010; President and Chief Executive Officer from 2006 until 2008; and Chief Operating Officer from 2005 until 2006. Mr. Foss received his Bachelor of Science degree from Ball State University.

Other Public Company Directorships: Aramark Corporation (2012-2019), UDR, Inc. (2003-2015), The Pepsi Bottling Company (2006-2010)

Business Leader. Mr. Foss has extensive leadership experience through his roles as Chairman, President and CEO of Aramark, combined with his 30-year career at Pepsi Beverages Company and The Pepsi Bottling Group, including his role as Chairman and CEO.

Finance. As Chairman, President and CEO of Aramark and as CEO of Pepsi Beverages Company and The Pepsi Bottling Group, Mr. Foss’s experience includes oversight of financial operations, financial reporting, merger and acquisition activities and corporate restructurings. He led Aramark’s initial public offering in 2013 and was instrumental in The Pepsi Bottling Group’s initial public offering and oversaw its acquisition by PepsiCo, Inc.

Global Operations. Mr. Foss’s responsibilities at Aramark, Pepsi Beverages Company and The Pepsi Bottling Group included international business leadership, managing the challenges of operating a global business and strategic planning. At Aramark, he had oversight of operations in 20 countries, and throughout his tenure at Pepsi Beverage Company and The Pepsi Bottling Group, had responsibilities for global operations including international assignments.

Marketing and Consumer Insights. Mr. Foss’s service as CEO of Pepsi Beverages Company and The Pepsi Bottling Group provided him experience as an executive officer of a consumer oriented company.

Technology Operations. Mr. Foss oversaw Aramark’s complex global technology platforms.

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ELDER GRANGER, MD, MG, USA (RETIRED)
President and Chief Executive Officer of The 5Ps, LLC
   
AGE: 66
   
DIRECTOR SINCE: 2018            
   
COMMITTEES: Compliance, Corporate Governance

Elder Granger is a U.S. Army Major General (retired) and has served as the President and Chief Executive Officer of The 5Ps, LLC, a healthcare, education, and leadership consulting firm, since August 2009. He served in the U.S. Army for over 35 years before retiring in June 2009, and was the Deputy Director and Program Executive Officer of the TRICARE Management Activity, Office of the Assistant Secretary of Defense (Health Affairs) in Washington, D.C. from December 2005 to June 2009. General Granger is a Governance Fellow with the National Association of Corporate Directors. He is board certified by the American College of Physician Executives, American Board of Medical Quality and American Board of Internal Medicine and holds numerous medical certifications. He received his Bachelor of Science Degree from Arkansas State University and earned his medical degree from University of Arkansas School of Medicine.

Other Public Company Directorships: DLH Holdings Corp (2014-Present), Express Scripts Holding Company (2015-2018)

Business Leader. General Granger has unique and extensive leadership experience throughout his career with the U.S. Army and role as the Deputy Director and Program Executive Officer of the TRICARE Management Activity, Office of the Assistant Secretary of Defense (Health Affairs).

Global Operations. Through his career with the US. Army, General Granger has extensive international experience. In his role as Deputy Director and Program Executive Officer of the TRICARE Management Activity, he led the planning, budgeting and execution of the defense health program and in ensuring the effective and efficient provision of high-quality, accessible health care for 9.4 million uniformed service members, their families, retirees and others located worldwide.

Health Services and Delivery Systems. General Granger brings experience with respect to health care management and operations and has broad experience throughout the health service industry as well as in the government sector. He led the largest U.S. and multi-national battlefield health system in recent history while serving as Commander, Task Force 44th Medical Command and Command Surgeon for the Multinational-Corps-Iraq.

Regulated Industry/Public Policy. In his role as the Deputy Director and Program Executive Officer of the TRICARE Management Activity, Office of the Assistant Secretary of Defense, General Granger served as the principal advisor to the Assistant Secretary of Defense (Health Affairs) on Department of Defense health plan policy and performance and oversaw the acquisition, operation and integration of the Department of Defense’s managed care program within the military health system.

Technology Operations. General Granger has earned the CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University.


ISAIAH HARRIS, JR.
Former President and Chief Executive Officer of AT&T Advertising & Publishing — East
   
AGE: 67
   
DIRECTOR SINCE: 2005            
   
COMMITTEES: Executive (Chair)
   

Isaiah Harris has served as Cigna’s Chairman of the Board since December 2009 and served as Vice-Chairman of the Board from July 2009 through December 2009. Mr. Harris served as President and Chief Executive Officer of AT&T Advertising & Publishing — East (formerly BellSouth Advertising & Publishing Group), a communications services company, from 2005 until his retirement in 2007; as President, BellSouth Enterprises, Inc. from 2004 until 2005 and as President, Consumer Services, BellSouth Corporation from 2000 until 2004. Mr. Harris has served as an Independent Trustee of Wells Fargo Advantage Funds, a provider of mutual funds, since 2008. Mr. Harris was nominated as NYSE 2014 Chairman of the Year. Mr. Harris received his Bachelor of Science degree from Iowa State University and has also completed the University of Minnesota Executive MBA program.

Other Public Company Directorships: Deluxe Corporation (2004-2011)

Business Leader. In his executive business leadership roles, including as CEO of AT&T Advertising and Publishing – East, Mr. Harris managed large organizations, developed and executed business strategies and led transformational change initiatives in both domestic and international operations.

Finance. Mr. Harris’ extensive finance experience includes 19 years of corporate finance and operational experience in multi-national organizations, including as Vice President of Finance, BellSouth Corporation, preceded by 13 years as a CPA with KPMG LLP. Through service on the board of directors of Deluxe Corporation, a provider of customized products and services including financial services and direct checks, and as a trustee of Wells Fargo Advantage Funds, he has insight into financial services-related issues.

Marketing and Consumer Insights. As President, Consumer Services, BellSouth Corporation, Mr. Harris focused on marketing communication services to end-user consumers.

Regulated Industry/Public Policy. Throughout his career at AT&T Advertising & Publishing – East, Mr. Harris navigated a heavily regulated and dynamic legal environment.

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ROMAN MARTINEZ IV
Private Investor
   
AGE: 72
   
DIRECTOR SINCE: 2005            
   
COMMITTEES: Audit (Chair),
Executive, Finance
   

Roman Martinez has been a private investor since 2003. In 2003, he retired as Managing Director of Lehman Brothers, an investment banking firm, following a 31-year career with the firm. Mr. Martinez has served on the Board of Trustees of New York Presbyterian Hospital since 1996, and in August 2019 was appointed to the Board of Governors of the United States Postal Service, an independent agency of the executive branch of the United States federal government responsible for providing postal service in the United States. He received his Bachelor of Science degree from Boston College and his MBA from the Wharton School of the University of Pennsylvania.

Other Public Company Directorships: Orbital ATK, Inc. (2015-2018), Alliant Techsystems, Inc. (2004-2015)

Finance. Mr. Martinez has extensive experience in investment banking through his 31-year tenure with Lehman Brothers where he was involved in a broad spectrum of U.S. and international investment banking activities covering financing, mergers and acquisitions and restructuring advisory assignments, as well as financing transactions for governments and corporations. Mr. Martinez also has over fifteen years of experience as a private investor and has served on the Investment Committees of several non-profit organizations. He previously served on the Investment Advisory Council of the State of Florida, which provides independent oversight of the Florida Retirement System funds and other state funds, which aggregated in excess of $150 billion.

Health Services and Delivery Systems. Through his over 20 years serving on the Board of Trustees of New York Presbyterian Hospital, Mr. Martinez developed insights into the issues facing health care systems in a rapidly changing environment, including the provision of care management and delivery systems.


KATHLEEN M.
MAZZARELLA
Chairman, President and Chief
Executive Officer of Graybar Electric Company, Inc.
   
AGE: 59
   
DIRECTOR SINCE: 2018            
   
COMMITTEES: Finance, People
Resources

Kathleen Mazzarella has served as Chairman of Graybar Electric Company, Inc. (Graybar), a distributor of electrical, communications and data networking products and provider of related supply chain management and logistics services, since January 2013 and as President and Chief Executive Officer of Graybar since June 2012. She previously served as Executive Vice President and Chief Operating Officer from December 2010 to June 2012. Ms. Mazzarella joined Graybar in January 1980, and has held increasing roles of seniority, including Senior Vice President, Sales and Marketing and Senior Vice President, Human Resources and Strategic Planning. She has served as a Director of Graybar since January 2004. Ms. Mazzarella served as a director of the Federal Reserve Bank of St. Louis from January 2015, and as its Chairman from April 2016, until December 2019. Ms. Mazzarella also serves on several other private company boards. She received her Bachelor of Science degree from National Louis University and her Masters of Business Administration from Webster University.

Other Public Company Directorships: Waste Management, Inc. (2015-Present), Express Scripts Holding Company (2017-2018)

Business Leader. Ms. Mazzarella has over 13 years of service as an executive officer, including five years as Chief Executive Officer of a Fortune 500 wholesale distribution company.

Finance. As Chairman and CEO of Graybar, she has had oversight of financial operations, merger and acquisition activities and corporate restructurings. As Chairman of the Federal Reserve Bank of St. Louis, Ms. Mazzarella developed expertise regarding the nation’s banking and financial systems.

Marketing and Consumer Insights. Through leadership roles at Graybar, Ms. Mazzarella brings experience in the areas of communications, logistics, marketing, supply chain, human resources and strategic planning. Her prior position as Chairman of the Federal Reserve Bank of St. Louis provides her with unique consumer insights.

Technology Operations. As Chairman, President and CEO of Graybar, Ms. Mazzarella has oversight of complex technology systems and platforms.

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MARK B. MCCLELLAN,
MD, PH.D.
Director, Duke-Robert J. Margolis,
MD, Center for Health Policy
   
AGE: 56
   
DIRECTOR SINCE: 2018            
   
COMMITTEES: Corporate
Governance, People Resources

Mark McClellan became the inaugural Director of the Duke-Robert J. Margolis, MD, Center for Health Policy and the Margolis Professor of Business, Medicine and Policy at Duke University in January 2016. Previously, he served from 2007 to 2015 as a Senior Fellow in Economic Studies and as Director of the Initiatives on Value and Innovation in Health Care at the Brookings Institution. Dr. McClellan served as Administrator of the Centers for Medicare & Medicaid Services for the U.S. Department of Health and Human Services from 2004 to 2006 and as Commissioner of the U.S. Food and Drug Administration from 2002 to 2004. He served as a member of the President’s Council of Economic Advisers and as senior director for healthcare policy at the White House from 2001 to 2002 and, during President Bill Clinton’s administration, held the position of Deputy Assistant Secretary for Economic Policy for the Department of the Treasury. He was also an Associate Professor of Economics with tenure at Stanford University. Dr. McClellan received his Bachelor of Arts degree from the University of Texas, his Masters of Public Administration and Medical Doctorate from Harvard University and his Doctor of Philosophy in Economics from Massachusetts Institute of Technology.

Other Public Company Directorships: Johnson & Johnson (2013-Present), Aviv REIT, Inc. (2013-2015)

Health Services and Delivery Systems. Dr. McClellan has held varied health care delivery roles including as a practicing internist, an administrator of national healthcare programs and an academic policy researcher that provide him with a unique and wide ranging perspective.

Regulated Industry/Public Policy. With his extensive experience in public health policy, including as Commissioner of the United States Food and Drug Administration and Administrator for the United States Centers for Medicare & Medicaid Services, and his extensive academic experience, Dr. McClellan’s background as both a regulator and government advisor provides him with broad knowledge of, and unique insights into, the challenges facing the health service industry.


JOHN M. PARTRIDGE
Former President of Visa, Inc.
   
AGE: 70
   
DIRECTOR SINCE: 2009            
   
COMMITTEES: Finance (Chair), Audit, Executive
   
   

John Partridge served as President of Visa, Inc. (Visa), a publicly traded consumer credit company, from 2009 until 2013 and as Chief Operating Officer from 2007 to 2009. He joined Visa USA in October 1999 and served as President and Chief Executive Officer of Inovant (a Visa subsidiary) from 2000 to 2007 and as Interim President of Visa USA in 2007. From 1998 until joining Visa USA, Mr. Partridge served as Senior Vice President and Chief Information Officer of Unum Provident Corp. (Unum), a publicly traded disability insurance company. From 1989 to 1998, Mr. Partridge was Executive Vice President for Credicorp Inc., a commercial banking, insurance and investment banking company, where he was responsible for consumer banking, technology and operations. Prior to joining Credicorp Inc. (Credicorp), Mr. Partridge held various management positions with Wells Fargo Bank. Mr. Partridge has served as Chairman and Chief Executive Officer of Velo Payments, a global smart data network for business disbursements, since March 2017 and as an operating partner of Corsair Capital, a private equity firm focused on the financial services industry, since October 2015. Mr. Partridge received his Bachelor of Science degree from the University of California.

Other Public Company Directorships: Global Payments, Inc. (2013-2019)

Business Leader. Mr. Partridge has extensive senior leadership experience through his positions with Visa, Visa USA, Inovant, Unum, Credicorp and Velo Payments.

Finance. As President and CEO of Inovant, he had direct oversight of financial operations, financial reporting, merger and acquisition activities and corporate restructurings. As President of Visa, he was involved with financial oversight and reporting and strategic transactions. His responsibilities at Credicorp provided significant financial services experience.

Global Operations. As President of Visa, Mr. Partridge’s responsibilities included international business leadership. He also serves as a director of a large public company with extensive international operations. His responsibilities with Credicorp included international assignments.

Marketing and Consumer Insights. Through his tenure with Visa, Mr. Partridge focused heavily on consumer credit and oversaw marketing, product, client service, support and processing services. As Executive Vice President of Credicorp, his responsibilities included consumer banking.

Technology Operations. Mr. Partridge has experience managing and overseeing information technology investments in support of business objectives which he gained through each of his executive leadership positions, including as Chief Information Officer of Unum and as a director of Global Payments, a provider of electronic transaction processing services. As President of Inovant, he oversaw Visa’s electronic payment processing service.

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WILLIAM L. ROPER, MD, MPH
Interim President of The University of North Carolina System
   
AGE: 71
   
DIRECTOR SINCE: 2018            
   
COMMITTEES: Compliance (Chair), Executive, Finance

William Roper has served as Interim President of the University of North Carolina System since January 2019. He previously served as Dean of the School of Medicine and Vice Chancellor for Medical Affairs of the University of North Carolina (UNC) at Chapel Hill, an educational institution, and as Chief Executive Officer of the UNC Health Care System, a not-for-profit health care system from 2004 to 2019. He has also served as a Professor of Pediatrics and Social Medicine at the UNC School of Medicine and as a Professor of Health Policy and Administration at the UNC School of Public Health. Before joining UNC in 1997, Dr. Roper served as Senior Vice President of Prudential Health Care, a healthcare services company, from 1993 to 1997. He also served as director of the Centers for Disease Control and Prevention from 1990 to 1993, on the senior White House staff in 1989 and 1990 and as the administrator of the Centers of Medicare & Medicaid Services from 1986 to 1989. Dr. Roper received his Bachelor of Science and Medical degrees from the University of Alabama.

Other Public Company Directorships: DaVita, Inc. (2001-Present), Express Scripts Holding Company (2012-2018), Medco Health Solutions Inc. ((2007-2012) Medco Health Solutions Inc. was acquired by Express Scripts Holding Company in 2012)

Business Leader. In his executive leadership roles as Vice Chancellor for Medical Affairs at UNC and CEO of UNC Healthcare System and in his role as Interim President of the University of North Carolina System, Dr. Roper manages large complex organizations providing him with wide ranging leadership experience.

Health Services and Delivery Systems. Dr. Roper’s positions as Vice Chancellor for Medical Affairs at UNC, CEO of UNC Healthcare System, as well as former leadership roles at Prudential Health Care, as former director of the Centers for Disease Control and Prevention, a former member of the senior White House staff and as the former administrator of CMS provide him with direct experience regarding emerging health care issues and complex health delivery systems.

Regulated Industry/Public Policy. Dr. Roper’s background as former director of the Centers for Disease Control and Prevention, a former member of the senior White House staff and as the former administrator of CMS provide him with extensive insight into the highly regulated health industry in the U.S.


ERIC C. WISEMAN
Former Executive Chairman, President and Chief Executive Officer of VF Corporation
   
AGE: 64
   
DIRECTOR SINCE: 2007            
   
COMMITTEES: People Resources (Chair), Executive, Finance

Eric Wiseman served as Executive Chairman of VF Corporation, a publicly traded apparel and footwear company, from August 2008 until October 2017. He served as Chief Executive Officer from January 2008 until December 2016 and President from 2006 until June 2015. He served as Chief Operating Officer of VF Corporation from 2006 to 2008; Executive Vice President, Global Brands from 2005 to 2006; and Vice President and Chairman, Sportswear and Outdoor Coalitions from 2004 until 2005. Mr. Wiseman received his Bachelor of Science degree and MBA from Wake Forest University.

Other Public Company Directorships: VF Corporation (2006-2017), Lowe’s Companies, Inc. (2011-Present)

Business Leader. Mr. Wiseman has extensive senior leadership experience through his positions with VF Corporation.

Finance. As Chairman and CEO of VF Corporation, he had oversight of financial operations, merger and acquisition activities and corporate restructurings.

Global Operations. Through leadership positions at VF Corporation, Mr. Wiseman oversaw operations and product sales in over 100 countries. Prior to joining VF Corporation, he held executive leadership roles at Sara Lee Corporation that included international business leadership and international assignments.

Marketing and Consumer Insights. Through leadership roles at VF Corporation, Mr. Wiseman oversaw marketing of a variety of brands through all channels of distribution, both domestically and internationally. As a director of Lowe’s Companies, Inc., a retail home improvement and appliances company, he focuses on end-user consumer-related issues.

Technology Operations. As Chairman and CEO of VF Corporation, Mr. Wiseman oversaw VF Corporation’s complex global technology platforms.

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DONNA F. ZARCONE
President and Chief Executive Officer of The Economic Club of Chicago
   
AGE: 62
   
DIRECTOR SINCE: 2005            
   
COMMITTEES: Corporate Governance (Chair), Compliance, Executive

Donna Zarcone has been the President and Chief Executive Officer of The Economic Club of Chicago, a civic and business leadership organization, since February 2012 and has announced her intention to retire in the summer of 2020. She served as Interim President of The Economic Club of Chicago from October 2011 until February 2012 and as President and Chief Executive Officer of D. F. Zarcone & Associates LLC, a strategic advisory firm, from 2007 until February 2012. Ms. Zarcone served as the President and Chief Operating Officer of Harley-Davidson Financial Services, Inc., a provider of wholesale and retail financing, insurance and credit card programs and a wholly owned subsidiary of Harley-Davidson, Inc., from 1998 until 2006. She also served as Chairman of the Board of Eaglemark Savings Bank, a financial services provider, from 2002 to 2006. She received recognition from the National Association of Corporate Directors as an NACD Directorship 100 “Class of 2012” member, is an NACD Board Governance Fellow and recently earned a NACD Directorship Certification. Ms. Zarcone was named one of Crain’s Most Powerful Women in Chicago Business in 2018. She received her Bachelor of Science degree from Illinois State University and her MBA from the University of Chicago Booth School of Business.

Other Public Company Directorships: CDW Corporation (2011-Present), The Jones Group (2007-2012)

Finance. As an executive at Harley-Davidson Financial Services, Inc. and as the Chairman of the Board of Eaglemark Savings Bank, an FDIC-regulated entity, Ms. Zarcone oversaw end-user consumer financial services matters. She is also a certified public accountant. As President and CEO of The Economic Club of Chicago, she monitors social and economic issues facing the U.S. and global markets.

Marketing and Consumer Insights. As President of Harley-Davidson Financial Services, Inc., Ms. Zarcone oversaw direct marketing initiatives to end-user consumers for a portfolio of financial products. As head of Enthusiast Services at Harley-Davidson, Inc., she oversaw brand loyalty initiatives. As a director of The Jones Group, a designer, marketer and wholesaler of branded clothing, she gained further insight into end-user consumer-related issues.

Technology Operations. As a director of CDW Corporation, a leading provider of integrated information technology solutions, Ms. Zarcone oversees issues facing the information technology industry.

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Corporate Governance Policies and Practices

 

   

Cigna is committed to ensuring strong corporate governance practices on behalf of our shareholders. We believe that strong corporate governance and an independent Board provide the foundation for financial integrity and shareholder confidence. The Corporate Governance Committee annually reviews Cigna’s governance program based on, among other things, developments in corporate governance, feedback received during shareholder engagement, legal or regulatory actions, proxy advisory firm positions, Securities and Exchange Commission (SEC) guidance and New York Stock Exchange (NYSE) requirements. The Board and the Corporate Governance Committee developed the Board Corporate Governance Guidelines (the Guidelines) which set forth the key governance principles that guide the Board. The Guidelines, together with the charters of the Audit, Compliance, Corporate Governance, Finance, People Resources and Executive Committees, provide a framework of policies and practices for effective governance.

The Board and the Corporate Governance Committee review these Guidelines, and the committees review their respective charters, at least annually and update these governing documents as necessary to reflect changes in the regulatory environment, evolving practices and input from shareholders. The full text of the Guidelines and committee charters are available on our website at https://www.cigna.com/about-us/company-profile/corporate-governance/ and are available to any shareholder who requests a copy.(1)

   
KEY GOVERNANCE PRACTICES
Independence
Best Practices
Accountability
Shareholder Rights
 
 
 
 
•   Independent board of
     directors
   
•   Independent
     Chairman of the Board
     with clearly defined
     responsibilities
   
•   Independent Audit,
     Compliance,
     Corporate
     Governance, Finance
     and People
     Resources
     Committees
   
•   Regular executive
     sessions of the Board
     and its committees,
     without management
     present
   
•   Board and
     Committees may hire
     outside advisors
     independently of
     management
•   Active shareholder
     engagement
   
•   Diverse Board in
     terms of gender,
     ethnicity, experiences,
     and specific skills and
     qualifications
   
•   Adoption of the
     Rooney Rule
   
•   Separate Code of
     Business Conduct and
     Ethics for the Board
   
•   Majority of director
     compensation
     delivered in Cigna
     common stock
   
•   Meaningful stock
     ownership guidelines
     for directors
•   Annual election of all
     directors
   
•   Directors elected by
     majority voting
   
•   Annual
     self-evaluations of the
     Board, its committees
     and individual
     directors, including
     periodic independent
     third party
     assessments
   
•   Annual evaluation of
     CEO (including
     compensation) by
     independent directors
   
•   Clawback policy that
     applies to our short-
     and long-term
     incentive plans
•   Shareholder right to
     call a special meeting
   
•   Proxy access right for
     shareholders
   
•   No supermajority vote
     provisions in our
     Certificate of
     Incorporation or
     By-Laws
   
•   No shareholder rights
     plan, or poison pill
   
(1) Throughout this Proxy Statement, we reference information available on our website. The information on our website is not, and shall not be deemed to be, part of this Proxy Statement or incorporated herein or into any of our other filings with the SEC.

ADOPTION OF SPECIAL MEETING RIGHT IN RESPONSE TO 2019 WRITTEN CONSENT SHAREHOLDER PROPOSAL

Cigna values input from our shareholders, and regularly seeks and receives shareholder feedback when reviewing proposals to change practices or policies. At the 2019 annual meeting, holders of 53.71% of our outstanding shares expressed support for a non-binding shareholder proposal to allow action by written consent without a

meeting of shareholders (the “2019 proposal”). Of the votes cast, 63.5% supported the 2019 proposal and 36.1% voted against it.

In 2019, our Board recommended voting against this proposal for the following key reasons:

the written consent process lacks the important protections and advantages that shareholder meetings offer;
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the written consent process does not promote transparent decision-making and could disenfranchise shareholders; and
Cigna’s strong corporate governance practices demonstrate responsiveness, provide shareholders with means to express their views, and ensure Board accountability.

Cigna’s Board remained concerned about the disruptive effects of a shareholder written consent right. For example, shareholder action by written consent could impede Cigna’s and our shareholders’ ability to thoroughly consider significant corporate actions and possible alternatives. In addition, shareholders without full economic interests or voting rights in Cigna could force Cigna to expend significant company resources, and a small number of shareholders could potentially unduly influence corporate actions.

We view our relationship with our shareholders and other stakeholders as fundamental to good corporate governance practices, and have a strong record of shareholder engagement and responsiveness to shareholder concerns. Our Board appreciates that corporate governance practices are evolving, and consistently monitors trends and developments in corporate governance and compares them against current practices. Cigna determined that, in light of these considerations, further engagement with our shareholders would be appropriate, both to understand better the vote results with respect to the 2019 proposal and to allow Cigna to incorporate shareholder feedback into its decision-making with respect to the appropriate response to the 2019 proposal.

Following the 2019 annual meeting, management, at the request of the Corporate Governance Committee, undertook a robust shareholder outreach campaign. Cigna solicited specific feedback from shareholders related to the 2019 proposal to better understand why they did or did not vote for the 2019 proposal and shareholders’ views with respect to potential responses to the 2019 proposal. Cigna also sought to understand whether shareholder support for the 2019 proposal represented a desire among shareholders for the right to act by written consent, or if shareholders had instead intended their votes to convey other preferences or priorities (for example, a desire for the right to act between annual meetings outside of informal shareholder engagement, such as a shareholder right to call a special meeting). With respect to the possibility of amending Cigna’s By-Laws to allow shareholders to call a special meeting, Cigna management also sought feedback to understand shareholder preferences with respect to the ownership threshold at which such a right would apply.

We reached out to holders of approximately 74% of Cigna’s outstanding common stock, and received feedback from holders of approximately 55% of the outstanding

common stock, including 18 of Cigna’s 25 largest shareholders. Generally, the shareholders we spoke with indicated an understanding of Cigna’s approach to seeking additional feedback and conducting further engagement in response to shareholder support for the 2019 proposal. Prior to adopting the special meeting right, management conducted follow-up outreach to discuss the amendment with shareholders who had previously provided feedback.

During the course of this engagement, Cigna’s management heard a few key perspectives from shareholders. The holders of the vast majority of shares who provided feedback preferred a right for shareholders to call a special meeting over the right for shareholders to act by written consent. Many shareholders expressing this preference indicated that the former approach was desirable because it allows shareholders to act in between annual meetings, but also better facilitates participation of all shareholders to discuss the topic under consideration through an orderly and transparent process. Many of these shareholders further noted that they better understood the special meeting process, which is perceived by shareholders as simpler than the written consent process. During these interactions, holders of 18.7% of outstanding common stock stated that they voted in favor of the 2019 proposal because Cigna did not then have a shareholder right to call special meetings. Importantly, holders of approximately 43% of the outstanding common stock stated that they would prefer that Cigna adopt a shareholder right to call a special meeting instead of adopting a right for shareholders to act by written consent, compared to holders of less than 0.5% of the outstanding common stock indicating a preference for adoption of the right to act by written consent. Holders of only 5.5% of the outstanding common stock expressed the preference that Cigna adopt both rights. Shareholder feedback also indicated that holders of a majority of outstanding shares considered that an amendment to Cigna’s By-Laws to provide shareholders with the right to call a special meeting would be responsive to the support of Cigna’s shareholders for the 2019 proposal.

In addition to the shareholder feedback described above, our Board also considered, among others, the following specific factors:

the significant number of shareholders that indicated that they voted in favor of the 2019 proposal because Cigna did not have a shareholder right to act outside the annual meeting cycle;
the significant number of shareholders that preferred the right for shareholders to call a special meeting over to the right for shareholders to act by written consent;
the lack of consensus among Cigna’s shareholders as to whether the right to act by written consent would in fact be desirable for Cigna;
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the prevailing corporate governance trends and market practices of S&P500 companies and actions taken by similarly situated companies; and
the voting policies and guidelines of Cigna’s investors and third party advisory firms regarding the ability of shareholders to act in between annual meetings.

Cigna believes that the right for shareholders to call a special meeting is a better alternative to the right for shareholders to act by written consent. Indeed, according to data collected by FactSet, approximately 70.4% of the S&P500 companies either do not provide shareholders the right to act by written consent or will only allow action by unanimous written consent. In contrast, about 65% of S&P500 companies afford shareholders the right to call a special meeting, usually subject to an ownership threshold (with approximately 40% of S&P500 companies having an ownership threshold of 25% or greater).

Based on the extensive analyses and shareholder feedback described above, our Board concluded that the adoption of a shareholder right to act by written consent would not be in the best interests of Cigna and our shareholders. Our Board, however, is mindful of being responsive to shareholders’ expressed wishes regarding the ability to act outside of the regular annual meeting cycle. In light of the fact that holders of a substantial majority of Cigna’s outstanding shares that provided feedback believe that the right for shareholders to call a special meeting would be preferable to the right for shareholders to act by written consent, our Board amended Cigna’s By-Laws to provide a shareholder right to call special meetings.

The right for shareholders to call a special meeting entails some concerns similar to those presented by shareholder action by written consent, in particular a lack of transparency, the risk of shareholder disenfranchisement and the risk that a small group of Cigna’s shareholders could use the process in support of actions that are not supported by a broad cross-section of our shareholders, resulting in an inefficient use of corporate resources. To address these risks, the amendment adopted by our Board includes procedural requirements that mitigate the potential for abuse, including among others:

a 25% ownership threshold for shareholders to call special meetings, and that such ownership be of “net long” shares;
a requirement that requesting shareholders hold the requisite share ownership continuously for one year as of the date of the request for the special meeting, to prevent abuse of the right by shareholders focused on short-term interests;
a requirement that requesting shareholders provide the information that would be required to be delivered to Cigna when proposing an item for business at an annual shareholder meeting, in order

to ensure that shareholders receive adequate information in connection with the special meeting, and to improve transparency; and

a time limitation on action initiated within 120 days before the first anniversary of the immediately preceding annual meeting, to avoid unnecessary waste of resources.

The special meeting right adopted by our Board is consistent with prevailing corporate governance trends and the adopted ownership threshold is supported by a significant number of Cigna’s shareholders. Holders of approximately 32% of Cigna’s outstanding common stock, representing a majority of shares that engaged with us, supported the 25% ownership threshold to call special meetings. Although there was some support at lower ownership thresholds, no other threshold received a comparable level of support. Moreover, an analysis of market trends showed that 25% is the most prevalent threshold and reflects market practice: according to FactSet, approximately 40% of S&P500 companies provide shareholders the right to call a special meeting at an ownership threshold of 25% or greater.

For all of the reasons described above, Cigna determined that it would be consistent with the wishes of the majority of our shareholders, and responsive to the vote on the 2019 proposal, to amend Cigna’s By-Laws to provide shareholders the right to call special meetings. The Board adopted this amendment on February 26, 2020, including the features described above, and the By-Law amendment was publicly disclosed pursuant to a Current Report on Form 8-K filed on February 27, 2020.

We continue to welcome shareholder feedback on these and other matters of importance to all our investors and will incorporate such feedback appropriately into our decision-making, actions and approach to shareholder engagement and corporate governance.

DIRECTOR INDEPENDENCE

Cigna believes in the importance of a board composed largely of independent, non-employee directors. The current Board includes eleven non-employee directors. On an annual basis, the Board, through its Corporate Governance Committee, reviews relevant relationships between directors, their immediate family members and the Company, consistent with Cigna’s independence standards. Cigna’s independence standards, which are included in the Guidelines, are consistent with the independence requirements set forth in the NYSE’s listing standards.

To be independent, the Board must affirmatively determine that a director has no material relationships with the Company directly or as an officer, shareholder or partner of an organization that has a relationship with the Company. In making its recommendation to the Board, the Corporate Governance Committee reviewed relationships

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between the Company and each director and considered relevant quantitative and qualitative criteria. The Board has affirmatively determined that Mr. DeLaney, Mr. Foss, General Granger, Mr. Harris, Mr. Martinez, Ms. Mazzarella, Dr. McClellan, Dr. Roper, Mr. Partridge, Mr. Wiseman and Ms. Zarcone are independent directors. Mr. William Zollars also served as an independent director during 2019. In addition, at the committee level, all members of the Audit, Compliance, Corporate Governance, Finance and People Resources Committees are independent and the members of the Audit Committee and the People Resources Committee meet the NYSE’s heightened independence requirements for service on those committees.

In recommending to the Board that it determine each director is independent, the Corporate Governance Committee considered whether there were any facts or circumstances that might impair a director’s independence. There were no transactions that were material to either the Company or a director. The Committee considered that, in the ordinary course of business, the Company may engage in transactions with organizations affiliated with directors or their family members, such as through the sale and/or purchase of products and services or investments by the Company (generally in debt securities). The Committee considered relevant facts and circumstances, including the nature and value of any such transactions in the aggregate and, where applicable, as a percentage of any affiliated organization’s revenues or assets. The Corporate Governance Committee determined that none of our directors had a material interest in any of these transactions and that they did not impair such directors’ independence.

BOARD LEADERSHIP STRUCTURE

The Board is committed to the long-term growth of the business and the successful execution of our mission to improve the health, well-being and peace of mind of those we serve around the globe. To fulfill its responsibilities to our shareholders, Cigna’s Board, both directly and through its committees, regularly engages with management, ensures management accountability and reviews critical issues that face Cigna. The Board is committed to meeting the dynamic needs of the Company and focusing on the interests of its shareholders and, as a result, regularly evaluates and adapts its composition, role and relationship with management.

Independent Chairman of the Board

We currently separate the roles of the Chairman of the Board and Chief Executive Officer. Our CEO sets the strategic direction for the Company, working with the Board, and provides day-to-day leadership, while our Chairman leads the Board in the performance of its duties and serves as the principal liaison between the independent directors and the CEO. We believe that having an independent Chairman assists the Board in ensuring independent oversight of the Company and the management team. The Board regularly assesses the appropriateness of this leadership structure and has concluded that this structure best suits Cigna’s needs at this time.

In December 2018, the Board re-elected Isaiah Harris, Jr. to serve as our independent Chairman for a three-year term, subject to his annual election to the Board by shareholders. The full Board evaluates the Chairman’s performance on an annual basis as part of the annual Board evaluation.

   
Chairman Responsibilities
   
 
•   Serve as principal representative of the Board
   
•   Facilitate discussion among independent directors
     on key issues
   
•   Advise the CEO on issues of concern for the Board
   
•   Develop agenda for Board meetings, in consultation
     with the CEO and other directors
•   Act as liaison between Board and management
   
•   Lead the Board in CEO succession planning
   
•   Preside over Board and shareholder meetings
   
•   Engage in the director recruitment process
   
•   Represent the Company in interactions with external
     stakeholders, as appropriate
   

Access to Management and Advisors

A member of senior management is assigned to each committee to act as a staff officer. The Chief Financial Officer serves as the staff officer for the Audit and Finance Committees; the General Counsel serves as the staff officer for the Compliance and Corporate Governance Committees; and the Chief Human Resources Officer serves as the staff officer for the People Resources Committee. These executive officers work with their respective committee chair to assist in setting and developing meeting agendas and materials and attend

meetings as appropriate. Committee chairs communicate regularly with staff officers, the other executive officers and other members of management between scheduled Board meetings with respect to committee issues, and management is expected to update the Board on any significant Company matters or competitive developments between Board meetings.

The Board and its committees are able to access and retain independent advisors as, and to the extent, they deem necessary or appropriate.

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BOARD EVALUATIONS AND BOARD EFFECTIVENESS

Evaluation Process

The Board evaluation process allows the Board to gain insights into the effectiveness of, and challenges facing, the Board, its committees and its individual members, with the goal of enhancing Board performance and, as a result, increasing shareholder value. Cigna’s Board is committed to ongoing improvement and the evaluation process is an important vehicle that fosters and supports effectiveness. Our board evaluations are designed to solicit input and perspective on various matters, including:

board and committee structure and the role and responsibility of the Board;
board configuration, including size, diversity and skill set;
board dynamics and culture;
governance policies and practices;
strategy and risk oversight;
relationship with management;
board operations, including the conduct and cadence of meetings, schedule, presentation topics, pre-read information, and communications; and
progress achieved against prior year evaluation initiatives.

As set forth in its charter, the Corporate Governance Committee oversees the Board, committee and individual director evaluation process. Annually, the Corporate Governance Committee and the Chairman of the Board determine the appropriate form of evaluation and consider the design of the process to ensure it is both meaningful and effective.

In 2019, the Board engaged an independent third party, with substantial experience in board evaluations and organizational effectiveness, to lead the board evaluation. The third party engaged the directors on a wide range of topics, including those described above. Following the completion of this process, the third party discussed his assessment with the Corporate Governance Committee and the Board. The chairs of each committee led a similar self-assessment discussion for their particular committee.

The results of the evaluation process support the Board’s belief that the Board and committees are operating effectively.

Board Refreshment and Succession Planning

Our Corporate Governance Committee engages in Board succession planning on an ongoing basis. The Corporate Governance Committee is responsible for identifying new director candidates, reviewing the composition of the

Board and its committees and making recommendations to the full Board on these matters. When identifying new candidates for the Board, the Committee focuses on identifying candidates that possess skills and qualifications that will support the Company’s short- and long-term strategy, while being mindful of the complex and dynamic nature of the health service industry, as well as upcoming planned retirements. The Committee’s objective is to balance the knowledge and insights gained from long-term service on the Board with the new skills and experience that results from adding directors to the Board, at a pace that allows the Board to maintain its high-performing and effective culture.

On a targeted basis, the Corporate Governance Committee retains a third party search firm to assist in identifying and evaluating candidates for Board membership. A third party firm provided such assistance to the Committee in the recruitment of Ms. Ross. The Guidelines require the Corporate Governance Committee, and any search firm it engages, to include women and minority candidates in the pool from which the Committee selects director candidates.

New directors undergo an extensive Board and committee orientation process, overseen by the Corporate Governance Committee. The orientation process is designed to enable new members of the Board to quickly become active, knowledgeable and effective Board members. As part of this process, each new director receives a series of briefings designed to provide meaningful interactions with our executive officers and other senior leaders. These briefings focus on, among other topics, our business operations, strategic plans, financial statements and policies, risk management framework and significant risks, regulatory matters, corporate governance, and key policies and practices, including our Codes of Ethics, as well as the roles and responsibilities of the Board. Board orientation may also include site visits to key business operations.

RESPONSIBILITIES OF THE BOARD

Board Oversight of Risk and Enterprise Risk Management

The Board of Directors has the ultimate responsibility for risk oversight under Cigna’s risk management framework. The Board oversees our policies and procedures for assessing and managing risk, while management is responsible for assessing and managing our exposures to risk on a day-to-day basis. The Board executes its duty both directly and through its Audit, Compliance, Corporate Governance, Finance and People Resources Committees. The Audit Committee oversees Cigna’s enterprise risk management (ERM) framework. ERM is a Company-wide program that involves the Board, Cigna’s management, Cigna’s Chief Risk Officer and General Auditor (CRO) and internal audit function in an integrated effort to (1) identify, assess, prioritize and monitor a broad range of risks and

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(2) formulate and execute plans to monitor and, to the extent possible, mitigate the effect of those risks. The CRO meets with the Audit Committee regularly during its executive sessions and reports to the Board at least annually.

Cigna has implemented practices so that the Board and its committees are regularly briefed on issues related to the Company’s risk profile. These briefings are designed to provide visibility to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. These briefings address strategic, operational, financial reporting, succession and compensation, cyber security, compliance, reputational, governance and other risks, as appropriate.

The Board, including its committees, oversees risks associated with their respective areas of responsibility. The full board oversees strategic, financial and execution risks

and exposures associated with Cigna’s business strategy, including the impact of changes to laws and regulations, significant litigation and regulatory exposures and other current matters that may present material risk to financial performance, operations, infrastructure, plans, prospects, reputation, acquisitions and divestitures. The Board and each committee meet in executive session without management present and with key management personnel, including the Chief Financial Officer, CRO, Chief Accounting Officer, General Counsel, Chief Compliance Officer, Medicare/Medicaid Chief Compliance Officer, Chief Information Officer, and representatives of outside advisors, including the registered independent accounting firm and the independent compensation consultant, as necessary. A summary of each committee’s area of risk oversight responsibility is included in “ – Board Meetings and Committees.”

Shareholder Engagement

The Board and the Corporate Governance Committee oversee the Company’s shareholder engagement practices. Cigna's Board of Directors and management engage with shareholders on issues related to corporate governance, executive compensation, social responsibility, business strategy, Company performance and other areas of focus for shareholders.

SHAREHOLDER ENGAGEMENT
We have engaged with shareholders on a number of occasions.
Leading up to the 2019 annual meeting of shareholders, we invited holders of 64% of our outstanding stock to engage with us. Holders of 27% of our outstanding stock engaged with us.
   
Topics discussed
Corporate governance and shareholder rights
Board composition
Corporate social responsibility initiatives
Executive compensation and human capital matters
Business strategy, particularly in light of the combination with Express Scripts
After the 2019 annual meeting, we invited holders of 74% of our outstanding stock to engage with us. Holders of 55% of our outstanding stock discussed with us their vote on the 2019 shareholder proposal to adopt a right for shareholders to act by written consent and their views on potential responses by the Board.
   
For additional information regarding shareholder engagement related to the Board’s adoption of a special meeting right, see “Corporate Governance Policies and Practices – Adoption of Special Meeting Right in Response to 2019 Written Consent Shareholder Proposal.”

We have implemented several governance enhancements in recent years that shareholders have expressed support for in our engagement discussions, including, for example, our adoption of the “Rooney Rule,” which requires that the Corporate Governance Committee and any search firm it engages include women and minority candidates in the pool from which the Committee selects director candidates, the adoption of our proxy access bylaw and the elimination of supermajority voting provisions in our governing documents.

Oversight of Business Strategy

The Board provides unique insights into the strategic issues facing the Company, including changes in the regulatory environment, changing market dynamics and the competitive landscape. The Board and its committees provide guidance and oversight to management with respect to Cigna’s business strategy throughout the year. As part of its oversight of business strategy, the Board:

formally reviews Cigna’s annual and longer-term strategic plan, financial targets and strategies for achieving those targets;
regularly reviews and assesses Cigna’s results of operations, financial performance, prospects and competitive position;
regularly discusses external factors that affect the Company, such as regulatory developments and trends impacting the health service industry generally;
regularly reviews our performance compared to our competitors; and
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regularly evaluates potential strategic alternatives relating to Cigna and our business, including possible acquisitions, divestitures and business combinations.

Management Succession Planning and Human Capital Management Oversight

The Board oversees management succession planning, including for the CEO role. With the assistance of the People Resources Committee, the Board reviews and approves regular and emergency succession plans. Annually, the Board reviews comprehensive succession plans for the CEO and other executive officers and key members of senior management, including a discussion of those employees who are considered to be potential successors to executive and senior level positions with regard to their readiness and development opportunities.

The People Resources Committee is responsible for overseeing the Company’s policies and processes for people development and engagement in general. We strive to create a diverse workforce with employees skilled in critical capability areas essential to delivering on our mission and strategic objectives consistent with our values. The Committee oversees human capital management strategies, including employee development, compensation, benefits, recruiting and retention, and culture, diversity and inclusion.

BOARD MEETINGS AND COMMITTEES

In 2019, the Board held eight meetings and the committees of the Board held a total of 31 meetings. At all regular Board meetings held in 2019, the independent members of the Board met in executive session without management present. As part of all regularly scheduled Board meetings, the Chairman presides over all executive sessions of the Board. Each committee also met in executive session without management on a regular basis in connection with their respective meetings.

Each director attended more than 75% of the aggregate of all meetings of the Board and committees on which he or she served in 2019. During 2019, Board and committee attendance averaged 97% for the Board as a whole. In addition to formal Board meetings, the Board engages with management regularly throughout the year.

The Board expects directors to attend the annual meeting of shareholders. Twelve directors, including 11 of the director nominees, attended the 2019 annual meeting. All directors are expected to attend the Annual Meeting in 2020.

The specific roles and responsibilities of the Board’s Executive, Audit, Compliance, Corporate Governance, Finance and People Resources Committees are delineated in written charters adopted by the Board. Complete copies of the committee charters are available on Cigna’s website at https://www.cigna.com/about-us/company-profile/corporate-governance/board-committees. Each member of the Audit, Compliance, Corporate Governance, Finance and People Resources Committees is independent under the terms of Cigna’s independence standards, which are included in the Guidelines and consistent with the independence standards set forth in the NYSE’s listing standards.

The Executive Committee may exercise the power and authority of the Board as specifically delegated by the Board when convening a meeting of the full Board of Directors is impracticable. Mr. Harris is Chairman of the Executive Committee and Mr. Cordani, Mr. Martinez, Mr. Partridge, Dr. Roper, Mr. Wiseman and Ms. Zarcone serve on the Executive Committee. In 2019, the Board of Directors did not delegate any actions to the Executive Committee and, therefore, the Executive Committee did not meet in 2019.

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A summary of the key committee responsibilities and the composition of the Audit, Compliance, Corporate Governance, Finance and People Resources Committees is set forth below.

AUDIT COMMITTEE
Current Members*
   Mr. Martinez (Chair)
   Mr. DeLaney
   Mr. Partridge
   
Met 9 times in 2019
   
* Dr. McClellan served on the Committee until November 2019.
Primary Responsibilities
Assesses the qualification and independence of, appoints, compensates, oversees the work of and removes, if appropriate, Cigna’s independent registered public accounting firm.
Represents and assists the Board in fulfilling its oversight responsibilities regarding the adequacy and effectiveness of internal controls and the integrity of financial statements.
Reviews annual and quarterly financial statements, earnings releases, earnings guidance and significant accounting policies with management and, if appropriate, the independent registered public accounting firm.
Oversees material legal matters.
Maintains procedures for and reviews the receipt, retention and treatment of complaints and concerns regarding accounting, controls, auditing, reporting and disclosure matters.
 
Risk Oversight Focus Area
Oversees the Company’s enterprise risk management program and internal audit function.
Oversees risks related to the Company’s financial statements, the financial reporting process, accounting, and certain legal matters.
Together with the Board, ensures that the Company has cyber risk management policies and processes in place.
All members of the Audit Committee are financially literate within the meaning of the NYSE listing standards and are designated “audit committee financial expert[s]” as defined in the SEC rules. For more information regarding the Audit Committee’s activities see “Report of the Audit Committee” in the Audit Matters section of the Proxy Statement.

   

COMPLIANCE COMMITTEE
Current Members
   Dr. Roper (Chair)
   Mr. Foss
   General Granger
   Ms. Zarcone
Primary Responsibilities
Oversees the Company’s key compliance programs, including but not limited to, those regulatory and legal requirements relating to data security, provision of healthcare and related services, operational effectiveness (including service requirements) and employment matters.
Oversees the administration of the Company’s Code of Ethics and Principles of Conduct.
Met 6 times in 2019
Risk Oversight Focus Area
Oversees the Company’s key compliance and ethics programs, including compliance with the laws and regulations that apply to business operations, such as data privacy and U.S. federal and state healthcare program requirements.
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CORPORATE GOVERNANCE COMMITTEE
Current Members*
   Ms. Zarcone (Chair)
   Mr. DeLaney
   Mr. Foss
   General Granger
   Dr. McClellan

   
Met 5 times in 2019
      
* Mr. Zollars served on the Committee until his retirement in November 2019.
Primary Responsibilities
Reviews, advises and reports to the Board on the Board’s membership, structure, organization, governance practices and performance.
Assists the Board in refreshment planning.
Reviews committee assignments and director independence.
Oversees director nominations and compensation and develops specific director recruitment criteria.
Oversees engagement with external stakeholders, including shareholders.
Oversees corporate political and charitable contributions and the Company’s corporate responsibility and sustainability efforts.
 
Risk Oversight Focus Area
Oversees risks and exposures associated with director succession and refreshment planning, corporate governance and overall Board effectiveness.
Oversees risks related to political and charitable contributions. In exercising this oversight, the Corporate Governance Committee reviews and discusses financial contributions to such organizations.

   

FINANCE COMMITTEE
Current Members
   Mr. Partridge (Chair)
   Mr. Martinez
   Ms. Mazzarella
   Dr. Roper
   Mr. Wiseman
      
Met 5 times in 2019
Primary Responsibilities
Oversees the structure and use of Cigna’s capital.
Oversees Cigna’s long-term financial objectives and progress against those objectives.
Reviews Cigna’s strategic operating plan and budget.
Oversees Cigna’s investment strategy and sets investment policies and guidelines.
Oversees information technology strategy and execution.
 
Risk Oversight Focus Area
Oversees the Company’s deployment of capital, technology and investment-related initiatives. In exercising this oversight, the Finance Committee regularly reviews and discusses the technology, financial market and capital management risks that are monitored through the Company’s ERM process.
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PEOPLE RESOURCES COMMITTEE
Current Members*
   Mr. Wiseman    (Chair)
   Ms. Mazzarella
   Dr. McClellan
   
Met 6 times in 2019
   
* Mr. Zollars chaired the Committee until his retirement. Mr. Wiseman became Chair and Dr. McClellan rotated onto the Committee in November 2019.
Primary Responsibilities
Oversees the policies and processes for people development and assists the Board in reviewing executive officer succession plans.
Establishes company goals and objectives relevant to the CEO’s compensation, evaluates the CEO’s performance in light of those established goals and objectives, and based on this evaluation, recommends the CEO’s compensation to the independent members of the Board for approval.
Reviews and approves compensation targets, base salaries, cash and equity-based incentive compensation payments and arrangements, severance, and other compensation and benefits arrangements for any current or prospective executive officers other than the CEO, subject to required Board or shareholder approvals.
Establishes performance measures and goals and assesses whether these goals are met for awards under short-term and long-term cash-based and equity-based compensation plans.
Reviews and monitors the Company’s diversity program.
Risk Oversight Focus Area
Oversees compensation related-risks and management succession planning. For additional information regarding the People Resources Committee’s role in evaluating the impact of risk on executive compensation, see “Processes and Procedures for Determining Executive Compensation – Risk Oversight” in the CD&A.
For more information regarding the responsibilities and activities of the People Resources Committee, including the Committee’s processes for determining executive compensation, see the CD&A.

CODES OF ETHICS

Cigna is committed to conducting business in accordance with the highest standards of integrity, legal compliance and ethical conduct. All directors and employees, including executive officers, must comply with the Company’s Code of Ethics, available on Cigna’s website at https://www.cigna.com/about-us/company-profile/corporate-governance/code-of-ethics. In addition, directors also comply with the Director Code of Business Conduct and Ethics, available on Cigna’s website at https://www.cigna.com/static/www-cigna-com/docs/about-us/company-profile/corporate-governance/board-code-of-ethics.pdf. The Board believes that having a separate code of conduct for the Board meaningfully enhances Cigna’s governance framework by making Board-specific policies clearer. Both the Director Code of Business Conduct and Ethics and the Company Code of Ethics, together with Cigna’s related policies and procedures, address major areas of professional conduct, including, among others, conflicts of interest, protection of private, sensitive or confidential information, insider trading and adherence to laws and regulations affecting the conduct of Cigna’s business. Directors and employees affirm their adherence to the Director Code of Business Conduct and Ethics and the Code of Ethics, as applicable, annually.

CORPORATE RESPONSIBILITY

As a global health service company with the mission of helping improve the health, well-being and peace of mind of those we serve, Cigna believes that its success depends on earning trust through responsible business practices, corporate citizenship and providing services that meet our customers’ individual needs. Inspired by our mission, Cigna works to positively impact the health of people, communities and the environment.

The Corporate Governance Committee is responsible for overseeing Cigna’s positions on, and policies with respect to, Cigna’s corporate responsibility efforts around the globe. To support the Corporate Governance Committee’s responsibility, Cigna has established the Cigna Connects Corporate Responsibility Governance Council to provide input on Cigna’s policies, initiatives and reporting relative to corporate responsibility. This Council is a cross-functional team of leaders from various areas of the Company, including civic affairs, ethics and compliance, global real estate, risk management, supply chain, human resources and the Cigna Foundation.

Cigna annually publishes a corporate responsibility report, Cigna Connects, highlighting our corporate responsibility goals and initiatives. Cigna Connects covers areas such as Cigna’s practices around ethics and governance, diversity, privacy and information protection, environmental sustainability, and our Cigna Foundation. Cigna Connects is presented to the Corporate Governance Committee, which reviews the report with the Board. We encourage our

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shareholders to review our most current report, which is available on Cigna’s website at https://www.cigna.com/about-us/corporate-responsibility/report/.

Commitment to Diversity and Inclusion and Equitable Pay

We recognize that our continued success depends on the collective strengths of our employees. At Cigna, individual differences represent a mosaic of opportunities, and diversity and inclusion as a long-term business strategy will help drive the future success of the company. We take great pride in our diverse and talented workforce and are committed to being an employer of choice for diverse talent. This commitment is demonstrated through our programs and practices to attract, retain and reward our employees. Our Board of Directors, or a committee of the Board, is updated routinely by management on our diversity and inclusion programs and progress.

We recruit, hire, train and promote persons in all positions and work to ensure that all personnel actions are administered without regard to an employee’s race, color, religion, ethnicity, gender or sexual orientation. We seek to recruit diverse candidates at all stages of their careers and through a variety of venues and programs, including at national conferences for various diversity organizations. We push ourselves to increase representation of women and ethnic minorities, particularly in middle and senior management roles. We provide “Unconscious Bias” training to help ensure that decisions around hiring and promotions are focused on abilities and qualifications. Our ongoing diversity and inclusion programs, which are detailed in our Corporate Responsibility Report, have been recognized by leading organizations. For additional information regarding our commitment to Board diversity, see “Election of Directors – Commitment to Board Diversity.”

Cigna is committed to pay equity. Our compensation opportunities are defined for each job level based on market and benchmarking data and we have removed compensation inquiries from our job applications. We proactively monitor our pay practices for potential disparities with respect to gender and race, including conducting an annual review directed by outside counsel. This annual review considers multiple factors as determinants of compensation. We evaluate the results, take action as warranted and report our progress to the People Resources Committee on an annual basis.

Additional information regarding our commitment to diversity and inclusion and equitable pay is included in our Pay Equity Commitment Statement, which can be found on our website at https://jobs.cigna.com/payequity. In this statement, we emphasize our commitment to fairness in pay and opportunity for all of our employees, regardless of gender, race or ethnicity, as well as the steps we are taking

to increase the representation in Cigna’s leadership to ensure that the perspectives of women are included at all levels throughout the Company.


At Cigna, we are committed
to being an employer of
choice for diverse talent.
Cigna is committed to
equitable pay.


The Cigna Foundation

The Cigna Foundation, established more than 50 years ago, carries out our corporate philanthropy goals of bringing Cigna’s mission and brand promise to life for individuals and communities around the globe. The Cigna Foundation accomplishes these goals through strategically focused charitable grants to nonprofit organizations whose work enhances the health of individuals and families and the well-being of their communities. Cigna’s World of Difference grants center around collaborations with nonprofits pursuing projects that help people overcome barriers to their health and well-being related to factors such as ethnicity, race, gender, age, education, economic status or place of residence. Many of these grants support programs that utilize community health workers who bridge the gaps between specific groups of people and the health care system. In 2019, the Cigna Foundation, together with the Express Scripts Foundation, funded 230 grants to support innovative health solutions that work to improve health equity and respond to community needs in ways that are sustainable, scalable and effective.

Cigna and Express Scripts share a commitment to supporting local communities and improving societal health. In furtherance of this commitment, we announced a $200 million investment in our foundation and our communities. In January 2019, we launched Healthier Kids for Our Future, a $25 million five-year global initiative to improve the health and well-being of children. Healthier Kids For Our Future addresses three key areas of children’s health and welfare that align to the United Nations Sustainable Development Goals – good health and well-being, zero hunger and no poverty. The first year of the initiative addressed the second goal, zero hunger. Throughout the year, we teamed up with schools and community groups to reduce food insecurity for children – connecting our partners with the resources they need to solve this worldwide challenge. In 2020, we announced a $3 million commitment to address the mental health needs of children across our country, as part of our commitment to improving behavioral health.

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ANNUAL POLITICAL CONTRIBUTIONS AND LOBBYING ACTIVITY REPORT

Cigna is committed to transparency and strives to provide clarity about our goals and positions related to the Company’s federal and state lobbying and advocacy efforts, as well as why we believe active engagement in the public policy arena is important to our mission, business and customers. Cigna has engaged with shareholders to gain feedback regarding desired political contribution disclosure and published its first annual political contributions and lobbying activity report in 2011. Our report provides information on our overall lobbying framework, including the areas in which we focus our advocacy efforts and why we believe active engagement in the public policy arena is necessary to support the achievement of our mission, the success of our business and the well-being of our customers. The report also provides information about: (1) direct political contributions that Cigna makes at a corporate level; (2) contributions that Cigna makes through the Cigna Political Action Committee; and (3) the total amount of annual dues paid to any industry trade association to which Cigna pays $50,000 or more in annual dues, as well as the portion of any such dues that such trade associations inform us are allocable to any non-deductible lobbying expenses. The Corporate Governance Committee oversees Cigna’s political and lobbying activities. The Company updates the report annually and we encourage you to review our 2019 report which is available on Cigna’s website at https://www.cigna.com/about-us/company-profile/corporate-governance/.

CERTAIN TRANSACTIONS

Transactions with Related Persons

Cigna has not adopted a written policy concerning the review, approval or ratification of related person transactions. Cigna compiles information about

transactions between Cigna and Cigna’s directors, director nominees, executive officers and any immediate family members and affiliated entities identified by directors, director nominees and executive officers as having any form of relationship with Cigna, as well as shareholders that identified themselves since the beginning of 2019 as beneficially owning more than 5% of Cigna's common stock. Cigna’s Office of the Corporate Secretary analyzes the nature of any transaction to determine whether the transaction may require disclosure under SEC rules as a related person transaction. On an annual basis, the Corporate Governance Committee reviews the analysis prepared by the Company, and presents its assessment to the full Board of Directors.

A member of Mr. Wiseman’s family is an employee of Cigna. The position is not an executive officer or enterprise-level strategic role. Target total annual compensation for this position is determined by reference to a range of compensation for similarly situated roles and is approximately $80,000 to $180,000. Actual compensation was established in accordance with the Company’s compensation practices applicable to non-executive employees with equivalent qualifications, experience and responsibilities. The position also is eligible for standard benefits provided to other non-executive employees. The Board has determined that this employment relationship does not present a conflict for Mr. Wiseman. There were no other related person transactions requiring disclosure under SEC rules.

Compensation Committee Interlocks and Insider Participation

The People Resources Committee is composed of three independent directors: Eric C. Wiseman (Chair), Kathleen M. Mazzarella and Mark B. McClellan. There are no compensation committee interlocks.

Non-Employee Director Compensation

 

   

OVERVIEW

Cigna’s director compensation program is designed to attract and retain highly qualified independent directors by addressing the time, effort, expertise and accountability required of active board membership. The Board believes that the director compensation program:

aligns with shareholder interests because it delivers a majority of Board compensation through an equity-based component, the value of which is tied to Cigna’s stock price; and
is competitive based on the work required of directors serving on the board of an entity of the Company’s size, complexity and scope.

The Corporate Governance Committee’s charter provides that it will periodically review director compensation and assist the Board in the administration of director compensation plans. The Board approves the amount and form of director compensation. The Corporate Governance Committee may from time to time engage an independent compensation consultant to assist in its review of director compensation.

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DIRECTOR COMPENSATION PROGRAM

The Corporate Governance Committee reviews Cigna’s non-employee director compensation program on an annual basis. In October 2018, the Corporate Governance Committee, with the assistance of Pay Governance, evaluated the director compensation program in light of the Express Scripts merger. As part of this review, the Corporate Governance Committee reviewed benchmarking data from the Company’s post-merger compensation peer group and general industry peer group (each as described in “Executive Compensation Policies and Practices – Peer Groups”). The Committee considered both the level of compensation paid, as well as the mix and type of pay vehicles used. This analysis considered all elements of director compensation including: annual board and committee retainers, board and committee meeting fees, stock-based compensation, stock ownership guidelines and compensation for non-executive board chairpersons.

Following this review, the Board approved the following director compensation program, effective January 1, 2019. Similar to the prior director compensation program, there is no retainer for service on the Executive Committee and no compensation is paid under this program for directors that are also employees of the Company. In addition, the Board eliminated committee membership retainers.

RETAINER TYPE
ANNUAL AMOUNT
METHOD OF PAYMENT
Board (other than the Chairman of the Board)
$190,000  
 
Cigna common stock
$120,000  
 
Cash
Chairman of the Board
$230,000  
 
Cigna common stock
$320,000  
 
Cash
Committee chair
$25,000
 
Cash

In July 2019, the Corporate Governance Committee, with the assistance of Pay Governance, reviewed the director compensation program, to ensure that our pay practices remained competitive and aligned with peer companies. As part of this review, the Corporate Governance Committee reviewed benchmarking data from the Company’s compensation peer group and general industry peer group. There were no changes to the program as part of this review.

Deferral of Payments

Under the Deferred Compensation Plan of 2005 for Directors of Cigna Corporation (Deferral Plan), directors may elect to defer the payment of the cash and/or common stock portion of their annual retainers. Deferred common stock compensation is credited to a director’s deferred compensation account as a number of shares of hypothetical common stock and ultimately paid in shares. Deferred cash compensation is ultimately paid in cash, and directors have a choice of hypothetical investment funds whose rates of return are credited to that account. These funds include a Cigna stock fund and several other funds selected from those offered to all Cigna employees under the Cigna 401(k) Plan. Directors may elect to receive payments under the Deferral Plan in a lump sum or installments. Lump sum payments are made, or payment installments begin, in January of the year following a director’s separation from service.

Stock Ownership Guidelines

Cigna requires directors to maintain a stock ownership level of at least five times the value of the cash portion of the annual board retainer (currently $600,000) of Cigna common stock. Under the guidelines, directors have five years from their election to the Board to satisfy this ownership obligation. Common stock, deferred common stock, restricted stock units and hypothetical shares of Cigna common stock held by a director count toward the

stock ownership guidelines for directors whose service started before February 2014. Directors whose service started after February 2014 may only count common stock and deferred common stock for compliance with stock ownership guidelines. As of December 31, 2019, all of the directors are in compliance with the stock ownership guidelines and each of our directors met or exceeded their ownership requirements or are within the five-year share accumulation period.

Financial Planning and Matching Charitable Gift Programs

Directors may participate in the same financial planning and tax preparation program available to Cigna executive officers. Under this program, Cigna will make direct payments or reimburse directors for financial planning services that are provided by firms designated by Cigna and for tax preparation services in the amount of up to $6,500 annually. Each director whose service started before 2006 and has at least nine years of board service upon separation from service also is eligible for direct payments or reimbursement in the amount of up to $5,000 for financial planning and tax preparation services during the one-year period following separation from service.

Directors also may participate in the matching charitable gift program available to Cigna employees, under which Cigna will make a matching charitable gift of up to $5,000

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annually. In addition, upon a director’s retirement, in recognition of the retiring director’s service, the Board may make a donation in the amount of $10,000 to a charitable organization of the director’s choice.

Insurance Coverage

Cigna provides each director, on the same basis as employees and at no cost to the director, group term life insurance coverage and business travel accident insurance coverage. Cigna also provides $1 million of personal umbrella liability insurance coverage for directors. Directors may purchase additional coverage at the group rate.

Directors also may purchase or participate in, by paying premiums on an after-tax basis, additional life insurance, medical care, long-term care, property/casualty personal

lines and various other insurance programs available on a broad basis to Cigna employees. Directors also may elect to purchase worldwide emergency assistance coverage. This program, which provides international emergency medical, personal, travel and security assistance, also is available to Cigna executive officers and certain other Cigna employees who frequently travel abroad for business.

Cigna provides each retired director whose service started before 2006 and who has at least nine years of Board service upon separation from service with $10,000 of group term life insurance coverage, with premiums paid by Cigna. In addition, these directors may also participate for two years following separation from service in the medical care programs currently offered by Cigna to retired employees, with premiums paid by the director on an after-tax basis.

DIRECTOR COMPENSATION TABLE FOR 2019

The table below includes information about the compensation paid to non-employee directors in 2019. Mr. Cordani, the only Company employee on the Board of Directors, does not receive any director compensation for his Board service.

NAME
FEES EARNED
OR PAID IN CASH
($)
STOCK
AWARDS
($)
ALL OTHER
COMPENSATION
($)
TOTAL
COMPENSATION
($)
(a)
(b)
(c)
(d)
(e)
William J. DeLaney
 
120,000
 
 
190,000
 
 
365            
 
 
310,365            
 
Eric J. Foss
 
120,000
 
 
190,000
 
 
365