DEF 14A 1 a2017proxy.htm DEF 14A Document


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

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.      )

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Soliciting Material Pursuant to §240.14a-12
Unum Group
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TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
We are furnishing proxy materials, including this proxy statement, in connection with the solicitation of proxies on behalf of the Board of Directors, to be voted at the 2017 Annual Meeting of Shareholders of Unum Group and at any adjournment or postponement thereof. Our proxy materials are first being mailed and made available electronically to shareholders on April 13, 2017.


2017 PROXY STATEMENT
3
 


A LETTER FROM OUR BOARD OF DIRECTORS

April 13, 2017
Dear Fellow Shareholder:
By almost any measure, 2016 was a good year for Unum. Our company delivered strong operational and financial results, including record net income. It was also a great year for shareholders, with our stock price up sharply and total shareholder return that outpaced most of our peers and the S&P 500. These results are even more impressive given the difficult economic headwinds, including continued low interest rates and the impact of Brexit in the U.K.
Our success is driven by a relentless focus on serving customers well. We understand the critical role our products and services have in helping people preserve their financial stability during times of illness or injury. They count on us to be there, and that’s a solemn responsibility we never forget.
Our Board is committed to building a sustainable future for Unum, and we do that through ongoing investments that enhance our products, services and capabilities. This effort was highlighted in 2016 by our acquisition of Starmount Life, a leading dental and vision carrier in the U.S. We made a similar acquisition in the U.K. in 2015, and we’re excited about expanding our offering portfolio for employer clients and reaching more consumers.
At this year’s Annual Meeting, our Chairman of the Board, Tom Watjen, steps down, which completes a transition in leadership that began two years ago. Tom retired as CEO of Unum in 2015 and agreed to assume the role of Chairman for a two-year period to ensure leadership continuity. Tom is retiring after serving a total of 15 years on our Board and will be succeeded as Chairman by Kevin Kabat, our current Lead Independent Director, in the event he is re-elected to the Board at the Annual Meeting. Tom has been instrumental in shaping Unum as CEO beginning in 2003 and through his Board service. We are indebted to him for his many years of leadership.
The Board will also be saying goodbye to our longtime colleague Ed Muhl, who is retiring after 12 years as a Director. Ed’s guidance and insight will be missed, and we wish him well.
These retirements and other transitions on our Board and senior leadership team over the last few years have been the result of a deliberate and well executed succession planning process. Unum places a high priority on developing future leaders and ensuring we have an engaged and knowledgeable workforce. It’s a testament to our people that we’ve been able to successfully make these changes while continuing to deliver strong performance.
It’s an exciting time for Unum, and we remain confident we’re taking the steps necessary to position Unum well for the future and create value for our shareholders.
Thank you for your continued investment and support.
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2017 PROXY STATEMENT




NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS

NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS
The 2017 Annual Meeting of Shareholders of Unum Group will be held:
Date:     Thursday, May 25, 2017
Time:    10:00 a.m. Eastern Daylight Time
Place:     Unum Group
1 Fountain Square
Chattanooga, TN 37402
The items of business are:
To elect 11 directors named in the proxy statement, each for a one-year term expiring in 2018;
To conduct an advisory vote to approve executive compensation;
To conduct an advisory vote on the frequency of future advisory votes to approve executive compensation;
To ratify the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for 2017; and
To approve the Unum Group Stock Incentive Plan of 2017.
Shareholders also will transact any other business that may properly come before the meeting.
Management will also review the company’s 2016 performance and its outlook for the future.
Shareholders of record of the company’s common stock (NYSE: UNM) at the close of business on March 27, 2017, are entitled to vote at the meeting and any adjournments or postponements of the meeting.
jpaulsiga02.jpg 
J. Paul Jullienne
Vice President, Managing Counsel and Corporate Secretary
April 13, 2017
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 25, 2017: The proxy statement and annual report to shareholders are available at www.envisionreports.com/unm.


2017 PROXY STATEMENT
5
 


PROXY SUMMARY

PROXY SUMMARY
This summary is intended to highlight certain key information contained in this proxy statement that we believe will assist your review of the items of business to be voted on at the 2017 Annual Meeting of Shareholders of Unum Group (the "2017 Annual Meeting"). As it is only a summary, we encourage you to review the full proxy statement and our annual report on Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K") for more complete information about these topics.
Board Leadership Transition
Thomas R. Watjen, current non-executive Chairman of the Board of Directors and former CEO of Unum Group ("Unum" or the "company"), has decided as part of a planned transition not to stand for re-election to the Board at the 2017 Annual Meeting. After more than 15 years as a Board member, including the last two as Chairman, he made this decision after concluding that the company was well positioned for success following a smooth Board and management transition - the primary goal that the Board had set when he assumed the Chairman role.
In December 2016, the Board elected Kevin T. Kabat, our current Lead Independent Director, to succeed Mr. Watjen as non-executive Chairman, contingent on Mr. Kabat's re-election as a director by shareholders at the 2017 Annual Meeting. When Mr. Kabat, an independent director, becomes the Chairman, the Lead Independent Director role will no longer be needed and will terminate at that time. The naming of Mr. Kabat as successor Chairman represents the culmination of a succession planning process led by the Governance Committee that started soon after Mr. Watjen's appointment in 2015. Transparency was fundamental to the process, and director input was solicited in developing appropriate selection criteria for the role. In establishing the process, the Committee recognized the need for a successor Lead Independent Director in 2016 and the potential for this individual to later be named successor Chairman given natural alignment between the roles. Importantly, Mr. Kabat's service as Lead Independent Director during the past year provided fellow directors with a basis for evaluating his candidacy for Chairman and also has prepared him for the transition.
Performance Highlights
Unum had a very successful year in 2016 as growth accelerated and we continued to deliver consistent financial and operating performance. Positive sales and premium growth contributed to record earnings per share and our disciplined approach to running our business helped us maintain attractive profit margins and a high level of customer satisfaction. These results were achieved despite a very uncertain economic environment, including the pressure of continued low interest rates, and reflect our successful management transition as Mr. McKenney completed his first full year as CEO.


 
6
2017 PROXY STATEMENT




PROXY SUMMARY

Financial highlights(1) from 2016 include:
After-tax operating income of $926.2 million, based on total revenue of $11.0 billion;
Record operating earnings per share (EPS) of $3.92, a 7.7% increase from the prior year and the eleventh consecutive year of operating EPS growth; 
Consolidated operating return on equity (ROE) of 11.4% (15.9% in our core operating segments);
Book value per share growth of 9.3% from 2015 (excluding accumulated other comprehensive income, or AOCI), the eighth consecutive year of growth; and
Solid investment results in a difficult interest rate environment while emphasizing sound risk management and credit quality.
Operating highlights from 2016 include: 
Approximately $6.9 billion in benefits paid to people facing illness, injury, or loss of life;
Healthy growth in premium of 4.5% and solid sales growth throughout our core businesses, while maintaining our pricing and risk discipline;
Acquisition of a leading dental and vision carrier to complement the offerings of our U.S. businesses;
High client satisfaction metrics that generally exceeded our plan benchmarks; and
A strong company brand, image, and reputation.
Capital Generation for Shareholders
Our capital generation remained strong and allowed us to deploy that capital in a number of ways.
Shareholders received $182.6 million in Unum dividends, representing an increase in the dividend rate of 8.1% over the prior year, bringing our cumulative dividend rate increase since 2008 to 166.7%;
We also repurchased approximately 11.9 million shares at a cost of approximately $403 million, bringing our total share repurchases since 2007 to $3.6 billion; and
Our credit ratings remain high as a result of our strong balance sheet, our favorable operating results and our highly respected brand in the employee benefits market. 



______________________ 
(1) Operating results referenced in this document are non-GAAP financial measures that exclude certain specified items. For 2016, these excluded items were net realized investment gains and losses and non-operating retirement-related gains or losses. For reconciliations of the non-GAAP financial measures, including after-tax operating income, after-tax operating earnings per share, operating return on equity and book value per share (excluding accumulated other comprehensive income, or AOCI), to the most directly comparable GAAP measures, refer to Appendix B.


2017 PROXY STATEMENT
7
 


PROXY SUMMARY

Total Shareholder Return
Unum has been a very good performer and an excellent long-term investment during one of the most challenging economic periods in memory, with a 9.76% compound annual return to shareholders over the last 10 years. In fact, our total shareholder return (TSR) has outperformed our peers in nearly every index comparison during the last decade.
Although our performance continues to be pressured by the historically low interest rate environment, we nevertheless saw our TSR grow by more than a third during 2016. This was a far better performance than the S&P 500, our peers in the S&P Life and Health Index and the average of our Proxy Peer Group (as defined on page 46) during the same time period. Over the most recent three-, five- and 10-year periods, we exceeded the TSR performance of every index group other than the Proxy Peer Group for the five-year comparison. This strong performance is due primarily to our market-leading positions, prudent underwriting and risk management discipline, and effective capital management.
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2017 PROXY STATEMENT




PROXY SUMMARY

2016 Say-on-Pay Vote and Shareholder Outreach
Our 2016 shareholder advisory vote to approve executive compensation passed with 97% support. As we have done for several years, we continued our shareholder engagement through an extensive outreach effort, contacting each of our top 50 investors, representing the holders of over 72% of our outstanding shares. Eight of these investors, representing holders of more than 32% of our outstanding shares, accepted our invitation for engagement and we met with each of them. Another six shareholders, representing approximately 8% of our outstanding shares, responded that a meeting was not necessary.
During the meetings, shareholders provided feedback on a variety of topics. Multiple shareholders commented that they were pleased to see a robust process for Board succession along with a focus on diversity and skills needed to support our business strategy. We did not receive any suggestions for changes to our compensation programs. In fact, the shareholders we spoke with generally had favorable comments about the design and disclosure of our executive compensation programs and policies.
In addition to our meetings with shareholders, we also met with two large proxy advisory firms to provide an update on our shareholder engagement efforts and gain further insight into their views regarding our compensation and governance practices and disclosures.
Through these meetings, we identified opportunities for further enhancements to our proxy statement and discussed issues that some shareholders asked us to consider, including:
Greater insight on Board diversity and focus on diversity during recent Board refreshment efforts;
Potential for director involvement in future shareholder outreach discussions;
Additional disclosure with respect to incentive plan adjustments and their impact on plan payouts; and
Continued disclosure with respect to feedback from shareholder outreach meetings and how we are responding.
For our response on each of these items, please see disclosure on page 43. Overall, shareholders told us they appreciated the opportunity to engage in these discussions and the company’s willingness to consider their input with respect to both executive compensation and governance practices.


2017 PROXY STATEMENT
9
 


PROXY SUMMARY

Key Corporate Governance and Executive Compensation Practices
We are committed to good corporate governance and executive compensation practices, as evidenced by the following:
Pay for performance linking a majority of our compensation to financial and stock price performance measures as well as individual performance;
Annual election of directors;
Majority vote requirement for directors (in uncontested elections);
Proxy access bylaws;
Annual say-on-pay votes;
Robust stock ownership and retention requirements for senior officers and directors;
Anti-pledging and anti-hedging policies applicable to executives and directors;
Annual Board, committee, and individual director evaluations;
Substantially independent Board (11 of 13 current directors are independent and 10 of 11 nominees are independent);
All Board committees fully independent;
Limits on outside board and audit committee service;
Regular executive sessions of independent directors at scheduled Board meetings;
High meeting attendance by directors (average attendance of 98% in 2016);
No poison pill;
Political transparency and accountability;
Annual, proactive shareholder engagement;
Commitment to diversity initiatives and recruitment at the Board level and within the enterprise as a whole;
Double-trigger (change in control and termination) required for accelerated vesting of equity;
Independent compensation consultant to the Human Capital Committee;
Minimal perquisites; and
Elimination of golden parachute excise tax gross-ups.
In addition, the Board adopted amendments to the company's bylaws in March 2017 to provide shareholders owning at least 25% of outstanding shares the right to call a special meeting of the shareholders in accordance with the provisions of the bylaws. For further information, please refer to "Adoption of Special Meeting Rights" on page 28.


 
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2017 PROXY STATEMENT




PROXY SUMMARY

Voting Items
The following items will be voted on at the 2017 Annual Meeting:
Voting Item
Page
Board Recommends
Item 1: Election of Directors
93
FOR EACH NOMINEE
Eleven director nominees are standing for election this year, each for a one-year term expiring in 2018 and until his or her successor is duly elected and qualified or until his or her earlier death, resignation, disqualification, or removal from office. The Board and the Governance Committee believe that each director nominee possesses the necessary skills and qualifications to provide effective oversight of the business. The director nominees are:
Theodore H. Bunting, Jr.
E. Michael Caulfield
Joseph J. Echevarria
Cynthia L. Egan
Pamela H. Godwin
Kevin T. Kabat
Timothy F. Keaney
Gloria C. Larson
Richard P. McKenney
Ronald P. O’Hanley
Francis J. Shammo


Item 2: Advisory vote to approve executive compensation
93
FOR
We are seeking a non-binding advisory vote to approve the compensation of our named executive officers. We describe our compensation programs in the Compensation Discussion and Analysis section of this proxy statement. The Human Capital Committee believes these programs reward performance and align the long-term interests of management and shareholders. Although non-binding, the Human Capital Committee will take into account the outcome of the advisory vote and shareholder feedback when considering future executive compensation decisions.

Item 3: Advisory vote on the frequency of future advisory votes to approve executive compensation
94
1 YEAR
We are seeking a non-binding advisory vote to determine whether shareholders believe we should hold future advisory votes to approve executive compensation, similar to Item 2 above, every one year, every two years, or every three years.

Item 4: Ratification of appointment of independent registered public accounting firm
94
FOR
The Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm for 2017, and shareholders are being asked to ratify the appointment.

Item 5: Approval of Unum Group Stock Incentive Plan of 2017
96
FOR
The Human Capital Committee has adopted the Unum Group Stock Incentive Plan of 2017 (the "2017 Plan"), and shareholders are being asked to approve it. The 2017 Plan is similar to our existing Stock Incentive Plan of 2012, as amended, but includes certain new terms and provisions that we believe are more representative of current compensation practices in our industry and among our peers. Approval of the 2017 Plan also is intended to satisfy the conditions so that the company can make awards that qualify as performance-based compensation not subject to the $1 million annual limit on the company's tax deduction for compensation paid to certain covered individuals under Section 162(m) of the Internal Revenue Code.


2017 PROXY STATEMENT
11
 


INFORMATION ABOUT THE BOARD OF DIRECTORS

INFORMATION ABOUT THE BOARD OF DIRECTORS
Below are brief biographies for each of our directors and descriptions of the directors’ key qualifications, skills, and experiences that contribute to the Board’s effectiveness as a whole.
Director Nominees
bunting.jpg     
 
Director    
since 2013    
 
Age 58     
 
Theodore H. Bunting, Jr.
 
Independent Director
 
 
 
Member of the Audit Committee   
Member of the Human Capital Committee   
 
 
Mr. Bunting is the Group President, Utility Operations of Entergy Corporation, an integrated energy company engaged primarily in electric power production and retail distribution operations in Arkansas, Louisiana, Mississippi, and Texas, a position he has held since June 2012. From August 2007 to May 2012, he served as Senior Vice President and Chief Accounting Officer for Entergy and its subsidiaries. Prior to that, he held numerous executive positions within the Entergy organization, which he joined in 1983. He began his professional career in public accounting with Arthur Andersen & Co. in 1981 and is a certified public accountant. Mr. Bunting was a director of Imation Corp., a global data storage and information security company, from November 2012 until August 2014.
 
Mr. Bunting possesses extensive financial, accounting, and operational experience as a senior executive with a public company in a regulated industry. His leadership responsibilities have included financial reporting oversight, strategic and financial planning, customer service, operations support, and risk management. He also has experience as a director of another publicly traded company and qualifies as an "audit committee financial expert" under SEC regulations.

caulfield.jpg 
 
Director    
since 2007    
 
Age 70    
 
E. Michael Caulfield
 
Independent Director
 

Chair of the Audit Committee
Member of the Risk and Finance Committee
  
 
Mr. Caulfield served as President of Mercer Human Resource Consulting from September 2005 until his retirement in September 2006, prior to which he served as Chief Operating Officer from July 2005. He retired from Prudential Insurance Company as Executive Vice President in 2000, after having held a number of executive positions, including Executive Vice President of Financial Management, Chief Executive Officer of Prudential Investments, and President of both Prudential Preferred Financial Services and Prudential Property and Casualty Company. He previously served as a director of our company from August 2004 to July 2005.
 
Mr. Caulfield has senior leadership experience in finance, investments, and executive management in both the insurance and broader financial services industry. His operating background with large global businesses included responsibility for financial reporting oversight, risk management, and strategic planning. He also qualifies as an "audit committee financial expert" under SEC regulations.



 
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2017 PROXY STATEMENT




INFORMATION ABOUT THE BOARD OF DIRECTORS


echevarria.jpg 

Director    
since 2016    
 
Age 60    
 
Joseph J. Echevarria
 
Independent Director
 
 
 
Member of the Audit Committee   
Member of the Governance Committee   
 
Mr. Echevarria served as Chief Executive Officer of Deloitte LLP, a global provider of professional services, from 2011 until his retirement in August 2014. During his 36-year tenure with Deloitte he held increasingly senior leadership positions prior to being named CEO, including U.S. Managing Partner and Chief Operating Officer, Deputy Managing Partner, and Southeast Region Audit Managing Partner. He also served on key boards and committees within Deloitte and its member firm network, including chair of the U.S. Executive and Americas Executive committees and memberships on the U.S. and global boards. Mr. Echevarria serves as a director of Xerox Corporation (since January 2017), The Bank of New York Mellon Corporation (since January 2015, serving as its Lead Independent Director since April 2016), and Pfizer Inc. (since June 2015). In addition, he serves as the Chair of My Brother’s Keeper Alliance and is a member of the President’s Export Council and the Presidential Commission on Election Administration.
 
Mr. Echevarria brings to the Board significant experience in finance, accounting, global operations, strategic planning, executive management and corporate governance acquired through his leadership at Deloitte and on the boards of other publicly traded companies. He has a deep understanding of the financial services industry, including the current regulatory environment. He also brings public policy perspectives from his government service, is a certified public accountant and qualifies as an "audit committee financial expert" under SEC regulations.

egan.jpg 

Director    
since 2014    
 
Age 61    
 
Cynthia L. Egan
 
Independent Director
 
 
  
Member of the Human Capital Committee   
Member of the Regulatory Compliance Committee   
 
 
Ms. Egan was President of T. Rowe Price Retirement Plan Services, Inc., a retirement planning subsidiary of the global investment management firm T. Rowe Price Group, Inc., from May 2007 until her retirement in December 2012. She served an appointment as a senior advisor to the U.S. Department of the Treasury on the development of myRA, a Treasury-sponsored retirement savings program from April 2014 to April 2015. Prior to her work at T. Rowe Price, she was a long-time member of the executive team at Fidelity Investments where she was head of Fidelity Institutional Tax-Exempt Services Company and President of the Fidelity Charitable Gift Fund. Ms. Egan previously served as a director of Envestnet, Inc., a wealth management technology and services provider, from August 2013 to March 2016. She has been a director of The Hanover Insurance Group, Inc., the holding company for several property and casualty insurers, and the BlackRock Closed-End Funds, since May 2015 and April 2016, respectively.
 
Ms. Egan has significant operational experience in delivering complex financial products and services on a large scale through her work at T. Rowe Price and Fidelity. She has used technology and process improvement to successfully lead businesses through transition, including growth and strategic redirection, and her knowledge of the retirement industry gives her insight into the need for the financial protection benefits we provide. She also has experience operating in a regulated environment, serving as a director of other publicly traded companies, including within the insurance sector.


2017 PROXY STATEMENT
13
 


INFORMATION ABOUT THE BOARD OF DIRECTORS

godwin.jpg    
 
Director    
since 2004    
 
Age 68    
 
Pamela H. Godwin
 
Independent Director
 
 
  
Chair of the Governance Committee   
Member of the Risk and Finance Committee   
 
 
Ms. Godwin has been President of Change Partners, Inc., a consulting firm specializing in organizational change and growth initiatives, since 2001. From 1999 to 2001, she was President and Chief Operating Officer of the personal lines agency division of GMAC Insurance. Prior to that time, she held a number of executive positions within the financial services industry, including Senior Vice President of customer management for the credit card division of Advanta Corporation, President and Chief Operating Officer of Academy Insurance Group, a unit of Providian Corporation, and Senior Vice President of property/casualty claims at Colonial Penn Group, Inc. Ms. Godwin has also been a director of the Federal Home Loan Bank of Pittsburgh since January 2013.
 
Ms. Godwin possesses executive management and operating experience within the insurance industry. She has expertise in strategic change initiatives, including cultural and operational integration of acquisitions, operational turnaround, and crisis intervention. She also has risk-assessment skills from her work as a chartered property/casualty underwriter and experience managing high-risk lines of insurance.

 
 
 
 
kabat.jpg 
 
Director    
since 2008    
 
Age 60    
 
Kevin T. Kabat
 
Lead Independent Director
 
 
  
Chair of the Human Capital Committee   
Member of the Governance Committee   
 
 
Mr. Kabat served as Chief Executive Officer of Fifth Third Bancorp, a diversified financial services company, from 2007 until October 2015, before retiring from the company in April 2016. He served as Vice Chairman of the Board of Directors of Fifth Third Bancorp from September 2012 until his retirement in April 2016. He previously served at Fifth Third Bancorp as President from 2006 to September 2012, and as Executive Vice President from 2003 to 2006. Before that, he was President and CEO of Fifth Third Bank (Michigan) from 2001 to 2003. Prior to joining Fifth Third Bancorp, Mr. Kabat served in a number of management and executive positions with Old Kent Financial Corporation, including as its Vice Chairman and President. Mr. Kabat joined the Board of E*TRADE Financial Corporation, a financial services company, in June 2016, and has been a director of NiSource Inc., an energy holding company, since July 2015.

Mr. Kabat has served as Lead Independent Director of Unum's Board of Directors since May 2016 and has agreed to serve as the Chairman of the Board if re-elected as a director at the 2017 Annual Meeting.

Mr. Kabat brings to the Board executive leadership experience, including his recent service as chief executive officer of a large public company in the financial services industry, along with extensive financial, operating and strategic planning expertise. He understands the importance of risk management and the challenges of managing a business in a highly regulated industry. He also has a strong corporate governance perspective from his service as a director of other publicly traded companies, including lead independent director and board chairman experience.

 


 
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2017 PROXY STATEMENT




INFORMATION ABOUT THE BOARD OF DIRECTORS

keaney.jpg    
 
Director    
since 2012    
 
Age 55    
 
Timothy F. Keaney
 
Independent Director
 
 
  
Chair of the Risk and Finance Committee   
Member of the Audit Committee   
 
 
Mr. Keaney served as Vice Chairman of The Bank of New York Mellon Corporation (BNY Mellon), a global investments company, from October 2010 to September 2014. While at BNY Mellon, he held a number of executive positions, including Chief Executive Officer of Investment Services from January 2013 to June 2014 and Chief Executive Officer of Asset Servicing from September 2010 to December 2012. He served as co-CEO of Asset Servicing at BNY Mellon following its formation in 2007 upon the merger of The Bank of New York Company, Inc. and Mellon Financial Corporation. Prior to the merger, Mr. Keaney was head of The Bank of New York’s asset servicing business and head of that company’s presence in Europe, with management responsibilities for all business activities in the region. 
 
Mr. Keaney possesses significant operational, investment, and finance experience, both domestically and internationally. His work has included lengthy periods of executive leadership service in the United Kingdom, which has given him a deep understanding of many of the challenges and opportunities that we face there. He also qualifies as an "audit committee financial expert" under SEC regulations.
larson.jpg     

Director    
since 2004    
 
Age 66    
 
Gloria C. Larson
 
Independent Director
 
 
  
Chair of the Regulatory Compliance Committee   
Member of the Governance Committee   
 
 
Ms. Larson has been the President of Bentley University since July 2007. She previously served as co-chairperson of the Government Practices Group of the law firm Foley Hoag LLP and coordinator for its Administrative Practices Group after joining the firm in 1996. Prior to joining Foley Hoag, she served as Secretary of Economic Affairs and as Secretary of Consumer Affairs and Business Regulation for the Commonwealth of Massachusetts, and prior to that was Deputy Director of Consumer Protection for the Federal Trade Commission. Ms. Larson has served as a director of Boston Private Financial Holdings, Inc., a wealth management company servicing high net worth individuals, families and select institutions, since January 2015.
 
Ms. Larson has executive management experience as president of a major university. In addition, she brings regulatory insight from her service as a regulator and her experience advising clients in the course of her practice of law. She also has corporate governance experience from her current and prior service on the boards of other publicly traded companies.




2017 PROXY STATEMENT
15
 


INFORMATION ABOUT THE BOARD OF DIRECTORS

mckenney.jpg     

Director    
since 2015    
 
Age 48    
 
Richard P. McKenney
 
Director
 
 
 
 
President and Chief Executive Officer   
 
 
Mr. McKenney has served as President and Chief Executive Officer of Unum since May 2015. He previously served as Executive Vice President and Chief Financial Officer from August 2009 until April 2015. Before joining Unum in July 2009, Mr. McKenney served as Executive Vice President and Chief Financial Officer of Sun Life Financial, Inc., an international financial services company, from February 2007 until July 2009, having joined that company as Executive Vice President in September 2006.
 
Mr. McKenney has significant executive management, financial, and insurance industry experience through his prior service as chief financial officer of our company and other publicly traded insurance companies, and his current service as chief executive officer of our company. He has an intimate knowledge of all aspects of our business, including strategic planning, risk management and public policy, and close working relationships with senior management.
ohanley.jpg    
 
Director    
since 2015    
 
Age 60    
 
Ronald P. O’Hanley
 
Independent Director
 
 
 
 
Member of the Human Capital Committee   
Member of the Risk and Finance Committee   
 
 
Mr. O’Hanley is the President and Chief Executive Officer of State Street Global Advisors, the investment management arm of State Street Corporation, a provider of financial services to institutional investors worldwide. In January 2017, he was also appointed as the Vice Chairman of State Street Corporation. Prior to joining State Street in this capacity in April 2015, he served as President of Asset Management and Corporate Services for Fidelity Investments, a leading provider of financial products and services, from July 2010 until March 2014 and was a member of Fidelity’s Executive Committee. From 2007 until May 2010, Mr. O’Hanley served as Vice Chairman of The Bank of New York Mellon Corporation (BNY Mellon), a global investments company, and President and Chief Executive Officer of BNY Mellon Asset Management. Prior to the merger of The Bank of New York and Mellon Financial Corporation, he was Vice Chairman of Mellon Financial Corporation and President and Chief Executive Officer of Mellon Asset Management. Before joining Mellon in 1997, he was a partner with McKinsey & Company, Inc., a management consulting firm.
 
Mr. O’Hanley has significant executive management and operational experience within the financial services industry, both domestically and internationally. He has served in senior leadership positions at large, global organizations, which has included responsibility for investment, finance, human resources, legal, risk, corporate compliance, and enterprise technology functions.
 
 


 
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2017 PROXY STATEMENT




INFORMATION ABOUT THE BOARD OF DIRECTORS

shammo.jpg    
 
Director    
since 2015    
 
Age 56  
 
Francis J. Shammo
 
Independent Director

 
  
Member of the Audit Committee   
Member of the Regulatory Compliance Committee   

 
Mr. Shammo served as Executive Vice President and Chief Financial Officer of Verizon Communications, Inc., a leading communications provider, from November 2010 until November 2016, and retired from Verizon at the end of 2016. After joining Bell Atlantic Corporation in 1989, which merged with GTE Corporation in 2000 to form Verizon, he held positions of increasing responsibility in finance, mergers and acquisitions, logistics, facilities, regional operations, and planning. His prior positions include President and Chief Executive Officer of Verizon Telecom and Business, Senior Vice President and Chief Financial Officer of Verizon Business, President - West Area of Verizon Wireless, and Vice President and Controller of Verizon Wireless.

Mr. Shammo has significant executive management, financial and operational experience, including service as chief financial officer, for large publicly traded companies in the telecommunications industry, where technology and connectivity are integral to the business. He has led major business units, with responsibility for sales, marketing and customer service for customers worldwide. He is also a certified public accountant and qualifies as an "audit committee financial expert" under SEC regulations.


2017 PROXY STATEMENT
17
 


INFORMATION ABOUT THE BOARD OF DIRECTORS

Additional Current Directors – Retiring at the 2017 Annual Meeting
muhl.jpg 
 
Director    
since 2005    
 
Age 72    
 
Edward J. Muhl
 
Independent Director
 
 
  
Member of the Human Capital Committee   
Member of the Regulatory Compliance Committee   
 
 
Mr. Muhl served as the National Leader of the Insurance Regulatory Advisory Practice of PricewaterhouseCoopers from 2001 until his retirement in June 2005. He was Senior Managing Director of Navigant Consulting, Inc. from 1998 to 2000, which he joined as Executive Vice President in 1997. Prior to that time, Mr. Muhl held important regulatory positions within the insurance industry, including Superintendent of Insurance of the State of New York, Insurance Commissioner of the State of Maryland, and President of the National Association of Insurance Commissioners. Mr. Muhl is also a director of Farm Family Insurance Company.
 
Mr. Muhl has over 45 years of experience in the insurance industry, including leadership service for important insurance and regulatory bodies, and understands the regulatory compliance environment in which we operate. He has experience serving on other public and private company boards, including current service in the insurance sector.

watjen.jpg 
 
Director    
since 2002    
 
Age 62    
 
Thomas R. Watjen
 
Non-Executive Director
 
 
 
 
Chairman of the Board of Directors   
 
 
Mr. Watjen has served as the Chairman of the Board of Directors of Unum since May 2015, having served as President and Chief Executive Officer from 2003 until April 2015 and May 2015, respectively, when he retired from the company. He previously served as Vice Chairman and Chief Operating Officer from 2002 until 2003 and, before that, was named Executive Vice President, Finance in 1999. Prior to the 1999 merger between Unum and Provident, he served as Chief Financial Officer from 1994. Before that, Mr. Watjen served as a Managing Director of the insurance practice of the investment banking firm Morgan Stanley & Co. Mr. Watjen has been a director of SunTrust Banks, Inc. since April 2010.
 
Mr. Watjen has executive management and financial experience as chief executive officer of our company as well as his prior positions within the financial services industry. He also serves as a director and the chair of the audit committee of another publicly traded company in the financial services industry.


 
18
2017 PROXY STATEMENT




INFORMATION ABOUT THE BOARD OF DIRECTORS

Director Compensation
The Human Capital Committee (the "Committee") reviews our non-employee director compensation annually and makes recommendations to the Board as appropriate.
Benchmarking
With the assistance of its independent third-party compensation consultant, Pay Governance LLC, the Committee reviews peer group data to understand market practices for director compensation.
Our non-employee director compensation is compared to that of companies in two peer groups: (1) the Proxy Peer Group described beginning on page 46 of this proxy statement; and (2) a general industry peer group, which consisted of 145 companies for the review completed in December 2016. The Committee believes the companies in the general industry peer group provide appropriate comparisons given that their market capitalizations and revenues are well aligned with those of the company (data below as of December 2016):
Market capitalizations ranging from $4.5 billion at the 25th percentile to $12.7 billion at the 75th percentile (compared to Unum market capitalization of $8.1 billion); and
Revenues ranging from $3.7 billion at the 25th percentile to $11.6 billion at the 75th percentile (compared to Unum revenues of $10.7 billion).
The use of two peer groups provides an indication of director pay levels both within the insurance industry as well as the broader market. The Committee uses the approximate median of these peer groups as a reference point for setting director compensation.
The Committee’s consultant provided its annual analysis of non-employee director compensation at the December 2016 Committee meeting. The Committee was advised that our total non-employee director compensation was aligned with the Proxy Peer Group median, and therefore determined not to recommend any changes to non-employee director compensation at that time.


2017 PROXY STATEMENT
19
 


INFORMATION ABOUT THE BOARD OF DIRECTORS

Elements of Non-Employee Director Compensation
Non-employee directors receive cash retainers and equity awards as outlined in the following table:
NON-EMPLOYEE DIRECTOR COMPENSATION
 
 
2016/2017 Pay

All Directors:
 
Annual cash retainer
$
110,000

Annual restricted stock unit award
150,000

Committee Chairs:
 
Additional annual cash retainer - Audit Committee
22,500

Additional annual cash retainer - Human Capital Committee
17,500

Additional annual cash retainer - other Board committees
10,000

Board Chairman:
 
Additional annual cash retainer (paid in quarterly installments)
200,000

Lead Independent Director:
 
Additional annual cash retainer (paid in quarterly installments)
50,000

For new Board members, these amounts are prorated for partial-year service based on the date of election to the Board. Amounts may be deferred at the election of each director for payment in company common stock at a future date. Directors deferring cash compensation receive a number of deferred share rights equal to the number of whole shares of common stock that could be purchased for the deferred amount, based on the closing price of a share of common stock on the date the cash compensation would otherwise be payable.
Directors’ expenses of attending Board and committee meetings, or other meetings relating to company business, are paid by the company. Directors are eligible to participate in our employee matching gifts program. Under this program, we match up to $10,000 each year for eligible gifts to non-profit organizations.
Mr. McKenney is employed by the company and receives no additional compensation for his Board service.
2016 Compensation
Our Board compensation year starts at the Annual Meeting each year and runs to the next Annual Meeting. The annual cash retainer and restricted stock unit award are paid/granted annually in advance. The additional cash retainers for the Chairman and Lead Independent Director are paid quarterly in advance. The following table provides details of the compensation of each person who served as a non-employee director during 2016. Mr. Echevarria was elected to the Board on April 1, 2016, prior to the 2016 Annual Meeting. Therefore, his compensation shown in the below table reflects prorated amounts for the 2015/2016 Board year in addition to the annual amounts for the 2016/2017 Board year. Messrs. MacMillan and Ryan served only through the date of the 2016 Annual Meeting.


 
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2017 PROXY STATEMENT




INFORMATION ABOUT THE BOARD OF DIRECTORS

NON-EMPLOYEE DIRECTOR COMPENSATION
Name
Fees Earned
or Paid in Cash(1)
Stock
Awards(2)
All Other
Compensation(3)
Total
Theodore H. Bunting, Jr.
$
110,000

$
149,985

$
10,000

$
269,985

E. Michael Caulfield
132,500

149,985

-

282,485

Joseph J. Echevarria
124,540

171,467

-

296,007

Cynthia L. Egan
110,000

149,985

10,000

269,985

Pamela H. Godwin
120,000

149,985

4,100

274,085

Kevin T. Kabat
157,445

149,985

-

307,430

Timothy F. Keaney
120,000

149,985

-

269,985

Gloria C. Larson
120,000

149,985

-

269,985

A.S. (Pat) MacMillan, Jr.
-

-

5,000

5,000

Edward J. Muhl
110,000

149,985

-

259,985

Ronald P. O'Hanley
110,000

149,985

-

259,985

William J. Ryan
20,192

-

5,000

25,192

Francis J. Shammo
110,000

149,985

-

259,985

Thomas R. Watjen
310,000

149,985

-

459,985

(1)
Amounts represent retainers, including for service as Board Chairman and committee chairs, which were paid in 2016, either in cash or deferred, for 2016/2017 Board service. Mr. Echevarria's amount also includes a prorated retainer for his 2015/2016 board year service. Mr. Echevarria elected to defer a total of $124,540 which was converted to deferred share rights.
(2)
On May 26, 2016, each then serving non-employee director was granted 4,125 restricted stock units (RSUs) under our Stock Incentive Plan of 2012. Messrs. MacMillan and Ryan retired from the Board at the 2016 Annual Meeting and did not receive a grant of RSUs for the 2016/2017 Board year. In addition, upon his election to the Board, Mr. Echevarria also received a prorated grant of 685 RSUs for the 2015/2016 Board year. The amounts shown are the grant date values of these units.
We account for stock-based payments under the requirements of Accounting Standards Codification Topic 718 Compensation Stock Compensation (ASC 718). A complete discussion of the assumptions made as well as the financial impact of this type of compensation can be found in Notes 1 and 11 of the Consolidated Financial Statements in Part II, Item 8 of our 2016 Form 10-K.
The following table provides details of the unvested RSUs, including dividend equivalent units, held by each non-employee director as of December 31, 2016.
Director Name
Number of Unvested
Restricted Stock Units at Fiscal Year End
 
Director Name
Number of Unvested
Restricted Stock Units at Fiscal Year End
Theodore H. Bunting, Jr.
4,149
 
Timothy F. Keaney
4,149
E. Michael Caulfield
4,149
 
Gloria C. Larson
4,149
Joseph J. Echevarria
4,841
 
Edward J. Muhl
4,149
Cynthia L. Egan
4,149
 
Ronald P. O'Hanley
4,149
Pamela H. Godwin
4,149
 
Francis J. Shammo
4,149
Kevin T. Kabat
4,149
 
Thomas R. Watjen
4,149
(3)
With the exception of Messrs. MacMillan and Ryan, who both retired from the company in 2016, the amounts shown represent the company’s matching gifts resulting from the directors’ charitable gifts. For Messrs. MacMillan and Ryan, in recognition of their respective retirements from the Board, the company made a $5,000 charitable contribution on behalf of each director.


2017 PROXY STATEMENT
21
 


INFORMATION ABOUT THE BOARD OF DIRECTORS

Director Stock Ownership and Retention Requirements
Each non-employee director is required to own Unum equity securities with an aggregate value of five times the director’s annual cash retainer ($550,000 effective May 2016). New directors have five years from the date of their election to meet the ownership requirement.
In addition, each non-employee director is required to retain 60% of Unum equity securities received as a result of director compensation for at least one year from the time they vest, and to retain at least the amount of equity securities necessary to meet his or her ownership requirement until retirement from the Board.
The Committee annually reviews each director’s stock ownership level. If a director does not reach his or her ownership requirement within the time period provided, the Committee will determine whether action is appropriate. As of December 31, 2016, 9 of the 12 non-employee directors serving on the Board at that time had met the ownership requirement. The other three directors joined the Board within the past five years and are expected to meet the ownership requirement within the applicable time period provided.


 
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2017 PROXY STATEMENT




CORPORATE GOVERNANCE

CORPORATE GOVERNANCE
Corporate Governance Guidelines
The Board of Directors has adopted corporate governance guidelines on a number of significant matters, including director selection and independence, director responsibilities, Board leadership, and management succession. The corporate governance guidelines are available on our investor relations website under the "Corporate Governance" heading at www.investors.unum.com. The Governance Committee regularly reviews developments in corporate governance and recommends updates to the corporate governance guidelines and other documents as necessary or appropriate in response to regulatory requirements and evolving practices.
As a reflection of our commitment to strong governance practices, in March 2017, the Board of Directors adopted amendments to the company's bylaws to provide shareholders owning at least 25% of outstanding shares the right to call a special meeting of the shareholders in accordance with the provisions of the bylaws. See page 28 for further discussion.
Board Leadership Structure
At present, Thomas R. Watjen serves as Chairman of the Board, and Richard P. McKenney serves as President and Chief Executive Officer (CEO) of the company. Mr. Watjen will retire from the Board at the 2017 Annual Meeting and the Board has elected one of its independent directors, Kevin T. Kabat, to serve as the next Chairman effective following the 2017 Annual Meeting provided he is re-elected to the Board. Mr. Kabat currently serves as the Lead Independent Director, which will cease to be a separate role when he becomes the Chairman.
As the current Lead Independent Director, Mr. Kabat has the responsibilities outlined in our corporate governance guidelines, including:
Presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the non-management and independent directors;
Communicating actions/issues arising from executive sessions to the Chairman and/or the CEO, as appropriate;
Authority to call meetings of the independent directors;
Authority to approve meeting schedules, agendas and information provided to the Board;
In conjunction with the Chairman, advising the Board on Board development, including Board and committee leadership succession planning;
Unless otherwise determined by the Board, together with the Chairman, meeting with each director to evaluate the Board and committees and reporting this evaluation to the Governance Committee;
When requested by the independent directors, hiring advisors to the independent directors, to be paid by the company;


2017 PROXY STATEMENT
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CORPORATE GOVERNANCE

Receiving through the Corporate Secretary communications from shareholders seeking to communicate with the Board;
Serving as liaison between the Chairman and the independent directors; and
If requested by major shareholders, ensuring that he is available for consultation and direct communication.
The Board believes the current leadership structure, together with our active and engaged independent directors, continues to provide significant independent oversight of management, as Messrs. Watjen and McKenney are the only members of the Board who are not independent directors – Mr. Watjen because he is a recent employee of our company, and Mr. McKenney because he is a current employee of our company. Following Mr. Watjen's retirement in May, Mr. McKenney will be the only non-independent member of the Board and Mr. Kabat will serve as the independent Chairman of the Board. The Board holds executive sessions, without management present, at each regularly scheduled in-person Board meeting. In 2016, the independent directors met alone in executive session five times, and each session was chaired by the Lead Independent Director.
Our bylaws and corporate governance guidelines allow the offices of Chairman and CEO to be filled by the same or different individuals. This allows the Board flexibility to select the appropriate leadership for our company based on a number of factors, including the specific needs of the business and what best serves the company and shareholders at a given time. The independent directors of the Board will continue to review the Board’s leadership structure periodically and may modify this structure from time to time as they determine appropriate in the best interests of the company and shareholders.
Chairman Succession
In December 2016, our current non-executive Chairman of the Board of Directors, Thomas R. Watjen, notified the Board of his decision not to stand for re-election as a director at the 2017 Annual Meeting. His retirement from the Board will mark the completion of a leadership transition that began in 2015 when he stepped down as President and CEO of the company and assumed the role of Chairman, with Richard P. McKenney succeeding him as President and CEO. The timing of Mr. Watjen’s retirement aligns with his commitment upon being named Chairman to serve for two years to ensure continuity during a period of Board and management transition, and is also reflective of the success of the transition.
The Board has elected Kevin T. Kabat, our current Lead Independent Director, to succeed Mr. Watjen as non-executive Chairman if Mr. Kabat is re-elected to the Board at the 2017 Annual Meeting. The naming of Mr. Kabat as successor Chairman represents the culmination of a succession planning process led by the Governance Committee that started soon after Mr. Watjen’s appointment in 2015. Transparency was fundamental to the process, and director input was solicited in developing appropriate selection criteria for the role. In establishing the process, the Committee recognized the need for a successor Lead Independent Director in 2016 and the potential for this individual to later be named successor Chairman given natural alignment between the roles. Importantly, Mr. Kabat’s service as Lead Independent Director during the past year provided fellow directors with a basis for evaluating his candidacy for Chairman and also prepared him for the transition. The Lead Independent Director role will terminate when Mr. Kabat, an independent director, becomes the Chairman at the 2017 Annual Meeting.


 
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2017 PROXY STATEMENT




CORPORATE GOVERNANCE

Director Independence
Our corporate governance guidelines provide that a substantial majority of the Board will be independent. For a director to be considered independent, the Board must determine that the director has no material relationship with our company, and the director must meet the requirements for independence under the listing standards of the New York Stock Exchange (NYSE). The Board has also determined that certain categories of relationships are not considered to be material relationships that would impair a director’s independence. These independence standards are listed in our corporate governance guidelines.
The Governance Committee reviews information about the directors’ relationships and affiliations that might affect their independence and makes recommendations to the Board as to the independence of the directors. In making independence determinations, the Board considers all relevant facts and circumstances. In this regard, the Board considered that each of the non-employee directors, or one of their immediate family members, is or was during the last three fiscal years a director, trustee, advisor, or executive or served in a similar position at another business that had dealings with our company during those years. In each case, these have been ordinary course dealings (business where the other business obtains insurance policies from us or we receive interest on debt security investments or make payments for trustee, depository and commercial banking business relationships) involving amounts less than 1% of both our and the other business’ total consolidated revenues for such fiscal year or in which the director's only interest arose only from his or her position as a director of the other business. In addition, each of Messrs. Bunting, Caulfield, Echevarria, and O'Hanley and Mses. Egan, Godwin, and Larson, or one their immediate family members, is or was during the last three fiscal years, a director, executive, or employee of a charitable organization or university that received contributions from us (other than non-discretionary matching contributions) of less than $120,000 in any one fiscal year.
Based on a review of the findings and recommendations of the Governance Committee and applying the standards described above, the Board has determined that each of Messrs. Bunting, Caulfield, Echevarria, Kabat, Keaney, Muhl, O’Hanley and Shammo and Mses. Egan, Godwin and Larson is (as well as Messrs. MacMillan and Ryan who retired in 2016, were each during their tenure) an independent director.
Mr. McKenney, our President and CEO, and Mr. Watjen, our Chairman and former CEO, are not independent directors.


2017 PROXY STATEMENT
25
 


CORPORATE GOVERNANCE

Board Profile
Unum values a Board that represents a variety of backgrounds, experience and perspectives. With that in mind, the Governance Committee periodically reviews the composition of the Board, considering a number of factors.
Qualifications
We strive to maintain a Board with independence of thought and diverse professional experience. The committee looks for directors who have qualifications in areas relevant to Unum.
Financial services industry experience keeps us abreast of industry and marketplace trends, and helps us navigate the increasingly complex regulatory environment.
Experience as a corporate or business unit CEO provides us valuable insight into understanding organizations and business strategy, and driving change.
Investment markets expertise helps guide our prudent investment strategy and maintain strong alignment with shareholders.
An operational background ensures management remains focused on improving business processes, leveraging partnerships and developing talent.
Global experience helps us better understand international markets and the nature of running a company such as Unum, with operations in the U.S., U.K. and Ireland.
The following charts show the distribution of certain qualifications among our 11 director nominees:
qualification.jpg
Tenure
Directors with varied tenure contribute to a range of perspectives and ensure we transition knowledge and experience from longer-serving members to those newer to our Board. We have a good mix of new and long-standing directors, with our 10 independent director nominees averaging 5.9 years of service on our Board.
tenurediversity.jpg


 
26
2017 PROXY STATEMENT




CORPORATE GOVERNANCE

Diversity
Our directors represent a range of backgrounds and overall experience. More than one-third are women or represent an ethnic group, which places Unum's Board among the top of our industry in gender and ethnic diversity. In recent years, our Governance Committee has focused on ensuring continued diversity on the Board during refreshment activities by requiring that candidate pools include diverse individuals meeting the recruitment criteria. Our director nominees range from 48 to 70 years of age, with the average age being 60.2 years.
genderethnicdiversity.jpg
Process for Selecting and Nominating Directors
The Governance Committee is responsible for identifying and evaluating director candidates and recommending to the Board a slate of nominees for election at each annual meeting of shareholders. The Committee has engaged a third-party search firm to assist with recruitment efforts in preparation for anticipated retirements. This firm identifies candidates who meet the criteria of our search, provides requested background and other relevant information regarding candidates, and coordinates arrangements for interviews as necessary. Nominees may also be suggested by directors, management, or shareholders.
Shareholders who wish to recommend director candidates for consideration by the Governance Committee must submit to the Corporate Secretary at Unum Group, 1 Fountain Square, Chattanooga, Tennessee 37402 the same information that would be required to nominate a director candidate as described on page 111 in the section titled "Shareholder proposals and nominations for our 2018 Annual Meeting." The Governance Committee’s policy is to consider candidates recommended by shareholders in the same manner as other candidates.
In addition, our bylaws permit shareholders to nominate directors for inclusion in our proxy materials or directly at an Annual Meeting in accordance with the procedures in our bylaws, as described on page 111 in the section titled "Shareholder proposals and nominations for our 2018 Annual Meeting."
Our corporate governance guidelines specify the following criteria to be used in evaluating the candidacy of a prospective nominee:
Reputation for high ethical conduct, integrity, sound judgment, and accountability;
Current knowledge and experience in one or more core competencies identified in the corporate governance guidelines;


2017 PROXY STATEMENT
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CORPORATE GOVERNANCE

Ability to commit sufficient time to the Board and its committees;
Collegial effectiveness; and
Diversity, whether in viewpoints, gender, ethnic background, age, professional experience or other demographics (though no specific diversity policy has been adopted).
The core competencies sought in any particular candidate depend on the current and future needs of the Board based on an assessment of the composition of the Board and the mix of attributes and qualifications represented. Core competencies include knowledge and experience in finance and accounting, executive management, the insurance or financial services industry, risk oversight, technology, marketing, strategic planning, regulatory compliance, public policy and such other areas that may be considered appropriate by the Board.
In addition to the criteria and qualifications described above and in the discussion on page 26 under "Board Profile," the Governance Committee considers other specific qualifications that may be desired or required of nominees, including their independence and ability to satisfy specific Audit Committee or Human Capital Committee requirements. The Governance Committee assesses the effectiveness of its Board membership criteria as part of the director selection and nomination process. In determining whether to recommend a director for re-election, the Governance Committee also considers the director’s interest in continuing to serve, past attendance at meetings, contributions to the Board and committees on which the director serves, the skills, experience and background that the director brings to the Board relative to the Board’s needs and existing composition, and the results of the most recent Board, committee and individual director evaluations.
Adoption of Special Meeting Rights
In March 2017, the Board of Directors adopted amendments to the Company's bylaws to provide shareholders owning at least 25% of outstanding shares the right to call a special meeting of the shareholders in accordance with provisions of the bylaws. Enabling shareholders to call special meetings provides an opportunity for shareholders to vote on important items of business outside of the regularly scheduled Annual Meeting cycle. The Board's decision to adopt this shareholder right aligns with feedback received during annual shareholder outreach and reflects our commitment to maintaining strong governance practices.
Limits on Board and Audit Committee Service
While we recognize that Board members benefit from service on the boards of other companies and such service is encouraged, the Board believes it is critical that directors be able to dedicate sufficient time to their service on our Board. To that end, no director may serve on more than three public company boards in addition to our Board, or on more than two audit committees of public companies in addition to our Audit Committee.


 
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2017 PROXY STATEMENT




CORPORATE GOVERNANCE

Board Meetings and Attendance
The Board of Directors met six times during 2016. Depending upon committee assignments, a director generally would have had 18 to 25 meetings to attend in 2016. Average director attendance at Board and committee meetings was 98%, and each incumbent director attended at least 89% of the total number of meetings of the Board and committees on which he or she served during the period of the director’s service in 2016.
Directors are expected to attend annual meetings of shareholders. All current directors serving on the Board at the time of the 2016 Annual Meeting attended that meeting.
Committees of the Board
The Board of Directors has five standing committees: Audit, Risk and Finance, Governance, Human Capital, and Regulatory Compliance. Each committee has a charter that is available on our investor relations website under the "Corporate Governance" heading at www.investors.unum.com. In addition to the duties contained in their respective charters, each committee may be assigned additional tasks by the Board, and each is charged with reporting its activities to the Board.
BOARD MEMBERS AND COMMITTEES
Name
Term
Expires
Audit
Risk &
Finance
Governance
Human
Capital
Regulatory
Compliance
Theodore H. Bunting, Jr.
2017
 
 
 
E. Michael Caulfield
2017
Chair
 
 
 
Joseph J. Echevarria(1)
2017
 
 
 
Cynthia L. Egan(2)
2017
 
 
 
Pamela H. Godwin
2017
 
Chair
 
 
Kevin T. Kabat
2017
 
 
Chair
 
Timothy F. Keaney
2017
Chair
 
 
 
Gloria C. Larson
2017
 
 
 
Chair
Richard P. McKenney
2017
 
 
 
 
 
Edward J. Muhl(3)
2017
 
 
 
Ronald P. O'Hanley
2017
 
 
 
Francis J. Shammo
2017
 
 
 
Thomas R. Watjen(3)
2017
 
 
 
 
 
2016 Committee Meetings 
 
10
9
7
7
5
(1)
Mr. Echevarria joined the Board effective April 1, 2016.
(2)
Ms. Egan rotated from the Audit Committee to the Human Capital Committee in May 2016.
(3)
As noted on page 18, Messrs. Muhl and Watjen will retire from the Board at the 2017 Annual Meeting.


2017 PROXY STATEMENT
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CORPORATE GOVERNANCE

Audit Committee
The Audit Committee assists the Board in oversight of financial statement and disclosure matters, the effectiveness of internal control over financial reporting, the relationship with our independent auditor, the internal audit function, compliance with legal and regulatory requirements, and financial risk. The Audit Committee has the sole authority to appoint, oversee and, if necessary, replace the company’s independent auditors. A more complete description of the responsibilities of the Audit Committee is included in the Report of the Audit Committee beginning on page 35.
All members of the Audit Committee meet the independence requirements of the SEC and the NYSE for audit committee members and our corporate governance guidelines. The Board has further determined that all five members of the Audit Committee, Theodore H. Bunting, Jr., E. Michael Caulfield, Joseph J. Echevarria, Timothy F. Keaney, and Francis J. Shammo, are "audit committee financial experts" under SEC regulations, and are "financially literate" as required by the NYSE.
Risk and Finance Committee
The Risk and Finance Committee assists the Board in oversight of our investments, capital and financing plans and activities, including dividends and borrowings, and related financial matters and the associated risks. It also oversees our enterprise risk management activities and other risks not specifically allocated to another committee. Among other responsibilities, the Risk and Finance Committee:
Monitors, evaluates and recommends to the Board capital and financing plans, activities, requirements and opportunities;
Oversees implementation of and compliance with investment strategies, guidelines and policies;
Authorizes loans and investments of the company;
Reviews, assesses and reports on the impact of various finance activities on our debt ratings; and
Monitors, evaluates and makes recommendations regarding matters pertaining to our Closed Block segment, including the long-term care business, that could have a meaningful impact upon any of the matters for which the Risk and Finance Committee has oversight responsibility.
All members of the Risk and Finance Committee meet the independence requirements of our corporate governance guidelines.
Governance Committee
The Governance Committee assists the Board in implementation and oversight of our corporate governance policies. Among other responsibilities, the Governance Committee:
Identifies qualified candidates for the Board, consistent with criteria approved by the Board, and recommends the individuals to be nominated by the Board for election as directors;
Develops and recommends to the Board our corporate governance guidelines;
Oversees the process for Board and committee evaluations; and


 
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2017 PROXY STATEMENT




CORPORATE GOVERNANCE

Advises the Board on corporate governance matters, including with respect to the size, composition, operations, leadership, succession plans and the needs of the Board and its committees.
All members of the Governance Committee meet the independence requirements of the NYSE and our corporate governance guidelines.
Human Capital Committee
The Human Capital Committee assists the Board in oversight of our compensation and benefit programs and related risks to support business plans, attract and retain key executives and tie compensation to performance. Among other responsibilities, the Human Capital Committee:
Establishes our general compensation philosophy, principles and practices;
Takes into consideration the results of the company’s most recent say-on-pay vote;
Evaluates and approves compensation and benefit plans;
Annually reviews and approves compensation of the CEO and other executive officers;
Reviews and recommends to the Board the form and amount of director compensation; and
Reviews the Compensation Discussion and Analysis and related disclosures in our proxy statements.
All members of the Human Capital Committee meet the independence requirements of the NYSE for directors and compensation committee members and our corporate governance guidelines and are "non-employee directors" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and "outside directors" for purposes of Section 162(m) of the Internal Revenue Code.
Regulatory Compliance Committee
The Regulatory Compliance Committee assists the Board in its oversight of regulatory, compliance, policy and legal matters and related risks and compliance with laws and regulations. Among other responsibilities, the Regulatory Compliance Committee:
Monitors the effectiveness of our compliance efforts concerning applicable regulatory and legal requirements and internal policy;
Reviews and discusses with management any communication to or from regulators or governmental agencies and any complaints, reports and legal matters that raise significant issues regarding our compliance with applicable laws or regulations; and
Monitors the investigation and resolution of any significant instances of noncompliance or potential compliance violations.
All members of the Regulatory Compliance Committee meet the independence requirements of our corporate governance guidelines.


2017 PROXY STATEMENT
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CORPORATE GOVERNANCE

The Board’s Role in Risk Oversight
The Board has an active role, as a whole and also at the committee level, in overseeing management of the company’s risks. The Board is responsible for managing strategic risk, and it regularly reviews information regarding our capital, liquidity and operations, as well as the risks associated with each. The Risk and Finance Committee is responsible for oversight of the company’s enterprise risk management program and receives a report on these activities at least quarterly. The Risk and Finance Committee is also responsible for overseeing risks associated with investments and related financial matters, including those pertaining to our Closed Block segment, and any other risks not specifically allocated to another committee for oversight. The Audit Committee is responsible for oversight of financial risk and continues to fulfill its NYSE-mandated responsibility to discuss guidelines and policies with respect to the process by which the company undertakes risk assessment and risk management. The Audit Committee and Risk and Finance Committee may also meet jointly as appropriate to oversee certain risks for which they have overlapping responsibility, including operational risks relating to data privacy, cybersecurity and business continuity. The Human Capital Committee is responsible for overseeing the management of risks relating to our compensation plans and programs and, as more fully described below, receives an annual report from the company’s chief risk officer with respect to these risks. The Regulatory Compliance Committee oversees management of risks related to regulatory, compliance, policy and legal matters, both current and emerging and whether of a local, state, federal or international nature. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks in addition to the risk information it receives directly.
Compensation Risk
Each year, the company’s chief risk officer, in consultation with the Human Capital Committee, undertakes a risk assessment of our compensation programs and practices. This year’s process included the following steps:
Review of the overall design and philosophy of the incentive compensation programs.
Review and assessment of the 2016 annual incentive program and long-term incentive program performance measures for alignment between actual results and achievement payout levels.
Identification of fundamental principles to test, including the SEC’s non-exclusive list of situations where compensation programs may have the potential to raise material risks to the company.
Assessment of the incentive programs in light of the company’s primary risks (as disclosed in the company’s 2016 Form 10-K) and the company’s annual financial and capital plans.
Assessment of proposed design changes to the 2017 incentive plans.
Assessment of the sales compensation programs to identify behaviors incented, inherent risks and existing safeguards.
Based on this assessment, the following conclusions were reached by the chief risk officer and presented to the Human Capital Committee:
The company’s incentive program targets, thresholds, caps, weights and payout curves are effective control mechanisms.


 
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The incentive plans are balanced and align the long-term interests of stakeholders and management.
The program’s goals are effectively balanced and consistent with the risk levels embedded in the company’s financial and capital plans.
All potential awards are subject to Human Capital Committee discretion and the company has a recoupment policy in place in the event of a material earnings restatement.
Accordingly, our chief risk officer and the Human Capital Committee do not believe the company’s compensation programs create risks that are reasonably likely to have a material adverse effect on the company, and that the programs fall within the range of the company's risk appetite.
Director Retirement Policy
Our bylaws do not allow any person to serve as a director beyond the date of the annual meeting of shareholders immediately following his or her 72nd birthday. In accordance with this policy, Mr. Muhl will retire from the Board effective at the Annual Meeting.
Compensation Committee Interlocks and Insider Participation
None of the members of the Human Capital Committee has served as an officer of the company, and during 2016 none of the members of the Human Capital Committee was an employee of the company. None of our executive officers served as a member of a board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board or Human Capital Committee.
Related Party Transactions and Policy
The Board has adopted a written policy concerning related party transactions. This policy covers any transaction in which the company was or is to be a participant and the amount involved exceeds $120,000, and in which any related party had or will have a direct or indirect material interest. A "related party" means any of our directors, director nominees, executive officers, persons known to us to beneficially own more than 5% of our outstanding common stock, and any of their respective immediate family members, and any entity in which any of these persons has an interest as an employee, principal or 10% or greater beneficial owner or other material financial interest.
Prior to entering into a transaction that may be viewed as a related party transaction, the related party must notify our general counsel of the facts and circumstances of the transaction. If the general counsel determines that the proposed transaction is a related party transaction, it is submitted to the disinterested members of the Audit Committee for consideration at the next Committee meeting (or to the chair of the Committee if it is not practical to wait until the next meeting and the chair is not a related party to the transaction). The Committee considers all relevant facts and circumstances, including the benefits to the company, if the related party is an independent director or nominee, the potential effect of entering into the transaction on the director’s or nominee’s independence, any improper conflict of interest that may exist, the availability of other sources for the products and services, the terms of the transaction, and the terms available from or to unrelated third parties generally.


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The transaction may be approved if it is determined in good faith not to be inconsistent with the best interests of the company and shareholders. Certain types of transactions are deemed to be pre-approved by the Audit Committee, including executive officer and director compensation arrangements approved by the Board of Directors or the Human Capital Committee, indemnification payments and any transaction between the company and any entity in which a related party has a relationship solely as a director, less than 10% equity holder, or employee (other than an executive officer), or all of these relationships.
Transactions with Related Persons
The company employs a sister-in-law of Michael Q. Simonds, Executive Vice President, President and Chief Executive Officer of Unum US. Charlene Glidden serves as Vice President, Business Planning and Technology Strategy for Colonial Life and does not report within the Unum US organization. Her compensation for 2016 was approximately $423,328, and she participated in compensation and benefit arrangements generally applicable to similarly-situated employees.
Codes of Conduct and Ethics
The Board has adopted a code of conduct establishing certain business practices and ethics applicable to all of our directors, officers and employees. The Board has also adopted a separate code of ethics applicable to our CEO and certain of our senior financial officers. Both of these codes, together with any information on certain amendments or any waivers applicable to certain of our executive officers, are available on our investor relations website under the "Corporate Governance" heading at www.investors.unum.com.


 
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REPORT OF THE AUDIT COMMITTEE

REPORT OF THE AUDIT COMMITTEE
The Audit Committee (in this report, the "Committee") is appointed by the Board of Directors and operates under a written charter adopted by the Board, a copy of which is available on the company’s investor relations website under the heading "Corporate Governance" at www.investors.unum.com. The Committee is comprised solely of independent directors who meet the independence requirements of the SEC and the NYSE. All members of the Committee are "financially literate" as required by the NYSE, and the Board has determined that all five members are "audit committee financial experts" under SEC regulations. In April 2016, Joseph J. Echevarria became a member of the Committee upon his election to the Board.
The primary purpose of the Committee is to assist the Board in its oversight of the:
Integrity of the company’s financial statements and related disclosures;
Effectiveness of the company’s internal control over financial reporting;
Compliance by the company with legal and regulatory requirements;
Qualifications, independence and performance of the company’s independent auditor;
Responsibilities and performance of the company’s internal audit function; and
Management of the company’s financial risks. 
The Committee is also responsible for discussing guidelines and policies with respect to the process by which the company undertakes risk assessment and management, and communicates with the Risk and Finance Committee as necessary for this purpose. The Committee receives regular enterprise risk management (ERM) reports, including results of the Own Risk and Solvency Assessment (ORSA). In 2016, the Committee Chair and another member of the Committee reviewed and provided input in the development of the ORSA Summary Report. This report provides strong evidence of the strengths of the company’s ERM framework, measurement approaches, key assumptions utilized in assessing our risks, and prospective solvency assessments under both normal and stressed conditions.
The Committee met 10 times during 2016. The Committee regularly held executive sessions and met separately with its independent auditor, Ernst & Young, and with the internal auditors without management present.
In fulfilling its oversight responsibilities, the Committee reviewed and discussed with management and the independent auditor matters relating to the company’s accounting and financial reporting processes, including the internal control over financial reporting; reviewed and discussed with management and the independent auditor the company’s annual and quarterly financial statements and related disclosures in reports filed with the SEC; pre-approved all audit services and permitted non-audit services to be performed by the company’s independent auditor; reviewed and discussed with management the responsibilities and performance of the internal audit function; discussed with management policies relating to risk assessment and risk management, as well as specific financial risks; and obtained and reviewed reports concerning the company’s policies and procedures for ensuring compliance with legal and regulatory requirements.


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REPORT OF THE AUDIT COMMITTEE

Management is primarily responsible for the preparation, presentation and integrity of the company’s financial statements and for the reporting process, including the establishment and effectiveness of the company’s internal control over financial reporting. The company’s independent auditor is responsible for performing an independent audit of the financial statements and of the effectiveness of the company’s internal control over financial reporting in accordance with auditing standards promulgated by the Public Company Accounting Oversight Board (PCAOB). The independent auditor reports directly to the Committee, which is responsible for the appointment, compensation, retention and oversight of the work performed by the independent auditor.
The Committee reviewed and discussed with management the company’s audited financial statements for the year ended December 31, 2016, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant estimates and assumptions which could impact the amounts reported in the company’s financial statements, and the clarity of disclosures in the financial statements. The Committee reviewed and discussed with the independent auditor the overall scope and results of the independent audit and its judgments of the quality and acceptability of the company’s accounting principles. The Committee also engaged in discussions with management and the independent auditor, among other matters, concerning management’s assessment of reserve adequacy across all major business lines, which is presented to the Committee each year. The Committee discussed with the independent auditor the matters required to be discussed by applicable standards of the PCAOB. The Committee received the written disclosures and the letter from the independent auditor required by applicable requirements of the PCAOB regarding the auditor’s communications with the Committee concerning independence. The Committee also discussed with the independent auditor matters relating to its independence, including consideration of whether the independent auditor’s provision of non-audit services to the company is compatible with the auditor’s independence. In order to assure continuing auditor independence, the Committee periodically considers whether there should be a regular rotation of the independent auditor.
The company’s internal audit function, under the direction of the chief auditor, reports directly to the Committee, which is responsible for the oversight of the work performed by the internal auditors. The internal auditors are responsible for, among other matters, conducting internal audits designed to evaluate the company’s system of internal controls. The Committee reviewed and discussed with the company’s internal auditors, and received regular status reports from them concerning, the overall scope and plans for their audits. The Committee met with the internal auditors, with and without management present, to discuss their audit observations and findings, and management’s responses, and their evaluation of the effectiveness of the company’s internal control over financial reporting.
The Committee evaluates the performance of its independent auditor, including the senior audit engagement team, each year and considers whether to retain the current independent auditor or consider other audit firms. In doing so, the Committee took into consideration a number of factors, including the professional qualifications of the firm and the lead audit partner, the quality and candor of the firm’s communications with the Committee and the company, and evidence supporting the firm’s independence, objectivity, and professional skepticism. The Committee also reviewed the 2015 PCAOB inspection report of Ernst & Young which was published in 2016 and discussed its findings with the independent auditor. In conjunction with the mandated rotation of the independent auditor’s lead engagement partner, the Committee and its chair are directly involved in the selection of the independent auditor’s lead


 
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engagement partner, including the current partner who assumed this role in 2014 after meeting with a subgroup of the Committee during which his qualifications were discussed.
Based on this evaluation, the Committee has determined that the continued retention of Ernst & Young to serve as the company’s independent auditor is in the best interests of the company and its shareholders. Accordingly, the Committee appointed Ernst & Young as the company’s independent auditor for 2016. Ernst & Young has served as the company’s independent auditor since the merger of Unum and Provident in 1999, and before that served at various times as the independent auditor for the company and certain predecessor companies. Although the Committee has sole authority to appoint the independent auditor, the Committee recommended that the Board of Directors seek shareholder ratification of the appointment at the Annual Meeting as a matter of good corporate governance.
Based on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board approved, that the company’s audited financial statements for the year ended December 31, 2016 be included in the company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission.
2016 Audit Committee:
E. Michael Caulfield, Chair
Theodore H. Bunting, Jr.
Joseph J. Echevarria
Timothy F. Keaney
Francis J. Shammo


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COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION DISCUSSION AND ANALYSIS
In this section, we provide an overview of our compensation philosophy and processes, and explain how the Human Capital Committee of our Board (referenced throughout this section as the "Committee") arrived at its compensation decisions for the below named executive officers (NEOs) for 2016, all of whom are included in the 2016 Summary Compensation Table on page 72.
Richard P. McKenney, President and Chief Executive Officer
John F. McGarry, Executive Vice President and Chief Financial Officer
Michael Q. Simonds, President and Chief Executive Officer, Unum US
Lisa G. Iglesias, Executive Vice President, General Counsel
Breege A. Farrell, Executive Vice President, Chief Investment Officer
Business and Performance Review
Our Business
We are a leading provider of financial protection benefits in the United States and United Kingdom. Our products include disability, life, accident, critical illness, dental and vision insurance. These products, which are primarily offered through the workplace, help protect millions of working people and their families from the financial hardships that can occur in the event of illness, injury, or loss of life.
Our business operations are divided into three primary segments – Unum US, Unum UK, and Colonial Life – and a Closed Block of business that includes products we service and support but no longer actively market.
2016 Performance
Unum had a very successful year in 2016 as growth accelerated and we continued to deliver consistent financial and operating performance. Positive sales and premium growth contributed to record earnings per share and our disciplined approach to running our business helped us maintain attractive profit margins and a high level of customer satisfaction. These results were achieved despite a very uncertain economic environment, including the pressure of continued low interest rates, and reflect our successful management transition as Mr. McKenney completed his first year as CEO.
Financial highlights(1) from 2016 include:
After-tax operating income of $926.2 million, based on total revenue of $11.0 billion;
Record operating earnings per share (EPS) of $3.92, a 7.7% increase from the prior year and the eleventh consecutive year of operating EPS growth;
Consolidated operating return on equity of 11.4% (15.9% in our core operating segments);
Book value per share growth of 9.3% from 2015 (excluding accumulated other comprehensive income or AOCI), the eighth consecutive year of growth; and


 
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COMPENSATION DISCUSSION AND ANALYSIS

Solid investment results in a difficult interest rate environment while emphasizing sound risk management and credit quality.
Operating highlights from 2016 include:
Approximately $6.9 billion in benefits paid to people facing illness, injury, or loss of life;
Healthy growth in premium of 4.5% and solid sales growth throughout our core businesses, while maintaining our pricing and risk discipline;
Acquisition of a leading dental and vision carrier to complement the offerings of our U.S. businesses;
High client satisfaction metrics that generally exceeded our plan benchmarks; and
A strong company brand, image, and reputation.
Our capital generation remained strong and allowed us to deploy that capital in a number of ways.
Shareholders received $182.6 million in Unum dividends, representing an increase in the dividend rate of 8.1% over the prior year, bringing our cumulative dividend rate increase since 2008 to 166.7%;
We also repurchased approximately 11.9 million shares at a cost of approximately $403 million, bringing our total share repurchases since 2007 to $3.6 billion; and
Our credit ratings remain high as a result of our strong balance sheet, our favorable operating results and our highly respected brand in the employee benefits market.
CAPITAL GENERATION AND DEPLOYMENT
Year
Share Repurchases
Dividend Rate Increase  
2009
10.0%
2010
$356 million
12.1%
2011
$620 million
13.5%
2012
$500 million
23.8%
2013
$319 million
11.5%
2014
$301 million
13.8%
2015
$427 million
12.1%
2016
$403 million
8.1%


______________________ 
(1) Operating results referenced in this document are non-GAAP financial measures that exclude certain specified items. For 2016, these excluded items were net realized investment gains and losses and non-operating retirement-related gains or losses. For reconciliations of the non-GAAP financial measures, including after-tax operating income, after-tax operating earnings per share, operating return on equity, and book value per share (excluding AOCI), to the most directly comparable GAAP measures, refer to Appendix B.


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COMPENSATION DISCUSSION AND ANALYSIS

Business Highlights
The following are 2016 performance highlights within our primary business segments and other key areas of the company:
Unum US
unumushighlight.jpg
Our Unum US segment, representing 62.7% of our consolidated premium income in 2016, built on the momentum of the prior year. The business delivered healthy premium growth and solid sales results, along with favorable benefits experience and effective expense management. Operating income improved nicely from 2015 and our acquisition of a dental and vision carrier is poised to drive growth.
Unum UK
unumukhighlight.jpg
Our Unum UK segment, representing 6.3% of our consolidated premium income in 2016, showed continued improvement despite an uncertain economic environment due to that country's vote to leave the European Union, with double-digit sales growth and solid premium results in local currency.
Colonial Life
coloniallifehighlight.jpg
Our Colonial Life segment, representing 17.0% of our consolidated premium income in 2016, had another good year. The business delivered strong sales growth and solid premium results, along with stable benefits experience. Consistent with past years, Colonial Life continues to generate solid margins and returns.
Closed Block
Our Closed Block segment, representing 14.0% of our consolidated premium income in 2016, performed well, with a healthy increase in operating income of 8.7%. We continue to see consistent results from this block of business largely as a result of our continued investments in management resources and capabilities.
Investments
Our investment results remain solid, although we recorded lower net investment income in 2016. This was primarily due to a decline in the yield on invested assets as we continue to invest new cash flows at lower rates. 


 
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Total Shareholder Return
Unum has been a very good performer and an excellent long-term investment during one of the most challenging economic periods in memory, with a 9.76% compound annual return to shareholders over the last 10 years. In fact, our total shareholder return (TSR) has outperformed our peers in nearly every index comparison during the last decade.
Although our performance continues to be pressured by the historically low interest rate environment, we nevertheless saw our TSR grow by more than a third during 2016. This was a far better performance than the S&P 500, our peers in the S&P Life and Health Index and the average of our Proxy Peer Group (as defined on page 46) during the same time period. Over the most recent three-, five- and 10-year periods, we exceeded the TSR performance of every index group other than the Proxy Peer Group for the five-year comparison. This strong performance is due primarily to our market-leading positions, consistent underwriting and risk management discipline, and effective capital management.
tsr.jpg


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COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation
Key Practices
We are committed to good executive compensation practices, including the following:
Pay for performance linking a majority of compensation to financial and stock price performance measures as well as individual performance;
Annual say-on-pay votes;
Robust stock ownership and retention requirements for senior officers and directors;
Anti-pledging and anti-hedging policies applicable to executives and directors;
Compensation recoupment policy allowing recovery of performance-based compensation paid to senior officers in the event of a material restatement of our financial results;
Double-trigger vesting of long-term incentives, which would only occur upon a qualifying termination following a change in control;
Independent compensation consultant to the Human Capital Committee;
Minimal perquisites; and
Elimination of golden parachute excise tax gross-ups.
2016 Say-on-Pay Vote and Shareholder Outreach
We continued our robust shareholder outreach efforts in 2016, contacting each of our top 50 investors, representing the holders of over 72% of our outstanding shares. Eight of these investors, representing 32% of our outstanding shares, accepted our invitation for engagement. Six of these investors, representing 8% of our outstanding shares, responded that a meeting was not necessary.
During meetings, shareholders provided feedback on a variety of topics. Multiple shareholders commented that they were pleased to see the proxy disclosure with respect to our engagement and responsiveness to the say-on-pay vote in 2015. Additionally, shareholders commented that they were pleased to see a robust process for Board succession along with a focus on diversity and skills needed to support our business strategy.
We did not receive any suggestions for changes to our compensation programs. In fact, the shareholders we spoke with had favorable comments about the design of our executive compensation programs and policies.
In addition to our meeting with shareholders, we also met with two large proxy advisory firms to provide an update on our shareholder engagement efforts and gain further insight into their views regarding our compensation programs and disclosure.


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Below is a summary of the key feedback we heard and our responses:
What We Heard
 
Our Response
Provide greater insight on Board diversity and focus on diversity during recent Board refreshment effort
à
We have expanded the disclosure in our Corporate Governance section to include additional information with respect to the tenure, diversity and qualifications of our board.
 
 
(see disclosure beginning on page 26 )
Potential for director involvement in future shareholder outreach discussions
à
Our Human Capital and Governance Committees are considering this feedback and expect to finalize the process in advance of our post-Annual Meeting outreach efforts.
Additional disclosure with respect to incentive plan adjustments and their impact on plan payouts
à
We have expanded our disclosure with respect to the incentive plan adjustments to provide additional details about the impact of such adjustments.
 
 
(see disclosure beginning on page 57)
Continue to provide disclosure with respect to feedback from shareholder outreach meetings and how we are responding
à
See the information provided or referenced in this section.
Compensation Program Structure and Committee Decisions
Our executive compensation philosophy is to reward performance that helps us achieve our corporate objectives, increase shareholder return, and attract and retain talented individuals. We do this by:
Offering base salaries that reflect the competitive market as well as the roles, skills, abilities, experience, and performance of employees;
Providing incentive opportunities for all employees based on the achievement of corporate and individual performance goals; and
Aligning the long-term interests of management and shareholders by offering performance-based equity compensation opportunities and requiring senior officers to own a specified value of shares and retain equity awards for a specified period of time after vesting. These practices also promote a culture of ownership and accountability in the company.
Elements of Pay
There are five primary elements of pay in our executive compensation program, which are summarized in the following table.
Those pay elements that are "at risk," or contingent upon individual or corporate performance, are noted in the table below. Our NEOs, as the most senior officers of the company, have a majority of their targeted total direct compensation (consisting of fixed salary and variable annual and long-term incentive awards) at risk. This design creates an incentive for achievement of performance goals (short- and long-term) and aligns the interests of our executives with those of our shareholders. For 2016, 88% of Mr. McKenney’s targeted total direct compensation was at risk. For the remaining NEOs, an average of 70% of their aggregate targeted total direct compensation was at risk.


 
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PAY ELEMENTS
Annual base salary
To provide a fixed amount of compensation that is reflective of the market for similar jobs as well as individual skills, abilities, and performance. Aligns with our compensation philosophy of attracting and retaining talented individuals.

Annual incentive awards (at risk)
To motivate executives to achieve short-term corporate financial goals as well as individual objectives. This form of compensation is paid in cash based on the achievement of corporate and individual goals and aligns with our compensation philosophy of rewarding performance in the achievement of short-term corporate objectives.

Long-term incentive awards (at risk)
To motivate long-term performance and align the interests of management and shareholders. This form of compensation is awarded in performance-based restricted stock units (PBRSUs) and performance share units (PSUs) based on a corporate earnings threshold and individual performance. Additionally, PSU vesting is based on achievement over a three-year performance period, of prospective corporate financial goals, modified by relative total shareholder return. This aligns with our compensation philosophy of rewarding long-term performance, increasing total shareholder return, and attracting and retaining talented individuals.
Retirement and workplace benefits
To provide a competitive overall compensation program that addresses health, welfare, and retirement needs of executives and other employees. Aligns with our compensation philosophy of attracting and retaining talented individuals.

Perquisites and other personal benefits
Most perquisites were eliminated as of 2008. The limited perquisites we currently offer are in support of a specific business purpose.

Roles of the Committee, Executive Officers and Consultants
The Committee, CEO, and compensation consultant each have important roles in our compensation program. The Committee, with input from the CEO, and compensation consultant, has the final authority to:
Evaluate, design, and administer a compensation program for executive officers that appropriately links pay, company and individual performance, and the creation of shareholder value;
Establish performance goals and certify whether they have been attained;
Review the performance of the CEO, with input from the full Board, and determine his compensation; and
Determine compensation for each of the other NEOs.
The CEO provides to the Committee:
A self-assessment outlining his own performance for the year;
Performance assessments and compensation recommendations for executives who report directly to him, which includes all of the NEOs; and


 
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His perspective on the business environment and the company’s performance.
The CEO does not participate in any decisions related to his own compensation.
Pay Governance LLC, as independent compensation consultant to the Committee, provides objective, expert analyses, independent advice, and comparative data across peer companies on executive and director compensation. Pay Governance reports directly to the Committee, which is responsible for the appointment, compensation, retention, and oversight of the work performed by the consultant. A senior representative of the compensation consultant generally attends Committee meetings, participates in executive sessions of the Committee without management present, and communicates directly with Committee members outside of meetings. Management interacts with the compensation consultant only when doing so on behalf of the Committee or concerning proposals the Committee will review for approval.
The Committee has adopted a policy requiring that its compensation consultant be independent. During 2016, the Committee completed its annual assessment of the independence of Pay Governance, taking into account the following factors:
Compliance with the Committee’s independence policy;
Other services, if any, provided to the company by the consultant;
The amount of fees paid by the company to the consultant as a percentage of the consultant’s total revenues;
Any business or personal relationships between the consultant (including its representatives) and the company’s directors or senior officers; and
The policies and procedures the consultant has in place to prevent conflicts of interest, which include a prohibition against stock ownership in the company.
Pay Governance has attested to its independence and does not provide any services to the company other than those related to director and executive compensation consulting. Fees paid to Pay Governance for such services provided in 2016 totaled $130,773.
Based on its assessment, the Committee concluded that Pay Governance is independent under the Committee’s policy and that Pay Governance's work has not raised any conflict of interest.
The company’s finance, human resources, and legal staff, including the Chief Financial Officer, support the Committee in its work. Employees from these departments discuss various executive compensation topics with the Committee and Pay Governance, including how compensation plans fit in with other programs and business objectives. Although these staff members may make recommendations, the final decision on all executive compensation matters rests solely with the Committee.


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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Benchmarking
The Committee compares the compensation of our named executive officers to the median pay of executives in similar positions at peer companies. By targeting each pay element to the approximate median of the applicable comparator group (as described below), we ensure that the balance among the elements is competitive, while at the same time allowing company and individual performance to determine a majority of the compensation received by our NEOs. Overall, these benchmarking comparisons are used as points of reference and are secondary to the primary factors considered by the Committee when making compensation decisions. The primary factors are: company performance; individual performance; the executive’s level of responsibility and tenure; internal equity considerations; the creation of shareholder value; our executive compensation philosophy; and the results of the most recent shareholder say-on-pay vote.
The two sources used by the Committee for benchmarking executive compensation are:
For CEO and CFO compensation, a proxy peer group comprised of insurance and financial services companies that are either our business competitors or primary competitors for talent (the "Proxy Peer Group"). The Proxy Peer Group is also a reference for compensation programs and practices. The composition of the Proxy Peer Group is determined by the Committee and reviewed annually as outlined below; and
For the compensation of our other NEOs, the Willis Towers Watson Diversified Insurance Study of Executive Compensation (Diversified Insurance Study). This source is used because responsibilities of our other NEOs may not be directly comparable with those of named executives at other companies in the Proxy Peer Group.
In addition to benchmarking executive compensation, the Committee uses a subset of the Proxy Peer Group (which we refer to as the "PSU Peer Group") for purposes of measuring relative TSR for our PSU awards (see page 56 for details on these awards). This subset is selected because they are considered to be direct business competitors of Unum.
The Committee evaluates the composition of the Proxy Peer Group every year. Peer companies are determined based on five primary criteria (life and health GICS code; reasonable range of: assets, revenues, and market capitalization; and competition with Unum for talent and/or market share). Based on the most recent peer review in August 2016, on average, the companies in the Proxy Peer Group met three of the five criteria. Overall, Unum is at 53% of the median asset level and approximately 90% of the revenue median (as of the 12 months ended March 31, 2016). Additionally, eight of the 14 peers (57%) selected Unum as a peer for compensation benchmarking purposes in their 2016 proxy statements.
During its annual Proxy Peer Group analysis in August 2016, the Committee determined to remove Assurant, Aon, and Marsh & McLennan from the Proxy Peer Group for 2017. Aon and Marsh & McLennan were removed due to their continued expansion outside of the traditional insurance business and Assurant was removed following the sale of their employee benefits and supplemental health and small lines insurance businesses. The Committee concluded that the changes to their business models makes them less relevant competitors for executive talent. Furthermore, the Committee considered other insurance and financial services companies with its consultant, Pay Governance, and determined that no companies were appropriate for inclusion in the Proxy Peer Group at the time. The effect of these changes to the Proxy Peer Group was a 5% reduction in median CEO targeted total direct compensation.


 
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COMPENSATION DISCUSSION AND ANALYSIS

The following table lists the companies in the Diversified Insurance Study (DIS), PSU Peer Group and Proxy Peer Group.
BENCHMARKING EXECUTIVE COMPENSATION
 
 
 
 
Proxy Peer Group Indicators(1)(2)
Company
DIS
Survey
Partici-
pant(1)
PSU
Peer
Group(3)
2016 
Proxy 
Peer Group 
Life &
Health
GICS
0.4x to 2.5x
Unum
Revenues
0.4x to 2.5x
Unum
Assets
0.5x to 5.0x
Unum Market
Capitalization
List
 Unum
as a
Peer
Aflac
AIG
 
 
 
 
 
 
 
Allstate
 
 
 
 
 
 
 
Aon
 
 
 
 
Assurant
 
 
 
AXA Group
 
 
 
 
 
 
 
Cigna
 
 
 
 
 
 
 
CNO Financial
 
 
 
Genworth Financial
 
 
Guardian Life
 
 
 
 
 
 
 
Hartford Financial Services
 
 
John Hancock
 
 
 
 
 
 
 
Lincoln Financial
 
Marsh & McLennan
 
 
 
 
 
Massachusetts Mutual
 
 
 
 
 
 
 
MetLife
 
 
 
 
Nationwide
 
 
 
 
 
 
 
New York Life
 
 
 
 
 
 
 
Northwestern Mutual
 
 
 
 
 
 
 
One America Financial
 
 
 
 
 
 
 
Pacific Life
 
 
 
 
 
 
 
Phoenix Companies
 
 
 
 
 
 
 
Principal Financial
 
 
Prudential Financial
 
 
 
Reinsurance Group of America
 
 
 
Securian Financial
 
 
 
 
 
 
 
Sun Life Financial
 
 
 
 
 
 
 
Thrivent Financial
 
 
 
 
 
 
 
TIAA-CREF
 
 
 
 
 
 
 
Torchmark
 
 
Transamerica
 
 
 
 
 
 
 
USAA
 
 
 
 
 
 
 
Voya Financial
 
 


2017 PROXY STATEMENT
47
 


COMPENSATION DISCUSSION AND ANALYSIS

(1)
For compensation decisions made in early 2016, benchmarking comparisons were made using the 2016 Proxy Peer Group and the 2015 DIS (the latest data available at the time). Although Unum participates in the DIS, we are excluded from this table. The number of participants in the DIS remained the same as the prior year.
(2)
The Proxy Peer Group includes both property and casualty insurers and life and health insurers, with Unum’s assets equal to 57% of the peer median as of December 31, 2015, and our revenue at 92% of the peer median for the year ended December 31, 2015. Unum is not part of the Proxy Peer Group.
(3)
This peer group will be used for the relative TSR comparison under the 2016 PSU grant. These companies are our direct competitors, are generally followed by the same sell-side research analysts, and generally compete with us for talent.
Individual Performance Assessments
The Committee uses individual performance assessments as a factor in its determination of compensation for each NEO. Individual performance is measured against the leadership criteria and Board assessment goal areas described in the table below, as well as the common performance goals outlined on the following page. Collectively, these can be used to adjust earned annual incentive and long-term incentive awards between 0% and 125%.
Evaluation Criteria
In evaluating how effectively each NEO met the leadership criteria, the Committee considered:
Company performance;
For the CEO, the Board’s assessment of his performance, as well as his self-assessment;
For NEOs other than the CEO, the performance assessments of the NEOs. For each individual, the performance assessment is based on a combination of performance feedback from the individual’s direct manager (the CEO), peers, direct reports, and other partners, as well as the individual’s self-assessment; and
Written assessments by all Board members of each NEO against the stated goals in the areas listed in the table below.
INDIVIDUAL PERFORMANCE ASSESSMENTS
 Leadership Criteria
 Board Assessment Goal Areas
●    Delivers results
●    Builds organizational talent
●    Makes effective decisions
●    Creates business and enterprise value
●    Engages employees in the corporate vision
●    Adheres to the company's values
●    Leadership
●    Strategic planning, succession planning and leadership development
●    Demonstrated performance
●    Building and sustaining a high-functioning organization and team
●    Humility and ego maturity
●    Statesmanship
●    Balance of putting the company first with appropriate self-care and resilience
●    Ability to balance complex and competing factors
●    Commitment to the enterprise and their business unit
●    Board relations


 
48
2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

2016 Performance Assessment and Highlights
The NEOs’ achievement levels, for purposes of the 2016 annual incentive paid in March 2017 and long-term incentive awards granted in March 2017, were determined in part based on the following common performance goals. Each common performance goal has specific areas of focus for each NEO and his or her respective business areas.
2016 COMMON PERFORMANCE GOALS
Achieve the business and financial objectives the Board approved for the company, which includes the following areas of focus: 
●    Positioning each business to deliver planned results and capitalize on market positions and opportunities
●    Appropriately redeploying the company’s excess capital
●    Continuing to manage the plans of the company on an integrated basis
Deepen the management talent and employee engagement throughout the company:
●    Strengthen the senior leadership succession plan
●    Maintain a high level of employee engagement in all businesses
●    Continue to take actions to assure that our workforce diversity matches that of our key stakeholders
Continue to develop the culture and values of the company at all levels which includes:
●    Ethics and compliance
●    Social responsibility
●    Risk management
Build on the image and reputation of the company with key constituents:
●    Including with regulators, media and public policy makers
Develop the office of the CEO (for Mr. McKenney only):
●    Visibility across the employee base
●    Visibility with investors, regulators and media
●    Continued development of strong relationships between the Board and management
●    Work closely with Chairman and Lead Independent Director through Board transition
Based on the above criteria, the Committee assessed the individual performance of our NEOs and awarded each an individual performance percentage. These percentages were used to calculate the final payout of 2016 annual incentives and long-term incentive awards granted in 2017, as described later in this section.
Individual performance highlights for each NEO, and their respective awarded performance percentages, are included below:


2017 PROXY STATEMENT
49
 


COMPENSATION DISCUSSION AND ANALYSIS

Richard P. McKenney
President and Chief Executive Officer
In assessing Mr. McKenney’s performance for 2016, the Committee noted that he:
Led the company to record levels of financial performance in 2016 with above-plan results across most financial metrics;
Maintained a strong balance sheet and capital position. Most capital metrics were better than plan, allowing us to continue to invest in our business, fund an acquisition, and return capital to shareholders through dividend increases and share repurchases;
Demonstrated effective leadership in his first full year as CEO, and has been highly visible driving his vision for performance, change management and culture across the enterprise;
Completed an acquisition of a dental and vision insurer in the U.S., which further strengthens our market presence and positions us well for the future; and
Made significant progress developing and executing the company's long-term Closed Block strategy.
Given these accomplishments and the company’s overall performance achievement of 115%, the Committee awarded Mr. McKenney an individual performance percentage of 105% for his 2016 annual incentive award and 105% as the individual performance modifier for his long-term incentive award granted in March 2017.
John F. McGarry
Executive Vice President and Chief Financial Officer
In assessing Mr. McGarry’s performance for 2016, the Committee noted that he:
Provided strong leadership as the company exceeded most financial objectives, with each business segment generally meeting or exceeding its goals for the year;
Maintained a strong capital position, which allowed the company to continue to invest in the growth of the business, fund an acquisition in the U.S., and return capital to shareholders through dividend increases and share repurchases;
Successfully established the necessary processes to drive financial planning, monitoring and reporting. He appropriately balanced basic finance operations with a strategic focus on broader issues;
Worked closely with the Finance leadership team to drive change, strengthen talent and create a more efficient organization; and
Continued to take on a more visible role, representing the company with the investment community.
Given these accomplishments, the Committee applied an individual performance percentage of 110% for Mr. McGarry’s 2016 annual incentive award and 111% as the individual performance modifier for his long-term incentive award granted in March 2017.


 
50
2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

Michael Q. Simonds
Executive Vice President, President and Chief Executive Officer, Unum US
In assessing Mr. Simonds’ performance for 2016, the Committee noted that he:
Led Unum US to excellent financial results, including record levels of before-tax operating income;
Delivered strong premium growth and solid sales results, while maintaining risk and pricing discipline. Premium growth was 5.7%, continuing a strong trend over the last several years;
Directed the negotiations and closing of and integration following the Starmount transaction, which positions the company well for future growth;
Continued to focus on talent development across the enterprise; and
Represented the company with a variety of outside stakeholders, including shareholders, regulators, customers and brokers.
Given these accomplishments, the Committee applied an individual performance percentage of 110% for Mr. Simonds’ 2016 annual incentive award and 111% as the individual performance modifier for his long-term incentive award granted in March 2017.
Lisa G. Iglesias
Executive Vice President, General Counsel
In assessing Ms. Iglesias’ performance for 2016, the Committee noted that she:
Provided effective leadership for the legal department in the role of General Counsel;
Continued to execute significant changes in the legal organization to better align her team with the needs of the business;
Produced strong performance with most indicators on track for the year, and delivered several items not on the original plan, including the Starmount acquisition;
Developed solid linkages with the Board and effectively supported the Board and governance process; and
Utilized her considerable legal and public company expertise to move the organization forward.
Given these accomplishments, the Committee applied an individual performance percentage of 100% for Ms. Iglesias’ 2016 annual incentive award and 100% as the individual performance modifier for her long-term incentive award granted in March 2017.


2017 PROXY STATEMENT
51
 


COMPENSATION DISCUSSION AND ANALYSIS

Breege A. Farrell
Executive Vice President, Chief Investment Officer
In assessing Ms. Farrell’s performance for 2016, the Committee noted that she: 
Achieved positive results despite a continued difficult investment environment, which included stress in the energy sector early in the year as well as sharply lower interest rates throughout much of the year;
Remained disciplined in asset selection and maintained the overall strong credit quality of the portfolio;
Partnered effectively with the business segment owners to ensure we have appropriate alignment between products and investments;
Continued to build and enhance talent and depth within the investment team; and
Continued to have a strong external focus on industry trends, helping us to take advantage of market opportunities.
Given these accomplishments, the Committee applied an individual performance percentage of 100% for Ms. Farrell’s 2016 annual incentive award and 105% as the individual performance modifier for her long-term incentive award granted in March 2017.
Company Performance Targets
Each year, the Committee sets targets for several performance measures that are used to calculate annual and long-term incentive awards. Performance measures and their respective targets are established for the company as a whole as well as for each of our principal operating business segments, and weightings are assigned to each performance measure based on its relative importance to the company or business segment.
The performance targets are aligned with the company’s primary business objectives:
Strong operational performance
Disciplined growth
Effective risk management
Consistent capital generation
The performance goals in our incentive plans are a direct output of our business plans which are approved by the Board each year.
The business plans and the associated metrics carefully balance the current performance of the business and the risk appetite of the enterprise with an appropriate amount of stretch designed to drive consistent growth and improvement. In addition, the Committee considered external economic factors including: (1) the overall economic growth rate, (2) employment and wage growth which impacts our overall premium levels, and (3) the interest rate and investment environment which can have a significant impact on our overall profit margins.


 
52
2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

While the absolute year-over-year goals for most of the performance metrics generally increase, there are instances where a performance goal for the year may be below or equivalent to the prior year goal, based on pressures in each of the identified factors above. Our 2016 annual incentive target for after-tax operating income and our 2016 long-term incentive target for operating return on equity (ROE) were each below the level of the comparable prior year metric. This was due to the continued low interest rate environment and increases in statutory capital requirements rather than lower operational expectations.
In setting the business plans and performance metrics, a number of sensitivity tests are run to determine the possible upside and downside scenarios to the plan. These scenarios are reviewed to be certain we have the appropriate degree of rigor in the plan. We set challenging business plans and performance measures to ensure that their achievement will drive long-term value for shareholders.
Once the performance measures are established, the incentive payout targets are set to appropriately reward performance above the targets and to penalize results that are below target.
Generally, the payout range for each annual incentive performance measure is set based on what is appropriate for the variability of the metric. For example, the payout range for after-tax operating income and ROE begins at achieving 75% of target with a 0% payout for achieving less than 75% of target. Performance which is 100% of the target will equate to a 100% payout, while achieving 115% of target will result in a 200% payout for that performance measure. The payout range for earned premium begins at achieving 85% of target and ranges to 120% of target. The actual ranges for each performance metric can be determined from the table on page 55. While the payout range for each metric is 0 - 200%, the overall plan maximum payout is 150%. Our incentive plans are subject to an annual risk assessment by our chief risk officer, which is discussed with the Committee as described on page 32.
The ROE performance measure is used under both our annual and long-term incentive plans. The Committee has concluded that ROE is one of the most important metrics for shareholders, over both a near-term and an extended timeframe. The Committee believes that using this metric in incentive plans that pay out over both one-year and three-year periods encourages executives to focus on both short- and long-term results. The Committee also believes that any risk of overemphasizing ROE in the annual and long-term incentive plans is avoided by assigning it only a 20% weighting for the Unum Group annual incentive performance measure and by weighting it equally with another performance measure (in recent years, average after-tax operating earnings per share) with further adjustment based on relative TSR for PSUs awarded under our long-term incentive plan.
Prior to 2016, consolidated ROE was included as an annual performance measure for Unum Group but not for the individual business segments. Effective in 2016, the consolidated ROE metric was included as a performance measure for each business segment.
For 2016, a change was made to Unum Group's annual performance measures to replace the prior business area composite metric with individual metrics for earned premium, sales, services, and operating expense ratio for the core operating business segments. Additionally, for the business segments, beginning in 2016, we are measuring the quality of our customers’ experiences from their point of view, focusing on a few specific areas that we know most directly impact customer loyalty and satisfaction. For this reason, we renamed the service performance measure "customer experience."


2017 PROXY STATEMENT
53
 


COMPENSATION DISCUSSION AND ANALYSIS

The changes to the annual performance measures for Unum Group and the business segments are designed to create consistency among the plan metrics which should provide better alignment between the business segments and overall company performance.
Incentive Funding Performance Requirement
Our annual and long-term incentive plans are conditioned on the company achieving a specified level of performance. We apply an incentive funding performance requirement because we believe employees and officers should receive incentive awards only after our shareholders and creditors are paid. Additionally, the company intends that meeting this incentive funding performance requirement will allow the company to retain certain deductions in accordance with Section 162(m) of the Internal Revenue Code (the "Code").
The Annual Incentive Plan specifies a performance requirement of $250 million of statutory after-tax operating earnings to fund the plan. At the time the plan was established, this was approximately enough to cover dividends to shareholders and after-tax interest on our recourse debt. For 2016, the Committee established the same performance requirement to fund grants under the long-term incentive plan. Funds used to attain the performance requirement are derived from statutory after-tax operating earnings and other sources of cash flow available from the company’s insurance and non-insurance subsidiaries.
The company successfully achieved the performance requirement for funding the 2016 annual incentive awards and the long-term incentive grants made in March 2017.
Annual Incentive Targets
Depending on their role in the company, the annual incentive awards of our NEOs are tied in various ways to the performance of Unum Group and its business units. The annual incentive awards of Mr. McKenney, Mr. McGarry and Ms. Iglesias are based entirely on Unum Group performance. For business unit executives 25% of their award is based on Unum Group performance and 75% is based on their business unit’s performance (Investments for Ms. Farrell and Unum US for Mr. Simonds). The following table outlines the targets for annual incentives awarded for 2016 performance and how the company and business units performed against those targets in 2016.


 
54
2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

2016 ANNUAL INCENTIVE AWARD PERFORMANCE TARGETS AND RESULTS ($s/£s IN MILLIONS)
Performance Measure
Component
Weighting
Threshold(1)
Target
Maximum
Actual    
 
Unum Group
 
 
 
 
 
After-tax operating income(2)
35%
$662.1
$882.8
$1,015.2
$926.2
Consolidated operating return on equity(3)
20%
8.14%
10.86%
12.48%
11.4%
Customer experience(4)
10%
270%
300%
450%
309%
Earned premium(5)
15%
$6,101.2
$7,165.8
$8,613.5
$7,187.3
Sales
10%
$1,151.9
$1,534.1
$2,150.3
$1,511.9
Operating expense ratio(6)
10%
20.74%
18.74%
16.74%
18.64%
 
Unum US
 
 
 
 
 
Before-tax operating income(7)
35%
$605.6
$865.1
$1,038.1
$914.2
Consolidated operating return on equity(3)
10%
8.14%
10.86%
12.48%
11.4%
Customer experience(4)
15%
90%
100%
150%
103%
Earned premium
15%
$4,431.9
$5,214.0
$6,256.8
$5,240.9
Sales
15%
$734.7
$979.6
$1,371.4
$943.8
Operating expense ratio(6)
10%
21.22%
19.22%
17.22%
19.00%
 
Colonial Life
 
 
 
 
 
Before-tax operating income(7)
35%
$221.5
$316.4
$379.7
$314.2
Consolidated operating return on equity(3)
10%
8.14%
10.86%
12.48%
11.4%
Customer experience(4)
15%
90%
100%
150%
101%
Earned premium
15%
$1,196.3
$1,407.4
$1,688.9
$1,417.1
Sales
15%
$352.5
$470.0
$658.0
$483.6
Operating expense ratio(6)
10%
18.53%
16.53%
14.53%
16.65%
 
Unum UK
 
 
 
 
 
Before-tax operating income(7)
35%
£67.5
£96.4
£115.7
£94.8
Consolidated operating return on equity(3)
10%
8.14%
10.86%
12.48%
11.4%
Customer experience(4)
15%
90%
100%
150%
105%
Earned premium
15%
£340.3
£400.3
£480.4
£390.5
Sales
15%
£46.6
£62.1
£86.9
£62.7
Operating expense ratio(6)
10%
21.84%
19.84%
17.84%
20.41%
 
Investments
 
 
 
 
 
Net investment income(8)
50%
$2,330.9
$2,445.9
$2,580.9
$2,487.6
Avoided losses(9)
25%
$(100.0)
$7.4
$150.0
$(4.4)
Market composite(10)
25%
83%
100%
175%
94%
(1)
For each performance measure, there is no payout at or below the threshold. For each performance measure, the payout would be 200% for performance at or above the maximum. However, the overall payout for the aggregate annual incentive plan is capped at 150% of target. For performance between defined levels, the payout is interpolated.


2017 PROXY STATEMENT
55
 


COMPENSATION DISCUSSION AND ANALYSIS

(2)
After-tax operating income is defined as net income adjusted to exclude after-tax net realized investment gains or losses and after-tax non-operating retirement-related gains or losses and certain other items specified in the reconciliation of non-GAAP (generally accepted accounting principles) financial measures attached hereto as Appendix B.
(3)
Consolidated operating return on equity is calculated by taking after-tax operating income and dividing it by the average of the beginning- and end-of-year stockholders’ equity adjusted to exclude the net unrealized gain or loss on securities and the net gain on cash flow hedges.
(4)
Customer Experience is based on the quality of our customers' experiences and includes measures which focus on areas that impact customer loyalty and satisfaction.
(5)
Earned premium is calculated for our core operations (Unum US, Unum UK, and Colonial Life).
(6)
The operating expense ratio is equal to operating expenses as a percentage of earned premium. For Unum Group, the operating expense ratio is calculated for our core operations (Unum US, Unum UK and Colonial Life).
(7)
Before-tax operating income is defined as net income adjusted to exclude net realized investment gains or losses, non-operating retirement-related gains or losses, and income tax expense.
(8)
Net investment income reflects the impact of investment results on after-tax operating income. Net investment income excludes interest on policy loans, investment income on floating rate securities backing floating rate debt, investment income on index-linked securities which support claim reserves that provide for index-linked claim payments, variances to plan for asset levels and specified portions of miscellaneous net investment income, and includes investment income related to investments managed by Unum supporting reserves related to a block of individual disability business assumed through a modified coinsurance agreement.
(9)
Avoided losses are calculated by multiplying an industry standard weighted default rate by Unum’s total credit exposure and comparing to Unum’s actual investment losses.
(10)
Market composite consists of comparing the average of three targets: (1) credit spreads on purchases to a specified benchmark, (2) yields on purchases to a specified benchmark, and (3) realized investment losses to a specified peer group.
Each performance target has been selected because the Committee believes it is an appropriate driver of long-term shareholder value:
The growth and competitiveness of the company are measured using sales and earned premium targets;
Profitability achievement is measured using after-tax operating income for Unum Group; before-tax operating income for Unum US, Colonial Life, and Unum UK; and net investment income for Investments;
The balance of profitability and capital management effectiveness is measured using operating return on equity; and
Effective and efficient customer service is measured using the customer experience and operating expense ratio targets.
Long-Term Incentive Targets
The achievement of a corporate performance threshold must be met before any award may be granted under the company’s long-term incentive program, as described on page 54. All of our NEOs received a portion of the long-term incentive grant in February 2016 in the form of PSUs. The PSUs will vest based on the achievement of three-year, prospective (2016-2018) average operating earnings per share and average operating return on equity goals, and the achievement will be modified (up to +/-20%) based on linear interpolation on our total shareholder return (TSR) relative to 8 members of our Proxy Peer Group, referred to herein as our "PSU Peer Group." These eight companies (Aflac, Hartford Financial Services, Lincoln National, MetLife, Principal Financial, Prudential Financial, Torchmark and Voya Financial) were selected because they are considered to be direct business competitors of Unum (see discussion


 
56
2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

beginning on page 46 for the differences between our Proxy Peer Group and PSU Peer Group). We believe it is appropriate to adjust these awards for relative TSR, since Unum’s individual TSR performance directly affects the value of the equity awards. The table below outlines the three-year performance targets established by the Committee for the PSU grants made in February 2016.
TARGETS FOR PERFORMANCE SHARE UNITS (PSUs) GRANTED IN 2016
Corporate 
Performance Factors
Driver of 
Shareholder Value
Component
Weighting
Threshold
Target
Maximum  
Average 3-year Operating Return on Equity (2016-2018)
Capital Management
Effectiveness
50%
8.08%
10.77%
12.38%
Average 3-year After-Tax Operating 
EPS (2016-2018)
Profitability
50%
$3.04
$4.05
$4.67
Relative Total Shareholder Return
Modifier
Percentile
-20% @
35th
0 @
50th
+20% @
75th
Items Excluded When Determining Company Performance
When pre-establishing the performance measures and weightings for 2016, the Committee determined that certain items not included in the 2016 financial plan would be excluded from the calculation of the company’s performance, for purposes of both the annual and long-term incentive plans, should they occur. These criteria are the same ones that we used in 2015 and the Committee has also approved them for use in the 2017 plans as well. These items are:
Unplanned adjustments resulting from accounting policy changes, legal, tax or regulatory rule or law changes;
The impact of any unplanned acquisitions, divestitures, or block reinsurance transactions;
Unplanned adjustments to the Closed Block of business;
The effect of any unplanned regulatory, legal, or tax settlements;
The effect of unplanned changes to strategic asset allocation;
Unplanned debt issuance, repurchasing or retirement; or stock repurchase or issuance;
The effect of differences between actual currency exchange rates versus exchange rates assumed in the financial plan;
Unplanned fees or assessments, including tax assessments, from new legislation; and
The effect on revenue from unplanned variances from floating rate securities and index-linked securities.
The Committee believes it is appropriate to exclude these items because they: (1) are unusual or infrequent in nature, (2) do not directly reflect company or management performance, or (3) could serve as a disincentive to capital management or other decisions which are in the best interest of the company and shareholders.


2017 PROXY STATEMENT
57
 


COMPENSATION DISCUSSION AND ANALYSIS

Applying these criteria, the Committee adjusted the performance calculations for the impact of the following five items on our 2016 financial results that were not included in the 2016 financial plan from which the targets were initially derived:
The effect of differences between actual stock repurchases and the amount assumed in the financial plan (actual repurchases were slightly higher than planned and the impact was immaterial);
The effect of unplanned debt issuance (favorable conditions in debt markets allowed us to accelerate debt issuance that was planned for the future which was an advantage to shareholders);
The impact of an unplanned reinsurance treaty (this lowered earned premium for Unum US with an immaterial impact on after-tax operating earnings);
The effect of differences between actual foreign currency rates and the exchange rates assumed in the financial plan; and
The effect of the unplanned acquisition of Starmount Life Insurance Company (this increased earned premium and sales for Unum US with an immaterial impact to earnings).
Each year, the Committee undertakes an overall assessment of the results while also maintaining the discretion to make final adjustments. Any adjustments are based on a review of the actual achievement for each performance measure compared to the annual incentive targets listed on page 54, as well as a qualitative assessment of results. For 2016, the Committee made minor adjustments to each business unit’s performance based on a number of qualitative considerations that reduced the aggregate annual incentive payout by approximately 1%. The resulting annual incentive plan achievement levels for 2016 and their comparison to the previous year are shown in the table below.
The achievement levels for 2016 were used in calculations for annual incentive awards described in the "Compensation Decisions" section below.
ANNUAL INCENTIVE PLAN ACHIEVEMENT LEVELS
Plan
2016
2015
 Unum Group
115%
103%
 Unum US
115%
100%
 Unum UK
98%
105%
 Colonial Life
105%
102%
 Investments
109%
105%


 
58
2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

Compensation Decisions
Annual Base Salary
Salaries for our NEOs are established based on their position, skills, experience, responsibility, and performance. Competitiveness of salary levels is assessed annually relative to the approximate median of salaries in the marketplace using the sources noted beginning on page 46 for similar executive positions. Increases may be considered for factors such as changes in responsibilities, individual performance, and/or changes in the competitive marketplace. In early 2016, the Committee approved base salary increases for NEOs as outlined in the following table. For a discussion of 2017 salary adjustments, see "2017 Compensation Decisions" beginning on page 64.
2016 ANNUAL BASE SALARY DECISIONS
Name
2016
2015
% Change
Mr. McKenney
$1,000,000
$975,000
2.6%
Mr. McGarry
600,000
550,000
9.1%
Mr. Simonds
600,000
575,000
4.3%
Ms. Iglesias
495,000
485,000
2.1%
Ms. Farrell
453,000
446,500
1.5%
Setting Incentive Targets
For purposes of determining the amount of annual incentive and long-term incentive awards for our NEOs, the Committee establishes a target amount as a percentage of each executive’s salary, except that the long-term incentive target is set as an absolute dollar amount for the CEO. In establishing each target for 2016 awards, the Committee considered market data from the appropriate peer group as well as each individual’s target relative to other NEOs, given their respective levels of responsibility. In early 2016, the Committee approved annual and long-term incentive target award values for each NEO as outlined in the tables below. 
2016 ANNUAL INCENTIVE TARGET DECISIONS
Name
2016
2015
% Change
Mr. McKenney
175%
175%
– %
Mr. McGarry
100%
100%
– %
Mr. Simonds
90%
90%
– %
Ms. Iglesias
75%
75%
– %
Ms. Farrell
120%
120%
– %


2017 PROXY STATEMENT
59
 


COMPENSATION DISCUSSION AND ANALYSIS

2016 LONG-TERM INCENTIVE TARGET DECISIONS
Name
2016
2015
% Change
Mr. McKenney
$5,250,000
$5,000,000
5.0%
Mr. McGarry
150%
150%
– %
Mr. Simonds
150%
150%
– %
Ms. Iglesias
125%
125%
– %
Ms. Farrell
100%
100%
– %
Annual Incentive Awards
Our annual incentive awards reward performance based on the achievement of both company and individual performance, which the Committee believes aligns compensation with the objectives of shareholders. The Annual Incentive Plan, under which 2016 annual incentive awards were granted, includes:
Eligibility for all non-sales employees to receive an annual incentive;
An Executive Officer Incentive Plan in which our NEOs participate; and
An objective performance threshold of $250 million of statutory after-tax operating earnings and other sources of cash flow available from the company’s insurance and non-insurance subsidiaries for the fiscal performance year that provides funding for incentive payments. This goal must be achieved before participants are eligible to receive an award. If the goal is not achieved, no awards are paid.
The decision making process to determine 2016 annual incentive awards was as follows:
incentiveaward2016.jpg 
(1)
The Committee exercises discretion as to the final percentage considering all performance factors, including, but not limited to, the quality of financial results. For details on adjustments for 2016, see page 57.
(2)
Individual performance may range from 0% to 125%.
Once it was determined that the performance threshold had been met for 2016, specific awards for our NEOs were arrived at by:
Applying the individual annual incentive targets, which had been set in early 2016, to each individual’s base salary;


 
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2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

Calculating company and business unit performance percentages by comparing actual results to the performance targets described beginning on page 52 (the Committee may also take into account other factors, including economic considerations as well as non-financial goals);
Establishing an individual performance percentage (from 0% to 125%) using the individual assessment process described beginning on page 48; and
Multiplying company and business unit performance by individual performance and the NEO’s annual incentive target. The "qualified performance-based compensation" exemption under Section 162(m) of the Code requires that a maximum individual award be established. The maximum award that an individual may receive under the Annual Incentive Plan is $8 million.
The table below sets forth the target incentive and the actual annual incentive awards approved by the Committee to our NEOs for 2016 performance. For a discussion of 2017 annual incentive award targets, see "2017 Compensation Decisions" beginning on page 64.
ANNUAL INCENTIVE PAID IN 2017
(for 2016 performance)
Executive
2016
Incentive
Target
(%)
  
Eligible
Earnings
($)
  
Company
Performance
(%)
  
Individual
Performance
(%)
  
2016 Annual
Incentive Paid
($)
Mr. McKenney(1)
175%
X
994,231
X
115%
X
105%
=
2,100,937
Mr. McGarry(1)
100%
X
588,461
X
115%
X
110%
=
744,404
Mr. Simonds(2)
90%
X
594,231
X
115%
X
110%
=
676,532
Ms. Iglesias(1)
75%
X
492,692
X
115%
X
100%
=
424,946
Ms. Farrell(3)
120%
X
451,500
X
110.5%
X
100%
=
598,689
(1)
Company performance for Mr. McKenney, Mr. McGarry and Ms. Iglesias was weighted 100% based on Unum Group performance.
(2)
Company performance for Mr. Simonds was weighted with 75% based on Unum US and 25% based on Unum Group performance. Unum US achievement was 115% and Unum Group achievement was 115%, resulting in overall achievement of 115%.
(3)
Company performance for Ms. Farrell was weighted with 75% based on Investments and 25% based on Unum Group performance. Investments achievement was 109% and Unum Group achievement was 115%, resulting in overall achievement of 110.5%.
Long-Term Incentive Awards Granted in 2016
Our long-term incentive plan aligns the long-term interests of management and shareholders by tying a substantial portion of executive compensation directly to the company’s stock price. The grants to the NEOs in February 2016 were based on the Committee’s February 2016 assessment of their performance for the prior year.
The mix of awards for each NEO was 50% performance-based restricted stock units (PBRSUs) and 50% performance share units (PSUs). PBRSUs were awarded in 2016 based on the achievement of an after-tax statutory earnings threshold for 2015, as modified by individual achievement factors for 2015. They vest ratably over three years.


2017 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS

PSUs granted in 2016 vest based upon the achievement of three-year (2016-2018) pre-established average operating earnings per share and average operating return on equity goals, modified (up to +/-20%) based on Unum’s relative total shareholder return as described on page 56. Assuming performance above the threshold, PSUs can be paid out at 40% to 180% of target.
All long-term incentive awards in 2016 were granted under the Stock Incentive Plan of 2012. Our long-term incentive award mix is based on a review of peer practices as well as what the Committee believes most appropriately retains and rewards our NEOs and ensures that a significant portion of each executive’s compensation is tied to the increase of our stock price over the long-term.
PBRSUs, which are valued in terms of company stock, do not include any actual stock issued at the time of grant. Instead, company stock is issued only when the grant is settled. During the restricted period, dividend equivalents accrue and vest only when and to the extent that the underlying PBRSUs vest. In addition, there are no shareholder voting rights unless and until the award is settled in shares.
PSUs are notional units that will track the value of our share price over the three-year performance period, and will vest and be settled through the issuance of shares based upon the achievement of predetermined performance metrics. Dividend equivalents accrue during the three-year performance period and will vest only when and to the extent that the underlying PSUs vest.
The decision-making process to determine long-term incentive awards granted in February 2016 was as follows:
 incentiveaward2015.jpg
(1)
Individual performance may range from 0% to 125%.

As outlined in the previous diagram, once it was determined that the performance threshold had been met, the total value of the long-term incentive awards for our NEOs were determined by:
Applying the individual long-term incentive targets, which were set in early 2015 by considering the market data from the appropriate comparator group (as described beginning on page 46) as well as each individual’s target relative to other NEOs, given their respective levels of responsibility, to each individual’s base salary, except that, the long-term incentive target is set as a dollar amount for Mr. McKenney;
Establishing an individual performance percentage (from 0% to 125%) using the individual assessment process described beginning on page 48; and
Multiplying each NEO’s long-term incentive target by his or her individual performance percentage.


 
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2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

Once the long-term incentive award value was determined, it was awarded as described below:
The 2016 long-term incentive award was divided evenly between PBRSUs (50%) and PSUs (50%) for each NEO; and
The PBRSUs vest based on each NEO’s continued service over a three-year period. The PSUs vest based on the achievement of three-year pre-established goals (2016-2018) for average operating return on equity and average operating earnings per share, modified by relative total shareholder return as previously described.
In February 2016, the Committee approved grants of PBRSUs and PSUs for the NEOs as outlined below. For a discussion of 2017 long-term incentive award targets, see "2017 Compensation Decisions" below.
LONG-TERM INCENTIVE GRANTED IN 2016
(for 2015 Performance)
Executive
Long-Term
Incentive Target
  
Individual
Performance
  
2016 Long-Term
Incentive Grant(2)
Mr. McKenney(1)
$5,000,000
X
103%
=
$5,150,000
Mr. McGarry
825,000
X
110%
=
$907,500
Mr. Simonds
862,500
X
110%
=
$948,750
Ms. Iglesias
606,250
X
105%
=
$636,563
Ms. Farrell
446,500
X
100%
=
$446,500
(1)
Mr. McKenney’s target was set as a dollar amount, rather than as a percentage of salary as for the other NEOs.
(2)
The long-term incentive granted in February 2016 was based on individual performance during 2015. The grant date fair value of the long-term incentive grant (as reported in the Summary Compensation Table on page 72) differs due to the valuation of the PSUs based on a Monte Carlo valuation.
Executive
Grant Date
Fair Market Value
Performance Share
Units Granted
(Feb. 2016)
Restricted Stock Units
Granted
(Feb. 2016)
Mr. McKenney
$5,150,022
92,460
92,460
Mr. McGarry
907,520
16,293
16,293
Mr. Simonds
948,738
17,033
17,033
Ms. Iglesias
636,539
11,428
11,428
Ms. Farrell
446,491
8,016
8,016
Vesting of 2014 Performance Share Units (PSUs)
The long-term incentive mix for our NEOs' 2014 awards included 50% in the form of PSUs, which vested based on performance over a three-year performance period that ended on December 31, 2016.
The table below provides an overview of the three-year goals for the 2014 PSU grant as well as their actual achievement levels.


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COMPENSATION DISCUSSION AND ANALYSIS

2014 PERFORMANCE SHARE UNIT (PSU) AWARDS
Corporate Performance Factors
Component
Weighting
Threshold
Target
Maximum  
Actual  
Average 3-year Operating Return on Equity (2014-2016)
50%
8.13%
10.84%
12.46%
11.32%
Average 3-year After-Tax Operating EPS (2014-2016)
50%
$2.83
$3.78
$4.35
$3.69
Relative Total Shareholder Return
Modifier
Percentile
-20% @
35th
0 @
50th
+20% @
75th
At
50th
Based on the above performance, and after taking into account the factors described below, in February 2017, the Committee certified the results for this grant and approved a payout of 105.2%. The business goals were achieved at 105.2%, with relative TSR at the 50th percentile which resulted in no additional modification to the achievement level.
When setting the performance measures and weightings for the 2014 PSU grant, the Committee determined that certain items not included in the financial plan for fiscal years 2014 to 2016 would be excluded from the calculation of the company’s performance, for purposes of the performance share units, should they occur. The list of items is the same list used for our annual incentive plan, the details of which can be found under "Items Excluded When Determining Company Performance," beginning on page 57.
Applying these criteria, the Committee adjusted targets for the impact of the following four items that were not included in the financial plans from which the targets were initially derived:
The effect of differences between actual stock repurchases and the amount assumed in the financial plan;
The effect of differences between actual foreign currency rates and the exchange rates assumed in the financial plan;
The effect of the unplanned acquisition of Starmount Life Insurance Company, National Dental Plan Limited and associated companies; and
The effect of an accounting policy election to account for certain investments in qualified affordable housing projects using the proportional amortization method.
In calculating relative TSR, the PSU grant agreement provided that any company that was a part of the peer group at the beginning of the performance period would be removed from the peer group for the entire period if it had been acquired by another company prior to the end of the performance period. Protective Life was removed from the peer group when calculating relative TSR because it was acquired in 2015 and is no longer a public company.
2017 Compensation Decisions
At its February 2017 meeting, after consideration of company and individual performance during 2016, each executive’s responsibilities, tenure and market data, the Committee made decisions with respect to our NEOs’ base salaries and annual and long-term incentive targets for 2017 as outlined below.


 
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2017 PROXY STATEMENT




COMPENSATION DISCUSSION AND ANALYSIS

2017 ANNUAL BASE SALARY DECISIONS
Name
2017
2016
% Change
Mr. McKenney
$1,000,000
$1,000,000
—%
Mr. McGarry
630,000
600,000
5.0%
Mr. Simonds
615,000
600,000
2.5%
Ms. Iglesias
505,000
495,000
2.0%
Ms. Farrell
460,000
453,000
1.5%
The base salary increases noted above, were approved in recognition of each NEO’s individual performance in 2016 as well as consideration of their comparison to market benchmarks.
Annual and long-term incentive targets were set based on consideration of each NEO’s current target, the approximate median of the appropriate comparator group, and each individual’s target relative to other NEOs given their respective levels of responsibility. 
2017 ANNUAL INCENTIVE TARGET DECISIONS
Name
2017
2016
% Change
Mr. McKenney
175%
175%
—%
Mr. McGarry
100%
100%
—%
Mr. Simonds
90%
90%
—%
Ms. Iglesias
75%
75%
—%
Ms. Farrell
120%
120%
—%
2017 LONG-TERM INCENTIVE TARGET DECISIONS
Name
2017
2016
% Change