Allstate CEO's Pay Falls 11% As Long-Term Bonus Plan Pays Zero
March 09 2011 - 9:44AM
Dow Jones News
Allstate Corp. (ALL) cut compensation for Chief Executive Tom
Wilson by 11% to $9.3 million for 2010 as the insurer paid nothing
under a bonus plan that measures performance over a three-year
period.
The company also missed seven of 12 targets set up to gauge
executive performance last year, and a separate one-year bonus was
less than the target amount set by the compensation committee of
Allstate's board of directors. Still, the one-year bonus rose 12%
from the year-earlier payout as results improved at Allstate's life
insurance operation.
It was the third year in a row that Wilson's one-year bonus pay
was less than the target. Like other insurers, Allstate struggled
during the financial crisis, and has paid out more in claims in
recent years because of rising catastrophe costs. But the company
has also lost customers in its auto insurance business even as
Wilson and other executives have fought to bring in new
drivers.
In 2008, Wilson earned 12% of his one-year target bonus, and he
earned 60% of the target in 2009. Last year, he earned 67% as
Allstate's life insurance operation exceeded all four of its
performance targets.
The company noted in a regulatory filing Wednesday that there
was no payout to senior management under its long-term cash
incentive plan because Allstate failed to meet a three-year
return-on-equity target "due to the impact of 2008 results." But it
also noted that it had paid out under the long term plan in 2008
and 2009 because those years included "strong financial
performance" from before the financial crisis of 2008. Under the
latest calculation, results from 2009 and 2010 weren't enough to
offset 2008.
The value of Wilson's stock and option awards also declined
slightly for 2010. But the compensation committee boosted Wilson's
base salary 3.8% to $1.1 million, effective March 1, 2010.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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