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Table of Contents
Table of Contents
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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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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The Allstate Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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The Allstate Corporation
2775 Sanders Road, Northbrook, IL 60062
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April 11, 2012
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To Our Stockholders,
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The Allstate Board is fully committed to fulfilling its fiduciary obligations to all stockholders and has a history of strong corporate governance. Your objectives and insights are integral to Allstate's success and
therefore of primary importance to the company's leadership. Over the last year Tom Wilson, our chairman, met in person with investors representing about 30% of our outstanding shares, as well as the leading proxy advisory firms, to discuss corporate
governance and executive compensation. The entire board then thoughtfully considered this feedback, evaluated alternatives, and developed a proposed set of changes to our corporate governance and our executive compensation program. These proposed
changes were then further discussed with stockholders and we implemented important modifications in three areas: stockholder ability to act between annual meetings, executive compensation, and board effectiveness.
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STOCKHOLDER ABILITY TO ACT BETWEEN ANNUAL MEETINGS
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Recommending Instituting A Written Consent Right
We are recommending the addition of a stockholder right to act by written consent. This right is structured so that all
stockholders will have the benefit of participating in a fully transparent process that can be initiated by one or a group of investors holding at least 10% of the outstanding shares. This action is responsive to the stockholders' votes at the last
two annual meetings where a stockholder proposal to act by written consent received 67% and 52% of the shares voted in 2010 and 2011, respectively.
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Recommending Lowering The Ownership Threshold For Special Meetings
Last year, we recommended stockholders approve the addition of a right to call special meetings for
stockholders owning 20% or more of the shares outstanding. This proposal received affirmative support from 83% of our outstanding shares. This year, we are recommending that the ownership threshold be lowered from 20% to 10%. This will make this
right consistent with the proposed threshold for stockholder action by written consent.
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EXECUTIVE COMPENSATION
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We made changes to our executive compensation program based on stockholder input and discussions with our independent compensation consultant on recent market trends. The changes are designed to further align pay with
performance. The primary changes are listed below, with greater detail in the
Executive Compensation
section of the proxy statement.
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Reduced Change-in-Control Benefits
We revised our change-in-control arrangements. For senior executives, the new plan eliminates tax gross ups and pension enhancements.
Severance benefits were lowered for senior executives, except the CEO. In addition, beginning in 2012, equity awards will have a "double trigger," which means that they will not vest in the event of a change-in-control, unless also accompanied by a
qualifying termination of employment.
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Raised Performance Standards on Long-Term Equity Awards
We changed the mix of long-term equity awards granted to our senior leadership team. For 2012, long-term equity
awards consisted of 50% performance stock awards and 50% stock options. Previously this mix was 35% restricted stock units that vested over time and 65% stock options.
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Narrowed the Benchmark Compensation Range
We changed the benchmark target used for total direct compensation to the 50
th
percentile of the peer group we
use for compensation purposes. The benchmark had previously been a range between the 50
th
and 75
th
percentiles.
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BOARD EFFECTIVENESS
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Restructured Lead Director Role
We expanded the responsibilities of the lead director and shifted from a model where this responsibility rotated among directors.
H. John Riley, Jr. was elected our lead director based on his leadership skills and extensive experience with Allstate.
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Expanded Board Capabilities
We elected John W. Rowe, chairman and chief executive officer of Exelon, to our board. Mr. Rowe will stand for election with the entire
board for an annual term in May. Mr. Rowe was named the best electric utility CEO in America by Institutional Investor in 2008 and 2009.
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The Allstate board is completely committed to the company's long-term success and representing stockholders' interests. Investor feedback on governance and executive compensation is extremely helpful in enabling us to
achieve these objectives. Thank you for your insights, support, and confidence. We are optimistic about Allstate's strategy and long-term ability to continue to serve America as it has throughout the last 80 years.
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Please join us at the Annual Meeting of Stockholders on Tuesday, May 22, 2012.
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The Allstate Board of Directors
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Table of Contents
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THE ALLSTATE CORPORATION
2775 Sanders Road
Northbrook, Illinois 60062-6127
April 11, 2012
Notice of 2012 Annual Meeting and Proxy Statement
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Dear Stockholder:
Allstate's 2012 annual meeting of stockholders will be held on Tuesday, May 22, 2012, at 11:00 a.m. (CDT) at our offices in Northbrook, Illinois. Your vote on the issues being considered at this meeting is important to our continued
success. This proxy statement contains the information you will need to make an informed decision on the election of directors and five governance proposals.
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Your vote is important. Please vote as soon as possible by telephone, internet, or mail, even if you plan to attend the meeting.
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Sincerely,
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Thomas J. Wilson
Chairman, President and Chief Executive Officer
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Table of Contents
Notice of 2012 Annual Meeting of Stockholders
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When:
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Tuesday, May 22, 2012, at 11:00 a.m. Registration begins at 10:00 a.m.
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Where:
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West Plaza Auditorium
Allstate
3100 Sanders Road
Northbrook, Illinois 60062
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Items of Business:
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1.
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To elect to the Board of Directors the 12 director nominees named in this proxy statement to serve until the 2013 annual meeting.
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2.
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To provide an advisory vote on the compensation of the named executive officers as disclosed in this proxy statement.
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3.
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To approve the proposed amendment to the corporation's certificate of incorporation granting stockholders the right to act by written consent.
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4.
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To approve the proposed amendment to the corporation's certificate of incorporation granting stockholders owning not less than 10% of the outstanding shares the right to call a special meeting of
stockholders.
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5.
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To ratify the appointment of Deloitte & Touche LLP as Allstate's independent registered public accountant for 2012.
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6.
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To consider a stockholder proposal on reporting political contributions, if properly presented.
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In addition, any other business properly presented may be acted upon at the meeting.
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Who Can Vote:
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If you held stock at the close of business on March 23, 2012, you will be entitled to vote at the annual meeting and at any adjournments or postponements of the meeting. You may be asked to present picture identification
and proof of stock ownership. If you hold stock through a bank or broker, you will need to bring your account statement showing ownership as of March 23, 2012.
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Date of Mailing:
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Allstate began mailing its Notice of Internet Availability of Proxy Materials, proxy statement and annual report, and proxy card/voting instruction form to stockholders and to participants in its Allstate 401(k) Savings Plan
on April 11, 2012.
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Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 22, 2012. The Notice of 2012 Annual Meeting, Proxy
Statement, and 2011 Annual Report and the means to vote by internet are available at www.proxyvote.com.
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By Order of the Board,
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Mary J. McGinn
Secretary
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April 11, 2012
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Table of Contents
Table of Contents
Table of Contents
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Proxy and Voting Information
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PROXY STATEMENT
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WHO IS ASKING FOR YOUR VOTE AND WHY
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The annual meeting will be held only if there is a quorum, which means that a majority of the outstanding common stock entitled to vote is represented at the meeting by proxy or in person. To ensure there will be a
quorum, the Allstate Board of Directors asks you to vote before the meeting, which allows your Allstate stock to be represented at the annual meeting by the proxies named on the proxy card/voting instruction form.
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WHO CAN VOTE
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You are entitled to vote if you were a stockholder of record at the close of business on March 23, 2012. On that date, there were XXX,XXX,XXX Allstate common shares outstanding and entitled to vote at the annual
meeting.
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HOW TO VOTE
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If you hold shares in your own name as a registered stockholder, you may vote in person by attending the annual meeting, or you may instruct the proxies how to vote your shares by following the instructions on the proxy
card/voting instruction form.
If you hold shares in street name (that is, through a broker, bank, or other record holder), you should follow the instructions provided by your broker, bank, or other record holder to vote your shares. If you hold shares through the Allstate 401(k)
Savings Plan, see the instructions on page 65.
Before your shares have been voted at the annual meeting by the proxies, you may change or revoke your vote by voting again by telephone, by internet, in writing, or in person at the annual meeting, if you are a registered stockholder.
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CONFIDENTIALITY OF VOTES
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All proxies, ballots, and tabulations that identify the vote of a particular stockholder are confidential, except as necessary to allow the inspector of election to certify the voting results or to meet certain legal
requirements. A representative of American Election Services, LLC will act as the inspector of election and will count the votes. The representative is independent of Allstate and its directors, officers, and employees.
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If you write a comment on your proxy card, voting instruction form, or ballot, it may be provided to our secretary along with your name and address. Your comments will be provided without reference to your vote,
unless the vote is mentioned in your comment or unless disclosure of the vote is necessary to understand your comment. At our request, the distribution agent or the solicitation agent may provide us with periodic status reports on the aggregate vote.
These status reports may include a list of stockholders who have not voted and breakdowns of vote totals by different types of stockholders, as long as we are not able to determine how a particular stockholder voted.
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1
-- The Allstate Corporation
Table of Contents
Providing voting instructions, discretionary voting authority of proxies
You
may instruct the proxies to vote "FOR" or "AGAINST" each proposal, or you may instruct the proxies to "ABSTAIN" from voting. Each share of our common stock outstanding on the record date will be
entitled to one vote on each of the 12 director nominees and one vote on each other proposal. A description of how votes are counted is included with each proposal.
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Proposal
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Board Recommendation
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1.
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Election of directors
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FOR
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2.
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Approve Compensation
advisory vote to approve the executive compensation of the named executive officers. *
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FOR
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3.
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Act by written consent
proposed amendment to the corporation's certificate of incorporation granting stockholders the right to act by written consent.
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FOR
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4.
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Call a special meeting
proposed amendment to the corporation's certificate of incorporation granting stockholders owning not less than 10% of the outstanding shares the
right to call special meetings of stockholders.
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FOR
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5.
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Ratification of auditors
ratification of the appointment of Deloitte & Touche LLP as Allstate's independent registered public accountant for
2012. *
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FOR
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6.
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Stockholder proposal
stockholder proposal on reporting political contributions. *
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AGAINST
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* Advisory/Non-Binding Proposal
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Abstentions
are counted for quorum purposes. If you return a signed proxy card/voting instruction form to allow your shares to be represented at the annual meeting, but do not indicate how your shares
should be voted on one or more proposals listed above, then the proxies will vote your shares as the Board of Directors recommends on those proposals. Other than the proposals listed above, we do not
know of any other matters to be presented at the meeting. If any other matters are properly presented at the meeting, the proxies may vote your shares in accordance with their best judgment.
The Allstate
Corporation --
2
Table of Contents
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Corporate Governance Practices
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PROXY STATEMENT
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Corporate Governance Practices and Code of Ethics
Allstate has a history of strong corporate governance, as governance "best practices" are a critical component to our success in
driving sustained stockholder value. Over the years, our Board of Directors has responded to evolving governance standards by enhancing our practices to best serve the interests of Allstate
stockholders, including:
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Annual election of all directors.
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Majority vote standard in uncontested elections.
Each director must be elected by a majority of votes cast, not a plurality.
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No stockholder rights plan ("poison pill").
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No supermajority voting provisions.
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Stockholders have the right to call a special meeting.
Proposal 4 seeks stockholder approval of a lower ownership threshold of 10% for this right.
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If proposal 3 is approved, stockholders will have the right to act by written consent.
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Independent Board.
Our Board is comprised of all independent directors, except our chief executive officer.
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Independent lead director.
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Independent Board committees.
Each of the audit, compensation and succession, and nominating and governance committees is made up of independent directors. Each standing committee
operates under a written charter that has been approved by the Board.
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Confidential voting.
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Committee authority to retain independent advisors.
Each of the audit, compensation and succession, and nominating and governance committees has the authority to retain independent
advisors; all fees and expenses are paid by Allstate.
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Robust code of ethics.
Allstate is committed to operating its business with honesty and integrity and maintaining the highest level of ethical conduct. These absolute values are embodied
in our
Code of Ethics
and require that every customer, employee, and member of the public be treated accordingly. Allstate's
Code of Ethics
applies to all
employees, including the chief executive officer, the chief financial officer, the controller, and other senior financial and executive officers, as well as the Board of Directors.
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Stock ownership guidelines for senior executives and directors.
Significant requirements strongly link the interests of the Board and management with those of stockholders.
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Corporate Involvement in Public Policy
report published on allstate.com.
The report provides transparency on Allstate initiatives to promote sound public policy in areas such as teen safe driving.
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Stockholder engagement.
Allstate regularly engages with its stockholders to better understand their perspectives.
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You
can learn more about our corporate governance by visiting
www.allstateinvestors.com
, where you will find our
Corporate Governance Guidelines,
each standing committee charter, our
Code of Ethics,
and
Director Independence Standards.
Each of these items also is available in print upon request made to the Office of the Secretary, The Allstate
Corporation, 2775 Sanders Road, Suite A2W, Northbrook, Illinois 60062-6127.
Board Meetings and Committees
The Board held eight meetings during 2011. Currently, the Board has four standing committees: audit, compensation and succession, executive, and
nominating and governance. The following table identifies each standing committee, its members, functions, and number of meetings held during 2011. The Board has determined the members of the audit,
compensation and succession, and nominating and governance committees are independent within the meaning of applicable laws, New York Stock Exchange (NYSE) listing standards, and the
Director Independence
Standards
in effect at the time of determination. Each committee except the executive committee evaluates its performance at the
end of each in-person meeting.
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-- The Allstate Corporation
Table of Contents
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Committee and
Members
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Functions
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Meetings
in 2011
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Committee
Report
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Audit
(1)
F. Duane Ackerman
Robert D. Beyer
Jack M. Greenberg
(2)
Ronald T. LeMay
Judith A. Sprieser*
(2)
Mary Alice Taylor
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Appoints, oversees, and approves
the fees of the independent registered public accountant.
Evaluates the independence of
the independent registered public accountant.
Reviews Allstate's annual
audited and quarterly financial statements.
Recommends to the Board whether
the audited financial statements should be included in Allstate's annual report on Form 10-K.
Reviews Allstate's accounting
and auditing principles and practices affecting the financial statements, including the adequacy of internal controls over financial reporting.
Discusses risk assessment and
risk management processes with management, including the corporation's major financial risk exposures and the steps management has taken to monitor and control them.
Reviews the scope of audits
conducted by the independent registered public accountant and internal auditors.
Oversees Allstate's ethics and
compliance program; periodically reviews and approves its
Code of Ethics
.
Adopts procedures for handling
complaints on accounting, internal accounting controls, and auditing matters.
Has authority to conduct
independent inquiries and retain independent outside counsel and other advisors.
Provides functional oversight of
Allstate's internal audit department.
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Pg. 61
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Compensation
and
Succession
Robert D. Beyer
W. James Farrell*
Jack M. Greenberg
Ronald T. LeMay
Andrea Redmond
Joshua I. Smith
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Assists the Board in
determining the compensation of the chief executive officer and other executive officers.
Has sole authority to retain its
compensation consultant.
Administers our executive
compensation plans. Monitors executive performance toward goals throughout the year; reviews executive compensation program design and executive pay levels annually.
Reviews management succession
plans and executive organizational structure for Allstate and each significant operating subsidiary; recommends nominees for certain officer positions.
Recommends supplemental
retirement benefits and change-in-control arrangements for executive officers to the Board.
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6
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Pg. 35
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Nominating and
Governance
F. Duane Ackerman*
W. James Farrell
Andrea Redmond
H. John Riley, Jr.
Joshua I. Smith
Judith A. Spreiser
Mary Alice Taylor
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Recommends candidates to be
nominated by the Board for election as directors.
Advises the Board on the
standards used in assessing the independence of directors.
Advises the Board on the
standards used in assessing the performance of the chief executive officer.
Reviews the
Corporate Governance Guidelines
and advises the Board on corporate governance issues.
Determines performance criteria
and oversees assessment of the Board's performance.
Administers non-employee
director compensation with Board oversight.
Has authority to retain
independent consultants.
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5
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None
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The Allstate
Corporation --
4
Table of Contents
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Committee and
Members
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Functions
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Meetings
in 2011
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Committee
Report
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Executive
F. Duane Ackerman
W. James Farrell
H. John Riley, Jr.
Judith A. Sprieser
Thomas J. Wilson*
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Has the powers of the Board
to manage Allstate's business affairs to the extent permitted under the bylaws, excluding any powers granted by the Board to any other committee of the Board.
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0
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None
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* Chair
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(1) Separately established in accordance with the requirements of Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
(2) The Board has determined that Ms. Sprieser and Mr. Greenberg are each individually qualified as an audit committee financial expert, as defined in Regulation S-K, Item 407(d)(5) under the Securities Exchange
Act of 1934, and each is independent under the listing standards of the NYSE.
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Board Leadership Structure
Allstate's
Corporate Governance Guidelines
allow the Board the flexibility to allocate the
responsibilities of chairman and of chief executive officer in any way it considers to be in Allstate's best interests. Currently, Thomas J. Wilson is the chairman of the Board as well as chief
executive officer. The Board has determined that Allstate currently is well-served by having these roles performed by Mr. Wilson, who provides unified leadership and direction for
management to execute our strategy and business plans. At other times, such as when
Mr. Wilson was transitioning into the CEO role in 2007, Allstate has split the roles of chairman and chief executive officer between two individuals.
H.
John Riley, Jr. is the Board's independent lead director. As lead director, Mr. Riley:
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Presides at all Board meetings at which the chairman is not present and at all executive sessions.
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Serves as a liaison between the chairman and the independent directors when necessary to provide a supplemental channel of
communication.
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Works with the chairman in developing Board meeting agendas, schedules, and information provided to the Board.
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Participates in the evaluation of the performance of the chief executive officer.
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Participates in the evaluation of the Board's performance.
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Communicates with significant stockholders on matters involving broad corporate policies and practices when appropriate.
Board Role in Risk Oversight
The Board is responsible for the oversight of Allstate's business and management, including risk management. In exercising this responsibility, the
Board regularly reviews strategy; business plans for Allstate's property and casualty business, life insurance and annuity business, and investment portfolio; liquidity and use of capital; and legal,
regulatory, and legislative issues. Twice a year, the Board reviews Allstate's risk management objectives and processes. This includes how management measures, evaluates, and manages exposure to risks
posed by a wide variety of events and conditions, including the capital markets and natural catastrophes. The Board also examines
third-party assessments of these risk management processes, including a comparison with peer organizations, leading industry practices, and emerging trends. The audit committee reviews quarterly
reports on risk management and discusses risk assessment and management processes with Allstate executives, including the chief risk officer. Both the audit committee and full Board monitor whether
Allstate's strategies balance risk and return within a clear set of risk tolerances and whether risk management processes are executed as designed.
Board Role in Management Succession
One of the Board's responsibilities is to oversee the recruitment, development, and retention of executive talent to successfully pursue Allstate's
strategic vision and operating priorities. Management succession is discussed by the Board, in executive session or in committee meetings, as appropriate. As described in our
Corporate Governance Guidelines,
the chief executive officer meets at least annually with the compensation and succession committee and the nominating
and governance committee, either separately or jointly, as appropriate, to discuss succession planning and
5
-- The Allstate Corporation
Table of Contents
management
development for senior executives. Every year, the compensation and succession committee reviews succession plans for senior officers, confers with the chief executive officer about
executives' qualifications for potential senior leadership vacancies, and recommends to the Board officer elections.
In
addition, the chief executive officer advises the nominating and governance committee and the Board about chairman and chief executive officer succession plans under various scenarios, such as
chief executive officer retirement or incapacity. In case of a leadership transition, the nominating and governance committee would recommend candidates to the Board for the roles of chairman and
chief executive officer.
Board Role in Setting Compensation
Our executive compensation program is designed around the central beliefs that compensation should inspire performance that is better than industry
average; a greater percentage of compensation should be at risk for senior executives; and compensation should be aligned with performance and stockholder value. These objectives are balanced with the
goal of attracting and retaining highly talented executives and balancing risk and return. The compensation and succession committee reviews our executive compensation program annually and confers
with its independent compensation consultant on market practices and changes to the design of our executive
compensation program. The compensation and succession committee makes recommendations to the Board regarding the compensation package of our chief executive officer and modifications to existing plans
for executive officers.
The
compensation and succession committee has authority to grant equity awards to eligible employees in accordance with the terms of our 2009 Equity Incentive Plan. In between meetings, the Board has
delegated authority to an equity award committee, consisting of the chief executive officer, to make awards of stock options or restricted stock units, subject to limits, in connection with an
employee's hiring or promotion or recognition of an employee's particular achievement. All awards granted by the equity award committee are reported to the compensation and succession committee at its
next meeting. The equity award committee is not permitted to grant awards to individuals designated as executive officers for purposes of Section 16 of the Securities Exchange Act of 1934 or
covered employees as defined in Section 162(m)(3) of the Internal Revenue Code.
The
compensation and succession committee has sole authority to retain, terminate, and approve the fees of its compensation consultant. In 2011, the committee retained Towers Watson as its independent
compensation consultant. In this role, Towers Watson assessed Allstate's executive compensation design, peer group selection, and relative pay for performance. In addition, Towers Watson provided a
competitive assessment of total direct compensation (base salary and annual and long-term incentives) for senior management positions. Towers Watson also evaluated changes to the executive
compensation program that were proposed by management to better align pay and performance and risk and reward with competitive market levels and practices. In 2011, Towers Watson received $169,000 in
aggregate fees for executive compensation consulting services. Towers Watson representatives participated in five committee meetings in 2011.
In
addition to executive compensation consulting services, Towers Watson provided Allstate with benefits consulting and software license and maintenance services for fees totaling $2,345,000 in 2011.
These fees were primarily incurred under a three year agreement entered into with Watson Wyatt in 2008, prior to its merger with Towers Perrin. The committee reviews a report on services provided to
Allstate by Towers Watson or its affiliates in any given fiscal year for fees that exceed $120,000.
Management Participation in Committee Meetings
Audit Committee.
Our chief executive officer, chief financial officer, chief risk officer, general counsel, secretary, controller, and senior internal audit
officer participate in audit committee meetings. Executive sessions of the committee are scheduled and held throughout the year, including sessions in which the committee meets exclusively with the
independent registered public accountant and the senior internal audit officer.
Nominating and Governance Committee.
Our chief executive officer, general counsel, and secretary participate in nominating and governance committee meetings. The
committee regularly meets in executive session without management present.
Compensation and Succession Committee.
In designing the various elements and amounts of compensation, the compensation and succession committee draws on the
expertise of our chief executive officer and senior human resources officer and confers with our general counsel, secretary, and chief financial officer on matters that fall within their respective
responsibilities. The committee
The Allstate
Corporation --
6
Table of Contents
regularly
meets in executive session without management present.
Our
chief executive officer attends committee meetings and advises on the alignment of our incentive plan performance measures with our overall strategy, appropriate weightings of performance measures
with the responsibilities of each executive, and how the design of our equity incentive awards affects our ability to attract, motivate, and retain highly talented executives. The chief executive
officer provides this advice in the context of our products, business risks, financial results, and stockholder return. The chief executive officer also provides the committee with performance
evaluations of executives who report to him, recommends merit increases for senior officers, and recommends compensation packages for senior executives being hired or promoted.
Our
senior human resources officer attends committee meetings. He provides the committee with internal and external analyses of the basic structure and competitiveness of our compensation program and
operational details on our various compensation and incentive plans, including the design of performance measures for our annual cash incentive plan and the design of our equity awards. Throughout the
year, the senior human resources officer also provides the committee with a detailed review of the estimated and actual results for each performance measure compared to threshold, target, and maximum
ranges, along with the resulting estimated and actual payments to executive officers.
Our
chief financial officer attends meetings to discuss financial results relevant to incentive compensation, other financial measures, or accounting rules. The general counsel is available at
meetings to provide input on the legal and regulatory environment. The secretary attends meetings to respond to questions about corporate governance and to assist in the preparation of minutes.
For
both the chief executive officer and the chief financial officer, committee meeting participation is one of the ways in which they assure themselves that the Compensation Discussion and Analysis
included in this proxy statement is accurate so that they can provide the certification required by the Sarbanes-Oxley Act of 2002.
Board Attendance Policy
Board members are expected to make every effort to attend all meetings of the Board and the committees on which they serve, to actively participate
in discussions, and to attend the annual meeting of stockholders. All directors who stood for election at the 2011 annual meeting of stockholders attended that meeting. Each incumbent director
attended at least 75% of the combined board meetings and meetings of committees of which he or she was a member. Attendance at board and committee meetings during 2011 averaged 98% for directors as a
group.
Communication with the Board
The Board has established a process to facilitate communication by stockholders and other interested parties with directors as a group. Written
communications may be sent by mail or email to the Board. Communications received will be handled as directed by the general counsel. The general counsel reports regularly to the nominating and
governance committee on all correspondence received that, in her opinion, involves functions of the Board or its committees or that she otherwise determines merits Board attention. The communication
process is posted on the Corporate Governance section of allstate.com.
Compensation Committee Interlocks and Insider Participation
During 2011, the compensation and succession committee consisted of Ms. Redmond, and Messrs. Beyer, Farrell, Greenberg, LeMay, Riley,
and Smith. None is a current or former officer or employee of Allstate or any of its subsidiaries. There were no committee interlocks with other companies in 2011 within the meaning of the Securities
and Exchange Commission's proxy rules.
Related Person Transactions
There were no related person transactions identified for 2011. The nominating and governance committee has adopted a written policy on the review,
approval, or ratification of transactions with related persons, which is posted on the Corporate Governance portion of allstate.com. In accordance with the policy, the committee or committee chair
reviews transactions with the corporation in which the amount involved exceeds $120,000
and in which any "related person" had, has, or will have a direct or indirect material interest. In general, "related persons" are directors, executive officers, their immediate family members, and
stockholders beneficially owning five percent or more of our outstanding stock. The committee or chair approves or ratifies only those transactions that are in, or not inconsistent with, the best
interests of the corporation and its stockholders. Transactions are reviewed and approved or ratified by the chair when it is not practicable or desirable to delay review of a transaction until a
committee meeting. The
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-- The Allstate Corporation
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chair
reports any approved transactions to the committee. Annually, the committee reviews any ongoing, previously approved or ratified related person transactions.
Nominee Independence Determinations
The Board has determined that all nominees other than Mr. Wilson are independent according to applicable law, the NYSE listing standards, and
the Board's
Director Independence Standards
. In accordance with the
Director Independence Standards,
the
Board has determined that the nature of the relationships with the corporation that are set forth in Appendix A do not create a conflict of interest that would impair a director's independence.
Nomination Process for Board Election
The nominating and governance committee has responsibility to assess the need for new Board members to address specific requirements or fill a
vacancy, and to recommend candidates to the Board based on the following criteria from our
Corporate Governance Guidelines.
Allstate Board members
should:
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Demonstrate integrity and independent judgment, including the ability to understand, and exercise sound judgment on,
issues related to the corporation's goals.
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Have held positions of leadership.
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Have business or professional skills and experience that will contribute to the effectiveness of the Board and its
committees, taking into consideration the skills and experience of current directors.
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Intend to foster long-term value for the corporation's stockholders.
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Act in the interests of all stockholders rather than any particular stockholder constituency, while understanding and
balancing the concerns of other stakeholders, including agency owners, employees, customers, and communities.
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In the light of their other commitments, including service on other public company boards, be willing and able to devote
the time and effort necessary to serve as an effective director, including preparation for Board and committee meetings.
In
addition, the Board and the committee look for nominees who reflect a diversity of experience and viewpoints. The Board expects each non-employee director to be free of interests or
affiliations that could give rise to a biased approach to directorship responsibilities or a conflict of interest, free of any significant relationship with Allstate that would interfere with the
director's exercise of independent judgment, and to act in a manner consistent with fiduciary duties of loyalty and care. All nominees for election must comply with the applicable requirements of the
corporation's bylaws, which are posted on allstate.com. Furthermore, Allstate executive officers may not serve on boards of other corporations whose executive officers serve on Allstate's Board.
The
table below lists the skills and experiences of our independent directors that are important to achieve Allstate's strategic vision and priorities. A "" in the chart indicates that
director possesses that particular skill or experience. The lack of a "" does not mean the director does not possess that qualification or skill, but rather that the nominating and
governance committee did not consider that skill or experience when evaluating that particular nominee for election.
The Allstate
Corporation --
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The
nominating and governance committee initiates a director search by seeking input from the directors and the chief executive officer. The committee also retains a third-party search firm to
identify potential candidates, reviews potential candidates, initiates contact with preferred candidates, and presents them to the Board for approval. Mr. Rowe, a new director who joined the
board on February 7, 2012, was identified both by a third-party search firm and several of our directors. The invitation to join the Board may be extended by the Board, the committee chair, or
the chairman of the Board. The Board ultimately is responsible for naming nominees for election or appointing nominees for service until election at the next annual meeting.
The
nominating and governance committee will consider candidates recommended by a stockholder in the same manner as all other candidates recommended by other sources. A stockholder may make a director
candidate recommendation at any time of the year by writing to the Office of the Secretary, The Allstate Corporation, 2775 Sanders Road, Suite A2W, Northbrook, Illinois 60062-6127. A
stockholder also may directly nominate someone for election as a director at a stockholders' meeting. Under our bylaws, a stockholder may nominate a candidate at the 2013 annual meeting of
stockholders by providing advance notice to Allstate that is received by the Office of the Secretary no earlier than the close of business on January 22, 2013, and no later than
February 21, 2013. The notice must be sent to the Office of the Secretary, The Allstate Corporation, 2775 Sanders Road, Suite A2W, Northbrook, Illinois 60062-6127 and must meet the
requirements set forth in the corporation's bylaws. A copy of the bylaws is available from the Office of the Secretary upon request or can be accessed on the Corporate Governance portion of
allstate.com.
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Proposal 1 Election of Directors
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PROXY STATEMENT
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Management Proposals
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Proposal 1
Election of Directors
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The
Board recommends 12 nominees for election to the Allstate Board for one-year terms beginning May 2012. This is a talented slate of nominees, both individually and as a team. They bring
a full complement of business and leadership skills to their oversight responsibilities. Half have been public company CEOs and most nominees serve on other public company boards, enabling best
practices from other companies to be adapted to serve Allstate. Their diversity of experience and expertise facilitates thoughtful decision-making on Allstate's Board.
Since
the 2011 annual meeting the Board has undertaken the following changes to Allstate's governance and executive compensation practices:
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Placed a management proposal on the ballot to implement the right to act by written consent. See
Proposal 3 Act by Written Consent
.
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Placed a management proposal on the ballot to lower the ownership threshold for the right to call a special meeting of
stockholders from 20% to 10% of our outstanding shares. See
Proposal 4 Call a Special Meeting
.
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Elected a single lead director, H. John Riley, Jr., with a specific set of duties, which are listed in the
Board Leadership Structure
section.
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Changed the long-term equity incentive mix for senior executives from 65% stock options and 35% restricted
stock units to 50% performance stock awards and 50% stock options.
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Revised our change-in-control arrangements for senior executives. Our new plan eliminates all tax
gross-ups and reduces severance benefits payable upon a qualifying termination following a change-in-control.
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Modified the vesting of equity awards in the event of a change-in-control so that, beginning with
awards granted in 2012, equity awards will be "double-trigger" and will no longer vest immediately upon a change-in-control.
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Changed our benchmark target for total direct compensation to the 50
th
percentile of our peers.
Previously, the range was between the 50
th
and 75
th
percentiles.
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Broadened disclosure on our compensation practices and rationale.
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Agreed with management's decision to release an annual report on Allstate's involvement in the public policy arena in
response to a stockholder proposal last year that received the support of 33% of votes cast.
Each
nominee, other than Mr. Rowe, previously was elected at Allstate's annual meeting of stockholders on May 17, 2011, and has served continuously since then. Mr. Rowe was
elected by the Board effective February 7, 2012. The terms of all directors expire at the annual meeting in May 2012. The Board expects all nominees named in this proxy statement to be
available for election. If any nominee is not available, then the proxies may vote for a substitute. On the following pages, we list the background and reasons for nominating each individual. Current
committee membership is indicated in bold, although some directors changed committee membership during 2011. Unless otherwise indicated, each nominee has served for at least five years in the business
position currently or most recently held.
Each
director must receive the affirmative vote of the majority of the votes cast. In other words, the number of shares voted "FOR" a director must exceed 50% of the votes cast on that director.
Abstentions will not be counted as votes cast and will have no impact on the vote's outcome. Broker non-votes will not be counted as shares entitled to vote on the matter and will have no
impact on the vote's outcome.
The Board recommends that you vote FOR all director nominees listed in this proxy statement.
The Allstate
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F. Duane Ackerman
Age 69
Director since 1999
Independent
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Chairman Emeritus of BellSouth Corporation, a communication services company, from December 2006 until his retirement in April 2007. Mr. Ackerman served as Chairman and Chief Executive Officer of BellSouth from
mid-2005 through 2006, when it was merged into AT&T. He previously served BellSouth as Chairman, President and CEO from 1998 through mid-2005 and as President and CEO from 1997 to 1998. Mr. Ackerman is a past chairman of the National Council
on Competitiveness, as well as a past chair of the National Security Telecommunications Advisory Committee.
Mr. Ackerman brings extensive executive leadership and
management experience to his role as a director from having served as CEO of a publicly traded company for nearly a decade. Moreover, his experience in the highly regulated telecommunications industry gives him insight into how the complex insurance
and financial services regulatory environment impacts Allstate. His telecommunications background is useful in evaluating management's increased use of technology to connect employees, agencies, and customers. In addition, his experience in managing
risk, evaluating financial statements, and supervising the chief financial officer of BellSouth make him a valued member of the audit committee and the executive committee. As chair of the nominating and governance committee, Mr. Ackerman draws
on his experience leading BellSouth, as well as his tenure as a director at both Home Depot and United Parcel Service, in evaluating corporate governance issues.
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Key Areas of Experience:
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Customer service and
innovation
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Technology
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Investment
management
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Corporate governance and
compliance
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Risk management
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Leadership and
management
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Strategy formation
Experience in financial services or
regulated industries
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Executive compensation and
talent management
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Allstate Committee Membership
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Public Board Membership
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Audit
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UPS Corporation
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2007 present
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Executive
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Home Depot
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2007 present
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Nominating and Governance (Chair)
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-- The Allstate Corporation
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Robert D. Beyer
Age 52
Director since 2006
Independent
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Chairman of Chaparal Investments LLC, a private investment firm and holding company that manages a diverse portfolio of operating and financial assets. From 2005 to 2009, Mr. Beyer served as Chief Executive
Officer of The TCW Group, Inc., a global investment management firm. Mr. Beyer previously served as President and Chief Investment Officer from 2000 until 2005 of Trust Company of the West, the principal operating subsidiary of TCW.
Mr. Beyer is a former director of Société Générale Asset Management, S.A. and The TCW Group, Inc.
As the former CEO of TCW and
the leader of its principal operating subsidiary, Mr. Beyer has extensive executive leadership and management experience with investment portfolios comparable in size to Allstate's. While at TCW, he also conceived and developed the firm's risk
management infrastructure, acquiring expertise that the Allstate Board draws on in performing its risk management oversight functions. His experience leading a global investment management firm provides him insight into today's global economy. As a
CEO and as a member of the Kroger board, he oversaw compensation programs, an experience which makes him a valued member of the compensation and succession committee. As a member of the audit committee, he draws on his experience as Chair of Kroger's
Financial Policy Committee, as well as his prior experience in evaluating financial statements and supervising financial and accounting executives. His abilities and service as a director were recognized by his peers in 2008 when he was named an
outstanding director by the Outstanding Director Exchange, a division of the
Financial Times
.
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Key Areas of Experience:
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Investment management
Leadership and management
Corporate governance and compliance
Experience in financial services or
regulated industries
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Accounting and finance
Risk management
Executive compensation and talent management
Strategy formation
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Allstate Committee Membership
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Public Board Membership
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Audit
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The Kroger Company
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1999 present
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Compensation and Succession
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The Allstate
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W. James Farrell
Age 69
Director since 1999
Independent
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From 1996 until his retirement in 2006, Mr. Farrell served as Chairman of Illinois Tool Works Inc., a manufacturer of highly engineered fasteners, components, assemblies, and systems, with operations in 54
countries. He served Illinois Tool Works as Chief Executive Officer from 1995 to 2005. Earlier, he served in various leadership positions at Illinois Tool Works, including a number of general manager and vice president positions.
Mr. Farrell has considerable leadership and management expertise from more than ten years of experience as Chairman and CEO. His knowledge of global operations and economics
gives him keen insight in evaluating the strategies and operating plans of Allstate's business units. His experience leading a large, publicly traded company and his service on the boards of 3M, Abbott, and United Continental give him an in-depth
understanding of compensation programs and executive talent, which is critical in his service as chair of the compensation and succession committee and as a member of the executive committee. His experience with corporate governance issues, including
his prior service as chair of the nominating and governance committee, makes him a valued member of the nominating and governance committee. Mr. Farrell also serves on the boards of a number of civic organizations, including Northwestern
University and United Way of Chicago.
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Key Areas of Experience:
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Corporate governance and
compliance
Risk management
Leadership and management
Experience in financial services or
regulated industries
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Investment management
Strategy formation
Executive compensation and talent management
Customer service and
innovation
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Allstate Committee Membership
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Public Board Membership
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Compensation and Succession (Chair)
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3M Corporation
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2006 present
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Executive
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Abbott Laboratories
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2006 present
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Nominating and Governance
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United Continental Holdings
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2001 present
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13
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Table of Contents
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Jack M. Greenberg
Age 69
Director since 2002
Independent
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Chairman of The Western Union Company, a money transfer service firm, since 2006. Chairman of Innerworkings, Inc., a global provider of print and promotional services, since June 2010. Chairman and Chief Executive
Officer of McDonald's Corporation from 1999 until his retirement in 2002. Mr. Greenberg has also previously served as a director at Abbott Laboratories.
Mr. Greenberg brings extensive executive leadership and management experience to the Board. Mr. Greenberg's experience leading McDonald's Corporation, with its large franchise organization, and serving as Chairman and a board member of
Western Union, with its worldwide independent network, provides valuable perspective in understanding today's global economy and its effect on Allstate and its customers, agencies, and operations across the U.S. and Canada. Mr. Greenberg's
in-depth understanding of consumer-focused businesses is particularly relevant to Allstate. His experience in managing compensation programs and talent makes him a valued member of the compensation and succession committee. As a member of the audit
committee, he draws on his extensive experience in evaluating financial statements and supervising financial and accounting executives as the Chief Financial Officer at McDonald's Corporation and his expertise as an attorney, a certified public
accountant, and a member of the American Institute of Certified Public Accountants.
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Key Areas of Experience:
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Corporate governance and
compliance
Customer service and
innovation
Risk management
Experience in financial services or
regulated industries
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Accounting and finance
Strategy formation
Executive compensation and talent management
Leadership and management
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Allstate Committee Membership
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Public Board Membership
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Audit
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Hasbro, Inc.
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2003 present
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Compensation and Succession
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Innerworkings, Inc.
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2007 present
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Manpower, Inc.
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2003 present
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The Western Union Company
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2006 present
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The Allstate
Corporation --
14
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Ronald T. LeMay
Age 66
Director since 1999
Independent
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Mr. LeMay is President and Managing Director of Openair Equity Partners, LLC, a venture capital firm he formed in 2008 to make early-stage investments in wireless communications companies. Mr. LeMay also has
been Chairman of October Capital since 2000, and Chairman of Razorback Capital since 2006. Both companies are private investment companies. He serves in various board and executive capacities in the portfolio companies of October Capital and
Razorback Capital. Mr. LeMay has been Chief Executive Officer of MachineryLink, Inc. since March 2011. Mr. LeMay has been Chairman of Aircell Corporation since 2006, and served as its Chief Executive Officer from 2009 to 2010. Executive
Chairman of E-Recycling Corporation since 2010. Mr. LeMay previously served as industrial partner of Ripplewood Holdings, LLC, a private equity fund, from 2003 to 2009, and as Executive Chairman and Chief Executive Officer of Last Mile
Connections, Inc. from September 2005 and October 2006, respectively, until August 2009.
Mr. LeMay has broad operational and leadership experience as chairman of
October Capital for more than ten years. His experience as a private equity executive provides insight into investment management strategies. His counsel is helpful in developing operational plans and related change management initiatives.
Mr. LeMay's experience in the telecommunications field provides him with insight on highly regulated industries such as insurance and financial services, as well as the use of new technologies to drive innovation. His financial oversight and
executive compensation experience make him an effective member of both the audit committee and the compensation and succession committee.
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Key Areas of Experience:
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Technology
Risk management
Customer service and innovation
Leadership and management
Experience in financial services or regulated industries
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Investment management
Strategy formation
Executive compensation and talent management
Corporate governance and
compliance
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Allstate Committee Membership
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Public Board Membership
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Audit
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Imation Corporation
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1996 present
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Compensation and Succession
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15
-- The Allstate Corporation
Table of Contents
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Andrea Redmond
Age 56
Director since 2010
Independent
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Independent consultant with more than 20 years of experience providing executive recruiting, succession planning, and talent management services. Previously, Ms. Redmond was managing director and co-head of the
CEO/board services practice at Russell Reynolds Associates Inc., a global executive search firm, and led the firm's insurance practice for more than ten years. Ms. Redmond's civic involvement includes service as a director of Children's
Memorial Hospital, Northwestern Memorial Hospital, and LivingWell Cancer Resource Center.
Ms. Redmond has extensive experience with succession planning and talent
management from conducting numerous assignments to recruit and place chief executive officers in a number of high profile companies across industries, including financial services, technology, transportation, consumer products, and health care. She
also has recruited directors for public and private corporate boards. Ms. Redmond's exposure to business issues across a wide range of industries provides a broad perspective on Allstate's strategic and operational priorities. Her experience
helping companies identify and recruit leaders capable of building high performance organizations also is useful to the Board in evaluating Allstate's leadership, as well as recruiting new executives and directors, and has been valuable in her
service on both the compensation and succession committee and nominating and governance committee.
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Key Areas of Experience:
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Strategy formation
Customer service and innovation
Leadership and management
Experience in financial services or
regulated industries
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Corporate governance and
compliance
Executive compensation and
talent management
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Allstate Committee Membership
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Public Board Membership
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Compensation and Succession
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None
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Nominating and Governance
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The Allstate
Corporation --
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H. John Riley, Jr.
Age 71
Director since 1998
Independent
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Chairman of Cooper Industries, Ltd., a diversified manufacturer of electrical products, tools, and hardware, from 1996 until his retirement in 2006. Mr. Riley previously served Cooper Industries as Chairman and
Chief Executive Officer from 1996 to 2005 and as Chairman, President and CEO from 1996 to 2004.
Mr. Riley has extensive executive leadership and management experience
from nearly a decade of leading Cooper Industries, Ltd., a large publicly traded company. This experience, which is enhanced by his service on the board of Baker Hughes Incorporated as its lead director and as chair of its compensation committee,
serves him well as our independent lead director and as a member of the nominating and governance committee and executive committee. Mr. Riley's background as former head of a worldwide manufacturer is valuable in evaluating how Allstate's
operations and technology connect employees, agencies, and customers. Mr. Riley's service on the Allstate board since 1998, as well as his former leadership of our compensation and succession committee, provides him with keen insight into
Allstate strategies and succession plans and makes him well qualified to serve as our independent lead director.
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Key Areas of Experience:
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Technology
Leadership and management
Strategy formation
Experience in financial services or regulated industries
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Executive compensation and
talent management
Corporate
governance and compliance
Customer
service and innovation
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|
Allstate Committee Membership
|
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|
Public Board Membership
|
|
|
|
|
|
Compensation and Succession
|
|
|
|
Baker Hughes, Inc.
|
|
1997 present
|
|
|
|
|
|
Executive
|
|
|
|
Westlake Chemical Corporation
|
|
2007 present
|
|
|
|
|
|
Nominating and Governance
|
|
|
|
|
|
|
|
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17
-- The Allstate Corporation
Table of Contents
|
|
|
John W. Rowe
Age 66
Director since 2012
Independent
|
|
Chairman and Chief Executive Officer of Exelon Corporation, one of the country's largest electric utilities, since its formation in 2000 through the merger of PECO Energy and the parent of Commonwealth Edison.
Mr. Rowe has held chief executive officer positions at the New England Electric System and Central Maine Power Company, has served as general counsel of Consolidated Rail Corporation, and was a partner in the law firm Isham, Lincoln &
Beale. Mr. Rowe has also previously served as a director at Sunoco, Inc.
As a senior executive in the utility industry, Mr. Rowe has extensive experience
leading in a highly regulated industry, and he understands the challenges confronting Allstate in the complex insurance regulatory system. Through his service as the lead director on the board of Northern Trust Corporation, he has developed insight
into the financial services industry in which Allstate operates. His expertise in strategy formation and execution will be useful to the Board in overseeing Allstate's current strategy to deliver stockholder value.
|
|
|
|
|
|
|
|
Key Areas of Experience:
|
|
|
|
|
Corporate governance and
compliance
Executive compensation and
talent management
Customer service
and innovation
Experience in
financial services or regulated industries
|
|
Leadership and management
Risk management
Strategy formation
|
|
|
|
|
|
|
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|
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|
Allstate Committee Membership
(1)
|
|
|
|
Public Board Membership
|
|
|
|
|
|
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|
|
Exelon Corporation
|
|
2000 present
|
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Northern Trust Corporation
|
|
2002 present
|
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|
SunCoke Energy, Inc.
|
|
2012 present
|
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|
(1) Mr. Rowe was elected to the board on February 7, 2012, and has not been appointed to any committee as of the date of this filing.
|
The Allstate
Corporation --
18
Table of Contents
|
|
|
Joshua I. Smith
Age 71
Director since 1997
Independent
|
|
Chairman and Managing Partner since 1999 of The Coaching Group, a management consulting firm. Previously, he was founder, Chairman and Chief Executive Officer of The MAXIMA Corporation, a consultancy that achieved a
national reputation as one of the top African-American-owned and fastest-growing firms in the United States. Appointed by President George H.W. Bush, he has served as Chairman of the U.S. Commission on Minority Business Development, as a member of
the Executive Committee of the 1990 Economic Summit of Industrialized Nations, and as a director of the John F. Kennedy Center for the Performing Arts. He was a Member of the Board of the Maryland Small Business Development Finance Authority and
Chairman of a special Task Force on Minority Business Reform for the Governor of the State of Maryland. He was also Chairman of the National Urban Coalition and a member of the National Fundraising Campaign Committee of the NAACP.
With more than a decade of experience leading The Coaching Group, Mr. Smith has extensive executive leadership and management experience. In addition, he has considerable
expertise with entrepreneurial enterprises, specifically with small, minority and women-owned businesses, which provides him with insights on managing Allstate's relationships with its agencies. As a member of the nominating and governance committee,
Mr. Smith draws on his experience in evaluating corporate governance issues as a director of three large publicly traded companies. His experience as a coach, advisor, and consultant to chief executive officers gives him insights into effective
executive leadership that make him a valued member of the compensation and succession committee.
|
|
|
|
|
|
|
|
Key Areas of Experience:
|
|
|
|
|
Customer service and
innovation
Corporate governance and
compliance
Experience in financial
services or regulated industries
|
|
Executive compensation and
talent management
Leadership and
management
Strategy
formation
|
|
|
|
|
|
|
|
|
|
|
|
Allstate Committee Membership
|
|
|
|
Public Board Membership
|
|
|
|
|
|
Compensation and Succession
|
|
|
|
Caterpillar, Inc.
|
|
1993 present
|
|
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|
|
|
Nominating and Governance
|
|
|
|
Comprehensive Care Corporation
|
|
2009 present
|
|
|
|
|
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|
|
Federal Express Corporation
|
|
1989 present
|
|
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19
-- The Allstate Corporation
Table of Contents
|
|
|
Judith A. Sprieser
Age 58
Director since 1999
Independent
|
|
Chief Executive Officer of Transora, Inc., a technology software and services company from 2000 to 2005. Previously, Ms. Sprieser served in a number of key leadership roles for the Sara Lee Corporation from 1987
to 2000, including Executive Vice President, Chief Executive Officer of Sara Lee's Food Group, and prior to that as Chief Financial Officer. Ms. Sprieser has also previously served as a director of Adecco SA and USG Corporation.
Ms. Sprieser's leadership of Transora, Inc., a start-up technology software development and services company, provides her with important insights in evaluating Allstate's
business operations and initiatives to drive change and innovation in the insurance and financial services markets. Her considerable experience in evaluating financial statements and supervising financial and accounting executives, which includes
several years of service as chief financial officer of the Sara Lee Corporation, makes her particularly well-suited to serve as chair of the audit committee and as a member of the executive committee. As a member of the nominating and governance
committee, she draws on her extensive experience in evaluating corporate governance issues on the boards of other publicly traded companies. Moreover, her service on the boards of international companies gives her insight into the global economy and
its effect on Allstate's business operations across the U.S. and Canada.
|
|
|
|
|
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|
|
Key Areas of Experience:
|
|
|
|
|
Corporate governance and
compliance
Leadership and management
Strategy formation
Executive compensation and talent
management
|
|
Accounting and finance
Risk management
Experience in financial services or regulated
industries
|
|
|
|
|
|
|
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|
Allstate Committee Membership
|
|
|
|
Public Board Membership
|
|
|
|
|
|
Audit (Chair)
|
|
|
|
Experian plc
|
|
2010 present
|
|
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|
|
|
Executive
|
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|
|
InterContinental Exchange Inc.
|
|
2004 present
|
|
|
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|
|
Nominating and Governance
|
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|
Reckitt Benckiser Group plc
|
|
2003 present
|
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|
Royal Ahold NV
|
|
2006 present
|
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|
The Allstate
Corporation --
20
Table of Contents
|
|
|
Mary Alice Taylor
Age 62
Director since 2000
Independent
|
|
Mrs. Taylor is an active independent business executive with extensive experience in senior executive positions with Fortune 100 companies. Before her retirement in 2000, she served as Chairman and Chief Executive
Officer of Webvan Group, Inc. and as Chairman and Chief Executive Officer of HomeGrocer.com. Earlier, she was Corporate Executive Vice President of Citicorp and Senior Vice President at FedEx Corporation. Mrs. Taylor has served on several
major public company boards. Currently, she sits on the board of Blue Nile, Inc., where she has been lead independent director since 2004, chairperson of its nominating and governance committee, and a member of its audit committee.
Allstate benefits from Mrs. Taylor's experience in top-level executive positions, including roles in technology, finance, operations, and distribution logistics at large publicly
traded companies such as Citigroup and FedEx Corporation. Furthermore, Mrs. Taylor's supervisory experience in financial management roles makes her an effective member of the audit committee. As a member of the nominating and governance
committee, Ms. Taylor draws on her experience in evaluating corporate governance issues from her years working as an executive and serving on the boards of large publicly traded companies.
|
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|
|
Key Areas of Experience:
|
|
|
|
|
Technology
Strategy formation
Leadership and management
Experience in financial services or regulated industries
|
|
Executive compensation and
talent management
Risk management
Corporate governance and
compliance
|
|
|
|
|
|
|
|
|
|
|
|
Allstate Committee Membership
|
|
|
|
Public Board Membership
|
|
|
|
|
|
Audit
|
|
|
|
Blue Nile, Inc.
|
|
1999 present
|
|
|
|
|
|
Nominating and Governance
|
|
|
|
|
|
|
|
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|
21
-- The Allstate Corporation
Table of Contents
|
|
|
Thomas J. Wilson
Age 54
Director since 2006
Not Independent Management
|
|
Chairman since May 2008 and President and Chief Executive Officer of Allstate since January 2007. Mr. Wilson previously served as President and Chief Operating Officer (2005 to 2007), President of Allstate Protection
(2002 to 2006), and as Chairman and President of Allstate Financial (1999 to 2002). He joined Allstate in 1995 from Sears, Roebuck and Co., where he was Vice President of strategy and analysis.
Mr. Wilson's 17-year career with Allstate, culminating in his appointment as Chairman, President and Chief Executive Officer, is one in which he has been entrusted with a number of key
leadership roles throughout the enterprise. Through these roles, he has developed a thorough and in-depth understanding of Allstate's business, including its employees, agencies, products, investments, customers, and investors. Operating profits grew
rapidly during his leadership of Allstate Financial from 1999 to 2002. Allstate Protection grew auto market share and substantially increased underwriting income under Mr. Wilson's leadership from 2002 through 2006. In 2007, as president and
chief executive officer, he led the creation and implementation of a risk and return optimization program which helped Allstate weather the financial market crisis which began in 2008. He also assembled and leads the senior leadership team.
Mr. Wilson also actively represents Allstate in the industry and community. He holds leadership positions in leading business organizations, including The Financial Services
Roundtable (Chairman), the U.S. Chamber of Commerce (Executive Committee), and the Property-Casualty CEO Roundtable (Chairman). His civic involvement includes The Commercial Club of Chicago (Executive Committee), and board memberships at Rush
University Medical Center, the Museum of Science and Industry, and Catalyst (a nonprofit organization working to advance women in business).
|
|
|
|
|
|
|
|
Key Areas of Experience:
|
|
|
|
|
Leadership and management
Strategy formation
Marketing, innovation, and customer service
Experience in financial services or
regulated industries
|
|
Executive compensation and
talent management
Risk management
Accounting and finance
Investment management
|
|
|
|
|
|
|
|
|
|
|
|
Allstate Committee Membership
|
|
|
|
Public Board Membership
|
|
|
|
|
|
Executive (Chair)
|
|
|
|
None
|
|
|
|
|
|
The Allstate
Corporation --
22
Table of Contents
|
|
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Proposal 2 Approve Compensation
|
|
PROXY STATEMENT
|
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|
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|
|
Proposal 2
Advisory Vote to Approve the Executive Compensation of the Named Executive Officers
|
Last
year, you voted on how frequently we should have an advisory vote on executive compensation, typically known as a "say-on-pay" vote. In accordance with those voting
results, we will conduct a say-on-pay vote every year at the annual meeting. A say-on-pay vote is required by section 14A of the Securities
Exchange Act. Although the say-on-pay vote is non-binding, the Board and the compensation and succession committee will consider the voting results as part of its
annual evaluation of our executive compensation program.
You
may vote to approve or not approve the following advisory resolution on the executive compensation of the named executive officers.
RESOLVED,
on an advisory basis, the stockholders of The Allstate Corporation approve the compensation of the named executive officers, as disclosed pursuant to the compensation disclosure rules of the
Securities and Exchange Commission, including the Compensation Discussion and Analysis and accompanying tables and narrative on pages 23-53 of the Notice of 2012 Annual Meeting and
Proxy Statement.
To
be approved, a majority of shares present in person or represented by proxy at the meeting and entitled to vote on the proposal must be voted "FOR." Abstentions will be counted as shares present at
the meeting and will have the effect of a vote against the proposal. Broker non-votes will not be counted as shares entitled to vote on the matter and will have no impact on the vote's
outcome.
The Board of Directors recommends that you vote FOR the resolution to approve the compensation of the named executive officers.
Please read the following
Executive Compensation
section for information necessary to inform your vote on this proposal.
Executive Compensation
Compensation Discussion and Analysis
Named Executives
Our Compensation Discussion and Analysis describes Allstate's executive compensation program, including total 2011 compensation for our named
executives, who are listed below with titles as of December 31, 2011:
-
-
Thomas J. Wilson Chairman, President and Chief Executive Officer (CEO)
-
-
Don Civgin Executive Vice President and Chief Financial Officer (CFO)
-
-
Judith P. Greffin Executive Vice President and Chief Investment Officer of Allstate Insurance Company
-
-
Suren Gupta Executive Vice President Technology & Operations of Allstate
Insurance Company
-
-
Matthew E. Winter Senior Executive Vice President, Insurance Operations, and President and Chief
Executive Officer, Allstate Financial
-
-
Joseph P. Lacher, Jr. Former President, Allstate Protection
23
-- The Allstate Corporation
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Compensation
|
|
PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
2011 Say on Pay Vote Results
Stockholders approved the "say-on-pay" resolution last year with 57% of the votes cast in favor. Over the last year Tom
Wilson, our chairman, met face-to-face with stockholders representing 30% of our outstanding stock, as well as with several proxy advisory firms, to gather additional feedback
on executive compensation. We met with our stockholders throughout the year to obtain additional insight on compensation changes under consideration based on stockholder comments and current market
practices. Those of our stockholders who felt changes to our compensation program were warranted supported the program changes we presented. We summarize the results of these discussions in the table
below, noting differing feedback where our stockholders were not in consensus. The compensation and succession committee (Committee) considered the results of the stockholder vote, investor input, and
current market practices when designing the compensation program for 2012.
|
|
|
|
|
Aspect of
Compensation
Program
|
|
Feedback
|
|
Compensation Program Changes for 2012
|
|
Benchmarking Target
|
|
Benchmarking target should not be above the 50
th
percentile of peer group.
|
|
We now use the 50
th
percentile as our benchmark for target compensation, replacing the former range of 50
th
to 75
th
percentiles.
|
|
Base Salary
|
|
No specific concerns noted.
|
|
|
|
Annual Incentive Awards
|
|
Proxy statement should disclose the threshold and maximum goals for the annual incentive program.
|
|
Page 30 lists threshold, target, and maximum for the three performance measures for the annual incentive program.
|
|
Long-term Equity Incentives
|
|
Some stockholders believe that long-term equity incentives should be expanded beyond the impact of stock price changes on stock option valuations.
Other stockholders said that the use of stock options was performance based compensation given the direct tie to stock price improvement.
|
|
Performance stock awards tied to achievement of performance measures were awarded instead of time-based restricted stock units beginning in 2012. The mix of long-term incentives changed from 35% restricted stock units
and 65% stock options to 50% performance stock awards and 50% stock options.
|
|
Change-in-Control Agreements
|
|
Some stockholders said that excise tax gross-ups should be eliminated in all instances, not just in new arrangements.
Other stockholders said
reducing benefits and eliminating excise tax gross-ups could disincentivize executives from pursuing a potentially valuable change-in-control.
|
|
A new change-in-control plan that eliminated excise tax gross-ups and reduced severance benefits payable upon a qualifying termination following a change-in-control was implemented in 2011. In addition, beginning in 2012,
equity awards have a "double-trigger;" that is they will not accelerate in the event of a change-in-control unless also accompanied by a qualifying termination of employment. See page 34 for more information.
|
|
Stock Ownership Guidelines
|
|
|
|
We adjusted stock ownership guidelines to accommodate the shift to performance stock awards beginning in 2012. We also implemented an additional requirement that 75% of net after-tax shares be retained until an executive
meets the stock ownership guideline. See page 34 for more information.
|
|
The Allstate
Corporation --
24
Table of Contents
The
impact of some of these changes will not be reflected until 2012 executive compensation is reported in our 2013 proxy statement because many of the decisions summarized above were made after the
2011 advisory vote on executive compensation was conducted and after the 2011 executive compensation program had been developed and implemented.
Elements of 2011 Executive Compensation Program
As described above, we have made changes to our executive compensation program for 2012. The following table lists the elements of target direct
compensation for our 2011 executive compensation program. The design balances fixed and variable compensation elements and provides alignment with both short and long-term business goals
through annual and long-term incentives. Our incentives are designed to drive overall corporate performance, specific business unit strategies, and individual performance using operational
measures that we correlate to stockholder value and align with our strategic vision and operating priorities.
|
|
|
|
|
|
|
|
|
|
|
|
|
Element
|
|
Key Characteristics
|
|
Why We Pay This
Element
|
|
How We Determine
Amount
|
|
2011 Decisions
|
|
|
|
Fixed
|
|
Base salary
|
|
Fixed compensation component payable in cash. Reviewed annually and adjusted when appropriate.
|
|
Provide a base level of competitive cash compensation for executive talent.
|
|
Experience, job scope, market practice, individual performance.
|
|
Four of our six named executives received a salary increase in 2011 see page 31.
|
|
|
|
Annual incentive awards
|
|
Variable compensation component payable in cash based on performance against annually established goals and assessment of individual performance.
|
|
Motivate and reward executives for performance on key strategic, operational, and financial measures over the year.
|
|
Company performance on three measures:
Adjusted underlying operating income
Book value per share
Growth in policies in multi-category households
Individual contribution to performance.
|
|
Strong adjusted underlying operating income and an improvement in book value per share resulted in funding at 102.4% of target. Threshold performance was not achieved for multi-category households as management actions to
improve returns in the homeowners business negatively impacted this measure. See page 30.
|
|
|
|
Variable
|
|
Restricted Stock Units
|
|
RSUs vest over four years; 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversary dates.
|
|
Coupled with stock options, align the interests of executives with long-term shareholder value and retain executive talent.
|
|
Job scope, market practice, individual performance.
|
|
Eliminated usage of time vested RSUs in favor of performance stock awards beginning with 2012 awards.
|
|
|
|
|
|
Stock Options
|
|
Nonqualified stock options that expire in ten years and become exercisable over four years; 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversary dates.
|
|
Coupled with RSUs, align the interests of executives with long-term shareholder value and retain executive talent.
|
|
Job scope, market practice, individual performance.
|
|
Beginning with the 2012 awards, stock options will make up 50% of the equity awards rather than the 65% for 2011, reflecting a move to balance the overall long-term equity incentives between stock options and performance
stock awards. Vesting of stock options in a change-in-control was modified to "double-trigger" vesting.
|
|
25
-- The Allstate Corporation
Table of Contents
Pay for Performance
Our compensation program is designed to deliver compensation in accordance with corporate, business unit, and individual performance. A significant
percentage of each named executive's target total direct compensation is "pay at risk" through long-term equity awards and annual incentive awards that are linked to actual performance.
The mix of compensation for 2011 for our CEO and the average of our other named executives, excluding Mr. Lacher, is shown in the charts below.
|
|
|
Mr. Wilson
|
|
Average of Other Named Executives
|
|
|
|
The
table below summarizes the compensation that Mr. Wilson received in 2011. The table does not show the grant date fair value of equity awards granted in 2011, which is shown in the
Summary Compensation
Table
, but instead shows the value of any stock options that were exercised and restricted stock units that vested in 2011. This
table is intended to supplement the information in the
Summary Compensation Table
.
Supplemental Table of CEO Compensation Realized in 2011
|
|
|
|
|
|
|
|
|
Compensation Element
|
|
Target
Compensation
|
|
Total Realized
|
|
Performance Results that Produced the
Compensation
|
|
Base salary
|
|
|
$1,100,000
|
|
|
$1,100,000
|
|
The Committee did not increase Mr. Wilson's base salary in 2011.
|
|
Annual Incentive Award
|
|
|
$2,200,000
|
|
|
$2,252,800
|
|
Strong adjusted underlying operating income and an improvement in book value per share resulted in funding at 102.4% of target. Threshold performance was not achieved for the growth in policies in
multi-category households measure as management actions to improve returns in the homeowners business negatively impacted the measure.
|
|
Total Cash
|
|
|
$3,300,000
|
|
|
$3,352,800
|
|
|
|
Stock Options
|
|
|
$0
|
|
|
$0
|
|
Mr. Wilson did not exercise any stock options in 2011.
|
|
Restricted Stock Units
|
|
|
$1,393,242
|
|
|
$825,335
|
|
Vesting of 22,385 restricted stock units granted in 2007. The amount in the target column is the grant date fair value of that award while the total realized represents the actual amount delivered on the
vesting date, including dividends that were paid in years 2007 through 2010.
|
|
Total
|
|
|
$4,693,242
|
|
|
$4,178,135
|
|
|
|
The
chart below demonstrates the differences between the targeted and realized compensation amounts for the CEO for 2009, 2010, and 2011. The chart below includes the same compensation elements as the
table above and also includes,
The Allstate
Corporation --
26
Table of Contents
for
2009 and 2010, target and realized values for the long-term cash incentive plan that has since been discontinued. The chart below utilizes the same approach as the table above for
valuing equity awards. For restricted stock units, the chart includes the value realized upon the vesting of restricted stock units, including any dividends paid, in the realized amount and the
corresponding grant date fair value of the same award in the target amount. The chart below does not contain any compensation realized upon the exercise of stock options since Mr. Wilson did
not exercise any stock options during this time.
Target Compensation vs. Realized
Compensation for the CEO
Compensation Practices
The Committee monitors performance toward goals throughout the year and reviews executive compensation program design and executive pay levels
annually. As part of that evaluation, independent compensation consultant Towers Watson provided executive compensation data, information on current market practices, and alternatives to consider when
determining compensation for our named executives. The Committee benchmarked our executive compensation program design, executive pay, and performance against a group of peer insurance companies that
are publicly traded and comparable to Allstate in product offerings, market segment, annual revenues, assets, and market value. The Committee believes Allstate competes against these companies for
executive talent and stockholder investment. Towers Watson recommended no modifications to our peer group for 2011.
Peer Insurance Companies
ACE Ltd.
AFLAC Inc.
The Chubb Corporation
The Hartford Financial Services Group, Inc.
Lincoln National Corporation
Manulife Financial Corporation
MetLife Inc.
The Progressive Corporation
Prudential Financial, Inc.
The Travelers Companies, Inc.
In
its executive pay discussions, the Committee also considered compensation information from S&P 100 companies with $15 billion to $60 billion in fiscal 2010 revenue. We compete
with these publicly traded companies for executive talent. If compensation data was unavailable for certain executive positions, the Committee considered compensation surveys that provided information
on companies of broadly similar size and business mix as Allstate, as well as companies with a broader market context.
27
-- The Allstate Corporation
Table of Contents
The
Committee uses the 50
th
percentile of our peer group as a guideline in setting the target total direct compensation of our named executives. Within the guideline, the
Committee balances the various elements of compensation based on individual performance, job scope and responsibilities, experience, and market practices.
Mr. Wilson's
compensation is evaluated by the independent compensation consultant in comparison to our peer group. In 2011, this analysis indicated that Mr. Wilson's target direct
compensation was substantially below our benchmark guideline of the 50
th
percentile of our peer group.
Executive salaries are set by the Board based on the Committee's recommendations. In recommending executive base salary levels, the Committee uses
the 50
th
percentile of our peer insurance companies as a guideline, which allows Allstate to compete effectively for executive talent. Annual merit increases for the named
executives other than the CEO are based on evaluations of their performance by the CEO, Committee, and Board, using the average enterprise-wide merit increase as a guideline. An annual
merit increase for the CEO is based on an evaluation of his performance and market conditions by the Committee and the Board.
In 2011 executives could earn an annual cash incentive award based on Allstate's achievement of performance measures during the year and assessments
of individual performance.
In
order to qualify annual incentive awards paid to our named executives as deductible performance-based compensation under section 162(m) of the Internal Revenue Code, the aggregate annual
incentive awards earned by the named executives, except for the CFO, cannot exceed a pool equal to 1.0% of Adjusted Underlying Operating Income (defined on page 52). As CFO, Mr. Civgin
is not covered by section 162(m) of the Internal Revenue Code. Therefore, Mr. Civgin's annual incentive award is not subject to the Adjusted Underlying Operating Income pool. For the
other named executives, the maximum award that could be earned was a given percentage of the Adjusted Underlying Operating Income pool (but in no event greater than the $8.5 million maximum set
forth in the Annual Executive Incentive Plan). The CEO can earn up to 45% of the pool, while the next two highest-paid named executives can earn up to 20% each, and the third
highest-paid can earn up to 15% of the pool. These limits established the maximum annual cash incentive awards that could be paid while preserving deductibility under
section 162(m). The Committee retained complete discretion to pay less than these maximum amounts, with actual awards based on the named executive's target annual incentive award opportunity
and the achievement of performance measures and assessments of individual performance as described below.
We grant equity awards to executives based on scope of responsibility, consistent with our philosophy that a significant amount of executive
compensation should be in the form of equity and that a greater percentage of compensation should be tied to performance for executives who bear higher levels of responsibility for Allstate's
performance. Additionally, from time to time, equity awards are also granted to attract new executives. The Committee annually reviews the mix of equity incentives provided to the named executives.
Since 2009, the mix has consisted of 65% stock options and 35% restricted stock units, because we believe stock options are a form of performance-based incentive compensation, requiring growth in the
stock price to deliver any value to an executive. The restricted stock units provide alignment with stockholder interests along with an effective retention incentive. As noted above, beginning with
awards made in 2012, the mix of equity incentives will change to 50% performance stock awards and 50% stock options.
Typically, the Committee approves grants of equity awards on an annual basis during a meeting in the first quarter, after we announce fourth quarter
and full-year results. The timing allows the Committee to align direct compensation elements with our performance and business goals. Throughout the year, the Committee grants equity
incentive awards to newly hired or promoted executives, and in recognition of outstanding achievements.
Under
authority delegated by the Board and Committee, equity incentive awards to employees other than executive officers also may be granted by an equity award committee, which currently consists of
the CEO. The Committee receives a list of equity awards granted by the equity award committee at each regularly scheduled meeting. The equity award committee may grant restricted stock units and stock
options to newly hired
The Allstate
Corporation --
28
Table of Contents
and
promoted executives and in recognition of outstanding achievements. The grant date for awards to newly hired or promoted executives in 2011 was fixed as the first business day of a month following
the later of committee action or the date of hire or promotion.
Performance Measures for 2011
Allstate's shared vision is to meet the protection and retirement needs of consumers. Our strategy is to offer competitively differentiated products
and services designed to meet the unique needs of each distinct customer segment. In the fourth quarter of 2011, we completed the acquisition of Esurance and Answer Financial, which positions us as
the only insurer to serve all customer segments with unique value propositions based on whether they are brand-sensitive or brand-neutral, want an agent's advice, or prefer to do their own research on
the Internet.
Our
unique strategy
In
2011, we delivered on our strategy to improve overall returns and offer unique products for different customer segments.
Corporate
net income for 2011 was $788 million, or $1.51 per diluted share, compared to $928 million in 2010. The decrease was primarily due to higher catastrophe losses at Allstate
Protection, partially offset by higher net income from Allstate Financial.
Allstate
Protection did make significant progress on its strategy to maintain auto profitability and improve homeowners returns excluding catastrophes. Actions taken to improve homeowners
profitability as well as auto profitability in Florida and New York did reduce Allstate brand policies in force, but were necessary to protect stockholder value. Customer relationships were broadened
through increased life insurance sales and Good Hands
SM
Roadside Assistance.
Allstate
Financial's 2011 performance reflected ongoing progress on its strategy to improve overall business returns while shifting the focus from spread-based products to underwritten products. Net
income for 2011 was $586 million compared to $58 million for 2010.
Allstate
Investments continued to apply a proactive approach to risk and return optimization throughout 2011, focusing on income and delivering solid total returns. Total portfolio yields were stable
in 2011 despite a lower interest rate environment, reflecting yield enhancement actions, favorable limited partnership distributions and equity dividends.
For
2011 annual incentive awards, the Committee used a single enterprise-wide funding program based on three equally weighted performance measures. These measures are consistent with
overall shareholder value creation, growth, and profitability, and encouraged success and collaboration across business units. The three measures also align with Allstate's strategy and operating
priorities for 2011 related to improving overall returns, growing our business profitably, and broadening customer relationships. The three measures are shown in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 Annual Cash Incentive Award Performance Measures
|
|
|
|
Measure
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual Results
|
|
|
|
Book Value per Share
|
|
|
$31.50
|
|
|
$37.40
|
|
|
$40.75
|
|
|
$36.41
|
|
|
91.6
|
%
|
|
|
Adjusted Underlying Operating Income
(in millions)
|
|
|
$2,700
|
|
|
$2,925
|
|
|
$3,300
|
|
|
$3,214
|
|
|
215.6
|
%
|
|
|
Growth in Policies in Multi-Category Households
|
|
|
0
|
|
|
50,000
|
|
|
200,000
|
|
|
-36,232
|
|
|
0
|
%
|
|
|
Payout*
|
|
|
50
|
%
|
|
100
|
%
|
|
250
|
%
|
|
102.4% payout
|
|
|
|
-
*
-
Actual
performance below threshold results in a 0% payout.
The
ranges of performance for Book Value Per Share and Adjusted Underlying Operating Income were developed through statistical modeling and adjusted to reflect strategic priorities. Our models
measured the variability of actual results so that the measures required superior performance to achieve maximum levels. The performance
29
-- The Allstate Corporation
Table of Contents
ranges
were then calibrated against management expectations around business operations, risks and prospects, plans and budgets as well as industry and market trends.
The
range of performance for the Growth in Policies in Multi-Category Households reflects our strategic priority to grow the number of our product lines represented in customer households. The
threshold for this measure was aggressively set at zero despite the fact that actual results were a negative 200,000 in 2010. The focus on improving returns in the homeowners line made this goal
unattainable despite dramatic improvements in geographies not burdened by this conflicting objective.
In
calculating the overall funding of the plan, our achievement with respect to each performance measure was expressed as a percentage of the target goal, with interpolation applied between the
threshold and target goals and between the target and maximum goals. The overall funding pool was calculated using the aggregate base salaries of all participants in the plan, as adjusted by any merit
and promotional increases granted during the year on a prorated basis. The overall funding pool is the sum of the amounts as calculated below and the pool was utilized in a zero sum scheme.
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate salaries**
|
|
×
|
|
Target award opportunity as a percentage of salary**
|
|
×
|
|
Actual performance interpolated relative to threshold and target on a range of 50% to 100% and relative to target and maximum on a range of 100% to 250%*
|
|
×
|
|
Weighting***
|
-
*
-
Actual
performance below threshold results in 0%
-
**
-
Base
salaries, as adjusted by any merit and promotional increases granted during the year on a prorated basis.
-
***
-
All
three measures were equally weighted, so that collectively their weights added to 100%.
The Committee approved the annual incentive award performance measures and the threshold, target, and maximum ranges in the first quarter of 2011. After the end
of the year, the Committee reviewed the extent to which we had achieved the various performance measures, evaluated each named executive's individual performance, and approved the actual amount of all
cash incentive awards for our executive officers including the named executives. We paid the cash incentive awards in March 2012.
Compensation Decisions for 2011
Mr. Wilson
As stated in its charter, one of the Committee's most important responsibilities is to recommend the CEO's compensation to the Board. The Committee
establishes the goals against which the CEO's performance for the year is evaluated and, in conjunction with the nominating and governance committee, evaluates the CEO's performance toward these
goals. When reviewing performance relative to these goals, the Board discusses the Committee's recommendations in executive session, without the CEO present. The Committee fulfills its oversight
responsibilities and provides meaningful recommendations to the Board by analyzing competitive compensation data provided by its independent executive compensation consultant and company performance
data provided by senior management. The Committee reviews the various elements of the CEO's compensation in the context of his total compensation package, including salary, annual cash incentive
awards, and long-term incentive awards, as well as the value of Allstate stock holdings, and then presents its recommendations to the Board within this total compensation framework.
Mr. Wilson's
total compensation and the amount of each compensation element are driven by the design of our compensation plans, his years of experience, the scope of his duties, including his
responsibilities for Allstate's overall strategic direction, performance, and operations, and the Committee's analysis of peer company CEO compensation and overall industry CEO compensation practices.
Because of Mr. Wilson's leadership responsibilities, experience, and ultimate accountability for company performance, the Committee set a higher level of target total direct compensation than
for other executive officers.
-
-
Salary.
In 2011, the Committee
did not adjust Mr. Wilson's annual base salary of $1,100,000, which was effective in March 2010.
-
-
Incentive Targets.
Since
Mr. Wilson's total target direct compensation was substantially below the guideline of the 50
th
percentile of our peer group, the Committee approved an increase to his
annual incentive award opportunity for 2011 from 150% to 200% of base salary. The Committee did not adjust the target equity
The Allstate
Corporation --
30
Table of Contents
-
-
Annual Incentive
Award.
-
-
Under Mr. Wilson's leadership, in 2011 Allstate delivered on its strategy to improve overall returns and offer
unique products for different customer segments. We completed the acquisition of Esurance and Answer Financial, which positions us as the only insurer to serve customers in each distinct consumer
segment.
-
-
Allstate Financial performance reflected ongoing progress on its strategy to improve overall business returns while
shifting the mix of business from spread based products to underwritten products.
-
-
Allstate Investments continued to apply a proactive approach to risk and return optimization throughout 2011, focusing on
income and delivering solid returns.
-
-
The Committee approved an annual cash incentive award of $2,252,800 for Mr. Wilson based on its assessment of his
performance in improving overall returns.
-
-
Equity Incentive Awards.
Based on
the Committee's evaluation of Mr. Wilson's performance during 2010, the Committee granted him equity awards with a grant date fair value of $6,600,006 reflecting his target equity incentive
award opportunity.
-
-
Target Total Direct
Compensation.
The Committee continues to review Mr. Wilson's target total direct compensation against
the benchmark guideline of the 50th percentile of our peers. Mr. Wilson's salary, annual cash incentive target of 200% of salary and long-term equity incentive target of 600%
of salary places his target total direct compensation substantially below the 50
th
percentile of our peer group.
Other Named Executives
After year-end, Mr. Wilson evaluated the performance and contributions of each member of his senior leadership team, including
each other named executive. Based on his review, Mr. Wilson recommended specific adjustments to salary and incentive targets as well as actual incentive awards. The recommendations were
considered and approved by the Committee.
Mr. Civgin.
-
-
Salary.
The Committee approved an
increase from $565,000, to $635,000, effective February 27, 2011, based on a combination of Mr. Civgin's individual performance in 2010 and salary market positioning relative to peers.
-
-
Incentive Targets.
To better align
the mix of variable compensation elements with market for 2011, the Committee approved an increase in the target annual incentive award opportunity for Mr. Civgin from 100% to 110% of salary
offset by a decrease in his target equity incentive award opportunity from 310% to 300% of salary.
-
-
Annual Incentive
Award.
Mr. Civgin demonstrated strong leadership in the acquisition of Esurance and Answer Financial
in 2011. Under Mr. Civgin's leadership Allstate continued to demonstrate excellent capital management results and continued to develop stronger relationships with its stockholders. The
Committee approved an annual cash award of $750,000 for Mr. Civgin based on its assessment of his performance in improving overall returns and positioning Allstate to offer unique products for
different customer segments.
-
-
Equity Incentive Award.
Based on
the Committee's evaluation of Mr. Civgin's performance during 2010, the Committee granted him equity awards with a grant date fair value of $1,700,000 reflecting his target equity incentive
award opportunity.
Ms. Greffin.
-
-
Salary.
The Committee approved an
increase from $510,000 to $590,000 effective February 27, 2011, based on a combination of Ms. Greffin's individual performance in 2010 and salary market positioning.
-
-
Incentive Targets.
No changes were
made to Ms. Greffin's incentive targets. Ms. Greffin's annual incentive opportunity was 110% of salary and the target equity incentive opportunity was 300% of salary.
-
-
Annual Incentive Award.
Under
Ms. Greffin's leadership, Allstate Investments continued to apply a proactive approach to risk and return optimization, focusing on income and delivering solid total returns. In addition, in
2011, Allstate Investments was successful in outsourcing a significant portion of its investment technology platform to improve our execution capabilities. The Committee approved an annual cash award
of $750,000 for Ms. Greffin based on its assessment of her performance in generating investment income and total returns and leading the investment platform initiative.
31
-- The Allstate Corporation
Table of Contents
-
-
Equity Incentive Award.
Based on
the Committee's evaluation of Ms. Greffin's performance during 2010, the Committee granted her equity awards with a grant date fair value of $1,530,000 aligned with her target equity incentive
award opportunity.
Mr. Gupta.
-
-
Target Compensation.
The Committee
set Mr. Gupta's salary and incentive targets when he joined Allstate in April 2011. Target compensation was set to reflect the external market for attracting superior talent. The Committee
approved a salary of $525,000 for Mr. Gupta as well as target annual and equity incentive award opportunities of 85% and 255% of salary, respectively.
-
-
Annual Incentive Award.
For 2011,
Mr. Gupta was eligible for an annual incentive award based on a full annual salary, rather than a salary pro rated for his April start date, to make-up for the cash incentive
opportunity he forfeited when he left his prior employer. In a relatively short period of time, Mr. Gupta has improved the capabilities and organizational alignment of the technology and
operating functions which serve Allstate. In addition, a strategy to enhance and accelerate the corporation's use of technology was developed in 2011. The committee approved an annual cash award of
$500,000 for Mr. Gupta based on its assessment of his performance in improving capabilities and planning to enhance the use of technology.
-
-
Equity Incentive Award.
The
Committee granted him equity awards with a grant date fair value of $1,000,000 aligned with his target equity incentive award opportunity on a pro rated basis to reflect a partial year of employment.
-
-
Sign-On Awards.
The
Committee approved $750,000 in cash, $350,000 payable within 30 days of start date and the remainder payable on January 31, 2012, with a 24-month clawback for voluntary
termination, and $650,000 in equity granted in April 2011, 50% in restricted stock units and 50% in stock options to replace unvested equity awards he forfeited with his previous employer.
Mr. Winter.
In September 2011, Allstate reorganized to improve integration, accelerate speed to market, and enhance our ability to anticipate local market
opportunities. As a result, Mr. Winter's responsibilities were expanded to include some Allstate Protection operational functions, such as claims and product operations, in addition to the
oversight of Allstate Financial.
-
-
Salary.
The Committee approved an
increase from $600,000 to $650,000 effective February 27, 2011, based on a combination of Mr. Winter's individual performance in 2010 and salary market positioning relative to peers. The
Committee approved a promotional increase from $650,000 to $700,000 effective October 6, 2011, to reflect his expanded job scope and responsibilities.
-
-
Incentive Targets.
No changes were
made to Mr. Winter's incentive targets during 2011. Mr. Winter's annual incentive target opportunity was 125% of salary and the target equity incentive opportunity was 350% of salary.
-
-
Annual Incentive Award.
In 2011,
under Mr. Winter's leadership, Allstate Financial's results reflected ongoing progress on improving overall business returns while shifting focus from spread-based products to underwritten
products. Allstate Protection made significant progress on its strategy to maintain auto profitability and improve homeowners returns. Allstate Financial operating income rose 11.1% to
$529 million in 2011 from $476 million in 2010. The Committee approved an annual cash award of $1,000,000 for Mr. Winter based on its assessment of his performance in improving
overall business returns for Allstate Financial, his initial work at Allstate Protection, and success in broadening customer relationships through Allstate agencies.
-
-
Equity Incentive Award.
Based on
the Committee's evaluation of Mr. Winter's performance during 2010, the Committee granted him equity awards with a grant date fair value of $2,200,000. This reflects his strong performance in
2010 with an additional $100,000 in equity above his target equity incentive award opportunity.
Mr. Lacher.
Mr. Lacher's employment with the corporation terminated effective July 17, 2011. Under the terms of his separation agreement,
Mr. Lacher received two lump sum payments of $365,000 each, one payable in 2012, and he was not eligible to receive a 2011 annual incentive award. All previously granted equity incentive awards
outstanding were forfeited.
The Allstate
Corporation --
32
Table of Contents
Other Elements of Compensation
To remain competitive with other employers and to attract, retain, and motivate highly talented executives and other employees, we provide the
benefits listed in the following table.
|
|
|
|
|
|
|
Benefit or Perquisite
|
|
Named
Executives
|
|
Other
Officers
and Certain
Managers
|
|
All Full-time
and Regular
Part-time
Employees
|
|
401(k)
(1)
and defined benefit pension
|
|
|
|
|
|
|
|
Supplemental retirement benefit
|
|
|
|
|
|
|
|
Health and welfare benefits
(2)
|
|
|
|
|
|
|
|
Supplemental long term disability and executive physical program
|
|
|
|
(3)
|
|
|
|
Deferred compensation
|
|
|
|
|
|
|
|
Tax preparation and financial planning services
|
|
|
|
(4)
|
|
|
|
Mobile phones, ground transportation, and personal use of aircraft
(5)
|
|
|
|
|
|
|
|
-
(1)
-
Allstate
contributed $.40 for every dollar of basic pre-tax deposits made in 2011 (up to 5% of eligible pay).
-
(2)
-
Including
medical, dental, vision, life, accidental death and dismemberment, long term disability, and group legal insurance.
-
(3)
-
An
executive physical program is available to all officers.
-
(4)
-
All
officers are eligible for tax preparation services. Financial planning services were provided only to the senior leadership team.
-
(5)
-
Ground
transportation is available to members of the senior leadership team only. In limited circumstances approved by the CEO, members of our senior
leadership team are permitted to use our corporate aircraft for personal purposes. Mobile phones are available to members of the senior leadership team, other officers, certain managers, and certain
employees depending on their job responsibilities.
Each named executive participates in two different defined benefit pension plans. The Allstate Retirement Plan (ARP) is a tax qualified defined
benefit pension plan available to all of our regular full-time and regular part-time employees who meet certain age and service requirements. The ARP provides an assured
retirement income based on an employee's level of compensation and length of service at no cost to the employee. As the ARP is a tax qualified plan, federal tax law limits (1) the amount of an
individual's compensation that can be used to calculate plan benefits and (2) the total amount of benefits payable to a plan participant on an annual basis. For certain employees, these limits
may result in a lower benefit under the ARP than would have been payable otherwise. Therefore, the Supplemental Retirement Income Plan (SRIP) was formed to provide ARP-eligible employees
whose compensation or benefit amount exceeds the federal limits with an additional defined benefit in an amount equal to what would have been payable under the ARP if the federal limits did not exist.
Since a change-in-control or other triggering event may never occur, we do not view change-in-control
benefits or post-termination benefits as compensation. Consistent with our compensation objectives, we offer these benefits to attract, motivate, and retain highly talented executives. A
change-in-control of Allstate could have a disruptive impact on both Allstate and our executives. Our change-in-control benefits and
post-termination benefits are designed to mitigate that impact and to maintain alignment between the interests of our executives and our stockholders.
As
noted earlier, we substantially reduced our change-in-control benefits in 2011. The named executives who had previously been parties to certain
33
-- The Allstate Corporation
Table of Contents
change-in-control
agreements agreed to become participants in a new change-in-control severance plan (CIC Plan). Compared with the previous
arrangements, the CIC Plan eliminates all excise tax gross ups; eliminates the lump sum cash pension enhancement based on additional years of age, service, and compensation; and reduces for named
executives other than the CEO the amount of cash severance payable from three to two times the sum of base salary and target annual incentive. As a point of reference, Mr. Wilson's
change-in-control severance benefit on December 31, 2011, would have been $7.09 million greater if the lump sum cash pension enhancement had not been eliminated. In order to receive the
cash severance benefits under the CIC Plan following a change-in-control, a participant must have been terminated (other than for cause, death, or disability) or the
participant must have terminated employment for good reason (such as adverse changes in the terms or conditions of employment, including a material reduction in base compensation, a material change in
authority, duties, or responsibilities, or a material change in job location) within two years following a change-in-control. In addition, long-term equity
incentive awards granted
after 2011 will vest on an accelerated basis due to a change-in-control only if either Allstate terminates the executive's employment (other than for cause, death, or
disability) or the executive terminates his or her employment for good reason within two years after the change-in-control (so-called "double-trigger" vesting).
The
change-in-control and post-termination arrangements which are described in the
Potential Payments as a Result of Termination or
Change-in-Control
section are not provided exclusively to the named executives. A larger group of management employees is eligible to receive many of
the post-termination benefits described in that section.
Because we believe management's interests must be linked with those of our stockholders, we instituted stock ownership guidelines in 1996 that
require each of the named executives to own Allstate common stock worth a multiple of base salary. The Committee approved new guidelines effective February 20, 2012. The new guidelines provide
that an executive must hold 75% of net after-tax shares received as equity compensation until his or her salary multiple guideline is met. The chart below shows the salary multiple
guidelines and the equity holdings that count towards the requirement.
|
|
|
|
|
Name
|
|
Guideline
|
|
Status
|
|
Mr. Wilson
|
|
6x salary
|
|
ü
Meets guideline
|
|
Mr. Civgin
|
|
3x salary
|
|
ü
Meets guideline
|
|
Ms. Greffin
|
|
3x salary
|
|
ü
Meets guideline
|
|
Mr. Gupta
|
|
3x salary
|
|
Must hold 75% of net after-tax shares until guideline is met
|
|
Mr. Winter
|
|
3x salary
|
|
Must hold 75% of net after-tax shares until guideline is met
|
|
Mr. Lacher
|
|
|
|
|
|
|
|
|
What Counts Toward the Guideline
|
|
What Does not Count Toward the Guideline
|
|
Allstate shares owned
personally
Shares held in the
Allstate 401(k) Savings Plan
Restricted stock units
|
|
Unexercised stock options
Performance stock awards
|
We
also have a policy on insider trading that prohibits all officers, directors, and employees from engaging in transactions in securities issued by Allstate or any of its subsidiaries that might be
considered speculative or hedging, such as selling short or buying or selling options.
Impact of Tax Considerations on Compensation
We may take a tax deduction of no more than $1 million per executive for compensation paid in any year to our CEO and the three other most
highly compensated executives, excluding our CFO, as of the last day of the fiscal year in which the compensation is paid, unless the
The Allstate
Corporation --
34
Table of Contents
compensation
meets specific standards. We may deduct more than $1 million in compensation if the standards are met, including that the compensation is performance-based and paid under a plan
that meets certain requirements. The Committee considers the impact of this rule in developing, implementing, and administering our compensation programs. However, this consideration must be balanced
with our primary goal of structuring compensation programs to attract, motivate, and retain highly talented executives.
Our
compensation programs are designed and administered so that payments to affected executives can be fully deductible. However, in light of the balance mentioned above and the need to maintain
flexibility in administering compensation programs, we may authorize compensation in any year that exceeds $1 million and does not meet the required standards for deductibility. The amount of
compensation paid in 2011 that was not deductible for tax purposes was $981,575.
Compensation Committee Report
The Compensation and Succession Committee has reviewed and discussed the Compensation Discussion and Analysis, contained on pages 23 through
35 of this proxy statement, with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy
statement.
THE COMPENSATION AND SUCCESSION COMMITTEE
|
|
|
|
|
W. James Farrell (Chairman)
|
|
|
Robert D. Beyer
Jack M. Greenberg
|
|
Ronald T. LeMay
Andrea Redmond
Joshua I. Smith
|
|
|
35
-- The Allstate Corporation
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Compensation Tables
|
|
PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation of the named executives for the last three fiscal years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME
(1)
|
|
YEAR
|
|
SALARY
($)
(2)
|
|
BONUS
($)
|
|
STOCK
AWARDS
($)
(3)
|
|
OPTION
AWARDS
($)
(4)
|
|
NON-EQUITY
INCENTIVE
PLAN
COMPENSATION
($)
(5)
|
|
CHANGE IN
PENSION VALUE
AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($)
(6)
|
|
ALL
OTHER
COMPENSATION
($)
(7)
|
|
TOTAL
($)
|
|
|
|
Thomas J. Wilson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Chairman, President
|
|
|
2011
|
|
|
1,100,000
|
|
|
|
|
|
2,310,005
|
|
|
4,290,001
|
|
|
2,252,800
|
|
|
1,157,562
|
(9)
|
|
69,448
|
|
|
11,179,816
|
|
and Chief Executive
|
|
|
2010
|
|
|
1,093,846
|
|
|
|
|
|
2,225,995
|
|
|
4,134,002
|
|
|
1,091,096
|
|
|
679,359
|
|
|
75,322
|
|
|
9,299,620
|
|
Officer)
|
|
|
2009
|
|
|
1,100,769
|
|
|
|
|
|
2,226,003
|
|
|
4,261,776
|
|
|
1,713,361
|
|
|
1,050,579
|
|
|
68,072
|
|
|
10,420,560
|
|
|
|
Don Civgin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Executive Vice
|
|
|
2011
|
|
|
624,231
|
|
|
|
|
|
594,998
|
|
|
1,104,996
|
|
|
750,000
|
|
|
29,270
|
(10)
|
|
23,532
|
|
|
3,127,027
|
|
President and Chief
|
|
|
2010
|
|
|
562,692
|
|
|
|
|
|
596,759
|
|
|
1,108,246
|
|
|
400,000
|
|
|
20,648
|
|
|
27,013
|
|
|
2,715,358
|
|
Financial Officer)
|
|
|
2009
|
|
|
571,154
|
|
|
|
|
|
596,758
|
|
|
1,142,505
|
|
|
281,962
|
|
|
6,629
|
|
|
37,718
|
|
|
2,636,726
|
|
|
|
Judith P. Greffin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Executive Vice
|
|
|
2011
|
|
|
577,692
|
|
|
|
|
|
535,486
|
|
|
994,500
|
|
|
750,000
|
|
|
616,936
|
(11)
|
|
32,156
|
|
|
3,506,770
|
|
President and Chief
|
|
|
2010
|
|
|
502,684
|
|
|
|
|
|
485,567
|
|
|
901,771
|
|
|
230,526
|
|
|
397,608
|
|
|
30,890
|
|
|
2,549,046
|
|
Investment Officer)
|
|
|
2009
|
|
|
480,235
|
|
|
|
|
|
415,566
|
|
|
795,631
|
|
|
967,731
|
|
|
545,867
|
|
|
27,740
|
|
|
3,232,770
|
|
|
|
Suren Gupta
(Executive Vice President Technology & Operations)
|
|
|
2011
|
|
|
383,654
|
|
|
350,000
|
(8)
|
|
674,991
|
|
|
975,004
|
|
|
500,000
|
|
|
0
|
|
|
18,896
|
|
|
2,902,545
|
|
|
|
Matthew E. Winter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(President and Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer
|
|
|
2011
|
|
|
654,231
|
|
|
|
|
|
770,012
|
|
|
1,429,997
|
|
|
1,000,000
|
|
|
48,100
|
(12)
|
|
44,180
|
|
|
3,946,520
|
|
Allstate Financial)
|
|
|
2010
|
|
|
600,000
|
|
|
|
|
|
734,994
|
|
|
1,365,002
|
|
|
1,212,300
|
|
|
3,833
|
|
|
35,159
|
|
|
3,951,288
|
|
|
|
Joseph P. Lacher, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Former President
|
|
|
2011
|
|
|
380,769
|
|
|
|
|
|
743,763
|
(13)
|
|
1,381,254
|
(13)
|
|
0
|
|
|
16,797
|
(14)
|
|
404,464
|
|
|
2,927,047
|
|
Allstate Protection)
|
|
|
2010
|
|
|
650,000
|
|
|
|
|
|
796,244
|
(13)
|
|
1,478,753
|
(13)
|
|
250,000
|
|
|
3,908
|
|
|
42,490
|
|
|
3,221,395
|
|
|
|
-
(1)
-
Messrs. Lacher
and Winter were not named executives for 2009 and Mr. Gupta was not a named executive for 2009 and 2010.
-
(2)
-
Reflects
amounts for 2009 that were paid in 2009 but which included amounts earned in 2008, due to the timing of Allstate's payroll cycle.
-
(3)
-
The
aggregate grant date fair value of restricted stock unit awards computed in accordance with Financial Accounting Standards Board (FASB) Accounting
Standards Codification Topic 718 (ASC 718). The number of restricted stock units granted in 2011 to each named executive is provided in the
Grants of
Plan-Based Awards
table on page 39. The fair value of restricted stock unit awards is based on the final closing price of Allstate's stock as of the date of
grant, which in part reflects the payment of expected future dividends. (See note 18 to our audited financial statements for 2011.) This amount reflects an accounting expense and does not
correspond to actual value that will be realized by the named executives.
-
(4)
-
The
aggregate grant date fair value of option awards computed in accordance with FASB ASC 718. The fair value of each option award is estimated on the date
of grant using a binomial lattice model and the assumptions as set forth in the following table:
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
2009
|
|
|
|
Weighted average expected term
|
|
7.9 years
|
|
7.8 years
|
|
8.1 years
|
|
Expected volatility
|
|
22.1 - 53.9%
|
|
23.7 - 52.3%
|
|
26.3 - 79.2%
|
|
Weighted average volatility
|
|
35.1%
|
|
35.1%
|
|
38.3%
|
|
Expected dividends
|
|
2.5 - 3.7%
|
|
2.4 - 2.8%
|
|
2.6%
|
|
Weighted average expected dividends
|
|
2.7%
|
|
2.6%
|
|
2.6%
|
|
Risk-free rate
|
|
0.0 - 3.5%
|
|
0.1 - 3.9%
|
|
0.0 - 3.7%
|
-
-
(See
note 18 to our audited financial statements for 2011.) The number of options granted in 2011 to each named executive is provided in
the Grants of Plan-Based Awards table on page 39. This amount reflects an accounting expense and does not correspond to actual value that will be realized by the named executives.
The Allstate
Corporation --
36
Table of Contents
-
(5)
-
Amounts
in this column for 2009 and 2010 include amounts earned under the annual executive incentive plan and the long-term executive incentive
compensation plan. There was no 2011 payout from the long-term executive incentive compensation plan as it was discontinued; the last pay cycle was 2008-2010. Annual cash
incentive awards are paid in the year following performance. The breakdown for each component is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
Cash Incentive Award
|
|
Long-term
Cash Incentive Award
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
Amount
|
|
Cycle
|
|
Amount
|
|
|
|
|
|
Mr. Wilson
|
|
|
2011
|
|
|
$2,252,800
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
$1,091,096
|
|
|
2008-2010
|
|
|
$0
|
|
|
|
|
|
2009
|
|
|
$950,000
|
|
|
2007-2009
|
|
|
$763,361
|
|
|
|
|
|
Mr. Civgin
|
|
|
2011
|
|
|
$750,000
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
$400,000
|
|
|
2008-2010
|
|
|
$0
|
|
|
|
|
|
2009
|
|
|
$281,962
|
|
|
2007-2009
|
|
|
$0
|
|
|
|
|
|
Ms. Greffin
|
|
|
2011
|
|
|
$750,000
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
$230,526
|
|
|
2008-2010
|
|
|
$0
|
|
|
|
|
|
2009
|
|
|
$862,477
|
|
|
2007-2009
|
|
|
$105,254
|
|
|
|
|
|
Mr. Gupta
|
|
|
2011
|
|
|
$500,000
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Winter
|
|
|
2011
|
|
|
$1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
$1,212,300
|
|
|
2008-2010
|
|
|
$0
|
|
|
|
|
|
Mr. Lacher
|
|
|
2011
|
|
|
$0
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
$250,000
|
|
|
2008-2010
|
|
|
$0
|
|
|
|
|
-
(6)
-
Amounts
reflect the aggregate increase in actuarial value of the pension benefits as set forth in the Pension Benefits table, accrued during 2011, 2010, and
2009. These are benefits under the Allstate Retirement Plan (ARP) and the Supplemental Retirement Income Plan (SRIP). Non-qualified deferred compensation earnings are not reflected since
our Deferred Compensation Plan does not provide above-market earnings. The pension plan measurement date is December 31. (See note 17 to our audited financial statements for 2011.)
-
(7)
-
The
All Other Compensation for 2011 Supplemental Table
provides details regarding the
amounts for 2011 for this column.
-
(8)
-
As
part of his sign-on bonus, Mr. Gupta received $750,000 in cash, $350,000 payable within 30 days of his start date and the
remainder payable on January 31, 2012. If Mr. Gupta voluntarily terminates his employment within 24 months of his hiring date, this bonus must be fully reimbursed to Allstate.
-
(9)
-
Reflects
increases in the actuarial value of the benefits provided to Mr. Wilson under the ARP and SRIP of $117,603 and $1,039,959, respectively. The
increases resulted from $295,987 of accrual for one year with the remaining increase due to changes in the discount and interest rates and one year of interest.
-
(10)
-
Reflects
increases in the actuarial value of the benefits provided to Mr. Civgin under the ARP and SRIP of $6,984 and $22,286, respectively. The
increases resulted from $25,277 of annual pay credit and one year of interest with the remaining increase due to changes in the discount and interest rates.
-
(11)
-
Reflects
increases in the actuarial value of the benefits provided to Ms. Greffin under the ARP and SRIP of $124,761 and $492,175, respectively. The
increases resulted from $127,032 of accrual for one year with the remaining increase due to changes in the discount and interest rates and one year of interest.
-
(12)
-
Reflects
increases in the actuarial value of the benefits provided to Mr. Winter under the ARP and SRIP of $6,300 and $41,800, respectively. The
increases resulted from $45,687 of annual pay credit and one year of interest with the remaining increase due to changes in the discount and interest rates.
-
(13)
-
All
equity awards granted to Mr. Lacher since his hire date were forfeited upon his separation from the corporation on July 17, 2011.
-
(14)
-
Reflects
increases in actuarial value of the benefits provided to Mr. Lacher under the ARP and SRIP of $6,300 and $10,497, respectively.
Mr. Lacher was not vested in this amount prior to his separation from the corporation.
37
-- The Allstate Corporation
Table of Contents
ALL OTHER COMPENSATION FOR 2011 SUPPLEMENTAL TABLE
(In dollars)
The following table describes the incremental cost of other benefits provided in 2011 that are included in the "All Other
Compensation" column.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Personal
Use of
Aircraft
(1)
|
|
401(k)
Match
(2)
|
|
Other
(3)
|
|
Total
All Other
Compensation
|
|
|
|
Mr. Wilson
|
|
|
32,606
|
|
|
4,900
|
|
|
31,942
|
|
|
69,448
|
|
|
|
Mr. Civgin
|
|
|
0
|
|
|
4,900
|
|
|
18,632
|
|
|
23,532
|
|
|
|
Ms. Greffin
|
|
|
0
|
|
|
4,900
|
|
|
27,256
|
|
|
32,156
|
|
|
|
Mr. Gupta
|
|
|
0
|
|
|
1,798
|
|
|
17,098
|
|
|
18,896
|
|
|
|
Mr. Winter
|
|
|
0
|
|
|
4,531
|
|
|
39,649
|
|
|
44,180
|
|
|
|
Mr. Lacher
|
|
|
0
|
|
|
0
|
|
|
404,464
|
|
|
404,464
|
|
|
|
-
(1)
-
The
amount reported for personal use of aircraft is based on the incremental cost method, which is calculated based on Allstate's average variable costs per
flight hour. Variable costs include fuel, maintenance, on-board catering, landing/ramp fees, and other miscellaneous variable costs. The total annual variable costs are divided by the
annual number of flight hours flown by the aircraft to derive an average variable cost per flight hour. This average variable cost per flight hour is then multiplied by the flight hours flown for
personal use to derive the incremental cost. This method of calculating the incremental cost excludes fixed costs that do not change based on usage, such as pilots' and other employees' salaries,
costs incurred in purchasing the aircraft, and non-trip related hangar expenses.
-
(2)
-
Each
of the named executives participated in our 401(k) plan during 2011. The amount shown is the amount allocated to their accounts as employer matching
contributions. Messrs. Gupta and Winter will not be vested in the employer matching contribution until they have completed three years of vesting service.
-
(3)
-
"Other"
consists of premiums for group life insurance and personal benefits and perquisites consisting of mobile phones, tax preparation services, financial
planning, executive physicals, ground transportation, and supplemental long-term disability coverage, and for Messrs. Lacher and Winter, $22,939 and $9,620, respectively, for
reimbursement of taxes related to relocation expenses. (Tax assistance for certain relocation benefits is a standard component of our relocation program available to all employees.)
Messrs. Lacher and Winter also received amounts for relocation that are not reflected in other compensation because they are part of the standard relocation package available to all employees.
In addition, Mr. Lacher received a $365,000 severance payment in 2011 in relation to his separation from Allstate. There was no incremental cost for the use of mobile phones. We provide
supplemental long-term disability coverage to all regular full-time and regular part-time employees whose annual earnings exceed the level which produces the
maximum monthly benefit provided by the long-term disability plan. This coverage is self-insured (funded and paid for by Allstate when obligations are incurred). No obligations
for the named executives were incurred in 2011, and therefore, no incremental cost is reflected in the table.
The Allstate
Corporation --
38
Table of Contents
GRANTS OF PLAN-BASED AWARDS AT FISCAL YEAR-END 2011
(1)
The following table provides information about non-equity incentive plan awards and equity awards granted to our named
executives during fiscal year 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards
(2)
|
|
Exercise
or Base
Price of
Option
Awards
($/Shr)
(3)
|
|
Grant Date
Fair Value ($)
(4)
|
|
Name
|
|
Grant Date
|
|
Plan Name
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Stock
Awards
|
|
Option
Awards
|
|
|
|
Mr. Wilson
|
|
|
|
Annual cash incentive
|
|
|
1,100,000
|
|
|
2,200,000
|
|
|
8,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 22, 2011
|
|
Restricted stock units
|
|
|
|
|
|
|
|
|
|
|
|
72,779
|
|
|
|
|
|
|
|
|
2,310,005
|
|
|
|
|
|
|
February 22, 2011
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
447,808
|
|
|
31.74
|
|
|
|
|
|
4,290,001
|
|
|
|
Mr. Civgin
|
|
|
|
Annual cash incentive
|
|
|
343,327
|
|
|
686,654
|
|
|
1,716,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 22, 2011
|
|
Restricted stock units
|
|
|
|
|
|
|
|
|
|
|
|
18,746
|
|
|
|
|
|
|
|
|
594,998
|
|
|
|
|
|
|
February 22, 2011
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115,344
|
|
|
31.74
|
|
|
|
|
|
1,104,996
|
|
|
|
Ms. Greffin
|
|
|
|
Annual cash incentive
|
|
|
317,731
|
|
|
635,461
|
|
|
4,821,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 22, 2011
|
|
Restricted stock units
|
|
|
|
|
|
|
|
|
|
|
|
16,871
|
|
|
|
|
|
|
|
|
535,486
|
|
|
|
|
|
|
February 22, 2011
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,810
|
|
|
31.74
|
|
|
|
|
|
994,500
|
|
|
|
Mr. Gupta
|
|
|
|
Annual cash incentive
|
|
|
223,125
|
|
|
446,150
|
|
|
6,428,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 2, 2011
|
|
Restricted stock units
|
|
|
|
|
|
|
|
|
|
|
|
19,923
|
|
|
|
|
|
|
|
|
674,991
|
|
|
|
|
|
|
May 2, 2011
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,593
|
|
|
33.88
|
|
|
|
|
|
975,004
|
|
|
|
Mr. Winter
|
|
|
|
Annual cash incentive
|
|
|
408,894
|
|
|
817,788
|
|
|
6,428,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 22, 2011
|
|
Restricted stock units
|
|
|
|
|
|
|
|
|
|
|
|
24,260
|
|
|
|
|
|
|
|
|
770,012
|
|
|
|
|
|
|
February 22, 2011
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
149,269
|
|
|
31.74
|
|
|
|
|
|
1,429,997
|
|
|
|
Mr. Lacher
(5)
|
|
|
|
Annual cash incentive
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 22, 2011
|
|
Restricted stock units
|
|
|
|
|
|
|
|
|
|
|
|
23,433
|
|
|
|
|
|
|
|
|
743,763
|
|
|
|
|
|
|
February 22, 2011
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,181
|
|
|
31.74
|
|
|
|
|
|
1,381,254
|
|
|
|
-
(1)
-
Awards
under the Annual Executive Incentive Plan and the 2009 Equity Incentive Plan.
-
(2)
-
The
amounts in these columns consist of the threshold, target, and maximum annual cash incentive awards for the named executives. The threshold amount for
each named executive is 50% of target, as the minimum amount payable if threshold performance is achieved. If threshold is not achieved, the payment to named executives would be zero. The target
amount is based upon achievement of the performance measures listed in the
2011 Annual Cash Incentive Awards Performance Measures
table on page 30.
The maximum amount payable to the named executives, except Mr. Civgin, is the lesser of a stockholder approved maximum of $8.5 million under the Annual Executive Incentive Plan or a
percentage of the award pool, which varies by executive. The award pool is equal to 1.0% of Adjusted Underlying Operating Income with award opportunities capped at 45% of the pool for
Mr. Wilson, 15% of the pool for Ms. Greffin, and 20% of the pool for Messrs. Gupta and Winter. Mr. Civgin does not participate in the adjusted underlying operating income
pool. Adjusted Underlying Operating income is defined on page 52.
-
(3)
-
The
exercise price of each option is equal to the fair market value of Allstate's common stock on the date of grant. Fair market value is equal to the
closing sale price on the date of grant or, if there was no such sale on the date of grant, then on the last previous day on which there was a sale.
-
(4)
-
The
aggregate grant date fair value of the February 22, 2011, restricted stock units was $31.74 and stock option awards was $9.58, computed in
accordance with FASB ASC 718. The aggregate grant date fair value of the May 2, 2011, restricted stock units was $33.88 and stock option awards was $10.53, computed in accordance with FASB ASC
718. The assumptions used in the valuation are discussed in footnotes 3 and 4 to the
Summary Compensation Table
on page 36.
-
(5)
-
Mr. Lacher's
employment terminated effective July 17, 2011. Mr. Lacher was not eligible to earn an award under the 2011 Annual
Executive Incentive Plan, and all of the equity awards granted to him in 2011 were forfeited, along with all other equity awards granted to him since his hire date.
Stock options
Stock options represent an opportunity to buy shares of our stock at a fixed exercise price at a future date. We use them to align the interests of
our executives with long-term stockholder value, as the stock price must appreciate from the date of grant for the executives to profit. Under our stockholder-approved equity incentive
plan, the exercise price cannot be less than the fair market value of a share on the date of grant. Stock option repricing is not permitted. In other words, without an
39
-- The Allstate Corporation
Table of Contents
event
such as a stock split, if the Committee cancels an award and substitutes a new award, the exercise price of the new award cannot be less than the exercise price of the cancelled award. All stock
option awards have been made in the form of nonqualified stock options. The options granted to the named executives in 2011 become exercisable over four years: 50% on the second anniversary of the
grant date and 25% on each of the third and fourth anniversary dates, and expire in ten years, except in certain change-in-control situations or under other special
circumstances approved by the Committee.
Each restricted stock unit represents our promise to transfer one fully vested share of stock in the future if and when the restrictions expire (when
the unit "vests"). Because restricted stock units are based on and payable in stock, they reinforce the alignment of interests of our executives and our stockholders. In addition, restricted stock
units provide a retention incentive because they have a real, current value that is forfeited in most circumstances if an executive terminates employment before the restricted stock units vest. Under
the terms of the restricted stock unit awards, the executives have only the rights of general unsecured creditors of Allstate and no rights as stockholders until delivery of the underlying shares. The
restricted stock units granted to the named executives in 2011 vest over four years: 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversary dates, except
in certain change-in-control situations or under other special circumstances approved by the Committee. The restricted stock units granted to the named executives in 2011
include the right to receive previously accrued dividend equivalents when the underlying restricted stock unit vests.
The Allstate
Corporation --
40
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Compensation Tables
|
|
PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
Outstanding Equity Awards at Fiscal Year-End 2011
The following table summarizes the outstanding equity awards of the named executives as of December 31, 2011.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
(1)
|
|
|
|
|
|
Stock Awards
|
|
|
|
Name
|
|
Option Grant
Date
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(2)
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(3)
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Stock Award
Grant Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested(#)
(4)
|
|
Market Value
of Shares or
Units of Stock
That Have
Not
Vested
(5)
|
|
|
|
Mr. Wilson
|
|
Feb. 07, 2002
|
|
|
97,750
|
|
|
0
|
|
|
$33.38
|
|
Feb. 07, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 07, 2003
|
|
|
101,000
|
|
|
0
|
|
|
$31.78
|
|
Feb. 07, 2013
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 06, 2004
|
|
|
97,100
|
|
|
0
|
|
|
$45.96
|
|
Feb. 06, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 22, 2005
|
|
|
98,976
|
|
|
0
|
|
|
$52.57
|
|
Feb. 22, 2015
|
|
|
|
|
|
|
|
|
|
|
|
June 01, 2005
|
|
|
100,000
|
|
|
0
|
|
|
$58.47
|
|
June 01, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 21, 2006
|
|
|
66,000
|
|
|
0
|
|
|
$53.84
|
|
Feb. 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 21, 2006
|
|
|
124,000
|
|
|
0
|
|
|
$53.84
|
|
Feb. 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 20, 2007
|
|
|
262,335
|
|
|
0
|
|
|
$62.24
|
|
Feb. 20, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Apr. 30, 2007
|
|
|
37,091*
|
|
|
0
|
|
|
$62.32
|
|
Feb. 07, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 26, 2008
|
|
|
253,737
|
|
|
84,579
|
|
|
$48.82
|
|
Feb. 26, 2018
|
|
Feb. 26, 2008
|
|
|
36,705
|
|
|
$1,006,084
|
|
|
|
Feb. 27, 2009
|
|
|
375,818
|
|
|
375,818
|
|
|
$16.83
|
|
Feb. 27, 2019
|
|
Feb. 27, 2009
|
|
|
132,264
|
|
|
$3,625,356
|
|
|
|
Feb. 22, 2010
|
|
|
0
|
|
|
417,576
|
|
|
$31.41
|
|
Feb. 22, 2020
|
|
Feb. 22, 2010
|
|
|
70,869
|
|
|
$1,942,519
|
|
|
|
Feb. 22, 2011
|
|
|
0
|
|
|
447,808
|
|
|
$31.74
|
|
Feb. 22, 2021
|
|
Feb. 22, 2011
|
|
|
72,779
|
|
|
$1,994,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
Market Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$8,568,832
|
|
|
|
Mr. Civgin
|
|
Sep. 08, 2008
|
|
|
48,750
|
|
|
16,250
|
|
|
$46.48
|
|
Sep. 08, 2018
|
|
Sep. 08, 2008
|
|
|
4,300
|
(6)
|
|
$117,863
|
|
|
|
Feb. 27, 2009
|
|
|
100,750
|
|
|
100,750
|
|
|
$16.83
|
|
Feb. 27, 2019
|
|
Feb. 27, 2009
|
|
|
35,458
|
|
|
$971,904
|
|
|
|
Feb. 22, 2010
|
|
|
0
|
|
|
111,944
|
|
|
$31.41
|
|
Feb. 22, 2020
|
|
Feb. 22, 2010
|
|
|
18,999
|
|
|
$520,763
|
|
|
|
Feb. 22, 2011
|
|
|
0
|
|
|
115,344
|
|
|
$31.74
|
|
Feb. 22, 2021
|
|
Feb. 22, 2011
|
|
|
18,746
|
|
|
$513,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
Market Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2,124,357
|
|
|
|
Ms. Greffin
|
|
Feb. 07, 2002
|
|
|
4,000
|
|
|
0
|
|
|
$33.38
|
|
Feb. 07, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 12, 2002
|
|
|
18,217
|
|
|
0
|
|
|
$36.61
|
|
Mar. 12, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 07, 2003
|
|
|
1,346
|
|
|
0
|
|
|
$31.78
|
|
Feb, 07, 2013
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 11, 2003
|
|
|
3,614
|
|
|
0
|
|
|
$31.22
|
|
Mar. 11, 2013
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 06, 2004
|
|
|
4,588
|
|
|
0
|
|
|
$45.96
|
|
Feb. 06, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 09, 2004
|
|
|
20,714
|
|
|
0
|
|
|
$45.29
|
|
Mar. 09, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 09, 2004
|
|
|
2,000
|
|
|
0
|
|
|
$45.29
|
|
Mar. 09, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 22, 2005
|
|
|
15,314
|
|
|
0
|
|
|
$52.57
|
|
Feb. 22, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 22, 2005
|
|
|
4,720
|
|
|
0
|
|
|
$52.57
|
|
Feb. 22, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 21, 2006
|
|
|
19,919
|
|
|
0
|
|
|
$53.84
|
|
Feb. 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 21, 2006
|
|
|
4,723
|
|
|
0
|
|
|
$53.84
|
|
Feb. 21, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 20, 2007
|
|
|
21,291
|
|
|
0
|
|
|
$62.24
|
|
Feb. 20, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 20, 2007
|
|
|
4,854
|
|
|
0
|
|
|
$62.24
|
|
Feb. 20, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Jul. 17, 2007
|
|
|
3,660
|
|
|
0
|
|
|
$60.42
|
|
Jul. 17, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 26, 2008
|
|
|
51,273
|
|
|
17,092
|
|
|
$48.82
|
|
Feb. 26, 2018
|
|
Feb. 26, 2008
|
|
|
7,417
|
|
|
$203,300
|
|
|
|
Feb. 26, 2008
|
|
|
21,223
|
|
|
7,075
|
|
|
$48.82
|
|
Feb. 26, 2018
|
|
Feb. 26, 2008
|
|
|
3,070
|
|
|
$84,149
|
|
|
|
Aug. 11, 2008
|
|
|
10,687
|
|
|
3,563
|
|
|
$46.56
|
|
Aug. 11, 2018
|
|
Aug. 11, 2008
|
|
|
1,500
|
|
|
$41,115
|
|
|
|
Feb. 27, 2009
|
|
|
70,161
|
|
|
70,162
|
|
|
$16.83
|
|
Feb. 27, 2019
|
|
Feb. 27, 2009
|
|
|
24,692
|
|
|
$676,808
|
|
|
|
Feb. 22, 2010
|
|
|
0
|
|
|
91,088
|
|
|
$31.41
|
|
Feb. 22, 2020
|
|
Feb. 22, 2010
|
|
|
15,459
|
|
|
$423,731
|
|
|
|
Feb. 22, 2011
|
|
|
0
|
|
|
103,810
|
|
|
$31.74
|
|
Feb. 22, 2021
|
|
Feb. 22, 2011
|
|
|
16,871
|
|
|
$462,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
Market Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,891,537
|
|
|
|
41
-- The Allstate Corporation
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
(1)
|
|
|
|
|
|
Stock Awards
|
|
|
|
Name
|
|
Option Grant
Date
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(2)
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(3)
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Stock Award
Grant Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested(#)
(4)
|
|
Market Value
of Shares or
Units of Stock
That Have
Not
Vested
(5)
|
|
|
|
Mr. Gupta
|
|
May 02, 2011
|
|
|
0
|
|
|
92,593
|
|
|
$33.88
|
|
May 02, 2021
|
|
May 2, 2011
|
|
|
19,923
|
|
|
$546,089
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
Market Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$546,089
|
|
|
|
Mr. Winter
|
|
Nov. 02, 2009
|
|
|
16,770
|
|
|
16,770
|
|
|
$29.64
|
|
Nov. 02, 2019
|
|
Nov. 02, 2009
|
|
|
5,904
|
|
|
$161,829
|
|
|
|
Feb. 22, 2010
|
|
|
0
|
|
|
137,879
|
|
|
$31.41
|
|
Feb. 22, 2020
|
|
Feb. 22, 2010
|
|
|
23,400
|
|
|
$641,394
|
|
|
|
Feb. 22, 2011
|
|
|
0
|
|
|
149,269
|
|
|
$31.74
|
|
Feb. 22, 2021
|
|
Feb. 22, 2011
|
|
|
24,260
|
|
|
$664,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
Market Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,468,189
|
|
|
|
Mr. Lacher
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
options granted in 2011 and 2010 vest over four years: 50% on the second anniversary date and 25% on each of the third and fourth anniversary dates. The
other options vest in four installments of 25% on each of the first four anniversaries of the grant date. The exercise price of each option is equal to the fair market value of Allstate's common stock
on the date of grant. For options granted prior to 2007, fair market value is equal to the average of high and low sale prices on the date of grant. For options granted in 2007 and thereafter, fair
market value is equal to the closing sale price on the date of grant. In each case, if there was no sale on the date of grant, fair market value is calculated as of the last previous day on which
there was a sale. An asterisk (*) denotes reload options issued to replace shares tendered in payment of the exercise price of prior option awards. These reload options are subject to the same vesting
terms and expiration dates as the original options including becoming exercisable in four annual installments beginning one year after the reload option grant date. For option awards granted after
2003, the Committee eliminated the reload feature, and no new option awards will contain a reload feature.
-
(2)
-
The
aggregate value and aggregate number of exercisable in-the-money options as of December 31, 2011, for each of the named
executives is as follows: Mr. Wilson $3,976,154 (375,818 aggregate number exercisable), Mr. Civgin $1,065,935 (100,750 aggregate number exercisable), Ms. Greffin $742,303 (70,161
aggregate number exercisable), Mr. Gupta $0 (0 aggregate number exercisable), Mr. Winter $0 (0 aggregate number exercisable).
-
(3)
-
The
aggregate value and aggregate number of unexercisable in-the-money options as of December 31, 2011, for each of the named
executives is as follows: Mr. Wilson $3,976,154 (375,818 aggregate number unexercisable), Mr. Civgin $1,065,935 (100,750 aggregate number unexercisable), Ms. Greffin $742,314
(70,162 aggregate number unexercisable), Mr. Gupta $0 (0 aggregate number unexercisable), Mr. Winter $0 (0 aggregate number unexercisable).
-
(4)
-
The
restricted stock unit awards granted in 2010 and 2011 vest over four years: 50% on the second anniversary of the grant date and 25% on each of the third
and fourth anniversary dates. The other restricted stock unit awards vest in one installment on the fourth anniversary of the grant date, unless otherwise noted.
-
(5)
-
Amount
is based on the closing price of our common stock of $27.41 on December 30, 2011.
-
(6)
-
Restricted
stock units granted as a new hire award. 2,000 restricted stock units vested on the second anniversary of the grant date, and the remaining 4,300
restricted stock units vest on the fourth anniversary of the grant date.
-
(7)
-
Mr. Lacher
did not have any outstanding equity awards at fiscal year end 2011.
The Allstate
Corporation --
42
Table of Contents
Option Exercises and Stock Vested at Fiscal Year-End 2011
The following table summarizes the options exercised by the named executives during 2011 and the restricted stock unit awards that vested during
2011.
OPTION EXERCISES AND STOCK VESTED AT FISCAL YEAR-END 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
Name
|
|
Number of
Shares
Acquired on
Exercise (#)
|
|
Value
Realized
on Exercise
($)
|
|
Number of
Shares
Acquired on
Vesting (#)
|
|
Value
Realized
on Vesting
($)
|
|
|
|
Mr. Wilson
|
|
|
0
|
|
|
0
|
|
|
22,385
|
|
|
718,782
|
|
|
|
Mr. Civgin
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Ms. Greffin
|
|
|
0
|
|
|
0
|
|
|
4,124
|
|
|
131,049
|
|
|
|
Mr. Gupta
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Mr. Winter
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Mr. Lacher
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Retirement Benefits
Each named executive participates in two different defined benefit pension plans. The following table summarizes the named executives' pension
benefits, which are calculated in the same manner as the change in pension value reflected in the
Summary Compensation Table
.
PENSION BENEFITS
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME
|
|
PLAN NAME
|
|
NUMBER OF
YEARS
CREDITED
SERVICE (#)
|
|
PRESENT
VALUE OF
ACCUMULATED
BENEFIT
(1)(2)
($)
|
|
PAYMENTS
DURING LAST
FISCAL YEAR ($)
|
|
|
|
Mr. Wilson
|
|
Allstate Retirement Plan
|
|
|
18.8
|
|
|
537,380
|
|
|
0
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
18.8
|
|
|
5,516,532
|
|
|
0
|
|
|
|
Mr. Civgin
|
|
Allstate Retirement Plan
|
|
|
3.3
|
|
|
12,866
|
|
|
0
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
3.3
|
|
|
43,681
|
|
|
0
|
|
|
|
Ms. Greffin
|
|
Allstate Retirement Plan
|
|
|
21.3
|
|
|
549,018
|
|
|
0
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
21.3
|
|
|
2,502,308
|
|
|
0
|
|
|
|
Mr. Gupta
(3)
|
|
Allstate Retirement Plan
|
|
|
0.8
|
|
|
0
|
|
|
0
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
0.8
|
|
|
0
|
|
|
0
|
|
|
|
Mr. Winter
(3)
|
|
Allstate Retirement Plan
|
|
|
2.2
|
|
|
6,300
|
|
|
0
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
2.2
|
|
|
45,633
|
|
|
0
|
|
|
|
Mr. Lacher
(4)
|
|
Allstate Retirement Plan
|
|
|
1.75
|
|
|
6,300
|
|
|
0
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
1.75
|
|
|
14,405
|
|
|
0
|
|
|
|
-
(1)
-
These
amounts are estimates and do not necessarily reflect the actual amounts that will be paid to the named executives, which will be known only at the
time they become eligible for payment. Accrued benefits were calculated
43
-- The Allstate Corporation
Table of Contents
as
of December 31, 2011, and used to calculate the present value of accumulated benefits at December 31, 2011. December 31 is our pension plan measurement date used for financial
statement reporting purposes.
-
-
The
amounts listed in this column are based on the following assumptions:
-
-
Discount rate of 5.25%, payment form assuming 80% paid as a lump sum and 20% paid as an annuity,
lump-sum/annuity conversion segmented interest rates of 4.75% for the first five years, 6.25% for the next 15 years, and 6.75% for all years after 20 and the 2012 combined static
Pension Protection Act funding mortality table with a blend of 50% males and 50% females (as required under the Internal Revenue Code), and post-retirement mortality for annuitants using
the 2012 Internal Revenue Service mandated annuitant table; these are the same as those used for financial reporting year-end disclosure as described in the notes to Allstate's
consolidated financial statements. (See note 17 to our audited financial statements for 2011.)
-
-
Based on guidance provided by the Securities and Exchange Commission, we have assumed a normal retirement age of 65 under
both the ARP and SRIP, regardless of any announced or anticipated retirements.
-
-
No assumption for early termination, disability, or pre-retirement mortality.
-
(2)
-
The
figures shown in the table above reflect the present value of the current accrued pension benefits calculated using the assumptions described in the
preceding footnote. If the named executives' employment terminated on December 31, 2011, the lump sum present value of the non-qualified pension benefits for each named executive
earned through December 31, 2011, is shown in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME
|
|
|
|
PLAN NAME
|
|
|
|
LUMP SUM
AMOUNT ($)
|
|
|
|
|
|
Mr. Wilson
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
|
|
$6,683,270
|
|
|
|
|
|
Mr. Civgin
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
|
|
$43,681
|
|
|
|
|
|
Ms. Greffin
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
|
|
$3,084,597
|
|
|
|
|
|
Mr. Gupta
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
|
|
$0
|
|
|
|
|
|
Mr. Winter
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
|
|
$45,633
|
|
|
|
|
|
Mr. Lacher
|
|
|
|
Supplemental Retirement Income Plan
|
|
|
|
|
$0
|
|
|
|
|
-
-
The
amount shown is based on the lump sum methodology (i.e., interest rate and mortality table) used by the Allstate pension plans in
2012, as required under the Pension Protection Act. Specifically, the interest rate for 2012 is based on 100% of the average corporate bond segmented yield curve from August of the prior year. The
mortality table for 2012 is the 2012 combined static Pension Protection Act funding mortality table with a blend of 50% males and 50% females, as required under the Internal Revenue Code.
-
(3)
-
Messrs. Gupta
and Winter are not currently vested in the Allstate Retirement Plan or the Supplemental Retirement Income Plan.
-
(4)
-
Mr. Lacher
was not vested in the Allstate Retirement Plan or the Supplemental Retirement Income Plan as of the date his employment terminated,
July 17, 2011. The present values were determined based on his nonvested benefit.
The
benefits and value of benefits shown in the
Pension Benefits
table are based on the following material factors:
The ARP has two different types of benefit formulas (final average pay and cash balance) which apply to participants based on their date of hire or
the individual choices they made before a cash balance plan was introduced on January 1, 2003. Of the named executives, Messrs. Civgin, Gupta, and Winter are eligible to earn cash
balance benefits. Benefits under the final average pay formula are earned and stated in the form of a straight life annuity payable at the normal retirement age 65. Participants who earn final average
pay benefits may do so under one or more benefit formulas based on when they became ARP members and their years of service.
Ms. Greffin
and Mr. Wilson have earned ARP benefits under the post-1988 final average pay formula which is
The Allstate
Corporation --
44
Table of Contents
the
sum of the Base Benefit and the Additional Benefit, as defined as follows:
-
-
Base Benefit=1.55% of the participant's average annual compensation, multiplied by credited service after 1988 (limited to
28 years of credited service)
-
-
Additional Benefit=0.65% of the amount, if any, of the participant's average annual compensation that exceeds the
participant's covered compensation (the average of the maximum annual salary taxable for Social Security over the 35-year period ending the year the participant would reach Social Security
retirement age) multiplied by credited service after 1988 (limited to 28 years of credited service)
For
participants eligible to earn cash balance benefits, pay credits are added to the cash balance account on a quarterly basis as a percent of compensation and based on the participant's years of
vesting service as follows:
Cash Balance Plan Pay Credits
|
|
|
|
|
Vesting
Service
|
|
Pay Credit %
|
|
|
|
Less than 1 year
|
|
|
0
|
%
|
|
|
1 year, but less than 5 years
|
|
|
2.5
|
%
|
|
|
5 years, but less than 10 years
|
|
|
3
|
%
|
|
|
10 years, but less than 15 years
|
|
|
4
|
%
|
|
|
15 years, but less than 20 years
|
|
|
5
|
%
|
|
|
20 years, but less than 25 years
|
|
|
6
|
%
|
|
|
25 years or more
|
|
|
7
|
%
|
|
|
SRIP benefits are generally determined using a two-step process: (1) determine the amount that would be payable under the ARP
formula specified above if the federal limits described above did not apply, then (2) reduce the amount described in (1) by the amount actually payable under the ARP formula. The normal
retirement date under the SRIP is age 65. If eligible for early retirement under the ARP, the employee also is eligible for early retirement under the SRIP.
As has generally been Allstate's practice, no additional service credit beyond service with Allstate or its predecessors is granted under the ARP or
the SRIP. Mr. Wilson has 18.8 years of combined service with Allstate and its former parent company, Sears, Roebuck and Co. As a result of his prior Sears service, a portion of
Mr. Wilson's retirement benefits will be paid from the Sears pension plan. Consistent with the pension benefits of other employees with prior Sears service who moved to Allstate during the
spin-off from Sears in 1995, Mr. Wilson's pension benefits under the ARP and the SRIP are calculated as if he had worked his combined Sears-Allstate career with Allstate, and then
are reduced by amounts earned under the Sears pension plan.
For
the ARP and SRIP, eligible compensation consists of salary, annual cash incentive awards, pre-tax employee deposits made to our 401(k) plan and our cafeteria plan, holiday pay, and
vacation pay. Eligible compensation also includes overtime pay, payment for temporary military service, and payments for short term disability, but does not include long-term cash
incentive awards or income related to equity awards. Compensation used to determine benefits under the ARP is limited in accordance with the Internal Revenue Code. For final average pay benefits,
average annual compensation is the average compensation of the five highest consecutive calendar years within the last ten consecutive calendar years preceding the actual retirement or termination
date.
Payment
options under the ARP include a lump sum, straight life annuity, and various survivor annuity options. The lump sum under the final average pay benefit is calculated in accordance with the
applicable interest rate and mortality as required under the Internal Revenue Code. The lump sum payment under the cash balance benefit is generally equal to a participant's cash balance account
balance. Payments from the SRIP are paid in the form of a lump sum using the same interest rate and mortality assumptions used under the ARP.
Age 65 is the earliest retirement age that a named executive may retire with full retirement benefits under the ARP and SRIP. However, a participant
earning final average pay benefits is entitled to an early retirement benefit on or after age 55 if he or she terminates employment after completing 20 or more years of service. A participant earning
cash balance benefits who terminates employment with at least three years of vesting service is entitled to a lump sum benefit equal to his or her cash balance account balance. Currently, none of the
named executives are eligible for an early retirement benefit.
As
defined in the SRIP, SRIP benefits earned through December 31, 2004 (Pre 409A SRIP Benefits) are generally payable at the normal retirement age of 65.
45
-- The Allstate Corporation
Table of Contents
Pre 409A
SRIP Benefits may be payable at age 50 or later if disabled, following early retirement at age 55 or older with 20 years of service, or following death in accordance with the
terms of the SRIP. SRIP benefits earned after December 31, 2004 (Post 409A SRIP Benefits) are paid on the January 1 following termination of employment after reaching age 55 (a
minimum six month deferral period applies), or following death in accordance with the terms of the SRIP.
Eligible
employees are vested in the normal ARP and SRIP retirement benefit on the earlier of the completion of five years of service or upon reaching age 65 (for participants with final average pay
benefits) or the completion of three years of service or upon reaching age 65 (for participants whose benefits are calculated under the cash balance formula).
-
-
Mr. Wilson's Pre 409A SRIP benefit would become payable at age 65 or following death or disability.
Mr. Wilson's Post 409A Benefit would be paid on January 1, 2013, or following death. Mr. Wilson will turn 65 on October 15, 2022.
-
-
Mr. Civgin's Post 409A Benefit would be paid on January 1, 2017, or following death.
Mr. Civgin will turn 65 on May 17, 2026.
-
-
Ms. Greffin's Pre 409A SRIP benefit would become payable at age 65 or following death or disability.
Ms. Greffin's Post 409A Benefit would be paid on January 1, 2016, or following death. Ms. Greffin will turn 65 on August 16, 2025.
-
-
Mr. Gupta's SRIP benefit is not currently vested but would become payable following death. Mr. Gupta will
turn 65 on March 4, 2026.
-
-
Mr. Winter's SRIP benefit is not currently vested but would become payable following death. Mr. Winter will
turn 65 on January 22, 2022.
-
-
Mr. Lacher's SRIP benefit was not vested prior to termination of employment and is not payable.
Non-Qualified Deferred Compensation
The following table summarizes the non-qualified deferred compensation contributions, earnings, and account balances of our named
executives in 2011. All amounts relate to The Allstate Corporation Deferred Compensation Plan.
NON-QUALIFIED DEFERRED COMPENSATION AT FISCAL YEAR-END 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last FY
($)
|
|
Registrant
Contributions
in Last FY
($)
|
|
Aggregate
Earnings
in Last FY
($)
(1)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance
at Last FYE
($)
(2)
|
|
|
|
Mr. Wilson
|
|
|
0
|
|
|
0
|
|
|
(8,596
|
)
|
|
0
|
|
|
453,863
|
|
|
|
Mr. Civgin
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Ms. Greffin
|
|
|
0
|
|
|
0
|
|
|
(40,171
|
)
|
|
0
|
|
|
1,451,808
|
|
|
|
Mr. Gupta
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Mr. Winter
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
Mr. Lacher
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
-
(1)
-
Aggregate
earnings were not included in the named executive's compensation in the last completed fiscal year in the
Summary
Compensation Table
.
-
(2)
-
There
are no amounts reported in the
Aggregate Balance at Last FYE
column that previously were reported as
compensation in the
Summary Compensation Table
.
In
order to remain competitive with other employers, we allow the named executives and other employees whose annual compensation exceeds the amount specified in the Internal Revenue Code ($245,000 in
2011), to defer up to 80% of their salary and/or up to 100% of their annual cash incentive award that exceeds that amount under the Deferred Compensation Plan. Allstate does not match
The Allstate
Corporation --
46
Table of Contents
participant
deferrals and does not guarantee a stated rate of return.
Deferrals
under the Deferred Compensation Plan are credited with earnings or debited for losses based on the results of the investment option or options selected by the participants. The investment
options available in 2011 under the Deferred Compensation Plan are: Stable Value, S&P 500, International Equity, Russell 2000, Mid-Cap, and Bond Funds. Under the Deferred
Compensation Plan, deferrals are not actually invested in these funds, but instead are credited with earnings or debited for losses based on the funds' investment returns net of administration and
investment expenses. Because the rate of return is based on actual investment measures in our 401(k) plan, no above market earnings are paid. Our Deferred Compensation Plan and 401(k) plan allow
participants to change their investment elections daily. Investment changes are effective the next business day. The Deferred Compensation Plan is unfunded; participants have only the rights of
general unsecured creditors.
Deferrals
under the Deferred Compensation Plan are segregated into Pre 409A balances and Post 409A balances. A named executive may elect to begin receiving a distribution of a
Pre 409A balance immediately upon separation from service or in one of the first through fifth years after separation from service. The named executive may elect to receive payment of a
Pre 409A balance in a lump sum or in annual cash installment payments over a period of two to ten years. An irrevocable distribution election is required before making any Post 409A
deferrals into the plan. The distribution options available to the Post 409A balances are similar to those available to the Pre 409A balances, except the earliest distribution date is six
months following separation from service. Upon proof of unforeseen emergency, a plan participant may be allowed to access certain funds in a deferred compensation account earlier than the dates
specified above.
47
-- The Allstate Corporation
Table of Contents
Potential Payments as a Result of Termination or Change-in-Control (CIC)
The following table lists the compensation and benefits that Allstate would provide to the named executives in various scenarios involving a
termination of employment, other than compensation and benefits generally available to all salaried employees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation Elements
|
|
|
|
Termination
Scenarios
|
|
Base Salary
|
|
Severance
Pay
|
|
Annual
Incentive
|
|
Stock
Options
|
|
Restricted
Stock Units
|
|
Non-Qualified
Pension
Benefits
(1)
|
|
Deferred
Compensation
(2)
|
|
Health,
Welfare and
Other Benefits
|
|
Termination
(3)
|
|
Ceases immediately
|
|
None
|
|
Forfeited unless terminated on last day of fiscal year
|
|
Unvested are forfeited, vested expire at the earlier of three months or normal expiration
|
|
Forfeited
|
|
Distributions commence per plan
|
|
Distributions commence per participant election
|
|
None
|
|
Retirement
(4)
|
|
Ceases Immediately
|
|
None
|
|
Pro rated for the year based on actual performance for the year with any discretionary adjustments
|
|
Awards granted more than 12 months before, and pro rata portion of award granted within 12 months of, normal retirement continue to vest; pro rata portion continue to vest upon early retirement. All expire at
earlier of five years or normal expiration.
(5)
|
|
Awards granted more than 12 months before, and pro rata portion of award granted within 12 months of, normal retirement continue to vest; pro rata portion continue to vest upon early retirement.
(6)
|
|
Distributions commence per plan
|
|
Distributions commence per participant election
|
|
None
|
|
Termination due to Change- in-Control
(7)
|
|
Ceases Immediately
|
|
Lump sum equal to two times salary and annual incentive at target, except for CEO who receives three times salary and annual incentive at target
(8)
|
|
Pro rated at target (reduced by any actually paid)
|
|
Awards granted prior to 2012 vest immediately upon a CIC. After 2011 vest upon qualifying termination after a CIC.
|
|
Awards granted prior to 2012 vest immediately upon a CIC. After 2011 vest upon qualifying termination after a CIC.
|
|
Immediately payable upon a CIC
|
|
Immediately payable upon a CIC
|
|
Outplacement services provided; lump sum payment equal to additional cost of continuation coverage
(9)
|
|
Death
|
|
One month salary paid upon death
|
|
None
|
|
Pro rated for year based on actual performance for the year with any discretionary adjustments
|
|
Vest immediately and expire at earlier of two years or normal expiration
|
|
Vest immediately
|
|
Distributions commence per plan
|
|
Payable within 90 days
|
|
None
|
|
Disability
|
|
Ceases Immediately
|
|
None
|
|
Pro rated for year based on actual performance for the year with any discretionary adjustments
|
|
Vest immediately and expire at earlier of two years or normal expiration
|
|
Vest immediately
(10)
|
|
Participant may request payment if age 50 or older
|
|
Distributions commence per participant election
|
|
Supplemental Long Term Disability benefits if enrolled in basic long term disability plan
|
|
-
(1)
-
See
the
Retirement Benefits
section for further detail on non-qualified pension benefits and
timing of payments.
-
(2)
-
See
the
Non-Qualified Deferred Compensation
section for additional information on the Deferred
Compensation Plan and distribution options available.
The Allstate
Corporation --
48
Table of Contents
-
(3)
-
Includes
both voluntary and involuntary termination. Examples of involuntary termination independent of a change-in-control include
performance-related terminations; terminations for employee dishonesty and violation of Allstate rules, regulations, or policies; and terminations resulting from lack of work, rearrangement of work,
or reduction in force.
-
(4)
-
Retirement
for purposes of the annual cash incentive plan is defined as voluntary termination on or after the date the named executive attains age 55 with
at least 20 years of service. The normal retirement date under the equity awards is the date on or after the date the named executive attains age 60 with at least one year of service. For
awards granted before February 22, 2011, the early retirement date is the date the named executive attains age 55 with 20 years of service. For awards granted on or after
February 22, 2011, the "early retirement date" is the date the named executive attains age 55 with ten years of service.
-
(5)
-
Stock
options granted prior to February 22, 2011, continue to vest upon a normal or health retirement and expire at the earlier of five years from
the date of retirement or the expiration date of the option. Unvested stock options are forfeited upon early retirement.
-
(6)
-
Restricted
stock units granted prior to February 22, 2011, continue to vest upon a normal retirement and are forfeited upon an early retirement.
-
(7)
-
In
general, a change-in-control is one or more of the following events: (1) any person acquires 30% or more of the combined
voting power of Allstate common stock within a 12-month period; (2) any person acquires more than 50% of the combined voting power of Allstate common stock; (3) certain
changes are made to the composition of the Board; or (4) the consummation of a merger, reorganization, or similar transaction. These triggers were selected because any of these could cause a
substantial change in management in a widely held company the size of Allstate. Effective upon a change-in-control, the named executives become subject to covenants prohibiting
solicitation of employees, customers, and suppliers at any time until one year after termination of employment. If a named executive incurs legal fees or other expenses in an effort to enforce the
change-in-control agreement, Allstate will reimburse the named executive for these expenses unless it is established by a court that the named executive had no reasonable basis
for the claim or acted in bad faith.
-
(8)
-
Under
the change-in-control plan, severance benefits would be payable if a named executive's employment is terminated either by
Allstate without cause or by the executive for good reason as defined in the plan during the two years following the change-in-control. Cause means the named executive has been
convicted of a felony or other crime involving fraud or dishonesty, has willfully or intentionally breached the restrictive covenants in the change-in-control plan, has
habitually neglected his or her duties, or has engaged in willful or reckless material misconduct in the performance of his or her duties. Good reason includes a material diminution in a named
executive's base compensation, authority, duties, or responsibilities, or a material change in the geographic location where the named executive performs services.
-
(9)
-
If
a named executive's employment is terminated by reason of death during the two years after the date of a change-in-control, the
named executive's estate or beneficiary will be entitled to survivor and other benefits, including retiree medical coverage, if eligible, that are not less favorable than the most favorable benefits
available to the estates or surviving families of peer executives of Allstate. In the event of termination by reason of disability, Allstate will pay disability and other benefits, including
supplemental long-term disability benefits and retiree medical coverage, if eligible, that are not less favorable than the most favorable benefits available to disabled peer executives.
-
(10)
-
If
a named executive's employment is terminated due to disability, restricted stock units granted prior to February 22, 2011, are forfeited.
49
-- The Allstate Corporation
Table of Contents
ESTIMATE OF POTENTIAL PAYMENTS UPON TERMINATION
(1)
The table below describes the value of compensation and benefits to each named executive upon termination that would exceed the
compensation or benefits generally available to all salaried employees in each termination scenario. The total column in the following table does not reflect compensation or benefits previously
accrued or earned by the named executives such as deferred compensation and non-qualified pension benefits. The payment of the 2011 annual cash incentive award and any 2011 salary earned
but not paid in 2011 due to
Allstate's payroll cycle are not included in these tables because these are payable regardless of termination, death, or disability. Benefits and payments are calculated assuming a December 31,
2011, employment termination date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Severance
($)
|
|
Stock
Options
Unvested and
Accelerated
($)
|
|
Restricted
Stock Units
Unvested and
Accelerated
($)
|
|
Welfare
Benefits and
Outplacement
Services
($)
|
|
Total
($)
|
|
|
|
Mr. Wilson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination/Retirement
(2)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Termination due to Change-in-Control
(3)
|
|
|
9,900,000
|
|
|
3,976,154
|
|
|
8,568,832
|
|
|
57,855
|
(5)
|
|
22,502,841
|
|
Death
|
|
|
0
|
|
|
3,976,154
|
|
|
8,568,832
|
|
|
0
|
|
|
12,544,986
|
|
Disability
|
|
|
0
|
|
|
3,976,154
|
|
|
1,994,872
|
|
|
7,880,203
|
(6)
|
|
13,851,229
|
|
|
|
Mr. Civgin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination/ Retirement
(2)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Termination due to Change-in-Control
(3)
|
|
|
2,667,000
|
|
|
1,065,935
|
|
|
2,124,357
|
|
|
37,663
|
(5)
|
|
5,894,955
|
|
Death
|
|
|
0
|
|
|
1,065,935
|
|
|
2,124,357
|
|
|
0
|
|
|
3,190,292
|
|
Disability
|
|
|
0
|
|
|
1,065,935
|
|
|
513,828
|
|
|
4,009,759
|
(6)
|
|
5,589,522
|
|
|
|
Ms. Greffin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination/Retirement
(2)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Termination due to Change-in-Control
(3)
|
|
|
2,478,000
|
|
|
742,314
|
|
|
1,891,537
|
|
|
37,855
|
(5)
|
|
5,149,706
|
|
Death
|
|
|
0
|
|
|
742,314
|
|
|
1,891,537
|
|
|
0
|
|
|
2,633,851
|
|
Disability
|
|
|
0
|
|
|
742,314
|
|
|
462,434
|
|
|
0
|
(6)
|
|
1,204,748
|
|
|
|
Mr. Gupta
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination/Retirement
(2)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Termination Due to Change-in-Control
(3)
|
|
|
1,942,500
|
|
|
0
|
|
|
546,089
|
|
|
37,855
|
(5)
|
|
2,526,444
|
|
Death
|
|
|
0
|
|
|
0
|
|
|
546,089
|
|
|
0
|
|
|
546,089
|
|
Disability
|
|
|
0
|
|
|
0
|
|
|
546,089
|
|
|
1,625,492
|
(6)
|
|
2,171,581
|
|
|
|
Mr. Winter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination/Retirement
(2)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Termination due to Change-in-Control
(3)
|
|
|
2,839,407
|
(4)
|
|
0
|
|
|
1,468,189
|
|
|
37,855
|
(5)
|
|
4,345,451
|
|
Death
|
|
|
0
|
|
|
0
|
|
|
1,468,189
|
|
|
0
|
|
|
1,468,189
|
|
Disability
|
|
|
0
|
|
|
0
|
|
|
664,967
|
|
|
6,288,245
|
(6)
|
|
6,953,212
|
|
|
|
Mr. Lacher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
730,000
|
(7)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
730,000
|
|
|
|
-
(1)
-
A
"0" indicates either that there is no amount payable to the named executive, or the amount payable is the same for both the named executives and all
salaried employees.
-
(2)
-
As
of December 31, 2011, none of the named executives are eligible to retire in accordance with Allstate's policy and the terms of its equity
incentive compensation and benefit plans.
The Allstate
Corporation --
50
Table of Contents
-
(3)
-
The
values in this change-in-control row represent amounts paid if both the change-in-control and qualifying
termination occur on December 31, 2011. Equity awards granted prior to 2012 immediately vest upon a change-in-control; the amounts payable to each named executive would
be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Stock Options
Unvested and
Accelerated
($)
|
|
Restricted stock
units
Unvested and
Accelerated
($)
|
|
Total
Unvested and
Accelerated
($)
|
|
|
|
|
|
Mr. Wilson
|
|
|
3,976,154
|
|
|
8,568,832
|
|
|
12,544,986
|
|
|
|
|
|
Mr. Civgin
|
|
|
1,065,935
|
|
|
2,124,357
|
|
|
3,190,292
|
|
|
|
|
|
Ms. Greffin
|
|
|
742,314
|
|
|
1,891,537
|
|
|
2,633,851
|
|
|
|
|
|
Mr. Gupta
|
|
|
0
|
|
|
546,089
|
|
|
546,089
|
|
|
|
|
|
Mr. Winter
|
|
|
0
|
|
|
1,468,189
|
|
|
1,468,189
|
|
-
-
Beginning
with awards granted in 2012, equity awards will not accelerate in the event of a change-in-control unless also
accompanied by a qualifying termination of employment. A change-in-control also would accelerate the distribution of each named executive's non-qualified deferred
compensation and SRIP benefits. Please see the Non-Qualified Deferred Compensation at Fiscal Year End 2011 table and footnote 2 to the Pension Benefits table in the Retirement Benefits
section for details regarding the applicable amounts for each named executive.
-
(4)
-
Under
the change-in-control plan, Mr. Winter's severance benefit was reduced by $310,593 to avoid the imposition of excise
taxes and maximize the severance benefit available under the plan.
-
(5)
-
The
Welfare Benefits and Outplacement Services amount includes the cost to provide certain welfare benefits to the named executive and family during the
period the named executive is eligible for continuation coverage under applicable law. The amount shown reflects Allstate's costs for these benefits or programs assuming an 18-month
continuation period. The value of outplacement services is $40,000 for Mr. Wilson and $20,000 for each other named executive.
-
(6)
-
The
named executives who participate in the long-term disability plan are eligible to participate in Allstate's supplemental
long-term disability plan for employees whose annual earnings exceed the level which produces the maximum monthly benefit provided by the long-term disability plan (basic
plan). The benefit is equal to 50% of the named executive's qualified annual earnings divided by twelve and rounded to the nearest one hundred dollars, reduced by $7,500, which is the maximum monthly
benefit payment that can be received under the Basic Plan. The amount reflected assumes the named executive remains totally disabled until age 65 and represents the present value of the monthly
benefit payable until age 65. Ms. Greffin does not participate in the long-term disability plan.
-
(7)
-
Under
the terms of Mr. Lacher's separation agreement, for a one year period following his termination of employment, Mr. Lacher is restricted
from soliciting Allstate employees, customers, or suppliers and engaging in certain activities competitive with the property and casualty insurance business of Allstate.
51
-- The Allstate Corporation
Table of Contents
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|
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|
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|
|
|
Executive Compensation
|
|
PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
Risk Management and Compensation
We
have reviewed our compensation policies and practices, and we believe that they are appropriately structured, that they are consistent with our key operating priority of keeping the company
financially strong, and that they avoid providing incentives for employees to engage in unnecessary and excessive risk taking. We believe that executive compensation has to be examined in the larger
context of an effective risk management framework and strong internal controls. As described in the
Board Role in Risk Oversight
section of the
Corporate Governance Practices and
Code of Ethics
portion of this proxy statement, the Board and audit committee both play an important role in risk
management oversight, including reviewing how management measures, evaluates, and manages the corporation's exposure to risks posed by a wide variety of events and conditions. In addition, the
compensation and succession committee employs an independent executive compensation consultant each year to assess Allstate's executive pay levels, practices, and overall program design.
A
review and assessment of potential compensation-related risks was conducted by management and reviewed by the chief risk officer. Performance-related incentive plans were analyzed using a process
developed in conjunction with our independent executive compensation consultant.
The
2011 risk assessment specifically noted that our compensation programs:
-
-
Provide a balanced mix of cash and equity through annual and long-term incentives to align with
short-term and long-term business goals.
-
-
Utilize a full range of performance measures that we believe correlate to long-term shareholder value
creation.
-
-
Incorporate strong governance practices, including paying cash incentive awards only after a review of executive and
corporate performance.
-
-
Enable the use of negative discretion to adjust annual incentive compensation payments when formulaic payouts are not
warranted due to other circumstances.
-
-
Limit annual incentive payouts by containing a maximum payout level.
Furthermore,
to ensure our compensation programs do not motivate imprudent risk taking, awards to the executive officers made after May 19, 2009, under the 2009 Equity Incentive Plan and awards
made under the Annual Executive Incentive Plan are subject to clawback in the event of certain financial restatements.
Performance Measures for 2011 Annual Cash Incentive Awards
Information regarding our performance measures is disclosed in the limited context of our annual cash incentive awards and should not be understood
to be statements of management's expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
The
following are descriptions of the performance measures used for our annual cash incentive awards for 2011. These measures are not GAAP measures. They were developed uniquely for incentive
compensation purposes and are not reported items in our financial statements. Some of these measures use non-GAAP measures and operating measures. The Committee has approved the use of
non-GAAP and operating measures when appropriate to drive executive focus on particular strategic, operational, or financial factors or to exclude factors over which our executives have
little influence or control, such as capital market conditions.
Adjusted Underlying Operating Income:
This measure is used to assess financial performance. This measure is equal to net income adjusted to exclude the after tax
effects of the items listed below:
-
-
Realized capital gains and losses (which includes the related effect on the amortization of deferred acquisition and
deferred sales inducement costs) except for periodic settlements and accruals on certain non-hedge derivative instruments.
-
-
Valuation changes on embedded derivatives that are not hedged.
-
-
Business combination expenses and the amortization of purchased intangible assets.
-
-
Gains and losses on disposed operations.
-
-
Adjustments for other significant non-recurring, infrequent, or unusual items, when (a) the nature of
the charge or gain is such that it is reasonably unlikely to recur within two years or (b) there has been no similar charge or gain within the prior two years.
-
-
Restructuring or related charges.
-
-
Underwriting results of the Discontinued Lines and Coverages segment.
The Allstate
Corporation --
52
Table of Contents
-
-
Any settlement, awards, or claims paid as a result of lawsuits and other proceedings brought against Allstate subsidiaries
regarding the scope and nature of coverage provided under insurance policies issued by such companies.
-
-
The after tax effects of catastrophe losses. Catastrophes are defined and reported in The Allstate Corporation
10-K.
Book Value Per Share:
This measure is used to assess financial performance. The measure is equal to book value per diluted share adjusted to exclude the effects of
2011 share repurchases. The numerator, shareholders' equity at December 31, 2011, is increased to exclude the cost of shares acquired in 2011 under approved share repurchase programs. The
denominator, total shares outstanding plus dilutive potential shares outstanding at December 31, 2011, is increased to exclude the number of shares acquired in 2011 under approved share
repurchase programs. Other effects resulting from approved share repurchase programs, such as the impacts on net investment income of using funds to purchase shares, are not adjusted.
Growth in Policies in Multi-Category Households:
This measure is used by management to assess the execution of its strategy to broaden customer relationships. This
measures represents the increase from December 31, 2010, to December 31, 2011, in the number of policies within households that have policies in multiple product categories. Product
categories are defined as Auto, Property, or Allstate Financial. The measure includes Encompass brand package policies, but not their existence in any cross-branded relationships. It excludes Allstate
Workplace Division, Allstate Roadside Services, Allstate Dealer Services, Allstate Business Insurance, and Expanded Markets products.
53
-- The Allstate Corporation
Table of Contents
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|
|
|
|
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|
|
|
|
|
|
Director Compensation
|
|
PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
The following table summarizes the compensation of each of our non-employee directors during 2011 for his or her services as a member of the Board
and its committees. Mr. Rowe is not included because he did not begin service as a director until February 7, 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned or
Paid in Cash
($)
|
|
Stock Awards
($)
(1)
|
|
Total ($)
|
|
|
|
Mr. Ackerman
|
|
|
|
|
85,000
|
|
|
|
|
|
|
150,008
|
|
|
|
|
235,008
|
|
|
|
Mr. Beyer
|
|
|
|
|
85,000
|
|
|
|
|
|
|
150,008
|
|
|
|
|
235,008
|
|
|
|
Mr. Farrell
(2)
|
|
|
|
|
103,750
|
(3)
|
|
|
|
|
|
150,008
|
|
|
|
|
253,758
|
|
|
|
Mr. Greenberg
|
|
|
|
|
85,000
|
|
|
|
|
|
|
150,008
|
|
|
|
|
235,008
|
|
|
|
Mr. LeMay
|
|
|
|
|
85,000
|
|
|
|
|
|
|
150,008
|
|
|
|
|
235,008
|
|
|
|
Ms. Redmond
|
|
|
|
|
85,000
|
|
|
|
|
|
|
150,008
|
|
|
|
|
235,008
|
|
|
|
Mr. Riley, Jr.
(4)
|
|
|
|
|
110,000
|
|
|
|
|
|
|
150,008
|
|
|
|
|
260,008
|
|
|
|
Mr. Smith
|
|
|
|
|
85,000
|
|
|
|
|
|
|
150,008
|
|
|
|
|
235,008
|
|
|
|
Ms. Sprieser
(5)
|
|
|
|
|
107,500
|
|
|
|
|
|
|
150,008
|
|
|
|
|
257,508
|
|
|
|
Mrs. Taylor
|
|
|
|
|
85,000
|
(6)
|
|
|
|
|
|
150,008
|
|
|
|
|
235,008
|
|
|
|
-
(1)
-
The
aggregate grant date fair value of restricted stock units is based on the final closing price of Allstate stock as of the date of the grant. The final
closing price in part reflects the payment of expected future dividends. For the annual restricted stock unit awards granted to each director on June 1, 2011, the final closing price of
Allstate stock on the grant date was $30.44. The aggregate grant date fair value of the annual 2011 restricted stock unit awards, computed in accordance with Financial Accounting Standards Board
Accounting Standards Codification Topic 718, was $150,008 for each director. Each restricted stock unit entitles the director to receive one share of Allstate stock on the conversion date. The
aggregate number of restricted stock units outstanding as of December 31, 2011, for each director is as follows: Mr. Ackerman 25,725,
Mr. Beyer 21,725, Mr. Farrell 25,725, Mr. Greenberg 25,725, Mr. LeMay 25,725,
Ms. Redmond 12,067, Mr. Riley 25,725, Mr. Smith 25,725, Ms. Sprieser 25,725, and
Mrs. Taylor 25,725. Restricted stock unit awards granted before September 15, 2008, convert into stock one year after termination of Board service, or upon death or
disability if earlier. Restricted stock unit awards granted on or after September 15, 2008, convert into stock upon termination of Board service, or upon death or disability if earlier.
-
-
Non-employee
directors no longer receive stock options as part of their compensation. The aggregate number of options outstanding as
of December 31, 2011, under prior option awards for each director is as follows: Mr. Ackerman 28,000, Mr. Beyer 10,667,
Mr. Farrell 28,000, Mr. Greenberg 29,000, Mr. LeMay 28,000, Ms. Redmond 0,
Mr. Riley 28,000, Mr. Smith 23,999, Ms. Sprieser 28,000, and Mrs. Taylor 28,000. All of
these outstanding stock options were exercisable as of December 31, 2011.
-
(2)
-
Chair
of the Nominating and Governance Committee during 2011.
-
(3)
-
Mr. Farrell
elected to receive 20% of his March 1, 2011, quarterly cash retainer payment in stock.
-
(4)
-
Chair
of the Compensation and Succession Committee during 2011. Elected lead director December 2011.
-
(5)
-
Chair
of the Audit Committee during 2011.
-
(6)
-
Mrs. Taylor
elected to receive 100% of her March 1, 2011, quarterly cash retainer payment in stock and 50% of her June 1,
September 1, and December 1, 2011, quarterly cash retainer payments in stock.
The Allstate
Corporation --
54
Table of Contents
On
March 1, 2011, each non-employee director was entitled to a $17,500 quarterly cash retainer, and each committee chair was entitled to an additional $3,750 quarterly cash
retainer. Beginning on June 1, 2011, each non-employee director was entitled to a $22,500 quarterly cash retainer, and each committee chair was entitled to an additional $5,000
quarterly cash retainer, except for the audit committee chair, who was entitled to an additional $6,250 quarterly cash retainer. In December 2011, an independent lead director was elected. The
independent lead director is entitled to an additional $6,250 quarterly cash retainer. On June 1, 2011, each non-employee director received an annual award of restricted stock units
under the 2006 Equity Compensation Plan for Non-Employee Directors. The number of restricted stock units granted to each director was equal to $150,000 divided by the fair market value of
a share of our stock on June 1, 2011. No meeting fees or other professional fees are paid to the directors. Under Allstate's Deferred Compensation Plan for Non-Employee Directors,
directors may elect to defer their retainers to an account that generates earnings based on (a) the market value of, and dividends paid on, Allstate common shares (common share units);
(b) the average interest rate payable on 90-day dealer commercial paper; (c) Standard & Poor's 500 Composite Stock Price Index, with dividends reinvested; or
(d) a money market fund. No director has voting or investment powers in common share units, which are payable solely in cash. Subject to certain restrictions, amounts deferred under the plan,
together with earnings thereon, may be transferred between accounts and are distributed after the director leaves the Board in a lump sum or over a period not in excess of ten years.
Restricted
stock unit awards granted on or after September 15, 2008, provide for delivery of the underlying shares of Allstate common stock upon the earlier of (a) the date of the
director's death or disability or (b) the date the director leaves the Board. Restricted stock unit awards granted before September 15, 2008, provide for delivery of the underlying
shares of Allstate common stock upon the earlier of (a) the date of the director's death or disability or (b) one year after the date the director leaves the Board. Each restricted stock
unit includes a dividend equivalent right that entitles the director to receive a payment equal to regular cash dividends paid on Allstate common stock. Under the terms of the
restricted stock unit awards, directors have only the rights of general unsecured creditors of Allstate and no rights as stockholders until delivery of the underlying shares.
In
accordance with the terms of the 2006 Equity Compensation Plan for Non-Employee Directors, the exercise price of the stock option awards is equal to the fair market value of Allstate
common stock on the date of grant. For options granted in 2007 and 2008, the fair market value is equal to the closing sale price on the date of the grant, and for options granted prior to 2007, fair
market value is equal to the average of high and low sale prices on the date of grant, and, in each case, if there was no such sale on the date of grant, then on the last previous day on which there
was a sale. The options become exercisable in three substantially equal annual installments and expire ten years after grant. Stock option repricing is not permitted. An outstanding stock option will
not be amended to reduce the option exercise price. However, the plan permits repricing in the event of an equity restructuring (such as a split) or a change in corporate capitalization (such as a
merger).
As
detailed in our
Corporate Governance Guidelines,
the corporation maintains stock ownership guidelines for our non-employee directors.
Within five years of joining the Board, each director is expected to accumulate an ownership position in Allstate securities equal to five times the value of the annual cash retainer paid for board
service. Every director has met the ownership guideline, except for Mr. Rowe, who joined the Board on February 7, 2012, and has until January 1, 2017, to meet the guideline.
55
-- The Allstate Corporation
Table of Contents
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Security Ownership
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PROXY STATEMENT
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Security Ownership of Directors and Executive Officers
The
following table shows the number of shares of Allstate common stock beneficially owned by each director and named executive officer individually, and by all executive officers and directors of
Allstate as a group. Shares reported as beneficially owned include shares held indirectly through the Allstate 401(k) Savings Plan and other shares held indirectly, as well as shares subject to stock
options exercisable on or before May 9, 2012, and restricted stock units with restrictions that expire on or before May 9, 2012. The percentage of Allstate shares of common stock
beneficially owned by any Allstate director or nominee or by all directors and executive officers of Allstate as a group does not exceed 1%. The following share amounts are as of March 10,
2012. As of March 10, 2012, none of these shares were pledged as security.
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Name of Beneficial Owner
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Amount and Nature of
Beneficial Ownership of
Allstate Common Stock
(a)
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Common Stock
Subject to Options
Exercisable and
Restricted Stock Units
for which restrictions
expire on or prior to
May 9, 2012
Included in Column (a)
(b)
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F. Duane Ackerman
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Robert D. Beyer
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Don Civgin
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W. James Farrell
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Jack M. Greenberg
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Judith P. Greffin
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Suren Gupta
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Joseph P. Lacher
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Ronald T. LeMay
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Andrea Redmond
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H. John Riley, Jr.
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John W. Rowe
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Joshua I. Smith
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Judith A. Sprieser
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Mary Alice Taylor
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Thomas J. Wilson
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Matthew E. Winter
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All directors and executive officers as a group
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The Allstate
Corporation --
56
Table of Contents
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Security Ownership
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PROXY STATEMENT
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Security Ownership of Certain Beneficial Owners
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Title of Class
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Name and Address of
Beneficial Owner
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Amount and Nature of
Beneficial Ownership
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Percent of
Class
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Common
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Northern Trust Corporation
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27,860,460
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(1)
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5.51
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%
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(1)
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As
of December 31, 2011. Held by Northern Trust Corporation together with certain subsidiaries (collectively "Northern"). Of such shares, Northern
held 2,697,661 with sole voting power; 25,099,042 with shared voting power; 5,819,437 with sole investment power; and 2,814,574 with shared investment power. 19,282,308 of such shares were held by The
Northern Trust Company as trustee on behalf of participants in Allstate's 401(k) Savings Plan. Information is provided for reporting purposes only and should not be construed as an admission of actual
beneficial ownership.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires Allstate's executive officers, directors, and persons who beneficially own more than ten percent of Allstate's common
stock to file reports of securities ownership and changes in such ownership with the SEC.
Based
solely upon a review of copies of such reports, or written representations that all such reports were timely filed, Allstate believes that each of its executive officers, directors, and greater
than ten-percent beneficial owners complied with all Section 16(a) filing requirements applicable to them during 2011.
57
-- The Allstate Corporation
Table of Contents
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Proposal 3 Act by Written Consent
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PROXY STATEMENT
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Proposal 3
Approval of Proposed Amendment to the Certificate of Incorporation Granting the Right to Act by Written Consent
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Stockholder
proposals seeking the right to act by written consent were on the ballots for our last two annual meetings and received support from 67% and 52% of stockholders who voted. In response, the
nominating and governance committee hired advisors to assist it in developing a right to act by written consent that would be fundamentally fair and fully transparent to all stockholders. The
nominating and governance committee and Board considered several alternatives over the course of multiple meetings in 2011 and 2012. After careful consideration, the Board unanimously approved an
amendment to our certificate of incorporation for stockholder consideration. (See Appendix B for the full text.) The proposed amendment provides for full transparency and enables all
stockholders to participate in the process.
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All stockholders must be solicited in accordance with the Securities and Exchange Commission rules. This ensures that all
stockholders are fully informed and able to participate in an action by written consent. Without this protection, an action by written consent could take place without you having been informed or
having a chance to vote.
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Stockholders requesting action by written consent must share the same information currently required of any Allstate
stockholder seeking to nominate directors or propose action at a meeting.
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Stockholders must own 10% of outstanding shares to begin the process to act by written consent. Without this protection,
someone holding just one share of Allstate stock could commence an action for written consent potentially resulting in considerable expense and distraction to Allstate without there being any
meaningful support for the action sought.
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-
Delivery of executed consents cannot begin until 60 days after the written consent process is commenced. This delay
is designed to ensure that all stockholders have a chance to consider the matter being proposed, including any arguments in opposition presented by the Board. In addition, this would provide time for
the Board to pursue other alternatives to maximize stockholder value.
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-
Actions to be considered by written consent cannot be the same as items proposed for a stockholder meeting scheduled to
occur within 90 days. This eliminates unnecessary expense and distraction to the corporation when there is a pending stockholders meeting to handle the same business.
The
Board believes this amendment implements the right to act by written consent in a fully transparent way that gives all stockholders equal rights. To be approved, a majority of the shares
outstanding and entitled to vote must be voted "FOR" the amendment. Abstentions will be counted as shares outstanding and will have the effect of a vote against the proposal. Broker
non-votes will be counted as outstanding shares and will have the effect of a vote against the proposal. If the amendment is approved, we will promptly file it with the Secretary of State
of Delaware. The amendment will be effective upon that filing. If the amendment is not approved, then it will not be filed or become effective.
A
copy of the full text of the amendment is in Appendix B.
The Board of Directors recommends that you vote FOR approval of this amendment to the certificate of incorporation.
The Allstate
Corporation --
58
Table of Contents
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Proposal 4 Call a Special Meeting
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PROXY STATEMENT
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Proposal 4
Approval of Proposed Amendment to the Certificate of Incorporation Granting Stockholders Owning 10% of Outstanding Shares the Right to Call a Special Meeting
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Last
year 83% of stockholders approved an amendment to our certificate of incorporation to give stockholders the right to call a special meeting. That amendment granted holders of 20% of outstanding
shares the right to call a special meeting of stockholders. The Board proposed that amendment in response to a stockholder proposal that had received support from a majority of votes cast at both the
2009 and 2010 annual meetings.
We
know that our stockholders have a range of opinions on the ownership threshold to exercise the right to call a special meeting. Some stockholders prefer a 10% threshold while others prefer a
threshold of 25%. The Board proposes this amendment to lower the ownership threshold required from 20% to 10% of outstanding shares in order to have consistent procedural requirements with those for
the right to act by written consent (described in
Proposal 3 Act by Written Consent)
and to respond to stockholder requests for a
lower threshold. The proposed 10% ownership threshold remains consistent with the Board's belief that special actions should be initiated only to address significant concerns of interest to all
stockholders that require attention before the next annual meeting.
To
be approved, a majority of the shares outstanding and entitled to vote must be voted "FOR" the amendment. Abstentions will be counted as shares outstanding and will have the effect of a vote
against the proposal. Broker non-votes will be counted as outstanding shares and will have the effect of a vote against the proposal. If the amendment is approved, we will promptly file it
with the Secretary of State of Delaware. The amendment will be effective upon that filing. If the amendment is not approved, then it will not be filed or become effective.
A
copy of the full text of the amendment is in Appendix B.
The Board of Directors recommends that you vote FOR approval of this amendment to the certificate of incorporation.
59
-- The Allstate Corporation
Table of Contents
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Proposal 5 Ratification of Auditors
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PROXY STATEMENT
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Proposal 5
Ratification of the Appointment of Independent Registered Public Accountant
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The
audit committee has appointed Deloitte & Touche LLP as Allstate's independent registered public accountant for 2012. The Board submits the selection of Deloitte &
Touche LLP to stockholders for ratification, consistent with its longstanding practice. If Deloitte is not ratified by the stockholders, the committee may reconsider its selection.
The
audit committee has adopted a
Policy Regarding Pre-Approval of Independent Registered Public Accountant's Services.
(See
Appendix C.) All services provided by Deloitte & Touche LLP in 2011 and 2010 were approved by the committee.
The
following fees have been, or are anticipated to be, billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, for professional
services rendered to Allstate for the fiscal years ending December 31, 2011, and December 31, 2010.
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2011
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2010
(5)
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Audit fees
(1)
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$9,321,500
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$8,793,244
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Audit-related fees
(2)
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$1,760,500
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$646,270
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Tax fees
(3)
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$26,000
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$5,250
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All other fees
(4)
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$
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$25,300
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Total fees
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$11,108,000
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$9,470,064
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(1)
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Fees
for audits of annual financial statements, reviews of quarterly financial statements, statutory audits, attest services, comfort letters, consents, and
review of documents filed with the Securities and Exchange Commission. The amount disclosed does not reflect reimbursed audit fees received from non-Deloitte entities in the amounts of
$607,600 and $90,000 for 2011 and 2010, respectively. Reimbursements are expected to increase for 2011 largely due to the sharing of Esurance acquisition-related audit fees with the White Mountains
Insurance Group.
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(2)
-
Audit-related
fees are for professional services, such as accounting consultations on new accounting standards, and audits and other attest services for
non-consolidated entities (e.g., employee benefit plans, various trusts, The Allstate Foundation) and are set forth below.
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2011
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2010
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Audits and other attest services for non-consolidated entities
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$347,000
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$433,670
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Adoption of new accounting standards
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$435,000
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$108,100
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Other audit-related fees
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$978,500
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$104,500
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Audit-related fees
(6)
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$1,760,500
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$646,270
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(3)
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Tax
fees include income tax return preparation and compliance assistance.
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(4)
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"All
other fees" are for coordination of work for a department of insurance exam in 2010.
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(5)
-
Total
fees presented above for 2010 have been decreased by $155,536 to primarily reflect a reduction of estimated fees relating to work performed last year.
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(6)
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Audit
related fees increased substantially in 2011 primarily due to the acquisition of Esurance and the adoption of ASU 2010-26, which required
a restatement of deferred acquisition costs. Non-recurring fees relating to Esurance are of $726,000 for 2011, while ASU 2010-26 fees total $385,000.
The Allstate
Corporation --
60
Table of Contents
Representatives
of Deloitte & Touche LLP will be present at the 2012 annual meeting to respond to questions and may make a statement if they choose. To be approved, a majority of the
shares present in person or represented by proxy at the meeting and entitled to vote on the proposal must be voted "FOR." Abstentions will be counted as shares present at the meeting and will have the
effect of a vote against the proposal.
The Board of Directors recommends that stockholders vote FOR ratification of the appointment of Deloitte &
Touche LLP as Allstate's independent registered public accountant for 2012.
Audit Committee Report
Deloitte & Touche LLP (Deloitte) was Allstate's independent registered public accountant for the year ended
December 31, 2011.
The
audit committee reviewed and discussed with management the audited financial statements for the fiscal year ended December 31, 2011.
The
committee discussed with Deloitte the matters required to be discussed by the statement of Auditing Standards No. 61, as amended (AICPA,
Professional
Standards,
Vol. 1. AU section 380) as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The
committee received the written disclosures and letter from Deloitte required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte's communications with
the committee concerning independence and has discussed with Deloitte its independence.
Based
on these reviews and discussions and other information considered by the committee in its judgment, the committee recommended to the Board of Directors that the audited financial statements be
included in Allstate's annual report on Form 10-K for the fiscal year ended December 31, 2011, for filing with the Securities and Exchange Commission, and furnished to
stockholders with this Notice of Annual Meeting and Proxy Statement.
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Judith A. Sprieser (Chair)
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F. Duane Ackerman
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Ronald T. LeMay
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Robert D. Beyer
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Mary Alice Taylor
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Jack M. Greenberg
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61
-- The Allstate Corporation
Table of Contents
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Stockholder Proposal
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PROXY STATEMENT
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Proposal 6
Stockholder proposal on reporting political contributions
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The
City of Philadelphia Public Employees Retirement System, Two Penn Center Plaza, Philadelphia, Pennsylvania, 19102-1721, beneficial owner of 142,057 shares of Allstate common stock as
of December 2, 2011, intends to propose the following resolution at the annual meeting.
To
be approved, a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal must be voted "for." Abstentions will be counted as shares
present at the meeting and will have the effect of a vote against the proposal. Broker non-votes will not be counted as shares entitled to vote on the matter and will have no impact on the
vote's outcome.
The
Board of Directors does not support the adoption of this proposal and asks stockholders to consider management's response following the proponent's statement.
The Board
recommends that stockholders vote
against
this proposal.
Resolved,
that the shareholders of Allstate ("Company") hereby request that the Company provide a report, updated semiannually, disclosing the Company's:
-
1.
-
Policies
and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
-
2.
-
Monetary
and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on
behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall
include:
-
a.
-
An
accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company's funds that
are used for political contributions or expenditures as described above; and
-
b.
-
The
title(s) of the person(s) in the Company responsible for the decision(s) to make the political contributions or expenditures.
The
report shall be presented to the board of directors or relevant board oversight committee and posted on the Company's website.
Stockholder
Supporting Statement
As
long-term shareholders of Allstate, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any
political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or
electioneering communications on behalf of federal, state or local candidates.
Disclosure
is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court's
Citizens United
decision
recognized the importance of political spending disclosure for shareholders when it said "[D]isclosure
permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different
speakers and messages." Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.
Allstate
contributed at least $6 million in corporate funds since the 2002 election cycle. (CQ:
http://moneyline.cq.com/pml/home.do
and National Institute on Money
in State Politics: http://www.followthemoney.org/index.phtml.)
However,
relying on publicly available data does not provide a complete picture of the Company's political spending. For example, the Company's payments to trade associations used for political
activities are undisclosed and unknown. In some cases, even management does not know how trade associations use their company's money politically. The
proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations used for political purposes. This would bring our
Company in line with a growing number of leading companies, including Merck, MetLife and Microsoft that support political disclosure and accountability and present this information on their websites.
The
Company's Board and its shareholders need comprehensive disclosure to be able to fully evaluate the
The Allstate
Corporation --
62
Table of Contents
political
use of corporate assets. We urge your support for this critical governance reform.
The Board recommends that stockholders vote
against
this proposal for the following
reasons:
-
-
Allstate has already posted a report that is responsive to this stockholder proposal on
allstate.com.
The report details Allstate's involvement in the public policy arena, which best serves the business interests of the corporation, its stockholders, and its
customers.
-
-
Allstate believes it is in the best interest of stockholders for Allstate to participate in the legislative process by
making corporate political contributions prudently to candidates and political organizations when such contributions are consistent with business objectives and are permitted by federal, state, and
local laws.
-
-
Publicly available disclosures already provide ample information about Allstate's political contributions, as so clearly
demonstrated by the proponent's reference to figures on contributions previously made by Allstate.
-
-
In 2011, Allstate's total expenditures on public policy related initiatives utilized approximately $14.1 million in
corporate funds, which represented four hundredths of one percent of revenues, of which one-half was spent on research supporting public policy initiatives, such as safe driving.
-
-
In addition, political contributions are reported regularly to, and overseen by, senior management
and reviewed on an annual basis by the Board
.
-
-
Our policy on political contributions is part of our
Corporate Governance
Guidelines
.
-
-
Allstate also demonstrates its support for transparency in the political contribution process by
fully complying with all disclosure requirements pertaining to political contributions under federal, state, and local laws.
Stockholder Proposals for the 2013 Annual Meeting
Proposals
which stockholders would like to include in Allstate's proxy material for presentation at the 2013 annual meeting of stockholders must be received by the Office of the Secretary, The
Allstate Corporation, 2775 Sanders Road, Suite A2W, Northbrook, Illinois 60062-6127 by December 12, 2012, and must otherwise comply with Securities and Exchange Commission rules in
order to be eligible for inclusion in the proxy material for the 2013 annual meeting.
If
a stockholder would like to bring a matter before the meeting which is not the subject of a proposal that meets the SEC proxy rule requirements for inclusion in the proxy statement, the stockholder
must follow procedures in Allstate's bylaws in order to personally present the proposal at the meeting. A copy of these procedures is available upon request from the Office of the Secretary or can be
accessed on Allstate's website, www.allstate.com. One of the procedural requirements in the bylaws is timely notice in writing of the business the stockholder proposes to bring before the meeting.
Notice of business proposed to be brought before the 2013 annual meeting must be received by the Office of the Secretary no earlier than the close of business on January 22, 2013, and no later
than February 21, 2013. Among other things, the notice must describe the business proposed to be brought before the meeting, the reasons for conducting the business at the meeting, and any
material interest of the stockholder in the business.
63
-- The Allstate Corporation
Table of Contents
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Other Items
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PROXY STATEMENT
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Allstate 401(k) Savings Plan Participants
If
you hold Allstate common shares through the Allstate 401(k) Savings Plan, your proxy card/voting instruction form for those shares will instruct the plan trustee how to vote those shares. If you
received your annual meeting materials
electronically, and you hold Allstate common shares both through the plan and also directly as a registered stockholder, the voting instructions you provide electronically will be applied to both your
plan shares and your registered shares. If you return a signed proxy card/voting instruction form or vote by telephone or the Internet on a timely basis, the trustee will follow your voting
instructions for all Allstate common shares allocated to your plan account unless that would be inconsistent with the trustee's duties.
If
your voting instructions are not received on a timely basis, the shares allocated to your plan account will be considered "unvoted." If you return a signed proxy card/voting instruction form but do
not indicate how your shares should be voted on a given matter, the shares represented by your proxy card/voting instruction form will be voted as the Board of Directors recommends. The trustee will
vote all unvoted shares and all unallocated shares held by the plan as follows:
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If the trustee receives instructions (through voting instruction forms or through telephonic or Internet instruction) on a
timely basis for at least 50% of the votable allocated shares in the plan, then it will vote all unvoted shares and unallocated shares in the same proportion and in the same manner as the shares for
which timely instructions have been received, unless to do so would be inconsistent with the trustee's duties.
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If the trustee receives instructions for less than 50% of the votable shares, the trustee shall vote all unvoted and
unallocated shares in its sole discretion. However, the trustee will not use its discretionary authority to vote on adjournment of the meeting in order to solicit further proxies.
Plan
votes receive the same level of confidentiality as all other votes. You may not vote the shares allocated to your plan account by voting in person at the meeting. You must instruct The Northern
Trust Company, as trustee for the plan, how to vote your shares.
Proxy Statement and Annual Report Delivery
Allstate
has adopted the "householding" procedure approved by the Securities and Exchange Commission, which allows us to deliver one set of documents to a household of stockholders instead of
delivering a set to each stockholder in a household, unless we have been instructed otherwise. This procedure is more environmentally friendly and cost-effective because it reduces the
number of copies to be printed and mailed. Stockholders who receive proxy materials in paper form will continue to receive separate proxy cards/voting instruction forms to vote their shares.
Stockholders who receive the Notice of Internet Availability of Proxy Materials will receive instructions on submitting their proxy cards/voting instruction form via the Internet.
If
you would like to change your householding election, request that a single copy of the proxy materials be sent to your address, or request a separate copy of the proxy materials, please contact our
distribution agent, Broadridge Financial Solutions, by calling (800) 542-1061 or by writing to Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717. We will
promptly deliver the proxy materials to you upon receipt of your request. If you hold your shares in street name, please contact your bank, broker, or other record holder to request information about
householding.
If
you receive more than one proxy card/voting instruction form, your shares are probably registered in more than one account or you may hold shares both as a registered stockholder and through the
Allstate 401(k) Savings Plan. You should vote each proxy card/voting instruction form you receive.
Proxy Solicitation
Officers
and other employees of Allstate and its subsidiaries may solicit proxies by mail, personal interview, telephone, facsimile, electronic means, or via the Internet. None of these individuals
will receive special
The Allstate
Corporation --
64
Table of Contents
compensation
for soliciting votes, which will be performed in addition to their regular duties, and some of them may not necessarily solicit proxies. Allstate also has made arrangements with brokerage
firms, banks, record holders, and other fiduciaries to forward proxy solicitation materials to the beneficial owners of shares they hold on your behalf. Allstate will reimburse these intermediaries
for reasonable out-of-pocket expenses. Georgeson Inc., 199
Water Street, 26
th
Floor, New York, NY 10038 has been retained to assist in the solicitation of proxies for a fee not to exceed $16,500 plus expenses. Allstate will pay the cost
of all proxy solicitation.
By
order of the Board,
Mary
J. McGinn
Secretary
Dated:
April 11, 2012
65
-- The Allstate Corporation
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Appendix A
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PROXY STATEMENT
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Appendix A
Categorical Standards of Independence
In accordance with the
Director Independence Standards,
the Board has
determined that the nature of the following relationships with the corporation do not create a conflict of interest that would impair a director's independence.
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1.
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An
Allstate director's relationship arising from (i) only such director's position as a director of another corporation or organization;
(ii) only such director's direct or indirect ownership of a 5% or less equity interest in another corporation or organization (other than a partnership); (iii) both such position and
such ownership; or (iv) such director's position only as a limited partner in a partnership in which he or she has an interest of 5% or less.
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2.
-
An
Allstate director's relationship arising from an interest of the director, or any entity in which the director is an employee, director, partner,
stockholder or officer, in or under any standard-form insurance policy or other financial product offered by the Allstate Group in the ordinary course of business.
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3.
-
An
Allstate director's relationship with another company that participates in a transaction with the Allstate Group (i) where the rates or charges
involved are determined by competitive bid or (ii) where the transaction involves the rendering of services as a common or contract carrier (including any airline) or public utility at rates or
charges fixed in conformity with law or governmental authority.
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4.
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An
Allstate director's relationship with another company that has made payments to, or received payments from, the Allstate Group for property or services in
an amount which, in the last fiscal year, does not exceed the greater of $1 million or 2% of such other company's consolidated gross revenues for such year.
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5.
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An
Allstate director's position as an executive officer of a tax exempt organization to which the aggregate amount of discretionary contributions (other than
employee matching contributions) made by the Allstate Group and The Allstate Foundation in any of the last three fiscal years of the tax exempt organization were equal to or less than the greater of
$1 million or 2% of such organization's consolidated gross revenues for such year.
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6.
-
An
Allstate director's relationship with another company (i) in which the Allstate Group makes investments or (ii) which invests in securities
issued by the Allstate Group or securities backed by any product issued by the Allstate Group, all in the ordinary course of such entity's investment business and on terms and under circumstances
similar to those available to or from entities unaffiliated with such director.
A-1
-- The Allstate Corporation
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Appendix B
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PROXY STATEMENT
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Appendix B
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
OF THE ALLSTATE CORPORATION
(Proposed additions indicated in bold with underline. Proposed deletions
are struck through.)
If Proposal 3 is approved by stockholders, the addition of Article Eleventh will be approved. If Proposal 4 is approved by stockholders, the amendment to Article Seventh will
be approved.
Article Seventh
Meetings of stockholders may be held within or without the State of Delaware, as the bylaws of the corporation may
provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the bylaws of the
corporation. Election of directors need not be by written ballot unless the bylaws of the corporation so provide.
Any
action required or permitted to be taken by the holders of any class or series of stock of the corporation entitled to vote generally in the election of directors
may be taken only by vote at an annual or special meeting at which such action may be taken and may not be taken by written consent.
Special
meetings of stockholders of the corporation, for any purpose or purposes, may be called only by (i) the Chairman of the board of directors of the corporation or
(ii) the Secretary of the corporation upon the written request of the holders of record owning not less than
20%
10%
of all
outstanding shares of common stock of the corporation, in accordance with the applicable requirements and procedures of the bylaws of the corporation. Each special meeting shall be held at such date,
time and place as may be stated in the written notice of the special meeting.
No
director may be removed, with or without cause, by the stockholders except by the affirmative vote of holders of not less than a majority of the total number of votes entitled to be
cast at an election of such director; provided, however, that, whenever the holders of any class or series of Preferred Stock issued pursuant to ARTICLE FOURTH, Section 1 hereof, are entitled,
by the terms of such class or series of Preferred Stock, voting separately by class or series to elect one or more directors, the provisions of the preceding clause of this sentence shall not apply
with respect to such directors if the terms of such class or series of Preferred Stock expressly provide otherwise.
Article Eleventh
1.
Written Consent.
Certain actions required or permitted
to be taken by the stockholders of the corporation at an annual or special meeting of the stockholders may be effected without a meeting by the written consent of the holders of common stock of the
corporation (a "Consent"), but only if such action is taken in accordance with the provisions of this Article ELEVENTH or by the holders of any class or series of Preferred Stock issued pursuant to
ARTICLE FOURTH, Section 1 hereof if the terms of such class or series of Preferred Stock expressly provide for such action by Consent.
2.
Request for Record Date.
The record date for
determining stockholders entitled to authorize or take corporate action by Consent shall be as fixed by the board of directors of the corporation or as otherwise established under this Article
ELEVENTH. Any stockholder seeking to have the stockholders authorize or take corporate action by Consent shall, by written notice addressed to the secretary of the corporation and delivered to the
principal executive offices of the corporation and signed by holders of record owning not less than 10% of all outstanding shares of common stock of the corporation, as determined in accordance with
the applicable requirements of the bylaws of the corporation, who shall continue to own not less than 10% of all outstanding shares of common stock of the corporation through the date of delivery of
Consents signed by a sufficient number of stockholders to authorize or take such action and who shall not revoke such request, request that a record date be fixed for such purpose (each such notice, a
"Request"). The Request must contain the information set forth in Section 3 of this Article ELEVENTH.
B-1
-- The Allstate Corporation
Table of Contents
By the later of (i) twenty days after delivery of a valid Request and (ii) five days after delivery of any information requested by the corporation
pursuant to Section 3 of this Article ELEVENTH, the board of directors of the corporation shall determine the validity of the Request and whether the Request relates to an action that may be
authorized or taken by Consent pursuant to this Article ELEVENTH and, if appropriate, adopt a resolution fixing the record date for such purpose. The record date for such purpose shall be no more than
ten days after the date upon which the resolution fixing the record date is adopted by the board of directors of the corporation and shall not precede the date such resolution is adopted. If the
Request has been determined to be valid and to relate to an action that may be authorized or taken by Consent pursuant to this Article ELEVENTH or if such no determination shall have been made by the
date required by this Article ELEVENTH, and in either event no record date has been fixed by the board of directors of the corporation, the record date shall be the day on which the first signed
Consent is delivered to the corporation in the manner described in Section 7 of this Article ELEVENTH; except that, if prior action by the board of directors of the corporation is required
under the provisions of Delaware law, the record date shall be at the close of business on the day on which the board of directors of the corporation adopts the resolution taking such prior
action.
3.
Request Requirements.
Any Request (a) must be
delivered by the holders of record owning not less than 10% of all outstanding shares of common stock of the corporation, as determined in accordance with applicable requirements of the bylaws of the
corporation (with evidence of such ownership attached), who shall continue to own not less than 10% of all outstanding shares of common stock of the corporation through the date of delivery of
Consents and who shall not revoke such request, signed by a sufficient number of stockholders to authorize or take such action; (b) must describe the action proposed to be authorized or taken
by Consent; and (c) must contain (i) such other information and representations, to the extent applicable, then required by the corporation's bylaws as though each stockholder submitting
such Request was submitting a notice of a nomination for election to the board of directors or of other business to be brought before a meeting of stockholders, other than as permitted to be included
in the corporation's proxy statement pursuant to applicable rules and regulations promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), (ii) the text of the proposal
(including the text of any resolutions to be adopted by Consent and the language of any proposed amendment to the bylaws of the corporation), and (iii) the agreement of the requesting
stockholders required by the bylaws of the corporation. The board of directors of the corporation may require the stockholders submitting a Request to furnish such other information as it may require
to determine the validity of the Request. Stockholders seeking to authorize or take action by Consent shall update the information provided in the Request as required by the corporation's bylaws with
respect to information provided concerning nominations for elections to the board or other business at stockholders meetings.
4.
Actions Which May Be Authorized or Taken by Written Consent.
Stockholders are not entitled to authorize or take action by Consent if (a) the action relates to an item
of business that is not a proper subject for
stockholder action under applicable law, (b) an identical or substantially similar item of business, as determined by the board of directors of the corporation in its reasonable determination,
which determination shall be conclusive and binding on the corporation and its stockholders (a "Similar Item"), is included in the corporation's notice of meeting as an item of business to be brought
before an annual or special stockholders meeting that has been called but not yet held or that has been called to be held on a date within 90 days after the receipt by the corporation of the
Request for such action, provided that the removal of directors without electing replacements shall not be a Similar Item to the election of directors, or (c) such Request was made in a manner
that involved a violation of Regulation 14A promulgated under the Exchange Act, or other applicable law.
5.
Manner of Consent Solicitation.
Stockholders may
authorize or take action by Consent only if such Consents are solicited from all holders of common stock of the corporation.
6.
Date of Consent.
Every Consent purporting to take or
authorize the taking of corporate action must bear the date of signature of each stockholder who signs the Consent, and no Consent shall be effective to take or authorize the taking of the action
referred to therein unless, within 60 days of the earliest dated Consent delivered in the manner required by Section 7 of this Article ELEVENTH, Consents signed by a sufficient number of
stockholders to authorize or take such action are so delivered to the corporation.
The Allstate
Corporation --
B-2
Table of Contents
7.
Delivery of Consents.
Every Consent purporting to take
or authorize the taking of corporate action must be dated and delivered to the corporation or its registered office in the State of Delaware no earlier than 60 days after the delivery of a
valid Request. Consents must be delivered to the corporation's registered office in the State of Delaware or its principal place of business. Delivery must be made by hand or by certified or
registered mail, return receipt requested. The secretary of the corporation, or such other officer of the corporation as the board of directors of the corporation may designate ("Other Officer"),
shall provide for the safe-keeping of such Consents and any related revocations and shall promptly conduct such ministerial review of the sufficiency of all Consents and any related
revocations and of the validity of the action to be authorized or taken by Consent as the secretary of the corporation or Other Officer, as the case may be, deems necessary or appropriate, including,
without limitation, whether the holders of a number of shares having the requisite voting power to authorize or take the action specified in the Consents have given consent; provided, however, that if
the action to which the Consents relate is the removal or replacement of one or more members of the board of directors, the secretary of the corporation or Other Officer, as the case may be, shall
promptly designate two persons, who shall not be members of the board of directors, to serve as inspectors ("Inspectors") with respect to such Consents and such Inspectors shall discharge the
functions of the secretary of the corporation or Other Officer, as the case may be, under this Article ELEVENTH. If after such investigation the secretary of the corporation, Other Officer, or the
Inspectors, as the case may be, shall determine that the action has been duly authorized or taken by the Consents, that fact shall be certified on the records of the corporation and the Consents shall
be filed in such records. In conducting the investigation required by this Section, the secretary of the corporation, Other Officer, or the Inspectors, as the case may be, may retain special legal
counsel and any other necessary or appropriate professional advisors as such person or persons may deem necessary or appropriate, at the expense of the corporation, and shall be fully protected in
relying in good faith upon the opinion of such counsel or advisors.
8.
Effectiveness of Consent.
No action may be authorized
or taken by the stockholders by Consent except in accordance with this Article ELEVENTH. If the board of directors of the corporation shall determine that any Request was not properly made in
accordance with, or relates to an action that may not be effected by Consent pursuant to, this Article ELEVENTH, or any stockholder seeking to authorize or take such action does not otherwise comply
with this Article ELEVENTH, then the board of directors of the corporation shall not be required to fix a record date and any such purported action by Consent shall be null and void to the fullest
extent permitted by applicable law. No Consent shall be effective until such date as the secretary of the corporation, Other Officer, or the Inspectors, as the case may be, certify to the corporation
that the Consents delivered to the corporation in accordance with Section 7 of this Article represent at least the minimum number of votes that would be necessary to authorize or take the
corporate action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with Delaware law and this certificate of
incorporation.
9.
Challenge to Validity of Consent.
Nothing contained in
this Article ELEVENTH shall in any way be construed to suggest or imply that the board of directors of the corporation or any stockholder shall not be entitled to contest the validity of any Consent
or related revocations, whether before or after such certification by the secretary of the corporation, Other Officer, or the Inspectors, as the case may be, or to take any other action (including,
without limitation, the commencement, prosecution, or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).
10.
Board-Solicited Stockholder Action by Written Consent.
Notwithstanding anything to the contrary set forth above, (a) none of the foregoing provisions of this Article ELEVENTH
shall apply to any solicitation of
stockholder action by written consent by or at the direction of the board of directors of the corporation and (b) the board of directors of the corporation shall be entitled to solicit
stockholder action by Consent in accordance with applicable law.
B-3
-- The Allstate Corporation
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Appendix C
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PROXY STATEMENT
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APPENDIX C
POLICY REGARDING PRE-APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT'S SERVICES
Purpose and Applicability
The Audit Committee recognizes the importance of maintaining the independent and objective stance of our Independent Registered Public
Accountant. We believe that maintaining independence, both in fact and in appearance, is a shared responsibility involving management, the Audit Committee, and the Independent Registered Public
Accountant.
The
Committee recognizes that the Independent Registered Public Accountant possess a unique knowledge of the Corporation and its subsidiaries and can provide necessary and valuable
services to the Corporation in addition to the annual audit. The provision of these services is subject to three basic principles of auditor independence: (i) auditors cannot function in the
role of management, (ii) auditors cannot audit their own work; and (iii) auditors cannot serve in an advocacy role for their client. Consequently, this policy sets forth guidelines and
procedures to be followed by this Committee when approving services to be provided by the Independent Registered Public Accountant.
Policy Statement
Audit Services, Audit-Related Services, Tax Services, Other Services, and Prohibited Services are described in the attached appendix.
All services to be provided by the Independent Registered Public Accountant must be approved by the Audit Committee or the Chair of the Audit Committee. Neither the Audit Committee nor the Chair will
approve the provision of any Prohibited Services by the Independent Registered Public Accountant.
Procedures
In connection with the approval by the Audit Committee of the engagement of the Independent Registered Public Accountant to provide
Audit Services for the upcoming fiscal year, the Independent Registered Public Accountant will submit to the Committee for approval schedules detailing all of the specific proposed Audit,
Audit-Related, Tax, and Other Services, together with estimated fees for such services that are known as of that date. Subsequent to the Audit Committee's approval of audit engagement, Corporation
management may submit to the Committee or the Chair for approval schedules of additional specific proposed Audit, Audit-Related, Tax, and Other Services that management recommends be provided by the
Independent Registered Public Accountant during the audit and professional engagement period. Regardless of when proposed to the Committee or the Chair, each specific service will require approval by
the Committee or the Chair before commencement of the specified service. The Independent Registered Public Accountant will confirm to the Committee or the Chair that each specific proposed service is
permissible under applicable regulatory requirements.
Prior
to approval of any specific Tax Service, the Independent Registered Public Accountant shall also provide to the Committee or the Chair a written description of (i) the
scope of the service and the related fee structure, (ii) any side letter or other agreement between the Independent Registered Public Accountant and the Corporation or any subsidiary regarding
the service, and (iii) any compensation arrangement or other agreement between the Independent Accountant and any person with respect to promoting, marketing, or recommending a transaction
covered by the service.
Delegation to Chair
In addition to the Audit Committee, the Chair of the Audit Committee has the authority to grant approvals of services to be provided
by the Independent Registered Public Accountant. The decisions of the Chair to approve services shall be reported to the Audit Committee at each of its regularly scheduled meetings.
Review of Services
At each regularly scheduled Audit Committee meeting, the Audit Committee shall review a report containing (i) a summary of any
services approved by the Chair since the Committee's last regularly scheduled meeting and (ii) an updated projection for the current fiscal year, presented in a manner consistent with the proxy
disclosure requirements, of the estimated annual fees to be paid to the Independent Registered Public Accountant.
C-1
-- The Allstate Corporation
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Appendix
Audit Services
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1.
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Annual
financial statement audit
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2.
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Review
of quarterly financial statements
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3.
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Statutory
audits
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4.
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Attestation
report on management's assessment of internal controls over financial reporting
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5.
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Consents,
comfort letters, and reviews of documents filed with the Securities and Exchange Commission
Audit-Related Services
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1.
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Accounting
consultations relating to accounting standards, financial reporting, and disclosure issues
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2.
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Due
diligence assistance pertaining to potential acquisitions, dispositions, mergers, and securities offerings
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3.
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Financial
statement audits and attest services for non-consolidated entities including employees benefit and compensation plans
Tax Services
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1.
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Domestic
and international tax compliance, planning, and advice
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2.
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Expatriate
tax assistance and compliance
Other Services
Any service that is not a Prohibited Service, Audit Service, Audit-Related Service, or Tax Service
Prohibited Services
The following services, as more fully described in Regulation S-X, Rule 2-01, of the Securities
and Exchange Commission, are Prohibited Services; provided however, that the services described in items 1 through 5 are not Prohibited Services if it is reasonable to conclude that the results
of such services will not be subject to audit procedures during an audit of the Corporation's financial statements:
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1.
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Bookkeeping
or other services related to the accounting records or financial statements
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2.
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Financial
information systems design and implementation
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3.
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Appraisal
or valuation services, fairness opinions, or contribution-in-kind reports
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4.
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Actuarial
services
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5.
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Internal
audit outsourcing services
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6.
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Management
functions or human resources
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7.
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Broker
or dealer, investment adviser, or investment banking services
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8.
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Legal
services and expert services unrelated to the audit
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9.
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Any
other services that the PCAOB determines, by regulation, to impair independence
The Allstate
Corporation --
C-2
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Appendix D
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PROXY STATEMENT
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Appendix D
Executive Officers
The following table lists the names and titles of our executive officers. "AIC" refers to Allstate Insurance Company.
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Name
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Principal Positions and Offices Held
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Thomas J. Wilson
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Chairman of the Board, President, and Chief Executive Officer of The Allstate Corporation and AIC. Mr. Wilson also is a director of The Allstate Corporation.
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Donald J. Bailey
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Executive Vice President of AIC.
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Don Civgin
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Executive Vice President of AIC and President and Chief Executive Officer, Allstate Financial.
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James D. DeVries
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Executive Vice President of AIC (Human Resources).
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Judith P. Greffin
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Executive Vice President and Chief Investment Officer of AIC.
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Suren Gupta
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Executive Vice President of AIC (Allstate Technology & Operations)
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Michele C. Mayes
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Executive Vice President and General Counsel of The Allstate Corporation and AIC (Chief Legal Officer).
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Samuel H. Pilch
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Senior Group Vice President and Controller of The Allstate Corporation and AIC.
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Steven E. Shebik
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Executive Vice President and Chief Financial Officer of The Allstate Corporation and of AIC.
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Steven C. Verney
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Executive Vice President and Chief Risk Officer of AIC.
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Joan H. Walker
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Executive Vice President of AIC (Corporate Relations).
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Matthew E. Winter
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Senior Executive Vice President of AIC and President Allstate Auto, Home, and Agencies.
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D-1
-- The Allstate Corporation
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TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR
RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY
WHEN SIGNED AND DATED. Signature (Joint Owners) Date Signature [PLEASE SIGN
WITHIN BOX] Date VOTE BY INTERNET - www.proxyvote.com Use the Internet to
transmit your voting instructions and for electronic delivery of information
up until 11:59 p.m. Eastern time on May 21, 2012*. Have this proxy
card/voting instruction form in hand when you access the web site and follow
the instructions to obtain your records and to create an electronic voting
instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone
to transmit your voting instructions up until 11:59 p.m. Eastern time on May
21, 2012*. Have this proxy card/voting instruction form in hand when you call
and then follow the instructions. VOTE BY MAIL Mark, sign and date this proxy
card/voting instruction form and return it in the postage-paid envelope we
have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717 for receipt no later than May 21, 2012*. *Allstate
401(k) Savings Plan With respect to any shares represented by this proxy
card/voting instruction form held in the Allstate 401(k) Savings Plan, your
voting instructions must be received no later than 11:59 p.m. Eastern Time on
May 15, 2012. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like
to reduce the costs incurred by our company in mailing proxy materials, you
can consent to receiving all future proxy statements, proxy card/ voting
instruction form and annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please follow the instructions
above to vote using the Internet and, when prompted, indicate that you agree
to receive or access proxy materials electronically in future years. THE
ALLSTATE CORPORATION C/O WELLS FARGO SHAREOWNER SERVICES P.O. BOX 64945 ST.
PAUL, MN 55164-0945 M40610-P19156 THE ALLSTATE CORPORATION The Board of Directors
recommends you vote "FOR" all nominees for Director. 1. Election of
Directors For Abstain Against Nominees: ! ! ! 1a. F. Duane Ackerman ! ! ! 1b.
Robert D. Beyer Abstain For Against The Board of Directors recommends you
vote "FOR" Proposals 2, 3, 4, and 5. ! ! ! ! ! ! 1c. W. James
Farrell 2. Advisory vote to approve the executive compensation of the named
executive officers. ! ! ! ! ! ! 1d. Jack M. Greenberg 3. Approve the proposed
amendment to the certificate of incorporation granting the right to act by
written consent. ! ! ! ! ! ! 1e. Ronald T. LeMay 4. Approve the proposed
amendment to the certificate of incorporation granting stockholders owning
not less than 10% of the corporation's shares the right to call a special
meeting of stockholders. ! ! ! 1f. Andrea Redmond ! ! ! ! ! ! 5. Ratification
of the appointment of Deloitte & Touche LLP as Allstate's independent
registered public accountant for 2012. 1g. H. John Riley, Jr. ! ! ! The Board
of Directors recommends you vote AGAINST Proposal 6. 1h. John W. Rowe For
Against Abstain ! ! ! ! ! ! 6. Stockholder proposal on reporting political
contributions. 1i. Joshua I. Smith ! ! ! 1j. Judith A. Sprieser ! ! ! 1k.
Mary Alice Taylor ! ! ! This proxy will be governed by and construed in
accordance with the laws of Delaware and applicable securities laws. 1l.
Thomas J. Wilson Please sign exactly as your name(s) appear(s) hereon. When
signing as attorney, executor, administrator, or other fiduciary, please give
full title as such. Joint owners should each sign personally. All holders
must sign. If a corporation or partnership, please sign in full corporate or
partnership name by authorized officer.
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With respect to
any shares represented by this Proxy Card/Voting Instruction Form which are
votable and held in the Allstate 401(k) Savings Plan (the "Plan"),
you may direct The Northern Trust Company as Trustee of the Plan to vote all
such shares on the matters shown, and in the manner directed on the reverse
hereof, unless to do so would be inconsistent with the Trustee's duties. If
you wish to vote the Allstate shares allocated to the Plan account, you
cannot do so in person. You must use this Proxy Card/Voting Instruction Form
or submit your voting instructions via the telephone or Internet. If you do
not return your signed Proxy Card/Voting Instruction Form or provide
telephonic or Internet voting instructions on a timely basis for the shares
allocated to the Plan account, those shares will be considered
"unvoted." If you return a signed Proxy Card/Voting Instruction
Form but do not indicate how the shares should be voted on a matter, the
shares represented by your signed Proxy Card/Voting Instruction Form will be
voted by the Trustee as the Board of Directors recommends. The Trustee will
vote all unvoted and all unallocated shares held by the Plan as follows: if
the Trustee receives instructions on a timely basis for at least 50% of the
votable allocated shares in the Plan, then it will vote all unvoted shares
and unallocated shares in the same proportion and in the same manner as the
shares for which timely instructions have been received, unless to do so
would be inconsistent with the Trustee's duties. If the Trustee receives
instructions for less than 50% of the votable shares, the Trustee shall vote
all unvoted and unallocated shares in its sole discretion. However, the
Trustee will not use its discretionary authority to vote on adjournment of
the meeting in order to solicit further proxies. Important Notice Regarding
the Availability of Proxy Materials for the Stockholder Meeting: The Allstate
Corporation Notice of 2012 Annual Meeting, Proxy Statement and 2011 Annual
Report are available at www.proxyvote.com. M40611-P19156 THE ALLSTATE
CORPORATION Annual Meeting of Stockholders May 22, 2012 11:00 a.m. This proxy
card/voting instruction form is solicited on behalf of the Board of Directors
You hereby authorize Michele C. Mayes, Mary J. McGinn, and Thomas J. Wilson
to vote all shares of common stock of The Allstate Corporation that you would
be entitled to vote if personally present at the annual meeting of
stockholders to be held on May 22, 2012 and at any adjournments thereof. The
authority conferred by this Proxy Card/Voting Instruction Form shall be
exercised by a majority of these persons present and acting at the meeting
or, if only one of them is present, by that person. Each such person has the
authority to designate a substitute to act for him or her. These persons are
authorized to vote such shares on the matters shown, and in the manner
directed, on the reverse hereof and in their discretion on any other matters
that may properly come before the meeting. If you return a signed proxy but
do not indicate how the shares should be voted on a matter, the shares
represented by your signed proxy will be voted as the Board of Directors
recommends. You acknowledge receipt of The Allstate Corporation's Notice of
2012 Annual Meeting and Proxy Statement, dated April 11, 2012 and its 2011
Annual Report. You hereby revoke any instructions previously given to vote
the shares represented by this Proxy Card/Voting Instruction Form. Allstate
and the Trustee have instructed the tabulation agent to keep your voting
instructions strictly confidential. Sign on reverse side
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