Allstate CEO Wilson Sees Pay Rise 20% As Cash Bonus Doubles
March 09 2012 - 6:52PM
Dow Jones News
Allstate Corp. (ALL) Chief Executive Tom Wilson saw his
compensation for 2011 rise 20% to $11.2 million as his cash bonus
more than doubled.
Wilson's total pay rose from $9.3 million for 2010, in part
because his bonus rose to $2.3 million from $1.1 million, according
to Allstate's preliminary proxy statement filed with regulators
Friday.
The rise in pay comes a year after the 2010 pay package got
about 58% support among votes cast by shareholders, a relatively
low figure for a company of Allstate's prominence. Wilson himself
was re-elected to the board with 68% of the votes, the lowest
margin last year for any CEO of a company in the Standard &
Poor's 500-stock index, according to proxy adviser Institutional
Shareholder Services.
The company's board of directors said in the proxy late Friday
that they had adjusted the way it calculated some elements of
executive pay after meetings with shareholders. Some of the changes
won't go into effect until this year, according to the proxy
filing.
"Those of our stockholders who felt changes to our compensation
program were warranted supported the program changes we presented,"
the filing said.
The changes to the compensation program include a lowering of
the benchmarks Allstate uses in measuring its executive pay against
its insurance peers. The company previously targeted pay to land
within the 50th to 75th percentiles; now, it aims to be at the 50th
percentile.
But the board said the target it set for the cash portion of
Wilson's salary was "substantially below the guideline of the 50th
percentile," which caused them to increase the potential bonus he
could earn.
The cash bonus was calculated based on whether Allstate hit
three performance metrics. The company exceeded one target, a
measure of profitability; just missed on a second; and didn't come
close on a third, which measured the number of products purchased
by customers. That figure fell in 2011, as it had in 2010, because
Allstate was focused on improving returns instead of adding
customers.
"The focus on improving returns in the homeowners line made this
goal unattainable despite dramatic improvements in geographies not
burdened by this conflicting objective," according to the
regulatory filing.
The filing noted that Allstate had completed the acquisition of
online car-insurer Esurance and that profit at its life-insurance
unit had jumped tenfold to $586 million. But overall net income
dropped to $788 million as a long string of natural disasters
weighed on returns at its home-and-auto insurance unit.
Wilson's stock and option awards also rose slightly in 2011. His
base salary was unchanged from $1.1 million, a level that was set
during 2010.
The preliminary proxy was filed in advance of Allstate's annual
shareholder meeting on May 22.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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