The Allstate Corporation Notice of 2017 Annual Meeting, Proxy Statement and 2016 Annual Report

296 Pages·2017·22.89 MB·English

you’re in
good hands®

At Allstate, we embrace
differences, enabling
us to deliver better
results for those
we serve.
Notice of 2022
Annual Meeting and
Proxy Statement
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Our Shared Purpose
As the good hands...
We empower customers with protection to help them achieve their
hopes and dreams.
We provide affordable, simple and connected protection solutions.
We create opportunity for our team, economic value for our
shareholders and improve communities.
our operating
our behaviors
standards
Collaborate early and often to
Focus on Customers by develop and implement
anticipating and exceeding service comprehensive solutions and
expectations at low costs. share learnings.
Be the Best at protecting Challenge Ideas to leverage
customers, developing talent collective expertise, evaluate
and running our businesses. multiple alternatives and create
the best path forward.
Be Bold with original ideas
using speed and conviction Provide Clarity for expected
to beat the competition. outcomes, decision authority
and accountability.
Earn Attractive Returns
by providing customer value, Provide Feedback that is
proactively accepting risk our values candid, actionable,
and using analytics. independent of
Integrity is non-negotiable. hierarchy and safe.
Inclusive Diversity & Equity values and leverages unique
identities with equitable opportunity and rewards.
Collective Success is achieved through empathy and prioritizing
enterprise outcomes ahead of individuals.
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letter from
Chair, President and CEO
The Allstate
Corporation
Allstate Is a Purpose-Driven A balanced business model, decisive execution
and organizational adaptability supported strong
Company That Is Powered by
operating results.
Purpose-Driven People.
• Revenues increased 21% to nearly $51 billion. Net
Our Shared Purpose is to empower customers, income was $1.5 billion, despite incurring a loss on
create opportunity for our team, deliver value for our the divestitures of the life and annuity businesses.
shareholders, and improve society. We have made • Adjusted net income* was $4.0 billion, which
a difference in each of these since articulating this excludes net gains and losses on investments and
purpose 15 years ago, but our work is not done. derivatives in the investment portfolio and other
Customers and employees want businesses to do non-recurring items like the loss from discontinued
more and Allstate's license to operate is based on operations. Adjusted net income return on equity*
trusting us to make a difference in society. was 17%.
• Customers are empowered with affordable, simple • Investment results were outstanding with net
and connected protection products and services investment income reaching $3.3 billion, as
including coverage for cars, homes, phones, the performance-based portfolio generated an
appliances and identities. additional $1.7 billion in income compared to the
• Employees and Allstate agents can develop and prior year.
expand their diverse capabilities as we build a • Auto insurance margins deteriorated rapidly
digital insurer that provides low-cost protection throughout the year as increased claims costs
to customers. reflected higher used car values and liability
• Shareholder value is being created through payments for non-customers injured in accidents.
profitable growth, attractive investment returns, Consequently, we are rapidly seeking regulatory
successfully acquiring and expanding protection approval to increase prices, while improving claims
plans, identity protection and National General, and excellence and reducing costs.
divesting the life and annuity businesses. • Homeowners insurance margins continue to be
• To improve society, we engage on climate change, amongst the best in the industry and provided
data privacy and equity through our business attractive returns to mitigate the loss in auto
practices and The Allstate Foundation, which helps insurance margins.
over 10,000 nonprofit organizations. • Allstate Protection Plans continued its rapid growth
with premiums written reaching $1.8 billion, a sixfold
Over the last 10 years, Allstate’s increase from when it was acquired five years ago.
shareholders have received a compound
Creating the Future
annual cash return of 18%.
Allstate seeks to create the future, not just react to
trends. Allstate has a long history of innovation from
Operational Execution
supporting air bags in cars in the 1970s to pioneering
telematics in insurance.
Purpose and long-term success are fueled by
operational excellence, which was maintained last year
despite the volatile pandemic environment.
* For definitions of these terms, please see the definitions of non-GAAP measures on pages 99-102 of our 2022 Proxy Statement.
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• Transformative Growth is a multi-year initiative to To further advance Allstate’s culture, we updated Our
increase market share starting with the personal Shared Purpose to highlight the values of integrity,
property-liability businesses. Today we have an inclusive diversity & equity and collective success.
analog business which has been digitized, but our Operating standards and behaviors were refined to
future is as a digital insurer powered by people. drive market share growth and expand protection
Lower prices, simple and connected protection with offerings to customers. Allstate was named among the
distribution through Allstate agents, independent World’s Most Ethical Companies by Ethisphere for the
agents and directly to customers will create eighth consecutive year.
sustainable growth.
• National General was acquired to build an industry Actions speak louder than words.
leading position in the independent agent channel
for personal property-liability insurance. The team
exceeded its acquisition goals in the first year. Leading on Environmental, Social
• Most of the life and annuity businesses were and Governance ("ESG")
divested, reallocating capital to higher returning
ESG has four pillars of value creation: planet, people,
businesses, lowering interest rate risk and funding
governance and prosperity. Our societal engagement
share repurchases.
is focused on climate, data privacy and equity where
• Telematics investments have exceeded $750 million
Allstate has the capabilities and platform to make
over 11 years and resulted in Allstate being a leader
a difference. We have actively addressed climate
in telematics-based auto insurance pricing and pay-
change for over 25 years since it damages customers’
per-mile insurance policies. We also created Arity to
homes and impacts shareholder returns. Data privacy
serve third parties to capture additional value from
threatens customers' identities and impacts operating
this expertise.
practices. Equity is a core value in Our Shared Purpose.
• Customers are empowered by expanding protection
services to include electronic devices, appliances, You are well served by a Board with the capabilities,
furniture and personal identities. Protection services experience and commitment to ensure Allstate
are sold through major retailers, brokers, worksites, stays true to its purpose. A leading governance
car dealers and other distribution partners. rating firm gave the company its top overall
rating. The independent directors’ oversight and
accomplishments are summarized in their annual
Leading With People and Culture
letter to you on pages 5-6 of this proxy statement.
People are critical to Allstate’s success, and we have a
This year, director Mike Eskew has reached our
talented, diverse and engaged team. To maintain this
mandatory retirement age and we will miss the
position, we are innovating by giving many employees
breadth of his experience, wisdom and leadership.
choice on working remotely, investing in additional
Quite simply, he has made Allstate and our
training and focusing communication on professional
leaders better.
development, personal well-being and affiliation. We
also embarked on a three-year inclusive diversity Allstate is a special company with special people that
& equity plan to create success by leveraging the plays an important role in America. It is an honor to
breadth of our differences. have your support and continue building on a 91-year
legacy of making a difference!
We defined culture to guide us.
Culture is a self-sustaining system of shared values,
priorities and principles that shape beliefs, drive
behaviors and influence decision-making within TOM WILSON
an organization. Chair, President and CEO
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letter from
independent directors
The Allstate
Corporation
April 11, 2022
Fellow Stockholders,
Thank you for trusting us to oversee the long-term sustainability of
Allstate. The past year presented continued challenges on a global
scale and volatility in financial results. Despite these headwinds,
Allstate executed on important strategic initiatives, earned attractive
returns and provided significant cash returns to shareholders. To
support transparency and accountability, we are pleased to share with
you an overview of the Board’s actions during the past year.
We are Executing on Key Strategic We are Enhancing our Human Capital
Initiatives and Creating Sustainable Management Practices
Long-Term Value
Allstate’s culture and human capital practices have
The Board is fully engaged in the oversight of evolved as the company shifts to a more remote
Allstate’s strategy, operating results and sustainability workforce by offering employees choice on where they
initiatives. The portfolio of businesses is assessed work. Other important initiatives were advanced:
regularly to ensure strategic, financial and valuation
optimization, including an analysis as if we were an • The Board oversaw a talent management strategy
activist investor. Long-term value is being created focused on expanding capabilities critical to the
through: successful implementation of Transformative Growth
and continued developing a robust senior leadership
• Implementation of Transformative Growth, a multi-
succession pipeline.
year initiative in the Property-Liability business,
• To better align compensation with strategic execution,
• Expansion of and increased growth from Allstate
the annual incentive compensation plan includes
Protection Plans and Allstate Identity Protection,
a measure related to Transformative Growth and
• Enhancement of the independent agent platform inclusive diversity and equity ("IDE") and the long-term
through the successful acquisition of National incentive plan includes a growth metric.
General for $4.0 billion,
We supplemented our oversight with
• Divestiture of the life and annuities businesses
external independent resources in
for $4.4 billion, which allows a focus on higher risk
several important areas – compensation,
adjusted returns and higher growth businesses,
pay equity, cybersecurity and Board
• Proactive management of the $65 billion investment
portfolio, and composition.
• Capital allocation practices that balance risk and
return.
The Board also assessed the risks presented by
Transformative Growth, the macro environment,
inflation, and climate change. We were able to return
value to shareholders in 2021 through a 50% dividend
increase and initiation of a $5 billion share repurchase
program. We returned over $4 billion in cash to
shareholders, 12.5% of market capitalization.
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We are Advancing Inclusive Diversity We are Committed to Engaging on
and Equity Societal Issues
Allstate continued its commitment to advance We recognize that businesses are being held
Inclusive Diversity and Equity in 2021. While IDE results accountable for issues outside traditional boundaries.
at Allstate have historically been at or above average The nominating, governance and social responsibility
on most external measures, a three-year IDE strategy committee oversees this work. A societal engagement
is being implemented to further differentiate our framework was developed to focus Allstate’s
leadership. The Board oversees this strategy which participation on three key issues: climate, data privacy
is focused on four key areas: Business Practices, and equity. Allstate's engagement in these important
Community, Culture and People. Allstate hired a chief areas is a core component of developing a holistic
inclusive diversity & equity officer to help further the environmental, social and governance strategy.
IDE strategy, disclosed its EEO-1 data, increased
Allstate has an extensive stockholder outreach
utilization of diverse suppliers, and issued $1.2 billion
program to foster dialogue with stockholders
of bonds using exclusively minority-, women- and
on societal issues. The program is crucial to
veteran-owned banking enterprises.
understanding stockholder priorities, and key
feedback is integrated into Board discussions
The Board provided effective oversight
and decisions. In 2021, Allstate held discussions
of Allstate's security and data privacy
with shareholders holding approximately 30% of
programs by reviewing cybersecurity outstanding shares with our Chair, independent lead
risk at multiple meetings and director and management team.
participating in a simulated ransomware
attack.
We want to thank Mike Eskew, who will be retiring from the Board in May. We are thankful for his wise counsel and
strategic expertise over the last seven years.
We value your continued engagement and support. As independent directors, we pledge to ensure that Allstate
fulfills its obligations to you, its customers, and the broader community.

DONALD E. BROWN RICHARD T. HUME JACQUES P. PEROLD JUDITH A. SPRIESER

KERMIT R. CRAWFORD MARGARET M. KEANE ANDREA REDMOND PERRY M. TRAQUINA

MICHAEL L. ESKEW SIDDHARTH N. (BOBBY) MEHTA GREGG M. SHERRILL
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notice of 2022 annual
meeting of stockholders
Items of Business
1 2 3
Election of Say-on-pay: advisory vote Ratification of appointment of Deloitte & Touche
11 directors. on the compensation of the LLP as Allstate’s independent registered public
named executives. accountant for 2022.
In addition, any other business properly presented may be acted upon at the meeting.
When How to Vote in Advance Inspection of
Tuesday, May 24, 2022, at 11:00 a.m. Stockholder List
Your vote is important. Please
Central time. Admittance to the Stockholders wishing to
vote as soon as possible by one
webcast begins at 10:30 a.m. inspect the list of registered
of the methods shown below.
stockholders of The Allstate
Where Make sure to have your proxy
Corporation as of the record
www.virtualshareholder card, voting instruction form, or date for the 2022 Annual
meeting.com/ALL2022 notice of Internet availability in Meeting of Stockholders
hand and follow the instructions. should send an e-mail to
Who Can Vote
You may also vote during the [email protected]. Please
Holders of Allstate common stock at annual meeting by visiting www. include (1) your name and
the close of business on March 25, virtualshareholdermeeting.com/ (2) if you hold your shares
2022. Each share of common stock is ALL2022, entering your control through a broker, bank
entitled to one vote for each director number, and following the instructions. or other intermediary,
candidate and one vote for each of an image of your stock
By Telephone ownership statement. Upon
the other proposals.
In the U.S. or Canada, you can verification of your status
Who Can Attend vote your shares toll-free by as a stockholder, you will be
Stockholders who wish to participate calling 1-800-690-6903. provided access to view and
in the meeting should review inspect the list of registered
pages 96-97. By Mail stockholders as of the record
date. Stockholders will not
You can vote by mail by
Date of Mailing be able to download or print
marking, dating, and
On or about April 11, 2022, these the list. Stockholders will
signing your proxy card or
proxy materials and annual report also have the opportunity to
voting instruction form and
inspect the list of registered
are being mailed or made available
returning it in the postage-
stockholders during the
to stockholders and to participants in
paid envelope.
virtual annual meeting on
the Allstate 401(k) Savings Plan.
May 24, 2022 at
By Internet
Important Notice Regarding the www.virtualshareholder
You can vote your shares
Availability of Proxy Materials for meeting.com/ALL2022.
online at proxyvote.com.
the Stockholder Meeting to Be Held
By Order of the Board,
on May 24, 2022 By Tablet or Smartphone
The Notice of 2022 Annual Meeting, You can vote your shares
Proxy Statement, and 2021 Annual with your tablet or RHONDA S. FERGUSON
Report and the means to vote by smartphone by scanning the Secretary
Internet are available at proxyvote.com. QR code. April 11, 2022
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3 Letter from Chair, President and CEO about
5 Letter from Independent Directors
7 Notice of 2022 Annual Meeting of Stockholders Allstate
9 Proxy Summary
16 Corporate Governance
PROPOSAL 1. ELECTION OF 11 DIRECTORS
17 Factors to be Considered by Stockholders
18 The Director Nominees at a Glance Allstate is one of the nation’s largest
19 Summary of Director Nominees’ Skills and Experience insurers with 191 million policies
20 Director Nominees
in force, protecting cars, homes,
26 Effective Board Governance at Allstate
motorcycles, health, disability, lives,
27 Board Composition
28 Board Effectiveness personal devices and identities. Its
31 Board Oversight products are sold through Allstate
35 Board Accountability
agents, independent agents, call
35 Stakeholder Input and Responsiveness
centers, online, major retailers and
38 Board Structure
39 Board Meetings and Committees voluntary benefits brokers. The
44 Board Independence and Related Person Transactions company harnesses the talent of
45 Director Compensation approximately 54,700 employees and
48 ESG 83,600 agents and agent support staff.
48 Governance of ESG
49 Climate Change Allstate was once again included in the
51 Human Capital Management Drucker Institute list of the nation’s
53 Data Privacy
250 best managed companies.
54 Executive Compensation
PROPOSAL 2. SAY-ON-PAY: ADVISORY VOTE ON THE
COMPENSATION OF THE NAMED EXECUTIVES New in this
55 Compensation Discussion and Analysis
Proxy Statement
71 Compensation Committee Report
72 Summary Compensation Table
Discussion of Allstate’s focus on climate
74 Grants of Plan-Based Awards at Fiscal Year-end 2021
risk on pages 49-50
76 Outstanding Equity Awards at Fiscal Year-end 2021
78 Option Exercises and Stock Vested During 2021
Discussion of Allstate’s progress on IDE
78 Retirement Benefits
81 Non-Qualified Deferred Compensation at Fiscal Year-end 2021 strategy on pages 51-52
82 Potential Payments as a Result of Termination or Change
in Control (“CIC”) Discussion of Allstate’s focus on data
84 Estimate of Potential Payments Upon Termination privacy on page 53
85 Performance Measures for 2021
88 CEO Pay Ratio
Explore Allstate
89 Audit Committee Matters
PROPOSAL 3. RATIFICATION OF DELOITTE & TOUCHE Get a quote in the blink of an eye
LLP AS THE INDEPENDENT REGISTERED PUBLIC https://www.allstate.com
ACCOUNTANT FOR 2022
92 Audit Committee Report
93 Stock Ownership Information
93 Security Ownership of Directors and Executive Officers
94 Security Ownership of Certain Beneficial Owners
95 Other Information
95 Proxy and Voting Information Review our ESG-related initiatives online
99 Appendix A – Definitions of Non-GAAP Measures https://www.allstatesustainability.com
102 Appendix B – Categorical Standards of Independence
103 Appendix C – Executive Officers
104 Helpful Links and Resources