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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.    )

 

 

Filed by the Registrant                               Filed by a Party other than the Registrant  

Check the appropriate box:

 

   Preliminary Proxy Statement

   CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2))

   Definitive Proxy Statement

   Definitive Additional Materials

   Soliciting Material Pursuant to §240.14a-12

Humana Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

     

  (2)  

Aggregate number of securities to which transaction applies:

 

     

  (3)  

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):

 

     

  (4)  

Proposed maximum aggregate value of transaction:

 

     

  (5)  

Total fee paid:

 

     

  Fee paid previously with preliminary materials.
  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.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


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LOGO   

Humana Inc.

500 West Main Street

Louisville, Kentucky 40202

 

 

 

LOGO

 

LOGO

 

(Top Photo: Kurt Hilzinger;

Bottom Photo: Bruce Broussard)

 

  

Dear Fellow Stockholders:

 

We would like to invite you to attend the Annual Meeting of Stockholders of Humana Inc., to be held on Thursday, April 21, 2022, beginning at 9:30 a.m., Eastern Time at the Company’s headquarters, located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky. The meeting will also be available through an audio-only webcast via the Internet on the Investor Relations section of the Company’s website, www.humana.com. For further information on how to participate in the meeting, please refer to the “Frequently Asked Questions” section within this Proxy Statement.

 

This proxy statement contains information about our Company and the three proposals to be voted upon by stockholders at the meeting. Please give this information your careful attention.

 

This year, we will once again be taking advantage of U.S. Securities and Exchange Commission (SEC) rules that allow us to furnish proxy materials to our stockholders on the Internet. These materials will be available on the Internet on or about March 9, 2022. We continue to believe that Internet delivery of our proxy materials allows us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting.

 

We hope you can attend the meeting. However, even if you are unable to join us, we urge you to still exercise your right as a stockholder and vote by telephone, mail or using the Internet. The vote of every stockholder is important.

 

This proxy statement is being mailed or transmitted on or about March 9, 2022, to our stockholders of record as of February 28, 2022.

 

 

 

2021 Reflections

 

For our Company and our stakeholders, 2021 was a year of transition as we continued to navigate the ongoing health, social and economic challenges caused by the global pandemic. We faced these challenges head on, actively responding to issues at every turn, to ensure the holistic needs of our members were met and that our Company remained a leader in the Medicare Advantage industry. Throughout the year, our Company’s core operations remained strong and we continued to advance our strategy to become an innovative integrated healthcare Company that has the power to help the millions of individuals we serve achieve their best health.

 

We are creating significant value by driving growth in our top-tier Medicare Advantage business while also organically expanding our Medicaid footprint, increasing the contribution from our Healthcare Services businesses, and delivering ongoing cost efficiencies and productivity improvements across the Company. We are operating from a position of strength and are confident in our enterprise strategy, the fundamentals of the Medicare Advantage industry, and our ability to deliver significant and sustainable long-term value for our customers and stockholders. We’ve seen success among our core businesses – Medicare Advantage, Medicaid, Pharmacy, Primary Care and Home Solutions – through strategic initiatives and technological advancements that have enhanced customer experiences and contributed to improved health outcomes. These successes are empowering us to pursue continued innovations with confidence as we maintain our effort to shift from an insurance company with elements of health to a health company with elements of insurance.

 

We are incredibly proud that Humana is the second largest Medicare Advantage health plan provider, supporting over 5 million beneficiaries with products that offer the highest quality among our public peers, as recognized by our Medicare Advantage plan Star ratings, and continued investment and growth in our Medicare Advantage business remains a key priority. We also continue to advance our consumer segmentation efforts, developing plans that are tailored to the unique needs of specific member populations, such as growing our dual eligible special needs plan (D-SNP) membership. Expansion of our Medicaid business remains a strategic priority as we’re able to offer states an individualized approach to care that considers the physical and mental well-being of beneficiaries, as well as the critical social determinants that impact the population. Our Healthcare Services businesses are an important component of our strategy and will contribute considerably to our long-term growth. Combining our leading Medicare Advantage platform with our growing Pharmacy, Primary Care and Home Solutions businesses increases our total addressable market and creates the opportunity for improved clinical outcomes, lower cost of care and increased enterprise margin from our health plan members.

 

Looking ahead, we are encouraged and energized by opportunities for our Company to continue leading the way in addressing health, wellness, social and economic needs of all our stakeholders. By leveraging core fundamentals of our business and maintaining strategic investments within our enterprise, we are confident in our ability to remain a leader in the Medicare Advantage industry, driving improved membership growth in 2023, while continuing to deliver on our long-term adjusted earnings growth target. We extend our sincere appreciation to our associates, members and patients, clinician partners, government partners and our stockholders for your continued support, trust, contribution and belief in the success of our Company.

 

  

 

LOGO

Kurt J. Hilzinger

Chairman of the Board

and Stockholder

 

March 9, 2022

 

  

LOGO

 

Bruce D. Broussard

Director, President and Chief Executive Officer

and Stockholder

 

March 9, 2022


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LOGO

Notice of 2022 Annual Meeting of Stockholders

 

 

Time and Date:   9:30 a.m., Eastern Time, on Thursday, April 21, 2022
Location:   Humana Inc. headquarters, located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky
Agenda:  

1.  Elect the thirteen (13) director nominees named in the proxy statement.

 

2.  Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022.

 

3.  Non-binding advisory vote to approve the compensation of the Company’s Named Executive Officers.

 

4.  Consider any other business properly brought before the meeting.

Record Date:   February 28, 2022. Humana stockholders of record at the close of business on that date will be entitled to vote.
Proxy Voting:  

Your vote is important so that as many Shares as possible will be represented. Please vote by one of the following methods:

 

  BY INTERNET

 

  BY TELEPHONE

 

  BY RETURNING YOUR PROXY CARD (if you elected to receive printed materials)

 

  BY VOTING DURING THE ANNUAL MEETING (for in person attendance only)

 

See instructions on your proxy card or at the voting site (www.proxyvote.com).

By Order of the Board of Directors,

 

 

LOGO

Joseph M. Ruschell

Associate Vice President, Assistant General Counsel & Corporate Secretary

March 9, 2022


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Table of Contents

 

Proxy Summary

    i  

Frequently Asked Questions

    1  

Company Overview

    7  

Corporate Governance

    9  
 

 

Proposal One: Election of Directors

 

   

 

30

 

 

 

Director Compensation

    41  

Stock Ownership Information

    44  

Compensation Discussion and Analysis

    48  
Organization & Compensation Committee Report     65  
Executive Compensation     66  
Certain Transactions with Management and Others     79  
Audit Committee Report     80  
 

 

Proposal Two: Ratification of Appointment of Independent Registered  Public Accounting Firm

 

   

 

82

 

 

 

 

 

Proposal Three: Non-Binding Advisory Vote with Respect to the Compensation of the Company’s Named Executive Officers

 

   

 

83

 

 

 

Incorporation by Reference     84  
Additional Information     84  
 


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Proxy Summary

 

General Information

 

Meeting:

   2022 Annual Meeting of Stockholders   Place:    Humana Inc. Headquarters

Date:

   Thursday, April 21, 2022      500 West Main Street

Time:

   9:30 a.m., Eastern Time      25th Floor Auditorium

Record Date:

 

   February 28, 2022      Louisville, KY 40202

 

How to Vote Your Shares

You may vote if you were a stockholder as of the close of business on February 28, 2022.

 

LOGO   

Online

www.proxyvote.com

  LOGO   

By Mail

Complete, sign, date, and return your proxy card

in the envelope provided

LOGO   

By Phone

Call the phone number located on the top

of your proxy card

  LOGO   

During the Meeting

Attend our annual meeting and cast your vote in person

Voting Overview

 

Items of Business

   Board
Recommendation
  

Page

  Reference  

1.

 

  

Elect the thirteen (13) director nominees named in the proxy statement.

 

   FOR

 

   30

 

2.

  

Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022.

 

   FOR    82

3.

  

Non-binding advisory vote to approve the compensation of the Company’s Named Executive Officers.

 

   FOR    83

4.

 

  

Consider any other business properly brought before the meeting.

 

 

     

 

Board of Directors Nominees

 

       
  Name    Position    Age        First Elected Director  

Kurt J. Hilzinger

  

Chairman of the Board, Independent Director

  

61    

  

07/2003

Bruce D. Broussard

  

Director, President and Chief Executive Officer

  

59    

  

01/2013

Raquel C. Bono, M.D.

  

Independent Director

  

65    

  

09/2020

Frank A. D’Amelio

  

Independent Director

  

64    

  

09/2003

David T. Feinberg, M.D.

  

Independent Director

  

59    

  

03/2022

Wayne A.I. Frederick, M.D.    

  

Independent Director

  

50    

  

02/2020

John W. Garratt

  

Independent Director

  

53    

  

02/2020

David A. Jones, Jr.

  

Independent Director

  

64    

  

05/1993

Karen W. Katz

  

Independent Director

  

65    

  

09/2019

Marcy S. Klevorn

  

Independent Director

  

62    

  

02/2021

William J. McDonald

  

Independent Director

  

65    

  

10/2007

Jorge S. Mesquita

  

Independent Director

  

60    

  

02/2021

James J. O’Brien

  

Independent Director

  

67    

  

04/2006

 

i      

Humana  |  2022 Proxy Statement    Proxy Summary


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Frequently Asked Questions

 

Why am I receiving this Proxy Statement?

You are receiving a proxy statement because you owned Humana Inc. common stock, which we refer to as Shares, as of Monday, February 28, 2022, which we refer to as the Record Date, and that entitles you to vote at the Annual Meeting. Our Board of Directors has made these materials available to you on the Internet or, upon your request, has delivered printed versions of these materials to you by mail, in connection with the Board’s solicitation of proxies on behalf of the Company for use at our 2022 Annual Meeting of Stockholders. Your proxy will authorize specified people (proxies) to vote on your behalf at the Annual Meeting. By use of a proxy, you can vote, whether or not you attend the meeting.

This proxy statement describes the matters on which the Company would like you to vote, provides information on those matters, and provides information about the Company that we must disclose when we solicit your proxy.

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet. We believe that Internet delivery of our proxy materials allows us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials, which we refer to as the Notice, to our stockholders and beneficial owners as of the Record Date. All stockholders will have the ability to access the proxy materials on a website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found on the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis by calling Broadridge Financial Solutions, Inc., or Broadridge, at 1-800-579-1639.

How can I get electronic access to the proxy materials?

The Notice provides you with instructions regarding how to:

 

   

View our proxy materials for the Annual Meeting on the Internet; and

 

   

Instruct us to send our future proxy materials to you electronically by e-mail.

Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meetings on the environment. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

When and where is the Annual Meeting?

The Annual Meeting will be held on Thursday, April 21, 2022, at 9:30 a.m., Eastern Time, at the Company’s headquarters, located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky.

Who is entitled to vote?

Anyone who owns Shares, as of the close of business on February 28, 2022, the Record Date, is entitled to vote at the Annual Meeting or at any later meeting should the scheduled Annual Meeting be adjourned or postponed for any reason. As of the Record Date, 126,743,282 Shares were outstanding and entitled to vote. Each Share is entitled to one vote on each of the matters to be considered at the Annual Meeting.

 

Frequently Asked Questions    2022 Proxy Statement  |  Humana

 

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What will I be voting on?

 

   

Election of the thirteen (13) director nominees named in this proxy statement to serve on the Board of Directors of the Company;

 

   

Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022; and

 

   

A non-binding, advisory vote to approve the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement.

The Board of Directors is not aware of any other matters to be presented for action at the Annual Meeting. However, if other matters are properly presented for a vote, the proxies will be voted for these matters in accordance with the judgment of the persons acting under the proxies.

How does the Board recommend I vote on each proposal?

The Board recommends that you vote your Shares as follows:

 

   

FOR the election of each of the thirteen (13) director nominees named in this proxy statement;

 

   

FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022; and

 

   

FOR the approval of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement.

All Shares that are represented at the Annual Meeting by properly executed proxies received before or at the Annual Meeting and not revoked will be voted at the Annual Meeting in accordance with the instructions indicated in the proxies.

How do I participate in the Annual Meeting?

This year’s Annual Meeting will be held in-person at the Company’s headquarters located at 500 West Main Street, 25th Floor Auditorium, in Louisville, Kentucky. The Company will also provide a live audio-only webcast of the Annual Meeting via the Internet on the Investor Relations section of the Company’s website (www.humana.com). You are entitled to participate in the Annual Meeting if you were a stockholder as of the close of business on the Record Date, or hold a valid proxy for the meeting. If you decide to attend the Annual Meeting by webcast, you will be able to listen to the Annual Meeting but will not have the ability to vote your shares or ask questions during the Annual Meeting. Conversely, if you are attending in-person, you will have the ability to ask questions and vote your Shares during the Annual Meeting. The Company will provide Rules of Conduct for the Annual Meeting which can be obtained at www.proxyvote.com after logging in with your unique 16-digit control number provided on your Notice of Internet Availability of Proxy Materials, your proxy card or your voting instruction form that accompanied your proxy materials (your “Control Number”). The Rules of Conduct will be strictly adhered to during the Annual Meeting.

If you are a beneficial stockholder, you may contact the bank, broker or other institution where you hold your account if you have questions about obtaining your Control Number. Non-stockholders are welcome to attend the Annual Meeting, however guests will not be allowed to participate during the Annual Meeting except as listeners.

A question and answer (Q&A) session will be available to stockholders during the Annual Meeting and will include questions submitted in advance of, and questions asked in person during, the Annual Meeting. You may submit a question in advance of the meeting at www.proxyvote.com after logging in with your Control Number. Questions may be submitted in person during the Q&A session of the Annual Meeting. The Company’s Corporate Secretary will review all questions submitted in advance to ensure that those presented for response are in accordance with the Rules of Conduct.

How do I vote?

There are four ways that you can vote your Shares. Voting by any of these methods will supersede any prior vote you made regardless of how that vote was made. PLEASE CHOOSE ONLY ONE OF THE FOLLOWING:

 

  1)

By Internet.  The website for voting is www.proxyvote.com. In order to vote on the Internet, you need the Control Number on your proxy card. Each stockholder has a unique control number so we can ensure all voting instructions are genuine and prevent duplicate voting. The Internet voting system is available 24 hours a day, seven days a week, until 11:59 p.m., Eastern Time, on

 

2      

Humana  |  2022 Proxy Statement    Frequently Asked Questions

 


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  Wednesday, April 20, 2022, the day before the Annual Meeting. Once you are logged on the Internet voting system, you can record and confirm (or change) your voting instructions. If you use the Internet voting system, you do not need to return your proxy card.

 

  2)

By Telephone.  If you are a registered holder in the United States or Canada, you may call 1-800-690-6903. The telephone voting system is available 24 hours a day, seven days a week, until 11:59 p.m., Eastern Time, on Wednesday, April 20, 2022, the day before the Annual Meeting. In order to vote by telephone, you need the Control Number on your proxy card. Each stockholder has a unique Control Number so we can ensure all voting instructions are genuine and prevent duplicate voting. Once you are logged on the telephone voting system, a series of prompts will tell you how to record and confirm (or change) your voting instructions. If you use the telephone voting system, you do not need to return your proxy card.

 

  3)

By Mail.  Mark your voting instructions, sign and date the proxy card and then return it in the postage-paid envelope provided. If you mail your proxy card, we must receive it before 12:00 p.m., Eastern Time, on Friday, April 15, 2022. If you are returning your proxy card to Broadridge, they must receive it before 10:00 a.m., Eastern Time, on Wednesday, April 20, 2022, the day before the Annual Meeting.

 

  4)

In person.  Attend the Annual Meeting. Mark your voting instructions and deliver the proxy card to the Inspectors of Election. Be aware that you can vote by methods 1, 2 or 3 above prior to the meeting and still attend the Annual Meeting. In all cases, a vote at the Annual Meeting will revoke any prior votes. Please note that if your Shares are held through a bank, broker or other nominee, you will need to obtain your Control Number in order to vote.

How will my Shares be voted if I do not specify how they should be voted?

If you sign and return your proxy card without indicating how you want your Shares to be voted, the persons acting under the proxies will vote your Shares as follows:

 

   

FOR the election of each of the thirteen (13) director nominees named in this proxy statement;

 

   

FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022; and

 

   

FOR the approval of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement.

What if my Shares are not registered in my name?

If you own your Shares in “street name,” meaning that your bank, broker or other nominee is actually the record owner, you should receive the Notice and voting instruction card from your bank, broker or other nominee. In addition, stockholders may request, by calling Broadridge at 1-800-579-1639, to receive proxy materials in printed form, by mail or electronically by e-mail, on an ongoing basis. When you own your Shares in street name, you are deemed a beneficial owner or holder for voting purposes and you may not vote your Shares at the Annual Meeting unless you receive a valid proxy from your brokerage, firm, bank, broker-dealer or other nominee holder.

If you hold Shares through an account with a bank, broker or other nominee and you do not provide voting instructions on your instruction form, your Shares may not be voted by the nominee with respect to certain proposals, including:

 

   

the election of directors;

 

   

the approval of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement; and

 

   

the frequency with which future non-binding advisory stockholder votes on the compensation of the Company’s Named Executive Officers will be held.

Banks, brokers and other nominees have the authority under the regulations of the New York Stock Exchange, or the NYSE, to vote Shares for which their customers do not provide voting instructions only on certain “routine” matters, including the ratification of the appointment of the Company’s independent registered public accounting firm. However, the proposals listed above are not considered “routine” matters for this purpose, and therefore your Shares will not be voted with respect to such proposals if you do not provide voting instructions on your instruction form.

 

Frequently Asked Questions    2022 Proxy Statement  |  Humana

 

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How many votes are required to approve each proposal, what are the effects of abstentions and unmarked proxy cards, and is broker discretionary voting allowed?

 

Proposal

 

  

Vote Required for

Approval

 

 

Effect of

    Abstentions    

 

 

 

Broker

    Discretionary    

Voting
Allowed
(2)

 

 

    Unmarked/Signed    

Proxy Cards

 

Election of directors

  

 

The number of votes
cast for a nominee

exceeds the number
of votes cast against
that nominee.(1)

 

  No effect   No  

Voted “For”

All Directors

 

Ratification of the
appointment of the

independent registered

public accounting firm

 

   Majority of shares
present and entitled
to vote
  Counted as “Against”   Yes   Voted “For”

Non-binding advisory vote

to approve executive

compensation

  

 

Majority of shares

present and entitled

to vote

 

  Counted as “Against”   No   Voted “For”

 

(1)

Under the Company’s Majority Vote Policy, following election to our Board of Directors, a director is required to submit his or her irrevocable resignation to our Board of Directors conditioned upon (a) the director not achieving the requisite stockholder vote at any future meeting at which he or she faces re-election, and (b) acceptance of the resignation by the Board of Directors following that election. The Board of Directors has 90 days after a director fails to achieve the requisite stockholder votes to determine whether or not to accept the director’s resignation and to report this information to our stockholders.

(2)

If you are a beneficial owner whose Shares are held of record by a broker or other NYSE member organization, you must instruct the broker how to vote your Shares. If you do not provide voting instructions, your Shares will not be voted on any proposal on which the broker does not have discretionary authority to vote. This is called a “broker non-vote.” A broker non-vote will not affect the outcome of the vote for the matters being presented for action at the Annual Meeting, because they are not considered to be votes cast.

What is a “broker non-vote”?

A broker non-vote occurs when a broker or other NYSE member organization holding Shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner, but does have discretionary voting power over other items and submits votes for those matters. As discussed above, if you hold Shares through a broker or other NYSE member organization and do not provide voting instructions to your broker or other NYSE member organization, your Shares may not be voted with respect to certain proposals, including the proposals listed above that are not considered routine.

What is a “quorum”?

A “quorum” is a majority of the issued and outstanding Shares entitled to vote at the Annual Meeting. Shares may be voted at the Annual Meeting by a signed proxy card, by telephone instruction, or electronically on the Internet. There must be a quorum for the Annual Meeting to be held. Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining whether a quorum exists.

 

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How do I vote the share equivalent units held in the Humana Common Stock Fund of the Humana Retirement Savings Plan or the Humana Puerto Rico Retirement Savings Plan?

If you have an interest in the Humana Common Stock Fund of the Humana Retirement Savings Plan or the Humana Puerto Rico Retirement Savings Plan on the Record Date, you may vote. Under the Humana Retirement Savings Plan and the Humana Puerto Rico Retirement Savings Plan, your voting rights are based on your interest, or the amount of money you and the Company have invested in your Humana Common Stock Fund.

You may exercise these voting rights in almost the same way that stockholders may vote their Shares, but you have an earlier deadline, and you should provide your voting instructions to Broadridge. Broadridge will aggregate the votes of all participants and provide voting information to the Trustee for the applicable plan. If your voting instructions are received by 11:59 p.m., Eastern Time, on Wednesday, April 13, 2022, the Trustee will submit a proxy that reflects your instructions. If you do not give voting instructions (or give them later than that time), the Trustee will vote your interest in the Humana Common Stock Fund in the same proportion as the Shares attributed to the Humana Retirement Savings Plan, or the Humana Puerto Rico Retirement Savings Plan, as applicable, are actually voted by the other participants in the applicable plan.

You must provide your instructions to Broadridge by using the Internet, registered holder telephone number (1-800-690-6903) or mail methods described above. Please note that you cannot vote during the Annual Meeting. Your voting instructions will be kept confidential under the terms of the Humana Retirement Savings Plan or the Humana Puerto Rico Retirement Savings Plan, as applicable.

Who will count the votes?

Broadridge will tabulate the votes cast by proxy, whether by proxy card, Internet or telephone. Additionally, the Company’s Inspectors of Election will tabulate the votes cast at the Annual Meeting together with the votes cast by proxy.

How do I change my vote or revoke my proxy?

You have the right to change your vote or revoke your proxy at any time before the Annual Meeting.

Your method of doing so will depend upon how you originally voted (a later vote will supersede any prior vote you made regardless of how that vote was made):

 

  1)

In Person — simply vote in person at the Annual Meeting;

 

  2)

By Internet — simply log in and resubmit your vote — Broadridge will only count the last instructions;

 

  3)

By Telephone — simply sign in and resubmit your vote — Broadridge will only count the last instructions;

 

  4)

By Mail — you must give written notice of revocation to Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or by fax at 1-515-254-7733, submit another properly signed proxy with a more recent date. For written and fax notices, you must include the Control Number that is printed on the upper portion of your proxy card.

What is the due date for stockholder proposals, including stockholder nominees for director, for inclusion in the Company’s proxy materials for the 2023 Annual Meeting?

Stockholder proposals, or stockholder nominees for director at the 2023 Annual Meeting, as permitted by SEC regulations for inclusion in our proxy materials relating to the 2023 Annual Meeting, must be submitted to the Corporate Secretary in writing no later than November 9, 2022. Proposals should be submitted to the attention of the Corporate Secretary, Humana Inc., 500 West Main Street, 21st Floor, Louisville, Kentucky 40202. Further, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than February 20, 2023.

 

Frequently Asked Questions    2022 Proxy Statement  |  Humana

 

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May a stockholder present a proposal not included in our Proxy Statement at the April 21, 2022, Annual Meeting?

A stockholder can present a proposal at the Annual Meeting (a so-called “floor resolution”) only if certain notice requirements are met. The SEC does not directly regulate meeting conduct. State law imposes only limited requirements, so meetings are governed by procedures set forth in our Amended and Restated Bylaws (the “Bylaws”). Humana’s Bylaws require that a stockholder provide written notice of intent to bring a proposal no less than 60 days or more than 90 days prior to the scheduled date of the Annual Meeting of stockholders. If less than 70 days’ notice of the Annual Meeting is given, written notice by a stockholder would be deemed timely if made no later than the 10th day following such notice of the Annual Meeting. A proposal must also meet other requirements as to form and content set forth in our Bylaws. Stockholder proposals should be sent to the attention of the Corporate Secretary, Humana Inc., 500 West Main Street, 21st Floor, Louisville, Kentucky 40202. A copy of our Bylaws is available on our website. From the www.humana.com website, click on “Investor Relations,” and then click on “Corporate Governance” subcategory and then click on the link entitled, “Bylaws.”

How will Humana solicit votes and who pays for the solicitation?

We have engaged D. F. King & Co., Inc. to assist in the distribution of proxy materials and solicitation of votes for approximately $13,000 plus expenses. We have also engaged Broadridge to assist in the distribution of proxy materials and the accumulation of votes through the Internet, telephone and coordination of mail votes for approximately $321,350 plus expenses. We will reimburse banks, brokers and other nominees for their reasonable out-of-pocket expenses for forwarding proxy and solicitation material to our stockholders.

How can I obtain additional information about the Company?

Included with this proxy statement (either in printed form or on the Internet) is a copy of our Annual Report on Form 10-K for the year ended December 31, 2021, which also contains the information required in our Annual Report to Stockholders. Our Annual Report on Form 10-K and all our other filings with the SEC also may be accessed via the Investor Relations section on our website at www.humana.com. We encourage you to visit our website. From www.humana.com click on “Investor Relations,” then click on the “SEC Filings and Financial Reports,” then click on the “Annual Reports” subcategory.

Where can I find voting results for this Annual Meeting?

The voting results will be published in a current report on Form 8-K which will be filed with the SEC no later than four business days after the Annual Meeting. The Form 8-K will also be available on our website. From the www.humana.com website, click on “Investor Relations,” then click on “SEC Filings and Financial Reports,” and then click on “SEC Filings” subcategory.

What is “householding”?

“Householding” occurs when a single copy of our Annual Report, proxy statement and Notice is sent to any household at which two or more stockholders reside if they appear to be members of the same family. Although we do not “household” for registered stockholders, a number of brokerage firms have instituted householding for Shares held in street name. This procedure reduces our printing and mailing costs and fees. Stockholders who participate in householding will continue to receive separate proxy cards, and householding will not affect the mailing of account statements or special notices in any way. If you wish to receive separate copies of our Annual Report, proxy statement or Notice in the future, please contact the bank, broker or other nominee through which you hold your Shares.

 

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Company Overview

 

Headquartered in Louisville, Kentucky, Humana Inc. is a leading (2021 Fortune #41 ranking) health and well-being company focused on making it easy for people to achieve their best health with clinical excellence through coordinated care. Our strategy integrates care delivery, the member experience, and clinical and consumer insights to encourage engagement, behavior change, proactive clinical outreach and wellness for the millions of people we serve across the country. As of December 31, 2021, we had approximately 17.1 million members in our medical benefit plans, as well as approximately 5.3 million members in our specialty products.

Our Strategy

We are committed to addressing the most important health needs of our millions of medical and specialty insurance members and health care services customers to simplify achieving better health and give our customers more healthy days. We offer insurance and non-insurance products to consumers through our various subsidiaries. Our medical and specialty insurance products allow members to access health care services primarily through our networks of health care providers with whom we have contracted. In addition, we offer pharmacy solutions, provider services, home solutions services and other services and capabilities to promote wellness and advance population health.

Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care delivery system with the power to address our customers’ most significant needs that impede simpler health care and better health by (i) making care more predictable, understandable, and affordable, (ii) addressing medical, behavioral, and social needs, and (iii) delivering care whenever and wherever our customers need it. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large. Humana’s innovative strategy continues to capitalize on industry changes by positioning ourselves as a partner in health and aging to our consumers. We understand that health care is complicated, and dealing with multiple physicians and other health care professionals can be a confusing and daunting task. That is one of the principal reasons why Humana continues to enhance its integrated care delivery strategy in key areas to enable a better and more seamless locally delivered health care experience for our members.

We are focusing on the unmet needs that matter the most to our customers, aligning our actions and behaviors to go above and beyond to solve those needs and deliver on a “more human” experience, so people get more than they expect, ultimately helping members achieve their best health. We call this delivering “human care.” Human care separates Humana from other traditional insurance companies, demonstrating that our approach is more caring, personalized, and easier. We do this by (i) listening to our customers, (ii) establishing strong partnerships with trusted individuals who are involved in their care, such as providers and caregivers, (iii) developing technologies and other solutions that offer convenient and easy ways for them to engage with their health, and (iv) leveraging data analytics to improve how they engage and interact with us by personalizing the experience for how they want to interact with Humana.

Our ecosystem of value-based care delivery capabilities engages our customers clinically by focusing on the physical, mental, and preventative aspects of their health, and delivering better health outcomes. We activate a network of proprietary and partnered solutions, focusing specifically on the highest influence touchpoints of the health care delivery system, including primary care, home health, pharmacy, behavioral health, and social determinants of health. We support the integration of these touchpoints through robust data, analytics, and digital health capabilities that help us engage our customers in their health and get them the right care, in the right place, at the right time. This approach allows us to deliver better quality and health outcomes while making the health care experience simpler for our members and patients.

Our Continued COVID-19 Response

Throughout 2021, the COVID-19 pandemic continued to present unique challenges that highlighted our commitment to quality, the strengths of the Medicare Advantage (MA) program, and the value that this enduring public-private partnership brings to our nation’s seniors, the disabled and the healthcare system as a whole. Early in the year, we activated our teams to support our members in getting vaccinated, leveraging our data, analytics and clinical capabilities to engage in proactive outreach to help our members schedule appointments, partnering with retail organizations, providers and the communities we serve in setting up vaccine clinics, and ensuring that underserved populations had equal opportunities to access the vaccines. As the year progressed, we continued to adapt to address our members’ needs, providing resources regarding the safety and efficacy of the vaccines, reducing financial barriers to care, further improving access to telephonic and in-home care and screening capabilities, supporting our members in receiving in-person care, and addressing social determinants of health needs that were exacerbated by the pandemic.

These efforts and our performance in 2021 were made possible by the ongoing, tireless efforts of our associates, who continued to put our members and patients at the front of everything we do while continuing to balance the daily challenges presented by the pandemic.

 

Company Overview    2022 Proxy Statement  |  Humana

 

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Our Performance

Our 2021 financial results reflect strong core performance:

 

   

We reported diluted earnings per common share (EPS) of $22.67 on a Generally Accepted Accounting Principles (GAAP) basis and Adjusted EPS of $20.64;*

 

   

We returned approximately $354 million to our stockholders in the form of dividends, representing an increase of $31 million over fiscal year 2020;

 

   

Over 97% of our Medicare Advantage members in 2021 were in a plan with a 4-Star rating or higher for 2022 and we’ve increased the number of contracts that received a 5-Star rating from 1 contract in 2021 to 4 contracts in 2022 - the most in our history;

 

   

We grew our Individual Medicare Advantage membership by 446,400 members, or 11.3%, in 2021, from 3,962,700 members as of December 31, 2020, to 4,409,100 members as of December 31, 2021, with enrollment in our dual eligible special needs plans (D-SNP) growing by more than 40% in 2021, and enrollment in our Humana Honor plan designed for Veterans, that is also available to all Medicare eligibles, growing by 80% in 2021;

 

   

We accelerated the growth of our senior-focused, value-based primary care organization, the largest in the nation, ending 2021 with more than 200 centers serving approximately 350,000 patients across 24 markets in 9 states;

 

   

We saw continued growth in our pharmacy business, with our Pharmacy Benefit Manager (PBM), the fourth largest in the country, processing 515 million 30-day equivalent scripts in 2021, an 8 percent increase year over year; and

 

   

We became the largest home health and hospice organization in the nation through the completion of our acquisition of Kindred at Home, and made substantial progress towards our goal of scaling and maturing a risk-bearing, value-based model that manages the provision of home health, durable medical equipment (DME) and home infusion services.

 

* 

Please refer to section entitled “Organization & Compensation Committee Report” in this proxy statement for a reconciliation of non-GAAP to GAAP financial measures. We encourage each stockholder to read the full financial analysis for year ended December 31, 2021 contained in our Annual Report on Form 10-K, filed with the SEC on February 17, 2022.

 

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Corporate Governance

 

 

 

LOGO

Care for the whole person – emotionally, physically, and spiritually, building inspired communities where health and well-being prosper.

  

Humana is committed to having sound corporate governance principles and operates within a comprehensive plan of governance for the purpose of defining responsibilities, setting high standards of professional and personal conduct, and ensuring compliance with such responsibilities and standards. Sound corporate governance is essential to running our business effectively and to maintaining our reputation of integrity in the marketplace. At the heart of these efforts lie our Company Values, the guiding forces behind all our actions — Inspire Health, Cultivate Uniqueness, Rethink Routine, Pioneer Simplicity, and Thrive Together. In addition, our Board of Directors has adopted Corporate Governance Guidelines, which we refer to as the Guidelines, intended to comply with the requirements of Section 303A.09 of the NYSE Listed Company Manual. The Guidelines may be viewed on our website at www.humana.com. From the www.humana.com website, click on “Investor Relations,” then click on “Corporate Governance” subcategory and then click on the link entitled “Corporate Governance Guidelines.”

 

Role of the Board and Board Leadership

 

Role of the Board

 

The business of the Company is managed under the direction of the Board, whose members are elected annually by the Company’s stockholders. The basic responsibility of the Board is to lead the Company by exercising its business judgment to act in what each director reasonably believes to be in the best interests of Humana and its stockholders, while engaging in active and independent oversight of the management of the Company’s business affairs and assets. In order to fulfill its responsibilities to the Company’s stockholders, the Board, both directly and through its committees, regularly engages with management to both evaluate the Company’s current operations and encourage the innovations and strategic imperatives that will drive our success in the future. The Board monitors management performance through reviews of the most critical issues facing the Company, including approval of the Company’s strategy and mission, execution of the Company’s financial and operational goals, oversight of risk management, succession planning, and determination of executive compensation. The Board plans for the future by ensuring management focuses on innovation in our strategy to meet the speed of change in our industry and monitoring the Company’s human capital management functions, working closely with the management team to ensure the Company has the correct levels of talent in place – within each business segment – for continued success in present and future states of the Company.

 

Board Oversight of Risk

 

While management is responsible for designing and implementing the Company’s risk management process, controls and oversight, the Board, both as a whole and through its committees, has overall responsibility for oversight of the Company’s risk management. The full Board regularly reviews risks that may be material to the Company, including those detailed in the Audit Committee’s reports and as disclosed in the Company’s quarterly and annual reports filed with the SEC. While the Board has established committees designated for various oversight functions, it is common practice for committees to collaborate on overlapping issues.

 

LOGO

Appreciate individual uniqueness, creating an environment where everyone can fully be themselves, reflecting all of us and the communities we serve.

 

LOGO

Work and learn together, transforming the norm to strengthen operational excellence and outcomes.

 

LOGO

Take personal accountability, working together to create simple, personalized, quality experiences.

 

LOGO

Collaborate openly, building positive relationships to achieve strong, sustainable results for us and the people we serve.

  

 

Corporate Governance    2022 Proxy Statement  |  Humana

 

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BOARD OF DIRECTORS

 

Oversees Management of Major Risks

Regulatory & Public Policy

Financial

     

Succession Planning

Strategic

 

     

Reputation

      Cyber Security        Investment Objectives

Audit

Committee

    Organization & Compensation Committee    

 

Nominating,

Governance & Sustainability Committee

   

Technology

Committee

   

Investment

Committee

         

 Financial Statement integrity and reporting

 Legal, regulatory and compliance

 Internal controls

 Cyber security risk oversight

 

   

 Executive compensation policies and practices

 Non-executive compensation policies and practices

 Succession planning

 Human Capital Management

 

   

 Governance structure and processes

 Legal and policy matters

 Stockholder concerns

 Board refreshment

 Environmental, Social and related-Governance (ESG) oversight

   

 Information security, technology and privacy & data protection

 Company IT strategy and consumer facing technology

   

 Investment objectives and policies

 Investment results and performance evaluation

               

 

Management

Business units identify and manage business risks; Central functions design risk framework (setting boundaries and monitoring risk appetite); and Internal Audit provides independent assurance on design and effectiveness of internal controls and governance processes.

 

The goal of these processes is to achieve serious and thoughtful board-level attention to the Company’s risk management process and system, the nature of the material risks faced by the Company, and the adequacy of the Company’s risk management process and system designed to respond to and mitigate these risks.

Board Leadership

Leadership of the Board is essential to facilitate the Board acting effectively as a working group to the benefit of the Company and its performance. As Chairman of the Board and our lead independent director, Mr. Kurt J. Hilzinger assumes key duties to ensure effectiveness and collaboration in all aspects of the Board’s role.

 

 

Duties of Our Chairman

 

LOGO    Serves as Chair of regular sessions of the Board and manages the overall Board process.

 

LOGO    Leads the Board in anticipating and responding to crises.

 

LOGO    Oversees and monitors Board engagement, participation and continued education to ensure our directors are in-tune with issues of our dynamic industry and the evolving landscape.

 

LOGO    Supports the Nominating, Governance & Sustainability Committee with director on-boarding and orientation programs.

 

LOGO    Models culture, philosophy, inclusivity and values expected of all directors.

 

LOGO    Conducts individual meetings with other directors, including the CEO, and management team to encourage open communication, collaboration and differences in perspective.

  

 

LOGO    Evaluates overall Board effectiveness, with emphasis on identifying areas of enhancement, development and/or furtherance and communicating these observances to the Board for discussion.

 

LOGO    Represents the Board on occasions where it is important for the Board to respond on matters independently from the Company’s management team.

 

LOGO    Provides guidance and direction to the CEO and management team.

 

LOGO    Engages with stockholders, through verbal or written communications, and presides over the Company’s Annual Meeting of Stockholders. Also recommends to the Board an agenda to be followed at the Annual Meeting.

 

LOGO    Works with the Organization & Compensation Committee to develop the process for CEO compensation evaluations.

 

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The Board believes the advisability of having separate or combined chairman and chief executive officer positions is dependent upon the strengths of the individual or individuals that hold these positions and the most effective means of leveraging these strengths, in light of the challenges and circumstances facing the Company, which may change over time. At this time, given the composition of the Company’s Board, the effective interaction between Mr. Hilzinger, as Chairman, and Mr. Broussard, as Chief Executive Officer, Mr. Hilzinger’s status as an independent director and previous service as our Lead Director, and the current challenges faced by the Company, the Board believes that separating the chief executive officer and board chairman positions provides the Company with the right foundation to pursue the Company’s strategic and operational objectives, while maintaining effective independent oversight and objective evaluation of the performance of the Company.

Board Engagement and Undertakings

The Board holds itself to a high standard of engagement, with a hands-on approach that leads to critical insights regarding our customers, operations and business and enhances their level of governance and oversight. An essential component to the Board’s engagement is communicating with the Company’s internal and external stakeholders. To accomplish this, meetings of the Board may be held in key Company markets where, together with management, the Board will personally meet with associates, customers, providers and other stakeholders to gain direct feedback into the Company’s operations, experiences and overall effectiveness. Despite continued COVID-19 restrictions and the Company’s workforce having remained primarily work-from-home, the Board maintained its commitment to engagement and continued to meet with stakeholders virtually, by videoconference and teleconference.

Certain other engagement practices of our Board are described below.

 

   

Follows an annual topical calendar used to balance strategic, operational, compliance, and cultural matters, among others, and receives detailed reports on those topics, in addition to ad hoc subjects, throughout the year.

 

   

Utilizes clear and proactive Board meeting agendas to achieve high productivity at each meeting.

 

   

Holds executive sessions during every meeting, with the CEO present and then with only the independent directors. Relevant feedback is then reported to the CEO and the management team, creating a feedback loop from the Board to the management team.

 

   

Maintains regular communication with the CEO and management team, apart from formal Board meetings, to ensure consistent and continuous progress toward established goals.

 

   

Employs Board technology tools to review Board materials and to remain informed of ongoing Company endeavors, to efficiently communicate with the management team and to take formal action when necessary.

 

   

Performs in-depth organizational structure reviews, through the Organization & Compensation Committee, of line and functional teams within the Company to assess leadership bench strength, culture, succession planning, diversity and related matters, and engages regularly with rising leaders within the Company. In addition, the Organization & Compensation Committee regularly reviews associate engagement scores, which maintained momentum during 2021, with 89% of our associates saying that Humana is committed to their health and well-being.

 

   

Receives continued education from external consultants on a wide range of industry topics to keep them apprised of the latest trends and anticipated future trajectories. In addition to our director’s individual pursuits, Board education opportunities during 2021, included, (i) a formal education session with external consultants; (ii) guest speaker attendance during select meetings; and (iii) routine briefings on regulatory developments.

 

 

 

2021 Notable Board Actions

 

  Appointed 2 new directors to the Board

 

  Elected 2 new executive officers in connection with management succession planning

 

  Oversaw enhanced ESG disclosures, as well as, the Company’s transition to an integrated ESG reporting framework – Humana’s Impact Report

 

  Approved strategic acquisitions of One Homecare Solutions and the remaining interests in Kindred at Home

 

     

 

2021 Board and Committee      Meetings     

 

 

34    

Videoconference / Teleconference      Meetings     

5    

In-person Meetings     

1    

Annual Stockholder Meeting (Virtual)     

 

     

 

2021 Director Attendance Average     

 

 

97% 

 

(Based on aggregated Board and Committee meeting attendance; includes all directors having served during 2021.)

 

 

Corporate Governance    2022 Proxy Statement  |  Humana

 

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Human Capital Management

Our associates are essential to our Company’s success in delivering on our core strategy, creating positive healthcare experiences and providing human care for our members. We are committed to recruiting, developing, and retaining strong, diverse teams, actively promoting a culture of inclusion and diversity to foster a workplace where all associates feel they can be authentic and bring their whole selves to work every day – cultivating uniqueness and thriving together.

These efforts are overseen by our Board of Directors – which has designated to our Organization & Compensation Committee the responsibility for Board-level oversight of the Company’s human capital management and inclusion and diversity policies and practices – and implemented under the direction of our Chief Administrative Officer. As of December 31, 2021, we had approximately 95,500 associates and approximately 1,400 additional medical professionals working under management agreements primarily between us and affiliated physician-owned associations.

 

Our Culture and Approach to Work

 

We believe that our members’ experience is linked to our associates’ experience—engaged, productive associates are the key to building a healthy company, a caring environment where our associates go above and beyond for our members, driving innovation, and offering fulfilling experiences that incentivizes them to stay with us over the long-term. We provide opportunities for our associates to add to their personal well-being experiences that go beyond health to enhance their individual need for purpose, belonging and security.

 

Each year, we measure our success and opportunities to advance through our annual, third-party administered Associate Experience Survey – results of the 2021 survey showed that 91% of associates are highly engaged, which is world-class level. We provide the survey results to our entire associate population and encourage leaders to use the information to create open, honest action plans with their teams to build upon and further deepen our collective engagement.

     

 

7.3 Years

 

Average Associate Tenure

 

       
  

 

84%

 

Of associates have a strong sense that they belong at Humana

 

  
  

Listening to the voice of our associates reinforces our Value of Rethink Routine. We send pulse surveys to associates throughout the year to get feedback on how we’re doing, allowing us to assess our approach to work and take action when needed. We believe this helps to strengthen our culture and support associate engagement. It was through this process that WorkLife Reimagined was formed – our latest work style model that’s focused on flexibility and collaboration. We’ve learned that there isn’t just one way to operate or one way work gets done. That’s why WorkLife Reimagined includes work styles that benefit everyone and will continue to guide and shape our culture. As our associates transition to their new work style we’re equipping them with the tools they need to be successful – whether working at home, the office, in the field or a hybrid style – they’ll stay connected no matter where they sit.

Strong Company culture starts with leadership at the top. Our CEO inspires Company culture by sending a weekly Company-wide email where he engages with associates on a variety of topics including business matters, current events, health and well-being, family and personal interests. A survey link is included within these communications encouraging associates to speak up and share their own experiences directly with our CEO.

Inclusion and Diversity

Celebrating diverse backgrounds and creating an environment of inclusion is at the heart of Humana. We take intentional steps to nurture a culture where all employees, no matter who they are, feel like they can be their best selves and do their best work. Only then can we make the best decisions for our customers to ensure that they all have a fair and just opportunity to be as healthy as possible.

Our associates’ vast experiences and perceptions—their unique characteristics, backgrounds and beliefs—drive the groundbreaking, strategic thinking that gives our Company its competitive edge in a diverse marketplace. Our approach fosters innovative thinking and creativity, expands insights and generates better business outcomes.

We are committed to having balanced diversity at all levels of the Company and have developed a pathway for top, diverse talent within our recruiting initiatives. To achieve our recruiting and hiring goals we proudly partner with local and national advocacy groups, including the CEO Action for Diversity and Inclusion, the Catalyst CEO Champions for Change, and the OneTen Coalition, to provide information about open roles, assistance with resume preparation and application submission, and to design and execute other talent acquisition and development initiatives. We’re proud to be recognized as a Military Friendly employer. Under our Veterans Hiring Initiative we partner with dozens of organizations for veteran recruitment, including the Wounded Warrior Project, United States Army Reserve, and Paralyzed Veterans of America, and have hired thousands of veterans and military spouses. We have also designed and implemented programs that enhance our hiring initiatives aimed toward women in technology, retiree/mature worker populations, and closing the hiring gap of persons with disabilities versus those without disabilities.

We’ve also incorporated balanced interview panels into our interview process, through which we strategically engage a broad spectrum of interviewers that bring greater diversity and perspective. This proven best practice strengthens the candidate experience and hiring of diverse talent, ensuring we get the right talent for any given role, and minimizes the potential for personal blind spots when evaluating candidates. Balanced interview panels enhance the experience of interviewees and demonstrate our Values in action.

 

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October 2021

 

Joined the Historically Black Colleges and Universities (HBCU) Partnership
Challenge

 

A bi-partisan effort to promote greater engagement and support between private companies and HBCUs.

 

   

 

November 2021

 

Signed the Disability:IN CEO Pledge

 

A global organization with the world’s most comprehensive disability inclusion benchmarking, serving as a resource to corporations desiring to drive disability inclusion and equality in business.

 

   

 

Ranked # 1

 

Network Resource Groups (NRG)

 

Our NRGs were recognized by DiversityInc in its 2021 Top Companies for Employee Resource Groups.

 

We’re committed to building balanced diversity at all levels of the Company through a focused effort on supporting a pathway for top, diverse talent, strengthening current collaborations and forging new partnerships. Achievement in this area requires a mindset of shared accountability and commitment to enterprise outcomes. In 2020, Humana leaders aligned to high-level goals – hiring and promotion of diverse talent, retention of diverse senior leadership (VP and above), inclusion, mentoring and leaders participating in conscious inclusion training – with shared accountability focused on driving inclusion and diversity throughout the enterprise. We’ve employed a metrics-driven approach to address areas of improvement quickly and goal achievement is linked to executive compensation (refer to section entitled “Compensation Discussion & Analysis – Associate Incentive Plan” within this proxy statement for more information on executive compensation). Since introducing these shared accountability measures, we’ve seen year-over-year (YOY) improvements among our female associates and associates of color. Our workforce representation is tracked through self-disclosure by our associates, and are committed to transparent disclosure of our demographic data. The charts below represent our workforce demographics as of December 31, 2021.

 

Associate Demographics

 

LOGO

 

Pay and Benefits Philosophy, Compensation and Financial Security

 

We believe all of our associates have the right to receive a fair living wage and we are committed to maintaining a pay and benefits philosophy that is market-based and recognizes an associate’s contributions so that we can attract and retain an engaged, talented team. Our Company’s pay and benefits structure is designed to motivate and reward our associates - at all levels of the organization - for their skill development, demonstration of our Values and performance. While our programs vary by location, employee type and business, they generally include:

     
     

 

90%

 

Of associates would recommend Humana as a great place to work

 

     

 

LOGO          LOGO          LOGO

  Competitive Base Pay

  Associate Incentive Plan (Annual Bonus)

  Supplemental Pay (Including Overtime)

  Recognition Pay and Service Awards

  401(k) Retirement Savings Plan with Company Match Program

  Life Insurance

  Short- and Long-Term Disability Insurance

   

  Medical, Dental and Vision Benefits

  Supplemental Health Benefits

  Long-Term Care Insurance

  Go365® Wellness and Rewards Program

  Health Plan Incentives

  On-site Health and Fitness Centers

  On-site Health Screenings and Vaccinations

   

  Paid Time Off, Paid Holidays, Paid Volunteer Time Off and Jury Duty Pay

  Paid Parental Leave Program (6 Weeks)

  Paid Caregiver Time Off Program (2 Weeks)

  Employee Assistance Program

  Associate Discount Programs and Services

  Helping Hands Program

  Transit Services

 

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Talent Development and Growth Opportunities

We champion the individual goals and development of our associates, and provide a number of programs to ensure that our associates have the resources and support they need to deliver on their passion. The Humana Learning Center gives our associates the opportunity to earn professional certifications through continued education programs and to participate in instructor-led and online courses designed to strengthen soft and hard-skills and enhance leadership development. Our Career Cultivation team sponsors workshops and events to promote associate accountability within their personal and professional growth as part of overall career development. In 2021, our associates averaged approximately 35 learning and development hours per active associate.

Our associates are also encouraged to participate in mentoring programs with people of various backgrounds and cultures. We view mentoring as an essential development tool for sharing skills and knowledge so we can all succeed. Our commitment to mentoring feeds the successful future of our Company. In 2021, our associates participated in more than 2,700 mentoring circles, underscoring the Company’s focus on creating a culture of mentoring and inclusion. We also utilize development programs to enhance talent within our business segments through targeted internal initiatives, where we aim to upskill and reskill existing associates for opportunities in new career pathways.

 

  

 

84%

 

Of associates believe Humana provides them with opportunity for growth and development.

 

    

 

216,843 Hours     

 

Volunteer hours tracked by 16,400 of our
associates in 2021

 

    

$1.2 Million

 

Total associate matching gift dollars made by The Humana Foundation in 2021

 

A Workplace With Purpose

Having a purpose and a connection to a community improves well-being. That’s why we strive to make it easy for our associates to give back, either as individuals or a team, to causes that ignite their passion and sense of purpose. Volunteerism is a tangible way to impact the health and well-being of the communities we serve and enrich our workplace.

We’ve created programs and practices to make volunteering easier and more vibrant for associates.

 

   

Our full-time associates annually receive eight hours of paid Volunteer Time Off (VTO)

 

   

We help associates discover and track volunteer opportunities through our Humana Together volunteer portal

 

   

We integrate volunteerism in our leadership development and team-building

 

   

We offer a matching charitable gift program through The Humana Foundation

 

   

We feature associates sharing their volunteerism stories on our Intranet to inspire others

 

   

We offer our associates paid time off to get vaccinated, including boosters, for COVID-19, helping to reduce barriers associates may have in taking time away from work to get vaccinated and supporting healthy communities

Board Oversight of Environmental, Social and Governance Matters

The Nominating, Governance & Sustainability Committee has responsibility for Board-level oversight of the Company’s ESG strategy, practices and reporting. The Nominating, Governance & Sustainability Committee receives formal ESG reports from management at least twice annually regarding the Company’s ESG initiatives, metrics and progress on established goals, as well as, ad hoc ESG communications as necessary. In addition, we have an internal ESG Steering Committee, overseen by our Chief Administrative Officer and Chief Legal Officer, to guide the integration of our ESG efforts with our long-term business strategy. This ESG governance structure complements the long-standing responsibility of our Board and each of our Board committees in overseeing various aspects of the Company’s ESG-related risks and practices, as illustrated below:

 

 

BOARD OF DIRECTORS

 

              

 

Nominating, Governance & Sustainability Committee

 

              

Audit     

Committee     

     Organization &   Compensation Committee        Technology
Committee
    

Investment

Committee

  Risk Management

  Cyber Security

    

  Human Capital Management

  Inclusion & Diversity Practices

  Company Compensation Plans & Policies

    

  Privacy & Data Protection

  Information Security

    

  Investment Portfolio

  Investment Guidelines

              

Chief Administrative Officer and Chief Legal Officer

(In collaboration with members of the executive management team)

              

 

ESG Steering Committee

 

              
Oversight      Management      Implementation

 

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Strategic Focus on ESG

We realize that the future of our business is linked with the well-being of our associates, members and patients, the communities we serve, the healthcare system, and the environment. It’s with our stakeholders in mind that we’ve established five key pillars of our ESG program that align to our strategic business goals, supporting our commitments to sustainable business and improving health outcomes. These pillars – Access to Healthcare; Data Privacy & Protection; Environmental Impact; Product Quality & Safety; and Talent & Diversity – are the driving force behind our impact platform and will guide our ESG program.

We’ve developed quantitative and/or qualitative metrics within each pillar to track, monitor, measure and report our performance. Transparent disclosures are a top priority, as such, we’ve mapped our ESG disclosures to frameworks established by the Sustainability Accounting Standards Board (SASB) Managed Care Standard, the Task Force on Climate-Related Financial Disclosures (TCFD), and the Global Reporting Initiative (GRI). We also support the United Nations Sustainable Development Goals, aligning our efforts to three goals where our Company can most contribute: Goal 3 – Good Health and Well-being; Goal 8 – Decent Work and Economic Growth; Goal 12 – Responsible Consumption and Production.

Our Impact Platform

We’ve set our intentions to have a positive well-being impact among all of our stakeholder groups and have developed a platform where we believe we can make the most difference. Our impact platform sets the direction for how we will advance health equity, address needs in our communities and drive sustainable change with shared value. The pillars may connect to one or more categories within the impact platform, reinforcing the interconnectedness of our holistic approach to ESG. We’ve highlighted below key elements of our ESG program along with some of our notable pillar metrics.

 

LOGO         LOGO         LOGO         LOGO         

For each person, we make it easier for people to achieve their best health.

  

For each community, we work to advance population health.

  

For our business and the collective healthcare system, we help build more equitable and sustainable practices.

  

For the environment, we invest in the health and sustainability of the environments around us.

We are all on a unique journey to our own best health, so through empathy and a personalized approach, we not only address medical needs, but meet people where they are by helping our customers, employees – everyone – address human needs, too.    Where people live, work and play is inextricable from their health outcomes, so we’re passionate about taking on the social determinants of health that impact their communities on a local level.    The future of health depends on the health of the collective system, so alongside our partners, we’re striving to create a more equitable health ecosystem that incorporates sustainable business practices, to better serve all of us, and the next generation.    The health of individuals is deeply tied to the health of their environments, so we do our part to invest in, protect and care for the places and planet all people depend on.

For Each Person

Our members achieving their best health is at the top of our mind. We know that health is not linear. Every member is unique as are the communities we serve. That’s why we’re continuously working to ensure that our health plan products and services are as affordable as possible, as well as, addressing access to healthcare barriers so that all of our members can receive the care they need. As we cultivate our philosophy of whole-person health care, we’re addressing the most crucial needs of our members, which means truly caring about them, understanding what is important to them and finding ways to make it easy for them to live their best life. Thanks to processes such as integrated care delivery and using health screenings that consider social determinants of health, we have a clearer view of each member’s very personal barriers to their best health. Through our integrated approach, we are building the tools to address the physical, behavioral and social factors that all play such a critical role in promoting improved health outcomes. Please refer to our Value-Based Care Report for more information on these efforts.

 

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Our associates are the driving force behind our Company’s well-being initiatives. We believe that when we invest in our associates they pay it forward by investing in others. In this effort we actively live out our Values, cultivating uniqueness and thriving together.

 

 

29%    

 

Associate participation in at least
1 of our 10 associate-led NRGs
during 2021 –

With over 8,574 members, the Women’s NRG is the largest.

 

 

The Company’s Office of Inclusion & Diversity (our “I&D Office”) efforts are led by our Chief Inclusion and Diversity Officer, who reports directly to the Chief Administrative Officer. The I&D Office works with key partners like the Chief Health Equity Officer, our new Director of Diverse Talent Strategy, our Executive Inclusion & Diversity Council (the “Council”), our Network Resource Groups (“NRGs”), local Inclusion and Diversity Councils, and Culture & Engagement professionals across the enterprise, to maximize our vibrant diversity and inclusive culture to empower our business strategy to help the communities we serve achieve their best health.

To help integrate inclusion and diversity into the fabric of the organization from the top down, the Council is led by our President and CEO, with top priorities consisting of (i) leading and informing the strategy to drive the hiring, developing, promotion and retaining of our full diverse workforce; (ii) creating and maintaining an inclusive culture; (iii) reviewing our supply base and spend for diversification opportunities; and (iv) improving transparency and accountability to sustain outcomes. The Council sets company-wide inclusion and diversity goals and objectives that complement our Talent & Diversity pillar.

Our inclusion and diversity objectives also aim to build an awareness of biases and beliefs, identify differences and similarities of our multi-generational workforce and enable associates to leverage differences to drive innovation and create value. We are committed to growing our associates’ inclusion skills and diversity knowledge and provide a variety of associate training programs and workshop opportunities in areas of unconscious bias, disability awareness, cultural competency, racial equity, and social justice, among others.

 

Our fundamental belief that every person has the right to a safe workplace includes having freedom of gender identity and expression, which we have included within our non-discrimination and anti-harassment policies. Additionally, our Company adopted guidance to support associates who are transgender and/or identify as non-binary. Our Workplace Gender Transition Guidelines, available to all associates, outlines a collaborative process to help guide transitioning associates, their coworkers and leaders by addressing the needs and issues that may arise in the workplace, and includes alignment of workplace resources, education and coaching.      

 

91%

 

Of associates believe top leaders of their organization would not tolerate workplace behavior that is discriminatory or retaliatory.

 

KEY PILLAR METRICS

 

  

 

Talent & Diversity      

Voluntary Turnover Rate (VTR) Goal

Reduce Director Level+ VTR

 

We’re working to retain representation among women and people of color in leadership levels of director and above, and have set VTR goals, excluding voluntary retirement, of 4% in each demographic.

 

2021 Women VTR: 5%         2021 POC VTR: 9%

 

      

 

Talent & Diversity     

Hiring and Promotion Goal

Increase in Director Level+ Representation

 

We’re working to increase representation among women and people of color in leadership levels of director and above, and have set targets of 50% for women and 30% for POC.

 

2021 Women: 47%         2021 POC: 29%

For Each Community

We recognize that we are part of a bigger community – one that is connected to our members, patients, employees and neighbors. We are dedicated to the holistic health of all people, and that is why we invest in communities across the country to advance health equity. Health equity is about making sure we all have a fair and just opportunity to be as healthy as possible. Helping communities and the people in them grow stronger benefits all of us, because where people live, work and play is inextricable from their health outcomes. We’re partnering with communities to advance health equity on a local level and take on the social determinants of health that impact all of us.

As our Company shifts from an insurance company with elements of health to a health company with elements of insurance, we are focused on five areas of influence to help improve health and aging: primary care, home health, pharmacy, behavioral health and social determinants of health. Championing this effort is our Bold Goal – a population health strategy launched in 2015 to improve the health of the people and communities we serve by creating solutions to address unmet social needs and making it easier to achieve their best health.

Since 2015 we’ve continued to adapt as we learned more about our communities and our members. We discovered how important it is to develop personalized solutions, determining how best to meet the needs of our members while striving to (i) help Humana and its partners understand social determinants of health and their prevalence in our communities; (ii) convey how such determinants actualize into social needs that limit or prevent health care; and (ii) create impactful care solutions that account for our members specific health-related social needs. That has meant getting to know our members better and the daily health-related challenges they’re facing in order to connect them to people and organizations who can support them – not only in their clinical needs, but also in their individual health-related social needs,

 

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such as getting access to healthy food, helping to connect them socially and addressing their housing needs. With community-based organizations and healthcare practices, we are creating evidence-based, scalable and financially-sustainable solutions to improve population health at a local level. We’ve scaled social determinants of health screenings across our business, which has impacted millions – connecting those in need to community resources and support.

Because we know social determinants of health play a significant role in addressing health needs, we have developed a variety of programs, services, benefits and resources for members and the public. Our Far From Alone campaign, with many partners, strives to improve the mental health and wellness of others by increasing social connectedness and reducing feelings of loneliness. The campaign drives awareness, action, and advocacy in support of addressing this important social determinant of health. Learn more about our Far From Alone campaign, and how you can get involved, at its website https://farfromalone.com.

 

  

 

$3.6 Million     

 

Invested by The Humana Foundation
supporting 30 community-based projects
aimed to address social determinants of
health in our hometown Louisville, KY in 2021.

 

      

 

Over 1.6 Million Meals     

 

Provided through our Basic Needs
Program, making a direct impact on
food insecurity to more than 94,000 at-risk
members in 2021.

KEY PILLAR METRICS

 

  

 

Access to Healthcare     

Value-Based Primary Care Goal

Expand Geographic Presence

 

We’re working to grow and expand our geographic presence in value-based primary care to provide more access and high-quality care to patients, including those in underserved areas. We ended 2021 with 206 primary care centers, representing a 32% increase over the prior year.

 

      

 

Access to Healthcare     

State Medicaid Goal

Increase Medicaid Footprint

 

We’re working to expand the number of our state-based Medicaid contracts to deliver care to more individuals of this vulnerable population. As of December 31, 2021 we had Medicaid contracts in six states: FL, IL, KY, OH, SC, and WI.

For Our Business and the Collective Healthcare System

Throughout our operations, we are dedicated to ensuring that every business decision we make reflects our commitment to improving the health and well-being of our members and patients, our associates, the communities we serve, and our environment. Our holistic, integrated approach to care and longstanding commitment to caring for vulnerable populations also afford us a unique opportunity to promote health equity and address the effects of health disparities in the U.S. healthcare system. We have established policies and programs that illustrate our commitment to responsible business practices that lead to a more efficient, equitable and sustainable healthcare system.

Our suppliers are essential to delivering services within our business, which is why we incorporate ESG principles into our procurement strategy - ensuring a fair and equitable approach to procurement. We understand that partnering with diverse suppliers and small businesses, and engaging with them to support common ESG goals, can lead to future sustainability and a reduction in environmental costs. We also understand that inclusive procurement practices deliver broad societal benefits by creating economic opportunities for traditionally underserved or underrepresented groups. That’s why we’ve made it a priority and strive to attract qualified, certified suppliers who reflect our customers, associates and communities we serve. Leveraging these suppliers now and in the future is a win-win for everyone.

Our Supplier Diversity Program promotes an inclusive approach to procurement that ensures we invest our dollars with a balance of partnerships with historically underutilized businesses. We also support the growth of small and diverse-owned businesses by being a resource partner for them, and during 2021 we launched a Supplier Diversity Mentor-Protégé program. The program is a 12-month pilot with half-day, onsite seminars featuring leadership from across our organization exploring topics impacting business growth and operations of small and diverse businesses. The program is designed to identify and overcome barriers that typically inhibit or restrict the success of small and diverse businesses and better position them for growth, sustainability and inclusion.

We also survey suppliers annually through a sustainability scorecard that addresses sustainability, diversity practices and supplier performance. The scorecard is distributed at year-end to our top 50 Prime Suppliers (top spend suppliers) and we typically receive a 25-30% overall spend response rate. We also hold our suppliers accountable for complying with our Company’s Standard of Excellence and Ethics Every Day policy – to the same degree as our associates.

Our governance practices and policies reflect strong controls that provide a solid foundation for our continued success. We are committed to supporting the delivery of consistent high-quality care, promoting efficient outcomes in the healthcare system and ensuring that healthcare remains affordable for all members and patients. Further, in a healthcare industry increasingly driven by quality, we have a corporate Quality Improvement (QI) program – with practicing network physicians as members of various quality subcommittees – to monitor, evaluate and facilitate improvement in the quality of health care services provided to our members. The QI program is overseen by our Corporate Quality Improvement Committee (CQIC), which among other things, promotes alignment to the third dimension of

 

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quality (experience and outcomes) through collaboration with stakeholders, personal accountability and speaking up when quality does not meet our standards.

Our associates are integral to running our Company responsibly and key to our ethics and compliance practices. That’s why all Humana associates and contractors are required to complete an annual ethics and compliance training, and why our Enterprise Compliance team places an emphasis on communicating about ethics, compliance and risk in an intentional way, throughout the year. Our Company is also committed to building digital care delivery operations and leveraging key insights from enterprise analytics. Integrating these critical capabilities across the organization will further accelerate our Company’s move toward differentiated experiences for our customers at the intersection of healthcare and lifestyle, tailored especially to the needs of seniors. We recognize that our emphasis on technology comes with great responsibility as our customers trust us with keeping their information safe. To that end, we are proud to be an industry leader in the adoption of principles and governance to guide our implementation of emerging technologies.

KEY PILLAR METRICS

 

  

 

Talent & Diversity     

Diverse Supplier Spend Goal

Increase Supplier Diversity

 

We’re working to increase our diverse supplier base through an inclusive and equitable approach to procurement, and set yearly goals to increase total diverse supplier spend among our Prime Suppliers. Our 2021 target increase was 9%.

 

2021 Total Diverse Spend: $345 Million, an 8.99% increase over 2020

 

      

 

Product Quality & Safety      

Star Ratings Goal

Continue Leadership of Members in Plans with 4+ Star Rating

 

Our commitment to quality of care, patient-centered clinical outcomes and customer service is reflected in the consistent strength of our plan’s Star Ratings.

 

Membership in plans with 4+ Star Rating1: 4.8 million members (2022); 4.1 million members (2021); 3.7 million members (2020)

For the Environment

We know that a strategic focus on environmental sustainability is critical to fulfilling our mission of helping people achieve lifelong well- being. The better we do at protecting the health of our environments, including our operations, supply chain, and communities around us, the better we can do at positively supporting people on their health journeys. We believe that our demonstrated commitment to environmental sustainability not only positions us to offer reliable and cost-effective service to our customers, but also embodies the principle of an intrinsic link between the health of our planet, our business, and the services we provide.

As a services company, our direct environmental impacts are concentrated within our internal operations. As such, our focus is on areas where we feel we can make the most impact: energy, emissions, and waste. We augment these initiatives with a broader effort to conserve other resources such as water, manage our real estate footprint, and collaborate with our stakeholders – namely our associates – to actively embrace sustainability. We understand that climate change impacts pose risks and opportunities for our business and seek to manage such impacts in several ways, including: continuous strengthening of our already robust business continuity program, investing in energy management and efficiency projects and applying financial incentives to support efforts toward reducing our environmental footprint. We also set challenging environmental targets, as shown below, that promote collaboration with vendors and associates to achieve them. These efforts mitigate risks and demonstrate our commitment by validating the intrinsic link between environment and well-being.

Our Workplace Experience team, overseen by our Chief Administrative Officer, is responsible for day-to-day planning, coordination and implementation of the Company’s operational environmental sustainability policies, including those around energy management and climate-change mitigation/ adaptation. The Workplace Experience team also leads initiatives toward achieving environmental targets in addition to tracking/reporting progress and assessing opportunity toward setting new climate-change mitigation/adaptation targets.

We are now working with a global leader in the digital transformation of energy management and automation, to create a more robust next generation goal that will align with the Science Based Targets initiative (SBTi) to address climate change. We understand that a path forward to net zero emissions is important to our collective future and we’re analyzing tactics, appropriate to our business, that allow us to contribute to net zero goals. We expect to publicly announce our new SBTi aligned environmental goal in late 2022. We encourage you to review our Environmental Sustainability Policy Statement and our 2021 CDP Report to learn more about our sustainability efforts and areas of concentration.

 

1 

Membership totals in plans with 4+ Star Rating reflect membership as of the September date when the applicable Star Ratings were released.

 

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KEY PILLAR METRICS

 

  

 

Environmental Impact

Humana Pharmacy Goal

TRUE Certified Zero-Waste Site

 

Our West Chester, OH distribution center is working to achieve a 90% waste diversion rate (WDR) for its production materials by the end of 2022, becoming Humana’s first TRUE certified site.

 

2021 WDR: 89%         Target WDR: 90%

 

      

 

Environmental Impact

Paper Reduction Goal

Increase Adoption of Digital Materials

 

We’re working to increase the digital adoption rate (DAR) among our medical plan members, encouraging them to receive more of their information from us online instead of on paper, and we plan to announce our goal metrics in Spring 2022.

 

ENVIRONMENTAL SUSTAINABILITY INITIATIVES

 

Greenhouse Gas (GHG) Emissions Reduction     LOGO             Energy Reduction     LOGO       

  We achieved our goal to reduce greenhouse gas emissions by 2.1% year-over-year (from a 2017 baseline) by the end of 2022 and are now pushing to go beyond our baseline measure. In 2021, keeping in line with best practices around goal setting, we expanded our goal boundary to include all Humana owned1 and leased properties and recalculated our goal progression over the last five years. Our emissions goal results2 ending 2021 reached 16%.

We offer our associates new workstyle options and alternative transportation options, engage in partnerships and programs designed to reduce emissions.

We put our buildings into “hibernation” to conserve energy while our associates were working from home during the pandemic. We used this opportunity to expedite repairs and replace equipment and infrastructure.

We calculate GHG emissions in accordance with the methodologies outlined by the GHG Protocol.

We provide a full report of our yearly energy consumption and reduction efforts within the Global Reporting Initiative (GRI) Content Index. We report our GHG initiatives to CDP and utilize a third-party assurance contractor to provide limited assurance verification of our information. We also align our reporting to the framework established by the Task Force on Climate-Related Disclosures (TCFD).

 

   

 

 

    

  We assess and make investments in renewable energy sources when and where it makes sense, environmentally and financially.

We’ve installed solar panels on the rooftop of an owned facility.

Our fleet is greener because our mobile marketing offices – vans equipped with WiFi, cameras and more – have been fitted with solar panels to reduce energy and power to operate the vehicles.

 

  We incorporate standards from both the ENERGY STAR Program and the U.S. Green Building Council’s LEED standards (Leadership in Energy and Environmental Design) into the design of new construction projects.

We proudly have 31 ENERGY STAR certified facilities within our portfolio sites.

Our data centers now have new energy-efficient cooling units and smart flooring to distribute air more efficiently. Both data centers are ENERGY STAR certified.

We continue working toward 100% replacement of fluorescent lights with LED lights across our portfolio sites.

   

   

 

Waste Reduction     LOGO              

  Absolute Target: 60% waste diversion rate (WDR) of waste to landfills via reduction and recycling efforts at our portfolio sites where Humana and our vendors manage waste recycling services, by the end of 2022. We not only achieved our goal early – we exceeded it – at a WDR of 65%. In 2021, keeping in line with best practices around goal setting, we expanded our goal boundary to include certain acquisitions1 where we have direct payment and available frequency data.2

Humana Pharmacy, our mail-order pharmacy, engages in medical waste reduction efforts by donating unused prescription medication – which would otherwise be incinerated – to nonprofit organizations that provide free healthcare, dental care and prescription medication to individuals who are uninsured or underinsured.

We partner with Georgia Pacific to recycle and reuse our baled empty pill bottles, pill bottle caps, cardboard and shrink wrap.

We promote and track our reduction and recycling efforts and make it convenient for our associates to recycle in our facilities. We also report our waste reduction initiatives to CDP and utilize a third-party assurance contractor to provide limited assurance verification of our information.

   

 

 

    

1  Kindred at Home is excluded from the re-baselining of GHG emissions and waste diversion.

2  2021 results described herein have been estimated. The final data will be published on our website (www.Humana.com) when available, which is anticipated during the second quarter of 2022.

   

   

 

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ETHICAL SUSTAINABILITY INITIATIVES       Helpful ESG Resources
Ethics & Compliance    

LOGO

    

 

 

          

 

We invite you to review the additional materials below to learn more about our Company’s ESG related reports, programs, policies and initiatives.

 

Annual Reports

 

https://humana.gcs-web.com

 

Humana Impact Report (Available Spring 2022)

 

2021 CDP Report

 

2021 Bold Goal Progress Report

 

2021 Value-Based Care Report

 

Policy Statements

 

https://humana.gcs-web.com

 

Environmental Sustainability Policy and Standard

 

Supplier Diversity Statement

 

Statement of AI Principles

 

Ethics

 

https://humana.gcs-web.com/corporate-governance

 

Ethics Every Day

 

Anti-Corruption Statement

 

Supplier Diversity Program

 

https://www.humana.com/supplier-information/supplier-diversity.

 

Fraud, Waste and Abuse

 

https://www.humana.com/legal/fraud-waste-and-abuse

 

Ethics Every Day for Contracted Healthcare Providers
    & Third Parties

Compliance Policy for Contracted Healthcare Providers
    & Third Parties

 

Population Health

 

https://populationhealth.humana.com

 

Data Privacy and Cyber Security

 

https://www.humana.com/legal/privacy

 

Public Policy

 

https://www.humana.com/about/public-policy

 

Workplace Benefits

 

https://careers.humana.com/why-choose-humana

 

The Humana Foundation

 

https://www.humanafoundation.org

 

Humana Healthcare Research

 

https://research.humana.com

  Our associates are the key to ethics and compliance.

 

 We have an Enterprise Compliance team that regularly communicates and engages with associates on ethics and compliance topics throughout the year.

 

 We require all associates (including executive officers and independent directors) and contractors to complete an annual training course on ethics and compliance matters.

 

 We enforce Standards of Conduct and a Compliance Policy, which are specifically designed for our contracted healthcare providers and third parties in effort to deter fraud, waste and abuse.

 

  Humana is an industry leader in the adoption of principles and governance to guide its implementation of emerging technologies.

 

 We govern our use of Artificial and Augmented Intelligence according to industry-leading principles.

 

 We have interdisciplinary committees that establish governance over the deployment and quality of Artificial and Augmented Intelligence models.

 

 We have signed the EqualAI pledge committing to ensuring our Artificial and Augmented Intelligence tools do not incorporate unintentional bias, and require all of our Artificial or Augmented Intelligence models that inform decisions about individuals to be reviewed to detect inadvertent bias. We also ask our vendors who utilize Artificial and Augmented Intelligence tools to sign the EqualAI pledge or another similar pledge.

   

  

  

  

   

  

  

  

 
Data Privacy    

LOGO

    

 

 

 

  We are committed to continuously enhancing and strengthening our technology infrastructure and security protocols.

 

 We employ best-practice precautions to safeguard information and protect our members’ data. We deploy defensive practices against the ever-evolving cyber threat landscape by measuring and maturing our cybersecurity capabilities and actively monitoring risks posed by threat actors.

 

 We have established formal data governance, which includes accountability, oversight, processes and controls to ensure our data usage transparency and non-repudiation.

 

 We refresh our data privacy and security policies at least annually.

 

 We provide Company-wide cyber security training to associates, led by our Enterprise Information Protection team, on how to avoid security vulnerabilities and equip them with the necessary tools to protect Company data and to reduce risk. We also test their knowledge through internal phishing campaigns – tracking and reporting aggregated outcomes to leadership.

 

 We report data breaches, as required by law, to the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR). Our reports are publicly available, free of charge, and can be obtained through the OCR Portal at:
https://ocrportal.hhs.gov/ocr/breach

 

 We engage an independent third party audit firm to perform an Annual Service Organizational Controls (SOC) 2 audit of enterprise claims platforms within the following Trust Services Criteria: availability, confidentiality and security.

   

  

  

  

  

  

  

 
Safety & Security    

LOGO

    

 

 

 

  We integrate a culture of safety and security into all aspects of our business to provide our associates, contractors, members and visitors a safe and secure work environment – we are committed to protecting people and safeguarding key assets, properties and information. 94% of associates feel safe and protected from physical risks while working.

 

 We have an Enterprise Safety and Security Policy that applies to our associates, facilities (owned or leased), and anyone requesting facility admittance regardless of relationship.

 

 We maintain and utilize the following resources to manage/mitigate occupational health and safety: Environmental Health and Safety Manual, Incident Reporting System, Associate Safety Handbook and Associate Emergency Preparedness Training. 95% of associates trust Humana would take appropriate action if a physical safety or security concern/incident was reported.

 

 Our safety and security team periodically performs on-site compliance audits to ensure safety plans and practices are implemented, in addition to providing training tools and information.

   

  

 

  

 

 

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Corporate Responsibility Awards and Recognition

We are pleased to have received recognition for our 2021 corporate responsibility and ESG efforts and we appreciate the acknowledgement of our commitment to inspiring health and well-being. Highlighted below are just a few of our valued achievements, however a complete list of awards and recognition is available on our website at www.humana.com – from there click “Corporate Responsibility” and then click “See Our Awards.”

 

 

LOGO

 

 

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Board Evaluation Practices

 

LOGO

The Board is committed to a rigorous self-evaluation process. Through evaluation, directors annually review the performance of the Board and each committee, as well as their own individual contributions, including areas where the Board feels it functions effectively, and most importantly, areas where the Board can improve. The Nominating, Governance & Sustainability Committee, with participation from our Chairman and Chief Executive Officer, initiates the annual Board evaluation process. We believe that having a review process for each group helps to (i) ensure an adequate representation of requisite skills; (ii) encourage high levels of engagement from directors; and (iii) strengthen the overall effectiveness of our Board. Results of the evaluations are shared with the Chairman of the Board and the Chairman of the Nominating, Governance & Sustainability Committee and then later discussed with the entire Board in an aggregated manner, with agreed upon actions and improvements then implemented and monitored for effectiveness.

 

  

 

Board Evaluation

 

 
  

 

The Board evaluation typically consists of a written questionnaire containing qualitative scaled and open-ended questions related to the effectiveness of the Board during the prior year. The questionnaire hones in on specific areas of responsibility and critical attributes of the Board in order to solicit candid feedback from each director. The questionnaire also seeks practical input as to what the Board is doing well, areas in which the Board could improve and any undertakings that the Board should commence or terminate. Every third year, this written evaluation process is supplemented by oral interviews and an analysis of Board and committee effectiveness conducted by an independent consultant.

 

 
  

 

Director Self-Evaluation

 

 
  

 

The director self-evaluation requires each director to honestly reflect upon and carefully consider his or her performance based on key characteristics that are expected of all board members. The self-evaluation also allows directors to provide additional or updated information regarding their skills and qualifications which in turn helps the Nominating, Governance & Sustainability Committee make future assessments and determinations regarding Board composition. The Company encourages directors to participate in continuing education programs focused on the Company’s business and industry, their committee roles and responsibilities, as well as legal and ethical matters. Annually, the Board will meet for purpose of furthering their education through external guest speakers to gain insights into key issues facing the industry and the Company, to supplement management’s views and perspectives.

 

 
  

 

Committee Evaluation

 

 
  

 

Each of our Board committees engages in an annual performance evaluation and a general charter adequacy review. Each committee is responsible for determining the manner of evaluation and for carrying out the evaluation. Further, the Board evaluation questionnaire includes a section specifically concerning Board committee structure and the performance and effectiveness of each committee, which is an opportunity for board members to provide feedback on each committee, regardless of their individual committee membership.

 

 
    

Director Independence

The Guidelines contain standards to assist the Board in its determination of director independence. In addition, to qualify as independent under the Guidelines, the Board of Directors must affirmatively determine that a director has no material relationship with the Company, other than as a director.

Pursuant to the Guidelines, the Board undertakes an annual review of director independence. During this review, the Board considers transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates, including transactions or relationships that are reported under “Certain Transactions with Management and Others” in this proxy statement. As provided in the Guidelines, the purpose of this review is to determine whether any such transactions or relationships are inconsistent with a determination that a director is independent.

In the course of this review for the current year, the Board specifically analyzed and discussed several matters:

 

(1)

a relationship between the Company and Fiserv Solutions, Inc., a subsidiary of Fiserv, Inc., or Fiserv, for which Frank. J. Bisignano, one of our former directors, serves as an executive officer and a director;

 

(2)

a relationship between the Company and Pfizer Inc., or Pfizer, for which Frank A. D’Amelio, one of our current directors, serves as an executive officer;

 

(3)

a relationship between the Company and Cerner Corporation, or Cerner, for which David T. Feinberg, M.D., one of our current directors, serves as a director and an executive officer.

 

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(4)

a relationship between the Company and Howard University and the Howard University Healthcare system, or Howard, for which Wayne A. I. Frederick, M.D., one of our current directors, serves as an executive officer;

 

(5)

a relationship between the Company and Chrysalis Ventures, LLC, or Chrysalis, for which David A. Jones, Jr., one of our current directors, serves as Chairman and Managing Partner and in which Mr. Jones, Jr. has a financial interest;

 

(6)

a relationship between the Company and Foundation Radiology Group PC, or Foundation Radiology, for which Mr. Jones, Jr., one of our current directors, served as a director during part of 2021, and of which Chrysalis Ventures, LLC has an investment interest; and

 

(7)

financing arrangements between the Company and companies that are affiliated with certain of our directors.

Fiserv. In 2021, we contracted for certain marketing and advertising services from Fiserv in connection with member communication materials for which we paid approximately $12.15 million, which is comparable to other non-affiliated vendors for the provision of similar services, is not material to the Company, and does not represent a direct or indirect material interest to Mr. Bisignano.

Pfizer. The relationship between the Company and Pfizer includes a negotiated rebate based on the volume of prescriptions of Pfizer drugs obtained by Humana members, which volume includes claims paid by Humana for our members and the co-payments paid by our members. Payments to Humana from Pfizer result from activity with many intermediaries over whom Humana exercises no control (i.e., the providers who prescribe these medications, the distributors who sell to the retailers, and the retailers from which our members get prescriptions). In 2021, the Pfizer rebates amounted to approximately $71.3 million, substantially all of which were passed through to our members in the form of lower premiums and/or higher benefits. Our subsidiary, Humana Healthcare Research, Inc. or HHR, has also contracted with Pfizer to complete various research studies at commercial rates and following our standard protocols; HHR received approximately $250,750 in fees from Pfizer for this service in 2021. The Company also received approximately $254,250 from Pfizer during 2021 related to hanger rental and other associated aircraft incidentals. The relationships described herein did not represent a direct or indirect material interest for Mr. D’Amelio.

Cerner. Cerner has a license subscription contract with our subsidiary, Humana Digital Health and Analytics Platform Services, Inc., or HDH&A. In 2021, Cerner paid HDH&A approximately $6.5 million in associated licensing, professional service and maintenance fees, which is comparable to other non-affiliated customers for the provision of similar services. Our subsidiary, Conviva Medical Center Management, LLC, has a database subscription contract with Cerner for which it paid Cerner approximately $7,000 in associated fees during 2021, which is comparable to other non-affiliated customers for the provision of similar services. The relationships described herein are not material to the Company and do not represent a direct or indirect material interest to Dr. Feinberg.

Howard. The relationship between the Company and Howard includes arrangements between the Howard University healthcare system in which the Company paid approximately $314,405 in medical claims during 2021. Additionally, the Company paid $25,000 to Howard’s School of Business, Career Services for participation in Howard’s career recruitment program and sponsorship of a Howard business conference. The relationships described herein did not represent a direct or indirect material interest for Dr. Frederick.

Chrysalis. In 2021, we contracted for services to be provided by certain companies in Chrysalis’ investment portfolio. In each case, the amounts paid under these arrangements were comparable to those for other non-affiliated vendors, were not material to the Company, and did not represent a direct or indirect material interest for Mr. Jones.

Foundation Radiology. Foundation Radiology, a multi-institutional radiology services group, serves as a provider in our network, for which we paid approximately $1.26 million medical claims during 2021, which is an amount that is comparable to other non-affiliated providers for the provision of similar services, is not material to the Company, and does not represent a direct or indirect material interest for Mr. Jones.

Financing Arrangements. Certain of our non-employee directors are partners, shareholders and/or officers of companies that have commercial paper programs or other financing arrangements in which we participate in the ordinary course of business. Payments to or from such companies constituted less than the greater of $200,000 or 1% of each of Humana’s and the recipient’s annual revenue, respectively, in each of the past three years.

At the conclusion of its review for the current year, the Board affirmatively determined that in each case the relationship between the Company or its affiliate and each director-related entity was not material, was below the thresholds for independence prescribed by the NYSE, and did not impact the independence of any of our directors. Directors recused themselves from the independence assessment as the matter was relative to himself or herself. Consistent with these considerations, and based on its review of director independence in light of the standards contained in the Guidelines, the Board determined that each member of the Board of Directors (except Mr. Broussard, as a current employee of the Company) is independent.

 

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Committee Membership and Attendance

The Board of Directors has the following standing committees: Audit; Organization & Compensation; Nominating, Governance & Sustainability; Executive; Technology and Investment. Only directors meeting the applicable SEC and NYSE director independence standards and Internal Revenue Code “outside director” criteria may serve on the Audit Committee, the Organization & Compensation Committee, and the Nominating, Governance & Sustainability Committee. Each standing Board committee operates pursuant to a charter, which may be viewed on our website at www.humana.com. From the www.humana.com website, click on “Investor Relations,” then click on “Corporate Governance,” then click on the “Committee Charters” subcategory. The number of Board committee meetings (telephonic and in-person) held in 2021 and membership as of March 1, 2022, were as follows:

 

Director

      Audit        

 

Organization      

&      

Compensation      

 

 

Nominating      

Governance &       

Sustainability      

 

    Executive      

  Technology         Investment      

Kurt J. Hilzinger

             

 

LOGO   

 

 

 

      

   

Bruce D. Broussard

             

 

LOGO   

 

       

Raquel C. Bono, M.D.

 

 

LOGO   

     

 

      

     

 

LOGO   

   

Frank A. D’Amelio

 

 

LOGO   

     

 

LOGO   

 

           

David T. Feinberg, M.D.1

                       

Wayne A. I. Frederick, M.D.

     

 

LOGO   

 

 

 

      

     

 

LOGO   

   

John W. Garratt

 

 

LOGO   

 

                 

 

LOGO   

David A. Jones, Jr.

     

 

LOGO   

 

 

 

LOGO   

 

 

 

LOGO   

 

       

Karen W. Katz

         

 

LOGO   

 

     

 

LOGO   

 

   

Marcy S. Klevorn

                 

 

LOGO   

   

William J. McDonald

 

 

LOGO   

 

                 

 

LOGO   

 

Jorge S. Mesquita

     

 

LOGO   

               

James J. O’Brien

     

 

LOGO   

             

 

LOGO   

 

Marissa T. Peterson

                 

 

LOGO   

 

 

 

LOGO   

 

Number of Meetings in 2021

 

  9     6     4     0     5     4  

LOGO  = Chair         LOGO  = Member

 

1 

Elected to the Board effective March 1, 2022.

Audit Committee

Committee Responsibilities

Pursuant to its charter, the Audit Committee:

 

   

assists the Board of Directors with the oversight of the integrity of our financial statements and disclosures and internal controls, our compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence and the performance of our internal audit function and the independent registered public accounting firm;

 

   

bears responsibility for the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm engaged to prepare the audit report or perform other audit, review or attest services;

 

   

reviews with the independent registered public accounting firm, our internal audit department, and our financial and accounting personnel, the effectiveness of our accounting and financial controls and, where appropriate, makes recommendations for the improvement of these internal control procedures;

 

   

reviews the scope, funding and results of our internal audit function, including the independence and authority of our reporting obligations, the proposed audit plans for the year, and the coordination of these plans with the independent registered public accounting firm;

 

   

reviews the scope, funding and results of our Enterprise Risk Management program and compliance program, including receiving, at least quarterly, an update from our Chief Risk Office and internal compliance department regarding any significant matters regarding our risk management and compliance with regulatory requirements and contracts with government entities, respectively;

 

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collaborates with the Technology Committee to regularly receive updates on risks, and risk mitigation measures, related to Company’s information technology, internal controls, information security, cyber security, business continuity and disaster recovery programs;

 

   

reviews the financial statements and other information contained in our Annual Report and other reports to stockholders with management and the independent registered public accounting firm to determine that the independent registered public accounting firm is satisfied with the disclosure and content of the financial statements to be presented to the stockholders and reviews any changes in accounting principles;

 

   

confers independently with our internal auditors, Chief Risk Officer, internal compliance department, key members of management, and the independent registered public accounting firm;

 

   

determines and approves the appropriateness of the fees for audit and permissible non-audit services performed by the independent registered public accounting firm;

 

   

discusses with management our compliance with applicable legal requirements and with our internal policies regarding related party transactions and conflicts of interest;

 

   

discusses our policies with respect to risk assessment and risk management;

 

   

maintains free and open means of communication between the members of our Board of Directors, the independent registered public accounting firm, our internal audit department, our Chief Risk Officer, our internal compliance department, and our financial management; and

 

   

annually evaluates its performance.

Corporate Governance Determinations

The Board of Directors has determined that each of the members of the Audit Committee at February 16, 2022 is independent according to SEC and NYSE requirements, and each is financially literate, as defined in the NYSE listing standards. The Board of Directors has determined further that Messrs. D’Amelio and Garratt and Dr. Bono each meet the definition of “audit committee financial expert.” PricewaterhouseCoopers LLP, our independent registered public accounting firm, reports directly to the Audit Committee. No member of the Board’s Audit Committee serves on the audit committees of more than three publicly traded companies. The Report of the Audit Committee for the year ended December 31, 2021, is set forth in this proxy statement under the caption “Audit Committee Report.”

Organization & Compensation Committee

Committee Responsibilities

Pursuant to its charter, the Organization & Compensation Committee:

 

   

reviews and approves our goals and objectives relevant to the compensation of our CEO, evaluates the CEO’s performance in light of those goals and objectives, and, either as a Committee or together with the other independent directors, determines and approves the CEO’s compensation level based on this evaluation;

 

   

review and approves all elements of compensation paid to our current or prospective executive officers, including without limitation, base compensation, incentive-compensation plans and equity-based plans, employment, change in control or severance programs and agreements, and any special compensation or benefits, including supplemental retirement benefits and any perquisites;

 

   

approves equity-based grants to our executive officers and other associates;

 

   

reviews and discusses with management the Company’s compensation plans and policies for all employees (including the Named Executive Officers) with respect to risk management and risk-inducing incentives;

 

   

ensures preparation of the Compensation Discussion and Analysis and the Compensation Committee Report as required by SEC regulations;

 

   

monitors compliance of executive officers and non-employee directors with relevant stock ownership guidelines;

 

   

reviews with management periodically, as it deems appropriate, management succession and inclusion and diversity practices;

 

   

administers our Executive Management Incentive Compensation Plan and other substantially similar or successor incentive compensation plans; and

 

   

annually evaluates its performance.

 

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Scope of Authority, Processes and Procedures

The Organization & Compensation Committee acts on behalf of the Board of Directors to establish the compensation of our executive officers and provides oversight of our compensation philosophy, as described in this proxy statement under the caption “Compensation Discussion and Analysis.” The role of the executive officers and the outside compensation consultant in establishing executive compensation is discussed in this proxy statement under the caption “Compensation Discussion and Analysis.” Other than routine administrative matters and the ability of our CEO to approve grants of equity awards subject to certain individual and annual thresholds, no executive compensation decisions are delegated to management.

Compensation Committee Interlocks and Insider Participation

No member of the Organization & Compensation Committee: (i) is or has ever been an officer or employee of the Company; or (ii) is or was, during the last fiscal year, a participant in a “related person” transaction requiring disclosure under Item 404 of the SEC’s regulations (see discussion in this proxy statement under the caption “Certain Transactions with Management and Others”); or (iii) is an executive officer of another entity at which one of our executive officers serves either as a director or on its compensation committee.

Corporate Governance Determinations

During 2021, James J. O’Brien (Chair), Frank J. Bisignano (until April 2021), Wayne A. I. Frederick, M.D. and David A. Jones, Jr. served as members of our Organization & Compensation Committee. Considering (i) the source of each director’s compensation, including any consulting, advisory or other compensatory fees paid by the Company; and (ii) whether each director has an affiliate relationship with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company, the Board has determined that each member of the Organization & Compensation Committee at February 16, 2022, is independent, as defined by the SEC and the NYSE, and is considered to be an “outside director” under Section 162(m) of the Internal Revenue Code.

Compensation Risk Determination

In early 2022, the Organization & Compensation Committee reviewed management’s assessment of the risks associated with the Company’s compensation practices and policies for employees, including a consideration of the counterbalance of risk-taking incentives and risk-mitigating factors in Company practices and policies. Following a review of this assessment, the Organization & Compensation Committee determined that the risks arising from the Company’s compensation practices and policies are not reasonably likely to have a material adverse effect on the Company.

Nominating, Governance & Sustainability Committee

Committee Responsibilities

Pursuant to its charter, the Nominating, Governance & Sustainability Committee:

 

   

recommends to the full Board criteria for the selection and qualification of the members of the Board;

 

   

evaluates and recommends for nomination by the Board candidates to be proposed for election by the stockholders at each annual meeting;

 

   

seeks out and assists in the recruitment of highly qualified candidates to serve on the Board;

 

   

recommends for Board approval candidates to fill vacancies on the Board which occur between annual meetings;

 

   

develops, periodically reviews and recommends to the Board revisions to the Guidelines;

 

   

studies and reviews with management the overall effectiveness of the organization of the Board and the conduct of its business, and makes appropriate recommendations to the Board;

 

   

reviews the overall relationship of the Board and management;

 

   

reviews issues and developments pertaining to corporate governance;

 

   

reviews our public policy and political spending practices through regular reviews of our policy on political expenditures, expenditures and payments made with corporate funds, and overall political activity, including review of our Political Contributions and Related Activity Report;

 

   

reviews the Company’s programs and policies relating to significant ESG and sustainability matters, and periodically receive updates from the Company’s management regarding significant ESG and sustainability undertakings; and

 

   

annually evaluates its performance.

 

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Executive Committee

Pursuant to its charter, the Executive Committee possesses the authority to exercise all the powers of the Board of Directors except as otherwise provided by Delaware law and our Bylaws during intervals between meetings of the Board. The Executive Committee does not have the power, to, among other things, declare a dividend, issue stock, adopt a certificate of merger or sell substantially all of the Company’s business.

Investment Committee

Pursuant to its charter, the Investment Committee establishes investment objectives and policies for our various investment portfolios and investment options available under various employee benefit plans, reviews investment results, and annually evaluates its performance.

Technology Committee

Pursuant to its charter, the Technology Committee represents and assists the Board of Directors with the oversight of:

 

   

our process, awareness, evaluation and perspective on potentially disruptive technologies and convergences that may represent threats or opportunities for our business operations;

 

   

our process and perspective on strategic technology capabilities that enable transformational business capabilities;

 

   

our process, execution roadmaps, requisite capital, progress in delivering technology-enabled transformational capabilities and their related outcomes; and

 

   

management’s focus on organizational, talent and cultural enablers required to ensure achievement of those outcomes.

The Technology Committee has five regular meetings each year, during which senior leadership briefs the Committee and board members on matters relating to the Company’s strategic technology capabilities, including information security capabilities. The Technology Committee may also assist the Audit Committee in its oversight of our information technology internal controls, cyber security, business continuity and disaster recovery programs. Senior leadership provides briefings to the Audit Committee and Technology Committee on information technology controls and risk as least once per year, and separately update the full Board of Directors on cyber security matters at least once per year. Briefings are also provided as-needed in response to industry or company specific developments or material events.

Corporate Governance Policies

Majority Vote Policy

Under our Bylaws, a director nominee will be elected if the number of votes cast for the nominee exceeds the number of votes cast against the nominee. In contested elections, those in which a stockholder has nominated a person for election to the Board, the voting standard is a plurality of votes cast. The Board has also adopted a policy to require the Board to nominate for election only nominees who agree that, if they are elected to the Board, they will tender an irrevocable resignation conditioned on, first, the failure to achieve the required vote for re-election at any future meeting at which they face re-election, and second, the Board’s acceptance of their resignation following that election. In addition, the Board may fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other directors, as described above. The Nominating, Governance & Sustainability Committee will submit a recommendation for prompt consideration by the Board whether to accept the resignation. Any director whose resignation is under consideration will abstain from participating in any decision regarding that resignation. The Bylaws also require stockholder nominees for director election to notify the Company whether or not such nominees intend to tender the same type of resignation required of the Board’s director nominees.

Change in Director’s Primary Position

The Board has adopted a policy requiring that a director whose primary position or affiliation changes must promptly notify the Board and the Nominating, Governance & Sustainability Committee of the change so that a determination may be made as to the value of his or her continued service on the Board.

Director Stock Ownership Policy

Our Board believes that directors should be stockholders and have a significant personal financial stake in the Company. Consequently, the Board has adopted the following stock ownership guidelines:

 

   

Each non-employee director must maintain a minimum equity ownership level of five times the annual cash retainer.

 

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Shares deferred at the election of the director are considered owned for purposes of the calculation of the ownership requirement.

 

   

Any Shares owned by a non-employee director (or Shares received upon the exercise of options or vesting of restricted stock or restricted stock units, less an amount to cover the exercise price and/or current tax liabilities) must be held by the director until the minimum equity ownership level is reached and thereafter maintained.

 

   

Once the minimum equity ownership level has been achieved, any Shares received upon the vesting of restricted stock or restricted stock units, less an amount to cover current tax liabilities, must be held by the director until one year following the vesting date.

Compliance with these guidelines is monitored by the Organization & Compensation Committee.

Director Attendance

The Board has developed a number of specific expectations of directors to define their responsibilities and to promote the efficient conduct of the Board’s business. With respect to the level of commitment expected of directors and related attendance protocols, as part of the Guidelines, the Board formally adopted a policy that all directors should make every effort to attend all meetings of the Board and the Committees of which they are members, and the Company’s Annual Meeting of Stockholders. Attendance by telephone or video conference may be used to facilitate a Director’s attendance.

During 2021, apart from Committee meetings, the Board of Directors met 10 times. All directors attended at least 75% of the scheduled Board of Directors’ meetings and meetings held by Committees of which they were members. All director nominees serving as directors at that time attended the Annual Meeting of Stockholders held on April 22, 2021.

Executive Sessions of Non-Management Directors

In 2021, our non-management directors held regularly scheduled, formal executive meetings, separate from management and led by our Chairman. Additional executive sessions of the Board are held as necessary or appropriate or upon the request of the Chairman, the Nominating, Governance & Sustainability Committee or any two other non-management directors. In addition, our non-management directors who qualify as independent within the meaning of our director independence guidelines meet in executive session at least once annually, and, in fact, met in 2021 in connection with each regularly scheduled Board of Directors meeting.

Code of Ethics and Code of Business Conduct

The Company has adopted the “Code of Conduct for the Chief Executive Officer and Senior Financial Officers,” which we refer to as the Executive Code of Ethics, violations of which are reported to the Audit Committee. In addition, we operate under the omnibus Humana Inc. Ethics Every Day, which we refer to as the Code of Ethics, which applies to all associates (including executive officers) and directors. The Humana Ethics Office is responsible for the design and enforcement of our ethics policies, the goal of which is to create a workplace climate in which ethics is so integral to day-to-day operations that ethical behavior is self-enforcing. All employees are required annually to review and affirm in writing their acceptance of the Code of Ethics. The Code of Ethics and the Executive Code of Ethics may be viewed on our website at www.humana.com. Any waiver for directors or executive officers from the provisions of the Code of Ethics or the Executive Code of Ethics must be made by the Board of Directors, and will be disclosed within four days of the waiver on our website at www.humana.com. To see either the Code of Ethics or the Executive Code of Ethics or any waivers to either policy, go to www.humana.com, then click on “Investor Relations,” then click on “Corporate Governance,” and then click on the relevant link.

Policy Regarding Employee, Officer and Director Hedging

The Company has a policy prohibiting all associates (including executive officers and independent directors) from hedging or pledging transactions using Company stock, including: (1) engaging in short sales of Company securities; (2) engaging in transactions in puts, calls or other derivative securities designed to hedge or offset any decrease in the market value of the Company’s equity securities, on an exchange or in any other organized market; or (3) engaging in certain monetization transactions, including holding Company securities in margin accounts or pledging Company securities as collateral.

Public Policy

Our Company has an active voice on healthcare policy issues that matter most to the people we serve. From Medicare Advantage, TRICARE and home health; to integrated care, Medicaid and healthcare reform – we are committed to advancing public policy that moves us toward a future in which everyone can enjoy lifelong health and well-being.

The Company has also established and sponsors a Political Action Committee (PAC), for which Company associates may voluntarily contribute. The PAC is registered with the Federal Election Commission (FEC) and certain states nationwide as required by applicable law. As a matter of policy, all Company political activities must promote the interests of the Company, and must be made without regard for the private political preferences of Company officers or executives. Furthermore, Humana does not make independent expenditures nor

 

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does it contribute to ballot measure committees. Distributions from the PAC are made to federal and state office candidates (and related election committees) or to other PACs on a non-partisan basis when, like the Company, such persons are solution-oriented and believe in building a high-quality, accessible and affordable health care system. The PAC is also committed to supporting diverse candidates at the state and federal level. While the PAC has its own separate board of directors to oversee its operations, the Company’s Board—through its Nominating, Governance & Sustainability Committee—has responsibility for (i) reviewing the political contributions and political activities of the Company and the PAC and (ii) overseeing compliance with the overall policy, process and contribution criteria with respect to such contributions and activities. The Board reviews occur semi-annually, along with semi-annual publication of a Contributions and Related Activity Report (PAC Report). To learn more about our public policy and to review the most recent PAC Report, visit our website at www.humana.com, then click on “About Humana,” then click on “Public Policy.”

Communication with Directors

Stockholders and other interested parties may communicate directly with our Chairman, non-management directors as a group, or any other individual director by writing to the special e-mail address published on our website. Specifically, interested parties may visit our website at www.humana.com then click on “About Humana,” then click on “Contact the Board of Directors,” where instructions for contacting these persons are available. All directors have access to this e-mail address. We use the staff of our Corporate Secretary to review correspondence received in this manner and will filter advertisements, solicitations, spam, and other such items. Concerns related to accounting, internal controls or auditing matters are required to be brought immediately to the attention of our Chief Legal Officer and the Board and handled in accordance with procedures established by the Audit Committee with respect to such matters.

 

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Proposal One

Election of Directors

 

 

The Board of Directors of the Company, in accordance with the provisions of the Company’s Articles of Incorporation and Bylaws, has determined that the number of directors to be elected at the Annual Meeting of the Company shall be thirteen (13). The directors are elected to hold office until the Annual Meeting of Stockholders in 2023 and until a qualified successor is elected.

Each of the nominees has consented to be named as a nominee and agreed to serve if elected. If any nominee becomes unable to serve for any reason (which is not anticipated), the Shares represented by the proxy granted to Messrs. Hilzinger and Broussard may be voted for the substituted nominee as may be designated by the Board of Directors. The Board has established a policy that non-employee directors must retire at the first annual meeting following his or her seventy-third birthday. To encourage director refreshment, there are no exemptions or conditions in this policy.

The following charts and tables show certain information concerning the nominees at March 1, 2022.

 

Name

       Age           Position   

First Elected

Director

Kurt J. Hilzinger

  

61

 

Chairman of the Board, Independent Director

  

07/2003

Bruce D. Broussard

  

59

 

Director, President and Chief Executive Officer

  

01/2013

Raquel C. Bono, M.D.

  

65

 

Independent Director

  

09/2020

Frank A. D’Amelio

  

64

 

Independent Director

  

09/2003

David T. Feinberg, M.D.

  

59

 

Independent Director

  

03/2022

Wayne A.I. Frederick, M.D.

  

50

 

Independent Director

  

02/2020

John W. Garratt

  

53

 

Independent Director

  

02/2020

David A. Jones, Jr.

  

64

 

Independent Director

  

05/1993

Karen W. Katz

  

65

 

Independent Director

  

09/2019

Marcy S. Klevorn

  

62

 

Independent Director

  

02/2021

William J. McDonald

  

65

 

Independent Director

  

10/2007

Jorge S. Mesquita

  

60

 

Independent Director

  

02/2021

James J. O’Brien

  

67

 

Independent Director

  

04/2006

Vote Required and Recommendation of the Board of Directors

A director nominee will be elected if the number of votes cast for the nominee exceeds the number of votes cast against the nominee. Shares not present at the Annual Meeting and Shares voting “abstain” or broker non-votes have no effect on the election of directors. Under the Company’s Majority Vote Policy, following election to our Board of Directors, a director is required to submit his or her irrevocable resignation to our Board of Directors, conditioned upon (i) the director not achieving the requisite stockholder vote at any future meeting at which they face re-election, and (ii) acceptance of the resignation by the Board of Directors following that election. The Board of Directors has 90 days to determine whether or not to accept the director’s resignation and to report this information to our stockholders.

FOR THE REASONS STATED HEREIN, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ALL NOMINEES.

 

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Director Skills and Qualifications

The Nominating, Governance & Sustainability Committee (“Committee”) regularly assesses the skills and experiences necessary to ensure that the Board has appropriate skill composition to oversee the Company’s long-term business strategy, operations, and risks. The Committee recognizes that our Board should represent a diverse group of individuals who bring a range of experience, skills and other attributes to their individual role on the Board and to the Board as a collective group. On an annual basis, the Committee assesses each Board candidate to determine whether to recommend currently serving directors for reelection to the Board and whether to recommend candidates for initial election to the Board. In assessing a director nominee, the Committee considers the appropriate balance of experience, skills and other qualifications required for service on our Board, including (i) core attributes that are expected of our directors, and (ii) specific skills, experience or qualifications that should be represented collectively on our Board. Although not an exhaustive assignment of skills and attributes, we have highlighted for each director the substantive areas of expertise that they bring to the Board in the biography of each nominee located in the section entitled “Director Nominee Biographies.”

 

Core Director Attributes      Substantive Areas of Expertise

 

 

LOGO

  

 

Independent under our Guidelines, as well as meeting the independence requirements of, as applicable, the NYSE, SEC, IRS;

 

 

 

LOGO

  

 

CEO or other C-suite experience with significant business acumen;

 

LOGO    External public company board service is limited (maximum of three);   LOGO    Financial expertise/capital markets experience;
LOGO    Risk oversight ability with respect to the particular skills of the individual director;   LOGO    Corporate governance/Board of Directors experience;
LOGO    Understanding of and experience with complex public companies or like organizations;   LOGO    Information technology and digital innovation; data privacy, cyber security, and/or general business compliance;
LOGO    Standing and reputation in the individual’s field;   LOGO    Health care industry experience, including clinical practice;
LOGO    Ability to work collegially and collaboratively with other directors and our management team;   LOGO    Product design and growth models, consumer marketing/orientation;
LOGO   

 

High integrity and ethical standards; and

  LOGO   

Government relations, public policy and regulatory experience; and

 

LOGO   

 

A commitment to diversity, equity and inclusion (DEI).

  LOGO   

 

Strategy development.

The Committee further assesses each director nominee’s ability to devote sufficient time and effort to his or her duties as a director, his or her willingness to consider all strategic proposals, and any core competencies or technical expertise necessary to staff Board committees. This annual assessment may also incorporate responses, as appropriate, from the Board’s annual individual self-evaluations. More information about the Board self-evaluation process can be found in the section entitled “Board Evaluation Process.” The director nominee analysis also helps to determine whether a nominee would meet the criteria for independence set forth in the Guidelines established by the Board and in accordance with independence requirements of the NYSE and the SEC. The Committee has determined that each of our independent director nominees satisfies all of the core director attributes set forth above.

Board Composition and Refreshment

Board Tenure and Refreshment

The Committee and the Board strive to maintain a balance of tenure on the Board. Longer-serving directors bring valuable experience and a deep understanding of our complex business and industry, along with a historical perspective of our long-term successes, challenges and business cycles, and how these past experiences may inform our current strategy. Newer directors are also critical to the advancement of our strategy, bringing new skills and experiences and contributing fresh perspectives. The Board has established a policy that non-employee directors must retire at the first annual meeting following his or her seventy-third birthday. To encourage director refreshment, there are no exemptions or conditions in this policy. The illustrations below depict independence, age and tenure represented in the current composition of our director nominees.

 

Independence
LOGO

Age

LOGO
 

 

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          31


Table of Contents

 

Our Board has undergone significant refreshment in recent years. Since January 2017, nine new directors have been appointed to our Board. Seven of those directors are standing for election this year, all of whom are independent and joined the Board since 2019, deepening the Board’s financial expertise, consumer perspective, healthcare industry experience, technology expertise and C-Suite experience while also building on the Board’s focus on diversity.

 

 

LOGO

 

Diversity

 

Humana and our Board actively promote and foster a culture of inclusion and diversity to enable an environment where the unique characteristics, backgrounds and beliefs of our teammates can drive the groundbreaking, strategic thinking that gives our Company its competitive edge in a diverse marketplace.

 

Our Board does not establish specific goals with respect to diversity; rather, the Board’s diversity is a consideration in the overall director nomination process and is a component of the overall assessment of the Board’s composition and effectiveness. Under the Nominating, Governance & Sustainability Committee Charter, we have further committed to include, and require any third-party search firm that it engages to include, candidates with diversity of race, ethnicity and gender in the slate of candidates considered by the Committee and/or the Board for nomination to the Board. The illustration (at right) depicts certain diversity represented in the current composition of our director nominees.

 

 

LOGO

Identifying Nominees for Directors

The Board has delegated an established screening process for director nominees to the Nominating, Governance & Sustainability Committee, with counsel from our Chairman, our Chief Executive Officer, and outside consultants as appropriate. The goal of the screening process is to assemble a group of potential board members with deep, varied experience, sound judgment, and commitment to the Company’s success.

The Committee receives notice of potential candidates through any of the following avenues: (i) Board self-identification; (ii) third-party recommendations; and (iii) stockholder nominations. While director nominees may be presented to the Board for consideration by the Committee through any of these methods, the Board is ultimately responsible for assessing the needs of the Board, appointing candidates to the Board, and nominating candidates for election by our stockholders at our annual meeting. Once the Committee has compiled its group of suitable candidates and conducted appropriate diligence, it then meets with the Board to review the candidates for further consideration.

Board Self-Identification. The Committee regularly assesses the appropriate size of the Board, the areas of expertise required to effectively contribute to the Board process, and whether any vacancies are anticipated. It also annually assesses the director qualification criteria to ensure the Board has appropriate skill composition aimed at the Company’s long-term business strategy, operations, risks, thought and perspective. As a result, the Committee may recommend to the Board a need for an additional director, Board refreshment for certain requisite skills and qualifications, and/or suggest the replacement of an existing director for other credible reasons.

Third-Party Recommendations. From time to time, the Committee engages a professional third-party search firm to assist the Board of Directors and the Committee in identifying and recruiting candidates for Board membership.

Stockholder Nominees. The policy of the Committee is to consider properly submitted stockholder nominations for candidates for membership on the Board as described above under “Identifying Nominees for Directors.” Stockholder nominations for election to the Board of Directors are governed by specific provisions in our Bylaws, a copy of which is available on our website at www.humana.com. From the www.humana.com website, click on “Investor Relations,” and then click on “Corporate Governance,” and then click on the link entitled, “Bylaws.” The Bylaws require that a stockholder provide written notice of intent to nominate a candidate for director no less than 60 days or more than 90 days prior to the scheduled date of the Annual Meeting of stockholders. If less than 70 days’ notice of the Annual Meeting is given, written notice by a stockholder would be deemed timely if made no later than the 10th day following such notice of the Annual Meeting. Any stockholder nominations proposed for consideration by the Committee should include, among other information required by the Bylaws, the nominee’s name, qualifications for Board membership and compliance with our Director Resignation Policy discussed in this proxy statement and should be sent to the attention of the Corporate Secretary, Humana Inc., 500 West Main Street, 21st Floor, Louisville, Kentucky 40202.

 

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Table of Contents

Board of Directors Nominee Determination

At the recommendation of the Nominating, Governance & Sustainability Committee, the Board has nominated 13 individuals for this year’s election. The Board believes that each director nominee possesses and demonstrates the character, integrity, independence, business judgment and all other requisite skills, qualifications and attributes necessary to effectively (i) act in the best interests of the Company and its stockholders and (ii) exercise active and independent oversight of the of the Company’s management team, business affairs and assets. As a group, the director nominees’ create a diverse, knowledgeable and experienced Board with strong executive experience, financial expertise, knowledge and experience in healthcare, expertise in digital innovation and technology, and consumer orientation necessary to oversee the Company’s business and the execution of our strategy.

We believe that the current Board members have a deep commitment to the Company’s success, as evidenced by the key qualifications, skills, experiences and diversity of backgrounds of each director described below. The information given in this proxy statement concerning the nominees is based upon statements made or confirmed to the Company by or on behalf of the nominees.

Director Nominee Biographies

 

 

Kurt J. Hilzinger

   

 

Age 61    Director since 2003

      
 

LOGO

Chairman of the Board

 

 

 

 

    

 

Kurt J. Hilzinger was initially elected to the Board in July 2003, and was elected Chairman of the Board effective January 1, 2014. Mr. Hilzinger served as Lead Director from August 2010 until his appointment as Chairman. Mr. Hilzinger is a Partner at Court Square Capital Partners, an independent private equity firm, having held this position since November 2007. At Court Square, Mr. Hilzinger focuses principally on investments in the healthcare industry. Prior to that, he was a Director of AmerisourceBergen Corporation from March 2004 to November 2007; having previously served as President and Chief Operating Officer of AmerisourceBergen Corporation from October 2002 to November 2007, and as Executive Vice President and Chief Operating Officer from August 2001 to October 2002. Mr. Hilzinger also serves on the Board of Directors of Outlook Therapeutics, Inc. and several privately held companies.

 

The Board believes that Mr. Hilzinger is a strong operating executive with a finance and strategic background, whose operational experience and financial expertise in the health care sector contributes valuable insight to the Board.

 

 
  Committees     Skills & Qualifications           

 

  Executive

   

 

  Financial Oversight

  Healthcare Industry Experience

 

 

  Global Experience

  Strategy Development

 

 

  Corporate Governance

  Risk Assessment

 
         
         

 

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Bruce D. Broussard

   

 

Age 59    Director since 2013

      
 

LOGO

Director, President and

Chief Executive Officer

 

 

 

 

    

 

Bruce D. Broussard, President and CEO, joined Humana in 2011. Under his leadership, Humana has created an integrated care delivery model centered on improving health outcomes, driving lower costs, enhancing quality, and providing a simple and personalized member experience. With its holistic, human care approach, Humana is dedicated to improving the health of the communities it serves by making it easier for people to achieve their best health.

 

Bruce brings to Humana a wide range of executive leadership experience in publicly traded and private organizations within a variety of healthcare sectors, including oncology, pharmaceuticals, assisted living/senior housing, home care, physician practice management, surgical centers and dental networks. Prior to joining Humana, Bruce was Chief Executive Officer of McKesson Specialty/US Oncology, Inc. US Oncology was purchased by McKesson in December 2010. At US Oncology, Bruce served in a number of senior executive roles, including Chief Financial Officer, President, Chief Executive Officer and Chairman of the Board.

 

Bruce plays a leadership role in key business advocacy organizations such as the Business Roundtable, the Business Council, and the American Heart Association CEO Roundtable. He is a member of the Board of Directors of HP Inc., and is a member and previous chair of America’s Health Insurance Plans (AHIP). Additionally, Bruce serves on the Board of the Trust for the National Mall, a nonprofit philanthropic partner of the National Park Service dedicated to restoring and preserving the National Mall.

 

The Board believes that Mr. Broussard’s wide range of executive leadership experience in publicly traded and private organizations within a variety of healthcare sectors, including oncology, pharmaceuticals, assisted living/senior housing, home care, physician practice management, surgical centers, and dental networks, as well as his in-depth knowledge of the Company’s operations, finances and strategy, brings valuable insight to the Board.

 

 
  Committees     Skills & Qualifications      

  Executive (Chair)

   

 

  Healthcare Industry Experience

  CEO Experience

  Strategy Development

 

  Corporate Governance

  Risk Assessment

 

  Consumer Design/Digital Orientation

  Government Relations/Public Policy

 
         

 

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Raquel C. Bono, M.D.

   

 

Age 65    Director since 2020

      
 

LOGO

Independent Director

 

 

 

 

    

 

Raquel C. Bono, M.D., was initially elected to the Board in September 2020. She is a Principal at RCB Consulting having held this position since October 2019, as well as, Chief Health Officer at Viking having held this position since November 2020. Dr. Bono, a board-certified trauma surgeon and retired Vice Admiral, U.S. Navy Medical Corps, previously served as the Chief Executive Officer and Director for the Defense Health Agency (DHA). In this capacity, Dr. Bono led a joint, integrated combat support agency that enables all branches of the U.S. military medical services to provide health care services to combatant commands in times of both peace and war. Dr. Bono integrated an unprecedented $50 billion worldwide health care enterprise for the Army, Navy, Air Force, and Marine Corps, composed of 50 hospitals and 300 clinics that provide care to 9.5 million military personnel, oversaw the Department of Defense deployment of the electronic health record, and facilitated the collaboration between the largest federated health systems of the Department of Defense and Department of Veterans Affairs (VA). An American College of Surgeons (ACS) Fellow since 1991, Dr. Bono served on the ACS Board of Governors and the Governors Health Policy and Advocacy Workgroup. She has been honored with the Defense Distinguished Service Medal, three Defense Superior Service Medals, four Legion of Merit Medals, two Meritorious Service Medals, and two Navy and Marine Corps Commendation medals. Dr. Bono also serves on boards of several privately held companies.

 

The Board believes that Dr. Bono’s decorated military service and distinguished and successful career in trauma surgery and healthcare administration bring an important perspective to Humana’s Board and further contribute to its strategic composition. Dr. Bono’s extensive operational expertise and discipline in managing and advancing healthcare delivery systems will be vital as the Company continues to evolve its clinical and care delivery strategies.

 

 
  Committees     Skills & Qualifications       

 

  Audit

  Technology

   

 

  Financial Oversight

  Healthcare Industry Experience

  Risk Assessment

 

 

  Executive Experience

  Global Experience

 

 

  Strategy Development

  Government Relations/Public Policy

 
         
         

 

Frank A. D’Amelio

   

 

Age 64    Director since 2003

      
 

LOGO

Independent Director

 

 

 

 

    

 

Frank A. D’Amelio was initially elected to the Board in September 2003. He is Executive Vice President, Chief Financial Officer at Pfizer Inc. having held this position since January 2022. Mr. D’Amelio began his career at Pfizer in 2007 and since then has held various roles of increasing responsibility, including, SVP & Chief Financial Officer (September 2007-December 2010), Executive Vice President, Business Operations and Chief Financial Officer (January 2011-October 2018) and Chief Financial Officer and Executive Vice President, Global Supply (November 2018-December 2021). Prior to that, Mr. D’Amelio was Senior Executive Vice President of Integration and Chief Administrative Officer at Alcatel-Lucent from December 2006 to August 2007, and Chief Operating Officer of Lucent Technologies Inc. from February 2006 to November 2006. From May 2001 until January 2006, he was Executive Vice President, Administration and Chief Financial Officer of Lucent. Mr. D’Amelio also serves on the Board of Directors of Zoetis, Inc. and on the board of the Independent Colleges and Universities of New Jersey.

 

The Board believes that Mr. D’Amelio’s skills, global experience and proven leadership in both financial and operational roles contribute greatly to the Board’s composition. As a senior executive at various global companies undergoing the kind of rapid and complex changes that the Company has undertaken in response to the rapidly changing markets and regulatory environment, Mr. D’Amelio has extensive knowledge of the capital markets as well as broad experience working with the investment community, regulatory bodies and rating agencies.

 

 
  Committees     Skills & Qualifications Committees  

  Audit (Chair)

  Nominating, Governance & Sustainability

   

 

  Financial Oversight

  C-Suite Experience

  Global Experience

 

  Healthcare Industry Experience

  Corporate Governance

  Risk Assessment

 

  Strategy Development

  Government Relations/Public Policy

  Compliance

 
         

 

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David T. Feinberg, M.D.

   

 

Age 59    Director since 2022

        
 

 

LOGO

Independent Director

 

 

 

 

    

 

David T. Feinberg, M.D., was initially elected to the Board in March 2022. Dr. Feinberg is the President and Chief Executive Officer and member of the Board of Directors of Cerner Corporation (Cerner) having held these positions since October 1, 2021. In this role Dr. Feinberg focuses on delivering tools and technology that help caregivers optimize the health of their patients and communities.

 

Dr. Feinberg joined Cerner from Google, where he held the position of Vice President of Google Health since 2019 and led Google’s worldwide health efforts, bringing together groups from across Google and Alphabet that used artificial intelligence, product expertise and hardware to tackle some of healthcare’s biggest challenges, and was responsible for organizing and innovating Google’s various healthcare initiatives. Prior to Google, he served as President and CEO of Geisinger Health where he led an operational turnaround, and pushed the use of new platforms and tools, including an IT system called a Unified Data Architecture that allowed the company to integrate big data into existing data analytics and management systems. During his Geisinger tenure, Dr. Feinberg also introduced programs and services to put a greater focus on precision medicine and better patient care. Prior to Geisinger, Dr. Feinberg worked at UCLA for more than 20 years and served in a number of leadership roles, including President, CEO and Associate Vice Chancellor of UCLA Health Sciences, Vice Chancellor and CEO for the UCLA Hospital System, and CEO of UCLA’s Ronald Reagan Medical Center.

 

Dr. Feinberg earned his undergraduate degree at the University of California, Berkeley. He graduated with distinction from the University of Health Sciences/Chicago Medical School. He completed an internship in pediatrics at Loyola University Medical Center, and residency and fellowship training in psychiatry, addiction psychiatry, and child and adolescent psychiatry at the UCLA School of Medicine. He earned a Master of Business Administration from Pepperdine University. Dr. Feinberg is a member of the Alpha Omega Alpha Medical Honor Society, a Distinguished Fellow of American Psychiatric Association and received the Cancro Academic Leadership Award from the American Academy of Child & Adolescent Psychiatry. Dr. Feinberg also serves on the Board of Directors of Douglas Emmett Inc.

 

The Board believes that Dr. Feinberg’s experience leading healthcare organizations focused on leveraging technology and digital innovation to improve clinical care, including public and private companies, brings valuable insights to the Board and further contribute to its strategic composition. Dr. Feinberg’s clinical background, patient-centric mindset, operating experience, and expertise in guiding systems transformations qualify him to offer key perspectives as the Company continues to advance the integration of its clinical systems and care models to improve the customer experience and reduce costs.

 

  Committees     Skills & Qualifications    

  No Current Committees

   

 

  CEO Experience

  Healthcare Industry Experience

  Global Experience

   

  Strategy Development

  Corporate Governance

 

  Technology

  Consumer Design/Digital Orientation

 
           

 

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Wayne A. I. Frederick, M.D.

   

 

Age 50    Director since 2020

        
 

LOGO

Independent Director

 

 

 

 

    

 

Wayne A. I. Frederick, M.D., was initially elected to the Board in February 2020. He is the President of Howard University, having held this position since July 2014. Prior to that Dr. Frederick served as Howard University’s Interim President (elected October 2013) after serving as Provost and Chief Academic Officer for more than a year. Following his post-doctoral research and surgical oncology fellowships at the University of Texas MD Anderson Cancer Center, Dr. Frederick began his academic career as Associate Director of the Cancer Center at the University of Connecticut. Upon his return to Howard University, his academic positions included Associate Dean in the College of Medicine, Division Chief in the Department of Surgery, Director of the Cancer Center and Deputy Provost for Health Sciences. He also earned a Master of Business Administration degree from Howard University’s School of Business in 2011. Dr. Frederick continues to operate and lectures to the medical students and residents of Howard University’s College of Medicine. Dr. Frederick is a fellow of the American College of Surgeons and belongs to numerous surgical organizations, including, the American Surgical Association. Dr. Frederick also serves on the Board of Directors of Mutual of America Life Insurance Co., Forma Therapeutics Holdings, Inc. and Insulet Corporation in addition to a few other privately held companies and charitable organizations.

 

The Board believes that Dr. Frederick’s exemplary career as a leader in medical research, healthcare academics and business administration brings valuable insights to the Board to assist in the advancement of its strategic healthcare goals. Dr. Frederick’s extensive healthcare and disease management background will be instrumental to our company’s relationships with our members and our physician partners, as Humana continues to innovate in the area of health data analytics.

 

  Committees     Skills & Qualifications    

 

  Organization & Compensation

  Technology

   

 

  Healthcare Industry Experience

  Executive Experience

 

 

  Strategy Development

  Government Relations/Public Policy

 
         
         

 

John W. Garratt

   

 

Age 53    Director since 2020

        
 

LOGO

Independent Director

 

 

 

 

    

 

John W. Garratt was initially elected to the Board in February 2020. He is the Executive Vice President and Chief Financial Officer of Dollar General Corporation, having held this position since December 2015. Mr. Garratt joined Dollar General in October 2014 as Senior Vice President, Finance & Strategy and subsequently served as Interim Chief Financial Officer from July 2015 to December 2015. Prior to joining Dollar General, Mr. Garratt held various positions of increasing responsibility with Yum! Brands, Inc., one of the world’s largest restaurant companies, between May 2004 and October 2014, holding leadership positions in corporate strategy and financial planning. Mr. Garratt served as Vice President, Finance and Division Controller for the KFC division and earlier for the Pizza Hut division and for Yum Restaurants International between October 2013 and October 2014. Mr. Garratt also served as the Senior Director, Yum Corporate Strategy, from March 2010 to October 2013, reporting directly to the corporate Chief Financial Officer and leading corporate strategy as well as driving key cross-divisional initiatives. Mr. Garratt served in various other financial positions at Yum from May 2004 to March 2010. Prior to his career at Yum! Brands, Mr. Garratt served as Plant Controller for Alcoa Inc. between April 2002 and May 2004, and held various financial management positions at General Electric from March 1999 to April 2002. He began his career in May 1990 at Alcoa, where he served for approximately nine years. Mr. Garratt also serves as a Class B Director of the Federal Reserve Bank of Atlanta.

 

The Board believes that Mr. Garratt’s substantial executive leadership at large public companies, combined with his extensive experience in key areas of finance, accounting, strategic planning and business analytics, supplement existing expertise essential to the Board‘s oversight function as Humana continues to evolve its population health and care delivery strategies. Mr. Garratt’s contributions to organizations across varied consumer-based industries further qualifies him to offer key perspectives as the Company enhances products and capabilities for our members.

 

  Committees     Skills & Qualifications    

  Investment (Chair)

  Audit

   

 

  Financial Oversight

  C-Suite Experience

 

  Corporate Governance

  Risk Assessment

 

  Strategy Development

  Product Design and Growth Models

 
         

 

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David A. Jones, Jr.

   

 

Age 64    Director since 1993

      
 

LOGO

Independent Director

 

 

 

 

    

 

David A. Jones, Jr. was initially elected to the Board in May 1993 and served as Chairman of the Board of the Company from April 2005 through August 2010, and Vice Chairman of the Board from September 1996 through April 2005. He is Chairman of Chrysalis Ventures, LLC, headquartered in Louisville, Kentucky, and also serves on the board of directors of several charitable, civic and privately held companies.

 

As a successful venture capitalist, the Board believes that Mr. Jones brings strategic insight and leadership and a wealth of experience in health care to the Board, both in the Company’s core businesses as well as in emerging technologies and business models.

 

  Committees     Skills & Qualifications           

 

  Nominating, Governance & Sustainability (Chair)

  Organization & Compensation

  Executive

   

 

  Healthcare Industry Experience

  Corporate Governance

  Strategy Development

 

 

  Financial Oversight

  Global Experience

 

 

  Risk Assessment

  Legal/Compliance

 
       
       

 

Karen W. Katz

   

 

Age 65    Director since 2019

      
 

LOGO

Independent Director

 

 

 

 

    

 

Karen W. Katz was initially elected to the Board in September 2019. Ms. Katz was formerly the President and CEO of Neiman Marcus Group LTD LLC from 2010 to February 2018. Neiman Marcus Group is an international multibrand omni-channel retailer whose portfolio of brands includes Neiman Marcus, Bergdorf Goodman and MyTheresa. Having joined Neiman Marcus in 1985, Ms. Katz served in key executive and leadership roles in the company’s merchant, stores and eCommerce organizations as Executive Vice President—Stores, a member of the Office of the Chairman of Neiman Marcus Group, and President, Neiman Marcus Online, and President and CEO, Neiman Marcus Stores. Ms. Katz currently serves on the Board of Directors of Under Armour, Inc. and The RealReal, Inc.

 

The Board believes that Ms. Katz is an extremely accomplished executive with deep experience and a demonstrated commitment to understanding, and meeting, the needs of customers by maintaining a personalized experience enabled by digital transformation. She brings a holistic approach to customer service, including acumen for employing technology to advance service delivery, combined with demonstrated success in growing business through forward thinking leadership, providing valuable perspective and expertise to the Board.

 

  Committees     Skills & Qualifications    

  Nominating, Governance & Sustainability

  Technology

   

 

  Financial Oversight

  CEO Experience

  Global Experience

 

 

  Strategy Development

  Corporate Governance

  Consumer Design/Digital Orientation

 

  Marketing

  Risk Assessment

  Product Design and Growth Models

 
         

 

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Marcy S. Klevorn

   

 

Age 62    Director since 2021

      
 

LOGO

Independent Director

 

 

 

 

    

 

Marcy S. Klevorn was initially elected to the Board in February 2021. Ms. Klevorn was formerly the Chief Transformation Officer of Ford Motor Company (Ford) from May 2019 until her retirement in October 2019. In this role, she accelerated the company’s transformation by helping to refine its corporate governance systems, facilitate faster adoption of agile teams across the business and ensure process improvements across the enterprise. She also facilitated strategic partnerships with key technology partners and supported the company’s diversity efforts. Having joined Ford Motor Company in 1983, Ms. Klevorn served in key executive and leadership roles within the company’s information technology organization including Director of the Office of the Chief Information Officer and Group Vice President of Information Technology, where she oversaw the transformation of Ford’s IT tools and talent. Ms. Klevorn also served as Executive Vice President and President of Ford Smart Mobility LLC, a division of Ford Motor Company, where she oversaw certain acquisitions and other investments and helped to accelerate the company’s plans to design, build, grow and invest in emerging mobility services and global data insight and analytics. Ms. Klevorn currently serves on the Board of Directors of Northern Trust Corporation.

 

The Board believes that Ms. Klevorn’s extensive executive experience and leadership in digital innovation and systems transformation brings valuable insights to the Board as the Company continues to enhance its technology-driven platforms for members and providers. Ms. Klevorn’s deep understanding of information technology, cyber security, and systems management and infrastructure, combined with her proven ability to connect systems to strategy execution qualify her to provide key insights in the Company’s consumer-focused approach to care.

 

  Committees     Skills & Qualifications       

 

  Technology

   

 

  C-Suite Experience

  Global Experience

 

 

  Strategy Development

  Risk Assessment

 

 

  Technology

  Consumer Design/Digital Orientation

 
         
         

 

William J. McDonald

   

 

Age 65    Director since 2007

      
 

LOGO

Independent Director

 

 

 

 

    

 

William J. McDonald was initially elected to the Board in October 2007. Mr. McDonald is the managing partner of Wild Irishman Advisory, LLC, a marketing consulting firm. Prior to that, he was Executive Vice President, Brand Management of Capital One Financial Corporation, having held that position from 1998 until his retirement in 2013. Mr. McDonald also serves on the advisory board of The University of Texas at Austin Longhorn Family Leadership Council.

 

The Board believes that Mr. McDonald’s service in various senior executive marketing positions contributes significant experience and expertise in brand development, marketing and related disciplines.

 

  Committees     Skills & Qualifications

  Audit

  Investment

   

 

  Executive Experience

  Marketing

 

 

  Strategy Development

  Corporate Governance

 

  Consumer Design/Digital Orientation

  Product Design and Growth Models

 
         

 

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Jorge S. Mesquita

   

 

Age 60    Director since 2021

      
 

LOGO

 

Independent Director

 

 

 

 

    

 

Jorge S. Mesquita was initially elected to the Board in February 2021. He is Chief Executive Officer of BlueTriton Brands, having held this position since July 2021. In this role Mr. Mesquita leads the company’s initiatives to expand market leadership, advance commitment to sustainability and environmental stewardship and to realize the potential of the company’s portfolio of water brands.

 

Prior to joining BlueTriton Brands, Mr. Mesquita was formerly the Executive Vice President, Worldwide Chairman, Consumer of Johnson & Johnson (J&J) from December 2014 until February 2019, where he was responsible for increasing the competitiveness of J&J’s consumer business through a comprehensive transformational strategy. In this role, Mr. Mesquita served on J&J’s Executive Committee and led the Consumer Group Operating Committee. Prior to that, Mr. Mesquita spent 29 years with The Procter & Gamble Company (P&G), where he held various roles leading P&G consumer product business units. During his tenure at P&G, Mr. Mesquita served as Group President – New Business Creation and Innovation from March 2012 until June 2013, Group President – Special Assignment from January 2012 until March 2012, Group President, Global Fabric Care from 2007 to 2011 and President, Global Home Care from 2001 to 2007, also serving as President of Commercial Products and President of P&G Professional from 2006 to 2007. Mr. Mesquita currently serves on the Board of Directors of Mondelez International, Inc.

 

The Board believes that Mr. Mesquita’s proven experience in leading business units for significant global, consumer-oriented companies provides a valuable perspective to Humana’s Board and further contribute to its strategic composition. Mr. Mesquita’s forward-thinking, transformational mindset and strong track record of building and marketing global brands, developing consumer insight-driven innovation capabilities, and driving strong, profitable growth will be essential as the Company continues to create seamless consumer experiences and help its members achieve their best health.

 

  Committees     Skills & Qualifications       

 

  Organization & Compensation

   

 

  CEO Experience

  Global Experience

 

 

  Strategy Development

  Marketing

 

 

  Consumer Design/Digital Orientation

  Product Design and Growth Models

 
         
         

 

James J. O’Brien

   

 

Age 67    Director since 2006

      
 

LOGO

Independent Director

 

 

 

 

    

 

James J. O’Brien was initially elected to the Board in April 2006. Until his retirement on December 31, 2014, Mr. O’Brien was the Chairman of the Board and Chief Executive Officer of Ashland Inc. Prior to being named to this position, Mr. O’Brien was President and Chief Operating Officer of Ashland Inc., and before that, Senior Vice President and Group Operating Officer. He also serves on the board of directors of Albemarle Corporation and Eastman Chemical Company.

 

As a highly respected leader in the global business community with an extraordinary track record of success, the Board believes that Mr. O’Brien’s breadth of management experience adds valuable expertise and insight to the Board.

 

  Committees     Skills & Qualifications

  Organization & Compensation (Chair)

  Investment

   

 

  Financial Oversight

  CEO Experience

 

 

  Strategy Development

  Global Experience

 

  Corporate Governance

  Risk Assessment

 
         

 

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Humana  |  2022 Proxy Statement    Proposal One

 


Table of Contents

Director Compensation

 

 

2021 Director Compensation Program

During 2021, our directors were compensated pursuant to the following schedule:

 

   

 

Annual Retainer (1)

 

  

 

$115,000  

 

 

 

Non-Employee Chairman of the Board

Additional Annual Retainer

 

  

 

$210,000  

 

 

 

Committee Chairman fee per year:

1. Audit Committee Chair

2. Organization & Compensation Committee Chair

3. All other Committee Chairs

 

  

 

$25,000  

$20,000  

$15,000  

 

 

 

Executive Committee Member fee per year

 

  

 

$12,000  

 

 

 

Common Stock per year

(1st Business Day of January)(2)(4)

 

  

 

$165,000 in common stock  

(variable # of shares)  

 

 

 

Charitable Contributions Annual Match

 

  

 

up to $40,000  

 

 

 

Group Life and Accidental Death Insurance —

(except Chairman)(5)

 

  

 

$150,000 of coverage  

 

 

 

Group Life and Accidental Death Insurance — Chairman

 

  

 

$400,000 of coverage  

 

 

 

Business Travel Accident Insurance

 

  

 

$250,000 of coverage  

 

 

 

Restricted Stock Units

Granted Initial Date of Election(3)

 

  

 

Restricted Stock Unit grant equal to the dollar value  

of the then current annual stock grant for directors  

 

(1)

The annual cash retainer for each non-employee director is paid in equal amounts on a monthly basis during the service year. If a director ceases service on the Company’s Board of Directors during a year, the final cash retainer payment will be for the final month during any portion of which the director serves on the Company’s Board of Directors. A non-employee director will receive the full annual cash retainer amount for the initial year in which the director serves on the Company’s Board of Directors, regardless of the director’s initial date of election.

(2)

The annual common stock retainer is paid in the form of restricted stock units, vests at the end of the year of service related to the retainer, and will be pro-rated for any service of less than the full year in respect of which the award is granted.

(3)

The initial award of restricted stock units is forfeited if the director serves less than one year on the Company’s Board of Directors. This initial award is in lieu of the annual common stock retainer for the year in which the director was first elected to the Board, but the director would receive the annual common stock retainer commencing in January of the year following election.

(4)

Pursuant to our revised Directors Stock Retention Policy, each non-employee director must maintain a minimum equity ownership level of five times the annual cash retainer. For additional information, please refer to “Corporate Governance — Corporate Governance Policies — Director Stock Ownership Guidelines” in this proxy statement.

(5)

Coverage amount decreases 50% at age 70.

 

Director Compensation    2022 Proxy Statement  |  Humana

 

          41


Table of Contents

2021 Compensation of Our Directors

The following table shows the compensation earned by our non-employee directors in connection with their service on our Board of Directors during all or a portion of the 2021 fiscal year:

 

Name(1)

(a)

  

Fees
Earned
or

Paid in

Cash

($)(3)

(b)

    

Stock

Awards

($)(3)(4)(5)
(c)

    

Option

  Awards  

($)

(d)

    

Non-Equity

Incentive Plan

 Compensation 

($)

(e)

    

Change in
Pension

Value and
Nonqualified
Deferred

 Compensation 

Earnings($)(7)

(f)

   

All Other

 Compensation 

($)(8)

(g)

    

Total

($)

(h)

 

Frank J. Bisignano(2)

  

 

38,333

 

  

 

54,838

(6) 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

40,183

 

  

 

133,354

 

Raquel C. Bono, M.D.

  

 

115,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

1,188

 

  

 

281,112

 

Frank A. D’Amelio

  

 

140,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

2,288

 

  

 

307,212

 

Wayne A. I. Frederick, M.D.

  

 

115,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

40,414

 

  

 

320,338

 

John W. Garratt

  

 

130,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

8,414

 

  

 

303,338

 

Kurt J. Hilzinger

  

 

337,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

43,168

 

  

 

545,092

 

David A. Jones, Jr.

  

 

142,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

(13,552

 

 

41,188

 

  

 

334,560

 

Karen W. Katz

  

 

115,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

19,938

 

  

 

299,862

 

Marcy S. Klevorn

  

 

115,000

 

  

 

164,843

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

20,990

 

  

 

300,833

 

William J. McDonald

  

 

115,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

42,268

 

  

 

322,192

 

Jorge S. Mesquita

  

 

115,000

 

  

 

164,843

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

990

 

  

 

280,833

 

James J. O’Brien

  

 

135,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

42,286

 

  

 

342,210

 

Marissa T. Peterson

  

 

130,000

 

  

 

164,924

 

  

 

—  

 

  

 

—  

 

  

 

—  

 

 

 

774

 

  

 

295,698

 

(1)

During 2021, Mr. Broussard served as President and Chief Executive Officer of the Company, and therefore, as an employee director, did not earn compensation in connection with his service on our Board. Mr. Broussard’s compensation as our Chief Executive Officer is discussed under “Executive Compensation” in this proxy statement.

(2)

Mr. Bisignano did not stand for re-election at the April 22, 2021 Annual Meeting of Stockholders. Compensation disclosed represents amounts earned for service during 2021 prior to his departure from our Board.

(3)

Under the Humana Inc. Deferred Compensation Plan for Non-Employee Directors, which we refer to as the Deferred Compensation Plan, non-employee directors may make an irrevocable election each year to defer compensation paid to them by the Company in the form of cash or stock for services rendered as Board members. For 2021, Ms. Katz, Drs. Bono and Frederick, and Messrs. D’Amelio, Hilzinger, and McDonald each deferred their stock compensation. Refer to footnote 1(c) to the section entitled “Stock Ownership Information — Security Ownership of Directors and Executive Officers” for a disclosure of the number of Shares of our common stock that have been deferred by each director. A director electing to defer cash can choose any of the investment options offered in the Deferred Compensation Plan using Charles Schwab’s Retirement Plan Services (other than the Humana Common Stock Fund) or can invest in stock units that have a value relative to that of our common stock. For 2021, Messrs. Garratt, Hilzinger, and McDonald and Mmes. Katz and Peterson each elected to defer a portion or all of their cash compensation under the Deferred Compensation Plan.

(4)

On January 4, 2021, when the fair market value of our common stock was $409.24, each director in office at that time, other than Mr. Broussard, was granted a restricted stock unit award of 403 Shares, representing the annual grant of approximately $165,000 in common stock. Ms. Klevorn and Mr. Mesquita each received a restricted stock unit award representing approximately $165,000 upon their election date, using the fair market value of our common stock on that date ($378.08) to determine the 436 Shares awarded. The amount shown in column (c) (“Stock Awards”) above is the grant-date fair market value times the number of Shares awarded calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) Topic 718.

(5)

Vested restricted stock units with a payout deferral election made by the director accrue quarterly dividend equivalent rights that are reinvested into the director’s account as additional restricted stock units and will be included in the final restricted stock unit payment when the Shares are issued in accordance with the director’s payout election. This column does not include dividend equivalent units that have accrued through December 31, 2021 nor includes dividend equivalent rights paid on any such deferred Shares.

(6)

Pursuant to equity award agreements, unvested restricted stock units will be prorated upon vesting for any portion of the year that the director did not serve. Mr. Bisignano received a prorated number of restricted stock units upon vesting. The value represented above in column (c) is the prorated value of the number of Shares that vested on December 31, 2021, using the grant date fair market value of $409.24.

 

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Table of Contents
(7)

Non-employee directors elected subsequent to 1997 do not receive any retirement benefits. As he was first elected to the board in 1993, Mr. Jones is the only director that will have retirement benefits under this former retirement policy, including: (A) at the director’s election, either: (x) an annual retirement benefit for the life of the director in the amount of $38,000, the annual retainer fee in effect for 1997; or (y) in lieu thereof, an actuarially equivalent joint and survivor annuity payment; and (B) an annual matching charitable contribution benefit of $19,000 for the life of the director.

(8)

We pay for or reimburse our directors’ travel, lodging and other reasonable out-of-pocket expenses in connection with attendance at board, committee and stockholder meetings. From time to time, we may transport one or more directors and members of their immediate family to and from such meetings or other Company business on Company aircraft. Directors may elect to participate in the medical and dental benefit programs offered to all our employees at a rate comparable to the rate paid by employees. In 2021, Mr. McDonald and Mmes. Katz and Peterson, elected to participate. Under the terms of our director compensation policy, each non-employee director who participates in medical and dental plans provided by the Company will, for two years following the date of completion of a change in control, be eligible to participate in medical and dental plans on substantially the same terms as immediately prior to the change in control, including the requirement to pay premiums at the same rates as our associates. We also reimburse directors for other reasonable expenses related to board service, such as director education, which amounts are not included in the table above. In addition, we pay certain local occupational taxes and life and accidental death insurance premiums per outside director, in each case as disclosed below, and provide a matching charitable gift program. The “All Other Compensation” amount above includes the following amounts earned in connection with service on our Board of Directors:

 

Director

 

Matching
Charitable Gift

($)

   

Occupational
Tax

($)

   

Life
Insurance

($)

   

Other

($)

   

Total –

All Other
Compensation

($)

 

Frank J. Bisignano

 

 

39,787

 

 

 

—  

 

 

 

396

 

 

 

—  

 

 

 

40,183

 

Raquel C. Bono, M.D.

 

 

—  

 

 

 

—  

 

 

 

1,188

 

 

 

—  

 

 

 

1,188

 

Frank A. D’Amelio

 

 

1,100

 

 

 

—  

 

 

 

1,188

 

 

 

—  

 

 

 

2,288

 

Wayne A. I. Frederick, M.D.

 

 

40,000

 

 

 

—  

 

 

 

414

 

 

 

—  

 

 

 

40,414

 

John W. Garratt

 

 

8,000

 

 

 

—  

 

 

 

414

 

 

 

—  

 

 

 

8,414

 

Kurt J. Hilzinger

 

 

40,000

 

 

 

—  

 

 

 

3,168

 

 

 

—  

 

 

 

43,168

 

David A. Jones, Jr.

 

 

40,000

 

 

 

—  

 

 

 

1,188

 

 

 

—  

 

 

 

41,188

 

Karen W. Katz

 

 

18,750

 

 

 

—  

 

 

 

1,188

 

 

 

—  

 

 

 

19,938

 

Marcy S. Klevorn

 

 

20,000

 

 

 

—  

 

 

 

990

 

 

 

—  

 

 

 

20,990

 

William J. McDonald

 

 

40,000

 

 

 

—  

 

 

 

2,286

 

 

 

—  

 

 

 

42,286

 

Jorge S. Mesquita

 

 

—  

 

 

 

—  

 

 

 

990

 

 

 

—  

 

 

 

990

 

James J. O’Brien

 

 

40,000

 

 

 

—  

 

 

 

2,286

 

 

 

—  

 

 

 

42,286

 

Marissa T. Peterson

 

 

—  

 

 

 

—  

 

 

 

774

 

 

 

—  

 

 

 

774

 

 

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Table of Contents

Stock Ownership Information

 

 

Security Ownership of Certain Beneficial Owners of Company Common Stock

We know of no person or entity that may be deemed to own beneficially more than 5% of our outstanding common stock except for:

 

     Number of Shares     

 

Percent of Class    

Outstanding(1)    

 

BlackRock, Inc.

55 East 52nd Street

New York, New York 10055

 

    

 

11,254,355 Shares

 

 

 

   8.7%(2)

 

 

FMR LLC

245 Summer Street

Boston, MA 02210

 

    

 

8,815,438 Shares

 

 

 

   6.8%(3)

 

 

T. Rowe Price Associates, Inc.

100 E. Pratt Street

Baltimore, MD 21202

 

    

 

10,508,002 Shares

 

 

 

   8.2%(4)

 

 

The Vanguard Group

100 Vanguard Boulevard

Malvern, Pennsylvania 19355

 

    

 

10,008,322 Shares

 

 

 

   7.8%(5)

 

 

(1)

The percentage of ownership is based on 128,801,984 Shares of our common stock outstanding as of December 31, 2021.

(2)

Based upon a Schedule 13G filed with the SEC for the period ended December 31, 2021, BlackRock, Inc. reports that through various subsidiaries, it has sole power to vote 9,808,235 Shares and has sole dispositive power over 11,254,355 Shares.

(3)

Based upon a Schedule 13G filed with the SEC for the period ended December 31, 2021, FMR LLC reports that through various subsidiaries, it has sole power to vote 892,700 Shares and has sole dispositive power over 8,815,438 Shares.

(4)

Based upon a Schedule 13G filed with the SEC for the period ended December 31, 2021, T. Rowe Price Associates, Inc. reports that through various subsidiaries, it has sole power to vote 3,402,524 Shares and has sole dispositive power over 10,508,002 Shares.

(5)

Based upon a Schedule 13G filed with the SEC for the period ended December 31, 2021, The Vanguard Group reports that through various subsidiaries, it has shared power to vote 203,596 Shares, sole dispositive power over 9,488,705 Shares, and shared dispositive power over 519,617 Shares.

 

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Table of Contents

Security Ownership of Directors and Executive Officers

The following table shows stock ownership as of January 15, 2022, by (i) each of our director nominees; (ii) Bruce D. Broussard, our President and Chief Executive Officer; (iii) Susan M. Diamond, our Chief Financial Officer; (iv) Brian A. Kane, our former Chief Financial Officer; (v) each of our three other highest compensated executive officers serving as of December 31, 2021, (we collectively refer to these officers in this proxy statement as our Named Executive Officers, or NEOs); and (vi) by all our director nominees and executive officers as a group, including those named above.

 

   
    

Company Common    

Stock Beneficially    

Owned as of    

January 15, 2022    

(1)(2)    

   Percent
of
Class as of
December 31, 2021
(3)
 
   

Raquel C. Bono, M.D.

        397     

 

 

 

 

 

   

Frank A. D’Amelio

   20,634     

 

 

 

 

 

   

David T. Feinberg, M.D.

           0     

 

 

 

 

 

   

Wayne A.I. Frederick, M.D.

        440     

 

 

 

 

 

   

John W. Garratt

        843     

 

 

 

 

 

   

Kurt J. Hilzinger

   19,448     

 

 

 

 

 

   

David A. Jones, Jr.

   69,128     

 

 

 

 

 

   

Karen W. Katz

        590     

 

 

 

 

 

   

Marcy S. Klevorn

        436     

 

 

 

 

 

   

William J. McDonald

     2,276     

 

 

 

 

 

   

Jorge S. Mesquita

          436     

 

 

 

 

 

   

James J. O’Brien

       1,002     

 

 

 

 

 

   

Bruce D. Broussard

   148,628     

 

 

 

 

 

   

Susan M. Diamond(4)

     11,069     

 

 

 

 

 

   

Brian A. Kane(4)

     26,339     

 

 

 

 

 

   

T. Alan Wheatley

     31,505     

 

 

 

 

 

   

Timothy S. Huval

     20,176     

 

 

 

 

 

   

William K. Fleming

     25,291     

 

 

 

 

 

   

All directors and executive officers as a group (24 in number, including those named above)

   495,990      0.39%  
(1)

Beneficial ownership of Shares, for purposes of this proxy statement, includes Shares as to which a person has or shares voting and/or investment power. Therefore, any restricted stock for which a person has voting power and all share equivalents in the Humana Retirement Savings Plan are included. These footnotes describe whenever an individual Shares voting and/or investment power over the Shares beneficially owned by them.

The number of Shares listed:

 

  (a)

Includes certain Share equivalents held for the benefit of the individuals in the Humana Retirement Savings Plan as of December 31, 2021, over which the employee participant has voting power and investment power. As of December 31, 2021, our Named Executive Officers held 3,214 of such Share equivalents in the Humana Retirement Savings Plan, while all of our executive officers as a group (12 in number, including our NEOs) held 4,333 of such Share equivalents.

  (b)

Does not include the initial stock retainer of 441 restricted stock units granted to Dr. Feinberg on his March 1, 2022 election date pursuant to our 2022 director compensation program. The restricted stock units represent approximately $190,000 and were determined using the grant date fair market value of our common stock ($430.62). The restricted stock units are expected to vest in full on March 1, 2023, unless service on the Board is less than one year in which case the restricted stock units will be forfeited in their entirety.

 

Stock Ownership Information    2022 Proxy Statement  |  Humana

 

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Table of Contents
  (c)

Includes unvested restricted stock unit awards of our directors and executive officers which are scheduled to vest within 60 days after January 15, 2022, as follows (performance-based restricted stock units are shown at the maximum level):

 

   

Marcy S. Klevorn

     436  
 

Jorge S. Mesquita

     436  
 

Bruce D. Broussard

     36,530  
 

Susan M. Diamond

     1,688  
 

Brian A. Kane

     10,554  
 

T. Alan Wheatley

     7,144  
 

Timothy S. Huval

     5,520  
 

William K. Fleming

     6,494  
 

All directors and executive officers as a group (24 in number, including our NEOs)

     88,284  

 

  (d)

Includes Shares which may be acquired by these individuals through the exercise of options, which are exercisable currently or within 60 days after January 15, 2022 under either the 2011 Stock Incentive Plan or the 2019 Amended and Restated Stock Incentive Plan. As of January 15, 2022, none of our non-employee directors held exercisable options. Exercisable options held by our NEOs and other executive officers as of January 15, 2022, or exercisable within 60 days thereof, were as follows:

 

   

Bruce D. Broussard

     50,843  
 

Susan M. Diamond

     4,373  
 

Brian A. Kane

     15,403  
 

T. Alan Wheatley

     16,725  
 

Timothy S. Huval

     7,761  
 

William K. Fleming

     13,083  
 

All executive officers as a group (12 in number, including our NEOs)

     181,948  

 

  (e)

Does not include stock awards to certain of our directors that have been deferred pursuant to our Deferred Compensation Plan for Non-Employee Directors. These deferred stock awards include the initial award of 7,500 restricted stock units to each of Messrs. McDonald and O’Brien when first elected as a director, which by its terms must be held until the recipient is no longer serving on our Board of Directors. As of January 15, 2022, the Shares deferred were as follows (includes accrued dividend equivalent units on deferred Shares and deferred cash that was invested in the Humana Common Stock Fund):

 

   

Raquel C. Bono, M.D.

     405  
 

Frank A. D’Amelio

     26,840  
 

David T. Feinberg, M.D.

     0  
 

Wayne A.I. Frederick, M.D.

     405  
 

John W. Garratt

     0  
 

Kurt J. Hilzinger

     34,964  
 

David A. Jones, Jr.

     5,987  
 

Karen W. Katz

     1,401  
 

Marcy S. Klevorn

     0  
 

William J. McDonald

     38,286  
 

Jorge S. Mesquita

     0  
 

James J. O’Brien

     29,662  

 

  (f)

Does not include the January 3, 2022 annual stock retainer of 412 restricted stock units granted to each of our directors (other than Mr. Broussard) pursuant to our 2022 director compensation program, which restricted stock units are expected to vest in full on December 31, 2022. The restricted stock units represent approximately $190,000 and were determined using the grant date fair market value of our common stock $461.09.

 

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Table of Contents
(2)

As of March 1, 2022, no Shares are pledged by any of our executive officers or directors in accordance with our policy prohibiting pledging or hedging transactions.

(3)

Based on 128,801,984 Shares outstanding as of December 31, 2021. Unless indicated, ownership is less than 1% of the class.

(4)

Mr. Kane served as Chief Financial Officer of the Company until his transition to a strategic advisor role on June 1, 2021. At such time, Ms. Diamond was appointed to serve as Interim Chief Financial Officer and was formally elected as the Company’s Chief Financial Officer effective on June 28, 2021.

 

Stock Ownership Information    2022 Proxy Statement  |  Humana

 

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Table of Contents

Compensation Discussion and Analysis

 

This Compensation Discussion and Analysis (CD&A) presents in detail our executive compensation policies and practices, describing each element of compensation and the decision-making process by our Organization & Compensation Committee (“Committee”) that supports it. We encourage you to read this CD&A in conjunction with the compensation tables that follow for additional context to the Committee’s decisions with respect to the 2021 compensation of our Named Executive Officers (“NEOs”), as listed below.

 

2021 Named Executive

Officers

 

 

Bruce D. Broussard

President and Chief Executive Officer

 

 

Susan M. Diamond

Chief Financial Officer

 

 

Brian A. Kane

Former Chief Financial Officer(1)

 

 

T. Alan Wheatley

Segment President, Retail

 

 

Timothy S. Huval

Chief Administrative Officer

 

 

William K. Fleming, PharmD

Segment President, Pharmacy Solutions & Chief Corporate Affairs Officer

 

(1)

Mr. Kane served as Chief Financial Officer of the Company until his transition to a strategic advisor role on June 1, 2021, the date that he ceased to be an executive officer of the Company.

CD&A Table of Contents

 

LOGO

   Executive Summary       49
   2021 Financial Performance Highlights       49
   Compensation Program Highlights       50
     

LOGO

   Compensation Framework       51
   Compensation Program Design Principles       51
   Key Compensation Program Governance Components       51
   Overview of Compensation Elements       52
   Inputs Into Compensation Decisions       52
   Independent Compensation Consultant       53
   Stockholder Engagement and Say-on-Pay       53
   Peer Group       56

LOGO

   Plan Design and Award Decisions       57
   Base Salary       57
   Short-Term Incentives       57
  

Associate Incentive Plan

      57
  

A Closer Look at AIP Strategic Measures

      59
  

2021 AIP Performance Results

      60
   Long-Term Incentives       61
  

Performance of our 2019-2021 Performance-Based Restricted Stock Units

      62
   Other Benefits and Perquisites       63

LOGO

   Compensation Risk Management, Policies and Practices       64
   Clawback Policy       64
   Hedging and Pledging Policy       64
   Stock Ownership Guidelines       64
  

Insider Trading Policy

 

  

   64

 

 

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Executive Summary

2021 was another extraordinary and challenging year for our Company, members, associates, and stakeholders as the COVID-19 pandemic and the emergence of the Delta and Omicron variants continued to drive an uncertain environment for the healthcare system. The widespread adoption of vaccines allowed the healthcare system to remain open and our members resume routine interactions with their healthcare providers, while unanticipated surges in the pandemic led to increased hospitalizations, particularly among the unvaccinated. Nonetheless, our core operations remained strong as we maintained focus on ensuring our members and patients received the right care at the right time, providing the highest quality health care experience, advancing our strategy and delivering on our commitments to ESG.

To that end, we were pleased to be recognized by CMS for having 97% of our members in 2021 in 4-Star or higher contracts for 2022, and increasing the number of our contracts that received a 5-Star rating from 1 contract in 2021 to 4 contracts in 2022, the most in our history. This accomplishment further demonstrates our enterprise-wide focus on quality, clinical outcomes and best-in-class customer service, which has been recognized from notable organizations such as Forrester, J.D. Power and USAA. We also saw an improvement of 930 basis points in our Net Promoter Score this past year, reflecting our ongoing efforts to enhance the customer experience.

The year was also marked by significant progress in our strategy to advance our healthcare services platform. We accelerated the growth of our senior-focused, value-based primary care organization, the largest in the nation, through the opening of fifteen de novo senior-focused centers and the completion of nine strategic acquisitions, which brought an additional forty wholly-owned centers to our portfolio. We also completed the acquisition of Kindred at Home, the largest home health and hospice organization in the nation. Together with our acquisition in the first half of 2021 of One Homecare Solutions (onehome), we continue our efforts to transform home health to a value-based model and capture the meaningful opportunity for home health organizations to engage differently with patients and Medicare Advantage payers to more holistically address patient needs and improve health outcomes and reduce the total cost of care. We are excited about the continued progress of our strategy in both primary care and the home.

We also saw continued growth in our pharmacy business, with our PBM, the fourth largest in the country, processing 515 million 30-day equivalent scripts in 2021, an 8 percent increase year over year. In addition, our pharmacy dispensing business continues to deliver industry leading mail order penetration and we have successfully implemented tools to enhance our e-commerce experience, while expanding our mail order footprint to move us closer to the consumer.

We offer superior quality to our members, have a strong brand, and a long history of expertise in caring for people as they age. Additionally, our clinical focus and suite of Healthcare Services capabilities allows us to take a holistic approach to supporting members, ensuring they receive high quality, proactive and comprehensive care, which improves health outcomes. We will continue leveraging the strength of these core fundamentals to drive meaningful results for our Company and each of our stakeholders.

2021 Financial Performance Highlights

Our 2021 results demonstrate the continued strength of our core operations, and the commitment of the Board and executive management team to achieving strong operating results as we navigated through significant headwinds presented by the continued volatility and uncertainly of the COVID-19 pandemic, which ultimately had a more significant impact than we initially anticipated. Highlights of our fiscal year 2021 financial performance are illustrated below.

 

LOGO

 

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LOGO

Compensation Program Highlights

The Committee is dedicated to maintaining a robust, structured and balanced compensation program designed to motivate and reward the Company’s executives to drive Humana’s performance. Our maturing compensation program is a testament to the Committee’s thoughtful consideration and progressive approach to evolve and align with market best practices and stockholders’ interests. The chart below identifies certain elements of our compensation program.

 

 

PROGRAM SUMMARY

 

 

    

  

 

Incentive Plans. Our executive compensation program includes both short-term incentive (STI) and long-term incentive (LTI) plans. These plans are designed with the goal of balancing short-term decisions with creating long-term stockholder value; we aim to drive focus on achieving key short-term enablers that will lead to successful outcomes on long-term strategic initiatives.

 

 

    

  

 

Equity Awards. We offer our executive officers a combination of incentive stock options (ISO), non-qualified stock options (NQ) and both time-based and performance-based restricted stock units (RSU) to align their interests with the creation of long-term stockholder value.

 

 

    

  

 

Vesting Periods. We offer time-based equity awards that vest annually in one-third increments over a three-year period, and performance-based equity awards that vest on the third anniversary of the grant date based on the achieved performance results against preset performance targets.

 

 

    

  

 

Performance Measures. For our executive officers, at least 55% of their LTI awards are performance-based. Performance is measured against the Company’s three-year aggregated return on invested capital (ROIC), and strategic performance measures, with a total stockholder return modifier (rTSR) that measures our performance relative to a PSU Comparator Group over the same period.

 

 

    

  

 

Stock Ownership Guidelines. We require our CEO, executive officers and senior vice presidents to maintain minimum stock ownership levels (7x, 3x and 1x of base salary, respectively). These requirements illustrate our belief in aligning the interests of our executives with the interests of our stockholders.

 

 

    

  

 

Market-based Compensation. We perform regular market compensation analysis to maintain competitiveness of our executive compensation program.

 

 

    

  

 

Peer Group. We leverage a robust peer group comprised of companies in the managed care industry, health care services and facilities industry, and financial and other insurance-related industries to benchmark and assess our compensation programs and practices.

 

 

    

  

 

Change in Control and Executive Severance Policies. We have a Severance Policy and Change in Control Policy, applicable to the CEO and other executive officers with restrictive covenants that align with the applicable severance period for any benefits.

 

 

    

  

 

Clawback Policy. We maintain a clawback policy that includes all incentive-based compensation.

 

 

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Compensation Framework

Compensation Program Design Principles

Our executive compensation program is designed to attract, retain and motivate leaders to achieve strategic milestones and performance objectives that advance and grow our integrated care-delivery model. We design our executive compensation programs to challenge participants as well as reward them for superior performance for our Company and our stockholders. Our compensation program is predicated on three interconnected design principles:

 

 

LOGO

Key Compensation Program Governance Components

Our robust and structured compensation program reflects the Committee’s belief that strong corporate governance is imperative for prudent compensation decision-making. Below are key governance elements of our compensation programs. We also identify certain common pay practices that we do not follow because they do not align with the strict standard of governance that we apply to our compensation programs.

 

   

WHAT WE DO

    

 

  WHAT WE DON’T DO
  Design incentive plans with the majority of executive pay at risk     

×

  No stock option repricing without stockholder approval
  Maintain a Clawback Policy that includes all incentive-based compensation     

×

  No single trigger vesting of equity or cash severance payments upon change in control
  Include double-trigger provisions under our Change in Control Policy and equity agreements applicable to our executive officers     

×

  No hedging or pledging of Humana securities by associates (including executive officers and directors)
  Require minimum stock ownership levels for senior leadership     

×

  No tax gross-ups for our NEOs or other executive officers
  Maintain commitment to stockholder engagement     

×

  No excessive perquisites for senior leaders; all perquisites require specific business rationale
  Conduct an annual compensation risk assessment     

×

  No positive discretion for incentive-based awards
  Utilize an independent compensation consultant hired and overseen by the Committee     

×

  No dividends or dividend equivalents on unearned PSUs or RSUs
      

×

  No employment contracts with CEO, NEOs or other executive officers and senior leaders
                

 

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Overview of Compensation Elements

The material components of our executive compensation programs are: (i) base salary; (ii) short-term cash incentives; and (iii) long-term equity incentives. We believe that having a combination of pay elements motivates and challenges our executives to achieve positive results for our Company and our stockholders. Each element of compensation is summarized as follows:

 

Fixed

Compensation

   Base Salary    Cash   

  Market competitive fixed compensation, reflecting executive’s scope of responsibility

 

  Annually reviewed for market alignment, with adjustments as appropriate

At Risk Compensation    Short-Term
Incentives
   Cash   

 

  Cash-based incentive compensation to reward performance for achievement of short-term business objectives

 

  Measures aim to optimize the level of year-over-year profitability in the short-term while contributing to the long-term success of the organization

   Long-Term
Incentives
   Humana Equity   

 

  Promotes retention of our executive talent

 

  Motivates executives to optimize the long-term success of the organization

 

  Mitigates excessive risk taking by encouraging executives to act in the long-term interest of the organization

 

 

LOGO

Inputs Into Compensation Decisions

For 2021, the Committee received input from a number of sources and reference points to guide its design of the Company’s executive compensation programs and individual pay decisions. These various perspectives allow the Committee to have visibility into our peer companies’ practices, investor viewpoints, changes in external market practices and each executive’s individual performance, as part of its review of compensation. The Committee regularly reviews input and data received from its independent compensation consultant, our stockholders, external market practice surveys and individual performance assessments to make informed compensation decisions for our NEOs. In addition, the Committee regularly reviews tally sheet information that provides a comprehensive look at total compensation for each of our NEO’s. The chart below further describes the primary sources contributing to the Committee’s decision-making process.

 

 

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LOGO

Independent Compensation Consultant

For 2021, the independent compensation consultant for the Committee was Farient Advisors, LLC (Farient). A representative of Farient attended all of the regularly scheduled Committee meetings in 2021, including, when invited, executive sessions. In accordance with the Committee’s Charter, the Committee has the sole authority to determine the compensation for, and to terminate the services of, the independent compensation consultant.

The Committee considered certain factors to determine whether Farient’s service as a compensation consultant raised a conflict of interest, including, among other things:

 

   

Whether the firm provided other services to the Company;

 

   

The amount of fees received by the firm from the Company, as a percentage of such firm’s total revenue;

 

   

The firm’s policies and procedures that are designed to prevent conflicts of interest;

 

   

Whether the firm’s representatives providing services to the Committee have any business or personal relationship with a member of the Committee;

 

   

Whether the firm’s representatives providing services to the Committee own Company stock; and

 

   

Whether the firm’s representatives providing services to the Committee, or the firm itself, have any business or personal relationship with any of our executive officers.

After considering all of the above factors, the Committee determined that the service provided to the Committee as an independent compensation consultant by Farient in 2021 did not raise any conflict of interest.

Stockholder Engagement and Say-on-Pay

The Board, together with its committees and management team, routinely reviews and responds to the feedback received from our stockholders – through formal stockholder engagements, stockholder voting results and routine communication during the year – creating a feedback loop of transparency into our compensation and governance practices. The continuous dialog supplements the Board’s customary review of our governance and compensation programs, policies and/or practices as it considers areas for enhancement or improvement.

The Board views these engagements as an opportunity to gain insight and perspective on issues that matter most to our stockholders, and believes that the most constructive way to achieve meaningful dialogue is to connect with them directly. Accordingly, the Company offers attendance by Board and executive management team members throughout the engagement process. Our Board respects the views voiced by our stockholders and understands the importance of regular engagement as priority issues evolve over time. Feedback received during dialogue with stockholders has, in some cases, led to the reaffirmation of, or enhancements to, certain of our corporate governance, ESG, and executive compensation practices.

 

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In addition to the above interactions, the Company routinely meets with stockholders, analysts and prospective investors throughout the year during industry conferences and other events. The Company’s meeting schedule, presentations to investors and webcast replays are available via the Investor Relations section on our website. From www.humana.com, click on “Investor Relations” and then click on the “Calendar of Events” tab. The illustration below further details our stockholder engagement and feedback consideration methods.

 

 

LOGO

 

   

Fall 2021 Outreach

 

As we’ve done in the past, in the fall of 2021 we solicited engagements with thirty of our largest stockholders, representing approximately 63% of our outstanding Shares as of June 30, 2021, and invited them to set the agenda based on their areas of interest. Our stockholder discussions included a variety of topics including: corporate governance, strategy, executive compensation, environmental and social issues and the Company’s continued response to the ongoing COVID-19 pandemic.

   30

Invited Stockholders

 

Members of the Board and the executive management team made themselves available to attend all meetings upon request. In addition, the Chairman of the Board participated at the request of certain of our stockholders.

   63%

Outstanding Stock Represented

 

Eight engagements were held in response to our outreach, representing approximately 36% of our outstanding Shares as of June 30, 2021. As a result of these engagements, we received valuable feedback regarding the Company’s current practices. The feedback was overwhelmingly positive regarding our programs and governance, as described in greater detail below. We believe the lower level of engagement interest from our stockholders represents satisfaction with our current programs and practices and illustrates the effectiveness of our ongoing communications with stockholders throughout the year on matters concerning the Company generally or the Board’s oversight.

   8

Engagements Held

 

The Board believes that having ongoing communication with the Company’s stockholders provides valuable insight to ensure the Board is acting in the best interests of Humana and its stockholders.

 

   36%

Outstanding Stock Represented

 

 

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Stockholder Engagement Key Discussion Themes

 

 

LOGO   LOGO   LOGO   LOGO

 

Corporate Governance & Strategy

 

 

Executive Compensation

 

 

Environmental & Social Issues

 

 

Continued COVID-19 Response

 

 

What We Heard During Our 2021 Stockholder Outreach

 

 

•  Stockholders commended our Board’s 2020-2021 refreshment and appreciated the current diversity and skills represented, while noting a continued focus on Board tenure. Given the Board’s current composition mix, stockholders were also interested in the Company’s director onboarding practices, boardroom dialogue and interactions with management.

 

•  Stockholders were interested in our Board’s process for management succession planning including the transition of the Company’s CFO role in 2021.

 

•  Stockholders inquired about our Board’s policy and perspective on political giving in the current political climate.

 

•  Stockholders appreciated the Company’s enhanced disclosure of compensation metrics and indicated the importance of continued transparency in this area. Stockholders also expressed interest in emerging compensation trends, including the potential inclusion of future ESG metrics within compensation programs, and sought the Company’s feedback on these trends.

 

•  Stockholders commended the Company’s enhanced ESG practices and reporting, including the reconstituted governance structure, as well as its expanded ESG disclosures using frameworks established by the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD). Stockholders also suggested opportunities for continued advancement within the Company’s ESG disclosures including: additional quantitative metrics, ambitious environmental targets, transparency in supplier oversight practices and statistics related to employee development and leadership.

 

•  Stockholders remained interested in business impacts resulting from COVID-19 with particular interest in steps taken to mitigate effects to stakeholders (members, providers, associates, investors) as the pandemic continues, including workforce re-entry plans, the Company’s COVID-19 vaccine policy, and Company culture in a continued remote work environment. The Company received positive feedback on maintaining world-class engagement scores in 2021.

 

 

 

How We Responded to What We Heard

 

 

Our Board is firmly committed to engagement with our stockholders and having candid dialogue. The Board welcomes feedback and believes these practices are in the best interest of our Company and our stockholders. Our responses to certain stockholder feedback received during the 2021 engagement period are outlined below.

 

•  Reaffirmed commitment to ongoing reviews performed by the Board in consideration of composition, tenure and refreshment.

 

•  Confirmed the Board’s oversight of Humana’s Political Action Committee (PAC) and the PAC’s commitment to supporting persons and/or organizations who share our belief that coordinated health care coverage brings quality, choice, access and affordability to consumers.

 

•  Reaffirmed our commitment to determine achievement under our compensation plans based on established compensation metrics and the terms of the plans and continuing to consider emerging trends in the design of our compensation programs.

 

•  Developed an integrated ESG report (Humana’s Impact Report) aligned to the Company’s strategy that contains quantitative and qualitative metrics and applies reporting standards established by prominent ESG frameworks. The Company is also committed to considering additional opportunities for enhancement to its ESG program, including establishing ambitious environmental targets and evaluating new areas of disclosure.

 

•  Maintained our commitment to support the health and well-being of our members, associates and the communities we serve as the COVID-19 pandemic persists.

 

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Say-on-Pay Support

Our 2021 say-on-pay proposal maintained its typically high level of approval with 95% of our stockholders voting in favor of the Company’s compensation strategy. We believe that the result of our 2021 say-on-pay proposal indicates that stockholders are generally supportive of our executive compensation program, and therefore the Committee made no material changes to the executive compensation program as a result of this vote.

Stockholder Voting Trend

 

 

LOGO

Peer Group

Our peer group is used as a reference point in making compensation decisions, such as developing base salary ranges, developing short-term and long-term incentive award ranges, determining competitiveness of the total compensation package for our NEO’s and comparing our performance in order to validate if our compensation programs are informed by market practices.

The Committee uses the framework below, in consultation with its independent compensation consultant, to filter and select a broad group of potential peers. This framework yields multiple perspectives that enrich our understanding of competitive executive pay practices while also ensuring that our peer group is comprised of companies with whom we may compete for talent and whose revenues, market capitalization, and business focus are similar to our own.

 

 

LOGO

For 2021 compensation decisions, based on its review along with advice from its independent compensation consultant, the Committee approved the following peer group (the “Peer Group”):

 

 

Managed Care Peers

      

 

Healthcare Services &

Facilities

 

     

 

Financial & Insurance

   Anthem, Inc.

    

   AmerisourceBergen Corporation

   

   Aflac, Inc.

   Centene Corporation

    

   Cardinal Health, Inc.

   

   Allstate Corporation

   Cigna Corporation

    

   DaVita Inc.

   

   MetLife, Inc.

   CVS Health Corp

    

   HCA Healthcare, Inc.

   

   Progressive Corporation

   UnitedHealth Group Inc.

    

   Laboratory Corporation of America Holdings, Inc.

   

   Prudential Financial, Inc.

    

   McKesson Corp

   

   The Travelers Companies, Inc.

    

   Walgreens Boots Alliance, Inc.

   

Humana’s 2021 Peer Group Financial Comparison

LOGO

 

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Plan Design and Award Decisions

Base Salary

On an annual basis, the Committee, in consultation with its independent compensation consultant, reviews the market data and current base salaries for our executives, considering adjustments as deemed appropriate. Salary increases, if any, must receive advance approval from the Committee. While the Committee approved no increases in 2020, the 2021 evaluation revealed that base salary increases were necessary for our NEOs in order to maintain competitive market pay levels. In addition to market data, the 2021 determinations took into account demonstration of enterprise value along with certain expansions of responsibilities. The table below represents base salaries for our CEO and other NEOs as of March 1, 2021, compared to March 1, 2020.

 

   

Named Executive Officer

2021 Base Salary

2020 Base Salary

   

Bruce D. Broussard

$

1,349,500

$

1,349,465

   

Susan M. Diamond(1)

$

750,000

$

525,000

   

Brian A. Kane

$

765,000

$

750,000

   

T. Alan Wheatley

$

665,000

$

625,000