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,

 

 

Joseph M. Ruschell

Associate Vice President, Assistant General Counsel & Corporate Secretary

March 9, 2022

Table of Contents

 

Frequently Referenced Information
Role of the Board and Board Leadership			9
Human Capital Management			12
Board Oversight of Environmental, Social and Governance Matters			14
Director Independence			22
Committee Membership and Attendance			24
Corporate Governance Policies			27
Board Composition and Refreshment			31
Director Compensation			41
Stockholder Engagement and Say-on-Pay			53
Peer Group			56
Stock Ownership Guidelines			64

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

 

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.

 

		Online www.proxyvote.com				By Mail Complete, sign, date, and return your proxy card in the envelope provided
		By Phone Call the phone number located on the top of your proxy card				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

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						1

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

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						3

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.

 

4				Humana  |  2022 Proxy Statement  •  Frequently Asked Questions

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, 21^st 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						5

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, 21^st 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.

 

6				Humana  |  2022 Proxy Statement  •  Frequently Asked Questions

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						7

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.

 

8				Humana  |  2022 Proxy Statement  •  Company Overview

Corporate Governance

 

 

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.
Appreciate individual uniqueness, creating an environment where everyone can fully be themselves, reflecting all of us and the communities we serve.
Work and learn together, transforming the norm to strengthen operational excellence and outcomes.
Take personal accountability, working together to create simple, personalized, quality experiences.
Collaborate openly, building positive relationships to achieve strong, sustainable results for us and the people we serve.

 

Corporate Governance  •  2022 Proxy Statement  |  Humana						9

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
Serves as Chair of regular sessions of the Board and manages the overall Board process.      Leads the Board in anticipating and responding to crises.      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.      Supports the Nominating, Governance & Sustainability Committee with director on-boarding and orientation programs.      Models culture, philosophy, inclusivity and values expected of all directors.      Conducts individual meetings with other directors, including the CEO, and management team to encourage open communication, collaboration and differences in perspective.		Evaluates overall Board effectiveness, with emphasis on identifying areas of enhancement, development and/or furtherance and communicating these observances to the Board for discussion.      Represents the Board on occasions where it is important for the Board to respond on matters independently from the Company’s management team.      Provides guidance and direction to the CEO and management team.      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.      Works with the Organization & Compensation Committee to develop the process for CEO compensation evaluations.

 

10				Humana  |  2022 Proxy Statement  •  Corporate Governance

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						11

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.

 

12				Humana  |  2022 Proxy Statement  •  Corporate Governance

		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

 

 

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

 

•  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

 

Corporate Governance  •  2022 Proxy Statement  |  Humana						13

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

 

14				Humana  |  2022 Proxy Statement  •  Corporate Governance

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.

 

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.

 

Corporate Governance  •  2022 Proxy Statement  |  Humana						15

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,

 

16				Humana  |  2022 Proxy Statement  •  Corporate Governance

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

Energy Reduction

•  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

•  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								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
•  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
•  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.”

 

 

 

 

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Board Evaluation Practices

 

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

Bruce D. Broussard

Raquel C. Bono, M.D.

Frank A. D’Amelio

David T. Feinberg, M.D.1

Wayne A. I. Frederick, M.D.

John W. Garratt

David A. Jones, Jr.

Karen W. Katz

Marcy S. Klevorn

William J. McDonald

Jorge S. Mesquita

James J. O’Brien

Marissa T. Peterson

Number of Meetings in 2021

9

6

4

0

5

4

 = Chair          = 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;

 

24				Humana  |  2022 Proxy Statement  •  Corporate Governance

•

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:

 

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

 

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

 

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

 

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

 

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

 

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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;

 

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reviews the overall relationship of the Board and management;

 

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reviews issues and developments pertaining to corporate governance;

 

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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;

 

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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

 

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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:

 

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

 

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

 

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

 

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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:

 

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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.

 

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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.

 

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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

 

28				Humana  |  2022 Proxy Statement  •  Corporate Governance

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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