UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section
14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
| ☑ | Filed by the Registrant | ☐ | Filed by a party other than the Registrant |
| CHECK THE APPROPRIATE BOX: | ||
| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☑ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material under §240.14a-12 | |
The Allstate Corporation
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
| PAYMENT OF FILING FEE (CHECK ALL BOXES THAT APPLY): | ||
| ☑ | No fee required | |
| ☐ | Fee paid previously with preliminary materials | |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | |
Allstate
exists to serve
customers, create
opportunity for our team,
generate attractive returns
for investors, improve
communities, and make a
difference in the world.
Notice
of 2023 Annual Meeting
and Proxy Statement
2022 Annual Report
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| Allstate Shareholder Letter |
 |
Adapting to the Present While Building for the Future
Allstate rapidly responded to a difficult operating environment in 2022 to mitigate negative financial results while staying on course to build a low-cost digital protection company. Financial results were below expectations with a net loss of $1.4 billion that resulted from auto insurance underwriting losses and a decline in the value of public equity investments. A comprehensive plan to increase auto insurance margins is well underway and margins are expected to increase. Despite these challenges, the strategies to increase market share in personal property-liability and expand protection offerings are on track. Allstate is creating a better future for customers, shareholders, team members and communities.
2022 Operating Performance
The decline in financial performance did not reflect the agility and precision of operating results.
| ● | The underwriting loss was generated from auto insurance as costs to repair and replace cars and settle third-party liability claims increased by over 15% from the prior year. Increases in the estimates for auto losses from pre-2022 claims also negatively impacted 2022 results. The comprehensive program to improve auto insurance margins includes Allstate brand rate increases of 16.9%, expense reductions, tighter underwriting standards and adapting claims practices to a high inflation environment. |
| ● | Homeowners insurance continued its industry leading performance generating $681 million of underwriting income, while growing policies in force by 1.4%. |
| ● | Investment results were strong in a difficult year. A proactive approach to investing reduced exposure to higher interest rates, which avoided $2 billion of declines in the portfolio’s market value. While the overall portfolio had a negative 4% return for the year, this was better than the Bloomberg Intermediate Bond and the S&P 500 equity indices which declined by 9% and 18%, respectively. |
| ● | The Protection Services businesses served more customers with broader protection and had strong operating results. Protection Plans’ written premiums increased by 5% to $1.9 billion and had $150 million of Adjusted Net Income (ANI). Health and Benefits generated $222 million of ANI. |
| ● | Shareholders received cash of $3.4 billion of which $926 million was dividends, which were increased by 5% per share. Relative ownership per share increased by 6.1% in 2022 reflecting share repurchases. |
A Purpose-Driven Company Powered by Purpose-Driven People
People are the key to success. The pandemic has changed the ways and places that people work. Allstate is adapting to these changes by approaching employees as customers who are team members.
| ● | Employees are “purchasing” a career opportunity that includes professional growth, compensation, flexibility, inclusivity, and an opportunity to make a difference. They “pay” for this with their expertise, engagement, and commitment. |
| ● | Flexibility to work remotely or hybrid is an increasingly important part of the employee value proposition. Commuting is overrated and no one wants to drive to an office for a Zoom call. As a result, Allstate has embraced the concept of flexibility with over 80% of U.S. employees choosing remote work. This significantly reduces real estate costs but does impact collaboration and belonging. |
| ● | New ways of collaborating and creating a sense of belonging are being developed given the extent of remote work. Allstate’s culture is a foundation for success so this legacy must be protected while adapting to a new work environment. |
| ● | Inclusive diversity and equity also drive belonging and commitment and improve business outcomes. Allstate’s leadership position was advanced with improvements in representation, business practices and community engagement. |
| ● | These results were delivered by a team that successfully dealt with business challenges, innovated, and managed leadership transitions. The Board of Directors provides invaluable wisdom and perspective to help an outstanding team. Don Civgin retired as Vice Chair in May after 13 years. Rhonda Ferguson’s passing in May stunned all of us and the team rallied to fulfill the Chief Legal Officer’s responsibilities. Glenn Shapiro also retired, staying until September to support these transitions. |
| Once again, Allstate was included in DiversityInc’s Top 50 Companies for Diversity. |
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| Allstate was named the 21st best managed company out of over 900 companies by the Wall Street Journal/Drucker Institute and ranked 4th overall for innovation. |
Climate Strategy
Increased severe weather, the transition to a lower carbon economy and higher societal expectations of business require us to incorporate climate change into strategy and operating plans. Climate change affects all four stakeholders covered by Our Shared Purpose.
| ● | Customers need affordable protection from severe weather and greater resiliency and disaster response capacity. Electrification of the auto fleet also needs to be reflected in auto insurance coverages. |
| ● | Shareholders require a sustainable business that adapts to external changes while delivering growth and attractive returns. New investment opportunities will be realized with the transition to a lower carbon economy. |
| ● | Allstaters value the opportunity to help customers, seize new business opportunities and improve society since these lead to professional growth and stable employment. |
| ● | Communities want businesses to utilize their capabilities to create a better future and they reward them by buying their products. |
Allstate has successfully adapted to increased severe weather change for over a quarter of a century. As a result, the homeowners business provides coverage to more than 7 million homes, and paid out over $11.4 billion in catastrophe losses while averaging $644 million of underwriting income annually over the last five years. Allstate also helped create public risk sharing pools in Florida, Texas, and California to provide customers with affordable protection for uninsurable risks.
Expertise and relationships are being expanded to find attractive investment opportunities from the transition to a lower carbon economy. In 2022, a commitment was made to achieve net zero emissions for Scope 1 and 2 measures by 2030. Scope 3 measures that cover the investment portfolio currently lack consistency and therefore these targets will not be established until 2025.
Creating the Future
Allstate seeks to create the future, not just react to trends. Transformative Growth in the property-liability business will improve the customer value proposition with affordable, simple, and connected protection. Becoming the lowest cost auto and home insurer will increase market share but requires significant operational changes, which are well underway.
Transformative Growth has five components and Allstate made significant progress in 2022.
| ● | Improve Customer Value Proposition – Affordability was improved by lowering operating expenses. A new, digital auto insurance product was launched in two states and is expected to become available to about one-third of the U.S. through direct distribution in 2023. |
| ● | Expand and Enhance Distribution – Allstate brand products are available through Allstate agents, call centers and online with pricing that reflects the cost and value of each channel. National General continues to expand its relationship with independent agents. |
| ● | Lower Customer Acquisition Costs – Strides were made in improving marketing effectiveness, which will be critical when marketing increases as auto insurance profitability improves. |
| ● | Build New Technology Ecosystems – A new product management system was deployed with the new auto insurance product, increasing agility and enabling the eventual retirement of legacy technology systems. |
| ● | Enhance Organizational Capabilities - Digital, analytical and technology capabilities were expanded to accelerate transformation. Focus on improving decision clarity enhanced execution. |
The Protection Services businesses also focused on creating the future. Protection Plans expanded into the furniture category and new international markets, building on its success in consumer electronics with U.S. retailers. Health and Benefits is implementing a new operating platform and expanding from worksite offerings to direct sales to individuals. Identity Protection upgraded its technology platform and expanded protection offerings.
Corporate Stewardship
Allstate is one of the largest “main street” protection companies in the U.S., serving over 189 million policyholders. We have grown into this responsibility since the first policy insured a 1930 Studebaker 92 years ago by focusing on customers and broadly defining our role in society. Our Shared Purpose and the Societal Engagement Framework provide clarity and structure to assess trade-offs between conflicting objectives. Allstate’s legacy is built on the fortitude to lead when needed, while limiting our role to the requirements of Our Shared Purpose.
The Allstate Foundation is also embedded in our history with 70 years of improving communities. Last year thousands of nonprofits were supported to disrupt the cycle of relationship abuse, empower youth through service and advance economic mobility for people of color.
Your support makes it possible for Allstate to build on this legacy, be forward-looking and live Our Shared Purpose. Together we are making a difference in the world!
Tom Wilson Chair, President |
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Letter from Independent Directors |
|
April 10, 2023
Fellow Shareholders,
2022 was a year of adaptations and persistence for Allstate. The external environment presented challenges with high inflation and declining investment values that negatively impacted earnings and economic value. Allstate has a long history of successfully navigating challenging environments and last year was no different with rapid adaptation of the annual plan while maintaining long-term value creation. This past year the Board was focused on short- and long-term priorities, risk and return, human capital and environmental, social and governance (“ESG”) issues. As we approach the 2023 annual meeting, this letter highlights the Board’s independent oversight of Allstate’s Shared Purpose.
Operating Performance
Maintaining Allstate’s operational excellence and performance is necessary for long-term growth and value creation. In 2022, operating results deteriorated with net loss of $1.4 billion and adjusted net loss* of $262 million, reflecting an underwriting loss in auto insurance and a valuation decline of equity investments. Consequently, increased Board time was spent overseeing management’s actions to improve profitability. Management is successfully implementing a comprehensive profit improvement plan with Allstate brand auto insurance rate increases of 16.9%. Strong operating performance in most other businesses, coupled with the capital freed up from the divestiture of the life and annuity businesses, supported the return of $3.4 billion to shareholders in 2022 through dividends and share repurchases.
Driving Long-Term Growth
Management and the Board also focused on long-term growth while adapting to dramatic cost increases and a volatile market. Transformative Growth, a multi-year initiative to increase personal property-liability market share and expand protection offered to customers, remains at the forefront of Allstate’s strategy. The Board continued its oversight of this important strategic initiative, which made substantial progress in 2022. A new automobile insurance product using state-of-the-art technology was introduced in two states with an improved customer experience and reduced costs.
Providing Effective Risk Oversight
Board oversight of risk and return practices are also critical to long-term value creation. We regularly review the company’s risks related to strategic direction, financial markets, environmental sustainability, human capital, culture and investment risks.
The Board assessed risks presented by Transformative Growth, compensation programs and financial controls and also focused on the impacts of inflation, reinsurance utilization, geopolitical risk, policyholder retention and climate change. Additionally, the Board oversaw Allstate’s security and data privacy programs. We supplemented our oversight with external independent resources in several important areas – compensation, cybersecurity, Board composition, and pay equity. We enhanced oversight of the independent auditors by reviewing their internal control process to ensure independence and public company oversight and completed a request for information from alternative auditors.
The Board also ensures we have the capabilities, experience and processes to provide appropriate oversight and guidance with respect to Allstate’s strategy, business results, diversity, culture and societal engagement. Board and individual director performance is evaluated throughout the year. Monica Turner joined the Board, bringing extensive strategic expertise with consumer-focused brands and outstanding operational leadership capabilities, which will enhance the value added by our Board.
| The Board continued its practice of utilizing external independent resources to supplement its oversight in several key areas - compensation, pay equity, cybersecurity and Board composition. |
| * | For additional information, please see Appendix A – Definitions of Non-GAAP Measures. |
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Sustainable Performance and ESG
Allstate’s purpose is to empower customers with protection, provide opportunities to team members, create attractive returns for shareholders, and improve communities. Achieving all of these is critical to sustainable success but requires focus and clarity to balance between objectives. Allstate’s focus on climate, data privacy and equity are based on a Societal Engagement Framework, which is used to evaluate, prepare and communicate Allstate’s participation in societal issues. This framework evaluates issues on five criteria: importance to our ability to serve customers, level of Allstate’s expertise, ability to effect change, impact on stakeholders, and risk adjusted returns.
Allstate has actively addressed the impacts of climate change on its customers for over 25 years by advocating for strong catastrophe disaster preparation and response, effective building standards and adequate risk sharing mechanisms. This year we established greenhouse gas emission reduction targets for Allstate’s operations with the goal to achieve net zero emissions for direct, indirect and value-chain greenhouse gas emissions by 2030. Investment capabilities have also been expanded to improve risk adjusted returns by participating in the transition to a low-carbon economy. The Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB) reports highlight this progress.
| Allstate’s shareholder engagement program is integral to the Board’s oversight and decision-making process and informs important practices and policies in our strategy and compensation and ESG programs. In 2022, Allstate engaged with shareholders holding approximately 36% of outstanding shares. |
Prioritizing Human Capital
Allstate’s employees and agents are essential to driving future success. Several important human capital initiatives were reviewed with the Board and advanced during the year:
| ● | Inclusive Diversity and Equity (IDE) – Progress was made in all three components of the multi-year IDE strategy: Representation, Business Practices and Community Engagement. Racial and gender representation increased across the company. Diverse supplier relationships were expanded. Allstate continues to be an active participant in OneTen, a cross-industry effort to create one million family sustaining jobs in America. We also completed our annual independent external pay equity analysis and publicly disclosed our EEO-1 report. |
| ● | Succession Planning – Allstate’s breadth and depth of talent is critical to achieving Our Shared Purpose. The Board reviews senior leadership and CEO succession from both an enterprise and individual perspective in multiple sessions throughout the year. |
| ● | Compensation – Compensation plans are tightly linked to a broad set of performance measures. Incentive compensation plans include performance on IDE and Transformative Growth implementation. Senior leadership’s annual incentives were substantially reduced given the net loss in 2022. |
Your view is important to us, and we value your continued investment and support. We believe Allstate is positioned for success in the coming year and remain confident in the company’s ability to accelerate sustainable growth and profitability and focus on ensuring Allstate fulfills its obligations to you, the customers and the broader community. Thank you for trusting us to oversee the long-term sustainability of Allstate.
 |
Donald E. Brown |
 |
Siddharth
N. |
 |
Judith A. Sprieser |
 |
Kermit R. Crawford |
 |
Jacques P. Perold |
 |
Perry M. Traquina |
 |
Richard T. Hume |
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Andrea Redmond |
 |
Monica Turner |
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Margaret M. Keane |
 |
Gregg M. Sherrill |
6
Notice of 2023
Annual Meeting of
Shareholders
| Items of Business | Board Recommendation |
||
 |
|||
| Election of 12 directors | FOR each nominee See pages 18-25 |
||
 |
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| Say-on-pay:
advisory vote on the compensation of the named executives |
FOR See pages 61-86 |
||
 |
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| Say-on-frequency:
advisory vote on the frequency of future advisory votes on the compensation of the named executives |
EVERY YEAR See page 107 |
||
 |
|||
| Ratification of appointment of Deloitte & Touche LLP as Allstate’s independent registered public accountant for 2023 | FOR See pages 108-111 |
||
In addition, any other business properly presented may be acted upon at the meeting.
By Order of the Board,
Christine DeBiase
Secretary
April 10, 2023
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 23, 2023 The Notice of 2023 Annual Meeting, Proxy Statement, and 2022 Annual Report and the means to vote by Internet are available at proxyvote.com. |
 |
Date and Time | |
| Tuesday, May 23, 2023, at 11:00 a.m. Central time. Admittance to the webcast begins at 10:30 a.m. | ||
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Virtual (Online Only) | |
| www.virtualshareholder meeting.com/ALL2023 | ||
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Record Date | |
| Holders of Allstate common stock at the close of business on March 24, 2023. Each share of common stock is entitled to one vote for each director candidate and one vote for each of the other proposals. | ||
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Participation | |
| Shareholders who wish to participate in the meeting should review pages 114-117. | ||
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Date of Mailing | |
| On or about April 10, 2023, these proxy materials and annual report are being mailed or made available to shareholders and to participants in the Allstate 401(k) Savings Plan. |
How to Vote in Advance
Your vote is important. Please vote as soon as possible by one of the methods shown below. Make sure to have your proxy card, voting instruction form, or notice of Internet availability in hand and follow the instructions. You may also vote during the annual meeting by visiting www.virtualshareholdermeeting. com/ALL2023, entering your control number, and following the instructions.
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By Telephone | |
| In the U.S. or Canada, you can vote your shares toll-free by calling 1-800-690-6903. | ||
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By Mail | |
| You can vote by mail by marking, dating, and signing your proxy card or voting instruction form and returning it in the postage-paid envelope. | ||
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By Internet | |
| You can vote your shares online at proxyvote.com. | ||
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By Tablet or Smartphone | |
| You can vote your shares with your tablet or smartphone by scanning the QR code. |
7
Participating in our
Annual Meeting
The 2023 annual meeting will be held in a virtual meeting format since it provides greater access and participation opportunities for shareholders.
Virtual Meetings SHAREHOLDER
SHAREHOLDER
|
Who can participate in the Virtual Annual Meeting? If you plan to participate in the annual meeting, you must be a holder of Allstate shares as of the record date of March 24, 2023, or hold a legal proxy for the meeting provided by your bank, broker, or nominee. To be admitted to the annual meeting webcast at www. virtualshareholdermeeting.com/ ALL2023, you must enter the 16-digit control number found on your proxy card, voting instruction form or notice of Internet availability. You may log into the meeting platform beginning at 10:30 a.m. Central time on May 23, 2023. The meeting will begin promptly at 11 a.m. Central time on May 23, 2023. The virtual meeting platform is fully supported across browsers (Firefox, Chrome, Microsoft Edge, and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the meeting. |
How can I vote at the meeting? You may vote during the annual meeting by following the instructions available on the meeting website during the meeting. Whether or not you participate in the annual meeting, we encourage you to vote and submit your proxy in advance of the meeting by one of the methods described in these proxy materials.
How can I ask a question at the meeting? This year’s shareholders’ question and answer session will include questions submitted in advance of, and questions submitted live during, the annual meeting. You may submit a question in advance of the meeting beginning at 8:30 a.m. Central time on May 19, 2023, and until 11:59 p.m. Central time on May 22, 2023, at www.proxyvote.com after logging in with your 16-digit control number. Once past the login screen, click on “Question for Management,” typing your question and clicking “Submit.” Alternatively, questions may be submitted during the annual meeting through www. virtualshareholdermeeting.com/ALL2023, by typing your question into the “Ask a Question” field and clicking “Submit.” We will try to answer as many questions as time permits. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or company business. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition. Any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints will be posted online at www.allstateinvestors.com.
Who do I contact about technical difficulties? If you encounter any difficulties accessing the meeting during the meeting time, please call the technical support number at (844) 986-0822. The technical support number will also be posted on the meeting website.
Will a replay of the meeting be available? Following completion of the meeting, a webcast replay will be posted online to our Investor Relations website at www.allstateinvestors.com for one year.
8
Table of Contents
| 2 | Letter from Chair, President and CEO |
| 4 | Letter from Independent Directors |
| 6 | Notice of 2023 Annual Meeting of Shareholders |
| 7 | Participating in Our Annual Meeting |
| 9 | Proxy Summary |
| 18 |
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Proposal 1. Election of 12 Directors |
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Proposal 2. Say-on-Pay: Advisory Vote on the Compensation of the Named Executives |
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Proposal 3. Advisory Vote on the Frequency of Future Advisory Votes on the Compensation of the Named Executives | |
| 108 |
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Proposal 4. Ratification of Deloitte & Touche LLP as the Independent Registered Public Accountant for 2023 |
| New and Frequently Requested Information |  |
Explore Allstate Get a quote in the blink of an eye https://www.allstate.com
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Proxy Summary
About Allstate
Allstate is one of the nation’s largest insurers with 189.1 million policies in force, protecting cars, homes, motorcycles, health, disability, lives, personal devices and identities. Its products are sold through Allstate agents, independent agents, call centers, online, major retailers and voluntary benefits brokers. The company harnesses the talent of approximately 54,500 employees, 10,100 exclusive Allstate agents and agent support staff, and 51,900 independent agents.
What We Do
Allstate empowers customers with protection to help them achieve their hopes and dreams. We do this by leveraging innovative, industry-leading technology to provide customers with affordable, simple and connected solutions. We offer a wide range of protection products and services for customers automobiles, homes, personal property, health, income and identities.
Allstate was ranked #21 on the Drucker Institute list of the nation’s 250 best managed companies.
Allstate’s Strategy to Increase Shareholder Value
Allstate’s strategy has two components: increase personal property-liability market share and expand protection offerings by leveraging the Allstate brand, customer base and capabilities. We are accomplishing this through the use of differentiated products, analytical expertise, telematics and an integrated digital enterprise that leverages data and technology to execute processes with a focus on greater effectiveness and efficiency.
| 10 | 2023 Proxy Statement |
Our Strategic Priorities
Executing comprehensive plan to improve profitability
Auto insurance margins need to be returned to pre-pandemic levels, amongst the best in the industry. Allstate brand auto insurance rate increases of 16.9% were implemented in 2022 and meaningful rate increases will likely continue through 2023. Allstate also implemented stricter auto new business underwriting requirements. We achieved half of our targeted ~6.0 point reduction in adjusted expense ratio* from 2018 to 2024 and reduced advertising spend. Claims practices were modified to manage loss costs and innovation and analytics were leveraged to drive accuracy and operational efficiency.
Generating profitable growth in Protection Services
Revenue from Allstate Protection Services was 5% higher than the prior year, generating approximately 5% of total Allstate revenues in 2022. Growth strategies for Health and Benefits, Protection Plans and Identity Protection also advanced.
Reducing investment portfolio exposure to higher interest rates and economic recession
Higher investment yields benefitted Net Investment Income. The portfolio was positioned defensively to higher rates driven by inflation and recession sensitive assets. This mitigated the negative impact of falling valuations in fixed income and equity markets.
Transformative Growth
Our Transformative Growth strategy is a multi-year initiative to increase personal property-liability market share by building a low-cost digital insurer with broad distribution of affordable, simple and connected protection. This strategy will be driven by a new business model, capabilities and culture that continually transform to better serve customers. We are making significant progress across all five components of this strategy:
| 01 | Improve Customer Value | |
● Improving the competitive prices of products through lower costs, increased price sophistication and telematics ● Increasing engagement with the Allstate Mobile app and new business penetration of telematics products, including pay-per-mile insurance ● Providing additional consumer-focused protection solutions | ||
| 02 | Expand Customer Access | |
● Transforming the Allstate agent sales system to enable more growth at a lower cost by incentivizing agents to focus on sales, while expanding our distribution capacity through new agent models ● Increasing direct channel distribution effectiveness and efficiency ● Growing National General by broadening the Allstate brand capabilities and data to expand product offerings using independent agency relationships | ||
| 03 | Increase Customer Acquisition Sophistication | |
● Improving the effectiveness of customer acquisition by expanding lead management, building data capabilities and utilizing household insights |
| 04 | Modernize Technology Ecosystems | |
● Deploying a new technology ecosystem to deliver affordable, simple, and connected experiences and products at a lower cost, which will also lead to the retirement of legacy systems | ||
| 05 | Drive Organizational Transformation | |
● Enhancing and expanding organizational capabilities by increasing digital expertise, process redesign, decision clarity, and employee empowerment and diversity |
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Allstate’s 2022 Operating Priorities Better Serve Customers Enterprise Net Promoter Score, which measures how likely customers are to recommend Allstate, finished below the prior year, reflecting substantial price increases necessary to offset higher loss costs. Grow Customer Base Consolidated policies in force reached 189.1 million, a 1.0% decrease from prior year. Property-Liability policies in force increased by 0.7% compared to the prior year, as continued growth at National General was offset by the Allstate brand. Protection Services policies in force declined 1.4%, primarily due to expiring low average premium policies from a major retail account that ended in 2019. Achieve Target Economic Returns On Capital Return on average Allstate common shareholders’ equity was (7.3)% in 2022. The Property-Liability combined ratio of 106.6 for the full year increased compared to the prior year primarily driven by higher auto losses. A comprehensive profitability plan is being executed. |
Proactively Manage Investments Net investment income of $2.4 billion in 2022 was $890 million below prior year as higher market-based investment income was more than offset by lower performance-based results. Total return on the $61.8 billion (as of 12/31/22) investment portfolio was (4.0)% in 2022 and compares favorably to full year 2022 performance of the S&P 500 of (18.1)% and the Bloomberg Intermediate Bond return of (9.4)%. Proactive portfolio actions to reduce inflation and economic risk by shortening fixed income duration mitigated portfolio losses by approximately $2 billion this year. Build Long-Term Growth Platforms Allstate made substantial progress in advancing Transformative Growth initiatives in 2022, including continued cost reductions, deploying a new property-liability technology platform and a new Affordable, Simple, Connected auto insurance offering in two states. National General is meeting or exceeding acquisition performance targets with the objective of building a strong competitive position in independent agent distribution. Protection Services has increased revenues, particularly Allstate Protection Plans. Arity continued to expand its data acquisition platform and launched Arity IQ, a product to improve new business profitability for auto insurers. |
Link to Executive Compensation Component Allstate’s executive compensation program is designed to ensure that the interests of our executives are aligned with those of our shareholders. We establish a strong nexus between performance measures and strategic objectives, which are also linked to operating priorities designed to create long-term shareholder value. |
Financial Highlights
| * | For definitions of these terms, please see the definitions of non-GAAP measures on pages 118-120 of our 2023 Proxy Statement. | |
| (1) | The peers are listed on page 69. | |
| (2) | Market Cap Weighted Average | |
| 12 | 2023 Proxy Statement |
Sustainability Highlights
See pages 52-59 for further information.
See page 60 for information about
the Board’s role in overseeing ESG.
Environmental, social and governance (“ESG”) matters are fundamentally connected to Allstate’s business strategies. Ensuring products and services are accessible, competitively priced, and mindful of environmental and social impacts is essential. ESG is managed through the lens of People, Planet and Prosperity and ESG issues are prioritized on their alignment to Our Shared Purpose, the Societal Engagement Framework, and long-term enterprise value creation.
Pillars of ESG Value Creation
People
|
Allstate is a purpose-driven company powered by purpose-driven people Allstate’s employees and agents are essential to achieving Our Shared Purpose. As Transformative Growth is accelerated, the focus is on how we recruit, retain, develop and engage employees while also focusing on the creation of an inclusive, diverse and equitable culture. Allstate strives to motivate employees and harness their diverse perspectives through leading employment practices. Employability is enhanced with training, mentoring and investing in professional growth. |
Planet
|
Allstate is developing products and services that address climate change and aligning our investment practices to support our sustainability goals Ensuring Allstate’s products are accessible, competitively priced and mindful of environmental and social impacts is an essential component of the Transformative Growth strategy. Another way to provide security and protection for customers is through our activities as an institutional investor, recognizing that climate-related issues can influence investment performance. Allstate’s investment analysis and decision-making processes consider these issues along with our values. |
Prosperity
|
Allstate is protecting customers’ information and empowering them with more control over their personal data Because of the products and services provided, customers entrust Allstate with their data and have an expectation of privacy and security around that data. This creates both business opportunities and constraints as Allstate works to safeguard consumer data while using that data to better serve customers. |
Primary focus on three ESG issues:
Climate, Data Privacy, and Inclusive Diversity and Equity
Climate change impacts customers and shareholders. Customer homes are subject to increasingly severe weather catastrophes. In 2022, Allstate incurred 124 natural-catastrophe events, totaling $3.1 billion. Catastrophic losses create volatility in shareholder returns.
Data privacy protects customers and is a growth opportunity. Protecting data and sensitive information is important to maintain trust in the Allstate brand. Allstate provides identity protection products to over 3 million individuals, empowering them with more control over their personal data.
Inclusive diversity and equity (IDE) creates a culture and team to drive success. An inclusive culture that supports the attraction, retention and development of diverse talent is necessary to meet diverse customer needs. IDE is integrated into business via policies, processes, and decision-making. IDE performance is reviewed by the Board twice a year and is a component of executive compensation.
Our Sustainability website includes further details on Allstate’s initiatives. https://www.allstatesustainability.com
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Climate Climate change is one of the most critical challenges threatening customers, businesses and communities. Today, a natural catastrophe that exceeds $1 billion occurred every 18 days, a 400% increase from 1980. This creates additional risks for customers and shareholders, but also offers opportunities to leverage Allstate’s capabilities and support proactive public policy initiatives. |
2022 Accomplishments ● Publicly committed to be net zero for direct, indirect and value- chain GHG emissions by 2030 ● Cut energy use beyond our original targets and significantly reduced our GHG emissions ● Committed $469 million to climate-related opportunities between 2021 and 2022, exceeding our goal of $375 million ● Achieved green or healthy building certification for 100% of newly acquired buildings ● Discouraged excess waste and encouraged recycling through centralized waste collection | |
Data Privacy Business practices are designed to protect data and keep sensitive information safe. We empower people with control over their personal data through transparency, offering solutions and leading others to do the same through four key avenues: policy and legislation, governance, products and services, and partnerships. |
2022 Accomplishments ● Implemented a digital ethics framework to provide actionable guidance to identify and address ethical concerns in the use of innovative technologies, like artificial intelligence ● Introduced an innovative personal information anonymization framework that respects privacy while still allowing the company to use data insights to drive new service and product developments ● Continued to grow Allstate Identity Protection (AIP), with over 3 million individuals protected as of year-end 2022 | |
Inclusive Diversity and Equity IDE is one of three core values in Our Shared Purpose. Allstate’s IDE strategy is focused on the four pillars of Business Practices, Culture, People and Community to leverage diverse talent, perspectives and experiences and foster an inclusive and equitable workplace. Allstate tracks workforce composition data over time to determine if it is making appropriate progress in advancing gender and racial/ethnic representation in the employee population and discloses its progress. As part of Allstate’s commitment to fair and equitable compensation practices, a pay equity analysis is completed on an annual basis. Allstate continuously strives to build awareness and drive action to be a differentiated leader in IDE. |
2022 Accomplishments ● Continued to drive skills-based hiring without degree requirements on job postings for Black talent. In 2022, in partnership with OneTen, Allstate hired over 340 Black individuals into family sustaining jobs without a four-year degree, exceeding our annual goal by over 159%. ● Implemented a monthly IDE Talent Scorecard to drive leadership accountability for developing a diverse team ● In 2022, Allstate launched the IDE A.C.T. (Accountability, Clarity, Transparency) Framework, integrating IDE strategy, goals, and collaboration across Allstate. This model ensures joint accountability, drives lower cost execution, and reduces complexity by clarifying roles and creating an IDE ecosystem of sharing and business area partnership with IDE leadership. ● Named among DiversityInc’s Top 50 Companies for Diversity for the 19th consecutive year |
| 14 | 2023
Proxy Statement Proxy Summary |
| 1 | Election of 12 Directors |
 |
The Board recommends a vote FOR each nominee |
| Donald E. Brown Jacques P. Perold Monica Turner |
Kermit R. Crawford Andrea Redmond Thomas J. Wilson |
Richard T. Hume Gregg M. Sherrill |
Margaret M. Keane Judith A. Sprieser |
Siddharth N. (Bobby) Mehta Perry M. Traquina |
See pages 18-51 for further information. ►
| ● | All candidates are highly successful executives with relevant skills and expertise | |
| ● | Average independent director tenure of 7.6 years, with 11 of 12 director candidates independent of management | |
| ● | Diverse slate of directors with broad leadership experience; 58% of the nominees bring gender or ethnic diversity, including three of the four committee chairs | |
| ● | Industry-leading shareholder engagement program and highly-rated corporate governance practices |
| (1) | Consistent with past practice, Ms. Turner’s committee assignments will be established during her first year of service. |
| www.allstateproxy.com Proxy Summary |
15 |
Nominees’ Skills and Experiences Advance Our Strategy
Allstate has a well-rounded and diverse Board that is independent with the institutional knowledge of longer-tenured directors and fresh perspectives brought by newer directors. Directors have a variety of skills and experiences developed across a broad range of industries and other public company boards. This enables effective oversight of the business and incorporates best practices from other companies.
| Key Skill or Qualification | Link to Strategy | % of Directors | |
| Core Competencies | |||
 |
Strategic and Operational Oversight | A practical understanding of developing, implementing and assessing business strategies, key initiatives and annual business plans. |  |
 |
Shareholder Advocacy | Brings perspective in understanding shareholder expectations and driving change based on engagement feedback. | |
 |
Corporate Governance | Supports Allstate’s goals of strong Board and management accountability, transparency, responsiveness and protection of shareholder interests. | |
 |
Leadership | Strong leadership qualities encourage robust and thoughtful dialogue and decision-making and provides succession planning opportunities for Board and committee leadership roles. | |
| Additional Capabilities | |||
 |
Financial Services | Assists with understanding the business and strategy of our company. |  |
 |
Risk Management | Aids in the Board’s role in overseeing the risks facing our company and provides effective oversight of our enterprise risk and return management (“ERRM”) program. | |
 |
Accounting and Finance | Financial reporting, audit knowledge, and experience in capital markets are elements of Allstate’s success. |  |
 |
Technology and/or Cybersecurity | Relevant to how Allstate approaches improving its internal operations and the customer experience and protects customer information. |  |
 |
Global Perspective | Provides valuable insights on how Allstate should continue to grow and manage its businesses outside the United States. | |
 |
Complex, Highly Regulated Business |
Our business is regulated in all 50 states and is subject to government regulations by the U.S. federal government, Canada and other countries. |  |
 |
Sustainability | Sustainability drives long-term value creation, and as a public company and good corporate citizen, shareholders expect effective oversight and transparency. | |
 |
Succession Planning and Human Capital Management | Ensures that Allstate has sufficient talent, robust development and retention practices and supporting our commitment to further inclusive diversity and equity. | |
 |
Innovation and Customer Focus | Helps Allstate grow its brand, enhance its reputation, generate disruptive innovation, and extend or create new business models. | |
 |
Government, Public Policy and Regulatory Affairs | Assists in identifying and understanding compliance issues and the effect of governmental actions on our business. | |
See page 29 for a presentation of our nominating process, including an ongoing review of board skills and experiences to align with Allstate’s strategy.
Relevant Skills and Experience
| 16 | 2023 Proxy Statement Proxy Summary |
| 2 | Say-on-Pay: Advisory Vote on the Compensation of the Named Executives |
| |
The Board recommends a vote FOR this proposal. |
See pages 61-86 for further information. ►
| ● | Independent oversight by compensation and human capital committee with the assistance of an independent consultant | |
| ● | Executive compensation targeted at 50th percentile of peers and aligned with short- and long-term business goals and strategy |
| ● | Compensation programs are working effectively. Annual incentive compensation funding for our named executives in 2022 was 57.5% of target, as formulaic result was reduced by 50% due to negative Net Income. Annual performance was above maximum performance on Total Premiums and Net Investment Income, below threshold performance on Performance Net Income, and above target performance on the Strategic Initiatives Scorecard. |
2022 Compensation Program Components
Allstate’s executive compensation program reflects our pay-for-performance culture and supports shareholder alignment while also incentivizing our executives:
| Cash | Long-Term Equity-Based Incentive | |||||||
| COMPONENT | Salary | Annual Cash Incentive |
Performance Stock Awards |
Stock Options | ||||
| LINK TO SHAREHOLDER VALUE |
Targeted at 50th percentile of peers to support Allstate’s goal of attracting and retaining top executive talent which ensures strong leadership over Allstate’s businesses. | Motivates and rewards executives for performance on key strategic, operational and financial measures during the year. Targets established based on company performance against four measures: Total Premiums, Performance Net Income, Net Investment Income and the Strategic Initiatives Scorecard. |
Motivates and rewards executives for performance on key long-term measures and aligns the interests of executives with long-term shareholder value. Performance stock awards (“PSAs”) vest based on results for Average Performance Net Income Return on Equity (“ROE”), Relative Total Shareholder Return and Items in Force Growth. | Stock options comprise 40% of equity incentives granted and further align the interests of executives with long-term shareholder value. | ||||
| Fixed | Performance-Based/At-Risk | |||||||
Target Compensation Mix
| www.allstateproxy.com Proxy Summary |
17 |
| 3 | Say-on-Frequency: Advisory Vote on the Frequency of Future Advisory Votes on the Compensation of the Named Executives |
 |
The Board recommends that you vote to conduct future advisory votes on executive compensation EVERY YEAR. |
See page 107 for further information. ►
| ● | Allstate’s shareholders have expressed interest in annual say-on-pay proposals | |
| ● | The Board values the opportunity to receive annual feedback to respond to changing market conditions | |
| ● | It is market practice to conduct a say-on-pay vote on an annual basis | |
| ● | The next say-on-frequency vote will be held at the 2029 annual meeting |
| 4 | Ratification of Deloitte & Touche LLP as the Independent Registered Public Accountant for 2023 |
|
The Board recommends a vote FOR this proposal. |
See pages 108-111 for further information. ►
| ● | Independent firm with few ancillary services and reasonable fees | |
| ● | Significant industry and financial reporting expertise | |
| ● | The audit committee annually evaluates Deloitte & Touche LLP and determined that its retention continues to be in the best interests of Allstate and its shareholders |
18
Corporate
Governance
| 1 | Election of 12 Directors |
What am I
voting on?
The Board recommends 12 nominees for election to the Allstate Board for one-year terms beginning in May 2023 and until a successor is duly elected and qualified or his or her earlier resignation or removal.
Overview
| ● | All candidates are highly successful executives with relevant skills and expertise |
| ● | Average independent director tenure of 7.6 years, with 11 of 12 director candidates independent of management |
| ● | Diverse slate of directors with broad leadership experience; 58% of the nominees bring gender or ethnic diversity, including three of the four committee chairs |
| ● | Industry-leading shareholder engagement program and highly-rated corporate governance practices |
|
Voting recommendation The Board recommends a vote |
 |
Each nominee was previously elected at Allstate’s annual meeting of shareholders on May 24, 2022, for a one-year term, with the exception of Ms. Turner who joined the Board in 2023. The Board expects all nominees named in this proxy statement to be available for election. If any nominee is not available, then the proxies may vote for a substitute. On the following pages, we list the reasons for nominating each individual.
| www.allstateproxy.com Corporate Governance |
19 |
The Director Nominees at a Glance
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Skills and Experiences | ||||||||||
| Name and Principal Occupation |
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 | ||||||||
| Thomas
J. Wilson Chair, President, and CEO of The Allstate Corporation |
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M | 65 | 16 |  |
0 |  |
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| Donald
E. Brown Executive Vice President and Chief Innovation Officer of NiSource, Inc. |
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M | 51 | 3 |  |
0 | |
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| Kermit
R. Crawford Former President and Chief Operating Officer of Rite Aid Corporation |
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M | 63 | 10 |  |
2 | |
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| Richard
T. Hume CEO of TD SYNNEX |
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M | 63 | 3 |  |
1 | |
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| Margaret
M. Keane Former Chair, CEO and President of Synchrony Financial |
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F | 63 | 5 |  |
0 | |
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| Siddharth
N. (Bobby) Mehta
Former President and CEO of TransUnion |
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M | 64 | 9 |  |
2 | |
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| Jacques
P. Perold Former President of Fidelity Management & Research Company |
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M | 64 | 7 |  |
1 | |
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| Andrea
Redmond Former Managing Director of Russell Reynolds Associates Inc. |
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F | 67 | 13 |  |
0 | |
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| Gregg
M. Sherrill Former Chair and CEO of Tenneco Inc. |
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M | 70 | 5 |  |
1 | |
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| Judith
A. Sprieser Former CEO of Transora Inc. and senior executive at Sara Lee Corporation |
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F | 69 | 23 |  |
2 | |
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| Perry
M. Traquina Former Chairman, CEO, and Managing Partner of Wellington Management Company LLP |
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M | 66 | 6 |  |
2 | |
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| Monica
Turner President, North America at Procter & Gamble |
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F | 57 | <1 | 0 | |
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Committee Chair |
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Audit Committee |
 |
Compensation and Human Capital Committee |
 |
Executive Committee |  |
Nominating, Governance and Social Responsibility Committee |
 |
Risk and Return Committee |
| 20 | 2023 Proxy Statement Corporate Governance |
Director Nominees
 |
Donald E.
Independent |
Key Experience and Qualifications
Risk Management: Overall responsibility for identifying and evaluating financial risk exposures and determining steps to mitigate those risks.
Accounting and Finance: Significant financial and accounting experience leading the financial operations of one of the largest utility companies in the country.
Technology and/or Cybersecurity: In-depth understanding of technological advancements and operational transformation to enhance the customer experience.
Complex, Highly Regulated Businesses: Regulatory expertise within the heavily regulated utilities industry.
Sustainability: Experience developing and leading transition to a less carbon-intensive business model.
Succession Planning and Human Capital Management: Responsibilities as senior leader at NiSource include oversight of employee recruitment, development and retention, as well as leadership of large teams.
Innovation and Customer Focus: Experience overseeing business focused on delivering safe, reliable and efficient services to customers and communities.
Government, Public Policy and Regulatory Affairs: Deep understanding of compliance and governmental requirements as a senior leader of one of the largest fully regulated utility companies in the United States.
|
|
Director since 2020
Professional Experience ●
Current Executive Vice President and Chief Innovation Officer of NiSource, Inc., a highly regulated natural gas and electric utilities company serving customers across multiple states. ●
Former EVP and CFO of NiSource, Inc.
Other Public Board Service ●
None
|
|||
Committee Assignments and Rationale
 |
Audit Committee |  |
Nominating, Governance and Social Responsibility Committee | |
|
●
Multiple leadership positions with financial oversight responsibility, including as former CFO at NiSource. |
●
Management and leadership experience as senior leader of NiSource, including oversight of employee talent and retention programs. ●
Experience leading climate strategies for large gas and electric company. | |||
 |
Kermit R.
Independent |
Key Experience and Qualifications
Risk Management: Deep understanding of consumer experiences and insights, as well as extensive experience in business strategy and risk management.
Accounting and Finance: Responsible for all operational aspects of large drugstore chains throughout country, including financial results.
Technology and/or Cybersecurity: Effectively led operational change, including through the use of technology.
Complex, Highly Regulated Businesses: Expertise assessing the strategies and performance of a geographically distributed and consumer-focused service business in a highly competitive industry.
Sustainability: Over 30 years of operational experience with consumer and retail companies that included driving sustainability initiatives.
Succession Planning and Human Capital Management: Responsibilities as senior leader at leading retail drugstore chain included leadership of large divisions and human capital priorities and culture.
Innovation and Customer Focus: Effectively oversaw transition of pharmacy experience from a model focused primarily on drug delivery to a pharmacist-patient centric model.
Government, Public Policy and Regulatory Affairs: Understanding of legal and regulatory requirements relevant for large, public companies to ensure compliance.
|
|
Director since 2013
Professional Experience ●
Former President and Chief Operating Officer of Rite Aid Corporation, which operates one of the leading retail drugstore chains in the United States. ●
Former Executive Vice President and President, Pharmacy, Health and Wellness for Walgreens Co., which operates one of the largest drugstore chains in the United States. ●
Former Director of TransUnion and LifePoint Health.
Other Public Board Service ●
C.H. Robinson (2020–present) ●
Visa (2022-present)
|
|||
Committee Assignments and Rationale
|
Audit Committee (Chair) | |
Risk and Return Committee | |
|
●
Responsibility for all aspects of strategic, operational, and profit and loss management of two of the largest drugstore chains in the United States. ●
Board leadership and nine years tenure on Allstate Board. ●
Former member of the audit committee at TransUnion and the audit and compliance committee at LifePoint Health. |
●
Operational experience at large, geographically dispersed service organizations. ●
Chair of Allstate audit committee. | |||
| www.allstateproxy.com Corporate Governance |
21 |
Committee Assignments and Rationale
 |
Compensation and Human Capital Committee |  |
Risk and Return Committee | |
|
●
Significant management experience leading large companies as CEO and COO. ●
Comprehensive market knowledge of executive compensation, recruitment and succession practices as CEO of TD SYNNEX. |
●
In-depth understanding of technology, innovation and transformative growth. ●
Responsibility for strategic direction of large technology company. | |||
 |
Margaret M.
Independent |
Key Experience and Qualifications
Financial Services: Extensive operational and strategic experience in the consumer financial services industry as CEO of Synchrony Financial.
Risk Management: In-depth understanding and experience in risk and return management as CEO of financial services company.
Accounting and Finance: Responsible for overall operations of large financial services company.
Technology and/or Cybersecurity: Valuable insights into innovation and technology transformation strategies for large financial services company.
Complex, Highly Regulated Businesses: Successful leadership experience across roles spanning consumer finance, vendor financial services, operations and quality.
Sustainability: Drove various sustainability priorities and programs throughout tenure as CEO, including diversity and inclusion initiatives.
Succession Planning and Human Capital Management: Significant experience in developing succession planning and performance goals as CEO of Synchrony.
Innovation and Customer Focus: Led strategic and technology transformation in rapidly changing consumer payments industry.
Government, Public Policy and Regulatory Affairs: Experience working with Business Roundtable to promote a thriving U.S. economy and expanded opportunity for all Americans through sound public policy.
|
|
Director since 2018
Professional Experience ●
Former Chair, CEO and President of Synchrony Financial, a consumer financial services company. ●
Former President and CEO of GE Capital Retail Finance.
Other Public Board Service ●
Synchrony Financial (2014–2023)
|
|||
Committee Assignments and Rationale
|
Compensation and Human Capital Committee | |
Nominating, Governance and Social Responsibility Committee | |
|
●
Substantial experience in establishing management performance objectives and specific goals. ●
Significant market knowledge of executive compensation as the former CEO of Synchrony Financial. |
●
Board leadership as former Chair of Synchrony Financial. ●
Thought leader and driver of inclusion and diversity initiatives. | |||
| 22 | 2023 Proxy Statement Corporate Governance |
 |
Siddharth N.
Independent |
Key Experience and Qualifications
Financial Services: Extensive operational and strategic experience in the industry as CEO of TransUnion and HSBC.
Risk Management: Deep understanding of identifying and managing risk within global risk and information solutions provider.
Accounting and Finance: Multiple leadership positions with financial and accounting oversight responsibility throughout career.
Technology and/or Cybersecurity: Experience overseeing cybersecurity risk initiatives and programs as director at other public companies.
Global Perspective: Demonstrated leadership that increased revenues and global reach through the use of technology.
Complex, Highly Regulated Businesses: Valuable insights into the highly regulated insurance industry and investment activities throughout career in financial services industry.
Sustainability: Investor in climate analytics company and thorough understanding of climate risk at financial services company.
Succession Planning and Human Capital Management: Led human capital and diversity and inclusion initiatives and oversaw succession planning during tenure as CEO.
Innovation and Customer Focus: Significant experience within customer-centric banking and credit markets including the use of advanced analytics.
Government, Public Policy and Regulatory Affairs: Understanding of compliance issues within highly regulated financial services industry and effect of governmental actions.
|
|
Director since 2014
Professional Experience ●
Former President and CEO of TransUnion, a global provider of credit information and risk management solutions. ●
Former Chairman and CEO, HSBC North America Holdings Inc.
●
Former CEO, HSBC Finance Corporation.
●
Former Director of TransUnion and Piramal Enterprises Ltd.
Other Public Board Service ●
JLL (Jones Lang LaSalle Incorporated) ●
Northern Trust Corp. (2019–present)
|
|||
Committee Assignments and Rationale
|
Risk and Return Committee (Chair) | |
Audit Committee | |
|
●
Significant experience in financial markets and utilization of data and analytics. ●
In-depth understanding and experience in risk and return management as a director and former CEO. |
●
Multiple leadership positions with financial oversight responsibility, including President and CEO of TransUnion, CEO of HSBC Finance Corporation, and Chairman and CEO of HSBC North America Holdings Inc. ●
Chair of Allstate risk and return committee. | |||
 |
Jacques P.
Independent |
Key Experience and Qualifications
Financial Services: Led investments and operations for large mutual fund as well as founded investment advisory firm.
Risk Management: Deep understanding of risks relevant to financial services industry, specifically related to investment activities.
Accounting and Finance: Held multiple leadership positions throughout career requiring financial and accounting oversight responsibilities.
Technology and/or Cybersecurity: Experience using data-driven tools and solutions to help clients build more effective portfolios.
Complex, Highly Regulated Businesses: In-depth understanding of SEC and FINRA rules that regulate financial services industry.
Sustainability: Served as chair of corporate responsibility committee at another public company which includes oversight of sustainability initiatives.
Succession Planning and Human Capital Management: As senior business leader, established executive compensation program management objectives and goals.
Innovation and Customer Focus: Leader of one of the world’s largest asset management funds representing customers with nearly $2 trillion assets under management.
|
|
Director since 2015
Professional Experience ●
Chair and founder of CapShift, an investment advisory firm. ●
Former President of Fidelity Management & Research Company, a privately-held investment and asset management company serving clients worldwide. ●
Founder, former President and Chief Investment Officer of Geode Capital Management LLC, a global asset manager and independent institutional investment firm and sub-advisor to Fidelity. ●
Current trustee of New York Life Insurance Company’s MainStay Funds.
Other Public Board Service ●
MSCI Inc. (2017–present)
|
|||
Committee Assignments and Rationale
|
Audit Committee | |
Risk and Return Committee | |
|
●
Multiple leadership positions with financial and operational oversight responsibilities, including as President of Fidelity Management & Research Company. |
●
Significant experience in management and oversight of risk for three large asset management firms. ●
Current trustee of several mutual funds. | |||
| www.allstateproxy.com Corporate Governance |
23 |
Committee Assignments and Rationale
|
Nominating, Governance and Social Responsibility Committee (Chair) | |
Compensation and Human Capital Committee | |
|
●
Significant expertise recruiting and evaluating directors for a variety of public companies. ●
A senior partner at a highly regarded global executive search firm, Russell Reynolds Associates, from 1986 to 2007, including significant tenure as co-head of the CEO/board services practice. |
●
Experience in executive recruiting, succession planning, and human capital management. ●
Extensive experience working with numerous publicly traded companies to recruit and place senior executives. | |||
 |
Gregg M.
Independent |
Key Experience and Qualifications
Risk Management: In-depth understanding of risk and return management as CEO and director.
Accounting and Finance: Created financial strategies and implemented operating plans to increase revenues and profitability during tenure at Tenneco.
Technology and/or Cybersecurity: Technology expertise gained during tenure as a senior operating executive.
Global Perspective: Successfully managed international operations as CEO of a global public company with employees in 23 countries.
Complex, Highly Regulated Businesses: Brings valuable insights and extensive operational and strategic experience within regulated automotive industry.
Sustainability: Oversight of sustainability priorities gained throughout tenure as leader of a large public company, specifically related to emissions control.
Succession Planning and Human Capital Management: Significant management experience, including executive recruitment and compensation programs.
Innovation and Customer Focus: Valuable insights into transformation and innovation within customer-centric automotive industry.
Government, Public Policy and Regulatory Affairs: Understanding of public policy and regulatory issues.
|
|
Director since 2017
Professional Experience ●
Former Executive Chair, CEO and director of Tenneco Inc., a producer of automotive emission control and ride control products and systems. ●
Former Corporate Vice President and President of Power Solutions at Johnson Controls Inc., a global diversified technology and industrial company.
Other Public Board Service ●
Snap-on Inc. (2010–present)
|
|||
| Committee
Assignments and Rationale Lead Director |
|
Nominating, Governance and Social Responsibility Committee | ||
|
●
Extensive board leadership experience as former Chair of Tenneco and former chair of organization and executive compensation committee at Snap-On. ●
Successfully led large, global manufacturing company through strategic growth and operational change. ●
Possesses strong integrity and professional credibility with the other directors and has excellent knowledge of Allstate’s strategy and business. |
●
Significant leadership experience as the former Chair and CEO of Tenneco, including oversight over sustainability and governance matters. ●
Experience on corporate boards. | |||
| 24 | 2023 Proxy Statement Corporate Governance |
 |
Judith A.
Independent |
Key Experience and Qualifications
Financial Services: Tenure as Allstate director has provided deep knowledge and understanding of financial services industry.
Risk Management: Risk and return management expertise gained through service on boards of multiple publicly traded companies.
Accounting and Finance: Extensive evaluation of financial statements and supervision of financial executives during tenure as CFO.
Global Perspective: Experience gained through service on boards of international companies.
Complex, Highly Regulated Businesses: Understanding of government regulations relevant to insurance industry acquired through tenure as Allstate director.
Sustainability: Tenure as CEO and director at other public companies, including as former Lead Director at Allstate, has included oversight of sustainability initiatives and programs.
Succession Planning and Human Capital Management: Significant executive management and succession planning experience gained through service on other boards and as former CEO.
Innovation and Customer Focus: Wide-ranging operational experience at consumer goods company.
|
|
Director since 1999
Professional Experience ●
Former CEO of Transora Inc., a technology software and services company. ●
Former CFO and other senior operating executive positions at Sara Lee Corporation, a global manufacturer and marketer of brand-name consumer goods.
●
Former director at Royal Ahold NV, Experian, Reckitt Benckiser Group plc and Jimmy Choo plc.
Other Public Board Service ●
Newell Brands Inc. (2018–present) ●
Intercontinental Exchange Inc. (2004–present)
|
|||
Committee Assignments and Rationale
|
Compensation and Human Capital Committee | |
Risk and Return Committee | |
|
●
Extensive experience leading other large companies as CEO and CFO. ●
Experience serving on boards of other publicly traded and international companies. |
●
Insight from service as prior chair of Allstate’s audit committee and current audit committee chair at Intercontinental Exchange Inc. ●
Tenure as an Allstate director has provided experience through multiple operating environments. | |||
 |
Perry M.
Independent |
Key Experience and Qualifications
Financial Services: Strong financial services and investment management expertise as CEO of large investment management firm.
Risk Management: Deep understanding of risk and return management within financial services industry and brings outside perspective as chair of risk committee at another public company.
Accounting and Finance: Expertise in evaluating financial statements and reports gained through service on audit company at another public company as well as financial education background.
Technology and/or Cybersecurity: Experience on another public company audit committee includes oversight of cybersecurity programs.
Global Perspective: Led one of the world’s largest global investment management firms including the globalization of Wellington’s investment platform.
Complex, Highly Regulated Businesses: In-depth understanding of SEC and FINRA rules that regulate financial services industry.
Sustainability: Oversaw sustainability initiatives during tenure as CEO and chairman of Wellington and provides insights gained from service on other public company boards.
Succession Planning and Human Capital Management: Deep understanding of executive compensation practices.
Innovation and Customer Focus: Built a world-class investment organization by more than doubling assets under management during tenure.
Government, Public Policy and Regulatory Affairs: Brings valuable market-oriented investor perspective.
|
|
Director since 2016
Professional Experience ●
Former Chairman, CEO and Managing Partner of Wellington Management Company LLP, one of the world’s largest global investment management firms with over $1 trillion of assets under management. ●
Held a series of positions of increasing responsibility at Wellington, including Partner and President.
Other Public Board Service ●
Morgan Stanley (2015–present)
●
eBay Inc. (2015–present)
|
|||
Committee Assignments and Rationale
 |
Compensation and Human Capital Committee (Chair) | |
Risk and Return Committee | |
|
●
Significant management experience as former Chairman and CEO of Wellington Management Company LLP from 2004 through June 2014. ●
Shareholder perspective on compensation and human capital as a significant investor and director of other public companies. |
●
In-depth understanding of financial markets, asset allocation strategies, and investment performance management. ●
Current chair of the risk committee at Morgan Stanley. | |||
| www.allstateproxy.com Corporate Governance |
25 |
Committee Assignments and Rationale
|
●
Consistent with past practice, committee assignments will be established during first year of service. |
||||
Committee Assignments and Rationale
 |
Executive Committee (Chair) | |||
|
●
Comprehensive knowledge of Allstate’s business and industry, with 28 years of leadership experience at the company. ●
Significant governance experience through active dialogue with shareholders and corporate governance experts. |
||||
| 26 | 2023 Proxy Statement |
Board and Nominee Independence Determinations
The Board has determined that all nominated directors, other than Mr. Wilson, are independent according to applicable law, the NYSE listing standards, and the Board’s Director Independence Standards. The Board’s Director Independence Standards are included on www.allstateinvestors.com. In accordance with the Director Independence Standards, the Board has determined that the nature of the relationships with the corporation that are set forth in Appendix B do not create a conflict of interest that would impair a director’s independence. The Board also determined that the members of the audit, compensation and human capital, nominating, governance and social responsibility, and risk and return committees are independent according to applicable laws, the NYSE listing standards, and the Board’s Director Independence Standards.
Additional independence considerations
When evaluating the independence of director nominees, the Board weighs numerous factors, including tenure and service on other public company boards.
Directors with more than 12 years of service are subject to specific considerations to ensure an undiminished level of independence. In particular, the Board weighed the potential impact of tenure on the independence of our longest-serving directors, Mses. Redmond and Sprieser. Ms. Redmond provides valuable perspectives and expertise on matters of significance to Allstate and is a respected leader in the Board room. The Board concluded that Ms. Redmond is a valued director who fulfills her responsibilities with independent-minded oversight. Ms. Sprieser has significant experience serving at Allstate under different operating environments, management teams and financial market cycles, and served on the Board under two CEOs and prior to Mr. Wilson’s appointment. The Board concluded that Ms. Sprieser is an effective director who fulfills her responsibilities with integrity and independence of thought. Mses. Redmond and Sprieser appropriately challenge management and the status quo, and are reasoned, balanced, and thoughtful in Board deliberations and in communications with management. The Board determined that each of Ms. Redmond and Ms. Sprieser’s independence from management has not been diminished by their years of service.
Related Person Transactions
The nominating, governance and social responsibility committee has adopted a written policy on the review, approval, or ratification of transactions with related persons, which is posted on the Corporate Governance section of www.allstateinvestors.com.
Since the beginning of 2022, there were no related person transactions identified.
The committee or committee chair reviews transactions with Allstate in which the amount involved exceeds $120,000 and in which any related person had, has, or will have a direct or indirect material interest. In general, related persons are directors, executive officers, their immediate family members, and shareholders beneficially owning more than 5% of our outstanding stock. The committee or committee chair approves or ratifies only those transactions that are in, or not inconsistent with, the best interests of Allstate and its shareholders. Transactions are reviewed and approved or ratified by the committee chair when it is not practicable or desirable to delay review of a transaction until a committee meeting. The committee chair reports any approved transactions to the committee. Any ongoing, previously approved, or ratified related person transactions are reviewed annually.
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Effective Board Governance at Allstate
Allstate has a history of strong corporate governance guided by three primary principles: dialogue, transparency and responsiveness. The Board has enhanced governance policies over time to align with best practices, drive sustained shareholder value and serve the interests of shareholders.
1
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Board See pages 28-29> |
● Regularly consider candidates in light of current skill sets and needs, as well as in anticipation of retirements, resignations or changing business dynamics ● All candidates evaluated and considered for their expertise, professional experiences and leadership ● Diversity, including race, gender, ethnicity and culture, are also important factors in consideration of Board composition ● Added five new directors within the last five years, including three that brought gender and/or ethnic/racial diversity to the Board | ||
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Board Effectiveness See pages 30-32> |
● Board evaluation process includes multiple assessments and reviews of the Board, committees and individual directors ● Robust director orientation and continuing director education program ● High standards of corporate governance | ||
3 |
Engaged See pages 33-40> |
● Frequent reviews of Allstate’s significant risks, including strategic, climate, human capital practices, culture, financial, investment markets and cybersecurity ● Ongoing reviews of overall ESG strategy, including climate change, human capital management and organizational health ● Reviews progress against three-year Inclusive, Diversity and Equity strategy twice a year | ||
4 |
Board See pages 41-44> |
● Comprehensive and continuous shareholder engagement program based on dialogue, transparency, and responsiveness ● Interactive investor dialogue provides perspective on investor concerns ● Feedback is provided to the Board and actions are taken to reflect shareholder sentiment and ensure continued best practice | ||
5 |
Board See pages 45-49> |
● Clearly defined roles for Board leadership ● Strong Board independence with 11 out of 12 members independent of management, including all standing committee members ● Instituted written policy to rotate Lead Director every three to five years and appointed new Lead Director in 2021 ● Independent Board Committees with frequent executive sessions ● Appropriate director compensation structured in a manner that is aligned with shareholder interests |
Allstate believes that strong and effective governance practices are critical to long-term value creation. To achieve that goal, Allstate follows the six corporate governance principles set out by the Investor Stewardship Group for U.S. listed companies.
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| 1. | Boards are accountable to shareholders |
| 2. | Shareholders should be entitled to voting rights in proportion to their economic interest |
| 3. | Boards should be responsive to shareholders and be proactive in order to understand their perspectives |
| 4. | Boards should have a strong, independent leadership structure |
| 5. | Boards should adopt structures and practices that enhance their effectiveness |
| 6. | Boards should develop management incentive structures that are aligned with the long-term strategy of the company |
| 28 | 2023 Proxy Statement |
Board Composition Essential Characteristics of Effective Directors |
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The Board considers multiple characteristics essential for each nominee to ensure Board excellence and effectiveness. These characteristics are considered for proposed and standing directors consistent with the criteria described in the Corporate Governance Guidelines (available at www.allstateinvestors.com).
| Core Competencies | Additional Capabilities | Independence | ||||
| Certain core competencies are required of all director nominees to ensure effective oversight of the affairs of the company for the benefit of its shareholders. These include strategic oversight, shareholder advocacy, corporate governance and leadership. | Other skills, expertise and experience are needed on the Board to further facilitate effective oversight of Allstate’s business strategies and priorities. These are described on page 15. | Directors should be free of interests or affiliations that could give rise to a biased approach to directorship responsibilities or a conflict of interest and to be free of any significant relationship with Allstate that would interfere with the director’s exercise of independent judgment. | ||||
| Commitment | Other Directorships | |||||
| Board members should have the ability to devote the time and effort necessary to serve as an effective director and act in a manner consistent with a director’s fiduciary duties of loyalty and care. Allstate executive officers may not serve on boards of other corporations whose executive officers serve on Allstate’s Board. | The Board has limits on the number of other public boards on which our directors may sit. Directors who are active executives may serve on the board of no more than two other public companies, and other directors may serve on the board of no more than four other public companies (in addition to Allstate’s Board in each case). | |||||
| Diversity in its broadest sense is a key consideration in identifying and evaluating directors for nomination. Our nominating, governance and social responsibility committee considers a number of demographics and other factors, including race, gender and ethnicity, to ensure the Board reflects diverse viewpoints, backgrounds, skills, experiences and expertise. | ||||||
| Our Nominees | ||||||||
| 3 | Black/African American |
1 | Asian/Other
Pacific Islander |
4 | Female | |||
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Board Nomination Process
The Board continually considers potential director candidates in anticipation of retirements, resignations, or the need for additional capabilities. Below is a description of the ongoing process to identify highly qualified candidates for Board service.
Board nominees are identified through a retained search firm, suggestions from current directors and shareholders, and through other methods, including self-nominations. Our newest director, Ms. Turner, was identified by a search firm.
The nominating, governance and social responsibility committee will consider director candidates recommended by a shareholder in the same manner as all other candidates recommended by other sources. A shareholder may recommend a candidate at any time of the year by writing to the Office of the Secretary, The Allstate Corporation, 3100 Sanders Road, Northbrook, IL 60062, or by email submission to invrel@allstate.com.
A shareholder or group of up to 20 shareholders owning 3% or more of Allstate’s outstanding common stock continuously for at least three years can nominate director candidates constituting up to 20% of the Board in the company’s annual meeting proxy materials.
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Evaluate Board Composition Ensure Board is strong in core competencies of strategic oversight, corporate governance, shareholder advocacy and leadership and has diversity of skills, expertise and perspectives to meet existing and future business needs | |
Consider Diversity The Board considers a number of demographic factors to develop a Board that, as a whole, reflects diverse representation, viewpoints and backgrounds | ||
Assess Potential Candidates To ensure appropriate personal qualities, such as independence of mind, tenacity, and skill set to meet existing or future business needs | ||
Check Conflicts of Interest and References All candidates are screened for conflicts of interest and independence | ||
Meet with Qualified Candidates To ensure appropriate personal qualities, such as independence of mind, tenacity, and skill set to meet existing or future business needs and strategic priorities | ||
Nominating, Governance and Social Responsibility Dialogue To consider shortlisted candidates, and after deliberations, recommend candidates for election to the Board | ||
Board Dialogue and Decision Added five highly qualified directors in the past five years |
| 30 | 2023 Proxy Statement |
Board Effectiveness Board Evaluation Process |
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Allstate’s Board evaluation process includes multiple assessments and reviews performed throughout the year. This process ensures that the Board’s governance and oversight responsibilities are updated to reflect best practices and are well executed. These evaluations include discussions after every meeting, an annual Board assessment, annual committee assessments and individual director evaluations.
Steps to Achieve Board Effectiveness
| Board | Individual Directors | ||||||||||
| Frequency | Evaluation at every regular meeting | Annual evaluation | Biennial review of responsibilities and time allocation | Annual evaluation | Change in circumstances | ||||||
| Performed By | Independent Directors | Board, Committee Chairs and Lead Director | Board and Committees | Lead Director, nominating, governance and social responsibility committee chair, and Board Chair | Board | ||||||
| Description | Measures effectiveness of Board oversight Ensures meeting objectives were satisfied, all agenda items sufficiently considered and information presented was complete, understandable and organized Identifies issues that need additional dialogue |
Ensures Board and committees are functioning effectively Results reviewed by nominating, governance and social responsibility committee and summarized for full Board; recommendations for improvement are reviewed and implemented |
Ensures all necessary issues were considered to fulfill Board and committee responsibilities Adjustments made to future agendas and timelines |
Review contributions and performance in light of Allstate’s business and strategies and confirm continued independence Feedback provided to each director by the Lead Director, nominating, governance and social responsibility committee chair, or Board Chair Discuss each director’s future plans for continued Board service |
Determine appropriateness of director’s continued membership on the Board after a change in primary employment Review potential conflicts and whether change impacts director’s ability to devote the necessary time and effort to Board service | ||||||
2022 Outcome Based on the Board’s annual evaluation process, the nominating, governance and social responsibility committee reviewed feedback and established action items for the upcoming year. Results of individual director evaluations were used by the nominating, governance and social responsibility committee in connection with the annual nomination process. Specific action plans were discussed with each director. |
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2022 Annual Evaluation Feedback and Action Items
Strategy
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Board
Structure |
Information
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Directors find the three-day strategy session to be highly effective. Directors value the frequent updates on Transformative Growth, succession planning, ESG priorities and the Societal Engagement Framework. |
Directors appreciate the transparency in the Board room and believe the dialogue appropriately challenges management and leads to effective oversight. Directors are pleased with steps taken to increase diversity at the Board level and believe the current mix of skills and experience are appropriate. |
Directors appreciate the executive sessions at every meeting and value the candid dialogue. Directors value the use of outside speakers on key strategic matters. |
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Action Items Management will provide additional updates in between Board meetings related to changes to key strategical matters. CEO succession planning and senior leadership development will remain focus areas. |
Action Items Diversity will continue to be prioritized with a facilitated Board discussion. |
Action Items Time limits will be used for meeting presentations to ensure adequate time for robust dialogue and executive sessions. External speakers will continue to be utilized, including an additional speaker at the three- day strategy session. |
Director Onboarding and Continuing Education
| Orientation | All new directors participate in a robust director orientation and onboarding process to ensure a working knowledge of Allstate’s business, strategies, operating performance and culture and a successful integration into boardroom discussions as soon as possible. To assist with their development, all new directors are invited to attend all committee meetings prior to their appointment to a particular committee. | ||
| Director Commitment Beyond the Boardroom | The commitment of our directors extends well beyond preparation for, and participation at, regularly scheduled Board meetings. Engagement beyond the boardroom provides our directors with additional insights into Allstate’s businesses and industry. Directors regularly meet with senior leaders and employees below the senior leadership level. These interactions are offered in various forums, including one-on-one meetings and larger group sessions. Directors also participate in informal meetings with other directors and senior leaders to share ideas, build stronger working relationships, gain broader perspectives, and strengthen their working knowledge of Allstate’s business, strategy, operating performance and culture. Allstate also encourages and facilitates director participation in continuing education programs, and each director is given the opportunity to become a member of the National Association of Corporate Directors. |
| 32 | 2023 Proxy Statement |
Board Re-Nomination Process
The Board recognizes the importance of evaluating individual directors and their contributions to the Board in connection with re-nomination decisions. In considering whether to recommend re-nomination of a director for election, the nominating, governance and social responsibility committee conducts a detailed review, considering several factors.
| Evaluation of Board Composition | ||||
● Essential characteristics ● Shareholder feedback ● Retirements |
● Evolving strategy and risk and return profile ● Time commitment ● Board and director evaluations |
● Attendance and participation ● Diversity | ||
| How the Board Considers Each Factor | For
more information | |||
| Essential characteristics | Whether the director continues to possess the core competencies and additional capabilities necessary to ensure continued success of the Board | page 28 | ||
| Evolving strategy and risk and return profile | The extent to which the director’s skills, perspectives and experience (including that gained due to service on the Board) continue to contribute to the effective oversight of Allstate’s business and strategic priorities | page 33 | ||
| Board and director evaluations | Feedback received during the annual Board evaluation and discussions between each individual director and the Lead Director, nominating, governance and social responsibility committee chair, and Board Chair | pages 30-31 | ||
| Attendance and participation | Attendance at, and participation during, Board and committee meetings | page 47 | ||
| Diversity | The extent to which the director contributes to the diversity of the Board | page 29 | ||
| Time commitment | Outside board and other affiliations, including overboarding considerations, time commitment and potential conflicts of interest or independence concerns | page 26 | ||
| Retirement policy | Whether the director has reached the retirement age specified in Allstate’s director retirement policy | N/A | ||
| Shareholder Feedback | Feedback received from shareholders, including support received during the most recent annual shareholder meeting | page 42 | ||
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Board Oversight Key Areas of Risk Oversight |
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The Board has primary responsibility for risk oversight. This includes oversight of Allstate’s Enterprise Risk and Return Management (“ERRM”), which applies risk-return principles, modeling and analytics, governance, and transparent management dialogue for the company’s significant risk and return priorities. Risks are regularly identified, measured, managed, and reported and risk and return perspectives are shared with the Board across six risk types: financial, insurance, investment, operational, strategic execution, and culture. The chief risk officer’s assessment of Allstate’s current risk position and alignment with risk and return principles is reviewed throughout the year, including risks associated with culture, climate, strategy, succession planning, political process, human capital, compensation and cybersecurity. See page
60 for additional detailed information about governance and oversight of ESG. | |||
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What’s New Allstate’s Societal Engagement Framework helps the Board evaluate, prepare for and act on societal issues important to the company. |
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Strategy |
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The Board provides oversight on the development and implementation of Allstate’s strategic plans and associated risks. The full Board oversees strategy and enterprise risk and Board committees have additional oversight of various aspects of Allstate’s strategy.
Strategy is discussed at each regular Board meeting and presentations are provided by management on specific strategic initiatives and topics such as short- and long-term strategic and operational plans, capital utilization, investment returns, acquisitions and divestitures, capital market transactions and strategic ESG priorities. Management reviews with the Board Allstate’s overall corporate strategy and key strategic risks and returns, which are assessed by the chief risk officer annually.
Throughout 2022, the Board engaged on an ongoing basis with management on the execution of the Transformative Growth strategy and progress towards achieving each of the various components of the strategic and annual operating plans.
| 34 | 2023 Proxy Statement |
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Political Engagement |
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Allstate engages in public policy advocacy at the state and federal levels to foster market innovation, protect consumers, promote safety and security, ensure a healthy regulatory system, and promote fiscal responsibility.
Allstate is regulated in all 50 states, Canada and at the federal level on many aspects of its business, including insurance pricing, claims practices, customer communications, privacy, sales practices, underwriting standards, investments and capital. As a result, it must participate in public policy issues to achieve Our Shared Purpose, including serving customers and generating attractive returns for shareholders. The scope of issues includes innovative products and services through the use of telematics auto insurance pricing, Arity, Allstate Protection Plans, Allstate Identity Protection and Avail (car sharing).
Allstate participates in political activities through direct and indirect advocacy, corporate political contributions and Allstate’s political action committee. Allstate contributes less than $1,000,000 annually in corporate funds to political organizations, including federal, state and local candidates and committees, in comparison to total revenues of $51.4 billion (less than 0.002% of total revenue). The types of expenditures are consistent from year to year.
The chief risk officer conducts an annual risk and return assessment of Allstate’s political activities for the Board to ensure there is appropriate oversight and management of corporate political engagement. In addition, the Board’s nominating, governance and social responsibility committee provides oversight of Allstate’s political contributions and activities, including in a joint session with the Board.
Chief Risk Officer’s Assessment The chief risk officer’s assessment approach is based on Principles and Guidance for Responsible Corporate Political Engagement published by Transparency International UK. The political activities and associated risks identified by Transparency International UK were expanded to address Allstate’s specific activities and risk profile. These political activities were grouped for assessment as follows: i) political expenditures, ii) lobbying, iii) trade associations, social welfare groups and research organizations, iv) state-based regulatory and legislation management, v) political activities in the workplace and vi) disclosure. The chief risk officer’s assessment concluded the following: 1. Strong governance is in place to provide transparency and promote dialogue around advocacy priorities and initiatives 2. Allstate’s political engagement risk profile and control framework remain stable versus prior year 3. Reputation risk remains moderate and while numerous controls exist to limit exposure, a single candidate or organization could create negative publicity and market perception 4. Lack of engagement would increase the likelihood of unfavorable legislation and policies, resulting in adverse business outcomes. | |
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Cybersecurity |
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The Board focuses on Allstate’s security and data privacy programs, recognizing that the quality and functionality of these programs affects reputation and customer trust. Allstate’s strategy revolves around protecting customers, and customers must feel that their personal data is safe.
Accordingly, the Board prioritizes its responsibility to oversee data protection efforts, including policies and systems designed to prevent and, if necessary, respond to cyber threats. The Board also oversees the company’s information security program, which is designed to protect and preserve the confidentiality, integrity and continued availability of all information owned by, or in the care of, the company. This program includes a cyber incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incident. Allstate is continually enhancing information security capabilities in order to protect against emerging threats, detect system compromise and recover should a cyber-attack or unauthorized access occur.
The cybersecurity program is regularly reviewed and tested by Allstate’s internal audit function with quarterly status reports provided to the audit committee and the full Board. The audit committee receives semi-annual reports from its independent cybersecurity advisor.
| Cybersecurity Governance Best Practices | ||
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Utilizes an independent cybersecurity advisor reporting to the audit committee to provide objective assessments of Allstate’s capabilities and to conduct advanced attack simulations | |
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Crisis simulations to prepare senior leaders to respond to a cyber attack | |
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Audit committee charter directs the Board’s data privacy oversight efforts | |
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Cross-functional approach to overseeing and addressing cybersecurity risk, with input from technology, risk, legal, and audit functions | |
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Climate |
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Climate change is one of the most critical challenges today as it threatens customers, businesses and communities. In addition to developing products and services that address climate change and the transition to a lower-carbon future, senior management works with the Board to identify, measure, manage and monitor climate risks, including those presented by severe weather, increased natural catastrophes, related policy shifts and the development of new technology.
Allstate’s business viability depends on effectively modeling, pricing and managing climate-related risks, as well as meeting the needs that result from a changing climate and a changing society. Climate risks are managed within our ERRM framework and evaluated across six key categories: strategic, insurance, financial, investment, operational and cultural risk. The Board regularly hears from Allstate’s chief risk officer about climate change risks and reviewed climate risk at two meetings in 2022.
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Proxy Statement Corporate Governance |
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Compensation |
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Compensation policies and practices are structured to reward employees for successfully executing the company’s strategies and annual operating plans while adhering to risk and return principles.
The compensation and human capital committee concluded the compensation plans are structured to ensure management does not take unnecessary or excessive risk based on assessments from the committee’s independent advisor and chief risk officer. Allstate’s compensation policies ensure balance of risk and return, while minimizing risks that could have a material adverse effect on Allstate.
| ● | Compensation plans balance annual and long-term incentives that align with short- and long-term business goals. No one, regardless of eligibility, is guaranteed an award under the annual cash incentive program. |
| ● | Multiple performance measures are utilized that correlate with shareholder value creation and diversify the risk associated with any single performance indicator. In addition, the annual incentive program contains a funding adjustment for senior executives in the event of a net loss, which reduces the corporate pool funding for those officers by 50% of actual performance. Likewise, for the performance stock award program, the compensation and human capital committee requires positive net income in order for executives to earn PSAs for Average Performance Net Income ROE above target. |
| ● | Equity awards and annual cash incentive awards are subject to a clawback policy, which provides for the recovery of certain equity awards and annual cash incentive awards to executive officers and other executive vice presidents. If performance results are later subject to a downward adjustment as a result of a material financial restatement, irrespective of cause, then the paid awards are recalculated with revised results with the compensation overpayment subject to clawback. The clawback policy also provides for recovery of equity and annual cash incentive awards in certain circumstances if an executive is terminated for improper conduct that leads to a material adverse impact on the reputation of, or a material adverse economic consequence for, the company. |
Board Role in Setting Compensation
The compensation and human capital committee makes recommendations to the Board on compensation for the CEO and executive officers and the structure of plans used for executive officers. The compensation and human capital committee reviews the executive compensation program throughout the year with the assistance of an independent compensation consultant, Pay Governance. Pay Governance’s responsibilities include:
| ● | benchmarking Allstate’s plans and compensation relative to the market, |
| ● | evaluating changes to the executive compensation program, and |
| ● | assessing Allstate’s executive compensation design, peer group selection, relative pay for performance, and total direct compensation for individual senior executive positions. |
The compensation and human capital committee annually evaluates the compensation consultant’s performance and independence.
The compensation and human capital committee grants all equity awards to individuals designated as executive officers for purposes of Section 16 of the Securities Exchange Act of 1934 or covered employees as defined in Internal Revenue Code Section 162(m). The compensation and human capital committee has authority to grant equity awards to eligible employees in accordance with the terms of our 2019 Equity Incentive Plan. The Board has delegated limited authority to the CEO and the CHRO to grant equity awards to non-executive officers. All awards granted between compensation and human capital committee meetings are reported at the next meeting. The compensation consultant also provides the nominating, governance and social responsibility committee with competitive information on director compensation.
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Human Capital Management |
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The Board engages in an ongoing review of human capital management practices since they are vital to Allstate’s continued success. This includes overall organizational health and practices, such as recruitment, development, and retention as well as progress against the company’s inclusive diversity and equity (IDE) strategy and goals.
Inclusive Diversity and Equity
IDE is a core value in Allstate’s Shared Purpose. In furtherance of the goal to be a differentiated IDE leader, Allstate launched a multi-year IDE strategy that is overseen by the Board. The Board reviewed IDE topics at multiple meetings in 2022, including a presentation by an outside speaker on IDE priorities and opportunities, leading to effective oversight of this important initiative.
| Pay Equity Analysis | ||
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As part of Allstate’s commitment to fair and equitable compensation practices, an internal pay equity analysis is completed on an annual basis. | |
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For the fourth year in a row, Allstate engaged an outside firm to provide a detailed pay equity analysis to identify potential pay gaps across substantially similar employee groups and identify policies, practices or systematic issues that may contribute to pay gaps now or over time. | |
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The external analysis found that Allstate’s results compare well to benchmarks for companies of similar size and scope. In the few employee groups where pay gaps were identified, these gaps were remediated and policies were established to ensure pay equity continues in the future. | |
Board Role in Reviewing Culture
At Allstate, we believe that a purpose driven company must be powered by purpose driven people.
Culture is defined as a self-sustaining system of shared values, priorities and principles that shape beliefs, drive behaviors and influence decision making within an organization.
At Allstate, we are focusing on how we recruit, retain, develop and engage employees. Organizational culture is included as a key risk category and is monitored and measured by management’s ERRM framework and overseen by the Board. This “tone at the top” message ensures that management is held accountable for its implementation and maintenance of high ethical standards and protecting Allstate’s reputation, assets and business. By including culture as a key risk category, the Board is able to review culture at a granular level. The Board reviewed organizational culture at two meetings in 2022.
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Proxy Statement Corporate Governance |
Board Role in Succession Planning
The Board’s involvement in leadership development and succession planning is systematic and ongoing. Management succession is discussed four times annually in compensation and human capital committee meetings, Board meetings, and executive sessions. Discussions cover the CEO and other senior executive roles. The Board also has regular and direct exposure to senior leadership and high-potential officers in meetings held throughout the year.
Board Reviews Management Leadership Succession Planning Continuously throughout the Year
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Risk Management Program and Board Oversight
The Board oversees Enterprise Risk and Return Management (“ERRM”), including management’s design and implementation of ERRM practices. ERRM applies risk-return principles, modeling and analytics, governance, and transparent management dialogue to understand the company’s highest-priority risks. The chief risk officer’s assessment of Allstate’s current risk position and alignment with risk and return principles is reviewed throughout the year, including reviews of compensation programs and political engagement. Significant risks, including those affected by climate change, financial markets, cybersecurity and privacy threats, are regularly identified, measured, managed, and reported.
Comprehensive Risk Management Oversight
ERRM governance includes Board oversight, an executive management committee, and chief risk officers that oversee various areas of Allstate.
The Board has overall responsibility for oversight of Allstate’s ERRM program, including management’s design and implementation of the ERRM framework. Oversight is supported by the audit and risk and return committees. The audit committee oversees the effectiveness of internal controls over financial reporting, disclosure controls, and procedures, as well as management’s risk control framework and cybersecurity program. The risk and return committee oversees the effectiveness of the ERRM program, governance structure and risk-related decision-making, while focusing on the company’s aggregate risk profile.
For further information on the risk oversight responsibilities of each committee, see page 40.
The Enterprise Risk and Return Council (“ERRC”) directs ERRM activities by establishing risk and return targets, determining economic capital levels, and monitoring integrated strategies and actions from an enterprise risk and return perspective. The ERRC consists of Allstate’s Chief Executive Officer, CRO, CFO, Market-Facing Business leaders, and other senior leaders.
Business unit chief risk officers report into the ERRM team, fostering a culture of collaboration, efficiency, and cross-functional dialogue regarding risks and opportunities.
Various management committees work with the ERRC to direct ERRM activities, including the Operating Committee, the Operational Risk and Return Council, the Information Security Council, the ESG Steering Committee, liability governance committees, and investment committees.
| Risk and return perspectives are shared with the Board across six risk types | |||||
| Financial | Insurance | Investment | Operational | Strategic Execution |
Culture |
| 40 | 2023
Proxy Statement Corporate Governance |
The key risk areas overseen by each Board committee are included below.
| Board of
Directors Overall accountability of Allstate’s enterprise risk and return management; reviews at least twice a year |
| Risk and Return Committee | Audit Committee | Compensation and Human Capital Committee | Nominating, Governance and Social Responsibility Committee |
| Reviews risk and return at least five times annually | Reviews risk at least four times annually | Reviews risk and return at least once annually | Reviews risk as needed |
● Oversees the effectiveness of Allstate’s ERRM framework, governance structure and decision making – Reviewed through a quarterly risk summary report that identifies key risks, measurement of the risk profile, and alignment with risk and return principles – Includes a review of the chief risk officer’s assessment of strategic and operating plans ● Reviews regulatory Own Risk and Solvency Assessment (“ORSA”) report ● Reviews Allstate’s culture ● The audit committee chair is a risk and return committee member to enhance cross- committee communication ● The chief risk officer attends all meetings and has regular executive sessions with the committee ● The chief audit executive attends all meetings ● Reviews risk factors included in the Form 10-K, including risks related to climate change and severe weather ● Assessed risks associated with special topics, including economic capital, inflation, and climate change |
● Oversees Allstate’s internal controls related to key risks and the major financial risk exposures – Reported through a semi-annual risk control dashboard ● Reviews risk factors included in the Form 10-K ● Reviewed the risk framework and internal audit approach related to Transformative Growth ● The chief risk officer attends all meetings ● Reviews the independence and performance of the company’s registered public accounting firm on an annual basis ● The chief audit executive attends all meetings and has regular executive sessions with the committee ● The risk and return committee chair is an audit committee member to enhance cross-committee communication ● Conducts quarterly reviews to oversee the efficacy of cybersecurity risk initiatives and related policies and procedures – Utilizes an external, independent cybersecurity advisor |
● Oversees executive compensation programs (including the design, performance measures and ranges in incentive plans) – Includes a review of the chief risk officer’s assessment of incentive compensation programs ● Reviewed progress on Transformative Growth and the IDE strategy and determined impact on the annual incentive program ● Oversees talent development and senior executive succession planning to ensure they appropriately align with Allstate’s risk and return principles ● Oversight responsibilities related to human capital management, including IDE, recruitment, leadership and development, turnover, retention, organizational health and pay equity ● Reviewed organizational transformation strategy |
● Oversees director elections and corporate governance practices to ensure they appropriately align with Allstate’s risk and return principles ● Considers Board composition on an ongoing basis to ensure the Board is composed of directors with skills and experiences that fit the company’s business and strategies ● Oversees the company’s significant ESG topics and its political contributions and activities – Reviewed the priorities and reporting related to Allstate’s ESG strategy and progress – Includes a review of the chief risk officer’s assessment of political activities and a periodic review of a report on ESG ● Recommended election of new director who brings specific skills and experience |
REPORTS FROM ● Chief risk officer ● Chief financial officer ● Chief audit executive ● Other internal subject matter experts |
REPORTS FROM ● Chief risk officer ● Chief financial officer ● Chief audit executive ● Chief information security officer ● External, independent cybersecurity advisor ● Other outside experts |
REPORTS FROM ● Independent compensation consultant ● Chief human resources officer ● Chief inclusive diversity and equity officer ● Chief risk officer |
REPORTS FROM ● External governance advisor ● Chairs of ESG Steering Committee ● Chief risk officer ● Other internal subject matter experts |
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| Board Accountability | 4 |  |
| Shareholder Engagement |
Allstate proactively engages with significant shareholders throughout the year. Dialogue, transparency and responsiveness are the cornerstones of our shareholder engagement program.
How We Engage
Direct engagement involves reaching out to Allstate’s largest shareholders multiple times throughout the year. We also engage with proxy and other investor advisory firms that represent the interests of various shareholders.
Discussions with shareholders may include Allstate’s Lead Director, Chair/CEO, chair of the compensation and human capital committee and other committee chairs or directors as necessary.
In 2022, Allstate engaged with shareholders representing approximately 36% of outstanding shares and provided opportunity for more robust dialogue and greater feedback, which was discussed at subsequent Board and committee meetings.
Four-Phase Engagement Cycle
Balanced-Transparent-Responsive
This input is reported to the nominating, governance and social responsibility committee, which in turn allocates specific issues to relevant Board committees for further consideration. Each Board committee reviews relevant feedback and determines if additional discussion or actions are necessary by the respective committee or full Board.
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Proxy Statement Corporate Governance |
Shareholder Feedback Is Integrated Into Board Discussions and Decisions
| WHAT WE HEARD DURING 2022 ENGAGEMENT | WHAT WE HAVE DONE IN RESPONSE | |
Strategy. Investors believe that company boards and management should be focused on strategies that most lead to sustained value creation. |
Allstate is successfully implementing a comprehensive auto insurance profit improvement plan as loss cost inflation has reduced margins. Increased Board time was spent overseeing management’s actions to improve profitability. The company’s progress on Transformative Growth was discussed at every Board meeting. A Societal Engagement Framework is used to evaluate, prepare and communicate Allstate’s participation on issues that drive sustainable value creation, including goals that are directly tied to our business strategy and Our Shared Purpose. | |
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Environment.
Investors increasingly expect companies to develop net zero commitments. |
Climate-related disclosures in the proxy statement were expanded. Allstate’s TCFD report was enhanced to incorporate the goal-setting work that is underway. An Environmental, Social and Governance Summary Report was published which further describes climate goals. Allstate announced its commitment to achieve net zero emissions for direct, indirect and value-chain greenhouse gas emissions by 2030. By the end of 2025, Allstate will establish a goal for financed emissions. Climate strategy and risk was reviewed with the Board over multiple meetings. | |
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Human Capital.
While investors are supportive of diversity and inclusion metrics in compensation programs, they want to ensure the metrics include criteria that can be measured. |
The company is using analytics to align skills to highest priority issues, focus talent development and deploy talent efficiently to further enable the Transformative Growth strategy. Allstate is executing a comprehensive multi-year Inclusive Diversity and Equity strategy to accelerate the pace of change for diversity across the enterprise. An Inclusive Diversity and Equity component was integrated into the annual incentive plan and includes specific, quantifiable goals that are reviewed by the Board. | |
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Board Composition.
Investors are interested in how oversight ESG-related responsibilities are effectively covered among Board committees. |
Three new Board members were added within the last three years, each bringing specific experience and skills sets to help oversee the key components of Allstate’s business strategy. Director skills and capabilities were reviewed during the annual evaluation process. Allstate’s Board has overall oversight of ESG and each committee has clear responsibilities over specific areas of ESG. The Board receives updates at each regular meeting. |
Strong Governance Practices Enhance Shareholder Rights
Allstate has also enhanced its governance practices over time to serve the best interests of its shareholders. Shareholder rights include annual election of directors with a majority vote standard, proxy access rights, no shareholder rights plan (“poison pill”), no supermajority vote provisions, confidential voting, and right to call a special meeting and request action by written consent.
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Stakeholder Input and Responsiveness
Allstate continually seeks stakeholder input to meet its obligation as a corporate citizen. In addition to shareholders, we regularly engage with customers and consumers, employees, Allstate agents, nongovernmental organizations, opinion leaders, policymakers and suppliers. Feedback is collected across these stakeholder groups, key topics are identified, and strategies are developed to address gaps. There are also stakeholder-specific avenues for engagement.
| We survey customers, consumers, Allstate agents and employees every quarter | Allstate partners with The RepTrak Co., a global research firm, to study how stakeholders perceive the company | Shareholders, shareholder advisors/agents and opinion leaders are surveyed each year | Non-governmental organizations and policymakers are surveyed every two years |
| Allstate focuses on serving customers, generating attractive shareholder returns, providing opportunities to employees and agents, and improving communities |
Allstate’s Societal Engagement Framework
We use a Societal Engagement Framework to evaluate, prepare and communicate to stakeholders Allstate’s participation in societal issues.
Criteria to Evaluate Potential Societal Issues
| Three societal issues are in the Lead category: Climate, Data Privacy and Equity |
Allstate’s participation is segmented into three response categories:
Lead Strongly aligns with criteria; unique ability to address through action with manageable risk ● Take strong position across stakeholders that positions Allstate as a leader Support Partially aligns with criteria; some ability to impact with manageable to moderate risk ● Communicate to stakeholders as appropriate Support/Low Engagement Limited alignment with criteria; moderate to high risk and negligible opportunity benefit ● Do not take public position, but continue to monitor and assess |
| 44 | 2023
Proxy Statement Corporate Governance |
More Information
You can learn more about Allstate’s corporate governance by visiting www.allstateinvestors.com, where you will find our Corporate Governance Guidelines, each standing committee charter, and Director Independence Standards. Allstate has adopted a comprehensive Global Code of Business Conduct that applies to the CEO, CFO, controller, and other senior financial and executive officers, as well as the Board of Directors and other employees. It is also available at www.allstateinvestors.com. Each of the above documents is available in print upon written request to the Office of the Secretary, The Allstate Corporation, 3100 Sanders Road, Northbrook, IL 60062, or by email request to invrel@allstate.com.
Communication with the Board
The Board has established a process to facilitate communication by shareholders and other interested parties with directors as a group. The chief legal officer and general counsel reports regularly to the nominating, governance and social responsibility committee on all correspondence received that, in her opinion, involves functions of the Board or its committees or that merits Board attention. Items that are unrelated to the duties and responsibilities of the Board are not forwarded, such as: business solicitations or advertisements; product related inquiries; junk mail or mass mailings; resumes or other job-related inquiries; or spam and overtly hostile, threatening, potentially illegal or similarly unsuitable communications. Activity on social media is also monitored and reported to the nominating, governance and social responsibility committee.
| The Allstate Board welcomes your input on compensation, governance, and other matters. | |
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directors@allstate.com |
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The Allstate Corporation, Nominating, Governance and Social Responsibility Committee, 3100 Sanders Road, Northbrook, IL 60062, c/o General Counsel |
In addition, the audit committee has established procedures for the receipt, retention, and treatment of any complaints about accounting, internal accounting controls, or auditing matters. To report any issue relating to The Allstate Corporation (including Allstate Insurance Company and its affiliates) accounting, accounting controls, financial reporting or auditing practices, you may contact the company by mail, telephone or email. Telephone contacts may be kept confidential at your request.
| By mail: | By phone: | By email: | ||
| The Allstate Corporation, Audit Committee 3100 Sanders Road, Northbrook, IL 60062 c/o General Counsel |
Allstate i-Report Line: 1-800-706-9855 | auditcommittee2@allstate.com |
The communication process and the methods to communicate with directors are posted on the “Governance Overview” section of www.allstateinvestors.com.
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| Board Structure | 5 |  |
| Board Leadership |
Currently, our Board leadership structure consists of an independent Lead Director, a Chair (who is also our CEO) and strong committee chairs. The Board believes that this structure provides independent Board leadership and engagement while providing the benefit of having our CEO, the individual with primary responsibility for managing the company’s day-to-day operations, chair regular Board meetings as key business and strategic issues are discussed.
The independent directors have the ability to separate the roles of Chair and CEO if it is in the best interests of Allstate and its shareholders, and did so during a CEO transition in 2007. When making this determination, the independent directors consider the recommendation of the nominating, governance and social responsibility committee, the current circumstances at Allstate, skills and experience of the individuals involved, and leadership composition of the Board.
The Board regularly reviews its leadership structure and thoroughly evaluated whether to combine or to split the chair and CEO roles. The independent directors have determined Allstate is well served by having Mr. Wilson hold the roles of Chair and CEO. Mr. Wilson has more than 28 years of insurance industry experience, has extensive company knowledge, has demonstrated successful leadership of external boards and provides excellent leadership and direction for both management and the Board. He is highly qualified to lead discussions of the Board and is in the best position to facilitate the flow of business information and communications between the Board and management. The Board has strong independent oversight with Allstate’s independent Lead Director and 11 of 12 directors being independent. The Board evaluates this structure annually.
Independent Lead Director
Allstate’s Board believes that a strong Lead Director role with clearly defined responsibilities provides an effective independent management oversight. A strong Lead Director role has been in place for over twelve years and the roles and responsibilities have been enhanced over time based on shareholder and other feedback. Allstate’s Corporate Governance Guidelines describe the responsibilities of the Lead Director and the selection process, including the characteristics that the Board considers important in a Lead Director.
The Lead Director is elected annually by the independent directors, and it is expected that the Lead Director serve three to five years.
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Gregg Sherrill Current Lead Director |
Independent Lead Director Responsibilities Board Meetings and Executive Sessions ● Has the authority to call meetings of the independent directors ● Approves meeting agendas and schedules and information sent to the Board to ensure there is sufficient time for discussion of all items and that directors have the information necessary to perform their duties ● Chairs executive sessions of independent directors at every Board meeting ● Presides at all Board meetings when the Chair is not present Duties to the Board ● Has regular communications with the CEO about Allstate’s strategy and performance ● Performs additional duties designated by the independent directors CEO Performance Evaluation ● Facilitates and communicates the Board’s performance evaluation of the Chair and CEO with the chair of the compensation and human capital committee Succession Plans ● Facilitates the development of a succession plan for the Chair and CEO Communication
Between Chair ● Serves as liaison between the Chair and independent directors ● Consults with the Chair and discusses items raised in executive sessions Communication with Shareholders ● Communicates with significant shareholders and other stakeholders on matters involving broad corporate policies and practices, when appropriate Committee Involvement ● Works with the Chair and committee chairs to ensure coordinated coverage of Board responsibilities and ensures effective functioning of all committees ● Ensures the implementation of a committee self-evaluation process and regular committee reports to the Board Board and Individual Director Evaluations ● Participates in the evaluation of individual director, Board and committee performance with the chair of the nominating, governance and social responsibility committee and the Chair | ||
Mr. Sherrill was named independent Lead Director in May 2021. As a director at Allstate since 2017, Mr. Sherrill has served on the audit and nominating, governance and social responsibility committees. During his tenure on Allstate’s Board, he has cultivated an expansive knowledge of Allstate through transformative growth, strategic advances, operational and organizational changes, and an evolving external environment. His leadership, knowledge and experience balances the perspectives of both the longer-tenured Board members and newer directors. Considerations in Selecting Current Lead Director The independent directors consider several factors, including the director’s corporate governance expertise, operational and leadership experience, board service and tenure, integrity, and ability to meet the required time commitment. It is preferable that the Lead Director hold a previous position as chair of a board committee, either at Allstate or another company. In 2021, Mr. Sherrill was chosen by the independent directors as he exemplified these characteristics. He has significant board leadership experience, including as former chairman of Tenneco and former chair of the organization and executive compensation committee of Snap-On. The independent directors believe that Mr. Sherrill is exceptionally well-qualified to serve as Allstate’s independent lead director. |
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| 46 | 2023 Proxy Statement |
Allstate’s Chair and CEO provides excellent leadership and direction for both management and the Board. The Lead Director is empowered with and exercises, robust, well-defined duties. The Board is composed of experienced and committed independent directors that provide objective independent Board leadership and effectively engage and oversee management. The Board committees have objective, experienced chairs and members.
Chair of the Board Purpose: Serves as the primary voice to articulate Allstate’s long-term strategic priorities, performance and operating results, as well as ensures management is effectively providing the proper information and analysis to the Board to facilitate effective oversight. Significant dialogue with stakeholders on governance, strategy and operating performance facilitates Board effectiveness. |
Independent Lead Director Purpose: Serves as a liaison between the Chair and the independent directors to provide a supplemental channel of communication. Collaborates with Chair/CEO on Board meeting agendas, effectiveness, planning matters, and other related topics of management oversight. |
Board of Directors Purpose: Provide objective oversight of management, review the CEO’s performance and succession planning, and approve CEO compensation. Oversee Allstate’s strategy, operating performance, and sustainable value creation. |
| Audit Committee | Compensation and Human Capital Committee |
Nominating, Governance and Social Responsibility Committee |
Risk and Return Committee | |||
| Purpose: Assists the Board in fulfilling its oversight responsibilities related to the integrity of the company’s financial statements, enterprise risk, ethics and compliance programs, internal audit and internal control functions and independent registered public accountant. | Purpose: Assists the Board in fulfilling its oversight responsibilities related to the compensation of the CEO and the selection and compensation of the other executive officers, administration of the company’s compensation plans and review of the company’s human capital practices. | Purpose: Assists the Board in fulfilling its oversight responsibilities related to director elections, committee composition, identification of director candidates, director evaluation processes and results, environmental, social and governance priorities, and other corporate governance matters and policies. | Purpose: Assists the Board in fulfilling its oversight responsibilities related to the identification, evaluation and mitigation of risks inherent in the company’s business, strategy, capital structure, and operating plans. |
Executive Committee The Board has an Executive Committee made up of the Lead Director, committee chairs and Board Chair. The Executive Committee is chaired by Mr. Wilson and has the powers of the Board in the management of Allstate’s business affairs to the extent permitted under the bylaws, excluding any powers granted by the Board to any other committee of the Board. In addition, the Executive Committee provides Board oversight if outside the scope of established committees or if an accelerated process is necessary. No meetings of the Executive Committee were necessary in 2022. |
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Use of Independent Advisors Each committee operates under a written charter and has the ability to hire third-party advisors. Outside experts such as independent auditors, compensation consultants, governance specialists, cybersecurity experts, board search firm representatives, and financial advisors attend meetings to provide directors with additional information on issues. In 2022, outside firms were engaged to provide independent assessments of Allstate’s compensation practices, financial results, Board composition, pay equity practices and cybersecurity program. |
| Board Attendance | 99% Average attendance of directors as a group at Board and committee meetings during 2022 33 Board and committee meetings in 2022 | |
Directors are expected to attend Board and committee meetings and the annual meeting of shareholders. During 2022, each director attended at least 75% of the combined Board meetings and meetings of committees of which he or she was a member. Ten of the eleven directors who stood for election at the 2022 annual meeting of shareholders attended the annual meeting. One director was unable to attend due to a prior professional obligation.
| 48 | 2023 Proxy Statement |
A Audit Report, pg. 111 Meetings in 2022: 9
Chair: Kermit R. Other Members: Donald E. Brown “We discussed internal audit advisory engagements on Transformative Growth initiatives and reviewed internal controls and compliance. Data privacy and cybersecurity continued to be areas of focus and we engaged an independent cybersecurity advisor for the seventh year in a row.” — Kermit R. Crawford, Chair |
Key Responsibilities: ● Oversees integrity of financial statements and other financial information and disclosures ● Oversees the system of internal control over accounting and financial reporting and disclosure controls and procedures ● Reviews the enterprise risk control assessment and guidelines, including cybersecurity and data privacy risk and the major financial risk exposures and management’s steps to monitor and control those risks ● Oversees the ethics and compliance program and compliance with legal and regulatory requirements ● Appoints, retains, and oversees the independent registered public accountant, and evaluates its qualifications, performance and independence ● Evaluates retaining an independent cybersecurity advisor ● Oversees Allstate’s internal audit function ● Oversees Allstate’s data privacy programs ● Has authority to engage independent counsel and other advisors to carry out its duties Management Participation in Committee Meetings The CFO, chief audit executive, chief compliance executive, chief risk officer, CEO, chief legal officer and general counsel, and controller all actively participate in meetings. Senior business unit and technology executives, including the chief information security officer, are present when appropriate. Executive sessions of the committee, in which the committee meets privately with the independent registered public accountant, independent cybersecurity advisor, chief audit executive, and chief compliance executive, are held at all regular meetings. Independence and Audit Committee Financial Expert The Board determined that all members of the audit committee are independent under the New York Stock Exchange (“NYSE”) and Securities and Exchange Commission (“SEC”) requirements, and that Messrs. Brown and Mehta are each an audit committee financial expert as defined under SEC rules. | |
C Compensation and Report, pg. 86 Meetings in 2022: 7
Chair: Perry M. Traquina Other Members: Richard T. Hume “We discussed Allstate’s human capital practices and organizational health, including progress against the three-year IDE strategy. We once again received an independent assessment of pay equity.” — Perry M. Traquina, Chair |
Key Responsibilities: ● Oversees Allstate’s executive compensation plans ● Selects and retains the committee’s independent compensation consultant ● Assists the Board in determining all compensation elements of the executive officers, including the CEO ● Reviews the Compensation Discussion and Analysis and prepares the Compensation Committee Report in this proxy statement ● Reviews management succession plans, evaluation processes and organizational strength ● Conducts an annual review of the company’s human capital management practices, organizational health, employee and agent survey data, company culture, diversity and inclusiveness, and pay equity ● Reviews CEO’s performance in light of approved goals and objectives Management Participation in Committee Meetings The chief human resources officer, chief legal officer and general counsel, CFO, and CEO participate in meetings. The committee regularly meets in executive sessions with the independent compensation consultant or chief human resources officer. ● The chief human resources officer provides the committee with internal and external analyses of the structure of compensation programs. Throughout the year, the estimated and actual results under our incentive compensation plans are reviewed. ● The CFO discusses financial results relevant to incentive compensation, other financial measures, and accounting rules. ● The CEO advises on the alignment of incentive plan performance measures with strategy and the design of equity incentive awards. He also provides the committee with performance evaluations of senior executives and recommends merit increases and compensation awards. ● The chief legal officer and general counsel provides input on the legal and regulatory environment and corporate governance best practices and ensures the proxy materials accurately reflect the committee’s actions. ● The chief risk officer reports annually on compensation plan alignment with Board-approved risk and return principles, and whether compensation outcomes were achieved within those principles. |
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N Nominating, Meetings in 2022: 5
Chair: Andrea Redmond Other Members: Donald E. Brown “We continued our focus on the company’s ESG initiatives and reporting frameworks and reviewed the Societal Engagement Framework to ensure effective communication of Allstate’s participation on key issues important to our stakeholders.” — Andrea Redmond, Chair |
Key Responsibilities: ● Recommends candidates for Board election and nominees for Board committees ● Recommends candidates for Lead Director and Chair ● Recommends criteria for selecting directors and the Lead Director, and determines director independence ● Reviews the Corporate Governance Guidelines and advises the Board on corporate governance issues ● Determines performance criteria and oversees the performance assessment of the Board, Board committees, and Lead Director ● Reviews Allstate’s non-employee director compensation program ● Has authority to retain a director search firm and director compensation consultant ● Reviews priorities and reporting related to Allstate’s ESG activities, including political contributions and sustainability initiatives Management Participation in Committee Meetings The CEO and chief legal officer and general counsel participate in meetings. The committee regularly meets in executive session without management present. The chief risk officer provides risk assessments on political contributions and activities. The chief legal officer and general counsel provides regular updates to the committee on ESG priorities. |
R Risk and Return Meetings in 2022: 6
Chair: Siddharth Other Members: Kermit R. Crawford “In 2022, we reviewed significant risk and return assumptions on Allstate’s strategic plans, including risks related to Transformative Growth, climate change, inflationary impacts and pricing regulation. We assessed the company’s information security and data privacy practices to reduce exposure risk to customer information and meet consumer expectations.” — Siddharth N. Mehta, Chair |
Key Responsibilities: ● Assists the Board in risk and return governance and oversight ● Reviews risk and return processes, policies, and guidelines used by management to evaluate, monitor, and manage enterprise risk and return ● Reviews Allstate’s enterprise risk and return management function, including its performance, organization, practices, budgeting, and staffing ● Supports the audit committee in its oversight of risk assessment and management policies ● Has authority to retain outside advisors to assist in its duties ● Reviews extremely low frequency high severity scenarios (“ELFS”) on an annual basis, including a periodic review of ELFS related to climate and weather-related risks Management Participation in Committee Meetings The chief risk officer, CFO, CEO, chief legal officer and general counsel, chief audit executive, chief technology officer and chief information security officer participate in meetings. The committee regularly meets in executive session, including sessions with the chief risk officer. |
| 50 | 2023 Proxy Statement |
Director Compensation
Director Compensation Program
The director compensation program is designed to appropriately compensate non-employee directors for serving on the board of a large, complex, and highly regulated company and to align their interests with shareholders. The nominating, governance and social responsibility committee reviews non-employee director compensation annually. The following charts describe each component of our non-employee director compensation program for 2022.
| NON-EMPLOYEE DIRECTOR | ADDITIONAL ANNUAL CASH RETAINERS(1) | |
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+ |  |
| (1) | Paid quarterly in advance on the first business day of January, April, July, and October. The retainer is prorated for a director who joins the Board during a quarter. Beginning in 2023, the additional annual cash retainer paid to the chair of the nominating, governance and social responsibility committee has been increased to $25,000. |
| (2) | Directors are granted restricted stock units on June 1 equal in value to $175,000 divided by the closing price of a share of Allstate common stock on such grant date, rounded up to the nearest whole share. |
| Director Equity Compensation | Further Director Compensation Highlights | |
● The Board believes that a meaningful portion of a director’s compensation should be in the form of equity securities to create alignment with corporate performance and shareholder interests. ● Annual restricted stock units are granted under a fixed-value formula and in accordance with the shareholder approved 2017 Equity Compensation Plan for Non-Employee Directors. The aggregate grant date fair value of any award during a calendar year may not exceed $800,000. |
● Director total compensation, Lead Director and committee chair retainers, and equity grant practices are all benchmarked annually against insurance industry peer group and relevant compensation surveys to target total compensation at the median. ● No additional fees are paid for Board or committee meeting attendance. |
Director Stock Ownership Guidelines
Each director is expected, within five years of joining the Board or within five years of an increase in annual cash retainer, if applicable, to accumulate an ownership position in Allstate common stock equal to six times the value of the cash retainer. Allstate’s stock ownership requirements specify that Allstate shares owned personally and beneficially, as well as unvested restricted stock units, count toward meeting the requirement.
Each director has met the ownership guideline, except for Messrs. Brown and Hume, who joined the Board in 2020, and Ms. Turner, who joined the Board in 2023.
| NEW | What’s New |
| Based on consultation with the independent compensation consultant and a competitive review of Allstate’s non-employee director compensation program, beginning in 2022, the equity portion of director compensation was increased from $155,000 to $175,000. Additionally, in light of increased focus on ESG matters, beginning in 2023, the additional annual cash retainer paid to the chair of the nominating, governance and social responsibility committee has been increased to $25,000. |
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2022 Director Compensation
The following table summarizes the compensation for each of our non-employee directors who served as a member of the Board and its committees in 2022.
| Name | Leadership Roles Held During 2022 | Fees
Earned or Paid in Cash ($)(1) |
Stock
Awards ($)(2)(3) |
Total ($) | |||
| Donald E. Brown | 125,000 | 175,110 | 300,110 | ||||
| Kermit R. Crawford | Audit Committee Chair | 160,000 | 175,110 | 335,110 | |||
| Michael L. Eskew | (retired in May 2022) | 62,500 | - | 62,500 | |||
| Richard T. Hume | 125,000 | 175,110 | 300,110 | ||||
| Margaret M. Keane | 125,000 | 175,110 | 300,110 | ||||
| Siddharth N. Mehta | Risk and Return Committee Chair | 160,000 | 175,110 | 335,110 | |||
| Jacques P. Perold | 125,000 | 175,110 | 300,110 | ||||
| Andrea Redmond | Nominating, Governance and Social Responsibility Committee Chair | 145,000 | 175,110 | 320,110 | |||
| Gregg M. Sherrill | Lead Director | 175,000 | 175,110 | 350,110 | |||
| Judith A. Sprieser | 125,000 | 175,110 | 300,110 | ||||
| Perry M. Traquina | Compensation and Human Capital Committee Chair | 155,000 | 175,110 | 330,110 |
| (1) | Under the 2017 Equity Compensation Plan for Non-Employee Directors, directors may elect to receive Allstate common stock in lieu of cash compensation. In 2022, Ms. Keane and Messrs. Brown and Traquina each elected to receive 100% of their retainer in stock. Also, under Allstate’s Deferred Compensation Plan for Non-Employee Directors, directors may elect to defer their retainers to an account that is credited or debited, as applicable, based on (a) the fair market value of, and dividends paid on, Allstate common shares (common share units); (b) an average interest rate calculated on 90-day dealer commercial paper; (c) S&P 500 Index, with dividends reinvested; or (d) a money market fund. No director has voting or investment powers in common share units, which are payable solely in cash. Subject to certain restrictions, amounts deferred under the plan, together with earnings thereon, may be transferred between accounts and are distributed after the director leaves the Board in a lump sum or over a period not in excess of ten years in accordance with the director’s instructions. The accumulated amount of Allstate common share units as of December 30, 2022, for directors previously electing to defer their cash retainer, is reflected in the table below. |
| Amounts Deferred under Deferred Compensation Plan for Non-Employee Directors | Allstate
Common Share Units (#) | |
| Mr. Traquina | 7,138 |
| (2) | Grant date fair value for restricted stock units granted in 2022 is based on the final closing price of Allstate common stock on the actual grant date, which in part also reflects the payment of expected future dividend equivalent rights. (See Note 19 to our audited financial statements for 2022). The final grant date closing price was $134.70. The values were computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Each restricted stock unit entitles the director to receive one share of Allstate common stock on the conversion date (see footnote 3). |
| (3) | The following table provides outstanding restricted stock units as of December 30, 2022, for each director, except for Ms. Turner, who did not join the Board until January 2023. The value of the restricted stock units is based on the closing price of our common stock of $135.60 on December 30, 2022. |
| Name | Restricted Stock Units (#) |
Value
of Restricted Stock Units as of 12/31/22 ($) |
Multiple
of Annual Cash Retainer | ||||
| Mr. Brown | 3,443 | 466,871 | 4.8 | ||||
| Mr. Crawford | 20,330 | 2,756,748 | 23.1 | ||||
| Mr. Eskew (retired in May 2022) | 2,225 | 301,710 | 2.4 | ||||
| Mr. Hume | 3,909 | 530,060 | 4.2 | ||||
| Ms. Keane | 3,989 | 540,908 | 14.5 | ||||
| Mr. Mehta | 13,533 | 1,835,075 | 18.2 | ||||
| Mr. Perold | 12,454 | 1,688,762 | 13.5 | ||||
| Ms. Redmond | 35,802 | 4,854,751 | 41.0 | ||||
| Mr. Sherrill | 3,989 | 540,908 | 9.1 | ||||
| Ms. Sprieser | 42,177 | 5,719,201 | 45.8 | ||||
| Mr. Traquina | 11,013 | 1,493,363 | 14.2 |
Restricted stock unit awards granted before September 15, 2008, convert into common stock one year after termination of Board service. Restricted stock unit awards granted on or after September 15, 2008, and before June 1, 2016, convert into common stock upon termination of Board service. Restricted stock units granted on or after June 1, 2016, convert into common stock on the earlier of the third anniversary of the date of grant or upon termination of Board service. Directors had the option to defer the conversion of the restricted stock units granted on June 1, 2016, for ten years from the date of grant or the later of termination of Board service or June 1, 2024. The conversion of restricted stock units granted after June 1, 2016, may be deferred for ten years or until termination of Board service. In addition to the conversion periods described above, restricted stock units will convert upon death or disability. Each restricted stock unit includes a dividend equivalent right that entitles the director to receive a payment equal to regular cash dividends paid on Allstate common stock.
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Sustainability at Allstate
Sustainability at Allstate means managing environmental, social and governance (“ESG”) risks and opportunities to ensure long-term value creation for our shareholders, customers and employees. Sustainability is not new to Allstate and we have been leading with purpose and driving growth through our ESG ambition for decades. We integrate ESG considerations across the enterprise by embedding these principles into key efforts like the development of products and services, management of the company’s investment portfolio and establishing net zero targets.
Our ESG Strategy
ESG issues are fundamentally connected to Allstate’s business and providing products and services that are accessible, competitively priced, and mindful of environmental and social impacts are important to our strategy. A Societal Engagement Framework is used to focus on the prioritization of ESG issues and to help us evaluate, prepare for and act on issues where we have a unique ability to make meaningful impact. This framework allows us to align our values, business priorities and ESG actions. We further prioritize our efforts on ESG matters that are strongly aligned to our brand, business and risk and return profile. Three ESG focus areas have been identified as most significant to Allstate and its stakeholders: Climate, Data Privacy, and Inclusive Diversity.
Allstate’s ESG ambition is also centered around its strong sustainability performance. The company has a solid track record of corporate sustainability disclosure in alignment with relevant ESG reporting organizations and standards such as the Global Reporting Index (GRI), CDP (formerly the Carbon Disclosure Project), S&P’s Corporate Sustainability Assessment (CSA), Sustainability Accounting Standards Board (SASB) and Task Force on Climate Related Financial Disclosures (TCFD).
| We have prioritized three ESG issues in particular: Climate, Data Privacy, and Inclusive Diversity and Equity. | Climate change impacts customers and shareholders. Customers have been increasingly subject to more severe weather catastrophes. As a result, Allstate focuses on stronger building codes, adequate disaster response capabilities, and creating state-based insurance pools for risks not covered by private markets. The company has net zero commitments and is seeking additional return by investing in a transition to a lower-carbon economy. Data privacy protects customers and is a growth opportunity. Allstate’s ability to serve customers and earn appropriate returns is dependent on access to personal information. An industry-leading data privacy program and commitment to influencing public policy initiatives is critical to value creation. Inclusive diversity and equity (IDE) practices foster a workplace culture that supports Our Shared Purpose. IDE is one of the three values in Our Shared Purpose. The breadth of differences at Allstate improves execution and agility. A multi-year IDE strategy positions the company to be a differentiated IDE leader. | |
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Our ESG strategy supports long-term value creation
| Focusing
on Our Important Topics… |
…Leads to Value Creation | ||||
People |
We strive to develop and retain a workforce that mirrors the diversity of the customers and communities we serve. To build on this focus, we launched an IDE strategy with the goal to become a differentiated IDE leader among major corporations by striving to eliminate inequities in our business practices, culture and communities for all people. |  |
Diversity enables business growth. Our collective differences, backgrounds, educations and cultures create an inclusive environment where diverse perspectives are encouraged and embraced. We work smarter, meet customer needs more effectively, share learnings better, and identify more innovative ideas when we utilize our individual characteristics, backgrounds, experiences and perspectives. The breadth of those differences makes us a stronger company, which in turn creates greater value for stakeholders. | ||
Planet |
Climate change is one of the most critical challenges threatening customers, businesses and communities. Global warming has increased the frequency and severity of severe weather. This creates additional risks for customers and shareholders, but also offers opportunities to leverage Allstate’s capabilities. | |
Allstate’s business success depends on effectively modeling, pricing and managing climate-related risks, as well as meeting the needs that result from a changing climate and a changing society. Products and services are being developed that address climate change and the transition to a lower-carbon future and are also growing our suite of environmentally responsible products through the offering of ride-sharing, homeowner reimbursement, pay-per-mile auto insurance and technology that allows customers to more efficiently file claims. Strategic climate-related investments present potential opportunities to capture attractive returns over the long-term for shareholders. Allstate will look to be a leader in this area and is modifying investment strategies and capabilities to best position to capture additional risk-adjusted return from the transition to a lower carbon-based economy. | ||
Prosperity |
Because of the products and services we provide, customers entrust Allstate with their data. Consumers have an expectation of privacy and security around that data. This creates both business opportunities and constraints as we work to safeguard consumer data while using that data to better serve our customers. | |
By carefully and responsibly handling data, Allstate maintains a strong reputation, fosters positive business relationships and creates shared value. Identity protection products are provided to millions of customers and help empower people with more control over their personal data, which in turn builds trust in the Allstate name. Data and analytics are also used in the business to better serve customers.
We believe, in the future, companies will need to adopt a simplified approach to data privacy with consumer-friendly interactions and easy-to-read disclosures that follow a common, standardized framework to enhance choice and control for consumers. Allstate seeks to shape this future via thought leadership, public advocacy, and the launch of new capabilities that easily and automatically enable this for consumers. |
| 54 | 2023 Proxy Statement Sustainability at Allstate |
Our Key ESG Priorities
 |
People |
Human Capital
Allstate believes that its people are its greatest assets and enablers of a purpose-driven strategy. The integration of ESG principles in to human capital management is key to success. We have a robust set of plans, which advance an approach to hiring, retention, talent development, training, well-being and culture. Allstate strives to motivate its employees and harness their diverse perspectives through Our Shared Purpose and leading employment practices. We provide employees with training, mentoring and career development, and invest in providing rewarding professional growth and opportunities. At the core of it all is an unwavering commitment to shared Values, Behaviors and Operating Standards.
Other Initiatives and Accomplishments
| • | At the start of the pandemic, we transitioned 95% of our workforce to remote working in just one weekend and to date, we’ve invested over $9 million to ensure our employees remain supported in a remote environment. |
| • | Introduced a Customer Retention and Growth bonus of $2,000 to $4,000 for over 30,000 eligible employees for achieving property-liability unit growth goals |
| • | Resources are devoted to occupational health and safety and benefit programs to support employees’ physical health, financial security, personal well-being and work-life integration |
| • | To ensure fair and equitable compensation practices, internal and external pay equity analyses are conducted annually |
| • | Utilized workforce analytics to dynamically align skills to highest priority issues, focus talent development and acquisition, and deploy talent efficiently |
| • | Increased minimum compensation for U.S. employees to $17-20/hour, based on geographic differentials |
| www.allstateproxy.com Sustainability at Allstate |
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Inclusive Diversity and Equity
Inclusive diversity and equity (“IDE”) is one of Allstate’s core values and a foundation of Our Shared Purpose. It represents who we are and how we conduct ourselves – not just as employees, but as people, leaders, decision-makers, and members of society. Allstate’s multi-year IDE strategy builds on existing efforts around hiring, talent development, investing and supplier diversity. The strategy is focused on four pillars to leverage diverse perspectives, experiences and engagement for a more inclusive and equitable workforce.
Pillars of IDE Strategy
 |
People | |
Allstate will build a diverse staff through thoughtful and intentional recruitment, retention and development activities. We are committed to increasing female and racially and/or ethnically diverse workforce representation and have set multi-year targets to achieve this goal. Allstate will also accelerate development, advancement, and retention of diverse talent through sponsorship, mentorship, and leadership development programs, and strive to improve the skills and capabilities of all team members.
 |
Business Practices | |
Allstate will use IDE to help us win and integrate it into our core policies, processes and decision-making, including choosing and managing our suppliers. Allstate was the first U.S corporate issuer to select diverse financial firms to exclusively lead a large corporate bond issuance.
 |
Culture | |
Allstate will create an inclusive culture and advance equity. Allstate supports and funds nine Employee Impact Groups (EIGs) and two Business Impact Groups (BIGs), that offer specific opportunities for employees to partner and collaborate with each other through professional development workshops, recruiting events, volunteer projects and mentoring. Over 7,700 Allstaters participate in at least one EIG or BIG (as of 12/31/22). Group members are more likely to be rated Better Than Expected, more likely to be promoted, and less likely to turnover.
 |
Community | |
Allstate will address our positive and negative impacts on inclusive diversity and equity in wider communities and on various stakeholders, taking a leadership position to advance IDE. In September 2022, Allstate was the only U.S. corporate issuer to voluntarily testify before the House Financial Services Subcommittee on Diversity Equity and Inclusion. The congressional hearing focused on Diversity and Inclusion at America’s Largest Insurance Companies.
| Our IDE Goals and Progress | |
| Goals | 2022 Progress |
| Expand IDE-related questions in Inspire Survey to measure culture of employee belonging, equal opportunity regardless of background, senior leadership commitment to addressing inequity, and Allstate’s commitment to IDE as a company | Maintained inclusive diversity index scores (Inspire Survey) in mid-80’s, on a scale of 0-100, from 2018-2022 |
| Strive for $180 million in new commitments with diverse investment sponsors and managers in 2022, nearly 3x historical annual average | While 2022 was a difficult market environment for commitments in general, Allstate continued to make progress. Including the $65 million closed in January 2023, we have closed roughly $177 million in new commitments. |
| Increase female and racially and/or ethnically diverse workforce representation | Maintained progress towards Allstate’s ongoing commitment to improve female and racially and/or ethnically diverse workforce representation |
| Achieve $366 million in spend in 2022 with diverse suppliers | Allstate exceeded our 2022 goal with $386 million in spend, on track toward our five-year 2025 goal of doubling diverse supplier spend |
| 56 | 2023 Proxy Statement Sustainability at Allstate |
 |
Planet |
Climate
Climate change is one of the most critical challenges of our time, as it threatens businesses, communities and customers. Allstate is working to reduce climate impacts across the entire value chain, which includes supply chain, operations, and customer use of our products and services. Allstate announced a target of net zero emissions for relevant direct, indirect and value-chain greenhouse gas emissions by 2030, and by the end of 2025, we will also establish a goal for our financed emissions. This target is aligned with the latest climate science and the 1.5°C reduction pathways called for by the Paris Agreement. Additionally, we will continue to evaluate emerging methodologies associated with GHG emissions from underwriting activities.
Other Initiatives and Accomplishments
| • | Committed $469 million to climate investments in 2021 and 2022 in our dedicated impact portfolio across climate mitigation and adaptation |
| • | Increased the percentage of the portfolio allocated to responsible investments to 12% at year-end 2022 |
| • | Established management-level committee with goal to evaluate and develop new products or new product features that encourages more sustainable consumer behavior |
| • | Identified areas for value creation within risk management processes given a global transition to a less carbon intensive economy |
| www.allstateproxy.com Sustainability at Allstate |
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Climate Risk Management
A changing climate means we must identify risks and opportunities, which can be either physical in nature, such as extreme weather patterns, or related to transitions such as policy shifts and the development of new technology. Allstate works to understand how this directly and indirectly affects our products, assets and liabilities. We manage climate risks within our integrated Enterprise Risk and Return Management (ERRM) Program, which applies risk-return principles, modeling and analytics, governance and transparent dialogue to understand the company’s highest-priority risks.
Addressing Climate Risk
 |
Risk Identification | |
| • | An increase in severe weather events has raised loss costs for homeowners insurance, requiring risk management actions such as changes in pricing, product coverages, geography, underwriting practices and reinsurance utilization. We expect that the impacts from climate change will continue to be concentrated in property insurance. |
| • | Allstate’s investment process reflects some of the same climate risk considerations as the company’s insurance underwriting process. We consider potential environmental and severe weather risks when making investments and limit our exposure to sectors with higher climate risk. We also monitor exposure to sectors with higher climate risk, including oil, gas and coal production, airlines and airports, and commercial real estate with higher catastrophe risk. Additionally, ESG considerations and climate specific metrics are a factor in asset management decisions. |
| • | Climate change is also important to internal and external stakeholders, and we collaborate through external partnerships and public engagements. |
 |
Risk Assessments | |
| • | Allstate’s Catastrophe Modeling and Analytics team and pricing groups assess climate change information and establish pricing, underwriting, concentration and coverage standards. The team uses information from the Intergovernmental Panel on Climate Change (IPCC), the U.S. Global Change Research Program (USGCRP) and the Actuaries Climate Index (ACI). The IPCC and USGCRP evaluate research by climate scientists around the world and conduct reviews to provide information to decision-makers. The Responsible Investing Committee and the Investments Risk Committee assess investments for potential short- and long-term exposures to climate change. |
 |
Risk Mitigation | |
| • | The ACI measures extreme weather and sea level increases through quarterly updates. The Catastrophe Modeling and Analytics team monitors state-specific risks and competitors’ actions and partners with the Investments team to model mortgage and real estate portfolios. We incorporate the outcome of the assessment into decision-making to balance risk and return. |
 |
Risk Monitoring and Reporting | |
| • | Allstate reports on progress in mitigating climate change through our annual sustainability, SASB and TCFD reports, as well as through alignment to key frameworks such as GRI and the UN Sustainable Development Goals. Additionally, we respond to questionnaires and assessments such as CDP’s Climate Change Questionnaire and S&P’s Corporate Sustainability Assessment. |
| 58 | 2023 Proxy Statement Sustainability at Allstate |
 |
Prosperity |
Data Privacy
Allstate’s business practices protect data and keep sensitive information safe. We provide identity protection products to millions of customers and will continue to empower people with more control over their personal data. Our goals are to enact change, demonstrate transparency, offer solutions and lead others to do the same through four key avenues: Operational Practices and Products, Governance, Policy and Legislation, and Partnerships.
 |
Operational Practices and Products | |
| • | Allstate’s products and services protect Personally Identifiable Information with strong data management and cybersecurity practices and we have an industry-leading data privacy program |
| • | Allstate Identity Protection is reinventing privacy and identity protection by giving consumers the tools to see, control and protect their digital identities |
| • | Product offerings include identity protection and privacy management (Allstate Digital FootprintTM on Allstate Mobile), and a third-party cyber product offering with mobile device protection, anti-phishing, Wi-Fi scan, and limited cyber-expense coverage |
 |
Governance | |
| • | Allstate strives to be transparent and ethically manage consumer data |
| • | Allstate also created an Enterprise Data initiative to reduce the personal information footprint across Allstate, which better protects and secures personal information while still providing services that matter to consumers |
| • | The Board and audit committee provide oversight of our cybersecurity and privacy programs; an independent cybersecurity advisor and external benchmarking practices further support continuous improvement |
 |
Policy and Legislation | |
| • | Allstate advocates for consumer rights and advocates for federal legislation to establish uniform consumer data protection standards |
| • | Allstate advanced our State Privacy Laws program, a framework to strategically approach consumer expectations of privacy and the dynamic regulatory environment |
| • | Allstate also worked to identify lawmakers, think tanks, policy institutes, thought leaders, and journalists aligned with the concept of greater consumer control over data |
 |
Partnerships | |
| • | We partner with organizations such as The Atlantic and the Aspen Institute to share perspectives on enhancing data privacy protections |
| • | Our security and privacy requirements extend to suppliers who have access to, store, or use Allstate data and we emphasize the importance of consumer privacy and data security with suppliers through our procurement standards, practices and contracts |
| • | We also require contingent workers who have access to our network to complete training on Allstate’s security policies and adhere to the privacy expectations described in our Supplier Code of Business Conduct |
| 2022 Goals and Progress | |
| Goals | 2022 Progress |
| Continue to enhance robust privacy compliance programs to protect consumer data and enable agile response to dynamic regulatory environment | Piloted data ethics framework that helps address ethical considerations throughout the data lifecycle. Implemented digital solution that triggers personal information lifecycle management processes to support compliance with dynamic regulatory requirements and reduce personal information footprint. |
| Advance more choice, control, and protection for consumers’ data outside of Allstate | Allstate’s Chair and CEO presented at the 2022 Aspen Ideas Festival on the cost of privacy in the digital age. The discussion sparked thought leadership about what privacy means today and how consumers can take control of their privacy and know when it has been lost. |
| Enhance potential and current customer experience with data privacy and related commercial experiences | Launched a privacy center on Allstate.com with simplified consumer-friendly messaging on Allstate’s privacy practices and easy to navigate privacy choices |
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Responsible Investing – Aligning with ESG Priorities
As of December 31, 2022, we managed a $61.8 billion investment portfolio and actively evaluated how ESG issues influence investment performance. We integrate ESG considerations within our investment analysis and decision-making processes and have established climate change and IDE as two pillars important to our investing approach while we continue to meet shareholder need by having a positive financial impact.
 |
Broad Portfolio | |
Build limitations/structure/analytics, as appropriate, into the portfolio that will mitigate allocations that negatively impact our ESG goals
 |
Impact Sub-Portfolio |
Invest in solving societal problems in a targeted manner while achieving attractive returns
| Goals | 2022 Progress |
| Expand climate-related investment capabilities and relationships, striving for at least $375 million in commitments between 2021 and 2022 | Committed $469 million in climate-related opportunities between 2021 and 2022, exceeding our goal of $375 million |
| Strive for at least $300 million in new commitments to low-income housing tax credits during 2022 | Committed $255 million in low-income housing tax credits after an above average investment year of $408 million during 2021. |
 |
Other Activities | |
Align investment so they support our ESG goals
| Goals | 2022 Progress |
| Maintain 2% of trading volumes with minority, women and veteran banking enterprises (MWVBE) in 2022, a 4x increase relative to historical volumes of 0.5%. | Allstate exceeded our 2022 goal with 2.3% of trading volumes with diverse brokers |
| Increase opportunity for women and racially and ethnically diverse individuals in the asset management industry | Founding partner of Asset Manager Diversity Accelerator (AMDA) program alongside William Blair and LGIM America, a two-year rotational development program for diverse and under-represented job seekers |
| 60 | 2023 Proxy Statement Sustainability at Allstate |
Governance of ESG
| Board of Directors |
| The Board believes sustainability benefits Allstate’s stakeholders and drives long-term value creation. The Board has overall responsibility for ESG oversight with regular updates on ESG matters. |
| Nominating, Governance and Social Responsibility Committee |
| The nominating, governance and social responsibility committee supplements the Board’s review of ESG matters. The chief legal officer and general counsel provides regular updates on ESG matters. |
| Additionally, other Board committees focus on specific components of the ESG strategy. The risk and return committee reviews climate change risk, the compensation and human capital committee reviews organizational health and other human capital management practices, and the audit committee reviews data privacy and cybersecurity. |
| Chief Legal Officer and General Counsel |
| Our chief legal officer and general counsel works with leadership from across the company to guide Allstate’s corporate responsibility and sustainability efforts and reports regularly to the nominating, governance and social responsibility committee on the company’s ESG progress as well as provides periodic updates to the full Board. |
| The Allstate ESG Steering Committee |
| Allstate has had an ESG Steering Committee (formerly, the Sustainability Council) since 2007. This cross-functional management committee supports Allstate’s ongoing commitment to environmental, health and safety, corporate social responsibility, human capital management, corporate governance, sustainability, and other public policy matters. |
| The committee is comprised of individuals from Strategy, Finance, Financial Products, Enterprise Solutions, Corporate Brand, Enterprise Risk and Return Management, Human Resources, Legal, Investments, Property-Liability, and Protection Products and Services. Allstate’s senior vice president of corporate strategy and senior vice president of corporate law co-chair the committee, which meets monthly, and updates senior executives. |
| The Responsible Investing Committee | The Sustainability Team |
| The Responsible Investing Committee monitors ESG investing trends, evaluates ESG investing best practices, supports the work of the ESG Steering Committee and periodically reports about its activities to senior leaders within Allstate. In conjunction with Allstate’s Investments Risk Committee, the Responsible Investing Committee also monitors our investment portfolio for potential short- and long-term exposures to climate change. | The Sustainability team develops the annual sustainability report, responds to ratings and rankings questionnaires, drives employee awareness and engagement with corporate sustainability initiatives and reports monthly to the ESG Steering Committee. |
61
Executive
Compensation
| 2 | Say-on-Pay: Advisory Vote on the Compensation of the Named Executives |
What am I
voting on?
We conduct a say-on-pay vote every year at the annual meeting. While the vote is non-binding, the Board and the compensation and human capital committee (the “committee” as referenced throughout the Compensation Discussion and Analysis and Executive Compensation sections) consider the results as part of their annual evaluation of our executive compensation program.
Overview
| ● | Independent oversight by compensation and human capital committee with the assistance of an independent consultant |
| ● | Executive compensation targeted at 50th percentile of peers and aligned with short-and long-term business goals and strategy |
| ● | Compensation programs are working effectively. Annual incentive compensation funding for our named executives in 2022 was 57.5% of target, as formulaic result was reduced by 50% due to negative Net Income. Annual performance was above maximum performance on Total Premiums and Net Investment Income, below threshold performance on Performance Net Income, and above target performance on the Strategic Initiatives Scorecard. |
| You may vote to approve or not approve the following advisory resolution on the executive compensation of the named executives: | |
| RESOLVED, on an advisory basis, the shareholders of The Allstate Corporation approve the compensation of the named executives, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis and accompanying tables and narrative on pages 62-106 of the Notice of 2023 Annual Meeting and Proxy Statement. | |
|
Voting recommendation The Board recommends a vote
FOR |
|
| 62 | 2023 Proxy Statement |
Compensation Discussion and Analysis
Message from the Compensation and Human Capital Committee
As members of the compensation and human capital committee, we want to thank the many of you that have met with and provided feedback to us over the course of the last year. We were pleased to hear many shareholders favorably acknowledge enhancements we have made to Allstate’s compensation program during the past few years, including the addition of an ESG-oriented metric in the annual incentive plan and a growth metric in the long-term incentive plan. This past year, the committee was focused on ensuring alignment between compensation decisions and progress against key business strategies, including Transformative Growth and inclusive diversity and equity (IDE). We reviewed progress against IDE goals. We also reviewed senior management selections and oversaw succession planning. We received regular updates on key human capital practices and initiatives happening across Allstate. This included everything from employee engagement to key hires to company culture, with a special focus on Allstate’s IDE strategy, which is an area where the committee is fully engaged and committed to driving improvements.
| Perry M. Traquina (Chair) | Margaret M. Keane | Judith A. Sprieser |
| Richard T. Hume | Andrea Redmond |
Our Compensation Discussion and Analysis describes Allstate’s executive compensation program, including total 2022 compensation for our named executives listed below(1):
Thomas J. Wilson
Chair, President, and Chief Executive Officer (CEO)
Jesse Merten
Executive Vice President and Chief Financial Officer (CFO)(2)
Mario Rizzo
President, Property-Liability and Former CFO(3)
John Dugenske
President, Investments and Corporate Strategy
Suren Gupta
President, Enterprise Solutions
Robert Toohey
Executive Vice President and Chief Human Resources Officer (CHRO)
Former Executive Officers
Don Civgin
Former Vice Chair and CEO, Protection Products and Services(4)
Glenn Shapiro
Former
President,
Property-Liability(5)
| (1) | See Appendix C for a full list of Allstate’s executive officers and titles. |
| (2) | Mr. Merten became Executive Vice President and CFO effective September 1, 2022. |
| (3) | Mr. Rizzo became President, Property-Liability effective September 1, 2022. Prior to September 1, 2022, Mr. Rizzo served as Executive Vice President and CFO. |
| (4) | Mr. Civgin retired from Allstate effective May 1, 2022. (5) Mr. Shapiro retired from Allstate effective September 30, 2022. |
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2022 Executive Compensation At-a-Glance
Allstate’s executive compensation program is designed to ensure that the interests of our executives are aligned with our shareholders:
Alignment of Pay with Performance
Allstate’s executive compensation program is aligned with long-term shareholder value through equity-based programs, combined with shareholder value-based performance measures and financial performance measures that are closely correlated with shareholder value over time. A significant portion of the named executives’ compensation is at-risk and aligned with achievement of our financial and long-term strategic goals. Incentive compensation plans incorporate relevant metrics and targets to drive the behaviors necessary to accomplish our short- and long-term goals.
| (1) | For a description of how these measures are determined, see pages 71-78. |
| 64 | 2023 Proxy Statement Executive Compensation |
Compensation Governance Best Practices
Our compensation program adheres to high standards of compensation governance.
 |
What We Do |  |
What We Do Not Do | |
|
| |||
Benchmark to Peers of Similar Industry, Size and Business Complexity
No Employment Agreements for Executive Officers
 What’s New
Beginning in 2023, in light of the prominence that IDE and Transformative Growth have within Allstate’s long-term strategic priorities, these two components will be integrated into the long-term incentive plan, with a weighting of 10% for each. |
Our Executive Compensation Program is Tied to Our Business Strategies
Allstate’s business relies on the expertise and capabilities of colleagues to lead the company and various businesses in ways that meet customers’ needs and, in turn, promote the long-term interests of shareholders. We have designed our executive compensation program to achieve business objectives and attract, motivate and retain highly talented individuals.
Allstate’s executive compensation program is designed not only to closely align the compensation and interests of the named executives with the long-term interests of shareholders, but also to reflect the economic realities of the operating environment. In addition to salary, Allstate’s executive compensation program emphasizes performance-based compensation in the form of cash incentive awards and equity incentive awards that focus respectively on the achievement of short- and long-term financial and strategic targets. Allstate believes that this target-based incentive structure fosters a culture of high performance and accountability and promotes shareholder interests by closely aligning executive compensation with objectively measured company performance and achievement of key strategic priorities.
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Business Context
In 2022, Allstate adapted to unprecedented increases in loss costs, generated investment returns in excess of benchmarks and advanced our Operating Priorities and the Transformative Growth Strategy:
$3.4 billion
Distributed to shareholders in cash through stock repurchases and common stock dividends
| 66 | 2023 Proxy Statement Executive Compensation |
Comparison of Total Shareholder Return (%) Against Allstate Peers
Compensation Reflects Continued Focus on Sustainable Value Creation
| ● | The committee evaluates the executive compensation structure on an annual basis to ensure alignment with Allstate’s compensation philosophy, business strategies and shareholder priorities. The compensation philosophy centers around maintaining a compensation program for the named executives that is designed to promote the achievement of short-term and long-term financial and strategic goals and create sustainable value for shareholders. Noteworthy accomplishments in 2022 that created shareholder value include: |
| ● | Customer value for auto and homeowners insurance was increased through cost reductions and sophisticated pricing |
| ● | Innovative growth platforms (such as telematics and identity protection) and broadened distribution of Allstate Protection Plans further enhance customer value proposition |
| ● | Expanded customer access was achieved with growth through independent agents |
| ● | Enhanced direct-to-consumer experience that also leverages our expertise in data and analytics through launch of Affordable, Simple, Connected auto insurance product |
| ● | Allstate’s capital position remained strong, allowing us to provide cash returns to shareholders of $3.4 billion in 2022 through dividends and share repurchases |
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Incentive Design and Goal Setting
Role of the Compensation and Human Capital Committee
The compensation and human capital committee oversees and provides strategic direction to management regarding Allstate’s executive compensation program. The committee sets the CEO’s compensation, reviews and approves compensation for the rest of the leadership team, reviews senior management selections and oversees succession planning. The committee also oversees human capital priorities for the company, including review of Allstate’s IDE strategy and initiatives.
The committee evaluates the executive compensation structure on an annual basis to ensure alignment with Allstate’s compensation philosophy, business strategy, and shareholder priorities. The compensation philosophy centers around maintaining a compensation program for the named executives that is designed to promote the achievement of short-term and long-term financial and strategic goals. For additional information on strategic and operating priorities, see pages 10-11.
Incentive Design, Payout, and Goal-Setting Process
For the annual and long-term incentive programs, the committee oversees a rigorous and comprehensive goal-setting process. The committee uses performance measures in the annual and long-term programs that (1) align with the company’s strategy, operating principles and priorities, and shareholder interests, (2) support the achievement of corporate goals, and (3) reflect the company’s overall performance. The following timeline of key events reflects the committee’s process:
|
What’s New
In 2022, the committee engaged a new independent compensation consultant, who provided fresh perspective to the committee on plan design, industry and market trends, and actual compensation in comparison to operating results and peers. |
| 68 | 2023 Proxy Statement Executive Compensation |
|
Shareholder Engagement and 2022 Say-on-Pay Results Allstate engages with its largest shareholders multiple times throughout the year to ensure continued alignment with shareholder expectations and market trends. The committee actively solicits the views of significant shareholders on executive compensation matters. In determining the structure and amount of executive pay, the committee carefully considered this feedback. Investors generally commented that Allstate utilizes best practices and remains focused on pay for performance in its plan design. The committee considered the vote results, investor input and current market practices and made changes to respond to that feedback, as described below. |
87% At our last annual shareholder meeting, approximately 87% of votes cast supported our executive compensation program. |
| What We Heard | What We Did | |||
| Prefer to see an ESG-oriented goal, or other non-financial metric, in the executive compensation program | In 2021, we added a qualitative measure to the annual incentive plan. The Strategic Initiatives Scorecard, weighted at 20%, measures progress made against Transformative Growth and IDE strategies throughout the year. Beginning in 2023, these two components will shift to the PSAs to align with sustainable long-term objectives. | |||
 |
| |||
| When ESG-related metrics are used in compensation programs, prefer to see clear disclosure for how they are evaluated | We include robust disclosure on the criteria considered by the committee when determining funding results under the Strategic Initiatives Scorecard, including a summary of prior year achievements. | |||
|
| |||
The committee has previously made changes to the compensation program based on shareholder feedback. For example, in response to shareholder feedback, beginning in 2020, relative TSR was added as a metric for our performance stock awards, weighted at 30%. This change to the long-term incentive program improves alignment between stock performance and pay outcomes in 2022 and beyond.
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Peer Benchmarking
The committee monitors performance toward goals throughout the year and reviews the executive compensation program design and executive pay levels annually. As part of that evaluation, Pay Governance, the committee’s independent compensation consultant, provided executive compensation data, information on current market practices, and benchmarking on target pay opportunities. The committee benchmarks executive compensation program design, executive pay, and performance against a group of peer companies that are publicly traded. Product mix, market segment, annual revenues, premiums, assets, and market value were considered when identifying peer companies. The committee believes Allstate competes against these companies for executive talent, business and shareholder investment. The committee reviews the composition of the peer group annually with the assistance of its compensation consultant.
The compensation consultant’s recommendation has been to use a peer group that reflects Allstate’s business and operations. Currently, eight out of eleven of Allstate’s peer companies also include Allstate in their respective peer company lists. The following table reflects the peer group used for 2022 compensation benchmarking.
| Total Shareholder Return (%) | ||||||||||||||||||||||||||||
| PEER
COMPANIES(1) Company Name | Revenue ($ in billions) | Market
Cap ($ in billions) | Assets ($ in billions) | Premiums ($ in billions) | One Year | Three Years | Five Years | |||||||||||||||||||||
| AFLAC Inc. | 19.5 | 44.3 | 131.0 | 15.3 | 26.4 | 46.9 | 85.0 | |||||||||||||||||||||
| American International Group Inc. | 56.5 | 46.6 | 526.6 | 34.8 | 13.7 | 34.4 | 21.9 | |||||||||||||||||||||
| Chubb Limited | 43.1 | 91.5 | 199.1 | 40.4 | 16.0 | 50.4 | 67.1 | |||||||||||||||||||||
| The Hartford Financial Services Group Inc. | 22.4 | 23.9 | 73.0 | 19.7 | 12.3 | 34.6 | 51.9 | |||||||||||||||||||||
| Humana Inc. | 92.9 | 64.0 | 43.1 | 87.7 | 11.2 | 42.5 | 113.7 | |||||||||||||||||||||
| Manulife Financial Corporation | 11.8 | 37.0 | 627.3 | 29.1 | (1.1 | ) | 3.0 | 8.6 | ||||||||||||||||||||
| Marsh & McLennan | 20.8 | 81.9 | 33.5 | 12.6 | (3.4 | ) | 55.6 | 121.2 | ||||||||||||||||||||
| MetLife Inc. | 69.9 | 56.4 | 666.6 | 55.0 | 19.2 | 58.0 | 71.4 | |||||||||||||||||||||
| The Progressive Corporation | 49.6 | 75.9 | 75.5 | 49.2 | 26.8 | 98.9 | ||||||||||||||||||||||