8-KLeadership ChangesShareholder MattersRegulation FD+1

CINCINNATI FINANCIAL CORP 8-K Report, Executive Changes (May 4, 2011)

Filed May 4, 2011For Securities:CINF

Summary

Cincinnati Financial Corporation (CINF) held its annual shareholders' meeting on May 2, 2011, where key corporate governance matters were addressed, including the election of directors, ratification of auditors, and executive compensation. The company reported strong shareholder support for its slate of directors and the ratification of Deloitte & Touche LLP as its independent auditor for 2011. Shareholders also provided a nonbinding advisory vote on executive compensation and the frequency of such votes. Additionally, the filing details significant adjustments and new compensation arrangements for several named executive officers, effective in May 2011. These include changes to base salaries, performance-based incentive compensation, and stock awards. A notable aspect is the new hire of Mr. Sewell as CFO, accompanied by a substantial compensation package and a purchased annuity to offset forfeited benefits from his previous employer.

Key Highlights

  • 1All incumbent directors were overwhelmingly re-elected with substantial majority votes.
  • 2Deloitte & Touche LLP was ratified as the independent registered public accounting firm for 2011 with strong shareholder approval.
  • 3Shareholders approved, on a nonbinding basis, the compensation of named executive officers.
  • 4Shareholders favored an annual nonbinding vote on executive compensation.
  • 5Performance objectives of the company's 2006 stock compensation plan were re-approved.
  • 6Significant adjustments were made to the base salaries and incentive compensation for Messrs. Stecher, Johnston, and Scherer.
  • 7A new Chief Financial Officer, Mr. Sewell, was appointed with a comprehensive compensation package, including a company-purchased annuity valued at $716,136.

Frequently Asked Questions

The shareholder meeting resulted in the re-election of all directors, the ratification of Deloitte & Touche LLP as the independent auditor, and a nonbinding approval of executive compensation. Shareholders also voted for an annual frequency for future advisory votes on executive compensation and re-approved performance objectives for the stock compensation plan.

Yes, the filing details adjustments to base salaries and performance-based compensation for Messrs. Stecher, Johnston, and Scherer. Notably, the newly appointed CFO, Mr. Sewell, received a comprehensive compensation package, including a base salary, performance-based incentives, stock awards, and a $716,136 annuity to compensate for forfeited retirement benefits from his prior employment.

Shareholders provided a nonbinding advisory vote approving the compensation of the named executive officers, with over 114 million 'For' votes compared to approximately 5.2 million 'Against' votes. They also indicated a preference for an annual frequency for these advisory votes.

The annuity was purchased to replace accrued but unvested retirement benefits that Mr. Sewell forfeited from his previous employer when he joined Cincinnati Financial Corporation. The annuity will provide him with a lifetime annual benefit once he reaches age 58.