8-KLeadership ChangesExhibits & Filings

PROGRESSIVE CORP/OH/ 8-K Report, Executive Changes (Mar 6, 2012)

Filed March 6, 2012For Securities:PGR

Summary

This 8-K filing from The Progressive Corporation, filed on March 6, 2012, primarily details the approval and implementation of the 2012 Progressive Capital Management Bonus Plan. The plan is designed to incentivize investment professionals, including the Chief Investment Officer, William Cody, by offering annual cash bonuses tied to the performance of the company's fixed-income portfolio. Key aspects of the plan include a performance benchmark against similar investment firms and a performance factor that can range from 0.0 to 2.0. This factor is then applied to a participant's target bonus amount, which is calculated based on eligible earnings and a target percentage. Additionally, the filing discloses the determination of Mr. Cody's 2011 bonus, which was based on a performance factor of 0.92, reflecting the portfolio's performance relative to its benchmark.

Key Highlights

  • 1The Progressive Corporation's Compensation Committee approved the 2012 Progressive Capital Management Bonus Plan on February 29, 2012.
  • 2The bonus plan is designed to incentivize investment professionals, including the Chief Investment Officer.
  • 3Bonuses are based on the performance of the company's fixed-income portfolio relative to an investment benchmark of similar investment firms.
  • 4A performance factor, ranging from 0.0 to 2.0, will be determined by the Compensation Committee.
  • 5This performance factor will be multiplied by the participant's target bonus amount to calculate the cash bonus.
  • 6The filing also discloses the determination of the Chief Investment Officer's (William Cody) 2011 bonus, which was based on a performance factor of 0.92.
  • 7The performance factor for Mr. Cody's 2011 bonus was calculated based on a comparison with 190 similar investment firms.

Frequently Asked Questions

The main purpose of the 2012 Progressive Capital Management Bonus Plan is to provide annual cash bonuses to investment professionals, including the Chief Investment Officer, based on the performance of the company's fixed-income portfolio compared to industry benchmarks, thereby incentivizing strong investment performance.

The bonus amount is calculated by multiplying a 'performance factor' (determined by the Compensation Committee, ranging from 0.0 to 2.0) by the participant's 'target bonus amount.' The target bonus amount is itself a product of the participant's eligible earnings and their target percentage.

For the year 2011, the Compensation Committee determined a performance factor of 0.92 for the Chief Investment Officer, William Cody. This factor was used to calculate his investment-related bonus based on the fixed-income portfolio's performance relative to a benchmark of 190 similar investment firms.

The investment benchmark consists of the performance of 190 similar investment firms used to evaluate the company's fixed-income portfolio performance for the purpose of bonus calculations.