Summary
The Progressive Corporation filed an 8-K report on March 21, 2012, detailing compensation arrangements for its executive officers and senior employees. The Compensation Committee approved awards of restricted stock units (RSUs) under the company's 2010 Equity Incentive Plan. These awards are a mix of time-based and performance-based units, designed to align executive interests with company performance and shareholder value.
Key Highlights
- 1Progressive Corporation approved restricted stock unit (RSU) awards to executive officers and senior employees on March 19, 2012.
- 2Time-based RSUs vest in equal installments on January 1st of 2015, 2016, and 2017.
- 3Performance-based RSUs tied to insurance operating results have terms similar to 2011 awards, with an expiration date of January 31, 2017.
- 4New for 2012, performance-based RSUs tied to investment performance were awarded to three executive officers.
- 5Investment performance RSUs will vest based on the company's fixed-income portfolio performance relative to a benchmark of comparable investment firms over 2012-2014.
- 6Vesting for investment performance RSUs can range from 0% to 200% based on percentile ranking against the benchmark.
- 7The investment performance RSU structure is contingent on shareholder approval of a plan amendment at the April 2012 Annual Meeting; unapproved awards will convert to the insurance operating results performance structure.
Frequently Asked Questions
The company approved awards of restricted stock units (RSUs) to its executive officers and certain other senior employees.
There are two types of performance-based awards: one tied to insurance operating results, and a new type tied to investment performance. The investment performance awards are particularly unique, with vesting contingent on how the company's fixed-income portfolio performs compared to industry peers.
Time-based RSUs vest in three equal installments on January 1st of 2015, 2016, and 2017. Performance-based awards related to insurance results expire on January 31, 2017. The investment performance awards cover the period 2012-2014, with vesting determined at the end of this period.
Yes, the vesting structure for the investment performance RSUs is contingent upon shareholders approving an amendment to the Equity Incentive Plan at the Annual Meeting of Shareholders in April 2012. If the amendment is not approved, these awards will automatically convert to the same structure as the performance-based awards tied to insurance operating results.