Summary
This 8-K filing from Progressive Corp/OH/ (PGR), filed on August 14, 2015, details special performance-based awards granted to two key executive officers: S. Patricia Griffith, Personal Lines Chief Operating Officer, and John P. Sauerland, Chief Financial Officer. These awards, consisting of 64,663 restricted stock units (RSUs) each at target, are designed to incentivize and reward progress on the company's "Destination Era" agenda, specifically focusing on increasing the growth of bundled policies. The performance metrics for these RSUs are tied to the increase in the percentage of personal auto policies that are bundled with other insurance products (e.g., boat, motorcycle, or home/condo/renters insurance) over a three-year period, ending in the second fiscal quarter of 2018. The vesting is tiered, with 20% growth in the "Bundled Percentage" triggering target vesting, and 40% growth triggering maximum vesting (double the target). The awards also have a critical financial performance condition tied to a combined ratio of 96 or less over the final 12 months of the performance period.
Key Highlights
- 1Progressive granted special performance-based restricted stock units (RSUs) to its Personal Lines COO and CFO.
- 2The awards are tied to the "Destination Era" agenda, focusing on increasing the "Bundled Percentage" of policies.
- 3Performance is measured by the growth in bundled policies (auto plus specialty lines, umbrella, or home insurance) over a three-year period (Q2 2015 to Q2 2018).
- 4Vesting thresholds are set at 20% growth for target units and 40% growth for maximum units (2x target).
- 5A critical condition for vesting is achieving a combined ratio of 96 or less for the last 12 months of the performance period.
- 6Dividend equivalents will be credited and reinvested into additional RSUs, vesting proportionally with the underlying RSUs.
- 7Awards will be forfeited upon termination of employment for any reason other than death, with provisions for death and the expiration date.