8-KMaterial AgreementsCorporate ChangesExhibits & Filings

TRAVELERS COMPANIES, INC. 8-K Report, Material Agreement (Feb 10, 2006)

Filed February 10, 2006For Securities:TRV

Summary

This Form 8-K filing from The St. Paul Travelers Companies, Inc. (now known as The Travelers Companies, Inc.) on February 10, 2006, primarily details executive compensation decisions for 2006 and awards for 2005. The executive compensation sub-committee of the Board of Directors approved annual base salaries, incentive awards (cash and restricted stock), stock options, and performance share awards for the Named Executive Officers. The filing also includes amendments to the company's bylaws, streamlining governance provisions that were in place following a prior merger and introducing flexibility for shareholder meetings, including the possibility of virtual meetings. For investors, the key takeaway is the compensation structure and amounts allocated to top executives, reflecting the company's performance and incentive plans. The performance metrics for bonuses, such as return on equity and operating income, are outlined, providing insight into how executive pay is tied to company financial results. The amendments to the bylaws are less material for immediate investment decisions but indicate corporate housekeeping and adaptation to post-merger integration.

Key Highlights

  • 1The St. Paul Travelers Companies, Inc. approved 2006 annual base salaries for its Named Executive Officers, with CEO Jay S. Fishman earning $1,000,000.
  • 2For 2005 performance, executive officers received significant annual incentive awards, totaling approximately $13.8 million ( $8.8 million cash, $5.0 million restricted stock), with CEO Jay S. Fishman receiving the largest portion.
  • 3Long-term incentive equity awards, including stock options and performance shares, were granted to Named Executive Officers, with stock options having an exercise price of $44.79 per share.
  • 4The company's Senior Executive Performance Plan links annual incentive pools to return on equity exceeding 8%, with award pools at 1.5% of after-tax operating earnings.
  • 5The Board of Directors amended and restated the company's bylaws, effective February 7, 2006, to simplify governance and enhance flexibility.
  • 6Bylaw amendments allow shareholder meetings to be held at the principal executive office or designated location, with provisions for county-specific meetings for shareholder-called events and the possibility of fully remote virtual meetings.
  • 7Governance provisions related to the April 1, 2004 merger were deleted from the bylaws as they were no longer effective after January 1, 2006.

Frequently Asked Questions

This 8-K filing primarily announces the executive compensation decisions made by The St. Paul Travelers Companies, Inc. for its Named Executive Officers for the upcoming year (2006) and reports on awards granted based on 2005 performance. It also details amendments to the company's bylaws.

Executive compensation includes base salary, annual incentive awards (cash bonuses and restricted stock) tied to the Senior Executive Performance Plan and company performance (like return on equity), and long-term equity incentives such as stock options and performance shares governed by the 2004 Stock Incentive Plan.

The bylaws were amended and restated to remove outdated governance provisions from a past merger and to provide more flexibility for shareholder meetings. Meetings can now be held at the principal executive office or other designated locations, shareholder-called meetings are restricted to the county of the principal executive office, and the Board can authorize meetings to be held solely by remote electronic communication.

The annual incentive award pool is determined under the Senior Executive Performance Plan. If the company's return on equity for a performance period exceeds 8%, an award pool equal to 1.5% of the company's after-tax operating earnings becomes available for distribution to Named Executive Officers at the Compensation Sub-Committee's discretion, based on company and individual performance.