DEF 14A of Progressive Corp/Oh/, Mar 25, 2024

DEF 14A of Progressive Corp/Oh/

Filed Mar 25, 2024 · FY20230000080661-24-000014

Open on EDGAR

  1. TABLE OF CONTENTS

    | Compensation Programs and Risk Management | 55 | | Executive Compensation | 56 | | Summary Compensation Table | 56 | | Grants of Plan-Based Awards | 58 | | Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table | 59 | | Outstanding Equity Awards at Fiscal Year-End | 60 | | Option Exercises and Stock Vested | 62 | | Nonqualified Deferred Compensation | 63 | | Potential Payments Upon Termination or Change in Control | 64 | | Pay Ratio Disclosure | 67 | | Pay Versus Performance | 69 | | Director Compensation | 75 | | Compensation of Non-Employee Directors At Fiscal Year-End | 75 | | Narrative Disclosure to Director Compensation Table | 75 | | Item 2: Proposal to Approve The Progressive Corporation 2024 Equity Incentive Plan | 77 | | Item 3: Advisory Vote to Approve our Executive Compensation Program | 92 | | Item 4: Proposal to Ratify the Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm for 2024 | 93 | | Other Independent Registered Public Accounting Firm Information | 94 | | Approval of Audit and Non-Audit Services | 94 | | Independent Registered Public Accounting Firm Fees | 94 | | Item 5: Shareholder Proposal | 95 | | Other Matters | 98 | | Procedures for Recommendations and Nominations of Directors and Shareholder Proposals | 98 | | Householding | 99 | | Charitable Contributions | 100 | | Solicitation | 100 | | Proxy Voting Matters | 100 | | Questions and Answers about the Annual Meeting and Voting | 101 | | Available Information | 104 | | Exhibit A: The Progressive Corporation 2024 Equity Incentive Plan | E-1 |

  2. NOMINEES FOR DIRECTOR

    NOMINEES FOR DIRECTOR The Board has nominated 12 directors, each of whom is a current director, with a broad and complementary set of skills, experiences, backgrounds, and perspectives.

  3. ITEM 1: ELECTION OF DIRECTORS

    ITEM 1: ELECTION OF DIRECTORS Our Code of Regulations establishes the number of directors at no fewer than five and no more than 13. The number of directors has been fixed at 12, and there are currently 12 directors on the Board. As stated in our Corporate Governance Guidelines, the Board may change the size of the Board from time to time depending on its needs and the availability of qualified candidates. In this proposal, we are asking shareholders to elect as directors the 12 nominees named below. Each director elected will serve a one-year term and until their successor is duly elected. If, by reason of death or other unexpected occurrence, any one or more of the nominees named below is not available for election, the proxies will be voted for substitute nominee(s), if any, as the Board may propose. In the alternative, the Board may decide to reduce the size of the Board prior to the 2024 Annual Meeting or fill the vacancy at a later date. (The deadlines for shareholders to nominate one or more individuals for election to the Board at the Annual Meeting have passed.)

  4. NOMINEES FOR DIRECTOR

    NOMINEES FOR DIRECTOR Based upon a recommendation from the Board’s Nominating and Governance Committee, the Board has nominated the following persons for election to the Board: •Danelle M. Barrett •Philip Bleser •Stuart B. Burgdoerfer •Pamela J. Craig •Charles A. Davis •Roger N. Farah •Lawton W. Fitt •Susan Patricia Griffith •Devin C. Johnson •Jeffrey D. Kelly •Barbara R. Snyder •Kahina Van Dyke Information regarding the nominees can be found below under “– Director Nominee Highlights” and “ – Director Nominee Information.”

  5. NOMINEES FOR DIRECTOR

    | The Board of Directors recommends that you vote FOR the election of each nominee. |

  6. DIRECTOR NOMINEE SELECTION PROCESS

    DIRECTOR NOMINEE SELECTION PROCESS The Board is responsible for recommending director candidates for election by the shareholders and for electing directors to fill vacancies or newly created directorships. The Board has delegated the screening and evaluation process for director candidates to the Nominating and Governance Committee, which identifies, evaluates, and recruits highly qualified director candidates and recommends them to the Board.

  7. Qualifications, Experiences, and Skills

    Qualifications, Experiences, and Skills The Nominating and Governance Committee evaluates each director candidate individually when considering whether the candidate should be nominated to serve on the Board. The committee will give due consideration to factors deemed relevant by the committee or the Board, including whether the candidate possesses the general qualities required to serve successfully as a director, including: intelligence, thoughtfulness, diligence, judgment, character, and commitment. The committee reviews the candidate’s relevant experiences, the extent of their demonstrated excellence and success in their chosen career and the specific attributes, skills, talents, or knowledge the candidate would be expected to add to the Board. In addition to the qualifications that each director nominee must have, the Board believes that one or more of its Board members should possess the following experiences and expertise because of their particular relevance to the company’s business, strategy, and structure. These experiences and expertise were considered by the committee in connection with this year’s director nomination process: •Accounting & Finance •Corporate Governance •Highly Regulated Businesses •Insurance/Financial Services •Investment & Capital Management •Leadership/Culture/DEI •Retail/Marketing •Risk Management •Technology/Cybersecurity The committee also considers the company’s and the Board’s needs, the qualifications of other available candidates, and how the addition of the candidate to, or the continued service on, the Board would enhance the Board’s overall diversity and capabilities.

  8. Diversity

    Diversity The Board’s policy is to include individuals with a wide variety of tenure, talents, skills, experiences, and perspectives, in addition to considering demographic criteria such as race, ethnicity, sexual orientation, gender, nationality, age, and disability, whenever possible. The directors believe that such diversity provides the Board with broader perspectives, a wide array of thoughts and ideas, and insight into the views and priorities of our diverse investor, customer, independent agent, and employee bases. The committee’s work in recruiting new members will continue to reflect their commitment to achieve such diversity. To evaluate the impact of the addition of a candidate on the diversity of the Board, the committee considers how distinct the candidate’s background, experiences, skills, and personal characteristics are from those of the incumbent directors and whether the candidate would bring a unique perspective to the Board. The committee assesses the effectiveness of its practices for consideration of diversity in nominating director candidates by periodically analyzing the diversity of the Board as a whole and, based on that analysis, determining whether it may be desirable to add to the Board a director with a certain type of background, talent, experience, personal characteristic, skill, or a combination thereof.

  9. Other Public Company Board Commitments

    Other Public Company Board Commitments The Board expects that each director will devote sufficient time and effort as necessary to serve as a director and as a member of the Board’s committee(s) to which the director may be assigned. Therefore, in accordance with our Corporate Governance Guidelines: •directors that are actively involved in an executive capacity with the company or another publicly held company can sit on no more than two public companies' boards in addition to the company (excluding subsidiaries or companies in which the director’s employer holds an investment); and •directors that are not actively involved in management of the company or another company (including a non-executive board chairperson) can sit on no more than four public companies' boards in addition to the company. Director commitment levels, including public company board leadership positions, are reviewed at least annually to confirm that each director has sufficient time to perform their duties. All directors are compliant with this expectation at this time.

  10. DIRECTOR NOMINEE HIGHLIGHTS

    DIRECTOR NOMINEE HIGHLIGHTS

  11. Director Nominee Diversity

    Director Nominee Diversity We are one of a few companies in the Fortune 500 with a female CEO, as well as a female independent Board chairperson. The nominees include a diverse mix of directors.

  12. Director Nominee Experiences, Qualifications, Attributes, and Skills

    Director Nominee Experiences, Qualifications, Attributes, and Skills The Board believes that it is desirable that the following experiences, qualifications, attributes, and skills be possessed by one or more of its Board members because of their particular relevance to the company’s business and structure, and these were all considered by the Nominating and Governance Committee in connection with this year’s director nomination process:

  13. Director Nominee Experiences, Qualifications, Attributes, and Skills

    | | | | | | | | | | | | | Accounting & Finance | Corporate Governance | Highly Regulated Businesses | Insurance/ Financial Services | Investment & Capital Management | Leadership/ Culture/DEI | Retail/Marketing | Risk Management | Technology/Cybersecurity | | Danelle M. Barrett | | l | l | | | l | | l | l | | Philip Bleser | l | l | l | l | l | l | l | l | | | Stuart B. Burgdoerfer | l | l | | | l | l | l | l | | | Pamela J. Craig | l | l | | | l | l | | l | l | | Charles A. Davis | l | l | l | l | l | l | | l | | | Roger N. Farah | l | l | | | | l | l | l | | | Lawton W. Fitt | l | l | l | l | l | l | | l | | | Susan Patricia Griffith | | l | l | l | | l | l | l | | | Devin C. Johnson | l | | | | | l | l | | l | | Jeffrey D. Kelly | l | l | l | l | l | l | | l | | | Barbara R. Snyder | | | l | l | | l | | l | l | | Kahina Van Dyke | | | | l | l | l | l | | l |

  14. DIRECTOR NOMINEE INFORMATION

    DIRECTOR NOMINEE INFORMATION The following information is provided for each nominee and includes descriptions of each nominee’s specific experience, qualifications, attributes, and skills that led the Nominating and Governance Committee and the Board to conclude that the nominee should serve on the Board. Unless otherwise indicated, each nominee has held the principal occupation indicated for more than five years. Current directorships and former directorships (held during the last five years) at other public companies are also shown. The term of each current director expires at the Annual Meeting.

  15. DIRECTOR NOMINEE INFORMATION

    | Name (Age) | Principal Occupation, Business Experience, and Qualifications | Other Directorships | | Danelle M. Barrett (56) Director since: 2023 | U.S. Navy, Rear Admiral, Retired; Cybersecurity Division Director and Deputy Chief Information Officer (military) Prior to retiring, Rear Admiral Barrett served in leadership positions with the U.S. Navy for 30 years. She most recently served as the Navy Cybersecurity Division Director and Deputy Chief Information Officer on the Chief of Naval Operations staff from 2017 to 2019. In this role, she led the U.S. Navy’s strategic development and execution of digital and cybersecurity efforts, including key enterprise information technology modernization improvements to enhance warfighting and business operations. Rear Admiral Barrett also held several prior leadership positions, including Director of Current Operations at the U.S. Cyber Command and the Chief of Staff at the Navy Information Forces Command. She received her commission as an officer from the U.S. Naval Reserve Officer Training Corps. She has several advanced degrees in national security strategic studies, information management, and human capital management, among others. In addition to her current and past service as a director of two public companies, including serving as a member of their compensation and governance committees, Rear Admiral Barrett brings to the Board extensive leadership and operational experiences in complex cybersecurity matters, digital modernization and innovation, information technology systems, technology risk management, and strategic assessment, planning, and implementation. | Current ShoulderUp Technology Acquisition Corp Former KVH Industries, Inc. | | | | | | | Key Skills: Corporate Governance Highly Regulated Businesses Leadership/Culture/DEI Risk Management Technology/Cybersecurity | |

  16. DIRECTOR NOMINEE INFORMATION

    | Name (Age) | Principal Occupation, Business Experience, and Qualifications | Other Directorships | | Philip Bleser (69) Director since: 2017 | Retired; Chairman of Global Corporate Banking, JPMorgan Chase & Co., New York, New York (financial services) Prior to retiring in 2016, Mr. Bleser served on the executive leadership team at JPMorgan Chase, a preeminent commercial bank and financial services company, where he led the firm’s global corporate banking efforts. In these roles, Mr. Bleser’s responsibilities included, among others, strategic direction and execution, risk management, and operations of a global technology- and customer-driven corporate banking operation. Mr. Bleser also previously served on the board of a specialty retail company, enhancing his experience in the areas of public company governance and the operations of its audit and governance committees, as well as deepening his understanding of a consumer-facing retail business. In addition to these financial and operational roles, Mr. Bleser has earned a climate leadership certificate, enhancing the Board’s oversight of climate risks and sustainable growth strategies. | Current None Former Francesca’s Holding Corp. | | | | | | | Key Skills: Accounting & Finance Corporate Governance Highly Regulated Businesses Insurance/Financial Services Investment & Capital Management Leadership/Culture/DEI Retail/Marketing Risk Management | | | Stuart B. Burgdoerfer (60) Director since: 2009 | Retired; Executive Vice President and Chief Financial Officer, L Brands, Inc., Columbus, Ohio (retailing) prior to August 2021; Interim Chief Executive Officer of VS NewCo (retailing) from May 2020 to February 2021 Mr. Burgdoerfer’s experience includes work as a CPA at Deloitte, as a management consultant and in financial leadership roles at PepsiCo/YUM Brands subsidiary Pizza Hut, and as Senior Vice President of Finance at The Home Depot. He was the Executive Vice President and Chief Financial Officer of L Brands from April 2007 through August 2021, and served from May 2020 through February 2021 as Interim Chief Executive Officer of L Brand’s subsidiary Victoria's Secret (VS NewCo), expanding his executive and leadership responsibilities at this global retail company. Mr. Burgdoerfer’s experience also includes service as a member of the Board of Trustees at Spelman College. Mr. Burgdoerfer’s substantial experience in leadership roles as a financial professional and senior executive also enhances the Board’s financial expertise. | Current None Former None | | | | | | | Key Skills: Accounting & Finance Corporate Governance Investment & Capital Management Leadership/Culture/DEI Retail/Marketing Risk Management | |

  17. DIRECTOR NOMINEE INFORMATION

    | Name (Age) | Principal Occupation, Business Experience, and Qualifications | Other Directorships | | Pamela J. Craig (67) Director since: 2018 | Retired; Chief Financial Officer, Accenture PLC, Dublin, Ireland (global management consulting) Ms. Craig is the former Chief Financial Officer of the global professional services firm, Accenture PLC. Ms. Craig worked at Accenture for 34 years in a variety of consulting and executive roles, where she developed extensive finance, capital management, operational, enterprise risk management, and technology expertise, as well as leadership experience in the context of a large, growth-oriented organization. In addition, her current and past service as a director of Progressive and other public companies, including companies in the retail, technology services and security, and manufacturing industries, and as a member of other audit, compensation, governance, and corporate responsibility and sustainability committees, provide her with valuable experience in addressing the many risks and governance issues facing public companies. | Current Merck & Co., Inc. Corning Incorporated Former 3M Company Akamai Technologies, Inc. | | | | | | | Key Skills: Accounting & Finance Corporate Governance Investment & Capital Management Leadership/Culture/DEI Risk Management Technology/Cybersecurity | | | Charles A. Davis (75) Director since: 1996 | Chief Executive Officer, Stone Point Capital LLC, Greenwich, Connecticut (private equity investing) Mr. Davis has broad financial, investment, and capital management expertise developed through his work as a partner at Goldman Sachs Group, investment management experience at MMC Capital, Inc., and as Chief Executive Officer of Stone Point Capital LLC. Mr. Davis has extensive knowledge of Progressive’s business and history, which he has gained through his service as a director of the company since 1996. From his decades of investment banking and private equity experiences, Mr. Davis has a deep understanding of the insurance industry, capital allocation, investment management, and strategic transactions. Additionally, he has substantial corporate governance and risk expertise from his service on the boards of other public and private companies, including in the reinsurance industry, and as a member of other finance and risk committees. | Current AXIS Capital Holdings Limited Former The Hershey Company | | | | | | | Key Skills: Accounting & Finance Corporate Governance Highly Regulated Businesses Insurance/Financial Services Investment & Capital Management Leadership/Culture/DEI Risk Management | |

  18. DIRECTOR NOMINEE INFORMATION

    | Name (Age) | Principal Occupation, Business Experience, and Qualifications | Other Directorships | | Roger N. Farah (71) Director since: 2008 | Retired; Executive Director, Tory Burch LLC, New York, New York (retailing) Mr. Farah previously served in executive officer positions at Ralph Lauren Corporation and Tory Burch LLC and as a director at other public companies, primarily in the retail and health insurance industries. The extensive management and operational experience Mr. Farah has obtained through over 40 years in the retail industry enables him to provide insights, particularly in the areas of customer trends, product development, brand management, and risk analysis, from a consumer-focused industry that is different than the property and casualty insurance industry. Due to his current and past service as a director of other public companies, he also has significant experience addressing the risks and corporate governance issues facing public companies, including serving as a member of their compensation, governance, and corporate social responsibility committees. | Current CVS Health Corporation Former Metro Bank PLC Tiffany & Co. | | | | | | | Key Skills: Accounting & Finance Corporate Governance Leadership/Culture/DEI Retail/Marketing Risk Management | | | Lawton W. Fitt (70) Director since: 2009 | Chairperson of the Board, The Progressive Corporation, Mayfield Village, Ohio since May 2018; Lead Independent Director, Progressive, prior to May 2018; Retired Partner, Goldman Sachs Group, New York, New York (financial services) Ms. Fitt brings a strong financial and corporate governance background to her service as Chairperson of our Board. She has substantial experience in the areas of investment banking, strategic transactions, risk analysis, including insight into the operation of capital markets, as a result of her work as a partner at Goldman Sachs Group. As our Chairperson, Ms. Fitt has a deep understanding of Progressive’s culture, long-term strategic vision, and risk management processes. In addition, she attained executive management experience through her work as the Secretary of the Royal Academy of Arts in London. Ms. Fitt also has significant experience as a director at various other public, for-profit and non-profit organizations, including service on the audit, compensation, and governance committees of public companies. | Current Ciena Corporation The Carlyle Group Inc. Former Micro Focus International plc | | | | | | | Key Skills: Accounting & Finance Corporate Governance Highly Regulated Businesses Insurance/Financial Services Investment & Capital Management Leadership/Culture/DEI Risk Management | |

  19. DIRECTOR NOMINEE INFORMATION

    | Name (Age) | Principal Occupation, Business Experience, and Qualifications | Other Directorships | | Susan Patricia Griffith (59) Director since: 2016 | President and Chief Executive Officer, The Progressive Corporation, Mayfield Village, Ohio Mrs. Griffith has been with the company since 1988 and has held a series of executive leadership positions, including Chief Executive Officer (since 2016), Chief Human Resource Officer, Claims Group President (in charge of the entire Claims organization), President of Customer Operations (overseeing the contact center (sales and delivery), customer experience, systems experience, and workforce management groups), and Personal Lines Chief Operating Officer, where she oversaw the Personal Lines, Claims, and Customer Relationship Management groups. Mrs. Griffith’s intimate knowledge of Progressive and her leadership experience gives her a deep understanding of our culture, DEI efforts, operations, challenges, and opportunities. In addition to her extensive service with Progressive, Mrs. Griffith has enhanced her experience in the area of public company governance through her current and past service as a director of other public companies. | Current FedEx Corporation Former None | | | | | | | Key Skills: Corporate Governance Highly Regulated Businesses Insurance/Financial Services Leadership/Culture/DEI Retail/Marketing Risk Management | | | Devin C. Johnson (50) Director since: 2020 | President, The SpringHill Company (global consumer and entertainment) since March 2022; Chief Operating Officer, The SpringHill Company from April 2020 to March 2022; President and Chief Operating Officer, UNINTERRUPTED, LLC (entertainment and media) prior to April 2020 Mr. Johnson has broad executive management and operational experiences in digital and social media, brand creation and marketing, and content production, developed through his experience at The SpringHill Company and through prior executive roles at Tribune Media and NBCUniversal. Mr. Johnson has extensive leadership experience in marketing, understanding and applying consumer insights, media and content delivery in the consumer products arena, and start-up and business development. Through his roles as the President and Chief Operating Officer of The SpringHill Company and previously as the President of UNINTERRUPTED, LLC, he has gained expertise in creating culturally inspired brands, entertainment, and products. | Current None Former None | | | | | | | Key Skills: Accounting & Finance Leadership/Culture/DEI Retail/Marketing Technology/Cybersecurity | |

  20. DIRECTOR NOMINEE INFORMATION

    | Name (Age) | Principal Occupation, Business Experience, and Qualifications | Other Directorships | | Jeffrey D. Kelly (70) Director since: 2012 Prior service: 2000-2009 | Retired; Chief Operating Officer and Chief Financial Officer, RenaissanceRe Holdings Ltd., Pembroke, Bermuda (reinsurance services) Mr. Kelly brings a strong history of executive management, investment management, capital markets, financial, and operational experiences in the financial services industry. Among other responsibilities, he has served as the principal financial officer at a major commercial bank and a large publicly traded reinsurer. Mr. Kelly’s experience on the Board also gives him insight into our insurance and investment operations. Due to his past roles at RenaissanceRe, Mr. Kelly also provides a different perspective about the insurance industry and understanding of reinsurance markets. | Current None Former None | | | | | | | Key Skills: Accounting & Finance Corporate Governance Highly Regulated Businesses Insurance/Financial Services Investment & Capital Management Leadership/Culture/DEI Risk Management | | | Barbara R. Snyder (68) Director since: 2014 | President, The Association of American Universities (higher education) since October 2020; President, Case Western Reserve University, Cleveland, Ohio, prior to October 2020 Ms. Snyder has extensive leadership experience as the President of The Association of American Universities (AAU), an organization composed of the country’s leading research universities helping shape higher education policy. This extensive expertise was also previously gained as the President of Case Western Reserve University (Case) and in leadership positions she held at other non-profit and university organizations. Ms. Snyder has for many years been a member of the board of directors of a large publicly traded financial services company, where she serves on the compensation and governance committees. At Case, she led a revitalization of the school while overseeing enhancements of academic excellence, faculty collaboration, strategic planning, fundraising efforts, cybersecurity initiatives, and the qualifications and diversity of Case’s student body. Her executive role at a leading university, and now the broader outlook that comes with the presidency of AAU, brings a unique perspective to our Board. | Current KeyCorp Former None | | | | | | | Key Skills: Highly Regulated Businesses Insurance/Financial Services Leadership/Culture/DEI Risk Management Technology/Cybersecurity | |

  21. DIRECTOR NOMINEE INFORMATION

    | Name (Age) | Principal Occupation, Business Experience, and Qualifications | Other Directorships | | Kahina Van Dyke (52) Director since: 2018 | Operating Partner, Advent International (private equity) since October 2023; Global Head, Digital Channels and Client Data Analytics, Standard Chartered PLC, London, England (international banking) from February 2020 through June 2023; Senior Vice President of Business and Corporate Development, Ripple Labs, Inc., San Francisco, California (global digital payments network) prior to December 2019 Ms. Van Dyke is an Operating Partner at Advent International, where she focuses on supporting Advent’s fintech investment efforts and related portfolio company management teams. In her prior role at Standard Chartered’s Corporate Commercial and Institutional Banking Division, she worked on developing a digital banking platform for global trade, commerce, and financial services. In previous roles at Ripple and Facebook, she was responsible for strategic partnerships and investments across the global financial and technology industries and working with external companies to develop and grow financial products and services. Prior to these roles, Ms. Van Dyke held senior international executive positions for more than 15 years in the global financial services industry. She is also the Founder and Chair of the Global Women Executive Leadership Council, a group that promotes leadership and peer mentoring for women in more than 70 countries. She brings to our Board extensive senior management experience in international consumer and corporate banking combined with leadership at a major technology company. | Current None Former None | | | | | | | Key Skills: Insurance/Financial Services Investment & Capital Management Leadership/Culture/DEI Retail/Marketing Technology/Cybersecurity | |

  22. OVERVIEW

    OVERVIEW Our Vision is to become consumers’, agents’, and business owners' number one destination for insurance and other financial needs. We believe that our Core Values, including our Profit Core Value, build the foundation that drives every decision we make and influences how we treat others. Accordingly, these values are deeply-rooted in the minds and actions of our executive officers. We structure our executive compensation program to support our Vision and our long-term profitability goal, providing strong alignment between pay and performance. We generally provide target compensation to our executives at or below the market median, with performance-based compensation providing upside potential when we perform well against pre-established and objective measures that we believe correlate to shareholder value. In addition, we provide a significant percentage of total compensation to executives in the form of performance-based equity awards, and we believe these awards support a strong pay-for-performance linkage and further align the interests of our executives with those of our shareholders. For many years, our goal has been to grow as fast as we can at a 96 or better combined ratio during each calendar year while continuing to deliver high-quality customer service. To us, this profitable growth goal is not a value of convenience from which we look to waiver depending on the state of our business. Instead, we believe it remains steadfast and that our continued and unrelenting focus on our profitable growth goal has increased, and will continue to increase, our shareholders’ value over the long term. The combined ratio represents the profitability of our insurance operations and is used in certain of our executive compensation program’s performance-based equity and cash awards. These awards represent 86% and 77% (on average) of the maximum potential 2023 annual compensation for Susan Patricia Griffith, our President and Chief Executive Officer (CEO), and our other named executive officers (NEO), respectively. We take a long-term view towards creating, sustaining, and increasing shareholder value and believe that focusing on achieving a 96 or better combined ratio, in addition to the other growth elements of our executive compensation program, supports this goal. In our view, by focusing on putting profit before growth, we are enabled to embrace uncertainty, be nimble and resilient, and ultimately pivot our focus and strategies to achieve our business objectives and deliver solid results. We believe this serves the long-term interests of our shareholders. We believe that our compensation programs have contributed to our exceptional and profitable growth in recent years. For example, over the past three years we have profitably grown our net premiums earned (the source of nearly all of our non-investment revenue) by $19.4 billion, or 49%. During 2023, net premiums written grew by 20% and net premiums earned grew by 19%, at a profitable 94.9 combined ratio. We believe this performance exceeds the underwriting performance of our industry peers. We continue to demonstrate strong pay-for-performance alignment in our equity and cash incentive awards. During the past five years: •we grew faster than the markets of the insurance business lines we measure, resulting in the related vesting of the performance-based restricted stock unit awards above target; •we achieved above-market longer-term fixed-income portfolio performance, resulting in the vesting of the performance-based restricted stock unit awards that reflect our investment results above target; and •our Gainshare program paid out an average of 162% of target based on the growth in average policies in force and profitability of our insurance businesses (for 2023, it paid out at 178% of target). In addition, our cumulative total shareholder return over the past five years exceeded that of the S&P 500 by 1.9 times (x), as disclosed in our performance graph in our 2023 Annual Report to Shareholders. Our cumulative total shareholder return over the past four years also exceeded that of our industry peer group by 2.2x, as disclosed in "Pay Versus Performance." See “Proxy Statement Summary” for more information regarding our annual financial results for 2023 and "Pay Versus Performance" for an additional discussion related to our pay-for-performance alignment.

  23. 2023 CEO Compensation

    2023 CEO Compensation At-risk annual equity and cash incentive awards represented 97% of maximum potential compensation and 93% of target compensation. Mrs. Griffith received a salary increase of 5.3% and her salary remains well below the market median. Annual Equity Awards: •Time-based: 1.0x salary •Performance-based: •Insurance operations: 8.0x target - could range from zero to 20.0x salary; and •Investment results: 1.0x target - could range from zero to 2.0x salary. Annual Cash Incentive: 2.5x target - could range from zero to 5.0x salary. CEO’s equity ownership (as of January 31, 2024): Our CEO directly owned shares valued at 86x salary, well in excess of the 6x required by our Corporate Governance Guidelines (which excludes all unvested equity awards).

  24. 2023 Other NEOs Compensation

    2023 Other NEOs Compensation At-risk annual equity and cash incentive awards averaged 90% of maximum potential compensation and 82% of target compensation. Each NEO received a salary increase, as discussed below. Annual Equity Awards: •Time-based: 1.0x salary; and •Performance-based: 2.17x target, on average - could range from zero up to 6.9x salary (amounts vary by executive). Annual Cash Incentives: between 1.0x and 1.5x target (amounts vary by executive) - could range between zero and 3.0x salary. Equity ownership requirements (as of January 31, 2024): Each of the NEOs was in compliance with the expectation in our Corporate Governance Guidelines that they hold equity (including unvested time-based equity awards) valued at a minimum of 3x salary.

  25. OUR EXECUTIVE COMPENSATION PROGRAM

    OUR EXECUTIVE COMPENSATION PROGRAM Our executive compensation program is designed and implemented under the direction and guidance of the Compensation and Talent Committee. Broadly stated, we seek to maintain a consistent executive compensation program with the following objectives: •attract and retain outstanding executives with the leadership skills and expertise necessary to drive results, build an enduring business, and create long-term shareholder value; •motivate executives to achieve our long-term strategic goals while meeting challenging short-term business objectives; •reward performance and differentiate compensation based on the achievement of challenging goals; and •align the interests of our executives with those of shareholders. Progressive’s executive compensation program is designed to serve shareholders’ interests by strongly tying our executives’ compensation to the achievement of important operating goals and the value of our common shares. As a result, while we seek to offer competitive salaries to our executives, the more significant aspects of our executive compensation program are at-risk components consisting of equity awards and annual cash incentive opportunities. As a general matter, executive salaries are intended to be at, or somewhat lower than, median amounts paid to executives who have similar responsibilities at comparable companies, while our performance-based equity and annual incentive programs provide the potential to earn above-market median total compensation when the company achieves challenging goals designed into these plans. While we consider market data when making decisions on executive compensation, variations occur for a number of reasons, including the unique nature of a specific executive’s responsibilities, individual performance, the tenure and experience of an executive, the executive’s future potential, and our business needs.

  26. Equity Awards

    Equity Awards A high percentage of our executive compensation program provides long-term incentives through grants of equity-based awards, currently in the form of restricted stock units, which creates a strong pay-for-performance linkage and aligns the interests of our executives with those of our shareholders. Under a restricted stock unit grant, the executive receives an award of a specified number of units; upon vesting of the award, the executive is entitled to receive one Progressive common share for each unit that is vesting. Annual awards of restricted stock units are made to the NEOs in the form of performance-based awards and time-based awards. As with other elements of our executive compensation program, integral to our performance-based equity awards are pre-established growth and profitability measurements that correlate to shareholder value, are consistent with our companywide objectives, and align with our Profit Core Value. For 2023, the aggregate dollar value (fair value on the date of grant) of annual equity awards made to the NEOs was approximately $14.5 million in performance-based awards (at target value) and $3.5 million in time-based awards. Those awards were determined based on the following target levels:

  27. Equity Awards

    | | Performance-Based Award Target Value (Multiple of Salary)1, 2 | | Time-Based Award Value (Multiple of Salary)2 | | Name | 2023 | | 2023 | | Susan Patricia Griffith | 9.00x | 3 | 1.00x | | John P. Sauerland | 2.75 | 3 | 1.00 | | Patrick K. Callahan | 2.75 | | 1.00 | | Karen B. Bailo | 1.50 | | 1.00 | | John Murphy | 1.50 | | 1.00 |

  28. Equity Awards

    1Pursuant to performance-based awards, between zero-2.5x (zero-2.0x for investment-based awards) of the number of units awarded can vest. See discussions above. 2For 2023, the Compensation and Talent Committee revised the allocation of Mrs. Griffith’s annual equity awards to increase the amount granted as performance-based awards to 9.0x of her salary and decrease the amount granted as time-based awards to 1.0x her salary. The other executives remained unchanged from the prior year. 3For the following executives, investment-based awards represented the indicated multiple of each executive's salary for the year: Mrs. Griffith, 1.0x; and Mr. Sauerland, 0.45x. Since 2021, our agreements include a non-compete provision and contain different provisions for death, disability and retirement than prior awards (see “Executive Compensation – Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table”). Annual Performance-Based Awards – Performance versus Market Insurance Results Each of the NEOs and 54 other senior managers were granted performance-based restricted stock unit awards that measure the growth of our insurance businesses, and compare that growth to the growth of the market as a whole, over a three-year performance period, and also include a profitability requirement of a combined ratio of 96.0 or better over the most recent 12-month period when the vesting is determined. The committee granted these awards to each of the NEOs in March 2023. These awards require our business lines to outgrow the market by a specified percentage for that business line in determining the actual number of units eligible to vest. Specifically, the 2023 awards measure the growth of two business lines (private passenger auto and commercial auto) from 2023 through 2025 as compared to the growth rate of each of these markets as a whole (excluding our results) over that same period. We measure against these business lines since they represent market categories that align with financial reporting to insurance regulatory authorities and are publicly available and compiled routinely by third parties. With respect to the 2023 awards, the homeowners multiple-peril business line was removed from the awards, in light of our focus on growing in states with traditionally less catastrophe exposure and limiting growth in coastal and hail-prone states; the homeowners multiple-peril business line had previously been included in prior awards. Each business unit will receive a score, which will then be weighted based on the business lines’ relative contribution to net premiums earned. These scores will then be combined to produce a final performance factor. In each case, we will use A.M. Best data to make these calculations. The final performance factor will be used as a “multiplier” to increase or decrease the number of units (compared to target) that can vest. Although these awards are designed to reward growth, they do not reward growth at all cost, and also include a restriction on vesting based on the profitability requirement previously described. The performance score for each business unit will be determined as follows:

  29. Equity Awards

    | Performance vs. Business Line Market1 | Determination of the Performance Score for the Business Line | | If our growth for the business line exceeds the market growth rate by the maximum measure for that business line or more | Score will be 2.5x; this is the maximum possible score | | If our growth rate for the business line exceeds the market growth rate by more than the target measure for that business line but less than the maximum measure for that business line | Score will be between 1.0x and 2.5x, in proportion to the extent to which each business line’s growth rate exceeds the market’s growth rate above the target rate | | If our growth rate for the business line exceeds the market growth rate by less than the target measure for that business line | Score will be up to 1.0x of the target in proportion to the extent to which each business line’s growth rate exceeds the market’s growth rate | | If the business line’s growth rate is equal to or less than the market growth rate | The score for the business line will be 0 |

  30. Equity Awards

    1 Growth is measured by premium growth, which is calculated as the percentage change in annual direct earned premium (defined as the sum of net earned premium and earned premiums ceded under reinsurance). For 2023, the target growth rate measure and maximum growth rate measure for each business line is as follows:

  31. Equity Awards

    | Business Line | Target Growth Rate Measure | Maximum Growth Rate Measure | | Private passenger auto | Two percentage points | Three and a half percentage points | | Commercial auto | Two percentage points | Three and a half percentage points |

  32. Equity Awards

    For the 2023 awards, the performance factor is expected to be determined in July 2026. If the performance factor is zero, the awards will not vest and will be forfeited. If the performance factor is greater than zero, the performance factor is determined and the awards are eligible to vest, if and when the 12-month profitability requirement is satisfied. For these awards, if the profitability requirement is not satisfied by January 31, 2028, the awards will not vest and will expire. We believe that this approach, with a potential upside for outperformance as compared with the private passenger auto and commercial auto markets, provides appropriate focus on our competitor set in the insurance market, consistent with our profitable growth goals. In addition, the profitability requirement imposes an additional challenge to our growth in market share, given the fact that some of our competitors do not consistently show a profit in their insurance operations and rely instead on their investment activity to fund insurance liabilities. Annual Performance-Based Equity Awards – Investment Results In March 2023, the Compensation and Talent Committee also awarded performance-based restricted stock units to Mrs. Griffith, Mr. Sauerland, and our CIO, with a performance goal relating to investment performance. These awards did not increase the aggregate size of the equity awards to the CEO or CFO, but represented a portion of the total performance-based awards that otherwise would have been granted to them. These awards measure the performance of our fixed-income portfolio for the three-year period of 2023 through 2025, on the basis of the fully taxable equivalent (FTE) total return. The FTE total return is calculated by dividing the recurring investment income (which includes 50% of the benefit of state premium tax abatements associated with certain municipal securities held in our portfolio, and the total net realized (and changes in total unrealized) gains or losses on the applicable securities), by the average outstanding fixed-income investments for the period. Those results are then compared to the performance results achieved by a benchmark group of comparable firms meeting a series of objective criteria for the same time periods. The fixed-income portfolio was chosen for these equity awards because it represents a substantial portion of our investment portfolio (over 95% at year end) and our CIO and other investment professionals actively manage this fixed-income portfolio and do not actively manage our equity investments. The CEO, CFO, and CIO each received a target number of restricted stock units and the number of units that will ultimately vest can vary between zero and 2.0 times target. At the end of the performance period, using performance data supplied by an independent third party, the performance factor will be determined based on our percentile ranking in the benchmark group as follows:

  33. Equity Awards

    | Score=0 Rank at or below the percentile | Score=1.0 Rank equal to the percentile | Score=2.0 Rank at or above the percentile | | 25th | 50th | 75th |

  34. Equity Awards

    The percentile ranking will be interpolated based on the positioning of our actual return compared to the other firms included in the peer set (e.g., a ranking at the 40th percentile will receive a score between zero and 1.0). These performance-based awards are intended to align the compensation of these executives with their responsibilities in connection with the longer-term performance of our fixed-income portfolio. For the 2023 awards, the use of the 25th percentile as the minimum performance level, and of the 75th percentile as the maximum performance level, reflected the Compensation and Talent Committee’s decision at the time of grant that our investment constraints and guidelines may differ from other firms included in the comparison. The committee determined that requiring “average” performance prior to vesting and/or rewarding performance above the 75th percentile might create an incentive to increase investment risks to a level that may exceed the company’s overall risk tolerance, and that below target payouts for performance between the 25th and 50th percentiles would be, on balance, fair compensation for the results achieved. Annual Time-Based Awards In 2023, time-based restricted stock unit awards were granted to the NEOs and 1,077 other senior level employees, comprising approximately 2% of our entire employee population. These awards will vest in three equal annual installments, in January of 2026, 2027, and 2028, subject to accelerated vesting and forfeiture provisions in the 2015 Equity Incentive Plan (2015 Plan) and the grant agreement.

  35. Annual Cash Incentive Payments (Gainshare)

    Annual Cash Incentive Payments (Gainshare) Our Gainshare program has been around for three decades and has been the primary vehicle to motivate and reward our employees to achieve our profitability and growth objectives. Most companies of our size utilize some form of bonus program. Under our Gainshare program nearly all of our employees participate, and we win or lose together based on our collective performance. We believe that Gainshare is a differentiator and contributes to the “all for one and one for all” attitude that in part defines our culture and is supported by our Core Values. Like other elements of our compensation program, Gainshare is designed to reward performance relative to our long-standing companywide goal to grow as fast as we can at a 96 or better combined ratio while continuing to deliver high-quality customer service. The Gainshare Plan is currently comprised of six matrices that objectively measure our various products and channels. We use different matrices for each line of business to reflect the different growth and profitability expectations given the wide variance in our market share across business lines and channels. We believe that focusing on performance at the business level is consistent with management’s approach to evaluating our operations. Beginning in 2023, the Property business is split into two matrices in light of our focus on growing in states with traditionally less catastrophe exposure and limiting growth in coastal and hail-prone states, weighted by premium. Gainshare payments for NEOs are determined using the same performance criteria we use for the Gainshare payments for all of our employees, resulting in a consistent set of goals across our employee population. Gainshare payments are determined using the following formula:

  36. Annual Cash Incentive Payments (Gainshare)

    | Paid SalaryX | Target PercentageX | Gainshare (i.e., Performance) Factor | = | Annual Incentive Payment |

  37. Annual Cash Incentive Payments (Gainshare)

    Annually, each executive’s salary and Gainshare target percentage are determined by the Compensation and Talent Committee for the calendar year. When the executive’s paid salary is multiplied by the assigned target percentage, the product is referred to as the participant’s “target annual incentive payment” for the year. The Gainshare Factor can range from zero to 2.00 each year, and annual cash incentive payments, therefore, can vary between 0x and 2x the target annual incentive payment amount, depending on our actual performance results for the year. Throughout the 31-year history of our companywide Gainshare program (including 2023), the final Gainshare Factor has ranged from zero to 2.00 and, over the past 5 years of profitable growth, has averaged 1.62. These results confirm management’s view that our Gainshare program has operated to provide annual cash incentive payments to our employees, including our executive officers, commensurate with our level of achievement. The Compensation and Talent Committee set the following Gainshare targets for 2023:

  38. Annual Cash Incentive Payments (Gainshare)

    | Name | 2023 Target (Multiple of Salary) | | Susan Patricia Griffith | 2.50x | | John P. Sauerland | 1.50 | | Patrick K. Callahan | 1.50 | | Karen B. Bailo | 1.00 | | John Murphy | 1.00 |

  39. Annual Cash Incentive Payments (Gainshare)

    For each NEO, the 2023 target values remained unchanged from 2022. The Gainshare payout was determined based on the performance of our Agency auto, Direct auto, and special lines business units (collectively, Personal Lines), Commercial Lines, and Property, subject to the following: •For several years, the business lines excluded from growth and profitability results (i.e., our umbrella, renters, flood, and business owners’ policy) represented less than 1% of our companywide net premiums earned. •We began including the transportation network company (TNC) business and the business of Protective Insurance Corporation and subsidiaries in the Commercial Lines’ profitability results in 2022 and 2023, respectively, but the businesses continue to be excluded from the average policies in force calculations since the policies for these businesses often include multiple vehicles. •Additionally, for 2023, both the Commercial Lines and Property businesses were subject to new profitability thresholds such that if the combined ratio of the applicable business unit in its entirety equaled or exceeded 100, the Gainshare Factor for that business unit would be 0. The Gainshare Factor for 2023 was 1.78 out of a possible 2.00 and all Gainshare payments for the NEOs are reported in the “Executive Compensation – Summary Compensation Table” as “Non-Equity Incentive Plan Compensation.” Focusing on performance at the business level was consistent with management’s approach to evaluating our operations. We used the average number of “policies in force” to measure growth for each of those businesses because it represents the average of all policies under which coverage was in effect as of the end of the periods specified. The combined ratio represents the profitability of our insurance operations. Our 2023 Gainshare plan evaluated the growth and profitability of each of our businesses separately and determined a score between zero and 2.00 for each business. The individual scores were calculated based on a matrix that was approved by the Compensation and Talent Committee at the beginning of the year that contemplated several profit and growth scenarios. Each matrix was built by anchoring the 1.00 score at the established profitability target for the line of business, along with an aggressive growth goal when compared to historical industry growth rates. Each possible combination of growth and profitability would produce a score, and a score at or near 1.00 could be earned with a variety of other growth and profitability combinations; that is, if growth was below expectations, a 1.00 could still be achieved if profitability increased and, likewise, a moderate decrease in profitability could be offset by higher growth to generate a score around 1.00. The nature of the Gainshare program and the measures that we use were relatively unchanged over the past several years. Although we review the interplay of profitability and growth levels for each business unit matrix annually, any changes are more in the nature of refinements based on market trends and internal expectations. Because the goals are relatively consistent over time and represent management’s expectations and goals on a business unit level, we believe that our competitors could glean valuable information about our current operations, strategies, and operating goals if we were to disclose the performance goals in greater detail, even for the previous fiscal year. We therefore believe that the specific goals for our current and prior fiscal years constitute competitive information, which, if disclosed, would harm our competitive position and that our current level of disclosure regarding performance goals and actual performance levels is appropriate and is in the best interests of our shareholders. The following table presents the overall 2023 growth and profitability data for the individual core business units that contributed to the 1.78 Gainshare Factor:

  40. Annual Cash Incentive Payments (Gainshare)

    | Business Unit | Combined Ratio | Increase in Policies in Force (%)3 | | Agency auto | 95.1 | 8% | | Direct auto | 92.7 | 14 | | Special lines1 | — | 6 | | Commercial Lines2 | 98.8 | 5 | | Property2 | 98.9 | 4 |

  41. Annual Cash Incentive Payments (Gainshare)

    1Consistent with the presentation of the combined ratio of our Personal Lines segment in our public reports, the combined ratio results for our special lines business are not presented separately and, instead, are included in either the Agency or Direct results, depending on whether the underlying policy was written through agents/brokers or directly by us. 2Represents the combined results of the segment, consistent with our public reports. 3Based on average policies in force outstanding during the year and, for Agency and Direct, represents auto policies in force only. Using the actual performance results for the year and the Gainshare matrices discussed above, we determined the performance score for each core business unit, weighted those scores based on each business unit’s relative contribution to overall net premiums earned, and then added the weighted scores to determine the Gainshare Factor, as follows:

  42. Annual Cash Incentive Payments (Gainshare)

    | Matrix | Performance Score | Weighting Factor (%) | Weighted Performance Score | | Agency auto | 1.92 | 33.7% | 0.64 | | Direct auto | 2.00 | 40.9 | 0.82 | | Special lines | 2.00 | 4.5 | 0.09 | | Commercial Lines | 1.31 | 16.9 | 0.22 | | Property – growth1 | 0.00 | 1.8 | 0.00 | | Property – limited2 | 0.30 | 2.2 | 0.01 | | Gainshare Factor | | | 1.78 |

  43. Annual Cash Incentive Payments (Gainshare)

    1 Results for the portion of our Property business focused on growth in states with traditionally less catastrophe exposure. 2 Results for the portion of our Property business focused on limiting growth in coastal and hail-prone states. As depicted in the table above, our Direct auto business and special lines business achieved the maximum score of 2.00, and our Agency auto business achieved a score of 1.92. These results reflect solid growth and profitability in these products. Commercial Lines experienced moderate policies in force growth and profitability, reflected by its slightly above target 1.31 score. For our Property business, the growth states had a score of zero due to an underwriting loss for the year, while the states where we are limiting growth had a score of 0.30 primarily due to achieving profitability for the year. Under the Gainshare calculations, average policies in force for the included products grew by just over 9%. Along with this unit growth, during 2023, companywide net premiums written grew 20% and net premiums earned grew 19%, at a 94.9 combined ratio. We were able to generate this growth despite the actions we took during the year to slow growth as part of our efforts to ensure we met our profitability target. We believe that the resulting 1.78 Gainshare Factor was an appropriate and reasonable outcome based on the overall profitability and growth achieved in 2023. The fact that the 2023 Gainshare Factor was higher than our average factor for the past 5 years of 1.62 further demonstrates our strong pay-for-performance alignment in our Gainshare program.

  44. Clawback Provisions

    Clawback Provisions In 2023, our Board of Directors adopted a clawback policy in accordance with applicable SEC and NYSE rules (the “Dodd-Frank Clawback Policy”). The Dodd-Frank Clawback Policy requires us to recover incentive-based compensation awarded to our current and former executive officers resulting from erroneously reported financial information in the event that we are required to prepare an accounting restatement. For several years, our cash and equity incentive plans have included, and will continue to include language that incorporates the Dodd-Frank Clawback Policy into them. Additionally, our equity and cash incentive plans each include one or more provisions that permit recoupment of performance-based compensation when a specified event occurs or an executive officer engages in specified conduct. If our operating or financial results used to calculate a payment or vesting factor are restated within three years of the payment or vesting, and the payment, or amount of common shares delivered at vesting, was inflated as a result of the incorrect results, we can recoup from the NEO the inflated portion of the payment or common shares delivered (or equivalent value). If an executive officer engaged in fraud or other misconduct that led to a restatement of operating or financial results, we can recoup from them the entire payment or value of common shares delivered at vesting, plus interest and collection costs, even if the restatement occurred more than three years after the payment or vesting event. In addition to provisions in our equity plan, our equity awards also address conduct that results in reputational harm. Under the 2015 Plan, if an executive officer engages in a “disqualifying activity,” they forfeit all outstanding equity awards (time-based and performance-based) held at the time the activity began. If an equity award vests after the conduct began but before we become aware of it, we can recoup the vested award. Among conduct that constitutes a “disqualifying activity” is conduct that is materially detrimental to our reputation or that is a material violation of our Code of Conduct.

  45. Additional Comments Regarding 2023 Compensation Decisions

    Additional Comments Regarding 2023 Compensation Decisions Consistent with our compensation philosophy and history with respect to executive compensation, the Compensation and Talent Committee granted a large proportion of each NEO’s compensation in the form of performance-based compensation, including equity compensation. In this way, overall compensation for these individuals is competitive, while providing the opportunity to earn above-market median compensation if and when justified by the company’s performance and our stock price, which aligns the interests of these individuals with those of shareholders. It should be noted, however, that the ultimate value of these awards remains dependent on our achievement of applicable performance goals and the value of our common shares at the time of vesting of restricted stock unit awards. Thus, for each NEO, a substantial portion of the compensation used to establish the NEO’s potential percentile position compared to market, and the value of those awards, will remain at risk for years before it is earned, and some of the restricted stock unit awards in fact may never vest. See "Pay Versus Performance" for additional information regarding the change in fair value of these awards until they vest. Chief Executive Officer As has been the case in prior years, Mrs. Griffith’s salary amount remained well below the 50th percentile of approximately $1.45 million for CEO salaries reflected in the market data reviewed by the Compensation and Talent Committee. After honoring Mrs. Griffith’s previous requests that her target compensation for 2020 through 2022 remain the same, for 2023, the committee increased her salary and revised the allocation of her annual equity awards to increase the amount granted as performance-based awards and decrease the amount granted as time-based awards. The committee determined that this equity award allocation would continue to provide Mrs. Griffith with compensation at an appropriate level, while adding significantly to the performance-based nature of her compensation and further aligning her interests with those of our shareholders. The committee believed that this pay package was consistent with the company’s compensation philosophy and presented an appropriate pay package that is largely performance-based. The result of these determinations for 2023 was that, despite her below-median salary and target cash incentive, Mrs. Griffith continues to have the potential to earn total compensation significantly above the median if the company performs exceptionally well over the various performance periods related to her compensation granted in 2023. If Mrs. Griffith were to have received a cash incentive payment based on a 1.0 Gainshare Factor and her annual performance-based restricted stock unit awards were to vest at their target amounts, her total annual compensation would be just above the 25th percentile for CEOs. However, her annual compensation would be above the 75th percentile if all performance-based compensation, cash and equity, payouts were to be maximized. Other Current Named Executive Officers Market comparison information is only one of a number of factors considered by the Compensation and Talent Committee in setting compensation each year, along with other factors such as the length of the executive’s experience in the specific job, the nature of the job held and related responsibilities, individual performance, expected future contributions, the reliability of the comparison data, and our business needs. However, we present comparison data here for the shareholders’ information (see “– Procedures and Policies – Compensation Comparisons” for further information on our market comparison process). Assuming that cash incentives had paid out at a 1.0 performance factor for the year and annual performance-based equity also were to vest at the target 1.0 factor, Mr. Sauerland and Ms. Bailo would receive total compensation for 2023 between the 25th and 50th percentile level reflected in the market data reviewed by the committee, Mr. Callahan would receive total compensation between the 50th and 75th percentile level, and Mr. Murphy would receive total compensation above the 75th percentile. In the event that all of their annual incentive based compensation were to pay out at their maximum level, the total compensation for Mr. Sauerland, Mr. Callahan, Ms. Bailo, and Mr. Murphy would be above the 75th percentile.

  46. Perquisites

    Perquisites We provide perquisites to our executives only when the Board or the Compensation and Talent Committee determines that such benefits are in the interests of Progressive and our shareholders. We own an aircraft that is used primarily for the CEO’s and other executive officers’ business travel. At the request of the Board, Mrs. Griffith also uses the company aircraft for her personal travel and that of her spouse and children when they accompany her. Such personal use of the aircraft constitutes a perquisite and is provided to enhance the CEO and her family’s personal security and the confidentiality of their travel. During 2023, Mrs. Griffith took fewer flights than the prior year and we incurred approximately $150,518 in incremental costs as a result of Mrs. Griffith’s personal use of the aircraft. Such personal trips by the CEO also result in taxable income being imputed as required under IRS regulations, and Mrs. Griffith is responsible for paying the taxes on such income without further contribution or reimbursement from the company. Other executives and guests may occasionally accompany the CEO on personal trips, at the CEO’s discretion. Mrs. Griffith is also provided with a company-owned vehicle and a driver for business needs to facilitate transportation to and among our headquarters and many other local facilities, and to allow her to use that travel time for work purposes. To the extent that the CEO uses the company car for personal matters, she receives a perquisite. In addition, in connection with Mrs. Griffith’s 2023 filing made to the Federal Trade Commission under the Hart-Scott-Rodino (HSR) Act’s pre-merger notification requirements, we paid for Mrs. Griffith’s associated filing fee ($30,000) and related legal expenses ($6,120). These filings are required prior to the acquisition of a company’s common shares when ownership levels will exceed certain dollar thresholds and are subject to certain exceptions. Often, significant shareholders are exempt from these filing requirements because they hold the shares on an “investment only” basis (i.e., as a passive investor). Under the HSR rules, directors and executive officers are not considered to be passive investors. A large portion of Mrs. Griffith’s compensation during her tenure has been in the form of equity-based awards and Mrs. Griffith has accumulated a significant number of our common shares. This has resulted in strong alignment between Mrs. Griffith’s interests and those of our shareholders. To further strengthen this alignment, a significant portion of her annual total compensation each year continues to be in the form of equity awards. Based on the considerable appreciation of her common stock holdings from previous equity award vesting events, and also taking into consideration future vesting events, a future vesting could cause Mrs. Griffith's ownership levels to exceed the HSR threshold. The Compensation and Talent Committee considered all of these factors when it determined that the company's payment of these amounts was appropriate since they arose as a result of the operation of the company’s executive compensation program. See the “All Other Compensation” column of “Executive Compensation – Summary Compensation Table” and related footnote for additional information concerning perquisites.

  47. Deferral Arrangements

    Deferral Arrangements NEOs and certain other senior level employees are given the opportunity to defer the receipt of annual cash incentive payments and annual equity awards under our Executive Deferred Compensation Plan (EDCP). This deferral mechanism allows NEOs to delay receipt of cash incentives or the vesting of equity awards that have been earned in full and otherwise would have been received as of a specific date. The EDCP is made available to executives in order to keep our executive compensation program competitive and also allow executives to manage their receipt of compensation to better fit their life circumstances, including their individual financial and tax planning objectives. We do not contribute additional amounts to a participant’s deferral account, either in the year of deferral or in future years. We also do not guarantee a specific investment return to participants in this plan. Deferred amounts are deemed to be invested in specific investments selected by the participant, which includes an option to invest in Progressive common shares. Deferrals of outstanding equity awards are currently required to be invested in Progressive common shares throughout the deferral period. The value of each participant’s deferred account thus varies based on the participant’s investment choices and market factors. Deferred amounts are at risk and may decrease in value if Progressive common shares or the other investments selected by the participant do not perform well during the deferral period. Additional details concerning this plan, including the NEOs’ respective holdings in the plan, can be found under “Executive Compensation – Nonqualified Deferred Compensation.”

  48. Retirement

    Retirement We do not provide pension benefits or supplemental retirement benefits to our NEOs. NEOs are eligible to participate in our 401(k) plan on the same terms and conditions available to all other regular employees, subject to limitations under applicable law. Also, upon leaving the company, the NEO may receive a payout of unused paid time off and, where legally required, paid sick leave, subject to limitations applicable to all employees. We do not provide other payments or benefits to executives related to retirement or eligibility for retirement other than with respect to equity awards. Our NEOs, along with all other equity award recipients, are eligible for “qualified retirement” (also referred to as "Rule of 70") treatment under our 2015 Plan. Beginning with the 2021 awards, if an NEO retires after satisfying the Rule of 70 requirements (age 55 with at least 15 years of service or age 60 with at least 10 years of service) and remained employed through the end of 2023: •100% of their 2023 time-based award will vest; and •the NEO will retain 100% of the applicable performance-based award, which will vest if, when and to the extent that the applicable performance measures and any profitability requirement, are achieved. For additional information regarding retirement benefits under earlier equity awards, see “Executive Compensation – Potential Payments Upon Termination or Change in Control.” As discussed in the preceding section, an executive who elects to participate in our deferral program may be entitled to receive post-employment distributions from the EDCP. See “Executive Compensation – Potential Payments Upon Termination or Change in Control – Other Termination Provisions Under Equity Plan.” The qualified retirement provisions are intended to provide a benefit for long-tenured employees. Mrs. Griffith, Mr. Sauerland, and Ms. Bailo satisfied the Rule of 70 requirements for a qualified retirement. See “Executive Compensation – Potential Payments Upon Termination or Change in Control – Qualified Retirement Provisions Under Equity Plan” for additional information.

  49. Severance and Change-in-Control Arrangements

    Severance and Change-in-Control Arrangements Severance and change-in-control arrangements are intended to provide compensation and a fair financial transition for eligible employees (including the NEOs) when an adverse change in their employment situation is required due to company needs or upon the occurrence of certain unexpected corporate events, and to recognize past contributions by those executives, who are typically long-tenured employees. These arrangements allow executives to focus on the company’s performance, and not on their personal financial situation, in the face of uncertain or difficult times or events beyond their control. Each of these programs is discussed in more detail under “Executive Compensation – Potential Payments Upon Termination or Change in Control.” Severance Our executive separation allowance plan (ESAP) provides executives with well-defined financial payments if the executive’s employment is terminated for any reason other than resignation (including retirement), death, disability, leave of absence, or discharge for cause, if certain conditions are satisfied. Based on tenure with us, for each of our NEOs, the severance payment would equal three times the executive’s salary (i.e., excluding cash incentives and equity awards) at the time of termination, plus medical, dental, and vision benefits for up to 18 months at regular employee costs, and outplacement services following termination. These benefits are payable to the NEOs upon any qualifying separation from the company, whether in a change-in-control situation or otherwise. In addition, if a change in control occurs and an NEO terminates employment within 24 months following the change in control for “good reason,” then the NEO will be entitled to receive the same severance benefits described above as though they had been terminated by the company. We believe that this level of severance payment for each of our NEOs (a maximum of three times the NEO’s salary) is reasonable. The severance payments do not take into account or include the value of cash incentives or equity-based awards in determining the executive’s severance payment, which substantially limits the amount of the severance payment when compared with severance plans offered by many other companies. In addition, an executive who qualifies for a severance payment under this plan does not receive accelerated vesting of equity awards (although those awards may vest (or partially vest) separately under our 2015 Plan if the executive is eligible for a qualified retirement, discussed above, or in a change-in-control scenario, as discussed immediately below). Finally, executives will not receive any tax “gross-up” payment to compensate them for any taxes they may owe in connection with a severance payment. Management and the Compensation and Talent Committee accordingly believe that the severance rights provide the NEOs with a fair, but not excessive, financial transition when an executive is asked to leave the company. The dollar values of benefits that would be payable to NEOs upon a qualifying termination under our severance plan are summarized under “Executive Compensation – Potential Payments Upon Termination or Change in Control.” Change-in-Control Benefits Under Equity Plan The provisions of the 2015 Plan are summarized below. Additional details regarding these provisions can be found under “Executive Compensation – Potential Payments Upon Termination or Change in Control – Change-in-Control Provisions Under Equity Plan.” The 2015 Plan has a “double-trigger” change-in-control provision. Unless the committee determines otherwise at the time of grant of an award, no acceleration or payment will occur with respect to any outstanding award upon a change in control if the outstanding award is honored, assumed, or replaced with a new right that complies with the requirements of the change-in-control provisions in the 2015 Plan, including providing substantially identical terms and substantially equivalent economic terms. Any honored, assumed, or replacement award will be subject to accelerated vesting after the change in control if, within 24 months after the change in control, the individual is terminated by the surviving entity other than for cause (as defined in the plan) or the individual terminates employment for good reason. If vesting is accelerated, performance-based awards will be considered to be earned at the higher of target (if applicable) or a multiple based on the level of achievement through the termination date, if determinable. If the awards are not honored, assumed, or replaced, as described above, they will vest immediately prior to the change in control and each restricted stock unit award will be cancelled in exchange for an amount equal to the fair market value of the common shares covered by the award, with any performance-based awards deemed to have been earned in full at the higher of target or a multiple of target based on the level of achievement through the date of the change in control, if determinable.

  50. Use of “Tally Sheets”

    Use of “Tally Sheets” When the Compensation and Talent Committee is considering annual compensation decisions for the NEOs, the committee is provided with information showing, for each NEO, the total target and maximum compensation (salary, annual cash incentive potential, and equity-based award values) proposed to be awarded to such executive for the upcoming year, along with tally sheets for each NEO summarizing recent total target and realized compensation, providing details with respect to outstanding equity awards and share ownership. These tally sheets are used by the committee to review each NEO’s current compensation level and to enable meaningful comparisons to the compensation paid to similar executives at comparable companies. This is one way that the committee monitors and assesses the reasonableness of its annual compensation decisions for each NEO. In addition, at least annually, the committee reviews summaries of the potential payments that would be made to each NEO upon the occurrence of various events, such as termination, retirement, or a change in control. These tally sheets allow the committee to see all of the potential payouts that the NEO could be eligible to receive in addition to annual compensation awards. Such payouts may arise from a number of sources, depending on the event triggering the payments, including: the executive’s prior service and earnings (such as distributions from deferral accounts); payments triggered by an employment termination (severance); or an acceleration of a vesting event that otherwise would not have occurred, if at all, until a future date (for example, a “change in control”). The committee thus is able to understand and monitor the amount of such potential payouts in each scenario, and to distinguish the source of individual components of such payouts. To the extent that these payments arise from an NEO’s prior earnings (such as distributions from deferral accounts), the committee generally does not factor those payments into compensation decisions, since those amounts were previously earned in full by the executive, the value of the account has increased or decreased over time based on their investment elections, and we have made no subsequent contributions to increase the value of these accounts. To the extent that these payments arise from performance measures established in prior years, the committee generally does not view such payments negatively either, since the amount and timing is dependent on whether and when the company achieves the stated performance goals and the executive’s services that helped lead to the achievements. Potential severance payments and acceleration events, on the other hand, are monitored by the committee to ensure that they are reasonable and appropriate in the applicable scenarios.

  51. No Tax “Gross-Up” Payments

    No Tax “Gross-Up” Payments We do not provide tax gross-up payments in connection with an executive officer’s compensation, severance, change-in-control payments, perquisites, or other benefits provided by us. Minor exceptions to this rule may arise under terms that apply to all of our employees; for example, any employee, including an executive officer, who receives taxable benefits from us under our relocation program is entitled to receive payments to defray the related tax obligation.

  52. Timing of Annual Equity Awards

    Timing of Annual Equity Awards We expect that, consistent with our actions for many years, annual equity awards will be made in March of each year, unless a legal or plan requirement causes us to adopt a change for a specific year. March is considered appropriate for annual awards because it follows shortly after annual performance evaluations and salary adjustments for executives and other equity eligible employees, thus providing an administratively convenient time to calculate the awards and communicate them to the recipients. In addition, the timing in March follows the publication of our annual report for the prior year and, typically, the publication of our financial results for the first two months of the year, ensuring that up-to-date public information concerning the company is available in the marketplace at that time. Historically, interim awards generally have been made to an executive officer at the time of appointment to or promotion within the executive team or in a few instances when the committee deemed a special award to be appropriate; any such interim or special award to an executive officer would require the approval of the Compensation and Talent Committee.

  53. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE

  54. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary1 ($) | Stock Awards2 ($) | Non-Equity Incentive Plan Compensation3 ($) | All Other Compensation4 ($) | Total ($) | | Susan Patricia Griffith | 2023 | $994,231 | $10,000,106 | $4,424,327 | $217,954 | $15,636,618 | | President and Chief Executive Officer | 2022 | 950,000 | 9,500,203 | 2,042,501 | 256,122 | 12,748,826 | | | 2021 | 950,000 | 9,500,212 | 3,847,502 | 165,247 | 14,462,961 | | John P. Sauerland | 2023 | 697,115 | 2,625,224 | 1,861,298 | 12,000 | 5,195,637 | | Vice President and Chief Financial Officer | 2022 | 672,116 | 2,531,445 | 867,029 | 12,000 | 4,082,590 | | | 2021 | 650,000 | 2,437,643 | 1,579,500 | 12,000 | 4,679,143 | | Patrick K. Callahan | 2023 | 647,115 | 2,437,619 | 1,727,798 | 12,000 | 4,824,532 | | Personal Lines President | 2022 | 622,115 | 2,343,838 | 802,529 | 12,500 | 3,780,982 | | | 2021 | 594,231 | 2,100,095 | 1,443,981 | 12,000 | 4,150,307 | | Karen B. Bailo | 2023 | 594,231 | 1,500,148 | 1,057,731 | 12,000 | 3,164,110 | | Commercial Lines President | 2022 | 550,000 | 1,375,024 | 473,000 | 12,000 | 2,410,024 | | | 2021 | 400,000 | 900,157 | 648,000 | 12,000 | 1,960,157 | | John Murphy | 2023 | 576,539 | 1,450,083 | 1,026,239 | 12,000 | 3,064,861 | | Claims President | 2022 | 550,000 | 1,375,024 | 473,000 | 12,750 | 2,410,774 | | | 2021 | 496,154 | 1,125,128 | 803,769 | 12,000 | 2,437,051 |

  55. SUMMARY COMPENSATION TABLE

    1 Amounts may differ from the salary amounts reported in “Compensation Discussion and Analysis – 2023 Decisions and Awards – Salaries” as salary changes are typically implemented in February of each year. 2 Represents grant date fair value of restricted stock unit awards for each year. Grant date fair value is measured using the closing price of our common stock on the date of grant. With regard to performance-based awards, the grant date fair value represents the target value; however, the ultimate value to the NEO can be higher or lower depending on performance. See “– Outstanding Equity Awards at Fiscal Year-End” for further discussion. The following table represents the value of performance-based awards at grant date assuming the maximum level of performance were to be achieved.

  56. SUMMARY COMPENSATION TABLE

    | Name | Grant Year | Grant Date Fair Value (Maximum Performance) | | Susan Patricia Griffith | 2023 | $22,000,179 | | | 2022 | 16,150,367 | | | 2021 | 16,150,288 | | John P. Sauerland | 2023 | 4,655,368 | | | 2022 | 4,489,006 | | | 2021 | 4,322,660 | | Patrick K. Callahan | 2023 | 4,469,014 | | | 2022 | 4,297,017 | | | 2021 | 3,750,203 | | Karen B. Bailo | 2023 | 2,250,153 | | | 2022 | 2,062,535 | | | 2021 | 1,250,263 | | John Murphy | 2023 | 2,175,055 | | | 2022 | 2,062,535 | | | 2021 | 1,562,603 |

  57. SUMMARY COMPENSATION TABLE

    For the terms of awards granted in 2023, see “– Grants of Plan-Based Awards” and “– Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table” below. Also, see “Compensation Discussion and Analysis,” as well as Note 9 – Employee Benefit Plans in our 2023 Annual Report to Shareholders for further discussion of the restricted stock unit awards and our recognition of expense relating to such awards. 3 For 2023, amounts were earned exclusively under The Progressive Corporation 2023 Gainshare Plan (Gainshare Plan) for all NEOs. Non-equity incentive plan compensation earned by these executives with respect to 2023 was paid (if not deferred by the NEO) in early 2024. Amounts reported include, if applicable, compensation that was deferred under our Executive Deferred Compensation Plan (EDCP). Further discussion of these plans is included in “Compensation Discussion and Analysis,” “– Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table,” and “– Nonqualified Deferred Compensation.” 4 All Other Compensation for 2023 is comprised of the following:

  58. SUMMARY COMPENSATION TABLE

    | Name | 401(k) Employer Contributionsa | Perquisitesb | Otherc | | Susan Patricia Griffith | $12,000 | $205,204 | $750 | | John P. Sauerland | 12,000 | — | — | | Patrick K. Callahan | 12,000 | — | — | | Karen B. Bailo | 12,000 | — | — | | John Murphy | 12,000 | — | — |

  59. SUMMARY COMPENSATION TABLE

    a Represents employer matching contributions made during 2023 under our 401(k) plan. Amounts contributed are based on level of employee contribution, with a maximum annual employer contribution of $12,000. b Includes $150,518 in incremental costs for Mrs. Griffith’s personal use of our company airplane. We calculate incremental costs to include the cost of fuel and oil per flight; trip-related inspections, repairs, and maintenance; crew travel expenses; on-board catering; trip-related flight planning services; landing, parking, and hangar fees; supplies; passenger ground transportation; and other variable costs. Since the airplane is used primarily for business travel, we do not include the fixed costs that do not change based on personal usage, such as pilots’ salaries, the depreciation of the airplane, and the cost of maintenance not related to personal trips. In addition, the perquisite amount includes $18,566 in incremental costs attributable to the personal use of a company-owned vehicle by Mrs. Griffith, which is primarily used for commuting to and from work. This also includes a $36,120 payment of a regulatory filing fee and related legal expenses paid with respect to a pre-merger notification filing under the Hart-Scott-Rodino Act. For more information, see “Compensation Discussion and Analysis – Other Elements of Compensation – Perquisites.” c Reflects a service anniversary award paid for each five-year anniversary of employment with the company, under a program applicable to all employees.

  60. GRANTS OF PLAN-BASED AWARDS

    GRANTS OF PLAN-BASED AWARDS The following table summarizes annual cash incentive awards (non-equity incentive plan awards) that were eligible to be earned by our NEOs with respect to 2023 and equity awards granted to our NEOs during 2023. Each restricted stock unit is equivalent in value to one common share.

  61. GRANTS OF PLAN-BASED AWARDS

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | Grant Date Fair Value of Equity Awards2 ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | | Target (#) | | Maximum (#) | | | | Susan Patricia Griffith | NA | 0 | $2,485,577 | $4,971,154 | | | | | | | | | | 3/20/2023 | | | | | | 7,191 | 3 | | | $1,000,052 | | | 3/20/2023 | | | | 0 | 4 | 64,716 | 4 | 158,195 | 4 | 9,000,054 | | John P. Sauerland | NA | 0 | 1,045,673 | 2,091,346 | | | | | | | | | | 3/20/2023 | | | | | | 5,034 | 3 | | | 700,078 | | | 3/20/2023 | | | | 0 | 4 | 13,843 | 4 | 33,475 | 4 | 1,925,146 | | Patrick K. Callahan | NA | 0 | 970,673 | 1,941,346 | | | | | | | | | | 3/20/2023 | | | | | | 4,674 | 3 | | | 650,013 | | | 3/20/2023 | | | | 0 | 4 | 12,854 | 4 | 32,135 | 4 | 1,787,606 | | Karen B. Bailo | NA | 0 | 594,231 | 1,188,462 | | | | | | | | | | 3/20/2023 | | | | | | 4,315 | 3 | | | 600,087 | | | 3/20/2023 | | | | 0 | 4 | 6,472 | 4 | 16,180 | 4 | 900,061 | | John Murphy | NA | 0 | 576,539 | 1,153,078 | | | | | | | | | | 3/20/2023 | | | | | | 4,171 | 3 | | | 580,061 | | | 3/20/2023 | | | | 0 | 4 | 6,256 | 4 | 15,640 | 4 | 870,022 |

  62. GRANTS OF PLAN-BASED AWARDS

    NA = Not applicable 1The amount of non-equity incentive plan compensation earned by the NEOs under the Gainshare Plan with respect to 2023 is included in the “– Summary Compensation Table.” Further description of both the non-equity and equity incentive plan awards is provided in “Compensation Discussion and Analysis” and in the “– Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table.” 2Awards were granted under the 2015 Equity Incentive Plan (the 2015 Plan) and are valued at the closing price of our common shares on the applicable date of grant, which was $139.07 for March 20, 2023. The target amount of performance-based restricted stock unit awards granted is used to determine grant date fair value. 3Represents the number of shares covered by time-based restricted stock unit awards. 4Represents the number of shares covered by performance-based restricted stock unit awards. Except as otherwise noted in this footnote 4, these awards measure growth of our vehicle insurance businesses against each respective market’s growth and will vest from 0-250% of the target award, only if and when pre-established performance goals are attained. As part of their annual awards, Mrs. Griffith received 7,191 units and Mr. Sauerland received 2,266 units in the form of performance-based awards that measure the performance of our fixed-income portfolio returns against a benchmark peer group. These awards can vest from 0-200% of the target award only if and when pre-established performance goals are attained.

  63. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table summarizes the unvested restricted equity awards outstanding at December 31, 2023, all of which were granted under our 2015 Plan. The value of the equity awards was calculated using $159.28 per share, the closing price of Progressive common shares on the last business day of 2023.

  64. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Stock or Unit Awards1 | | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#)2 | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#) | | Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($) | | Susan Patricia Griffith | 80,968 | $12,896,583 | 22,174 | 3 | $3,531,875 | | | | | 482,737 | 4 | 76,890,349 | | John P. Sauerland | 22,099 | 3,519,929 | 5,081 | 3 | 809,302 | | | | | 121,504 | 4 | 19,353,157 | | Patrick K. Callahan | — | — | 25,678 | 3 | 4,089,992 | | | | | 114,180 | 4 | 18,186,590 | | Karen B. Bailo | 13,911 | 2,215,744 | 4,604 | 3 | 733,325 | | | | | 49,329 | 4 | 7,857,123 | | John Murphy | — | — | 21,769 | 3 | 3,467,366 | | | | | 52,329 | 4 | 8,334,963 |

  65. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    1Amounts include restricted stock unit awards and related dividend equivalents, which are rounded to a whole unit. 2Represents time-based restricted equity awards that have been earned under the “qualified retirement” provisions of the 2015 Equity Incentive Plan (see "– Potential Payments Upon Termination or Change in Control – Qualified Retirement Provisions Under Equity Plan”); such shares will vest upon the earlier of the vesting dates defined in the restricted equity award agreements (see table below) or the NEO’s separation from the company. 3Represents time-based restricted stock unit awards for each NEO. The table below presents the applicable vesting dates for those awards (certain events may cause earned but unvested shares to vest earlier; see “– Potential Payments Upon Termination or Change in Control” for further discussion).

  66. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | Name | 1/1/24 | 1/16/24 | 1/1/25 | 1/21/25 | 1/20/26 | 1/19/27 | 1/18/28 | | Susan Patricia Griffith | 22,174 | 10,771 | 15,279 | 19,494 | 21,896 | 11,126 | 2,402 | | John P. Sauerland | 5,081 | 2,456 | 3,485 | 4,523 | 6,205 | 3,748 | 1,682 | | Patrick K. Callahan | 5,503 | 2,267 | 2,949 | 4,180 | 5,742 | 3,475 | 1,562 | | Karen B. Bailo | 2,522 | 1,512 | 2,083 | 3,195 | 4,637 | 3,125 | 1,441 | | John Murphy | 4,456 | 1,890 | 2,413 | 3,573 | 4,967 | 3,077 | 1,393 |

  67. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    4The following table presents, as of December 31, 2023, the number of unvested performance-based restricted stock units, including reinvested dividend equivalent units, for each of the NEOs, by year of grant. The number of units shown reflects either the target amount of units, or the maximum number of units for each individual award that comprises the total that can vest, depending on the company’s expectations, as described in the applicable note below.

  68. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | Name | 2021 | 2022 | 2023 | | Susan Patricia Griffith | 183,098 | 148,294 | 151,345 | | John P. Sauerland | 49,007 | 41,218 | 31,279 | | Patrick K. Callahan | 42,517 | 39,455 | 32,208 | | Karen B. Bailo | 14,174 | 18,938 | 16,217 | | John Murphy | 17,716 | 18,938 | 15,675 |

  69. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    Following are the performance criteria that must be achieved to enable the performance-based restricted stock unit awards to vest for the year of grant indicated. Pursuant to applicable regulations, expectations above the minimum threshold level, but at or below target, are shown at target and expectations of vesting above the target level are shown at the maximum potential vesting.

  70. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | Type | Measurement Period | Vesting Range | Combined Ratio | Growth Rate Over Base | Reported Value | Expiration Date | | Performance versus Marketa | | | | | | | | 2021 | 1/1/21-12/31/23 | 0-250% | 96 | Varies | Max | 1/31/2026 | | 2022 | 1/1/22-12/31/24 | 0-250% | 96 | Varies | Max | 1/31/2027 | | 2023 | 1/1/23-12/31/25 | 0-250% | 96 | 0-3.5% | Max | 1/31/2028 | | Investmentb | | | | | | | | 2021c | 1/1/21-12/31/23 | 0-200% | NA | NA | Max | 3/15/2024 | | 2022 | 1/1/22-12/31/24 | 0-200% | NA | NA | Max | 3/15/2025 | | 2023 | 1/1/23-12/31/25 | 0-200% | NA | NA | Target | 3/15/2026 |

  71. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    NA = Not applicable Note: The vesting provisions for the 2023 awards are discussed in “Compensation Discussion and Analysis – 2023 Decisions and Awards – Equity Awards,” and the vesting provisions for the 2021 and 2022 awards (other than actual vesting dates) have the same structure, except that the 2021 and 2022 Performance versus Market awards measure the growth of three business lines (private passenger auto, commercial auto, and homeowners multiple-peril). a At December 31, 2023, the company’s expectation for each award is based on our performance through 2023, industry growth rates for the applicable performance period to the extent available, and our estimates of each for the remainder of the performance period. b At December 31, 2023, the company’s expectation for each award is based on our performance through 2023, the performance of the peer group during the applicable performance period to the extent available, and our estimates of each for the remainder of the performance period. c This award vested at a factor of 134% out of a possible 200% in March 2024.

  72. OPTION EXERCISES AND STOCK VESTED

    OPTION EXERCISES AND STOCK VESTED The following table summarizes the vesting of restricted stock unit awards during 2023. Vesting values reflect considerable stock appreciation from the date of grant. For example, the stock price at original grant (March 2020) of the performance-based restricted stock units that vested on November 27, 2023, was $67.04 versus a stock price of $163.74 at vesting. The units that vested included dividend equivalent units valued at various other prices during the performance period; all of those prices were lower than the stock price at vesting. In addition, a vesting factor of 2.45 was achieved under the performance-based restricted stock unit awards that vested on November 27, 2023.

  73. OPTION EXERCISES AND STOCK VESTED

    | | Stock Awards | | | | Number of Shares Acquired on Vesting1 | Value Realized on Vesting | | Name | (#) | ($) | | Susan Patricia Griffith | 299,425 | $46,828,744 | | John P. Sauerland | 86,857 | 13,315,273 | | Patrick K. Callahan | 51,489 | 8,152,273 | | Karen B. Bailo | 6,520 | 963,863 | | John Murphy | 28,795 | 4,488,127 |

  74. OPTION EXERCISES AND STOCK VESTED

    1 The following table summarizes the number of time-based and/or performance-based restricted stock units, including dividend equivalent units, if applicable, that vested on various dates during the year. Our performance-based restricted stock unit awards vested either when the Compensation and Talent Committee certified that the performance criteria were achieved for the awards based on investment performance (February 21, 2023) or when the Compensation and Talent Committee certified that the company’s growth exceeded industry growth and also satisfied the predetermined profit requirement for awards based on market performance (November 27, 2023).

  75. OPTION EXERCISES AND STOCK VESTED

    | | Vesting Date | 1/3/2023 | 2/21/2023 | 11/27/2023 | | | Value at Vesting | $129.53 | $142.38 | $163.74 | | | Type | TB | PB | PB | | Name | Performance Factor | NA | 1.84 | 2.45 | | Susan Patricia Griffith | | 46,767 | 28,051 | 224,607 | | John P. Sauerland | | 24,104 | 3,840 | 58,913 | | Patrick K. Callahan | | 8,142 | — | 43,347 | | Karen B. Bailo | | 3,030 | — | 3,490 | | John Murphy | | 6,629 | — | 22,166 |

  76. OPTION EXERCISES AND STOCK VESTED

    NA = Not applicable for time-based awards TB = Time-based PB = Performance-based

  77. NONQUALIFIED DEFERRED COMPENSATION

    NONQUALIFIED DEFERRED COMPENSATION The following table summarizes amounts contributed to, earned within, and distributed from the EDCP during 2023, as well as each NEO’s aggregate balance in the EDCP at December 31, 2023. Participation in the EDCP is voluntary; deferral elections are made annually for both non-equity incentive compensation and annual restricted equity awards.

  78. NONQUALIFIED DEFERRED COMPENSATION

    | | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year1 | Aggregate Earnings (Losses) in Last Fiscal Year | Aggregate Withdrawals/ Distributions2 | Aggregate Balance at Last Fiscal Year End3 | | Name | ($) | ($) | ($) | ($) | ($) | | Susan Patricia Griffith | $— | $— | $211,662 | $— | $1,291,136 | | John P. Sauerland | — | — | 52,385 | 167,867 | 179,236 | | Patrick K. Callahan | — | — | 2,768,623 | — | 15,656,966 | | Karen B. Bailo | 473,000 | — | 246,418 | — | 2,550,424 | | John Murphy | — | — | 72,029 | — | 481,697 |

  79. NONQUALIFIED DEFERRED COMPENSATION

    1Progressive makes no supplemental contributions to the EDCP in the year of deferral or in subsequent years. 2Represents scheduled distributions based on the applicable executive’s elections made in prior years. 3 Amounts represent the accumulation of previously deferred non-equity incentive compensation awards or restricted equity awards, both time-based or performance-based, together with earnings on deemed investments. For Mr. Callahan, Ms. Bailo, and Mr. Murphy, the amounts recorded in our "– Summary Compensation Table" for previous years were $2,777,037, $473,000, and $443,077, respectively, which represents amounts deferred into the EDCP. A portion of the amounts may have been distributed to these executives; no other NEO had deferred amounts reported in the "– Summary Compensation Table." The NEOs employed prior to the beginning of a calendar year can defer all or part of the annual cash incentive payments earned under the Gainshare Plan, as well as all of their annual restricted equity awards (but not dividend equivalent units). Amounts equal to the deferred incentive payments or restricted equity awards are credited under the EDCP at the time that the incentive payment otherwise would be paid to the participant or the restricted equity awards otherwise would vest. The plan has 17 mutual funds, as well as Progressive common shares, as deemed investment choices. The participant selects the deemed investment choices for contributions and transfers; however, fund transfers are limited and restricted equity awards granted in or after March 2005 are automatically deemed invested in Progressive common shares until the date of distribution under the plan. We make no matching contributions or additional deposits on behalf of any participant. Any earnings are a result of an executive’s deemed investment choices. We have established an irrevocable grantor trust to provide a source of funds to assist us in meeting our liabilities under the EDCP. To secure our future payment obligations to participants, we deposit amounts equal to deferred cash incentive payments or restricted equity awards into the trust and the trust holds investments equivalent in kind and number to the aggregate deemed investment elections selected by participants. The rights of participants and their beneficiaries under the EDCP are merely unsecured contractual rights against us. Participants have no proprietary rights or interests in the trust’s assets, including any securities that are held by the trust, all of which remain subject to the claims of our general creditors. We do not guarantee any specific rate of return to participants who defer amounts into the EDCP. For the year ended December 31, 2023, returns for the EDCP’s deemed investment choices ranged from 5.09% to 46.78%. Distributions from the EDCP are made in accordance with an election made by the participant prior to earning the deferred award. Distributions are made in a lump-sum or in three, five, or ten annual installments, beginning at the earlier of the date selected by the participant or upon termination of employment. For deferrals made after 2004, distributions resulting from termination of employment begin six months after the participant leaves the company. In addition, distributions may be triggered by certain “change in control” events. All distributions are made in cash, with the exception of deferred restricted equity awards granted in or after March 2005, which are distributed in common shares.

  80. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table highlights the benefits that generally may be received by our NEOs, as well as other employees who participate in the applicable benefit plans, when certain events occur that result either in termination of employment or a change in control of the company.

  81. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    | | Potential Payments The Executive is Eligible to Receive1: | | | | | | | | Under Equity Plan | | | | | If This Triggering Event Occurs: | Severance Benefits | Change in Control Benefits2 | Qualified Retirement Benefits | Other Termination Provisions | Payments under EDCP3 | | Involuntary termination (without cause) | ü | | | | ü | | Voluntary separation (including nonqualified retirement) | | | | ü | ü | | Retirement – qualified (as defined in the plan)4 | | | ü | | ü | | Termination for cause | | | | | ü | | Change in control, no loss of employment | | | | | ü | | Change in control and involuntary termination (without cause) or resignation due to a significant job change | ü | ü | | | ü | | Death | | | ü | ü | ü |

  82. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    1This table is intended as a general summary only. This table excludes amounts attributable to any accrued but unpaid base salary, sick leave, and/or paid time off, if applicable. An executive’s eligibility to receive any of the benefits outlined in this table may be subject to certain criteria, conditions, or other requirements as set forth in the applicable plan documents or related agreements. See below for additional discussions. 2The 2015 Plan has a double trigger provision. See “– Change-in-Control Provisions Under Equity Plan” for additional information. 3An executive will be entitled to receive payments under the EDCP only if the executive deferred compensation under the EDCP. See “– Nonqualified Deferred Compensation” for additional information. 4Under our outstanding equity awards, as discussed below, a “qualified retirement” excludes any termination of employment for cause (as defined in the 2015 Plan). However, for some awards the same event can be treated as a “qualified retirement” under our 2015 Plan and an involuntary termination without cause under our severance plan. The significant provisions of our executive separation allowance (severance) plan, as well as the provisions of our 2015 Plan involving “change in control,” “qualified retirement,” and death benefits, are discussed in more detail below. Payments to be made under our EDCP upon an executive’s termination of employment or a “change in control” are discussed under “– Nonqualified Deferred Compensation.” We do not provide other benefits that are triggered by an NEO’s termination or retirement or by a change in control, except for our 401(k) plan (which is available to all employees) or those required by law (such as postemployment medical insurance coverage under COBRA). Severance Plan Our executive separation allowance plan is designed to provide executives with well-defined financial payments if we ask the executive to leave under certain circumstances. The plan covers our NEOs, other executive officers, and all other equity-eligible employees. Among other terms and conditions, we will generally pay a separation allowance (severance) payment to an eligible executive if: •the executive’s employment terminates for reasons other than resignation (including retirement), death, disability, leave of absence, or discharge for cause (as defined in the plan), or the executive resigns within a specific period of time following any change in the executive’s job duties that is deemed significant by Progressive; and •the employee signs a termination and release agreement as required by the plan. The amount of the severance payment will vary among employees based on position and years of service. Based on tenure, each of our NEOs would receive severance payments equal to three times the executive’s annual base salary only at the time of termination. Cash incentive payments, bonuses, equity awards, perquisites, and other compensation are excluded from the severance calculation. In addition, under the plan, the NEO would be entitled to continue medical, dental, and vision benefits for a period not to exceed 18 months at our cost, except that they would be required to make contributions to the cost of those benefits to the same extent as the executive did prior to termination. The NEO would also be eligible to receive outplacement services following separation with an estimated value of $13,000. In addition, the plan provides that eligible NEOs will have the right to receive a severance payment in accordance with the formula described above, if after any change in control of Progressive, either: •the NEO’s employment is terminated for reasons other than resignation (including retirement), death, disability, leave of absence, or discharge for cause (as defined in the plan); or •the NEO resigns due to a job change for “good reason.” This plan defines “change in control” and “good reason” the same as those terms are defined in the 2015 Plan, which is described below. In the event of a termination of employment of any of our NEOs due to a resignation (including retirement), death, disability, leave of absence, or discharge for cause (as defined in the plan), no separation allowance would be payable under the executive separation allowance plan. The following table summarizes for each of the NEOs the severance payments that would have been made to the NEOs, and the estimated value of health and welfare benefits for which the NEO would have been eligible, if the executive had separated from Progressive at December 31, 2023, under circumstances requiring payments under the executive separation allowance plan:

  83. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    | Name | Amount of Severance Payment ($) | Estimated Value of Health Benefits ($) | | Susan Patricia Griffith | $3,000,000 | $26,779 | | John P. Sauerland | 2,100,000 | 26,779 | | Patrick K. Callahan | 1,950,000 | 26,779 | | Karen B. Bailo | 1,800,000 | 23,044 | | John Murphy | 1,740,000 | 26,779 |

  84. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    Change-in-Control Provisions Under Equity Plan Benefits also may be provided under our 2015 Plan to holders of equity awards, including our NEOs, if a change in control occurs. All equity awards currently outstanding were granted under the 2015 Plan. The 2015 Plan has a “double-trigger” change-in-control provision. Unless an award provides otherwise, the award will not accelerate or be paid out upon a change in control if the outstanding award is honored, assumed, or replaced with a new right that complies with the terms of the change-in-control provisions in the 2015 Plan, including providing substantially identical terms and substantially equivalent economic terms. If the awards are not honored, assumed, or replaced, as described above, they will vest immediately prior to a change in control and each restricted stock unit award will be cashed out, at fair market value, with any performance-based awards deemed to have been earned at the higher of target or a multiple of target based on the level of achievement through the date of the change in control, if determinable. Any honored, assumed, or replacement award will vest after a change in control if, within 24 months after the change in control, the individual is terminated by the surviving entity other than for cause (as defined in the plan) or the individual terminates employment for good reason. If vesting is accelerated, performance-based awards will be considered to be earned at the higher of target (if applicable) or a multiple based on the level of achievement through the termination date, if determinable. The definition of “change in control” in the 2015 Plan is intended to satisfy Section 409A of the Internal Revenue Code and is defined as specific transactions or events, generally including (i) shareholder approval of a liquidation or dissolution, (ii) acquisition by an individual, entity, or group of 30% or more of the outstanding common shares or the combined voting power of the outstanding securities entitled to vote in the election of directors, unless specified exceptions are satisfied, (iii) a change in the composition of the Board such that the individuals who constituted the Board in May 2015 cease to constitute at least a majority of the Board (with new directors nominated for election by the Board generally treated as having been a director in May 2015), or (iv) the consummation of a reorganization, merger, consolidation, asset sale, or similar transaction unless the company’s shareholders retain more than 50% of the voting power of the surviving entity, no individual, entity, or group owns 30% or more of the outstanding common shares or the combined voting power of the outstanding securities entitled to vote in the election of directors of the surviving entity, and the company’s directors prior to the transaction constitute at least a majority of the board of directors of the surviving entity. “Good reason” involves an adverse employment decision affecting the NEO, such as a significant reduction in their duties or responsibilities, a decrease in their compensation, or a change in office location that would increase their commute by greater than 50 miles. The following table quantifies the amount of each NEO’s change-in-control benefits under our equity incentive plan, assuming a change in control (within the meaning of the applicable plan) had occurred and the vesting of all outstanding equity awards and payments had been required under the applicable plan on December 31, 2023:

  85. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    | Name | Payments on Unvested Restricted Stock Unit Awards/Total1 ($) | | Susan Patricia Griffith | $48,494,389 | | John P. Sauerland | 12,482,136 | | Patrick K. Callahan | 11,364,628 | | Karen B. Bailo | 6,091,982 | | John Murphy | 6,801,415 |

  86. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    1 Includes time-based and performance-based restricted stock unit awards, plus reinvested dividend equivalents. Performance-based awards are valued at their target amount. Qualified Retirement Provisions Under Equity Plan The 2015 Plan provides additional benefits in the event an NEO satisfies the Rule of 70 requirements (age 55 with at least 15 years of service or age 60 with at least 10 years of service). These benefits, as well as those related to death and disability, have changed over the past few years based upon the Compensation and Talent Committee’s review of applicable market data. Beginning with awards granted in 2021, if an NEO remains employed through the end of the calendar year in which the grant is made, when the NEO retires after satisfying the Rule of 70 requirements: •100% of the outstanding time-based award will vest; and •100% of each unvested performance-based award will be retained and will vest if, when and to the extent that the performance measures are achieved. With respect to awards granted in 2020, when the NEO retires after satisfying the Rule of 70 requirements: •50% of each outstanding time-based award will vest. With respect to unvested time-based awards granted in 2019: •50% of each award vested (or will vest) when the individual first satisfies the Rule of 70 requirements; •the remaining half of each award will then vest only when the time-based vesting provisions set forth in the applicable award agreement are satisfied; and •no portion of the award vests upon the participant’s retirement. The rights conferred by these provisions, among other rights, may be forfeited if the Compensation and Talent Committee determines that prior to vesting the executive has engaged in any “disqualifying activity.” See “Compensation Discussion and Analysis – 2023 Decisions and Awards – Clawback Provisions.” As of December 31, 2023, Mrs. Griffith, Mr. Sauerland, and Ms. Bailo satisfied the Rule of 70 requirements under our 2015 Plan. Mr. Murphy and Mr. Callahan will not be able to satisfy the qualified retirement eligibility until 2024 and 2025, respectively. The table below shows the value of each of the eligible executive’s retirement benefits if they had retired on December 31, 2023. The amounts are valued using our closing stock price on December 31, 2023, and include reinvested dividend equivalent units payable when the underlying award vests. For the performance-based equity awards, the amounts disclosed assume that all outstanding awards vest at the maximum factor; however, the actual value depends on whether, and the extent to which, the company achieves the applicable performance goals established at the time each award was made, within the time periods permitted by the award. See the “– Outstanding Equity Awards at Fiscal Year-End” table for more information.

  87. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    | | Value of Qualified Retirement Benefits1 (As of 12/31/2023) | | | | Time-Based Equity Awards | Performance-Based Equity Awards at Maximum | | Name | | | | Susan Patricia Griffith | $11,748,573 | $52,784,066 | | John P. Sauerland | 2,716,268 | 14,371,024 | | Karen B. Bailo | 1,526,836 | 5,274,114 |

  88. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    1Awards granted in 2023 do not become a qualified retirement benefit until January 1 in the year following the calendar year in which the grant is made due to the service requirements discussed above. Had the 2023 awards been eligible for vesting as a qualified retirement benefit on December 31, 2023, Mrs. Griffith’s time-based and performance-based equity awards would have increased by $1,147,973 and $25,254,199, respectively, Mr. Sauerland’s by $803,629 and $5,343,875, respectively, and Ms. Bailo’s by $688,847 and $2,582,978, respectively. Other Termination Provisions Under Equity Plan Under our 2015 Plan, termination of an executive for cause (as defined in the plan) will result in the forfeiture of all unvested awards. If an equity award recipient, including an NEO, ceases to be an employee prior to satisfying the Rule of 70 requirements, the employee generally would forfeit any unvested awards, both time-based and performance-based. A limited exception permits a holder of performance-based restricted stock units (including the NEOs) whose employment is terminated (other than by the company for cause) after the end of an applicable performance period but before the award vests to retain the award but only until the first opportunity for the award to vest; at that time, the award will vest only if and to the extent that all performance measures have been satisfied. If, however, the award does not vest at that time (either because the minimum growth measures are not achieved or the profitability requirement is not satisfied), the award is forfeited. Death Beginning with awards granted in 2021, if an NEO is employed through the end of the calendar year in which the grant is made, upon the death of an NEO: •the outstanding time-based awards will vest 100%; •with respect to performance-based awards, if the NEO dies: (i) before the end of the performance period, then the award will vest at 100% of target; or (ii) after the end of the performance period, then the award will remain outstanding and will vest if, when and to the extent that the performance measures are achieved; and •otherwise, the restricted stock unit awards will be forfeited. For awards granted in 2020 and earlier, upon the death of an NEO prior to the NEO satisfying the Rule of 70 requirements: •any outstanding time-based award will vest to the extent that it would have vested if the NEO had remained employed for the 12 months following death. With respect to awards granted in 2019, once an executive has reached the qualified retirement eligibility date, all eligible time-based awards that have not vested prior to the executive’s death will be forfeited. Unless noted above, these provisions apply equally to all participants. If an NEO had chosen to participate in our deferral plan, following the NEO’s death, the NEO’s estate or beneficiaries would also be entitled to receive distributions from the EDCP. Disability Provisions Under Equity Plan Beginning with awards granted in 2021, if an NEO is employed through the end of the calendar year in which the grant was made and if the NEO’s employment is terminated as a result of their disability: •the outstanding time-based awards will vest 100%; •with respect to performance-based awards, in the event the NEO’s employment is terminated •before the end of the performance period, then the performance-based award will vest at 100% of target; •after the end of the performance period, then the performance-based award will remain outstanding and will vest if, when and to the extent that the performance measures are achieved; and •generally all other restricted stock unit awards will be forfeited. For awards granted in 2020 and earlier, no benefit was provided if an NEO’s employment was terminated as a result of their disability, unless the NEO had satisfied the Rule of 70 requirements, in which case the termination was treated as a retirement. Non-Compete Provisions Beginning with awards granted in 2021, annual restricted stock unit awards also include a non-compete provision that will restrict the NEOs from the grant date through one year following termination of employment from engaging in any competitive business activity that would risk disclosure and/or use of our confidential information.

  89. PAY RATIO DISCLOSURE

    PAY RATIO DISCLOSURE Our employee compensation program is designed to support, reinforce, and align our Core Values with our business strategy of growth and profitability, while ensuring we can attract, motivate, and retain talented employees, at every level, who drive our success. Our compensation program, which is the result of our review of market data for our job families, consists of: •base pay that is competitive with the range of pay for jobs with similar duties and responsibilities at other companies, and •an annual cash incentive payment, which we refer to as Gainshare, that is available to nearly all permanent employees. As noted above, our Gainshare program promotes a common culture and rewards employees when annual business goals and objectives are achieved. The payout can range from zero to 2.00x the target, which is a stated percentage of base pay. Under the Gainshare Plan, the target percentage is typically: •0 - 8% for administrative support and entry level professionals; •8 - 20% for senior professionals and managers; and •20 - 150% for senior managers and senior executives, other than the CEO. The SEC rules for identifying the median employee and calculating that employee’s annual total compensation allows companies to make reasonable assumptions and estimates, to apply a variety of methodologies and exclusions that reflect their compensation practices. To identify our median employee, as of December 31, 2023, we used the Medicare taxable wages as reported on the 2023 Form W-2 for all employees (other than the CEO) that were continuously employed for the entire calendar year. For permanent employees hired during 2023, base pay and Gainshare payments were annualized to provide comparability. After we identified the median employee, we determined their total compensation in a manner consistent with the determination of the total shown for our CEO in the "– Summary Compensation Table." We believe the pay ratio provides a reasonable estimate of the required information calculated in a manner consistent with the applicable SEC rules. Total compensation in the "– Summary Compensation Table" includes a “non-equity incentive plan compensation” component, which for us generally represents payments under our Gainshare program for our median employee, who on the last day of the year had a Gainshare target of 8%. Gainshare payments for eligible employees are calculated in the same manner as the executive annual incentive payments described in “– Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table – Non-Equity Incentive Compensation.” For 2023, our median employee’s total annual compensation was $71,672 and our CEO’s total annual compensation was $15,636,618, which results in a pay ratio of CEO compensation to median employee compensation of 218:1. Given the different methodologies used by various public companies, the ratio reported above should not be used as a basis of comparison between or among companies, including companies in our peer group.

  90. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The table below sets forth information regarding compensation for our CEO and non-CEO NEOs, along with the financial performance of Progressive for the last four completed fiscal years. The table also provides a comparison of the compensation reported in the "Executive Compensation – Summary Compensation Table" (Summary Compensation Table) and the compensation actually paid to our NEOs. The disclosure of compensation actually paid is determined in accordance with SEC rules and requires certain adjustments to the amounts reported in the Summary Compensation Table total for each NEO. It does not reflect the amount of compensation actually realized or received by our NEOs during the applicable year. The compensation actually paid amounts include the value of our time-based and performance-based restricted stock unit awards, which is determined, in part, based on the value of Progressive common shares as of the earlier of December 31 or the vesting date, of each covered fiscal year. It also reflects the value of any reinvested dividend equivalent units applicable to these awards and changes in the projected vesting factor for performance-based awards, as described below. The values of these awards reflect considerable stock price appreciation from the date that the awards were originally granted, which is the value reported in the Summary Compensation Table. The ultimate value of unvested restricted stock unit awards remains dependent on our achievement of any applicable performance goals, the satisfaction of applicable vesting periods, and the value of our common shares at the time of vesting of such awards. Further, final values of vested stock holdings are not realized by the NEOs until disposition of their holdings. Additionally, as a property-casualty insurance company, we have earnings from both underwriting activity and investment operations. As discussed elsewhere, during 2023, we recognized an underwriting profit margin of 5.1% (exceeding our companywide profitability target of 4%), or $3.0 billion of pretax underwriting profit, and wrote $10.5 billion more in net premiums than in 2022, to end 2023 at $61.6 billion in net premiums written. Our investment portfolio consists principally of fixed-maturity securities, which represented 91.5% of the fair value of the portfolio at December 31, 2023. Investment income, which consists primarily of interest and dividends, was $1.9 billion in 2023. The changes in the market value of our fixed-maturity securities are not reflected in net income, but rather are a component of comprehensive income. On the other hand, unlike our fixed-maturity securities, changes in the value of our equity securities are reflected in net income. In 2023, 2021, and 2020, net income included total net realized gains on securities of $0.4 billion, $1.5 billion, and $1.6 billion, respectively, compared to total net realized losses of $1.9 billion in 2022.

  91. Pay Versus Performance Table

    Pay Versus Performance Table

  92. Pay Versus Performance Table

    | Year | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO1 | Average Summary Compensation Table Total for Non-CEO Named Executive Officers | Average Compensation Actually Paid to Non-CEO Named Executive Officers2 | Value of initial fixed $100 investment based on3: | | Net Income (in billions) | Combined Ratio5 | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return4 | | | | 2023 | $15,636,618 | $49,003,116 | $4,062,285 | $9,728,818 | $244.66 | $164.49 | $3.9 | 94.9 | | 2022 | 12,748,826 | 48,474,661 | 3,171,093 | 9,195,384 | 198.67 | 148.53 | 0.7 | 95.8 | | 2021 | 14,462,961 | 26,403,691 | 3,668,598 | 5,359,600 | 156.68 | 124.95 | 3.4 | 95.3 | | 2020 | 15,220,523 | 52,840,789 | 3,582,178 | 10,086,445 | 141.38 | 106.33 | 5.7 | 87.7 |

  93. Pay Versus Performance Table

    1 Represents amounts for Mrs. Griffith (our CEO since July 2016) as computed in accordance with Item 402(v) of Regulation S-K and includes certain adjustments to the amounts in the "Summary Compensation Table Total for CEO" column for each covered fiscal year. To determine compensation actually paid, the following adjustments were made to reflect the increase or change in fair value of Stock Awards (defined below) under the circumstances set forth below:a

  94. Pay Versus Performance Table

    | | 2023 | 2022 | 2021 | 2020 | | Closing stock price as of last trading day of year | $159.28 | $129.71 | $102.65 | $98.88 | | Deduction of the grant date fair value of awards reported in the "Stock Awards" column of the Summary Compensation Table (Stock Awards) for the covered fiscal year | $(10,000,106) | $(9,500,203) | $(9,500,212) | $(9,500,037) | | Addition of the year-end fair value of all Stock Awards granted during the covered fiscal year that are outstanding and unvested | 20,662,548 | 16,357,106 | 12,631,713 | 25,872,505 | | Change in the year-end fair value (from prior year-end) of all Stock Awards granted in any prior fiscal year that are outstanding and unvested | 15,038,380 | 23,872,689 | 8,498,852 | 16,252,534 | | Change in the fair value (from prior year-end to vesting date) of all Stock Awards granted in any prior fiscal year that vested | 7,665,676 | 4,996,243 | 310,377 | 4,995,264 | | Total Adjustments | $33,366,498 | $35,725,835 | $11,940,730 | $37,620,266 |

  95. Pay Versus Performance Table

    a The Stock Awards were granted under the 2015 Plan and include time-based and performance-based restricted stock unit awards. For each covered fiscal year, the additions and changes in fair value in the table above also reflect the value of any reinvested dividend equivalent units applicable to these Stock Awards in connection with dividends paid on the company’s common stock, and changes in the projected vesting factor for performance-based restricted stock unit awards. See “Executive Compensation – Summary Compensation Table,” “Executive Compensation – Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table,” “Executive Compensation – Outstanding Equity Awards at Fiscal Year-End,” and “Executive Compensation – Option Exercises and Stock Vested” for further discussion. 2 The non-CEO named executive officers include for (i) 2023 and 2022, Mr. Sauerland, Mr. Callahan, Ms. Bailo, and Mr. Murphy; (ii) 2021, Mr. Sauerland, Mr. Callahan, Remi Kent (Ms. Kent became our Chief Marketing Officer on November 1, 2021), and Michael D. Sieger (Mr. Sieger retired in January 2022); and (iii) 2020, Mr. Sauerland, Mr. Callahan, John A. Barbagallo (Mr. Barbagallo was the Commercial Lines President until mid-January 2021), and Mr. Sieger. As described in Note 1, to determine compensation actually paid, the following adjustments (expressed as averages) were made to reflect the increase or change in fair value of Stock Awards under the circumstances set forth below:a

  96. Pay Versus Performance Table

    | | 2023 | 2022 | 2021 | 2020 | | Deduction of the grant date fair value of Stock Awards for the covered fiscal year | $(2,003,269) | $(1,906,333) | $(2,134,497) | $(1,609,480) | | Addition of the year-end fair value of all Stock Awards granted during the covered fiscal year that are outstanding and unvested | 3,782,595 | 3,359,339 | 2,755,577 | 4,507,590 | | Change in the year-end fair value (from prior year-end) of all Stock Awards granted in any prior fiscal year that are outstanding and unvested | 2,854,453 | 3,915,370 | 1,061,423 | 2,787,532 | | Change in the fair value (from prior year-end to vesting date) of all Stock Awards granted in any prior fiscal year that vested | 1,032,754 | 655,915 | 8,499 | 818,625 | | Total Adjustments | $5,666,533 | $6,024,291 | $1,691,002 | $6,504,267 |

  97. Pay Versus Performance Table

    a For additional information, see note a to Note 1. 3 Total shareholder return is cumulative for the measurement periods beginning on December 31, 2019, and ending on the last fiscal day in 2023, 2022, 2021, and 2020, respectively, assuming $100 was invested at the close of trading on December 31, 2019. 4 Our peer group is the Standard & Poor's 500 Property & Casualty Insurance Index (S&P 500 P/C Group). 5 Combined ratio is the complement of our underwriting margin. The underwriting margin is the pretax underwriting profit (loss) expressed as a percentage of net premiums earned (i.e., revenues from underwriting operations). The pretax underwriting profit (loss) is calculated as net premiums earned plus fees and other revenues less losses and loss adjustment expenses, policy acquisition costs, other underwriting expenses, and for 2020, policyholder credits.

  98. NARRATIVE DISCLOSURE TO PAY VERSUS PERFORMANCE TABLE

    NARRATIVE DISCLOSURE TO PAY VERSUS PERFORMANCE TABLE The following narrative disclosure and graphs describe the relationships between (i) the compensation actually paid to our NEOs and the performance measures set forth in the Pay Versus Performance Table and (ii) our cumulative total shareholder return (TSR) and the cumulative TSR of our chosen peer group, as disclosed in our performance graph below. For additional information on the awards described below, see “Executive Compensation – Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table” and “Compensation Discussion and Analysis – 2023 Decisions and Awards.”

  99. Relationship Between Compensation Actually Paid and Performance Measures

    Relationship Between Compensation Actually Paid and Performance Measures Compensation Actually Paid As shown in the Pay Versus Performance Table, compensation actually paid decreased in 2020 to 2021 (although still meaningfully higher than the Summary Compensation Table totals), before returning again to higher levels in 2022 and 2023. The variation in these amounts during the covered periods reflected changes to the fair value of our time-based and performance-based restricted stock unit awards, the additional value of any new reinvested dividend equivalent units applicable to these awards, and changes in the projected vesting factor for performance-based awards. Combined Ratio We have selected our combined ratio as the “company-selected measure” for the Pay Versus Performance Table because it supports a strong pay-for-performance linkage and further aligns our executives’ interests with those of our shareholders. A fundamental tenet of our executive compensation program continues to be to support our long-standing companywide goal of growing as fast as we can at a 96 or better combined ratio while continuing to deliver high-quality customer service. We strongly believe that achieving our target profit margin takes precedence over growing premiums in years where we are challenged to achieve both, as was the case in both 2022 and 2023. Our Gainshare program is designed to support our long-standing companywide goal. Gainshare payments each year, if any, are based in part on the profitability of our insurance businesses, on a weighted-average basis, through our combined ratio performance measure. Accordingly, in years where our combined ratio is higher, the payouts under the Gainshare program are adversely impacted. During all of the covered fiscal years, we satisfied our goal of achieving a 96 or better combined ratio on a companywide basis, although not all of our insurance businesses achieved this target. The combined ratio was better in 2023, compared to the prior year, and the Gainshare payout for each NEO was correspondingly higher. Because Gainshare is a cash incentive program, the value applicable to Gainshare payouts is the same in both the Summary Compensation Table total and the compensation actually paid columns in the Pay Versus Performance Table. Additionally, our annual performance-based restricted stock unit awards (performance versus market insurance results) include a profitability requirement of a combined ratio of 96 or better over the most recent 12-month period when the vesting is determined. The profitability requirement was met for the awards that vested in each of the years shown. The vesting of these awards was included in the applicable compensation actually paid column in the Pay Versus Performance Table and reflected changes in the fair value of these awards as described above. Cumulative TSR As shown in the Pay Versus Performance Table, our TSR increased over the covered periods from $141.38 to $244.66. During all of the covered fiscal years, our cumulative TSR outpaced the TSR of our chosen peer group, the S&P 500 P/C Group. As noted above, the compensation actually paid amounts to our NEOs during the covered periods reflected changes in the fair value of our time-based and performance-based restricted stock unit awards. These amounts were significantly higher than the values reflected in the Summary Compensation Table totals for each NEO during each covered year. We do not include TSR as a performance measure in our executive compensation program. Rather, we focus on our stated operating and investment goals and allow TSR to reflect our achievement of those goals. However, we do provide a high percentage of total compensation to our NEOs in the form of equity awards. Accordingly, as our stock price increases (and TSR likewise increases), we expect that the compensation actually paid amounts to our NEOs will generally increase proportionately. Net Income As a property-casualty insurance company, we have earnings from both underwriting activity and investment operations. We believe that our shareholder value will be increased in the long run if we continue to focus on profitable growth of our insurance operations and the relative performance of our fixed-maturity portfolio. Net income, which includes the impact of market fluctuations on our equity investments, increased in 2023, reflecting profitable underwriting and investment results. Due to our long-term focus on our insurance operations, we make business decisions and set annual targets that are designed to enhance the longer-term performance of those operations. Accordingly, the trends in the compensation actually paid amounts to our NEOs may not correlate with net income as we do not use net income as a performance measure in our executive compensation program.

  100. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  101. COMPENSATION OF NON-EMPLOYEE DIRECTORS AT FISCAL YEAR-END

    COMPENSATION OF NON-EMPLOYEE DIRECTORS AT FISCAL YEAR-END Compensation of our non-employee directors for the year ended December 31, 2023, was as follows:

  102. COMPENSATION OF NON-EMPLOYEE DIRECTORS AT FISCAL YEAR-END

    | Name | Fees Earned or Paid in Cash1 ($) | Stock Awards2 ($) | Total ($) | | Danelle M. Barrett | $120,000 | $180,131 | $300,131 | | Philip Bleser | — | 325,035 | 325,035 | | Stuart B. Burgdoerfer | — | 350,120 | 350,120 | | Pamela J. Craig | 136,000 | 204,014 | 340,014 | | Charles A. Davis | — | 325,035 | 325,035 | | Roger N. Farah | — | 340,113 | 340,113 | | Lawton W. Fitt | — | 520,110 | 520,110 | | Devin C. Johnson | — | 300,084 | 300,084 | | Jeffrey D. Kelly | 124,000 | 186,001 | 310,001 | | Barbara R. Snyder | — | 300,084 | 300,084 | | Jan E. Tighe3 | — | — | — | | Kahina Van Dyke | — | 315,028 | 315,028 |

  103. COMPENSATION OF NON-EMPLOYEE DIRECTORS AT FISCAL YEAR-END

    1The cash fees will be earned on April 12, 2024, if the individual continues as a director until that date. 2Represents grant date fair value of restricted stock awards. Awards were granted on May 12, 2023, and valued based on that day’s closing price of $133.43 for all directors. All awards will vest on April 12, 2024, if the individual remains a director until that date. The 2023 awards are the only outstanding restricted stock awards held by directors. See “Security Ownership of Certain Beneficial Owners and Management – Security Ownership of Directors and Executive Officers” for the number of shares awarded. 3Ms. Tighe was a member of our Board until May 2023.

  104. NARRATIVE DISCLOSURE TO DIRECTOR COMPENSATION TABLE

    NARRATIVE DISCLOSURE TO DIRECTOR COMPENSATION TABLE Our director compensation program is market-based and is designed to be competitive with other compensation opportunities available to directors. Each year prior to the beginning of the term, the Compensation and Talent Committee reviews director compensation data from comparable companies obtained from management’s compensation consultants and other third parties, and analyses performed by our compensation department and/or consultants. With respect to compensation decisions made in May 2023 for the 2023-2024 term, and after a review of proxy data for companies similar to those reviewed in connection with 2023 executive officer compensation, the committee recommended to the Board no change in total compensation from 2022 for the Chairperson of the Board and each non-employee director. Amount of Compensation After receiving a recommendation from the Compensation and Talent Committee, the Board establishes compensation levels for each term based primarily on committee assignments, with separate compensation provided for services as Chairperson of the Board. The following table sets forth the annual compensation levels approved by the Board for the 2023-2024 term:

  105. NARRATIVE DISCLOSURE TO DIRECTOR COMPENSATION TABLE

    | Chairperson of the Board | $485,000 | | Non-Employee Director | 300,000 | | Additional compensation for Committee Chair: | | | Audit Committee | 35,000 | | Compensation and Talent Committee | 25,000 | | Investment and Capital Committee | 25,000 | | Nominating and Governance Committee | 20,000 | | Technology Committee | 25,000 | | Other additional compensation: | | | Audit Committee members | 10,000 | | Secondary Committee assignment | 15,000 |

  106. NARRATIVE DISCLOSURE TO DIRECTOR COMPENSATION TABLE

    No additional compensation is earned for service on the Executive Committee. Form of Compensation For the 2023-2024 term, each non-employee director was given an opportunity to indicate a preference to receive either (1) 100% of compensation in the form of a restricted stock award or (2) 60% of compensation in the form of a restricted stock award and 40% in the form of cash. After considering such preferences, the committee provided for restricted stock awards under the Amended and Restated 2017 Directors Equity Incentive Plan (the Directors Equity Plan) and cash awards, as indicated in the table above. Cash compensation will be paid, and restricted stock awards will vest, in April 2024, or earlier if a director dies or becomes disabled, or a change in control occurs. When a new director is appointed to the Board or a director changes committee assignments during a term, a proration or other appropriate adjustment may be made. Equity Ownership Guidelines for Directors Within five years after being elected to the Board, each director must acquire common shares having a value equal to at least three times the director’s annual compensation for the most recently completed term, and then maintain such level of holdings throughout their tenure as a director. A director’s unvested restricted stock awards and any common share equivalent units held in The Progressive Corporation Directors Restricted Stock Deferral Plan, as amended and restated (the Directors Restricted Stock Deferral Plan) are treated as common shares held when determining whether this requirement is satisfied. As of December 31, 2023, each director who had been on our Board for more than five years satisfied this requirement. Directors Restricted Stock Deferral Plan Directors receiving restricted stock awards under the Directors Equity Plan have the right to defer the receipt of the common shares covered by each such award under the Directors Restricted Stock Deferral Plan. If a director elects to defer a restricted stock award under this plan, immediately prior to vesting of the applicable award, the restricted shares are converted to units equivalent in value to Progressive common shares and credited to the participating director’s plan account. The participating director’s plan account will further be credited with amounts equal to any dividends and other distributions on Progressive common shares that are thereafter authorized by the Board. There are no other investment options under the Directors Restricted Stock Deferral Plan. All such accounts will be distributed in common shares (except that amounts attributable to dividend equivalent payments will be distributed in cash) in a lump sum or installments, at the time(s) designated by the participating director at the time of election (or later, if permitted); distributions may be accelerated, however, in the event of the participant’s death, the participant’s departure from our Board, or a change in control of Progressive. Directors Deferral Plan Under The Progressive Corporation Directors Deferral Plan, as amended and restated (the Directors Deferral Plan), directors are able to elect to defer cash compensation. Deferred fees are credited into a stock unit account under which the units are equivalent in value and dividend rights to Progressive common shares. All such accounts will be distributed in cash, in a lump sum or installments, when and as designated by the participating director at the time of election (or later, if permitted) or, if earlier, upon the death of the director or upon a change in control of Progressive. Each participating director’s unit holdings in the Directors Deferral Plan and the Directors Restricted Stock Deferral Plan are included in the table under “Security Ownership of Certain Beneficial Owners and Management – Security Ownership of Directors and Executive Officers,” under the column titled “Total Common Shares Beneficially Owned” or under the column titled “Units Equivalent to Common Shares.” Perquisites Consistent with our general practice, during 2023, we did not provide perquisites to any of our non-employee directors in excess of $10,000.