DEF 14A of Chubb Ltd

Filed Apr 1, 2024 · FY20230001104659-24-041810

Open on EDGAR

2023 Summary Compensation Table Information
2023 Summary Compensation Table Information The table below sets forth 2023 compensation for our NEOs as calculated in accordance with applicable SEC regulations. Additional detail, including the full Summary Compensation Table and explanatory footnotes, can be found in the Executive Compensation section of this proxy statement.
2023 Summary Compensation Table Information
| Name and Principal Position | Salary | Bonus | Stock Awards | Option Awards | All Other Compensation | Total | | Evan G. Greenberg Chairman and Chief Executive Officer | $1,550,000 | $9,000,000 | $15,650,006 | — | $1,461,311 | $27,661,317 | | Peter C. Enns Chief Financial Officer | $895,385 | $1,764,000 | $2,600,199 | — | $294,501 | $5,554,085 | | John W. Keogh President and Chief Operating Officer | $1,176,923 | $3,343,000 | $7,000,199 | — | $560,989 | $12,081,111 | | John J. Lupica Vice Chairman; President, North America Insurance | $969,231 | $3,100,000 | $5,000,142 | — | $561,533 | $9,630,906 | | Juan Luis Ortega President, Overseas General Insurance | $838,462 | $1,650,000 | $1,713,858 | $628,431 | $676,099 | $5,506,850 | | Sean Ringsted Chief Digital Business Officer | $837,500 | $1,185,000 | $1,612,687 | $591,313 | $2,339,434 | $6,565,934 |
Voting Requirement to Approve Agenda Item
| Michael G. Atieh Retired Chief Financial and Business Officer, Ophthotech Corporation Age: 70 Years of Service: 33 (since 1991) Committee Memberships: Risk & Finance | Michael G. Atieh served as Executive Vice President and Chief Financial and Business Officer of Ophthotech Corporation (biopharmaceutical company) from September 2014 until March 2016. From February 2009 until its acquisition in February 2012, Mr. Atieh was Executive Chairman of Eyetech Inc. (private specialty pharmaceutical company). He served as Executive Vice President and Chief Financial Officer of OSI Pharmaceuticals from June 2005 until December 2008. Mr. Atieh is currently a director and Chairman of the Audit Committee of Immatics N.V. (clinical stage biopharmaceutical company). Mr. Atieh served as a director and Chairman of the Audit Committee of Oyster Point Pharma, Inc. from October 2020 to January 2023. He also served as a member of the Board of Directors of electroCore, Inc. (medical technology company) from June 2018 to June 2022, a member of the Board of Directors of Theravance Biopharma, Inc. from June 2014 to April 2015, and as a member of the Board of Directors and Chairman of the Audit Committee of OSI Pharmaceuticals, Inc. from June 2003 to May 2005. Previously, Mr. Atieh served at Dendrite International, Inc. (software provider) as Group President from January 2002 to February 2004 and as Senior Vice President and Chief Financial Officer from October 2000 to December 2001. He also served as Vice President of U.S. Human Health, a division of Merck & Co., Inc., from January 1999 to September 2000, as Senior Vice President — Merck-Medco Managed Care, L.L.C., an indirect wholly-owned subsidiary of Merck, from April 1994 to December 1998, as Vice President — Public Affairs of Merck from January 1994 to April 1994 and as Treasurer of Merck from April 1990 to December 1993. Skills and Qualifications: Mr. Atieh brings a wealth of diverse business experience to the Board, which he gained as a senior executive in a Fortune 50 company, large and small biotechnology companies, and technology and pharmaceutical service companies. His experience in finance includes serving as a chief financial officer, developing and executing financing strategies for large acquisitions, and subsequently leading the integration efforts of newly acquired companies. He was an audit manager at Ernst & Young and has served as chair of the audit committee of Chubb and other public companies. Mr. Atieh also has deep knowledge of sales and operations gained from over a decade of experience in these disciplines, with extensive customer-facing responsibilities that also contribute to his value as a director. Mr. Atieh has served as a member of our Board since 1991 and as a result has significant experience and understanding of the Company’s business, growth, development, evolution and major risk, financial, operational and strategic considerations. His in-depth knowledge of the Company and its history adds significant value to our Board, particularly in supporting the development of our newer directors. |
Voting Requirement to Approve Agenda Item
| Sheila P. Burke Faculty Research Fellow, John F. Kennedy School of Government, Harvard University Age: 73 Years of Service: 8 (since 2016) Committee Memberships: Risk & Finance | Sheila P. Burke is a Faculty Research Fellow at the Malcolm Wiener Center for Social Policy, and has been a Member of Faculty at the John F. Kennedy School of Government, Harvard University, since 2007. She has been a Senior Public Policy Advisor at Baker, Donelson, Bearman, Caldwell & Berkowitz since 2009. From 1997 to 2016, Ms. Burke was a member of the board of directors of The Chubb Corporation (Chubb Corp.) and joined our Board at the time of its merger with the Company. From 2004 to 2007, Ms. Burke served as Deputy Secretary and Chief Operating Officer of the Smithsonian Institution. Ms. Burke previously was Under Secretary for American Museums and National Programs, Smithsonian Institution, from June 2000 to December 2003. She was Executive Dean and Lecturer in Public Policy of the John F. Kennedy School of Government, Harvard University, from November 1996 until June 2000. Ms. Burke served as Chief of Staff to the Majority Leader of the U.S. Senate from 1985 to 1996. Ms. Burke was also previously a member of the board of directors of health insurance provider WellPoint, Inc. (now Elevance Health Inc.). Skills and Qualifications: Ms. Burke brings an extensive knowledge of public policy matters and governmental affairs, in both public service and private practice, to our Board. Her substantial experience on public, private and not-for-profit boards enables her to provide valuable oversight and guidance to our management on strategy, regulatory matters and risk management. |
Voting Requirement to Approve Agenda Item
| Theodore E. Shasta Retired Partner, Wellington Management Company Age: 73 Years of Service: 14 (since 2010) Committee Memberships: Audit | Theodore E. Shasta has served as a Director of MBIA, Inc. (financial guarantee insurance provider) since 2009, and also serves as the Chair of its Audit Committee and a member of its Finance and Risk Committee, Compensation and Governance Committee and Executive Committee. Mr. Shasta was formerly a Senior Vice President and Partner of Wellington Management Company, a global investment advisor. Mr. Shasta joined Wellington Management Company in 1996 and specialized in the financial analysis of publicly-traded insurance companies and retired in June 2009. Prior to joining Wellington Management Company, Mr. Shasta was a Senior Vice President of Loomis, Sayles & Company (investment management). Before that, he served in various capacities with Dewey Square Investors and Bank of Boston. In total, Mr. Shasta spent 25 years covering the insurance industry as a financial analyst. Skills and Qualifications: Mr. Shasta’s history of working in the financial services industry, as well as in the property and casualty insurance arena, brings valuable insight to the Board from the investor perspective. His years of analysis of companies like Chubb and its peer group provide him with deep knowledge of particular business and financial issues we face. His financial acumen and industry knowledge make him a valuable contributor to the Audit Committee. Mr. Shasta has been a Chartered Financial Analyst since 1986. |
Voting Requirement to Approve Agenda Item
| David H. Sidwell Retired Chief Financial Officer, Morgan Stanley Age: 71 Years of Service: 10 (since 2014) Committee Memberships: Nominating & Governance (Chair), Compensation, Executive | David H. Sidwell was Executive Vice President and Chief Financial Officer of Morgan Stanley from March 2004 to October 2007, when he retired. From 1984 to March 2004, Mr. Sidwell worked for JPMorgan Chase & Co. in a variety of financial and operating positions, most recently as Chief Financial Officer of JPMorgan Chase’s investment bank from January 2000 to March 2004. Prior to joining JP Morgan in 1984, Mr. Sidwell was with Price Waterhouse LLP, a major public accounting firm, from 1975 to 1984, where he was qualified as a chartered accountant with the Institute of Chartered Accountants in England and Wales. Mr. Sidwell was Senior Independent Director of UBS Group AG until April 2020 and was a director of the Federal National Mortgage Association (Fannie Mae) until October 2016. Skills and Qualifications: Mr. Sidwell has a strong background in accounting, finance and capital markets, as well as the regulation of financial institutions. He also has considerable expertise in risk management from chairing the risk committee of a public company and his executive positions. Mr. Sidwell further contributes experience in executive compensation and corporate governance from his service on the committees of other public company boards. This comprehensive range of experience contributes greatly to his value as a Board member. |
What Happens If Shareholders Do Not Approve the Nominees in this Proposal?
What Happens If Shareholders Do Not Approve the Nominees in this Proposal? If the shareholders do not approve the nominees in this proposal, then the Board will consider the reasons the shareholders did not approve, if known, and will call an extraordinary general meeting of shareholders for reconsideration of the proposal or a revised proposal. Voting Requirement to Approve Agenda Item The affirmative “FOR” vote of the majority of the votes cast (in person or by proxy) at the Annual General Meeting, not counting abstentions, broker non-votes or blank or invalid ballots, is required to elect each of the above nominees in this agenda item.
What Happens If Shareholders Do Not Approve the Nominees in this Proposal?
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What Happens If Shareholders Do Not Approve the Nominees in this Proposal?
Election of Homburger AG as Independent Proxy Agenda Item Our Board of Directors is asking shareholders to elect Homburger AG as the Company’s independent proxy until the conclusion of our next annual general meeting. Explanation Under Swiss law and our Articles of Association, shareholders have the authority to elect an independent proxy. Swiss law does not permit other forms of institutional proxies for public companies, such as corporate proxies (appointing an officer or another representative of the Company) or depositary bank representatives as defined under Swiss law. The independent proxy’s main task is to exercise the voting rights granted to it by shareholders in accordance with shareholder instructions. The independent proxy will not make statements, submit proposals or ask questions of the Board of Directors on behalf of shareholders. Our Board of Directors has recommended that Homburger AG, Prime Tower, Hardstrasse 201, CH-8005 Zurich, Switzerland be elected as our independent proxy until the conclusion of our next annual general meeting. Homburger AG is a Swiss law firm.
Process Used to Determine Maximum Aggregate Compensation for the Board of Directors, Outside Consultant Survey and Analysis of Director Compensation
Process Used to Determine Maximum Aggregate Compensation for the Board of Directors, Outside Consultant Survey and Analysis of Director Compensation In February 2024, the Nominating & Governance Committee retained Farient Advisors LLC (Farient) to provide a survey and analysis of director compensation and our Outside Directors Compensation Parameters. The Committee considered the Farient survey and analysis, and recommended to the Board, and the Board approved, changes to our Outside Directors Compensation Parameters effective as of the date of the Annual General Meeting. The changes were based on, among other things, a comparison of our director compensation structure to that of our competitors and other insurance and similarly-sized companies. As a result, the Lead Director cash retainer was increased from $50,000 to $100,000; the Audit Committee Chair cash retainer was increased from $35,000 to $40,000; the Risk & Finance Committee Chair cash retainer was increased from $25,000 to $35,000; and the Nominating & Governance Committee Chair cash retainer was increased from $20,000 to $25,000. No other changes were made with respect to any other element of director compensation. Upon recommendation of the Nominating & Governance Committee, the Board also approved the maximum aggregate amount of director compensation to recommend to shareholders. Considerations included the proposed size of the Board, our Outside Directors Compensation Parameters, and the addition of a cushion to permit per-meeting fees to be paid in accordance with our Outside Directors Compensation Parameters in case of additional meetings, should they be necessary. The Board does not expect to consider changes to the Outside Directors Compensation Parameters until it considers the maximum aggregate compensation pool to be submitted for shareholder approval next year. The proposed maximum cap is to ensure a sufficient cushion, if needed. Our Board does not expect to utilize the full amount of the cap given the proposed size of our Board and the compensation amounts set forth in our Outside Directors Compensation Parameters.
Q&A Relating to Shareholder Ratification of the Swiss Compensation Report
| Are there differences between director compensation disclosed in the Swiss Compensation Report and the 2023 Director Compensation table in this proxy statement? | The director compensation table in the Swiss Compensation Report is generally the same as the 2023 Director Compensation table included in the Director Compensation section of this proxy statement. The primary differences are that the Swiss Compensation Report (i) includes a Swiss-franc equivalent amount, a year-over-year comparison, and total aggregate director compensation paid for the calendar year (in addition to per director), and (ii) excludes matching contributions made under our matching charitable contribution program for directors because that is considered director compensation under SEC regulations but is not treated as compensation under applicable Swiss compensation disclosure requirements. | | Are there differences between executive compensation disclosed in the Swiss Compensation Report and this proxy statement, including in the Summary Compensation Table? | There are a few differences between executive compensation disclosed in the Swiss Compensation Report and in the executive compensation section of this proxy statement, including the Summary Compensation Table. This is due to differences between Swiss and SEC compensation disclosure requirements. First, Swiss and SEC requirements necessitate compensation disclosures for slightly different sets of executives. The Swiss Compensation Report requires disclosure of compensation paid to our Swiss Executive Management, which is a set of executives appointed by the Board based on the applicable provisions of Swiss law and our Organizational Regulations. Our Executive Management is described in Agenda Item 12.2. On the other hand, this proxy statement discloses compensation paid to our named executive officers, which is determined in accordance with SEC rules. In sum, while Messrs. Lupica, Ortega and Ringsted are named executive officers, they are not members of Executive Management, and while Mr. Wayland is a member of Executive Management, he is not a named executive officer. Second, in accordance with Swiss rules, the executive compensation table in the Swiss Compensation Report sets out the individual compensation of Mr. Greenberg, our Chairman and CEO, and the aggregate compensation of the other members of Executive Management. SEC disclosures require the individualized compensation disclosure of each named executive officer. Third, the equity awards disclosed in the Swiss Compensation Report table represent grants for performance for that particular year (i.e., the equity awards that were granted in February 2024 for performance in 2023 are included in 2023 compensation). This is consistent with how our Compensation Committee views compensation for 2023 as described in the Compensation Discussion & Analysis section of this proxy statement; due to SEC requirements, the Summary Compensation Table in this proxy statement shows 2023 equity awards granted in 2023, which were intended to serve as compensation for 2022. All other forms and amounts of compensation, including base salary, cash bonus and all other compensation, are consistent between the Swiss Compensation Report and the executive compensation tables in this proxy statement. | | Where can I find more information about Chubb’s executive compensation program and practices? | For further detail on our executive compensation program and practices, including the decision-making process on how our Compensation Committee links pay to performance, please review the Compensation Discussion & Analysis section of this proxy statement. |
Board Tenure in Years (Director Nominees)
Board Tenure in Years (Director Nominees)
Director Commitments and Responsibilities
Director Commitments and Responsibilities Each of our directors should represent shareholders as a whole rather than any particular shareholder or group of shareholders. Individual directors are required to notify the Nominating & Governance Committee’s Chair, and the Chairman of the Board, of any change in business or professional affiliations or responsibilities, including retirement, so that conflicts and other Board composition issues can be considered. The Lead Director is also involved in this evaluation process. A director is required to offer his or her resignation from the Board in the event a director leaves a full-time job or otherwise materially changes his or her full-time employed position or status for any reason (for example, by resignation, termination, reassignment or retirement). The resignation may be accepted or not accepted, on behalf of the Board, by the Chair of the Nominating & Governance Committee after consulting with other Committee or Board members in the reasonable discretion of the Chair. In addition, under our Corporate Governance Guidelines, a director should offer to resign if the Nominating & Governance Committee concludes that he or she no longer meets the Company’s requirements for service on the Board, which includes the obligation to devote the time and effort
Director Commitments and Responsibilities
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Director Commitments and Responsibilities
necessary to fully meet their duty of care to shareholders. We believe all our directors have demonstrated a strong commitment to service on our Board in terms of meeting attendance, substantive discussion and effective leadership.
Annual Board and Committee Evaluations
Annual Board and Committee Evaluations Led by our Nominating & Governance Committee, our Board and its committees annually perform self-evaluations that allow for open and candid feedback on Board effectiveness, performance and process. Our evaluation process also includes individual evaluations of our directors, and separate reviews of the Lead Director. Our Lead Director and each of our committee chairs incorporate feedback received from these evaluations to enhance Board governance, process, collaboration and productivity, including by identifying possible topics for future meetings and other matters, such as potential skills and attributes for future director nominees and committee composition. In 2023, results of the Board and committee evaluations were overwhelmingly positive. In the self-evaluation context our Nominating & Governance Committee further considers the composition of the Board and its committees, including diversity considerations and whether the Board and each of its committees have the right mix of skill sets, qualifications, backgrounds, experience, talent and other considerations in order to function effectively. Board Leadership Structure Our Board’s mandate under Swiss law includes overall supervision and control of management of the Company. Though our management and employees direct and are responsible for the business operations of the Company and its divisions, and implementation of policies and strategies approved by the Board, the power of management is fundamentally delegated from the Board.
Determination of Board Leadership Structure
Determination of Board Leadership Structure Our Organizational Regulations and Corporate Governance Guidelines provide the Board with the right and flexibility to recommend to shareholders that the responsibilities of Chairman of the Board and Chief Executive Officer be vested in the same individual or in more than one individual, as the Board determines to be in the best interest of the Company. Our Nominating & Governance Committee regularly reviews and discusses Board composition, leadership and structure, and advises the Board as appropriate. The Nominating & Governance Committee also considers feedback from shareholders. The Board, upon recommendation from the Nominating & Governance Committee, recommends the Chairman for shareholder approval annually in accordance with Swiss law. The vote on our Chairman is a vested shareholder right, as described in Agenda Item 6. Our Board has determined it to be in the best interests of the Company, at this time, to vest the responsibilities of Chairman and CEO in Evan G. Greenberg because the Board believes he has the skills and experience to best perform both roles. Mr. Greenberg provides unique and immeasurable leadership value to our Board serving in the Chairman role. Our Board believes Mr. Greenberg is the preeminent executive in the insurance industry. Combining both roles creates strong leadership, continuity of expertise and one voice in the top Board and management roles. Our Board also believes Mr. Greenberg is best positioned to serve as the appropriate channel between management and the Board. Additionally, the Company is in a highly regulated industry, and Mr. Greenberg’s unparalleled insurance industry knowledge and deep experience spanning over 45 years serving in top management roles provide him with exceptional insight and direction to lead the Board on Company strategy, assessing market conditions, strategic opportunities, and risk management oversight, among other critical matters. Mr. Greenberg’s insurance knowledge and international business acumen make him the optimal individual to Chair our Board at this time, and our Board unanimously believes that shareholders are best served with Mr. Greenberg remaining Chairman of the Board. Moreover, the Board is structured to mitigate potential risks in combining the Chairman and CEO roles. Our Board has an independent Lead Director with significant and substantive powers and responsibilities, as further described below. Mr. Greenberg, in his capacity as CEO, reports to the Board. Led by the Lead Director, the independent directors conduct a comprehensive performance evaluation and compensation determination process with respect to Mr. Greenberg’s performance as CEO. Further, all directors other than Mr. Greenberg are independent, and each of the Audit, Compensation, Nominating & Governance and Risk & Finance Committees of the Board are comprised entirely of independent directors. Most of our directors also have significant executive experience, including some as CEO, and serve individually and collectively as an effective independent complement to the Chairman and CEO. Regular Board refreshment and well-balanced tenure also ensure new independent voices and perspectives are included in Board discussions. Mr. Greenberg’s tenure as Chairman since 2007 has led to continuously strong operational and stock price performance over time. Our Board considers Mr. Greenberg’s continued service as Chairman to be essential to continue the Company’s trajectory of success consistent with its track record. Our Board believes Mr. Greenberg should continue to serve as Chairman to best enable the Company to execute on its
Determination of Board Leadership Structure
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Determination of Board Leadership Structure
Corporate Governance — Board Leadership Structure strategic plan, identify and capitalize on market and other opportunities, and position itself well in the face of the multitude of risks and opportunities that lay ahead. Chubb’s Board leadership structure has evolved over time. For example, the Chairman and CEO roles were separate immediately before May 2007. Mr. Greenberg was promoted to CEO in 2004 and did not become Chairman of the Board until three years later. As Chubb develops into the future, the Board will continue to examine its leadership structure, consider shareholder feedback and will at all times conduct itself in the manner it determines to be in the best interests of the Company and its shareholders. We expect that the Company will always have either an independent Lead Director or a non-executive chairman.
Independent Lead Director — Role and Responsibilities
Independent Lead Director — Role and Responsibilities Board leadership also comes from our independent Lead Director, currently Michael P. Connors. Our Lead Director’s powers and responsibilities are both substantive and significant, many of which are codified in our Organizational Regulations and Corporate Governance Guidelines. Our Board’s leadership structure allows for the Lead Director to promote and foster effective director independence in deliberations and overall governance. Mr. Connors has served as Lead Director since 2020 and as a director since 2011, during which he has acquired and demonstrated an exceptional understanding of the Company’s business, including strategy, finances, operations, regulatory framework, governance and other matters. These include our Board’s oversight structure of the key risks facing the Company. In collaboration with the Chairman, our Lead Director ensures the Board and its relevant committees are appropriately overseeing and identifying short-, medium- and long-term risks. See “Board Oversight of Risk and Risk Management” for more information.
Independent Lead Director — Role and Responsibilities
| Our Lead Director’s specific powers and responsibilities include: • Establishing the agenda (with the Chairman) for Board meetings • Authority to convene meetings of the Board • Presiding at, and setting the agenda for, executive sessions of the independent directors (without the Chairman present) at every regular Board meeting and at other times as the Lead Director may separately call • Providing a forum for independent director feedback at executive sessions and communicating that feedback to the Chairman • Ensuring an appropriate level of Board independence in deliberations and overall governance • Authority to require Board consideration of matters, including risk topics • Working with the Compensation Committee to lead the Board’s review of the performance evaluation and compensation of the Chairman and CEO, a detailed and comprehensive process that evaluates Company and individual performance against a set of financial, operational and strategic metrics and goals as well as compensation and financial performance peer group data (see “How We Determine and Approve NEO Compensation” and “2023 NEO Total Direct Compensation and Performance Summary” in the Compensation Discussion & Analysis for more information) • Working with the Nominating & Governance Committee in the Board and individual director performance evaluation processes, and personally conducting individual director evaluations • Providing input to the Nominating & Governance Committee on the design and organization of the Board, including the review and vetting of potential nominees and committee structure and membership • Facilitating communication between Board members and the Chairman of the Board • Empowerment to respond to non-audit related shareholder inquiries, engage with shareholders, monitor the Company’s mechanism for receiving and responding to shareholder communications to the Board, and oversee the timely delivery of background materials to Board members | | • Helping to assure that all Board members have the means to, and do, carry out their fiduciary responsibilities • Communicating regularly with our CEO on matters of significance, and with the other independent directors to help foster independent thinking |
Independent Lead Director — Role and Responsibilities
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Independent Lead Director — Role and Responsibilities
Corporate Governance — The Committees of the Board The Committees of the Board The Board of Directors has five committees: Audit, Nominating & Governance, Compensation, Risk & Finance and Executive. Each committee’s principal role, current membership, independence standards and meetings held during 2023 are outlined below. For more information on committee members, see our Board of Director profiles in Agenda Item 5.
Independent Lead Director — Role and Responsibilities
| Committee | Role & Responsibilities | Independence | Meetings Held 2023 | | Audit Committee Chair: Robert W. Scully Members: Kathy Bonanno Nancy K. Buese Theodore E. Shasta | The Audit Committee provides oversight of the integrity of our financial statements and financial reporting process, our compliance with legal and regulatory requirements, our system of internal controls, and our audit process. The Committee’s oversight includes the performance of our internal auditors and the performance, qualification and independence of our independent auditors. If a member of our Audit Committee simultaneously serves on the audit committees of more than three public companies, the Board is required to determine and disclose whether such simultaneous service would impair the ability of such member to effectively serve on our Audit Committee. No member serves on the audit committees of more than three public companies. All members are audit committee financial experts as defined under Item 407(d) of Regulation S-K, and each member meets the financial literacy requirements of the NYSE. For more information on our Audit Committee and its role and responsibilities, see the “Audit Committee Report” section of this proxy statement. | All members are independent directors as defined by the independence standards of the NYSE and as applied by the Board | Fourteen meetings and one in-depth session covering various matters further described in the “Audit Committee Report” section of this proxy statement | | Nominating & Governance Committee Chair: David H. Sidwell Members: Michael P. Connors Frances F. Townsend | The responsibilities of the Nominating & Governance Committee include identification of individuals qualified to become Board members, recommending director nominees to the Board and developing and recommending corporate governance guidelines. The Committee also has the responsibility to review and make recommendations to the full Board regarding director compensation, examine and approve the Board’s leadership structure, committee structure and committee assignments, and advise the Board on matters of organizational and corporate governance, including our Corporate Citizenship activities and ESG-related policies and initiatives. In addition to general corporate governance matters, the Nominating & Governance Committee approves the Board calendar and assists the Board and the Board committees in their self-evaluations. | All members are independent directors as defined by the independence standards of the NYSE and as applied by the Board | Four meetings |
Independent Lead Director — Role and Responsibilities
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Independent Lead Director — Role and Responsibilities
Corporate Governance — The Committees of the Board
Independent Lead Director — Role and Responsibilities
| Committee | Role & Responsibilities | Independence | Meetings Held 2023 | | Compensation Committee Chair: Frances F. Townsend Members: Michael P. Connors David H. Sidwell | The Compensation Committee discharges the Board’s responsibilities relating to the compensation of employees, including compensation policies and pay structure for executive officers and other senior officers of the Company. It also evaluates the performance of the CEO and other NEOs based on corporate and individual goals and objectives. Based on this evaluation, it sets the CEO’s compensation level, both as a committee and together with the other independent directors, and approves NEO compensation. The Compensation Committee also works with the Nominating & Governance Committee and the CEO on succession planning, and periodically consults with the Risk & Finance Committee on matters related to executive compensation and risk. Under Swiss law, shareholders have sole authority to elect the members of the Compensation Committee. See Agenda Item 7 for more details. For more information about how the Compensation Committee determines executive compensation, see the Compensation Discussion & Analysis section of this proxy statement. | All members are independent directors as defined by the independence standards of the NYSE and as applied by the Board | Four meetings and several in-depth sessions covering various matters | | Risk & Finance Committee Chair: Olivier Steimer Members: Michael G. Atieh Sheila P. Burke Michael L. Corbat Robert J. Hugin | The Risk & Finance Committee helps execute the Board’s supervisory responsibilities pertaining to enterprise risk management, capital structure, financing arrangements and investments. For more information on the Risk & Finance Committee’s role, see “Board Oversight of Risk and Risk Management” below. | All members are independent directors as defined by the independence standards of the NYSE and as applied by the Board | Four meetings and one in-depth session covering various matters |
Independent Lead Director — Role and Responsibilities
Our Board also has an Executive Committee, comprised of the Chairman of the Board (as Chair), the Lead Director and each of our other committee chairs (as members). The Executive Committee did not meet in 2023 and has not met since 2011. Its primary focus is to act for the full Board when it is not practical to convene a meeting of the full Board. The Executive Committee is authorized to exercise all the powers and authorities of the Board, except as expressly limited by applicable law or regulation, stock exchange rule, our Articles of Association or our Organizational Regulations, and except for matters expressly reserved for another committee.
Independent Lead Director — Role and Responsibilities
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Independent Lead Director — Role and Responsibilities
Corporate Governance — Board Oversight of Our Independent Advisors Board Oversight of Our Independent Advisors
Elements of Director Compensation
Elements of Director Compensation
Elements of Director Compensation
| Pay Component | 2023 Compensation | | Standard Compensation Per year of service from May annual general meeting to the next May annual general meeting | $325,000 – $190,000 in restricted stock awards based on the fair market value of the Company’s Common Shares at the date of award – $135,000 in cash, paid in quarterly installments | | Committee Chair Fees | Audit Committee $35,000 Compensation Committee $25,000 Nominating & Governance Committee $20,000 Risk & Finance Committee $25,000 Paid in quarterly installments | | Lead Director Annual Fee | $50,000 Paid in quarterly installments | | Additional Board Meeting Fees | No fees were paid in 2023 for attendance at regular or special Board or Committee meetings. |
Elements of Director Compensation
Directors may elect to receive all of their compensation, other than compensation for special meetings, in the form of restricted stock awards issued on an annual basis. Restricted stock is awarded at beginning of the plan year (the date of the Annual General Meeting) and becomes non-forfeitable at end of the plan year, provided that the grantee has remained a Chubb director continuously during that plan year. In addition to the compensation described above, we have a matching contribution program for directors pursuant to which we will match director charitable contributions to eligible registered charities up to a maximum of $40,000 per year. In February 2023, the Nominating & Governance Committee retained Pay Governance, which was at the time the Compensation Committee’s independent compensation consultant, to provide its annual survey and analysis of director compensation. The Committee considered the Pay Governance survey and analysis, and recommended to the Board, and the Board approved, no changes to our Outside Directors Compensation Parameters.
Elements of Director Compensation
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Elements of Director Compensation
Director Compensation — Board of Directors’ Role and Compensation In February 2024, the Nominating & Governance Committee retained Farient Advisors LLC, the current independent compensation consultant to the Compensation Committee, to provide a survey and analysis of director compensation. The Committee considered the Farient survey and analysis, and recommended to the Board, and the Board approved, changes to our Outside Directors Compensation Parameters effective as of the date of the Annual General Meeting. The changes were based on, among other things, a comparison of our director compensation structure to that of our competitors and other insurance and similarly-sized companies. As a result, the Lead Director cash retainer was increased from $50,000 to $100,000; the Audit Committee Chair cash retainer was increased from $35,000 to $40,000; the Risk & Finance Committee Chair cash retainer was increased from $25,000 to $35,000; and the Nominating & Governance Committee Chair cash retainer was increased from $20,000 to $25,000. No other changes were made with respect to any other element of director compensation. Director Stock Ownership Requirements Our Corporate Governance Guidelines specify director equity ownership requirements to further align their interests with our shareholders. Chubb awards outside directors restricted stock awards as part of their standard compensation. The Company requires minimum equity ownership of $700,000 for outside directors (based on stock price on date of award). The minimum equity ownership amount was increased from $600,000 to $700,000 in February 2023. Each Director has until the fifth anniversary of his or her initial election to the Board of Directors to achieve this minimum. Deferred restricted stock units (which we no longer grant to directors) and restricted stock, whether or not vested, are counted toward achieving this minimum. All of our Directors who have served for at least five years satisfy Chubb’s director equity ownership requirements. Once a Director has achieved the $700,000 minimum equity ownership, this requirement remains satisfied going forward as long as he or she retains the number of shares valued at $700,000 based on the NYSE closing price for the Company’s Common Shares as of the date such minimum threshold is initially met. Any vested shares held by a Director in excess of the minimum share equivalent may be sold at the Director’s discretion after consultation with our General Counsel and in accordance with the requirements of the Company’s insider trading policy. Directors are also not permitted to pledge or hedge Common Shares.
Elements of Director Compensation
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Elements of Director Compensation
Director Compensation — 2023 Director Compensation 2023 Director Compensation The following table sets forth information concerning director compensation paid or, in the case of restricted stock awards, earned, during 2023.
Elements of Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards1 | All Other Compensation2 | Total | | Michael G. Atieh | $135,000 | $190,000 | $37,500 | $362,500 | | Kathy Bonanno | $135,000 | $190,000 | — | $325,000 | | Nancy K. Buese | $101,250 | $118,750 | $40,000 | $260,000 | | Sheila P. Burke | $135,000 | $190,000 | $11,000 | $336,000 | | Mary Cirillo3 | — | $129,375 | $22,765 | $152,140 | | Michael P. Connors | $185,000 | $190,000 | — | $375,000 | | Michael L. Corbat | $101,250 | $118,750 | $40,000 | $260,000 | | Robert J. Hugin4 | — | $325,000 | $40,000 | $365,000 | | Robert W. Scully5 | — | $360,000 | $40,000 | $400,000 | | Theodore E. Shasta | $135,000 | $190,000 | $30,000 | $355,000 | | David H. Sidwell | $150,000 | $190,000 | $20,000 | $360,000 | | Olivier Steimer | $160,000 | $190,000 | $22,944 | $372,944 | | Luis Téllez6 | $33,750 | $71,250 | — | $105,000 | | Frances F. Townsend | $160,000 | $190,000 | $20,250 | $370,250 |
Elements of Director Compensation
1 This column reflects restricted stock awards earned during 2023. Restricted stock awards were granted on the date of the 2023 and 2022 annual general meetings, respectively, and vest on the date of the subsequent year annual general meeting. The grant date fair value of the restricted stock awards for 2023 are based on the Common Share value of $198.93 and amount to $189,978 for each director. Such amount does not include Common Shares received in lieu of cash for annual retainer or committee fees earned, which are described in footnotes three, four and five to this table. 2 All other compensation includes matching contributions made under our matching contribution program for directors (pursuant to which we match director charitable contributions to eligible non-profit organizations up to a maximum amount, which was $40,000 in 2023) and retirement gifts. 3 Ms. Cirillo retired from our Board upon the expiration of her term at the May 2023 annual general meeting. 4 Included in Mr. Hugin’s stock awards is an annual retainer fee of $135,000 for which he received 679 restricted stock awards, rather than cash, at the election of the director. 5 Included in Mr. Scully’s stock awards are the following amounts which were paid in stock, rather than cash, at the election of the director: an annual retainer fee of $135,000 for which he received 679 restricted stock awards and a committee chair fee of $35,000 for which he received 176 restricted stock awards. Mr. Téllez retired from our Board upon expiration of his term at the May 2023 annual general meeting.
Elements of Director Compensation
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Elements of Director Compensation
Information About Our Share Ownership How Many Shares Do Our Directors, Nominees and SEC Executive Officers Own? The following table sets forth, as of March 22, 2024, the beneficial ownership of Common Shares by each of our NEOs, directors and director nominees, and by all directors, director nominees and SEC executive officers as a group. Unless otherwise indicated, the named individual has sole voting and investment power over the Common Shares listed in the Common Shares Beneficially Owned column. The Common Shares listed for each director, director nominee and NEO, and for all our directors, director nominees and SEC executive officers as a group, constitute less than 1% of our outstanding Common Shares.
Elements of Director Compensation
| Name of Beneficial Owner | Common Shares Beneficially Owned | Common Shares Subject to Options1 | Restricted Common Shares2 | | Evan G. Greenberg3 4 10 11 | 765,122 | 685,343 | 225,456 | | Peter C. Enns10 | 7,071 | 18,104 | 36,021 | | John W. Keogh3 10 | 149,459 | 249,542 | 91,282 | | John J. Lupica3 10 | 106,853 | 158,777 | 64,043 | | Juan Luis Ortega 10 11 | 16,291 | 53,915 | 19,800 | | Sean Ringsted 10 11 | 192,797 | 89,298 | 24,027 | | Michael G. Atieh5 6 7 | 16,763 | — | 955 | | Kathy Bonanno | 699 | — | 955 | | Nancy K. Buese | 12 | — | 955 | | Sheila P. Burke12 13 | 6,755 | — | 955 | | Nelson J. Chai | — | — | — | | Michael P. Connors | 15,790 | — | 955 | | Michael L. Corbat | — | — | 955 | | Robert J. Hugin8 | 16,681 | — | 1,634 | | Robert W. Scully9 | 42,886 | — | 1,810 | | Theodore E. Shasta | 13,556 | — | 955 | | David H. Sidwell | 12,661 | — | 955 | | Olivier Steimer6 | 21,158 | — | 955 | | Frances F. Townsend | 2,801 | — | 955 | | All our directors, nominees and executive officers as a group (23 individuals)14 | 1,541,258 | 1,434,921 | 530,252 |
Elements of Director Compensation
1 Represents Common Shares that the individual has the right to acquire within 60 days of March 22, 2024 through option exercises. For Mr. Greenberg, amount includes options that were gifted to entities for which adult family members of Mr. Greenberg are beneficiaries and for which he has no pecuniary interest. 2 Represents Common Shares with respect to which the individual has the power to vote (but not to dispose of). 3 Messrs. Greenberg, Keogh and Lupica share with other persons the power to vote and/or dispose of 41,700 shares, 29,380 shares and 88,700 shares, respectively, of the Common Shares listed. Of the Common Shares listed as held by all directors, nominees and executive officers as a group (including those in the immediately preceding sentence), the power to vote and/or dispose of 200,705 Common Shares is shared with other persons. 4 Mr. Greenberg has pledged 240,000 of the Common Shares beneficially owned by him. The amount included in the table for Mr. Greenberg also contains 463,793 additional pledged Common Shares that are owned by entities in which adult family members of Mr. Greenberg are beneficiaries and for which he has no pecuniary interest. In each of the cases in this footnote, such pledging is consistent with the Company’s share pledging policy under which, effective January 2017, new pledging of any Chubb shares owned by executive officers or directors is prohibited. 5 Included in these amounts are Common Shares that will be issued to the director immediately upon his separation from the Board. These Common Shares relate to vested stock units granted as directors compensation and associated dividend reinvestment accruals. The number of such Common Shares at March 22, 2024 included in the above table for Mr. Atieh is 16,254 shares. 6 Not included in these amounts are Common Shares that will be issued to the director no earlier than 6 months following his separation from the Board. Such Common Shares relate to deferred restricted stock units granted as directors compensation and associated dividend reinvestment accruals. The number of such Common Shares at March 22, 2024 not included in the above table for each director is as follows: Mr. Atieh (21,931) and Mr. Steimer (3,852). Includes 247 shares held by a family foundation. Mr. Atieh has no pecuniary interest in these shares.
Elements of Director Compensation
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Elements of Director Compensation
Information About Our Share Ownership — How Many Shares Do Our Directors, Nominees and SEC Executive Officers Own? Includes 335 shares held by Mr. Hugin’s sons, for which Mr. Hugin disclaims beneficial ownership. 9 Includes 23,765 shares held by a family foundation. Mr. Scully has no pecuniary interest in these shares. 10 Not included in these amounts are (i) Restricted Common Shares representing a premium performance share award with respect to the performance share awards granted in 2021, 2022, 2023 and 2024; and (ii) target and premium performance stock unit awards (PSUs) granted in 2024. Such Restricted Common Shares and PSUs will vest on the third anniversary, subject to the satisfaction of certain service and performance-based criteria. Such Restricted Common Shares will not be entitled to vote until vested. Dividends and dividend equivalents will be accumulated and distributed only when, and to the extent, that the awards have vested. The number of such Restricted Common Shares and PSUs at March 22, 2024 not included in the above table for each NEO is as follows: Mr. Greenberg (258,418), Mr. Enns (42,097), Mr. Keogh (119,980), Mr. Lupica (86,353), Mr. Ortega (24,162) and Mr. Ringsted (16,528). 11 Not included in these amounts are Restricted Stock Unit (RSU) awards granted in 2024 for Mr. Ortega and in 2022, 2023 and 2024 for Mr. Ringsted. Such RSUs will vest evenly over four years. RSUs will not be entitled to vote until vested. Upon vesting, one Common Share will be delivered for each vested RSU. The number of such RSUs at March 22, 2024 not included in the above table for each NEO is as follows: Mr. Ortega (1,840) and Mr. Ringsted (1,433). 12 Not included in these amounts are fully vested Market Value Units payable in Common Shares that will be paid out 3 months after separation from service, unless further deferred. The number of such Common Shares at March 22, 2024 for Ms. Burke is 11,378. 13 Not included in these amounts are fully vested Deferred Stock Units that will not be payable, unless further deferred, until the 90th day after the earliest to occur of the director’s (i) death, (ii) disability, or (iii) separation from service. The number of such Common Shares at March 22, 2024 for Ms. Burke is 28,837. 14 Includes shares beneficially owned by Mr. Ringsted, a named executive officer. Mr. Ringsted is not currently an executive officer of the Company under SEC rules, but is an NEO of the Company pursuant to SEC regulations. Which Shareholders Own More Than 5% Of Our Shares? The following sets forth information regarding each person, including corporate groups, known to us to own beneficially or of record more than 5% of our outstanding Common Shares as of December 31, 2023.
Elements of Director Compensation
| Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percent of Class | | The Vanguard Group1 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 38,930,986 | 9.54% | | BlackRock, Inc.2 50 Hudson Yards New York, New York 10001 | 29,507,346 | 7.2% | | T. Rowe Price Associates, Inc.3 100 E. Pratt Street Baltimore, Maryland 21202 | 21,675,760 | 5.3% |
Elements of Director Compensation
1 Based on a Schedule 13G/A filed by The Vanguard Group on February 13, 2024. The Vanguard Group, together with certain of its wholly-owned subsidiaries acting as investment managers, may be deemed to have had beneficial ownership of 38,930,986 Common Shares. No one person was known to have an interest with respect to more than 5% of the class of shares. The Vanguard Group had shared voting power over 518,790 shares, sole dispositive power over 37,200,032 shares, and shared dispositive power over 1,730,954 shares. 2 Based on a Schedule 13G/A filed by BlackRock, Inc. on February 6, 2024. BlackRock, together with certain of its affiliates, may be deemed to have had beneficial ownership of 29,507,346 Common Shares. No one person was known to have an interest with respect to more than 5% of the class of shares. BlackRock had sole voting power over 26,434,921 shares and sole dispositive power over 29,507,346 shares. Based on a Schedule 13G/A filed by T. Rowe Price Associates, Inc. (Price Associates) on February 14, 2024. Price Associates may be deemed to have had beneficial ownership of 21,675,760 Common Shares. Price Associates had sole voting power over 9,554,482 shares and sole dispositive power over 21,591,444 shares. These shares are owned by various individual and institutional investors which Price Associates serves as an investment adviser with power to direct investments and/or sole power to vote the securities, none of which is known to have such interest with respect to more than 5% of the class of shares. For the purposes of the reporting requirements of the Exchange Act, Price Associates is deemed to be a beneficial owner of such shares; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such shares.
Elements of Director Compensation
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Elements of Director Compensation
Compensation Committee Report The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis contained in this proxy statement with management. Based on our review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion & Analysis be included in this proxy statement for the 2024 Annual General Meeting and the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. This report has been approved by all members of the Committee. Frances F. Townsend, Chair Michael P. Connors David H. Sidwell
Elements of Director Compensation
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Compensation Profile
Compensation Profile Approximately 94% of the total direct compensation of our CEO and 87% of the total direct compensation of our other NEOs is variable or “at-risk.” A significant portion of variable compensation is in the form of performance-based equity awards, which cliff-vest after the end of a three-year performance period if certain performance criteria are satisfied. Performance-based equity awards comprise 100% of the annual equity award granted to the CEO, COO, CFO and President, North America Insurance. For the President, Overseas General Insurance and Chief Digital Business Officer, 25% of the value of their annual equity award consists of stock options; the balance of those awards consists of restricted stock, 75% of which is performance-based and 25% of which is time-based. The compensation components for each of our NEOs as considered by the Board’s Compensation Committee are summarized in the charts below. Further detail is provided in “2023 NEO Total Direct Compensation and Performance Summary” beginning on page 115. CEO Total Direct Compensation Other NEOs Total Direct Compensation
How We Use Peer Groups
How We Use Peer Groups We utilize two peer groups in order to (1) assess our financial performance against key metrics relative to our P&C insurance industry peers with whom we compete for business (Financial Performance Peer Group) and (2) align our CEO compensation with companies of comparable size and complexity that we seek to be competitive with for talent and compensation purposes (CEO Compensation Benchmarking Peer Group). The Committee reviews and assesses the peers in both groups at least annually.
How We Use Peer Groups
| 2023 Financial Performance Peer Group | 2023 CEO Compensation Benchmarking Peer Group | | | • The Allstate Corporation • American International Group, Inc. • CNA Financial Corporation • The Hartford Financial Services Group, Inc. • The Travelers Companies, Inc. • Zurich Insurance Group* | • The Allstate Corporation • American Express Company • American International Group, Inc. • Aon plc • Bank of America Corporation • The Bank of New York Mellon • BlackRock, Inc. • Cigna Corp. | • Citigroup Inc. • The Goldman Sachs Group, Inc. • Marsh & McLennan Companies, Inc. • MetLife, Inc. • Morgan Stanley • Prudential Financial, Inc. • The Travelers Companies, Inc. |
How We Use Peer Groups
* For 1-year and 3-year TSR only. The Compensation Committee determined that, due to Zurich Insurance Group’s adoption of IFRS 17 accounting in 2023, replacing U.S. GAAP, Zurich Insurance Group’s financial performance is no longer comparable and inclusion would distort the relative performance evaluation on the metrics other than TSR. The Company and every other peer in the Financial Performance Peer Group report in accordance with U.S. GAAP.
Long-Term Performance Highlights
Long-Term Performance Highlights Chubb has a distinguished and consistent track record of performance and outperformance relative to its insurance industry peers. The following charts reflect our performance across key financial and operating measures over the last 20 years, starting in 2004 when Evan Greenberg became CEO of the Company.
Long-Term Performance Highlights
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Long-Term Performance Highlights
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Long-Term Performance Highlights
Source: SNL and company disclosures. Peer average excludes Zurich Insurance Group on all metrics except Total Shareholder Return.
Long-Term Performance Highlights
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2023 Performance: Key Metrics and Strategic Achievements
2023 Performance: Key Metrics and Strategic Achievements The Compensation Committee evaluates our absolute and relative financial performance across the five key metrics detailed in the table below, as well as TSR. The Compensation Committee reviews relative Company financial performance against the Financial Performance Peer Group. On average across the key metrics, our performance relative to the Financial Performance Peer Group was at the 87th percentile. Overall 2023 financial results were excellent and reflect the best full-year financial performance in the Company’s history, with record net income and core operating income on both a per share and dollar basis from record P&C underwriting and investment income, a record combined ratio, record return on equity, outstanding fundamentals, underwriting margin improvement and double-digit premium revenue growth. Our tangible book value per share growth also substantially improved from prior year. On an absolute basis, Company performance exceeded prior year and plan on all five key metrics, even when excluding the favorable impact of a one-time deferred tax benefit related to Bermuda’s new income tax law. On a relative basis, Chubb significantly outperformed peers on four of the five key metrics, and performance was at median on the fifth metric. The Company also delivered strong 1-year and 3-year TSR results. Further information on each of the metrics is below.
2023 Performance: Key Metrics and Strategic Achievements
| Core operating income | $9.34B | Core operating income was a record for the Company in 2023 and substantially exceeded both prior year and plan. Core operating income growth was at the 91st percentile of the Financial Performance Peer Group. One of our peers was excluded from the percentile rank calculation for 2023 core operating income growth to eliminate the distortive impact of it having a core operating loss in 2022. | | Core operating return on equity (ROE) | 15.4% | Core operating ROE performance significantly exceeded both prior year and plan. Performance was at the 93rd percentile of the Financial Performance Peer Group. | | Core operating return on tangible equity (ROTE) | 24.2% | Core operating ROTE relative performance exceeded that of every company in the Financial Performance Peer Group (100th percentile). Absolute performance was a record in 2023 and substantially exceeded both prior year and plan. | | P&C combined ratio | 86.5% | P&C combined ratio relative performance was better than that of every company in the Financial Performance Peer Group (100th percentile). Absolute performance was a record for 2023 and improved on both prior year and plan. Current accident year P&C combined ratio excluding catastrophe losses was also a record 83.9% in 2023. | | Tangible book value per share growth | 21.3% | Tangible book value per share growth substantially improved on prior year and exceeded plan. On a relative basis, performance was at the 50th percentile of the Financial Performance Peer Group. | | Total shareholder return | 4.2% 1-year 15.6% 3-year | Our 1-year and 3-year annualized TSR were at the 5th (2.6 percentage points from median) and 66th percentiles, respectively, of our Financial Performance Peer Group. Our cumulative 3-year TSR was 54.5%. |
2023 Compensation Decisions
| In determining the compensation direction of the Company and in setting the 2023 compensation for the CEO and other NEOs, the Compensation Committee considered the Company’s performance on key financial metrics on an absolute basis and relative to its Financial Performance Peer Group, progress and execution on operational and strategic objectives, and shareholder value creation. When deciding 2023 variable pay for the CEO and other NEOs, including both cash bonuses and long-term equity awards, the Compensation Committee recognized their outstanding leadership, sound judgment and steadfast focus, which drove the Company’s outstanding overall performance described above in “2023 Performance: Key Metrics and Strategic Achievements”. The Compensation Committee determined to increase the CEO’s variable compensation, reflecting the Company’s excellent 2023 financial performance, execution and progress on short-, medium- and long-term operational and strategic objectives, and value created for shareholders. The CEO’s annual cash bonus was set at $9 million. The long-term equity award was set at $17.35 million. The Committee also reinforced the alignment of the CEO’s compensation with long-term Company performance, as 100% of the annual equity award is subject to performance-based vesting. The Committee believes that requiring the entirety of the CEO’s equity awards to vest, if at all, depending on Company performance, and eliminating solely time-based equity vesting, more closely aligns the pay of our CEO with long-term Company financial performance and the creation of shareholder value. The Committee further determined not to increase the CEO’s base salary. The Compensation Committee believes that 2023 compensation decisions for the CEO and other NEOs reflect the Company’s overall operating, strategic, financial and stock price performance, and thus are aligned with shareholders. Further details on the compensation decisions for the CEO and other NEOs are described in “2023 NEO Total Direct Compensation and Performance Summary” beginning on page 115. The Compensation Committee’s and Board’s compensation decisions for 2023 reflect the Company’s philosophy to closely link pay to performance, ensuring that its leadership team remains highly motivated, and strongly aligning remuneration outcomes with the creation of shareholder value. The decisions also demonstrate the use of short- and long-term variable pay components to adjust compensation to reflect current year results and longer-term impacts. The success of this philosophy is demonstrated in this year’s excellent financial performance, both on an absolute basis and relative to Chubb’s Financial Performance Peer Group, and in our long-term stock price performance. |
2023 Compensation Decisions
Starting with February 2024 equity grants, the Compensation Committee modified the form of certain equity awards to enable deferral of such awards under the Chubb Deferred Stock Unit Plan. The modified awards, which are now issued in the form of units instead of shares, carry the same vesting criteria and schedule as the prior respective form of such awards. Specifically, performance-based equity awards were modified from solely performance shares (PSAs) to a mix of PSAs and performance stock units (PSUs), or solely PSUs, depending on the executive. Additionally, for executives that receive both performance-based and time-based restricted stock awards, the time-based restricted stock awards (RSAs) were also modified to a mix of RSAs and restricted stock units (RSUs), or solely RSUs, depending on the executive.
Components of Total Direct Compensation
| | Component | What We Reward | Target Opportunity | What It Achieves | | Fixed compensation | Base salary | Annual base salary, which is closely tied to role and market. | Base salary is targeted at the median of our CEO compensation peer group (for our CEO) and industry peers and relevant compensation survey data (for our other NEOs). | Provides a competitive market-based level of fixed compensation. | | Variable compensation | Cash bonus | Each NEO’s annual cash bonus is based on the prior year’s performance, as measured against: • Individual Performance Criteria; • Company Performance Criteria; and • the performance of the operating unit(s) or functions directly managed by the NEO. | The annual cash bonus opportunity is based on performance for each NEO and in consideration of delivering total compensation in a range that typically approximates market median to the 75th percentile, depending on performance. | Ties NEO pay to annual Company and individual performance. | | | Long-term equity awards Performance-based equity awards (performance stock units (PSUs) and performance shares (PSAs)): • Target Awards • Premium Awards If the NEO does not receive 100% of the annual long-term equity award grant in the form of performance-based equity, the NEO is granted a mix of performance-based equity, stock options (time-based vesting) and restricted stock awards (restricted stock units (RSUs) and restricted stock awards (RSAs)) (time-based vesting). | The value of each NEO’s long-term equity award is based on the prior year’s performance, as measured against: • Individual Performance Criteria; • Company Performance Criteria; and • the performance of the operating unit(s) or functions directly managed by the NEO. The ultimate value realized from these awards is based on the Company’s stock price performance as well as, with respect to performance-based equity awards, relative tangible book value per share growth and P&C combined ratio performance over time. Premium Awards are also subject to a TSR modifier. | The value of the annual long-term equity award is based on performance for each NEO and is typically 1.5 to 2.5 times the annual cash bonus to emphasize long-term performance tied to shareholder value. The long-term equity award is intended to deliver total compensation in a range that typically approximates market median to the 75th percentile, depending on performance. | Ties the current year’s awards to future performance. The Compensation Committee approves a specific long-term equity award for each NEO that is linked both to prior year performance and multi-year future performance. Performance-based equity encourages superior growth in tangible book value per share and a strong P&C combined ratio relative to peers, as well as superior TSR. The three-year cliff-vesting requirement also aligns executive interests with those of shareholders and supports executive retention. Stock options reward stock price appreciation. Restricted stock (time-based) aligns executive interests with those of shareholders and supports executive retention. |
Annual Board Committee Review of Executive Compensation Practices
Executive Compensation — The Relationship of Compensation to Risk The Chubb Code of Conduct The Chubb Code of Conduct is at the heart of our corporate culture to drive every business decision our executives and employees make. The Board considers Chubb’s values-oriented culture to be a key factor in mitigating risky behavior. Executive Stock Ownership Requirements Chubb’s stock ownership guidelines require our NEOs to hold substantial amounts of equity. For our CEO, the guideline amount is seven times annual base salary, while for the other NEOs, the guideline amount is four times annual base salary. We believe that stock ownership encourages appropriate decision-making that aligns with the long-term interests of our shareholders. Compensation Alignment with Our Peer Groups Our compensation program target levels are benchmarked annually to ensure consistency with peers. For our CEO, we rely exclusively on the CEO Compensation Benchmarking Peer Group. For the other NEOs, we rely on proxy statement data and on broad survey data of insurance industry companies. Our Clawback Policies We maintain clawback policies allowing us to recover certain compensation from our current and former executive officers. See “Compensation Practices and Policies — Clawback Policies” in this Compensation Discussion & Analysis for further detail. Insider Trading Policy Our Insider Trading Policy applies to executives, employees, directors and others, and requires that transactions in Chubb securities are in compliance with applicable laws as well as certain Chubb guidelines. These guidelines include, among other matters, prohibitions on hedging, pre-approval to enter into any Rule 10b5-1 plan, and, for NEOs, executives and certain other persons, trading only during authorized periods and requiring pre-clearance prior to trading. Performance Goals Performance goals are set at levels that are high enough to encourage strong performance, but within reasonably attainable levels to discourage risky business strategies or actions. Periodic Assessment of Program Design Our Compensation Committee regularly reviews our compensation structure, short-term and long-term awards programs, and best practices to ensure our compensation programs do not encourage excessive risk-taking and that the Company rewards strong short-, medium- and long-term performance.
Our NEO Compensation Components and Their Relationship to Risk
Our NEO Compensation Components and Their Relationship to Risk Variable pay for our NEOs in the form of annual cash bonuses and equity grants comprises the substantial majority of each NEO’s annual total compensation. Base salary provides a fixed level of compensation for our NEOs and represents a relatively small portion of their overall compensation. Adjustments to base salary are driven more by competitive market data for similar positions as opposed to being tied to performance or short-term financial results and are targeted to market median. Cash bonuses are determined primarily by the prior calendar year’s results on key financial performance metrics as measured against a defined group of industry peers, prior year performance and Board-approved plan. These metrics are core operating income, core operating return on equity, core operating return on tangible equity, P&C combined ratio and tangible book value per share growth. These specific financial performance metrics, taken together, have been selected in part because they encourage sound business decision-making and measure the creation of both short- and long-term enterprise value. Equity awards deliver the remainder — and typically the majority — of each NEO’s total compensation. The types of equity awards and vesting periods are described in the following chart.
Our NEO Compensation Components and Their Relationship to Risk
| Type of Award | Vesting Period | | Performance-Based Equity: Performance Stock Units and Performance Shares | Cliff vest at end of a 3-year performance period if established performance criteria are met | | Time-Based Restricted Stock and Restricted Stock Units | Evenly over a 4-year period from date of grant | | Stock Options | Evenly over a 3-year period from date of grant (10-year exercise period) |
Our NEO Compensation Components and Their Relationship to Risk
Executive Compensation — The Relationship of Compensation to Risk Performance-based equity awards comprise 100% of the annual equity award granted to the CEO, COO, CFO and President, North America Insurance. For the other two NEOs, 25% of the value of their annual long-term equity award consists of 10-year stock options with strike prices set as of the grant date; the remaining 75% of the award consists of restricted stock (75% performance-based and 25% time-based). This results in the vesting of a substantial portion of our executives’ equity awards being dependent on objectively measured operating performance (and stock price performance with respect to Premium Awards) relative to peers over a multi-year period, making a significant percentage of overall compensation subject to long-term Company outcomes relative to the competition.
Our Assessment of Compensation Risk
Our Assessment of Compensation Risk As part of Board risk governance, the Compensation Committee reviews the Company’s compensation structure, policies and practices to determine whether incentives arising from compensation policies or practices relating to any of our NEOs and other employees would be reasonably likely to have a material adverse effect on the Company. The Compensation Committee and management concluded that the Company’s compensation structure, policies and practices do not create risks reasonably likely to have a material adverse effect on the Company, and again confirmed that the mix of compensation types and timeframes tended to align risk-taking with appropriate medium- and long-term performance for the Company. How We Use Peer Group and Market Data in Determining Compensation The Compensation Committee recommends to the full Board, and the Board reviews and approves, the total direct compensation for the CEO. The Compensation Committee also reviews and approves or modifies the CEO’s recommendations for the total direct compensation for the other NEOs and direct reports to the CEO. As part of the annual compensation review process, the Compensation Committee evaluates: • Each NEO’s individual compensation against compensation levels for comparable positions in the market. For our CEO, the Committee focuses on data from our CEO Compensation Benchmarking Peer Group, a group of companies with characteristics similar to us that best defines the market in which we compete for CEO talent. For our NEOs directly managing an operating unit or support function, the Committee focuses on proxy statement data and on broad survey data of insurance industry companies. • Company performance against the financial performance of companies in a second peer group that best defines the market in which we compete for business, which we refer to as our Financial Performance Peer Group.
How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group
How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group For our CEO, we rely exclusively on the CEO Compensation Benchmarking Peer Group. For the other NEOs, we rely on proxy statement data and on broad survey data of other insurance companies obtained from Willis Towers Watson, Mercer and McLagan. The Compensation Committee reviews the composition of our CEO Compensation Benchmarking Peer Group on an annual basis. The Compensation Committee’s independent executive compensation consultant assists in the annual evaluation of this group. Our CEO Compensation Benchmarking Peer Group is intended to be a group of companies that are similar to us in various ways that best define the market in which we compete for CEO talent. Our Compensation Committee determined to make no changes to the composition of this 15-member peer group from last year. When the Compensation Committee originally formulated the peer group, it conducted a thorough analysis to align the peer group with our meaningfully larger size and scope following the Chubb Corp. acquisition in January 2016. The analysis considered multiple characteristics, such as industry relevance, market capitalization, revenues and number of business lines, to identify companies within and outside our industry to constitute a robust group of peer companies. Our compensation peer group includes insurance companies with different primary businesses than ours and other financial services companies, which together complemented the remaining property and casualty insurance companies on the list. Specifically, we include eight global insurance companies (three of which are global life/health companies and two of which are brokers) and seven global financial services companies. Based on our size, our operational complexity (in terms of diversity of distribution channels, product and geography) and our risk profile, the Compensation Committee believes that this peer group supports more calibrated and appropriate CEO compensation decision-making than using our much smaller Financial Performance Peer Group. In developing our CEO Compensation Benchmarking Peer Group, we note that there are an insufficient number of comparable property and casualty insurers because, with few exceptions, they are considerably smaller than we are. For instance, Chubb’s market capitalization as of December 31, 2023 was $91.6 billion, which is comparable to the year-end 2023 average and median market capitalizations of the CEO Compensation Benchmarking Peer Group of $92.5 billion and $87.6 billion, respectively. On the other hand, the average and median market capitalizations of the Financial Performance Peer Group as of the end of 2023 were approximately $32.5 billion and $36.7 billion, respectively.
How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group
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How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group
Executive Compensation — How We Use Peer Group and Market Data in Determining Compensation Compared to peers outside the property and casualty insurer group, we may experience more volatility (particularly with regard to the impact of catastrophe losses) and there are different factors impacting our financial statements. Therefore these peers may have markedly different results in a given year than the Company for external reasons. However, these companies’ size and complexity better match the Company’s characteristics and therefore make them suitable CEO compensation peers. 2023 CEO Compensation Benchmarking Peer Group
How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group
| • The Allstate Corporation • American Express Company • American International Group, Inc. • Aon plc • Bank of America Corporation • The Bank of New York Mellon • BlackRock, Inc. | • Cigna Corp. • Citigroup Inc. • The Goldman Sachs Group, Inc. • Marsh & McLennan Companies, Inc. • MetLife, Inc. • Morgan Stanley • Prudential Financial, Inc. • The Travelers Companies, Inc. |
How We Select, and Who is in, Our Financial Performance Peer Group
How We Select, and Who is in, Our Financial Performance Peer Group The Financial Performance Peer Group includes companies that we view as comparable to us from a business perspective and our closest direct business competitors. The Compensation Committee annually reviews the composition of the Financial Performance Peer Group, with assistance from its independent compensation consultant. Due to Zurich Insurance Group’s adoption of IFRS 17 accounting standards in 2023, the Committee determined that it could evaluate Zurich on a relative basis for TSR only and not any of the other financial metrics. The Committee concluded that on each of the other metrics Zurich’s reported results would no longer be comparable and inclusion would distort the relative performance evaluation, as the Company and other peers report in accordance with U.S. GAAP. No other changes were made to this peer group for 2023. The Financial Performance Peer Group includes three companies in the CEO Compensation Benchmarking Peer Group that are considered commercial property and casualty insurance companies. It also has three additional commercial property and casualty insurance companies that are not in the CEO Compensation Benchmarking Peer Group because of their size and ownership structure relative to the Company. We think the Financial Performance Peer Group is the most relevant peer group to compare to the financial performance of the Company on core operating income, core operating return on equity, core operating return on tangible equity, P&C combined ratio and tangible book value per share growth, as well as TSR. 2023 Financial Performance Peer Group
How We Select, and Who is in, Our Financial Performance Peer Group
| • The Allstate Corporation • American International Group, Inc. • CNA Financial Corporation | • The Hartford Financial Services Group, Inc. • The Travelers Companies, Inc. • Zurich Insurance Group (TSR only) |
How We Select, and Who is in, Our Financial Performance Peer Group
How We Determine Total Direct Compensation Pay Mix
Elements of Total Direct Compensation
Elements of Total Direct Compensation Annual Base Salary The Compensation Committee reviews and approves or modifies the CEO’s recommendations for the annual base salary of each NEO. The Compensation Committee recommends, and the full Board of Directors determines, the annual base salary for the CEO. On an annual basis, the Committee reviews each NEO’s actual annual base salary in reference to the median compensation levels for comparable positions at companies in our CEO Compensation Benchmarking Peer Group (for the CEO) and, as applicable, broader insurance industry peers. The Committee relies on industry-specific market survey data for NEOs other than the CEO. While we typically target annual base salary to be at the median of the market, each NEO’s actual annual base salary may fall above or below the market median based on performance, experience, time in position and other considerations.
Equity Compensation
Equity Compensation Performance-Based Equity Award Criteria and Vesting To determine whether our performance-based equity awards — PSUs and PSAs — vest, we compare our performance on a relative basis to our Financial Performance Peer Group. Our performance criteria tie the three-year cliff vesting of these awards to specified relative performance targets, namely our tangible book value per share growth (70% weighting) and P&C combined ratio (30% weighting). If performance exceeds the 75th percentile, relative TSR is then measured to determine the additional number of Premium Awards that will vest. We selected tangible book value per share growth and P&C combined ratio as metrics for our performance-based equity award plan because they are strong indicators of growth in shareholder value and underwriting profitability for a commercial property and casualty insurer and common financial performance measures for companies in our industry. While tangible book value per share growth and P&C combined ratio are also included among the key metrics, along with achievement of non-financial strategic and operational measures, used to determine annual variable compensation (in the form of an annual cash bonus and long-term equity awards), these two measures are evaluated differently for performance-based equity vesting purposes. For the determination of annual variable compensation, these metrics are considered along with other metrics, as well as TSR, on an annual basis against prior year, plan and peers. For the determination of PSU and PSA vesting, the two metrics are evaluated only on a relative basis against peers over a three-year time horizon.
Equity Compensation
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Equity Compensation
Performance-Based Equity Awards—Target Awards and Premium Awards Our performance-based equity awards are comprised of PSAs, and beginning February 2024, PSUs. PSUs and PSAs have the same vesting requirements and performance criteria. With respect to the form of the award, shares are not issued for PSUs until vesting (unless settlement is further deferred at the executive’s election), while PSAs are issued shares at grant but subject to forfeiture if the shares do not vest. PSUs and PSAs each have two components: Target Awards and Premium Awards. The performance measurement and vesting requirements for each component are summarized below. Any Target Awards and Premium Awards earned cliff-vest at the end of the three-year performance period. Independent Verification of Performance Criteria We have retained Ernst & Young Ltd., an independent public accounting firm, to verify the calculations of our performance criteria for the vesting of performance-based equity awards and to prepare a report on its findings. Our Compensation Committee reviews the report prepared by Ernst & Young and, based on that report, formally confirms whether, and to what extent, the performance criteria were met for the particular vesting period and how many, if any, awards vested as a result. Issuance Criteria for Target Awards and Premium Awards NEOs who are granted PSUs are entitled to receive Common Shares representing Target Awards and Premium Awards in the future. Common Shares underlying PSUs are issued when the Committee certifies that performance criteria were met for the corresponding performance period. NEOs and other participating executives have the option to further defer settlement of shares representing vested PSUs pursuant to the Company’s deferred stock unit plan.
Equity Compensation
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Equity Compensation
Common Shares representing PSA Target Awards and Premium Awards are issued when the performance award is granted. The awards are subject to forfeiture if applicable performance criteria are not met. Shares vest upon certification by the Committee that performance criteria were met for the corresponding performance period. The Compensation Committee lacks discretion to increase the vesting of any performance-based award other than what was achieved based on actual performance. The Committee’s analysis of performance metrics for all performance-based awards may take into account the effect of any extraordinary transaction (including acquisitions, dispositions, extraordinary investments and extraordinary share purchases) on tangible book value and the combined ratio of the Company and peer companies during the applicable performance measurement period. This permits the Committee to ensure that executives are not unduly penalized or enriched for taking actions that it determines are in the best interests of the Company. In May 2023, the Compensation Committee certified that Target Awards granted to NEOs in February 2020 earned a Premium Award of 100% (totaling 65% of the Target Award) following completion of the three-year cumulative performance period. Equity Award Grants: Timing and Pricing The Compensation Committee grants long-term equity awards annually on a predetermined schedule. The awards are approved on the day of the annual February Board of Directors meeting, which is approximately three weeks following the public disclosure of the Company’s year-end financial results. From time to time, the Compensation Committee may make off-cycle grants to NEOs to recognize mid-year promotions or other circumstances. Officers who join the Company after February in a given year may be granted equity awards following their start date. The number of shares to be covered by a time-based or performance-based equity grant is the closing price of our Common Shares on the NYSE on the grant date. For option grants, the option exercise price is the closing price of our Common Shares on the grant date. To determine the number of shares for an option award, we use a notional Black-Scholes option value of 25% of the stock price, calculated in each case at the time that we granted the option. Vesting—Change in Control and Termination of Employment Each year the Compensation Committee reviews the vesting criteria for Executive Management and NEOs. All grants to members of Executive Management and our NEOs are subject to double-trigger vesting upon a change in control. Stock options, PSUs, performance shares, RSUs and restricted stock also vest if a recipient’s termination of employment occurs by reason of death or disability. Continued vesting requires uninterrupted employment with the Company unless the Compensation Committee (by recommendation from the CEO) exercises its discretion and grants continued vesting in unvested equity in connection with an employee’s separation from the Company. Also, upon reaching age 62 and having 10 years of service, employees who retire from the Company in good standing will be granted continued vesting without requiring Compensation Committee approval, except that the Compensation Committee may cancel the Premium Award portion of a PSU or performance share award to a retirement-eligible executive who departs the Company within six months of the grant date without appropriate notice.
Equity Compensation
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Equity Compensation
How We Determine and Approve NEO Compensation
Role of Independent Consultants in Advising the CEO and Compensation Committee on NEO Compensation Determinations
Role of Independent Consultants in Advising the CEO and Compensation Committee on NEO Compensation Determinations The Compensation Committee directly retains an independent compensation consultant to assist management in the collection and analysis of relevant market data, including compensation and financial performance data for our CEO Compensation Benchmarking and Financial Performance Peer Groups. The consultant also provides compensation benchmarking for the positions held by our NEOs for consideration by the CEO and the Compensation Committee. In addition, the Compensation Committee retains the consultant to assist it with respect to the compensation of the CEO. For this assignment, the consultant meets directly with the Compensation Committee to review Company performance and the performance of the CEO, and provides guidance on CEO compensation in the form of proposed compensation ranges for the annual cash bonus and long-term equity award. The consultant also facilitates discussion, reviews peer groups and provides guidance on current trends in executive compensation practices, in general, and CEO compensation practices, specifically. The Compensation Committee has the authority to retain and terminate any compensation consultant and to approve their fees and other retention terms. From November 2023, Farient Advisors LLC has been retained directly by the Compensation Committee as its independent compensation consultant, replacing Pay Governance, which had served as compensation consultant since January 2014. Farient also provides director compensation-related market data and analysis to our Nominating & Governance Committee.
2023 Total Direct Compensation—Supplemental Table
2023 Total Direct Compensation—Supplemental Table Each February, the Compensation Committee and the Board of Directors approve compensation for each NEO including any adjustments to base salary, and, in recognition of prior calendar year’s performance, a cash bonus and long-term equity award. The long-term equity award consists entirely of performance-based equity awards for each of Messrs. Greenberg, Enns, Keogh and Lupica. These awards are subject to performance-based vesting criteria, the target award portion of which is valued at the closing market price at the date of grant. Messrs. Ortega and Ringsted were granted a long-term equity award consisting of 25% stock options and 75% restricted stock, of which 75% is performance-based and 25% is time-based. The key compensation components for each of our NEOs as considered by the Compensation Committee are summarized in the supplemental table below. The totals and the equity award values do not directly correlate to what is ultimately reported in the Summary Compensation Table in accordance with SEC rules (for example, the equity award column below reflects February 2024 grants for 2023 performance, while the Summary Compensation Table reflects grants made during 2023).
2023 Named Executive Officers Compensation—Supplemental Table
| Name and Title/Business Unit | Salary1 2 | Cash Bonus | Long-Term Equity Award | Total Direct Compensation | | Evan G. Greenberg Chairman and Chief Executive Officer | $1,550,000 | $9,000,000 | $17,350,000 | $27,900,000 | | Peter C. Enns Chief Financial Officer | $895,385 | $1,764,000 | $3,125,000 | $5,784,385 | | John W. Keogh President and Chief Operating Officer | $1,176,923 | $3,343,000 | $7,850,000 | $12,369,923 | | John J. Lupica Vice Chairman; President, North America Insurance | $969,231 | $3,100,000 | $5,325,000 | $9,394,231 | | Juan Luis Ortega President, Overseas General Insurance | $838,462 | $1,650,000 | $2,500,000 | $4,988,462 | | Sean Ringsted Chief Digital Business Officer | $837,500 | $1,185,000 | $2,350,000 | $4,372,500 |
2023 Named Executive Officers Compensation—Supplemental Table
| Name and Principal Position | Year | Salary | Bonus | Stock Awards1 | Option Awards2 | All Other Compensation3 | Total | | Evan G. Greenberg Chairman and Chief Executive Officer | 2023 | $1,550,000 | $9,000,000 | $15,650,006 | — | $1,461,311 | $27,661,317 | | | 2022 | $1,400,000 | $7,700,000 | $11,625,143 | $3,022,290 | $1,404,637 | $25,152,070 | | | 2021 | $1,400,000 | $7,500,000 | $10,125,007 | $2,996,944 | $1,159,233 | $23,181,184 | | Peter C. Enns Chief Financial Officer | 2023 | $895,385 | $1,764,000 | $2,600,199 | — | $294,501 | $5,554,085 | | | 2022 | $880,000 | $1,528,000 | $1,800,027 | $467,971 | $252,138 | $4,928,136 | | | 2021 | $649,846 | $1,404,500 | $3,080,272 | $513,532 | $195,544 | $5,843,694 | | John W. Keogh President and Chief Operating Officer | 2023 | $1,176,923 | $3,343,000 | $7,000,199 | — | $560,989 | $12,081,111 | | | 2022 | $1,088,462 | $3,084,000 | $5,250,013 | $1,364,909 | $525,036 | $11,312,420 | | | 2021 | $1,050,000 | $2,980,100 | $3,900,006 | $1,154,372 | $464,594 | $9,549,072 | | John J. Lupica Vice Chairman; President, North America Insurance | 2023 | $969,231 | $3,100,000 | $5,000,142 | — | $561,533 | $9,630,906 | | | 2022 | $938,461 | $2,814,000 | $3,750,123 | $974,946 | $552,480 | $9,030,010 | | | 2021 | $900,000 | $2,650,000 | $3,647,665 | $783,668 | $469,214 | $8,450,547 | | Juan Luis Ortega President, Overseas General Insurance | 2023 | $838,462 | $1,650,000 | $1,713,858 | $628,431 | $676,099 | $5,506,850 | | Sean Ringsted Chief Digital Business Officer | 2023 | $837,500 | $1,185,000 | $1,612,687 | $591,313 | $2,339,434 | $6,565,934 |
Nonqualified Retirement Plans and Deferred Compensation Plans
| Chubb US Deferred Compensation Plan This is a nonqualified deferred compensation plan for a select group of employees who are generally higher paid that permits them to defer the receipt of a portion of their compensation. | • Participants generally elect the time and form of payment at the same time that they elect to defer compensation. Participants may elect: – to receive distributions at a specified date or at termination of employment; – to receive distributions in the form of a lump sum or periodic payments; – a different distribution date and form of payment each time they elect to defer compensation. The new date and payment form will apply to the compensation that is the subject of the new deferral election. • For plan amounts subject to Internal Revenue Code Section 409A, the plan imposes additional requirements on the time and form of payments. • Chubb credits employer contributions once each year for participants employed on December 31. • The plan also credits employer contributions that would have been made or credited to the Chubb US 401(k) Plan or the Chubb US Supplemental Retirement Plan if the employee had received the compensation rather than electing to defer it, subject to the same vesting period as those plans. | | Chubb Deferred Stock Unit Plan This is a nonqualified deferred compensation sub-plan of the Chubb Limited 2016 Long-Term Incentive Plan for a select group of employees who are granted performance stock units (PSUs) or a mix of performance stock units and restricted stock units (RSUs). PSUs and RSUs are only eligible for deferral to the extent such awards are US-allocated compensation. | • Participants may elect to defer up to 100% of their PSU and RSU awards (and associated dividend equivalents) to the extent such awards are US-allocated compensation. • Participants will elect the time and form of payment at the same time that they elect to defer awards. Participants may elect: – to receive distributions at a specified date or at termination of employment; – to receive distributions in the form of a lump sum or periodic payments; – to receive a distribution upon a change in control; and – a different distribution date and form of payment each time they elect to defer new awards. The new date and payment form will apply to equity compensation that is the subject of the new deferral election. • For plan amounts subject to Internal Revenue Code Section 409A, the plan imposes additional requirements on the time and form of payments. • Earnings or losses credited to a participant’s notional plan account are based on the performance of notional investments and any credited dividend equivalents. All amounts credited to the plan will initially be notionally invested in Common Shares. However, participants have the option to change their notional investment from Common Shares to a pre-set investment fund lineup, subject to certain limitations and timing requirements. | | Chubb Bermuda Employee Retirement Plan This is a broad-based plan in which all Chubb Bermuda-based employees who are non-U.S. citizens participate. It is a nonqualified retirement plan from a U.S. tax perspective. | • The plan provides for a matching employer contribution of up to 6% of compensation, as well as a noncontributory 6% employer contribution. • Bermudians participate in the plan over and above their participation in Bermuda’s National Pension Scheme Plan. • Subject to certain exceptions, benefits may be paid upon termination of employment once the participant has attained age 55. Benefits may be paid in a single sum or in the form of periodic distributions over the life expectancy of the participant. |
U.S. SEC Pay Versus Performance Disclosure
U.S. SEC Pay Versus Performance Disclosure This section sets forth the pay versus performance disclosure for the years 2020-2023 in accordance with SEC regulations. This section also includes certain non-GAAP financial measures. These non-GAAP financial measures are core operating income, core operating return on equity, core operating return on tangible equity, P&C combined ratio and tangible book value per share growth. More information on the rationale for the use of these measures and reconciliations to U.S. GAAP can be found in the “Non-GAAP Financial Measures” section in this proxy statement. The following sets forth the tabular pay versus performance disclosure required by SEC regulations, and includes measures that, in the Company’s assessment, are the most important financial performance measures used by the Company to link NEO “compensation actually paid” (as defined by SEC regulations) for the most recently completed fiscal year to Company performance.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table total for PEO(a) | Compensation actually paid to PEO(a)(b) | Average Summary Compensation Table total for non-PEO named executive officers(a) | Average compensation actually paid to non-PEO named executive officers(a)(c) | Value of fixed $100 investment based on(d) | | Chubb net income (in millions) | Core operating income (in millions) | | | | | | | Total shareholder return | Peer group total shareholder return | | | | 2023 | $27,661,317 | $35,703,017 | $7,867,777 | $9,453,265 | $156.73 | $142.44 | $9,028 | $9,337 | | 2022 | $25,152,070 | $44,160,566 | $8,148,565 | $12,454,746 | $150.44 | $133.77 | $5,246 | $6,429 | | 2021 | $23,181,184 | $42,028,742 | $7,014,834 | $10,960,083 | $129.69 | $115.42 | $8,525 | $5,586 | | 2020 | $20,328,167 | $14,619,607 | $6,700,291 | $5,454,658 | $101.42 | $93.94 | $3,533 | $3,313 |
Net Income and Core Operating Income to “Compensation Actually Paid”
Net Income and Core Operating Income to “Compensation Actually Paid”
Net Income and Core Operating Income to “Compensation Actually Paid”
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Net Income and Core Operating Income to “Compensation Actually Paid”
2020. Compensation for 2020 reflects the impacts of the COVID-19 pandemic and other catastrophe losses on financial results and the prudent but sizeable COVID-19 reserve adjustment taken in the second quarter of 2020. Financial results were strong and reflected solid earnings, but these impacts adversely affected performance. While the Compensation Committee also factored in the outstanding leadership, judgment and focus of the NEOs, for 2020 the Compensation Committee and Board reduced the CEO’s annual cash bonus 15% from 2019, and for the other NEOs, cash bonuses were reduced 9.4% on average. 2021. Company performance in 2021 was outstanding and improved upon 2020. 2021 results reflected then-record net income and core operating income, excellent premium revenue growth, an industry-leading P&C combined ratio, solid core operating ROE and core operating ROTE, good tangible book value per share growth and strong TSR results. Consequently, the Compensation Committee increased variable compensation for both the CEO and other NEOs for 2021 performance. The significant increase in stock price during and at year-end 2021 also increased the fair value of equity awards vesting during the year, as well as those granted in 2021 and prior years, contributing to an increase in “compensation actually paid” relative to the Summary Compensation Table amounts for the CEO and other NEOs. 2022. Company performance in 2022 was again excellent and reflected then-record core operating income, underwriting margin improvement and world-class underwriting performance as evidenced by a once-again industry-leading P&C combined ratio, and strong core operating ROE, core operating ROTE and TSR results. Tangible book value per share decreased compared to prior year, primarily due to the impact of rising interest rates on our investment portfolio and foreign currency adjustments. The Compensation Committee increased aggregate variable compensation for the CEO and other NEOs (other than Mr. Krump, who did not receive a long-term equity award for 2022 since he retired January 1, 2023). The significant increase in the Company’s stock price during and as of year-end 2022 increased the fair value of equity awards that vested during the year as well as those that were granted in prior years but remained unvested at year-end. This change in stock price contributed to an increase in “compensation actually paid” relative to the Summary Compensation Table amounts for the CEO and other NEOs for 2022 in a similar proportion as 2021. 2023. The Company delivered the best full-year financial performance in its history, reflecting records for core operating earnings, both on an absolute and per share basis, underwriting and investment income, P&C combined ratio, and core operating ROTE, and also had strong core operating ROE and TSR results. Tangible book value per share growth also significantly increased for the year. The Compensation Committee increased aggregate variable compensation for the CEO and other NEOs for 2023 performance. The increase in “compensation actually paid” relative to the Summary Compensation Table amounts for the CEO and other NEOs in the table above was primarily attributable to the inclusion of the year-end fair value of premium performance share awards due to the Company’s satisfaction of Company performance criteria relative to its peer group in accordance with the award terms. For detailed information on the Compensation Committee’s decisions and rationale for determining total direct compensation of the CEO and other NEOs for 2023, see “How We Determine and Approve NEO Compensation” and “2023 NEO Total Direct Compensation and Performance Summary” in the Compensation Discussion & Analysis section of this proxy statement. TSR versus peers. Company cumulative TSR over the 2020-2023, 2020-2022, 2020-2021 and 2020 periods in each case exceeded the cumulative TSR of our Financial Performance Peer Group by 10%, 12.5%, 12.4% and 8%, respectively. TSR performance relative to this peer group is also evidenced in the vesting of Premium Awards over and above the performance share Target Awards. For a description of the impact of TSR on the vesting of long-term equity awards, see “Executive Compensation — How We Determine Total Direct Compensation Pay Mix — Performance-Based Equity Awards — Target Awards and Premium Awards”. Important Note. Several factors account for differences in “compensation actually paid” in this SEC pay versus performance disclosure section and amounts in the Summary Compensation Table. First, the majority of each of our NEO’s compensation is delivered in the form of equity awards to directly tie a significant portion of compensation to medium- and long-term Company performance. In the case of performance shares, these awards cliff-vest at the end of a three-year performance period if established performance criteria are met. Time-based restricted stock and stock options vest over four and three years from date of grant, respectively. As a result, a significant portion of NEO compensation is subject to stock price movement over time, and in the case of a year in which there is strong stock price performance, it will drive an increase in “compensation actually paid”, particularly when the fair value of awards granted for prior years’ compensation are included in the current year compensation total. The amounts disclosed would therefore exceed the Summary Compensation Table amounts due to stock price and Company performance delivering over the short-, medium- and long-term, further substantiating that our compensation program and the decisions made by the Compensation Committee are aligned with shareholders. Second, accounting rules require that the grant date fair value of performance shares included in the Summary Compensation Table represent only the grant date fair value of the Target Awards, which excludes the additional Premium Award opportunity. The footnotes to our Summary Compensation Table and our Grants of Plan-Based Awards table include the grant date fair value of equity awards assuming the achievement of all performance conditions on Target Awards and Premium Awards, as well as disclosure on the vesting of performance shares in prior years. Target and Premium Awards also measure performance over a full three-year period, so while the fair value of Target Awards in the SEC pay versus performance table is included as of year-end of the grant year and subsequent years, and Premium Award fair value is measured as of year-end once the probable outcome of performance conditions are known,
Net Income and Core Operating Income to “Compensation Actually Paid”
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Net Income and Core Operating Income to “Compensation Actually Paid”
they do not cliff-vest and are not awarded (if at all) until the May following the end of the three-year performance period, when our stock price may be higher or lower. Finally, the timing of equity award grants presented in the pay versus performance table and Summary Compensation Table do not directly correlate with the Compensation Committee’s determination and approval of compensation for a particular year. The Summary Compensation Table discloses stock and option awards granted during the year. However, the Company grants annual equity awards for performance in a particular year in the following February, once year-end results are known. Therefore, the amounts included for stock and option awards granted in a particular year for Summary Compensation Table purposes — and therefore pay versus performance table purposes — generally relate to awards granted for prior year performance. Median Employee Pay Ratio Chubb is committed to delivering fair and competitive compensation to all our employees worldwide in our pursuit to attract and retain a highly qualified, experienced, talented and motivated workforce. We employ approximately 40,000 employees and have operations in 54 countries and territories around the world. Given our global presence and the geographical distribution of our workforce, our compensation program utilizes a variety of pay scales reflecting cost of living and other factors to determine how we compensate our employees in a particular region or country. The 2023 total annual compensation of our CEO calculated for purposes of disclosure in the Summary Compensation Table of this proxy statement was $27,661,317, which was approximately 452 times the compensation of the median employee ($61,188) calculated in the same manner. The median employee is an accounts specialist based in the United States. We identified the median employee by examining compensation information derived from our global human resources information systems for all employees as of December 31, 2023, excluding the CEO. In identifying the median employee, we assessed for all employees the sum of (as applicable): 2023 base salary (for salaried employees), wages, excluding overtime (for hourly employees), commissions (for commissions-based employees), annual equity awards granted in 2023 (based on grant date value) and cash bonuses awarded in 2023 under variable compensation plans. We annualized base salaries for salaried employees who were employed by us on December 31, 2023, but were not employed for the full fiscal year. The median employee’s total annual compensation calculated as above is not a good indicator of total annual compensation of any other individual or group of employees, and may not be comparable to the total annual compensation of employees at other companies who may award or calculate compensation differently.
Net Income and Core Operating Income to “Compensation Actually Paid”
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Net Income and Core Operating Income to “Compensation Actually Paid”
The Audit Committee currently consists of four members of the Board of Directors, each of whom is independent within the meaning of NYSE listing standards and the Company’s Categorical Standards for Director Independence, has been determined by the Board to be financially literate, as contemplated by NYSE listing standards, and is an “audit committee financial expert” within the meaning of SEC rules. The Audit Committee operates under our Organizational Regulations and a written charter approved by the Board, a copy of which is available on the Company’s website. As more fully described in the Organizational Regulations and charter, the primary purpose of the Audit Committee is to assist the Board in its oversight of the integrity of the Company’s financial statements and financial reporting process, the system of internal controls, the audit process, the performance of the Company’s internal auditors and the performance, qualification and independence of the Company’s independent auditors, PricewaterhouseCoopers LLP and PricewaterhouseCoopers AG, which we collectively refer to in this report as PwC. In addition, the Audit Committee has established procedures for the receipt, retention and treatment, on a confidential basis, of any communications and complaints it receives. Employees, third-party individuals and organizations are encouraged to report concerns about the Company’s accounting controls, auditing matters or anything else that appears to involve financial or other wrongdoing. To report such matters, please e-mail us at: chmnaudit@chubb.com. Internal control over financial reporting and financial statement matters. Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, and the Board oversees this process. Pursuant to the SEC’s rules and regulations, internal control over financial reporting is a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles. As of December 31, 2023, management has evaluated the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control-Integrated Framework”, issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in 2013. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023. The Company’s management prepares the Company’s consolidated financial statements in accordance with U.S. GAAP and is responsible for the financial reporting process that generates these statements. The Company’s independent auditors audit the Company’s year-end financial statements and review the interim financial statements. PwC audited the consolidated financial statements of the Company included in the Annual Report on Form 10-K and issued an unqualified report on the fair presentation of the consolidated financial statements in accordance with U.S. GAAP as well as on the effectiveness of the Company’s internal control over financial reporting, as of December 31, 2023. Further, PwC has audited the Swiss statutory financial statements of the Company and has issued an unqualified report that the accounting records and the statutory financial statements comply with Swiss law and the Company’s Articles of Association. The Audit Committee, on behalf of the Board, monitors and reviews these processes, acting in an oversight capacity relying on the information provided to it and on the representations made to it by the Company’s management, PwC and other advisors. The Audit Committee annually reviews PwC’s independence and performance in connection with the Committee’s determination of whether to retain PwC or engage another firm as our independent auditor. Meetings and additional sessions. The Committee met fourteen times in 2023, plus one in-depth session covering various matters. At the four regularly scheduled quarterly meetings, the Audit Committee met with members of management and PwC to review Company matters, including internal and independent audits; loss reserve estimates and developments; compliance-related activities; the Company’s cybersecurity program and related exposures and risks; and other financial reporting and accounting, legal, tax and internal policy matters. Additionally, at its February 2023 and February 2024 meetings, the Audit Committee met in joint session with the Risk & Finance Committee to review and discuss the Company’s enterprise risk management strategy, including risk priorities, risk perspectives and risk governance. Management participants at Audit Committee meetings include the Chief Financial Officer, Chief Accounting Officer, Chief Compliance Officer, Chief Auditor, Chief Actuary, legal counsel and others as requested. Also at the quarterly meetings, the Audit Committee met in executive session
Net Income and Core Operating Income to “Compensation Actually Paid”
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Net Income and Core Operating Income to “Compensation Actually Paid”
(without management present) with representatives of PwC and also with the Company’s Chief Auditor, in each case to discuss the results of their examinations and their evaluations of the Company’s internal controls and overall financial reporting, as well as with the Company’s Chief Financial Officer, General Counsel and Chief Compliance Officer. In January 2024, the Audit Committee met with the Chief Actuary to review, among other things, the external independent actuaries’ review and their annual independent assessment of the Company’s loss reserves. Also, at a February 2024 meeting, the Audit Committee reviewed and discussed the 2023 annual financial statements, including Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in our Annual Report on Form 10-K, with management and PwC prior to their filing with the SEC. In 2023 the Audit Committee held four other meetings outside the Board’s quarterly meeting cycle to discuss various financial reporting and accounting matters, including new or potential accounting updates, as well as PwC’s budgeted and actual fees for services. Members of the Audit Committee also met with the financial reporting senior leadership team and the internal audit leadership team to discuss how these teams fulfill their responsibilities and obligations as well as key initiatives, anticipated operational challenges and their methods to achieve efficiencies. The Audit Committee also held four meetings with management and PwC at which the Company’s quarterly and annual earnings press releases, consolidated financial statements and MD&A disclosures (including significant accounting policies and judgments) were reviewed in advance of their public release. In 2023 the Audit Committee also held its annual comprehensive in-depth session with members of management to focus on specific topics including international life operations; cyber-related security controls and activities; third-party security risk management; IT governance and compliance initiatives; data privacy matters; ESG reporting; and additional finance, tax and accounting topics. Communications with the independent auditors. The Audit Committee discussed with PwC all the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. These discussions included: • the auditor’s judgments about the quality, not just the acceptability, of the Company’s accounting principles as applied in its financial reporting; • methods used to account for significant transactions; • the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus; • critical audit matters disclosed in the independent auditor’s report; • the process used by management in formulating particularly sensitive accounting estimates and the basis for the auditor’s conclusions regarding the reasonableness of those estimates; • reviewed and approved the Company’s policy with regard to the hiring of former employees of the independent auditor; • reviewed with management the scope and effectiveness of the Company’s disclosure controls and procedures, including for purposes of evaluating the accuracy and fair presentation of the Company’s financial statements in connection with certifications made by the CEO and CFO; and • disagreements, if any, with management over the application of accounting principles (of which there were none), the basis for management’s accounting estimates, and disclosures in the financial statements. The Audit Committee reviewed all other material written communications between PwC and management. The Audit Committee discussed with PwC their independence from the Company and management, including a review of audit and non-audit fees, and has reviewed in that context the written disclosures and the applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee. The Audit Committee Chair also met with members of PwC’s global leadership team to review accounting matters and elicit their perspective regarding conduct of the Chubb global audit. Conclusion. Based on the review and discussions referred to above, and in reliance on the information, opinions, reports or statements presented to the Audit Committee by the Company’s management, its internal auditors and its independent auditors, the Audit Committee recommended to the Board that the December 31, 2023 audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K and that such report, together with the audited Swiss statutory financial statements of Chubb Limited, be included in the Company’s Annual Report to Shareholders for the fiscal year ended December 31, 2023.
Net Income and Core Operating Income to “Compensation Actually Paid”
| Chubb Limited 2024 Proxy Statement | 139 |
Net Income and Core Operating Income to “Compensation Actually Paid”
The foregoing report has been approved by all members of the Audit Committee. Robert W. Scully, Chair Nancy K. Buese Kathy Bonanno Theodore E. Shasta
Net Income and Core Operating Income to “Compensation Actually Paid”
| 140 | Chubb Limited 2024 Proxy Statement |

DEF 14A of Chubb Ltd

2023 Summary Compensation Table Information

2023 Summary Compensation Table Information

Voting Requirement to Approve Agenda Item

Voting Requirement to Approve Agenda Item

Voting Requirement to Approve Agenda Item

Voting Requirement to Approve Agenda Item

What Happens If Shareholders Do Not Approve the Nominees in this Proposal?

What Happens If Shareholders Do Not Approve the Nominees in this Proposal?

What Happens If Shareholders Do Not Approve the Nominees in this Proposal?

Process Used to Determine Maximum Aggregate Compensation for the Board of Directors, Outside Consultant Survey and Analysis of Director Compensation

Q&A Relating to Shareholder Ratification of the Swiss Compensation Report

Board Tenure in Years (Director Nominees)

Director Commitments and Responsibilities

Director Commitments and Responsibilities

Director Commitments and Responsibilities

Annual Board and Committee Evaluations

Determination of Board Leadership Structure

Determination of Board Leadership Structure

Determination of Board Leadership Structure

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Independent Lead Director — Role and Responsibilities

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Elements of Director Compensation

Compensation Profile

How We Use Peer Groups

How We Use Peer Groups

How We Use Peer Groups

Long-Term Performance Highlights

Long-Term Performance Highlights

Long-Term Performance Highlights

Long-Term Performance Highlights

Long-Term Performance Highlights

2023 Performance: Key Metrics and Strategic Achievements

2023 Performance: Key Metrics and Strategic Achievements

2023 Compensation Decisions

2023 Compensation Decisions

Components of Total Direct Compensation

Annual Board Committee Review of Executive Compensation Practices

Our NEO Compensation Components and Their Relationship to Risk

Our NEO Compensation Components and Their Relationship to Risk

Our NEO Compensation Components and Their Relationship to Risk

Our Assessment of Compensation Risk

How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group

How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group

How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group

How We Select, and Who is in, Our CEO Compensation Benchmarking Peer Group

How We Select, and Who is in, Our Financial Performance Peer Group

How We Select, and Who is in, Our Financial Performance Peer Group

How We Select, and Who is in, Our Financial Performance Peer Group

Elements of Total Direct Compensation

Equity Compensation

Equity Compensation