DEF 14A of Prudential Financial Inc
Filed Mar 27, 2025 · FY20240001104659-25-028759
Proxy Statement
| Compensation of Directors | 36 | | Compensation Discussion and Analysis | 38 | | Compensation Highlights | 38 | | Philosophy and Objectives of Our Executive Compensation Program | 41 | | How We Make Compensation Decisions | 43 | | Direct Compensation Components | 44 | | Compensation and Human Capital Committee Report | 52 | | Pay Versus Performance | 53 | | CEO Pay Ratio | 55 | | Executive Compensation | 56 | | 2024 Summary Compensation Table | 56 | | Grants of Plan-Based Awards | 58 | | Pension Benefits | 62 | | Nonqualified Deferred Compensation | 65 | | Post-Employment Compensation Arrangements | 66 | | Potential Payments upon Termination or Change in Control | 67 |
Summary of Director Nominee Qualifications and Experience
Summary of Director Nominee Qualifications and Experience
Summary of Director Nominee Qualifications and Experience
| | Casellas | Di Sibio | Hund-Mejean | Jones | Lowrey | Pianalto | Poon | Sullivan | Todman | | Business Ethics Play a critical role in the success of our businesses | • | | | | • | • | • | | | | Business Head/Administration Directors with administration experience typically possess strong leadership qualities and the ability to identify and develop those qualities in others | • | • | • | • | • | • | • | • | • | | Business Operations A practical understanding of developing, implementing and assessing our operating plan and business strategy | • | • | • | • | • | • | • | • | • | | Corporate Governance Supports our goals of strong Board and management accountability, transparency and protection of shareholder interests | • | • | • | • | • | • | • | • | • | | Finance/Capital Allocation For evaluating our financial statements and capital structure | | • | • | | • | • | • | • | • | | Financial Expertise/Literacy Assists our directors in understanding and overseeing our financial reporting and internal controls | • | • | • | • | • | • | • | • | • | | Financial Services Industry For understanding and reviewing our business and strategy | | • | • | | • | • | • | • | | | Government/Public Policy The Company operates in a heavily regulated industry that is directly affected by governmental actions | • | | | | | • | | • | • | | Human Capital Management/Talent/Inclusion For oversight of the implementation of a successful framework for workforce acquisition, workforce management and workforce optimization that results in the attraction, development and retention of top candidates with diverse skills and backgrounds | • | • | • | • | • | • | • | • | • | | Insurance Industry For understanding and reviewing our business and strategy | | | | | • | | | • | | | International For understanding and reviewing our business and strategy | | • | • | • | • | | • | • | • | | Investments For evaluating our financial statements and investment strategy | • | • | • | | • | | • | • | | | Marketing/Sales Relevant to the Company as it seeks to identify and develop new markets for its financial products and services | | • | | • | | | • | • | • | | Real Estate For understanding and reviewing our business and strategy | | | | | • | | | | | | Risk Management Critical to the Board’s role in overseeing the risks facing the Company | • | • | • | • | • | • | • | • | • | | Sustainability Aligns the Board’s oversight of strategic business imperatives with a sustainable business model | • | • | | | • | | | | | | Technology/Systems/Cybersecurity Relevant to the Company as it looks for ways to enhance the customer experience and internal operations and oversee cybersecurity risk | | • | • | • | | | | | |
Summary of Director Nominee Qualifications and Experience
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Director Nominees
Director Nominees
Director Nominees
| The Board of Directors recommends that shareholders vote “FOR” each of the nominees. |
Director Nominees
| | Gilbert F. Casellas Age: 72 Director Since: January 2001 (Director of Prudential Insurance since April 1998) | | | Prudential Committees: • Compensation and Human Capital • Corporate Governance and Business Ethics (Chair) • Executive | | Mr. Casellas served as Chairman of OMNITRU (a consulting and investment firm) from 2011 to 2017. He was VP, Corporate Responsibility, of Dell Inc. (a global computer manufacturer) from 2007 to 2010. Mr. Casellas served as Chairman, U.S. EEOC from 1994 to 1998 and General Counsel, U.S. Department of the Air Force, from 1993 to 1994. | |
Director Nominees
| | Carmine Di Sibio Age: 61 Director Since: July 2024 | | | Prudential Committees: • Audit Public Directorships: • Paypal Holdings, Inc. Former Directorships Held During the Past Five Years: • EY (June 2024) | | Mr. Di Sibio served as Global Chairman and CEO of EY, a professional organization that specializes in tax, information technology and consulting advisory services, from 2019 to 2024. Prior to this, Mr. Di Sibio served as EY Global Managing Partner — Client Service from 2013 to 2019 and led the execution of EY’s global strategy in its four geographic areas and four service lines. Mr. Di Sibio was also instrumental in the creation of the Global Innovation Team at EY, which redefined how EY teams use technology to transform existing services and create solutions. During his career at EY, Mr. Di Sibio also served as the Chair of the Global Financial Services Markets Executive as well as Regional Managing Partner for the Americas Financial Services Organization, where he started EY’s Risk Management and Regulatory Services, which is now a multibillion-dollar global business. Mr. Di Sibio served in various other executive positions after beginning his career as an auditor at EY in 1985. | |
Director Nominees
| | Martina Hund-Mejean Age: 64 Director Since: October 2010 | | | Prudential Committees: • Audit (Chair) • Executive • Finance Public Directorships: • Colgate-Palmolive Company • GE Vernova Inc. Former Directorships Held During the Past Five Years: • Shell plc (May 2023) | | Ms. Hund-Mejean served as CFO and as a member of the Management Committee at MasterCard Worldwide (a technology company in the global payments industry) from 2007 to 2019. Ms. Hund-Mejean served as SVP and Corporate Treasurer at Tyco International Ltd. from 2003 to 2007; SVP and Treasurer at Lucent Technologies from 2000 to 2002; and held management positions at General Motors Company from 1988 to 2000. Ms. Hund-Mejean began her career as a credit analyst at Dow Chemical in Frankfurt, Germany. | |
Director Nominees
| | Wendy E. Jones Age: 59 Director Since: January 2021 | | | Prudential Committees: • Audit • Compensation and Human Capital • Corporate Governance and Business Ethics | | Ms. Jones served as SVP, Global Operations at eBay, Inc. (a multi-national e-commerce corporation) from October 2016 to December 2020, and was responsible for eBay’s customer service, risk, trust, payment operations and workplace resources functions around the world. During that time, Ms. Jones also served as Chair of eBay’s Operating Committee, which managed the firm’s intersection of product and business teams and oversaw the development and execution of the company’s annual business road map. Prior to that time, she served in various other leadership positions and focused much of her career on eBay’s global presence, including launching eBay in markets such as Brazil, Russia and Mexico and spearheading eBay’s cross-border trade efforts. Prior to joining eBay, Ms. Jones worked in various leadership roles at State Street Bank, Land Rover NA, and for iSKY, Inc. | |
Director Nominees
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Director Nominees
| | Charles F. Lowrey Age: 67 Director Since: December 2018 | | | Prudential Committees: • Executive | | Mr. Lowrey has been elected the Executive Chairman of the Board of Prudential Financial, Inc., effective March 31, 2025, and has been the Chairman and CEO from 2018 to 2025. Prior to assuming his current roles, Mr. Lowrey served as EVP and Chief Operating Officer (COO) of Prudential’s International businesses from 2014 to 2018. Previously, he was EVP and COO of Prudential’s U.S. Businesses from 2011 to 2014. Mr. Lowrey also served as President and CEO of PGIM, Prudential’s global investment management business, and as CEO of its real estate investment business, PGIM Real Estate. Before joining Prudential in 2001, he was a managing director and head of the Americas for J.P. Morgan’s Real Estate and Lodging Investment Banking group, where he began his investment banking career in 1988. Earlier, he spent four years as a managing partner of an architecture firm he founded in New York City. During this time, he became a registered New York architect. | |
Director Nominees
| | Sandra Pianalto Age: 70 Director Since: July 2015 | | | Prudential Committees: • Corporate Governance and Business Ethics • Investment Public Directorships: • Eaton Corporation plc Former Directorships Held During the Past Five Years: • The J.M. Smucker Company (August 2023) • FirstEnergy Corp. (May 2021) | | Ms. Pianalto served as President and CEO of the Federal Reserve Bank of Cleveland (the Cleveland Fed) from February 2003 until her retirement in May 2014. Ms. Pianalto also served in various executive and supervisory roles at the Cleveland Fed from 1983 to 1988. Prior to joining the Cleveland Fed, Ms. Pianalto was an economist at the Board of Governors of the Federal Reserve System and served on the staff of the Budget Committee of the U.S. House of Representatives. | |
Director Nominees
| | Christine A. Poon Age: 72 Director Since: September 2006 | | | Prudential Committees: • Executive • Finance (Chair) • Investment Public Directorships: • Regeneron Pharmaceuticals, Inc. • The Sherwin-Williams Company • Neurocrine Biosciences, Inc. Former Directorships Held During the Past Five Years: • Decibel Therapeutics, Inc. (December 2021) • Koninklijke Philips NV (May 2021) | | Ms. Poon served as Executive in Residence at The Max M. Fisher College of Business at The Ohio State University (“Fisher College of Business”) from 2015 until her retirement in 2020 and served as Professor of Management and Human Resources at The Fisher College of Business from October 2014 to September 2015. Ms. Poon previously served as Dean and John W. Berry, Sr. Chair in Business at The Fisher College of Business at The Ohio State University from April 2009 until October 2014. She served as Vice Chair and Member of the Board of Directors of Johnson & Johnson from 2005 until her retirement in March 2009. Ms. Poon joined Johnson & Johnson in 2000 as Company Group Chair in the Pharmaceuticals Group. She became a member of Johnson & Johnson’s Executive Committee and Worldwide Chair, Pharmaceuticals Group, in 2001, and served as Worldwide Chair, Medicines and Nutritionals, from 2003 to 2005. Prior to joining Johnson & Johnson, she served in various management positions at Bristol-Myers Squibb for 15 years. | |
Director Nominees
| | Andrew F. Sullivan Age: 54 Nominee Director as of March 31, 2025 | | Mr. Sullivan has been elected Chief Executive Officer and President of Prudential Financial, Inc. and The Prudential Insurance Company of America effective March 31, 2025 and will become a member of the Board at that time. Currently, as Executive Vice President and Head of International Businesses and Global Investment Management, he oversees the company’s International Insurance segment which develops, distributes and services the operations, strategic investments and joint ventures for the Companies in Asia, Latin America and Africa, and he leads PGIM, the firm’s global asset management business. Previously, Mr. Sullivan has served in a variety of leadership positions at Prudential, including head of the firm’s U.S.-based businesses, comprising Group Insurance, Individual Life Insurance, Retirement Strategies, and Retail Advice and Solutions. He also served as head of Prudential’s Workplace Solutions businesses and had responsibility for the Group Insurance underwriting, claims and service organizations. Prior to joining Prudential in 2011, he served in various leadership roles at CareFirst BlueCross BlueShield, Cigna, Diamond Technology Partners and DaimlerChrysler. Mr. Sullivan graduated from the United States Naval Academy in Annapolis, Maryland and began his naval career as a nuclear submarine officer. During his tenure with the Navy, he was awarded the Navy and Marine Corps Achievement Medal for superior leadership and performance on board the USS Nebraska. | |
Director Nominees
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Director Nominees
| | Michael A. Todman Age: 67 Director Since: March 2016 Lead Independent Director Since: 2023 | | | Prudential Committees: • Compensation (Chair) • Executive (Chair) • Finance Public Directorships: • Brown-Forman Corporation • Carrier Global Corporation • Mondelēz International, Inc. Former Directorships Held During the Past Five Years: • Newell Brands (May 2020) | | Mr. Todman served as Vice Chairman of the Whirlpool Corporation (Whirlpool), a global manufacturer of home appliances, from November 2014 to December 2015. Mr. Todman previously served as President of Whirlpool International from 2006 to 2007 and 2010 to 2014, as well as President, Whirlpool North America, from 2007 to 2010. Mr. Todman held several senior positions with Whirlpool over his career. | |
Director Nominees
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Director Nominees
The Company is committed to good corporate governance, which helps us compete more effectively, sustain our success and build long-term shareholder value. The Company is governed by a Board of Directors and committees of the Board that meet throughout the year. Directors discharge their responsibilities at Board and committee meetings through ongoing communication with one another and management. The Board has adopted Corporate Governance Principles and Practices to provide a framework for the effective governance of the Company. The Corporate Governance Principles and Practices are reviewed regularly and updated as appropriate. The full text of the Corporate Governance Principles and Practices, which includes the definition of independence adopted by the Board, the charters of the Corporate Governance and Business Ethics, Compensation and Human Capital and Audit Committees, the Lead Independent Director Charter, the Code of Business Conduct and Ethics for Members of the Board of Directors, Prudential’s Code of Conduct “Making the Right Choices,” and the Related Party Transaction Approval Policy can be found at www.prudential.com/governance. Copies of these documents also may be obtained from the Chief Governance Officer and Corporate Secretary. Governance is a continuing focus at the Company, starting with the Board and extending to management and all employees. Therefore, the Board reviews the Company’s policies and business strategies and advises and counsels the CEO and other executive officers who manage the Company’s businesses, including actively overseeing and reviewing, on at least an annual basis, the Company’s strategic plans. In addition, we solicit feedback from shareholders on corporate governance and executive compensation practices, among other items, and engage in discussions with various groups and individuals on these matters.
Delinquent Section 16(a) Reports
| Compensation Element | Director Compensation Program | | Annual Cash Retainer | $150,000, which may be deferred, at the director’s option | | Annual Equity Retainer | $150,000 in restricted stock units that vest after one year (or, if earlier, on the date of the next Annual Meeting) | | Board and Committee Fees | None | | Committee Chairs | $35,000 for the Audit Committee | | | $30,000 for the Compensation and Human Capital Committee | | | $20,000 for all other committees(2) | | Lead Independent Director | $50,000 | | Members of the Company’s Corporate Social Responsibility Oversight Committee(3) | $1,250 per meeting (compensation contingent on meeting attendance) | | New Director Equity Award (one-time grant) | $150,000 in restricted stock units that vest after one year | | Stock Ownership Guideline | Ownership of Common Stock or deferred stock units that have a value equivalent to six times the annual cash retainer to be satisfied within six years of joining the Board(4) |
Delinquent Section 16(a) Reports
(1) As of January 1, 2025, the annual equity retainer and one-time grant for new nonemployee directors is now $180,000 (resulting in a new pay mix of 45% cash and 55% equity). Fees for the Lead Independent Director and Committee Chairs are as follows: Lead Independent Director — $60,000; Audit Committee Chair — $40,000; Compensation and Human Capital Committee Chair — $35,000; all other Committee Chairs, excluding the Executive Committee — $25,000. (2) Includes other standing committees and any non-standing committee of the Board that may be established from time to time but excludes the Executive Committee. (3) This is a committee comprising members of management and the Board. This committee typically meets following the Board and Board committee meetings. The nonemployee Directors on this committee currently consist of Mr. Casellas and Ms. Pianalto. The Corporate Social Responsibility Oversight Committee met three times in 2024. (4) As of December 31, 2024, each of our nonemployee Directors satisfied this guideline, with the exception of Ms. Murphy, who joined the Board in September 2023, and Mr. Di Sibio, who joined the Board in July 2024. Ms. Murphy and Mr. Di Sibio have six years from the date they joined the Board to fulfill the stock ownership requirement. For purposes of the stock ownership guideline, once a nonemployee Director satisfies his or her stock ownership level, the Director will be deemed to continue to satisfy the guideline without regard to fluctuation in the value of the Common Stock owned by the Director. We maintain a Deferred Compensation Plan for Nonemployee Directors (the “Plan”). Since 2011, 50% of the annual Board retainer has been awarded in restricted stock units that vest after one year (or if earlier, on the date of the next Annual Meeting). A nonemployee Director can elect to invest any cash or vested equity in accounts under the Plan that replicate investments in either shares of our Common Stock or, in accordance with the Plan’s terms, beginning effective December 30, 2024, a notional investment equivalent of any money market fund option offered under the Prudential Employee Savings Plan (“PESP”) since the Fixed Rate Fund was removed as a PESP investment option on that date. As elected by the Director, the Plan provides for distributions to commence upon or following termination of Board service or while a Director remains on the Board. Each Director receives dividend equivalents on the restricted stock units contained in his or her deferral account under the Plan, which are equal in value to the dividends paid on our Common Stock. The dividend equivalents credited to the account are then reinvested in the form of additional stock units.
Compensation of Directors
Compensation of Directors Under our director compensation program, if a nonemployee Director satisfies the stock ownership guideline, the restricted stock units granted as the annual equity retainer are payable upon vesting in cash or shares of our Common Stock (at the director’s option) and may be deferred beyond vesting at the Director’s election. If a Director does not satisfy the stock ownership guideline, the restricted stock units are automatically deferred until termination of Board service.
2024 Director Compensation Table
2024 Director Compensation Table
2024 Director Compensation Table
| | Fees Earned or Paid in | | All Other Compensation ($)(2) | | | Name | Cash ($) | Stock Awards ($)(1) | | Total ($) | | Gilbert F. Casellas | $173,750 | $150,000 | $1,000 | $324,750 | | Carmine Di Sibio(3) | $75,000 | $150,000 | | $225,000 | | Martina Hund-Mejean | $185,000 | $150,000 | $5,000 | $340,000 | | Wendy E. Jones | $150,000 | $150,000 | | $300,000 | | Kathleen A. Murphy | $150,000 | $150,000 | | $300,000 | | Sandra Pianalto | $153,750 | $150,000 | | $303,750 | | Christine A. Poon | $170,000 | $150,000 | | $320,000 | | Douglas A. Scovanner | $170,000 | $150,000 | | $320,000 | | Michael A. Todman | $230,000 | $150,000 | | $380,000 |
2024 Director Compensation Table
(1) Represents amounts that are in units of our Common Stock. The amounts reported represent the aggregate grant date fair value of the restricted stock units granted during the fiscal year, as calculated under the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“ASC Topic 718”). Under ASC Topic 718, the grant date fair value is calculated using the closing market price of our Common Stock on the date of grant, which is then recognized, subject to market value changes, over the requisite service period of the award. The aggregate balance in each of the nonemployee Directors’ accounts in the Deferred Compensation Plan denominated in units (which includes all deferrals from prior years and earned units deferred in 2024) and their value as of December 31, 2024 were as follows: Mr. Casellas: 41,501 and $4,919,114; Mr. Di Sibio: 1,304 and $154,563; Ms. Hund-Mejean: 38,780 and $4,596,593; Ms. Jones: 9,048 and $1,072,459; Ms. Murphy: 2,970 and $352,034; Ms. Pianalto: 21,775 and $2,580,991; Ms. Poon: 17,844 and $2,115,049; Mr. Scovanner: 22,765 and $2,698,335; and Mr. Todman: 22,375 and $2,652,109. (2) Amounts represent matching charitable contributions. (3) Mr. Di Sibio received a grant of restricted stock units valued at $150,000 upon joining the Board in July 2024.
2024 Director Compensation Table
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2024 Director Compensation Table
In this section, we describe the material components of our executive compensation program for our NEOs, whose compensation is set forth in the 2024 Summary Compensation Table and other compensation tables contained in this Proxy Statement. We also provide an overview of our executive compensation philosophy and our executive compensation program. In addition, we explain how and why the Compensation and Human Capital Committee of our Board (the “Committee”) arrived at the specific compensation decisions involving the NEOs for 2024.
Pay Versus Performance
Pay Versus Performance
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table
Compensation Actually Paid vs. TSR
Compensation Actually Paid vs. TSR
Compensation Actually Paid vs. TSR
| As shown to the right, the Compensation Actually Paid to our PEO and our other NEOs is directionally aligned with Company TSR between 2020 and 2024. | |
Compensation Actually Paid vs. Net Income
Compensation Actually Paid vs. Net Income
Compensation Actually Paid vs. Net Income
| As shown to the right, the Compensation Actually Paid to the PEO and our other NEOs is strongly correlated with our Net Income between 2020 and 2024. While the Company does not use Net Income as a direct measure to determine payouts under its incentive plans, Compensation Actually Paid is strongly aligned with Company earnings. | |
Compensation Actually Paid vs. Adjusted EPS
Compensation Actually Paid vs. Adjusted EPS
Compensation Actually Paid vs. Adjusted EPS
| As shown to the right, the Compensation Actually Paid to the PEO and our other NEOs is strongly aligned with Adjusted EPS, our Company-selected measure, further reflecting the correlation between Compensation Actually Paid and Company earnings. | |
2024 Summary Compensation Table
2024 Summary Compensation Table The following table sets forth information regarding fiscal years 2024, 2023 and 2022 compensation for our NEOs. In reviewing this information, it is important to take into account that certain amounts are included in the Stock Awards column of the Summary Compensation Table (SCT) as a result of SEC rules, but do not represent awards made or amounts paid to the NEOs, as explained in footnote (2) to the SCT. Yanela Frias replaced Kenneth Y. Tanji as Executive Vice President and Chief Financial Officer on March 15, 2024. Mr. Tanji remained with the Company until September 30, 2024. Effective March 31, 2025, Andrew F. Sullivan will become our Chief Executive Officer, Charles F. Lowrey will become our Executive Chairman and Caroline A. Feeney will become our Executive Vice President, Head of Global Retirement and Insurance. Robert M. Falzon, our Vice Chairman, will retire from Prudential on July 11, 2025.
2024 Summary Compensation Table
| Name & Principal Position | | Salary ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value ($)(4) | All Other Compensation ($)(5) | Total ($) | | Charles F. Lowrey, Chairman and Chief Executive Officer | 2024 | 1,383,333 | 20,889,309 | 4,558,000 | 1,247,861 | 89,755 | 28,168,258 | | | 2023 | 1,300,000 | 13,000,041 | 4,143,000 | 691,074 | 79,213 | 19,213,328 | | | 2022 | 1,284,615 | 12,500,145 | 5,191,834 | 1,016,309 | 100,705 | 20,093,608 | | Yanela Frias, Executive Vice President and Chief Financial Officer | 2024 | 572,917 | 1,451,922 | 1,590,000 | 84,169 | 44,211 | 3,743,219 | | Robert M. Falzon, Vice Chairman | 2024 | 1,106,667 | 16,694,385 | 3,646,000 | 806,560 | 68,346 | 22,321,958 | | | 2023 | 1,040,000 | 10,400,115 | 3,315,000 | 1,533,539 | 89,919 | 16,378,573 | | | 2022 | 1,033,846 | 10,000,019 | 4,158,447 | 184,599 | 47,146 | 15,424,057 | | Andrew F. Sullivan, Executive Vice President Head of International Businesses and Global Investment Management | 2024 | 750,000 | 7,625,495 | 2,385,000 | 227,789 | 77,146 | 11,065,430 | | | 2023 | 750,000 | 5,000,127 | 2,302,000 | 323,379 | 45,089 | 8,420,595 | | | 2022 | 700,000 | 4,400,154 | 2,517,435 | 761 | 40,895 | 7,659,245 | | Caroline A, Feeney, Executive Vice President, Head of US Businesses | 2024 | 720,833 | 5,253,778 | 2,306,000 | 176,023 | 107,010 | 8,563,645 | | | 2023 | 700,000 | 3,700,164 | 2,148,000 | 401,524 | 32,176 | 6,981,864 | | Kenneth Y. Tanji, Former Executive Vice President and Chief Financial Officer | 2024 | 646,154 | 6,199,309 | 1,391,000 | 922,128 | 3,791,437 | 12,950,028 | | | 2023 | 692,308 | 4,050,146 | 1,790,000 | 441,955 | 46,507 | 7,020,916 | | | 2022 | 650,000 | 3,600,104 | 2,072,272 | 1,075 | 34,097 | 6,357,548 |
2024 Summary Compensation Table
(1) The amounts reported in the Salary column for 2024 include elective contributions of a portion of their base salary to the SESP by Mr. Lowrey, Ms. Frias, Mr. Falzon, Mr. Sullivan, Ms. Feeney, and Mr. Tanji in the amounts of $41,533, $9,117, $30,467, $16,200, $0, and $23,894 respectively. (2) In January 2024, Prudential’s Board of Directors approved the modification to then in-flight performance share awards (2021, 2022, and 2023 grants), which was disclosed in the Company’s 2024 proxy statement. Prudential’s 2024 proxy statement and annual report on Form 10-K describe the expected compensation cost of the modifications. The resulting aggregate incremental accounting cost was $62 million, of which $60 million was recorded in the first quarter of 2024. $22 million of this expense is attributable to our six NEOs for 2024. The SEC considers the incremental fair value of a modification as if it were an actual equity grant for purposes of SCT reporting and requires that this amount be included for the calendar year in which the modification occurred. Accordingly, included for each NEO in the Stock Awards column for 2024 is an amount equal to the incremental fair value of the performance share modification in addition to
2024 Summary Compensation Table
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2024 Summary Compensation Table
the grant date fair value of awards actually made in 2024. For all years, the amounts reported in the Stock Awards column include the aggregate grant date fair value of performance shares at target and restricted stock units in each year. The grant date fair value in 2024 incorporates a discount rate of 9% for awards made to retirement-eligible NEOs to reflect the impact of post-vesting transfer restrictions (computed in accordance with FASB ASC Topic 718). Additionally, included for each NEO in their 2024 row is the incremental fair value of the performance share modification to awards granted in 2021, 2022, and 2023. The following table details the elements of what is included in the Stock Awards column for 2024. Additional detail is also provided in the Grants of Plan-Based Awards table.
2024 Summary Compensation Table
| 2024 Stock Awards Value Breakdown | | A | | B | | C | | D | | E | | | RSU Awards ($) | | Value of PS Awards at Target Performance ($) | | Total Stock Awards Granted in 2024 (A+B)($) | | PS Modification ($) | | Aggregate Value Reported in SCT (C+D)($) | | | Charles Lowrey | | 3,181,460 | | 9,544,190 | | 12,725,650 | | 8,163,659 | | 20,889,309 | | Yanela Frias | | 300,039 | | 700,056 | | 1,000,095 | | 451,827 | | 1,451,922 | | Rob Falzon | | 2,545,130 | | 7,635,390 | | 10,180,520 | | 6,513,865 | | 16,694,385 | | Andrew Sullivan | | 1,136,250 | | 3,408,653 | | 4,544,903 | | 3,080,592 | | 7,625,495 | | Caroline Feeney | | 988,550 | | 2,965,556 | | 3,954,106 | | 1,299,672 | | 5,253,778 | | Kenneth Tanji | | 920,345 | | 2,761,035 | | 3,681,380 | | 2,517,929 | | 6,199,309 |
2024 Summary Compensation Table
The maximum number of performance shares payable for 2024, 2023, and 2022 is 1.50, 1.50, and 1.25 times the target amounts, respectively. Based on the fair market value (closing price) on the date of grant, the maximum values for the stock awards granted to Mr. Lowrey, Ms. Frias, Messrs. Falzon and Sullivan, Ms. Feeney, and Mr. Tanji are $17,497,745, $1,350,124, $13,998,215, $6,249,229, $5,436,864, $5,061,897, respectively. (3) The amounts reported in the Non-Equity Incentive Plan Compensation column represent the annual incentives paid following each performance year. The values displayed for 2022 also include the value of book value units paid in February 2023 for 2020-2022 performance to Messrs. Lowrey, Falzon, Sullivan, and Tanji, which were $987,834, $795,447, $275,435, $334,272, respectively. (4) The amounts reported in the Change in Pension Value column represent the change in the actuarial present value of each NEO’s accumulated benefit under the Merged Retirement Plan, the Supplemental Retirement Plan, and the SERPs, as applicable, determined using interest rate and mortality rate assumptions consistent with those used for our consolidated financial statements, as well as above-market earnings on compensation that is deferred on a basis that is not tax-qualified. All of the NEOs accrue pension benefits under the Cash Balance Formula (described in the “Pension Benefits” section of this Proxy Statement). For 2024, the amounts reported in this column include payments from the Merged Retirement Plan for Mr. Tanji of $2,205,413 and from the Supplemental Retirement Plan for Mr. Lowrey, Ms. Frias, Mr. Falzon, Mr. Sullivan, Ms. Feeney and Mr. Tanji of $750,808, $1,732, $252,906, $4,484, $4,762 and $2,652, respectively; and above-market interest on the SESP of $0 for Mr. Lowrey, Ms. Frias, Mr. Falzon, Mr. Sullivan, Ms. Feeney, and Mr. Tanji, respectively. (5) The amounts reported in the All Other Compensation column for 2024 are itemized below:
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table presents, for each of the NEOs, information concerning awards under our Annual Incentive Program (“AIA”) for performance year 2024, the incremental fair value of modifications to performance share awards originally granted in 2021, 2022, and 2023 (“M21”, “M22”, and “M23”, respectively), and equity awards (“PS” for Performance Shares and “RS” for Restricted Stock Units) made during 2024 for 2023 performance under our Long-Term Incentive Program.
Grants of Plan-Based Awards
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards ($)(2) | | All Other Stock Awards: Number of Shares of Stocks or Units(3) (#) | Grant Date Fair Value ($/Sh) | Grant Date Fair Value of Stock and Option Awards(4) | | Name | | Grant Date | Target (#) | Maximum (#) | Target (#) | Maximum (#) | | | | | Charles F. Lowrey | AIA | N/A | 4,300,000 | 6,450,000 | N/A | N/A | | N/A | N/A | | | M21 | 01/10/2024 | N/A | N/A | 46,471 | N/A | | 103.72 | 4,819,954 | | | M22 | 01/10/2024 | N/A | N/A | 24,317 | N/A | | 103.72 | 2,522,113 | | | M23 | 01/10/2024 | N/A | N/A | 7,921 | N/A | | 103.72 | 821,592 | | | PS | 02/13/2024 | N/A | N/A | 99,772 | 149,658 | | 95.66 | 9,544,190 | | | RS | 02/13/2024 | N/A | N/A | | | 33,258 | 95.66 | 3,181,460 | | Yanela Frias | AIA | N/A | 1,500,000 | 2,250,000 | N/A | N/A | | N/A | N/A | | | M21 | 01/10/2024 | N/A | N/A | 2,687 | N/A | | 103.72 | 278,699 | | | M22 | 01/10/2024 | N/A | N/A | 1,271 | N/A | | 103.72 | 131,836 | | | M23 | 01/10/2024 | N/A | N/A | 398 | N/A | | 103.72 | 41,292 | | | PS | 02/13/2024 | N/A | N/A | 6,652 | 9,978 | | 105.24 | 700,056 | | | RS | 02/13/2024 | N/A | N/A | | | 2,851 | 105.24 | 300,039 | | Robert M. Falzon | AIA | N/A | 3,440,000 | 5,160,000 | N/A | N/A | | N/A | N/A | | | M21 | 01/10/2024 | N/A | N/A | 37,012 | N/A | | 103.72 | 3,838,902 | | | M22 | 01/10/2024 | N/A | N/A | 19,453 | N/A | | 103.72 | 2,017,684 | | | M23 | 01/10/2024 | N/A | N/A | 6,337 | N/A | | 103.72 | 657,279 | | | PS | 02/13/2024 | N/A | N/A | 79,818 | 119,727 | | 95.66 | 7,635,390 | | | RS | 02/13/2024 | N/A | N/A | | | 26,606 | 95.66 | 2,545,130 | | Andrew F. Sullivan | AIA | N/A | 2,250,000 | 3,375,000 | N/A | N/A | | N/A | N/A | | | M21 | 01/10/2024 | N/A | N/A | 18,095 | N/A | | 103.72 | 1,876,798 | | | M22 | 01/10/2024 | N/A | N/A | 8,560 | N/A | | 103.72 | 887,794 | | | M23 | 01/10/2024 | N/A | N/A | 3,047 | N/A | | 103.72 | 316,000 | | | PS | 02/13/2024 | N/A | N/A | 35,633 | 53,450 | | 95.66 | 3,408,653 | | | RS | 02/13/2024 | N/A | N/A | | | 11,878 | 95.66 | 1,136,250 | | Caroline A. Feeney | AIA | N/A | 2,175,000 | 3,262,500 | N/A | N/A | | N/A | N/A | | | M21 | 01/10/2024 | N/A | N/A | 5,374 | N/A | | 103.72 | 557,353 | | | M22 | 01/10/2024 | N/A | N/A | 4,902 | N/A | | 103.72 | 508,477 | | | M23 | 01/10/2024 | N/A | N/A | 2,255 | N/A | | 103.72 | 233,843 | | | PS | 02/13/2024 | N/A | N/A | 31,001 | 46,502 | | 95.66 | 2,965,556 | | | RS | 02/13/2024 | N/A | N/A | | | 10,334 | 95.66 | 988,550 | | Kenneth Y. Tanji | AIA | N/A | 1,750,000 | 2,625,000 | N/A | N/A | | N/A | N/A | | | M21 | 01/10/2024 | N/A | N/A | 14,805 | N/A | | 103.72 | 1,535,579 | | | M22 | 01/10/2024 | N/A | N/A | 7,003 | N/A | | 103.72 | 726,386 | | | M23 | 01/10/2024 | N/A | N/A | 2,468 | N/A | | 103.72 | 255,964 | | | PS | 02/13/2024 | N/A | N/A | 28,863 | 43,295 | | 95.66 | 2,761,035 | | | RS | 02/13/2024 | N/A | N/A | | | 9,621 | 95.66 | 920,345 |
Grants of Plan-Based Awards
(1) The amounts reported in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards columns represent the potential amounts for annual incentives for the 2024 performance year. Actual amounts earned by the NEOs are reflected in the Summary Compensation Table. (2) The amounts reported in the Estimated Future Payouts Under Equity Incentive Plan Awards columns, for rows labeled “PS”, represent performance shares awarded to the NEOs under the Omnibus Plan in 2024. For rows labeled “M21”, “M22”, “M23”, the amounts reported in the Target column represent the estimated incremental difference in the number of shares which were expected to vest upon
Grants of Plan-Based Awards
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Grants of Plan-Based Awards
modification. Performance share awards are granted for a three-year performance period with payouts determined at the end of the period based on our ROE performance and growth in adjusted book value per share as described in the CD&A. (3) The amounts reported in the All Other Stock Awards: Number of Shares of Stock or Units column represent restricted stock units awarded to the NEOs under the Omnibus Plan in 2024. RSUs vest in three equal annual installments. (4) For rows labeled “RS” or “PS”, the amounts in the Grant Date Fair Value of Stock and Option Awards column have been calculated by multiplying the closing price on the date of grant by the number of restricted stock units or target number of performance shares. Also incorporated is a discount rate of 9% for awards made to retirement-eligible NEOs to reflect the impact of post-vesting transfer restrictions. On January 10, 2024, Prudential's Board of Directors approved a modification to the methodology used to calculate the vesting criteria for in-flight performance share awards (2021, 2022, and 2023 grants). The SEC considers the incremental fair value of a modification as if it were an actual equity grant for purposes of reporting in the table above and requires that it be included for the calendar year in which the modification occurred. These modifications are shown with a grant date of 1/10/2024 (the date the modification was approved). For rows labeled “M21”, “M22”, or “M23”, the amounts shown in the Grant Date Fair Value of Stock and Option Awards column represent an amount equal to the incremental fair value of the modification, calculated in accordance with FASB ASC Topic 718. See “Compensation Discussion and Analysis — Adjustment to Performance Shares Program in January 2024” for more information.
Grants of Plan-Based Awards
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Outstanding Equity Awards
Outstanding Equity Awards The following table provides information on the NEOs’ outstanding equity awards as of December 31, 2024. The equity awards reported in the Option Awards columns consist of non-qualified stock options. The equity awards reported in the Stock Awards columns consist of performance share awards and restricted stock units. Grants of performance shares were made for three-year performance cycles with the 2022 grant as the 2022-2024 performance cycle, the 2023 grant as the 2023-2025 performance cycle and the 2024 grant as the 2024-2026 performance cycle.
Outstanding Equity Awards
| | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (# Exercisable) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Rights That Have Not Vested ($)(2) | | Charles F. Lowrey | 2/13/2024 | | | | 33,258 | 3,942,071 | 149,658 | 17,738,963 | | | 2/14/2023 | | | | 20,981 | 2,486,878 | 141,620 | 16,786,219 | | | 2/8/2022 | | | | 8,586 | 1,017,699 | 96,587 | 11,448,458 | | | 2/13/2018 | 30,885 | 106.89 | 02/13/2028 | | | | | | | 2/14/2017 | 36,806 | 110.45 | 02/14/2027 | | | | | | Yanela Frias | 2/13/2024 | | | | 2,851 | 337,929 | 9,978 | 1,182,693 | | | 2/14/2023 | | | | 1,356 | 160,727 | 7,118 | 843,697 | | | 2/8/2022 | | | | 577 | 68,392 | 5,049 | 598,458 | | | 2/11/2020 | 3,942 | 95.87 | 02/11/2030 | | | | | | Robert M. Falzon | 2/13/2024 | | | | 26,606 | 3,153,609 | 119,727 | 14,191,242 | | | 2/14/2023 | | | | 16,785 | 1,989,526 | 113,297 | 13,429,094 | | | 2/8/2022 | | | | 6,869 | 814,183 | 77,269 | 9,158,695 | | Andrew F. Sullivan | 2/13/2024 | | | | 11,878 | 1,407,899 | 53,450 | 6,335,429 | | | 2/14/2023 | | | | 8,070 | 956,537 | 54,470 | 6,456,330 | | | 2/8/2022 | | | | 3,023 | 358,316 | 33,999 | 4,029,902 | | | 2/13/2018 | 3,251 | 106.89 | 02/13/2028 | | | | | | | 10/2/2017 | 1,128 | 107.28 | 10/02/2027 | | | | | | | 2/14/2017 | 2,577 | 110.45 | 02/14/2027 | | | | | | Caroline A. Feeney | 2/13/2024 | | | | 10,334 | 1,224,889 | 46,502 | 5,511,882 | | | 2/14/2023 | | | | 5,972 | 707,861 | 40,308 | 4,777,708 | | | 2/8/2022 | | | | 2,226 | 263,848 | 19,473 | 2,308,135 | | | 1/12/2021 | | | | 60,761 | 7,202,001 | | | | | 6/12/2018 | 397 | 99.76 | 06/12/2028 | | | | | | | 2/13/2018 | 2,926 | 106.89 | 02/13/2028 | | | | | | | 10/2/2017 | 1,222 | 107.28 | 10/02/2027 | | | | | | | 2/14/2017 | 2,117 | 110.45 | 02/14/2027 | | | | | | Kenneth Y. Tanji | 2/13/2024 | | | | 9,621 | 1,140,377 | 43,295 | 5,131,756 | | | 2/14/2023 | | | | 6,537 | 774,831 | 44,121 | 5,229,663 | | | 2/8/2022 | | | | 2,473 | 293,125 | 27,818 | 3,297,268 | | | 2/11/2020 | 29,280 | 95.87 | 02/11/2030 | | | | | | | 2/12/2019 | 26,079 | 93.36 | 02/12/2029 | | | | | | | 2/13/2018 | 2,357 | 106.89 | 02/13/2028 | | | | | | | 2/14/2017 | 2,669 | 110.45 | 02/14/2027 | | | | |
Outstanding Equity Awards
(1) These Stock Awards are outstanding restricted stock units that vest at the rate of one-third per year at the end of February following each of the first three anniversaries of the date of grant. The dollar values reported represent the estimated value of the outstanding units based on the latest year-end share price. (2) The Equity Incentive Plan Awards columns reflect the number of outstanding performance shares that would be received by each NEO at the maximum payout level for the 2024, 2023 and 2022 grants, with the dollar values reflecting the latest year-end share price. Performance shares are subject to a three-year performance period with payout determined at the end of the period based on measures of Company performance. As discussed in the CD&A, the Committee approved a final earn-out factor of 0.815 for the awards granted on February 8, 2022.
Outstanding Equity Awards
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Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table provides information on the value realized by each of the NEOs as a result of the exercise of stock options and the vesting of stock awards from January 1, 2024 through December 31, 2024.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | | Charles F. Lowrey | 176,719 | 5,564,310 | 129,307 | 13,723,172 | | Yanela Frias | — | — | 7,821 | 831,013 | | Robert M. Falzon | 195,977 | 4,426,876 | 103,055 | 10,937,274 | | Andrew F. Sullivan | 27,117 | 771,226 | 49,979 | 5,303,140 | | Caroline A. Feeney | 12,899 | 175,074 | 18,342 | 1,956,307 | | Kenneth Y. Tanji | — | — | 40,860 | 4,335,454 |
Option Exercises and Stock Vested
(1) The amounts in the Stock Awards — Number of Shares Acquired on Vesting column represent the payout of shares of our Common Stock for the vesting of the 2021 performance shares grants, the first tranche of the 2023 restricted stock unit grants, the second tranche of the 2022 restricted stock unit grants, and the third tranche of the 2021 restricted stock unit grants. (2) The amounts in the Stock Awards — Value Realized on Vesting column represent the sum of the number of performance shares released multiplied by the closing market price of our Common Stock on February 13, 2024, $105.24, and the number of restricted stock units released multiplied by the closing market price of ourCommon Stock on February 29, 2024, $108.99.
Option Exercises and Stock Vested
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Pension Benefits
Pension Benefits The following table provides information on the defined benefit retirement plans in which the NEOs participate, including the present value of accumulated benefits as of December 31, 2024, except as noted below, payable for each of the NEOs under each of these plans determined using interest rate and mortality rate assumptions consistent with those used in our consolidated financial statements; namely, the PRI-2012 generational mortality table with white collar adjustments and an adjustment to reflect recent Prudential-specific experience and an interest discount rate of 5.85%. Cash Balance Formula accounts are assumed to grow with interest based on an assumed 30-year Treasury Rate, but not less than 4.25%, and PSI Cash Balance Formula accounts are assumed to grow with interest at 5.00% until the commencement of pension benefits. No additional earnings or service after December 31, 2024 is included in the calculation of the accumulated benefits.
Pension Benefits
| Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Charles F. Lowrey | Merged Retirement Plan — Cash Balance Formula | 23 | 3,015,062 | — | | | Supplemental Retirement Plan — Cash Balance Formula | 23 | 740,908 | 750,808(2) | | Yanela Frias | Merged Retirement Plan — Cash Balance Formula | 27 | 993,798 | — | | | Supplemental Retirement Plan — Cash Balance Formula | 27 | 507,458 | 1,732(2) | | Robert M. Falzon | Merged Retirement Plan — Cash Balance Formula | 41 | 3,383,133 | — | | | Merged Retirement Plan — PSI Cash Balance Formula | n/a(1) | 108,738 | — | | | Supplemental Retirement Plan — Cash Balance Formula | 41 | 4,654,976 | 252,906(2) | | Andrew F. Sullivan | Merged Retirement Plan — Cash Balance Formula | 13 | 555,958 | — | | | Supplemental Retirement Plan — Cash Balance Formula | 13 | 1,154,181 | 4,484(2) | | Caroline A. Feeney | Merged Retirement Plan — Cash Balance Formula | 31 | 1,273,584 | — | | | Supplemental Retirement Plan — Cash Balance Formula | 31 | 998,830 | 4,762(2) | | Kenneth Y. Tanji | Merged Retirement Plan — Cash Balance Formula | 35 | — | 2,110,355(3) | | | Merged Retirement Plan — PSI Cash Balance Formula | n/a(1) | — | 95,058(3) | | | Supplemental Retirement Plan — Cash Balance Formula | 35 | 1,881,614 | 2,652(2) |
Pension Benefits
(1) Mr. Falzon transferred to Prudential from Prudential Securities Incorporated in 1998 and began accruing pension benefits under the Traditional Pension Formula and, subsequently, the Cash Balance Formula upon his election of this formula in 2001. In accordance with the Merged Retirement Plan Cash Balance Formula, credited service includes service with the Company’s subsidiaries, in particular Prudential Securities Incorporated. As a result of his transfer, ongoing service is not a consideration in determining Mr. Falzon’s benefit under the PSI Cash Balance Formula. Mr. Tanji transferred from Prudential to Prudential Securities Incorporated in 1994 and transferred back to Prudential from Prudential Securities Incorporated in 2002. He began accruing pension benefits under the Traditional Pension Formula and, subsequently, the Cash Balance Formula upon his election of this formula in 2001; in accordance with the Merged Retirement Plan Cash Balance Formula, credited service includes service with the Company’s subsidiaries, in particular Prudential Securities Incorporated. As a result of Mr. Tanji’s transfer, ongoing service is not a consideration in determining his benefit under the PSI Cash Balance Formula. (2) For Ms. Frias, Mr. Sullivan, Ms. Feeney, and Mr. Tanji, this payment was a distribution from the Supplemental Retirement Plan Cash Balance Formula to pay for accrued FICA taxes due in 2024 on this benefit, and federal, state, and local taxes on the distributed amount. The entire payment was withheld to pay these taxes. For Mr. Falzon, this amount is made up of two payments: (i) for FICA taxes in the amount of $15,475; and (ii) because the terms of the Supplemental Retirement Plan require a participant in active service on the first day of the month on or following his or her 65th birthday to receive his or her benefit on that date. In accordance with these terms, Mr. Falzon began to receive his benefits in the form of a 50% Joint and Survivor Annuity and was paid $237,160 ($29,645 for 8 months). For Mr. Lowrey, this amount represents the Supplemental Retirement Plan benefits accrued in 2023 that were paid in early 2024, in accordance with the terms of the plan. (3) Mr. Tanji retired from the Company and elected to take a total distribution from the Merged Retirement Plan on December 1, 2024.
Pension Benefits
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Traditional Pension Formula
Traditional Pension Formula Under the Traditional Pension Formula, employees are fully vested in their accrued benefits. These benefits (which are subject to Internal Revenue Code limits) are determined using the following formula, which is based on Average Eligible Earnings (as defined) and years of Credited Service (as defined): For a separation from service in 2024, Average Eligible Earnings are determined by taking the average of earnings (base salary plus annual incentive payment) over the period beginning January 1, 2017, and ending on the date of separation after dropping the lowest two years of earnings in that period. Under the Traditional Pension Formula, the starting point for the averaging period is moved forward two years on January 1 of every even calendar year. “Covered Compensation” for a year is the average of the Social Security wage bases for the 35 years ending in the year the participant will reach Social Security normal retirement age. Benefits are payable as early as age 55 (with a reduction in benefits) as a single life annuity if not married or an actuarially equivalent 50% joint and survivor annuity if married. Generally, a participant’s benefit will be determined as the greater of: • the benefit as determined above calculated at the time of separation from service; • the benefit as determined above calculated as of January 1, 2002, plus all or a portion of the Supplemental Retirement Plan benefit calculated as of January 1, 2002; • if the Supplemental Retirement Plan benefit is to be paid in the form of an annuity, the benefit as determined above calculated as of January 1, 2012 (including any adjustment in the benefit on January 1, 2002 as described in the previous bullet), plus all or a portion of the Supplemental Retirement Plan benefit calculated as of January 1, 2012; and • if the Supplemental Retirement Plan benefit is to be paid in the form of an annuity, the benefit as determined above calculated as of January 1, 2023 (including any adjustment in the benefit on January 1, 2002 and January 1, 2012 as described in the previous bullets), plus all or a portion of the Supplemental Retirement Plan benefit calculated as of January 1, 2023. Additional benefits are provided to participants who are eligible to retire upon separation from service. A participant is eligible to retire if he or she separates from service either: (a) after attainment of age 55 (with 10 years of vesting service) or age 65 or (b) due to an involuntary termination (other than for cause or exhausting short-term disability benefits) after attainment of age 50 (with 20 years of continuous service). If a participant is eligible to retire, he or she is eligible for survivor benefits (with no actuarial reduction), a lesser (or no) reduction in benefit for benefit commencement before age 65, and an additional benefit paid to age 65. There are currently no NEOs that have their benefit calculated under the Traditional Pension Formula.
Cash Balance Formula
Cash Balance Formula The Cash Balance Formula was added to the Merged Retirement Plan in 2001 for employees hired on or after January 1, 2001, except employees of Prudential Securities Incorporated. At that time, we offered a one-time conversion election for the current Merged Retirement Plan participants with benefits under the Traditional Pension Formula to opt to have their individual retirement benefits determined under the Cash Balance Formula. Participants who made this election to use the Cash Balance Formula are fully vested in their Cash Balance Formula benefit. Otherwise, participants are generally vested in their Cash Balance Formula benefit after three years of service. Cash Balance Formula benefits (which are subject to Internal Revenue Code limits) are computed using a cash balance methodology that provides for credits to be made to a hypothetical account that is allocated basic credits equal to 2% to 14% (depending on age and service) of base salary and annual incentive payments. Interest credits are made to the hypothetical account each month using an interest rate set each year based on the average yield on 30-year U.S. Treasury securities (constant maturities) for October of the prior year, with a minimum rate of 4.25%. The rate in effect for 2024 was 4.37%.
Cash Balance Formula
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Cash Balance Formula
Active participants on June 30, 2003 received an additional credit equal to his or her Supplemental Retirement Plan Cash Balance Formula benefit determined as of January 1, 2002, if any. Active participants on June 30, 2012 received an additional credit of no more than his or her Supplemental Retirement Plan Cash Balance Formula benefit determined as of April 1, 2012, if any. Active participants on October 1, 2023 received an additional credit of no more than his or her Supplemental Retirement Plan Cash Balance Formula benefit determined as of June 30, 2023, if any. Benefits are payable at any time after separation of service as a lump sum amount (based on the account balance) or an actuarially equivalent single life annuity; 50%, 75%, or 100% joint and survivor annuity; or 50% contingent annuity. Employees who made the one-time conversion election to use the Cash Balance Formula (specifically, Ms. Frias, Mr. Falzon, Ms. Feeney, and Mr. Tanji) have a frozen “Grandfathered Benefit” determined as the accrued benefit under the Traditional Pension Formula as of January 1, 2002. The value of the Grandfathered Benefit, and early retirement subsidies on this benefit, if applicable, are included in determining the payable benefit. As reported in the Pension Benefits Table, cash balance accounts are assumed to grow with interest until, and benefits will commence on the participant’s Normal Retirement Date. Benefits are assumed to commence with 90% of participants electing a lump sum and 10% electing a 50% joint and survivor annuity.
PSI Cash Balance Formula
PSI Cash Balance Formula The PSI Cash Balance Formula applies only to employees who previously worked for Prudential Securities Incorporated. At this time, all participants are fully vested in their PSI Cash Balance Formula benefit. Messrs. Falzon and Tanji are the only NEOs with a benefit under this formula. PSI Cash Balance Formula benefits (which are subject to Internal Revenue Code limits) are computed using a cash balance methodology that provides for credits to be made to a hypothetical account. Prior to January 1, 2004, the hypothetical accounts were allocated basic credits equal to 1.7% to 7% (depending on age and service) of eligible earnings. Since then, interest credits only have been made to the hypothetical account each month using an interest rate set each year, with a minimum rate of 5.00%. The rate in effect for 2024 was 5.00%. Benefits are payable at any time after separation of service as a lump sum amount (based on the account balance) or an actuarially equivalent single-life annuity; 50%, 75%, or 100% joint and survivor annuity; 50% or 100% contingent annuity; or single-life annuity with five or 10 years guaranteed. As reported in the Pension Benefits Table, PSI Cash Balance accounts are assumed to grow with interest until, and benefits will commence, on the participant’s Normal Retirement Date. Benefits are assumed to commence with 90% of participants electing a lump sum and 10% electing a 50% joint and survivor annuity.
The Supplemental Retirement Plan and SERPs
The Supplemental Retirement Plan and SERPs The Supplemental Retirement Plan is a nonqualified retirement plan designed to complement the Merged Retirement Plan by providing benefits to all participants of the Merged Retirement Plan, including the NEOs, who are prohibited from receiving additional benefits under the Merged Retirement Plan because of Internal Revenue Code limits. Benefits under the Supplemental Retirement Plan are generally payable at the earlier of six months after separation from service and age 65. Under a special rule applicable to the Supplemental Retirement Plan, benefits are required to begin to be paid to a home office participant following attainment of age 65, regardless of whether he or she has separated from service. The Prudential Insurance Supplemental Executive Retirement Plan and the PFI Supplemental Executive Retirement Plan (collectively, the “Prudential SERPs”) provide “Early Retirement Benefits” to certain eligible executives, including the NEOs, subject to the approval of our Board and the Committee. Early Retirement Benefits are designed to recognize the service and contributions of eligible executives who are involuntarily terminated by exempting them from the reduction factor for early retirement between the ages of 55 and 65, a reduction of up to 50%, which would otherwise be applicable under the Traditional Pension Formula and the Grandfathered Benefit under the Cash Balance Formula of the Merged Retirement Plan and the Supplemental Retirement Plan. Benefits under the Prudential SERPs are generally payable at the earlier of six months after separation from service and age 65. No NEO is currently eligible for benefits under the Early Retirement Benefits provision. Upon an involuntary termination of employment, Ms. Feeney may be eligible for benefits under the Early Retirement Benefits provision. In 2008, Ms. Frias, Mr. Falzon, Ms. Feeney, and Mr. Tanji were permitted to make an irrevocable election regarding the form of payment for their pension benefits. Mr. Falzon and Ms. Feeney elected to receive their Supplemental Retirement Plan benefits in the form of an annuity. Ms. Frias and Mr. Tanji elected to receive their Supplemental Retirement Plan benefits in the form of a lump sum.
The Supplemental Retirement Plan and SERPs
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The Supplemental Retirement Plan and SERPs
The Prudential Securities Incorporated Supplemental Retirement Plan for Executives (“PSI SERP”) was designed to make it more attractive to certain key executives to remain employees of Prudential Securities Incorporated and its subsidiaries. The PSI SERP benefit is determined as a target benefit, less the benefit payable from the PSI Cash Balance Formula and an estimated Social Security retirement benefit. The target benefit is 60% of an employee’s average salary times a ratio of service to 30 years. There are no NEOs currently eligible for benefits under the PSI SERP. Notwithstanding the foregoing, benefits reported in the Pension Benefits Table are assumed to commence in the form of payment elected for this benefit, either an annuity or a lump sum, and at the same time as under the Merged Retirement Plan benefit to be consistent with assumptions used in the Company’s financial statements.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table provides information on the NEOs’ participation in the Prudential Supplemental Employee Savings Plan (the “SESP”) and the Deferred Compensation Plan:
Nonqualified Deferred Compensation
| Name | Plan | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(4) | | Charles F. Lowrey | SESP | 41,533 | 41,533 | — | — | 1,184,651 | | | Deferred Compensation | — | — | 587,382 | — | 17,152,365 | | Yanela Frias | SESP | 9,117 | 9,117 | — | — | 85,956 | | | Deferred Compensation | 218,400 | — | 103,346 | — | 2,019,715 | | Robert M. Falzon | SESP | 30,467 | 30,467 | — | — | 712,053 | | | Deferred Compensation | 331,500 | — | 1,591,302 | — | 10,635,536 | | Andrew F. Sullivan | SESP | 16,200 | 16,200 | — | — | 260,394 | | | Deferred Compensation | 115,100 | — | 154,467 | — | 1,012,938 | | Caroline A. Feeney | SESP | — | 70,000(5) | — | — | 119,383 | | | Deferred Compensation | — | — | 578,280 | — | 3,990,388 | | Kenneth Y. Tanji | SESP | 23,894 | 23,894 | — | — | 335,745 | | | Deferred Compensation | — | — | 651,698 | (543,249)(6) | 5,482,419 |
Nonqualified Deferred Compensation
(1) The amounts reported in the Executive Contributions in Last Fiscal Year column represent elective contributions of a portion of their base salary to the SESP and elective contributions to the Deferred Compensation Plan from the annual incentive award (which amounts are included in the Salary and Non-Equity Incentive Plan Columns of the Summary Compensation Table, respectively). (2) The amounts reported in the Registrant Contributions in Last Fiscal Year column represent the Company’s contributions to each NEO’s SESP account (which amounts are also included in the All Other Compensation column of the Summary Compensation Table). (3) The amounts reported in the Aggregate Earnings in the Last Year column reflect no amounts for above-market interest on the SESP, as this amount was $0 for all of the NEOs. (4) The amounts reported in the Aggregate Balance at Last Fiscal Year End column represent balances from the SESP and Deferred Compensation Plan and include various amounts previously reported in the Summary Compensation Table as Salary, Non-Equity Incentive Plan Compensation or All Other Compensation. (5) This amount represents a one-time discretionary contribution made by the Company to Ms. Feeney’s SESP account on April 1, 2024. The additional contribution addressed Ms. Feeney’s non-participation in SESP for several years due to an administrative issue. (6) This amount reflects the deferral of Mr. Tanji’s 2010 annual incentive award that he elected to have paid monthly beginning in 2022 and the deferral of his 2017 annual incentive award that he elected to have paid as a lump sum in 2024.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control The following table presents, for each of the NEOs, the estimated payments and benefits that would have been payable as of the end of 2024 in the event of a termination of employment (voluntary or involuntary without cause) or a separation for another reason (change in control, disability, or death). Consistent with SEC requirements, these estimated amounts have been calculated as if the NEO’s employment had been terminated as of the last business day of 2024. Retirement eligibility differs according to the employment separation event. The following table assumes that benefits are paid in an annuity form and commence on January 1, 2025, unless stated otherwise. The table also assumes Board approval of various payments as applicable, for all NEOs, and displays hypothetical amounts based on the disclosure of compensation information about the NEOs. Actual payments and benefits will depend on the circumstances and timing of any termination of employment or other triggering event. The following items are excluded from the table below: • The benefits the NEOs would be entitled to receive under the SESP and the Deferred Compensation Plan (these benefits are disclosed in the Nonqualified Deferred Compensation table contained in this Proxy Statement). • Additional payments to the NEOs under the PESP, The Prudential Welfare Benefits Plan and The Prudential Retiree Welfare Benefits Plan (plans providing, among other things, life insurance, disability insurance, medical coverage and/or dental coverage), which do not discriminate in scope, terms, or operation in favor of the NEOs and are generally available to all salaried employees. • The effects of an involuntary termination of employment for cause, which will result in a forfeiture of all outstanding vested and unvested performance shares, restricted stock units, and stock options. The NEOs will receive no additional payments in the event of a termination of employment for cause.
Potential Payments upon Termination or Change in Control
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Election of Directors
Election of Directors At the meeting, each nominee must receive the affirmative vote of a majority of the votes cast with respect to his or her election in order to be elected. If an incumbent nominee is not elected by the requisite vote, he or she must tender his or her resignation, and the Board, through a process managed by the Corporate Governance and Business Ethics Committee, will decide whether to accept the resignation.
Election of Directors
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