DEF 14A of Elevance Health, Inc., Apr 2, 2018

DEF 14A of Elevance Health, Inc.

Filed Apr 2, 2018 · FY20170001558370-18-002704

Open on EDGAR

  1. 2017 Compensation of Non-Employee Directors

    2017 Compensation of Non-Employee Directors The compensation of our non-employee directors is paid in the form of annual retainers for Board members and Committee Chairs and annual stock awards. An annual retainer is also paid when the Chair of the Board is not an employee or there is an independent Lead Director. In May 2017, the Governance Committee, based on the recommendations of CAP, approved the following changes to the compensation paid to our non-employee directors:

  2. 2017 Compensation of Non-Employee Directors

    | · | the annual cash retainer was increased from $95,000 to $125,000; |

  3. 2017 Compensation of Non-Employee Directors

    | · | the annual cash retainer paid to the Chair of the Audit Committee was increased from $25,000 to $30,000; |

  4. 2017 Compensation of Non-Employee Directors

    | · | the annual cash retainer paid to the Chairs of the Compensation and Governance Committees was increased from $15,000 to $20,000; |

  5. 2017 Compensation of Non-Employee Directors

    | · | the annual cash retainers paid to members of the Audit, Compensation and Governance Committees were eliminated; and |

  6. 2017 Compensation of Non-Employee Directors

    | · | the annual cash retainer paid to our Lead Director was increased from $30,000 to $35,000. |

  7. 2017 Compensation of Non-Employee Directors

    Commencing in May 2017, compensation for non-employee directors was as follows:

  8. 2017 Compensation of Non-Employee Directors

    | Compensation Element | 2017 | | Annual Retainer (Cash Portion) | $125,000 | | Annual Retainer (Company Stock Portion) | $175,000 | | Annual Committee Chair Retainers | | | • Audit Committee | $30,000 | | • Compensation and Governance Committees | $20,000 | | Annual Retainer for Non-Executive Chair of the Board, if any | $225,000 | | Annual Retainer for Lead Director, if any | $35,000 |

  9. 2017 Compensation of Non-Employee Directors

    The compensation actually paid to our non-employee directors for service during 2017 was as follows(1):

  10. 2017 Compensation of Non-Employee Directors

    | | Fees Earned or | Stock | All Other | | | Name | Paid in Cash ($) (2) | Awards ($)(3) | Compensation ($) (4) | Total ($) | | R. Kerry Clark | $123,182(5) | $ 174,923 | $ 10,000 | $308,105 | | Robert L. Dixon, Jr. | $121,286 | $ 174,923 | $ 26,441 | $322,650 | | Lewis Hay, III | $139,390 | $ 174,923 | $ 1,850 | $316,163 | | Julie A. Hill | $123,182 | $ 174,923 | $ 36,441 | $334,546 | | Ramiro G. Peru | $151,286 | $ 174,923 | $ 26,441 | $352,650 | | William J. Ryan | $43,600 | — | $ 66,575 | $110,175 | | George A. Schaefer, Jr. | $169,555 | $ 174,923 | $ 36,441 | $380,919 | | Elizabeth E. Tallett | $143,181 | $ 174,923 | $ 6,500 | $324,604 |

  11. 2017 Compensation of Non-Employee Directors

    | Employee directors do not receive any compensation for their service as a director. Mr. Swedish’s and Ms. Boudreaux’s compensation for 2017 is shown in the Summary Compensation Table on page 51. William J. Ryan retired from the Board in 2017. Mr. Neri did not receive any compensation in 2017, as payment for his services as a non-employee director during December 2017 were paid in 2018. Ms. Jallal joined the Board in February 2018.(1) |

  12. 2017 Compensation of Non-Employee Directors

    | In addition to annual Board and committee retainer fees, amounts include $76.90 paid in cash to each non-employee director then serving or elected at the 2017 annual meeting of shareholders, which represents cash payments in lieu of issuing fractional shares in connection with the annual grant of phantom shares of our common stock received on the date of our annual meeting of shareholders.(2) |

  13. 2017 Compensation of Non-Employee Directors

    | The amounts in this column reflect the grant date fair value of stock awards issued to each non-employee director during the year ended December 31, 2017, in accordance with Accounting Standards Codification Topic 718, “Compensation — Stock Compensation” (“ASC Topic 718”). Each non-employee director then serving received 990 deferred shares of our common stock for the annual retainer grant of shares of our common stock on the date of our annual meeting of shareholders (May 18, 2017). The deferred shares will be converted into common stock upon the lapse of the deferral period. See also “Compensation of Non-Employee Directors — Board Equity Compensation and Stock Ownership Guidelines.” The grant date fair value for the 2017 stock awards is calculated by multiplying the closing price of our common stock on the NYSE on the date of grant by the number of shares in the stock award. As of December 31, 2017, each non-employee director then serving had the following number of deferred shares under our Board of Directors’ Deferred Compensation Plan (“Board Deferred Compensation Plan”) for all years of service as a director:(3) |

  14. 2017 Compensation of Non-Employee Directors

    | 14 | Anthem, Inc. 2018 Proxy Statement |

  15. 2017 Compensation of Non-Employee Directors

    Compensation of Non-Employee Directors (continued)

  16. 2017 Compensation of Non-Employee Directors

    | | Deferred Shares | | Director | (as of 12/31/17) | | R. Kerry Clark | 5,056 | | Robert L. Dixon, Jr. | 7,304 | | Lewis Hay, III | 6,923 | | Julie A. Hill | 35,322 | | Antonio F. Neri | — | | Ramiro G. Peru | 7,304 | | George A. Schaefer, Jr. | 7,304 | | Elizabeth E. Tallett | 6,308 |

  17. 2017 Compensation of Non-Employee Directors

    No directors currently have any stock options outstanding. The deferred shares for each current director are included in the Security Ownership of Certain Beneficial Owners and Management — Stock Held by Directors, Nominees and Executive Officers table on page 16.

  18. 2017 Compensation of Non-Employee Directors

    | Includes: (i) matching charitable contributions made by the Anthem Foundation on behalf of Messrs. Clark, Hay and Schaefer, Mses. Hill and Tallett (see “— Matching Gift Program”) and (ii) dividend equivalents paid on directors’ deferred shares that vested in 2017 of $26,441 each to Messrs. Dixon, Peru and Schaefer and Ms. Hill, and of $66,575 to Mr. Ryan. This column does not include perquisites received by a director to the extent the amount of all such perquisites received by such director was less than $10,000.(4) |

  19. 2017 Compensation of Non-Employee Directors

    | All of Mr. Clark’s 2017 compensation was deferred by him pursuant to the Board Deferred Compensation Plan, other than the $76.90 paid in cash in lieu of a fractional share.(5) |

  20. Three-year Term to Expire at the 2021 Annual Meeting of Shareholders

    | LEWIS HAY, III Age: 62 Director since: 2013 Independent | Lewis Hay, III has been a director of the Company since July 2013. Mr. Hay has served as an operating advisor at Clayton, Dubilier & Rice, LLC (private equity investment firm) since September 2013. Mr. Hay retired as Executive Chairman of NextEra Energy, Inc. (“NextEra Energy”) (electricity-related services and renewable energy generator) in December 2013, having served in that position since July 2012. At NextEra Energy, he served as Chief Executive Officer from June 2001 to July 2012, Chairman from January 2002 to July 2012, and President from June 2001 to December 2006. He also served as Chief Executive Officer of Florida Power & Light Company from January 2002 to July 2008. Mr. Hay is a director of Capital One Financial Corporation (financial services) and Harris Corporation (international communications and information technology). Mr. Hay was a director and chairman of both the Institute for Nuclear Power Operations and the Edison Electrical Institute until 2013. He also served on the Board of Business Advisors for the Tepper School of Business at Carnegie Mellon University, and on the Advisory Council of Carnegie Mellon University’s Scott Institute for Energy Innovation until May 2017. Skills and Qualifications Mr. Hay brings extensive CEO, finance and regulatory and government experience to the Board through his positions as CEO, Chairman and CFO of a large utility company which was subject to significant regulation and oversight. He also has environmental, social and governance experience with his management of the utility’s expansion of renewable energy sources. In addition, Mr. Hay has marketing and public relations experience from his service as an officer of a large utility company and a director of a financial services company, and technology experience from his service as a director of an information technology company. |

  21. Three-year Term to Expire at the 2021 Annual Meeting of Shareholders

    | JULIE A. HILL Age: 71 Director since: 2004 Independent | Julie A. Hill has been a director of the Company since November 2004. Ms. Hill served on the former WellPoint Health Networks Inc. (“WHN”) board of directors from March 1994 until WHN’s merger with us in November 2004. Since 2002, she has been the owner of The Hill Company (real estate company). From 1998 to 2002, Ms. Hill was the President and owner of Hiram-Hill Development Company (residential real estate development firm). Prior thereto, she was the Chairman, President and Chief Executive Officer of Costain Homes, Inc. (home builders), the U.S. division of Costain Group Plc, a London-based company, from 1988 to 1997. Ms. Hill is also a director of the Lord Abbett Family of Mutual Funds (mutual funds) and UNYQ (provider of orthopedic devices). She is chair of the University of California at Irvine (“UCI”) Board of Trustees and chair emeritus of the UCI Paul Merage School of Business Dean’s Advisory Board, and serves as a member of the advisory boards of the Paul Merage School of Business Center for Real Estate, the UC Irvine School of Law Board of Visitors, the School of Social Ecology Dean’s Leadership Council, the Susan Samueli Center of Integrative Medicine, and the Paul Merage School of Business Center for Digital Transformation. Skills and Qualifications Ms. Hill brings extensive CEO and finance experience to the Board gained through her ownership and management of several companies. She also has significant marketing and public relations experience, having held several positions in sales, marketing, advertising and product development. In addition, Ms. Hill has health care industry and environmental, social and governance experience through her many medical school and other university board positions and service with groups promoting environmental, sustainability and other public policy issues. Further, Ms. Hill qualifies as an “audit committee financial expert” under the SEC’s rules. |

  22. Three-year Term to Expire at the 2021 Annual Meeting of Shareholders

    | ANTONIO F. NERI Age: 50 Director since: 2017 Independent | Antonio F. Neri has been a director of the Company since December 2017. Mr. Neri has served as President and Chief Executive Officer of Hewlett Packard Enterprise Company (“Hewlett Packard Enterprise”) (technology company) since February 2018. At Hewlett Packard Enterprise, he also served as President from June 2017 to February 2018 and Executive Vice President and General Manager, Enterprise Group from 2015 to June 2017. Prior to Hewlett Packard Enterprise’s spinoff from HP Inc. (technology company), Mr. Neri held a variety of leadership roles at HP Inc. since 1995, including Senior Vice President and General Manager, Enterprise Group from October 2014 to November 2015, Senior Vice President and General Manager, HP Servers from September 2013 to October 2014 and Senior Vice President and General Manager, HP Technology Services from August 2011 to September 2013. Mr. Neri has served as a director of Hewlett Packard Enterprise since February 2018. He was a director of H3C Technologies Co., LTD (information technology company), from May 2016 to July 2017. From March 2012 to February 2013, Mr. Neri was a director of Mphasis Limited (cloud technology company). Skills and Qualifications Mr. Neri has significant technology and marketing and public relations experience, having held several leadership positions at firms that provide technology solutions to the business and public sectors, including his current position of President and CEO of a large, multinational enterprise information technology company. In addition, Mr. Neri brings CEO and finance experience to the Board gained through his positions with Hewlett Packard Enterprise. Further, Mr. Neri qualifies as an “audit committee financial expert” under the SEC’s rules. |

  23. Three-year Term to Expire at the 2021 Annual Meeting of Shareholders

    | RAMIRO G. PERU Age: 62 Director since: 2004 Independent | Ramiro G. Peru has been a director of the Company since November 2004. Mr. Peru served on the former WHN board of directors from May 2003 until WHN’s merger with us in November 2004. During the second half of 2007, Mr. Peru was Executive Vice President and Chief Financial Officer of Swift Corporation (transportation) and prior thereto was Executive Vice President and Chief Financial Officer of Phelps Dodge Corporation (mining and manufacturing) from 1999 to 2007 (“Phelps Dodge”). Mr. Peru joined Phelps Dodge in 1979 and held various finance and accounting positions with Phelps Dodge and its affiliates. Mr. Peru is also a director of SM Energy Company (oil and gas exploration and production company) and UNS Energy Corporation (electric and gas utility holding company). Skills and Qualifications Mr. Peru brings significant finance experience to the Board as a former chief financial officer of two public companies. Mr. Peru’s positions also included technology experience as Senior Vice President at Phelps Dodge with responsibility for managing both information systems and technology and human resources. Further, Mr. Peru qualifies as an “audit committee financial expert” under the SEC’s rules. |

  24. Terms expiring at the 2019 Annual Meeting of Shareholders

    | BAHIJA JALLAL Age: 56 Director since: 2018 Independent | Bahija Jallal has been a director of the Company since February 2018. Ms. Jallal has served as Executive Vice President of AstraZeneca PLC (“AstraZeneca”) (pharmaceutical and biopharmaceutical business) and President of MedImmune (biotechnology business), a subsidiary of AstraZeneca, since January 2013. She joined MedImmune in 2006 and held various research and development positions, including Executive Vice President, Research and Development, from 2010 to 2013. She has been President of the Board of the Association for Women in Science since 2016 and a member of the Board of Trustees of Johns Hopkins University since 2014. Skills and Qualifications Ms. Jallal brings extensive health care industry experience to the Board gained through her several leadership positions at biopharmaceutical companies that provide new medicines to patients, including her current position of Executive Vice President at a multinational pharmaceutical and biopharmaceutical company. In addition, Ms. Jallal has CEO and finance experience through her position of President at a biologic research and development subsidiary of a large public company. |

  25. Terms expiring at the 2019 Annual Meeting of Shareholders

    | GEORGE A. SCHAEFER, JR. Age: 72 Director since: 2001 Independent | George A. Schaefer, Jr. has been a director of the Company since 2001 and was a director of Anthem Insurance Companies, Inc. (“Anthem Insurance”) from 1995 to 2003. Mr. Schaefer served as Chair of the Board of the Company from May 2013 until December 2015, at which time he was elected to his current role of Lead Director. He served as President and Chief Executive Officer of Fifth Third Bancorp (banking) from 1990 to 2006, as Chairman of the Board and Chief Executive Officer until 2007, and as Chairman of the Board until 2008. He was also a director of Ashland Global Holdings, Inc. (petroleum and chemical business) from 2003 to January 2018. He is a board member of the University of Cincinnati Healthcare System and the University of Cincinnati Healthcare Foundation. Skills and Qualifications As the former President, CEO and Chairman of a large Midwest bank holding company, Mr. Schaefer brings extensive CEO and finance experience to the Board, as well as marketing and public relations and technology experience from his involvement in retail marketing and product development for the financial institution. Also, he has health care industry experience through his service on the boards of several hospital systems and medical schools. Further, Mr. Schaefer qualifies as an “audit committee financial expert” under the SEC’s rules. |

  26. Terms expiring at the 2019 Annual Meeting of Shareholders

    | JOSEPH R. SWEDISH Age: 66 Director since: 2013 | Joseph R. Swedish will serve as the Chair of the Board until the annual meeting and has served in that role since December 2015. He has been a director since March 2013 when he was appointed our CEO. Mr. Swedish served as our President and CEO through November 2017. Prior to joining the Company, Mr. Swedish served as President and CEO of Trinity Health Corporation (“Trinity”) (multi-state integrated health care delivery system) from 2004 to 2013. Prior to his service at Trinity, Mr. Swedish was President and CEO of Centura Health (large health care provider) from 1999 to 2004. Mr. Swedish served as a director of Coventry Health Care, Inc. (health insurance company) from 2010 to February 2013. Mr. Swedish has served as a director of CDW Corporation (technology) since August 2015 and International Business Machines Corporation since October 2017. He also serves as a director of America’s Health Insurance Plans (Chairman effective January 2017), Proteus Digital Health, the Board of Visitors of Duke University’s Fuqua School of Business and the Duke Margolis External Advisory Board, and as a member of the Business Council. He served as director of the BCBSA, the National Institute for Health Care Management, and the Central Indiana Corporate Partnership, each through November 2017. He also previously served as chair of the Catholic Health Association and on the board of Loyola University Chicago. Skills and Qualifications Mr. Swedish brings significant CEO, health care industry, technology and insurance industry experience to the Board from his chief executive and board positions with several health care and insurance organizations and participation in numerous associations in the health care industry. Mr. Swedish’s positions also provided him with regulatory and government experience due to the highly-regulated nature of these organizations. He has finance experience through his service on the board of directors of a bank and technology experience through his service on the board of a technology company. Mr. Swedish also has environmental, social and governance experience, having served as chair of the Catholic Health Association. |

  27. Terms expiring at the 2019 Annual Meeting of Shareholders

    | ELIZABETH E. TALLETT Age: 68 Director since: 2013 Independent | Elizabeth E. Tallett has been a director of the Company since October 2013. She was a principal of Hunter Partners, LLC (health care consulting) from 2002 to 2015. Ms. Tallett continues to operate as a consultant to health care companies. Previously, Ms. Tallett was President and Chief Executive Officer of Transcell Technologies, Inc. (specialty pharmaceuticals), President of Centocor Pharmaceuticals (biotechnology), member of the Parke-Davis (pharmaceuticals) Executive Committee and Director of Worldwide Strategic Planning for Warner-Lambert Company (pharmaceuticals). Ms. Tallett has served as a director of Meredith Corporation (magazine publisher) since 2008, Principal Financial Group, Inc. (financial services) since 1992 (as lead director since 2007) and Qiagen, N.V. (biotechnology research equipment manufacturing) since 2011. She previously served as a director of Coventry Health Care, Inc. (health insurance) from 1998 to 2013 (including serving as lead director). Skills and Qualifications Ms. Tallett brings significant CEO, finance, health care industry, insurance industry and marketing and public relations experience to the Board from her chief executive, other management and board positions in several health care, insurance and pharmaceutical organizations. These positions also provided her with regulatory and governmental experience due to the highly-regulated nature of these organizations. She also has environmental, social and governance experience, having served as a lead director and as a member of the governance committees of several public companies. |

  28. Terms expiring at the 2020 Annual Meeting of Shareholders

    | GAIL K. BOUDREAUX Age: 57 Director since: 2017 | Gail K. Boudreaux has been a director of the Company since November 2017 when she was appointed our President and Chief Executive Officer. Prior to joining the Company, she served as Chief Executive Officer of GKB Global Health, LLC (health care strategy and business advisory firm) from July 2015 to November 2017. Prior thereto, Ms. Boudreaux was Executive Vice President of UnitedHealth Group Incorporated (diversified health care company) from May 2008 to February 2015, President of United HealthCare (managed health care company), a subsidiary of UnitedHealth Group Incorporated, from May 2008 to January 2011 and Chief Executive Officer of United HealthCare from January 2011 to November 2014. Before joining United HealthCare, she worked at Health Care Services Corporation (“HCSC”) (health insurance company) as Executive Vice President of External Operations from December 2005 to April 2008 and as President of Blue Cross Blue Shield of Illinois from 2002 to May 2005. Before joining HCSC, Ms. Boudreaux held various positions at Aetna Inc. (managed health care company), including Senior Vice President, Group Insurance. Ms. Boudreaux has served as a director of Zimmer Biomet Holdings, Inc. (medical device company) since 2012. She also serves as a director of the BCBSA, the National Institute for Health Care Management, Health Services Foundation, Dartmouth College Board of Trustees, and the Central Indiana Corporate Partnership, and as a member of the Business Roundtable. She previously served as a director of Xcel Energy, Inc. (utility holding company) from May 2012 to December 2017, Novavax, Inc. (biotechnology company) from June 2015 to November 2017 and Genzyme Corporation (biotechnology company) from 2004 to 2011. Skills and Qualifications Ms. Boudreaux brings significant CEO, health care industry, insurance, finance and information technology experience to the Board from her chief executive and other executive positions with several health care and insurance organizations and participation in numerous associations in the health care industry. Ms. Boudreaux’s positions also provided her with regulatory and government experience due to the highly-regulated nature of these organizations. She also gained financial and information technology experience through her service as a director and as a member of the audit committee and technology operations committee of several public companies including a medical device company and a biotechnology company. |

  29. Terms expiring at the 2020 Annual Meeting of Shareholders

    | R. KERRY CLARK Age: 65 Director since: 2014 Independent | R. Kerry Clark has been a director of the Company since May 2014. Mr. Clark served as Chairman and Chief Executive Officer of Cardinal Health, Inc. (health care products and services), until his retirement in 2009. Mr. Clark joined Cardinal Health (“Cardinal Health”) in 2006 as President and Chief Executive Officer and became Chairman in 2007. Prior to joining Cardinal Health, he held various positions at The Procter & Gamble Company (consumer products), including President of P&G Asia; President, Global Market Development and Business Operations; and Vice Chairman of the Board, President Global Family Health. He is a director of Avnet, Inc. (industrial distributors of electronic components, enterprise computer and storage products), General Mills, Inc. (consumer food products) and Textron, Inc. (aircraft, defense, and industrial products). He is also a director of Hauser Private Equity LLC (investment firm) and The Christ Hospital in Cincinnati, Ohio (hospital). Skills and Qualifications Mr. Clark brings to the Board extensive CEO, health care industry, marketing and public relations, and finance experience through his positions as Chairman and CEO of a major health care services organization, and as a senior executive at an international consumer products company, where he served in several positions involving marketing, advertising and product development of health care and other consumer products. Also, he has health care experience through his service on a hospital’s board of directors. Mr. Clark qualifies as an “audit committee financial expert” under the SEC’s rules. |

  30. Terms expiring at the 2020 Annual Meeting of Shareholders

    | ROBERT L. DIXON, JR Age: 62 Director since: 2011 Independent | Robert L. Dixon, Jr. has been a director of the Company since July 2011. Mr. Dixon also has been the owner of The RD Factor, Inc., a digital and information technology consulting business, since 2016. Mr. Dixon served as Global Chief Information Officer and Senior Vice President of PepsiCo, Inc. (“PepsiCo”) (food and beverages) from 2007 until April 2016 and as Senior Vice President until December 2016. Prior to joining PepsiCo, Mr. Dixon held various positions with The Procter & Gamble Company (consumer household products) since 1977, including Vice President of Global Business Services from 2005 until 2007. He is a director of Build-A-Bear Workshop, Inc. (specialty retailer) since February 2018. At the Georgia Institute of Technology, Mr. Dixon serves on the Engineering Advisory Board, the President’s Advisory Board, and the Foundation. He previously served on the CIO Advisory Board for International Business Machines Corporation. Skills and Qualifications Mr. Dixon has extensive technology experience through his position as Global Chief Information Officer of a large public company and his service on the CIO advisory board for another large public company. He also has significant marketing experiences through his senior positions at two large public companies, both of which have global retail consumer product focus. |

  31. Executive Summary

    | · | Based on our performance against predefined goals, the Annual Incentive Plan paid out at 152.6% of target for all named executive officers (“NEOs”), other than Ms. McCarthy, which is reflective of our strong performance against our Adjusted EPS (80% weighting), Consumer Centricity (10%), Provider Collaboration (5%), and Quality of Care (5%) objectives. Ms. McCarthy received a payout of 175.0% of target reflecting a discretionary upward adjustment by the Compensation Committee in recognition of her personal contribution and performance in 2017. |

  32. Executive Summary

    | · | Based on our performance against predefined goals, the 2015 – 2017 Performance Stock Unit (“PSU”) cycle (our first fully completed three-year PSU cycle) paid out at 159.7% of target for all NEOs, which is reflective of our strong performance against three-year cumulative Adjusted EPS (75% weighting) and three-year cumulative operating revenue (25% weighting) measures. |

  33. Executive Summary

    | · | Ms. Boudreaux has a base salary of $1,400,000, a target annual incentive of 175% of base beginning in 2018, and aggregate target long-term incentive awards valued at $10,250,000 for 2018 to be granted in the form consistent with all NEOs, which remains primarily performance-based (50% PSUs, 25% Stock Options, and 25% restricted stock units (“RSUs”)). |

  34. Executive Summary

    | · | In connection with her appointment, Ms. Boudreaux also received a sign-on PSU grant with a target value of approximately $2,000,000 that vests based on the level of achievement of our performance from 2017 through 2019 in accordance with the terms of the PSUs granted to our executives in 2017. This at-risk award provided an initial inducement while immediately aligning Ms. Boudreaux’s performance-incentives with that of our broader leadership team. |

  35. Pay-for-Performance Philosophy and Pay Mix

    Primary Compensation Elements The following chart shows the primary compensation elements for our NEOs. Additional detail on these compensation elements can be found in “Elements of Total Rewards” in this CD&A. Impact of Business Results, Stock Price and Shareholder Returns on Executive Compensation As indicated in the chart above, the compensation value received by our executives is highly dependent on share price performance and relies on meeting predetermined financial and operational goals approved by the Committee. Consistent with our pay-for-performance philosophy, and based on our financial and operational results in relation to our annual business plan, performance-based variable compensation has fluctuated over the years and was paid below target in 2015 and above target in 2017, 2016, 2014 and 2013. Our long-term compensation, comprised of PSUs, stock options and time-based RSUs, represented 74% and an average of 64% of the 2017 target compensation for Mr. Swedish and other NEOs, respectively. PSUs and RSUs more closely replicate shareholder return, as they gain or lose value as our stock price changes, and earn dividend-equivalents equal to the cash dividend per share amount, which are paid to participants without interest upon vesting and to the extent underlying shares are earned. Stock options gain value when our stock price rises over the grant price.

  36. Elements of Total Rewards

    | · | annual performance-based incentive awards under the AIP; |

  37. Elements of Total Rewards

    | · | equity awards in the form of PSUs, time-based RSUs and stock options under the Incentive Plan; |

  38. Elements of Total Rewards

    | · | the AIP award payouts for the prior year pursuant to the formulas previously established; |

  39. Elements of Total Rewards

    | · | prospective adjustments to target AIP award percentages of base salary; and |

  40. Elements of Total Rewards

    | · | the size and type of equity awards granted to each executive officer. |

  41. Elements of Total Rewards

    Independent directors engage in a formal review process annually to evaluate the CEO’s individual performance on numerous factors, including: leadership, strategic planning, getting results, external and internal relations and interaction with the Board. Directors are invited to speak directly with the Lead Director and the Chair of the Compensation Committee to provide individual feedback, and executive sessions are held at Board meetings throughout the year in which performance input from Board members is sought. The Committee’s 2017 compensation decisions were based on its evaluation of each executive’s performance (including performance assessments by the CEO for the other executive officers), as well as our 2016 and 2017 achievements, all of which reflect the NEOs’ individual performance. Such determinations are based on the Committee’s assessments after consideration of management recommendations, market-based compensation information and advice of the Committee’s independent compensation consultant. The assessments represent the Committee’s view of how the NEO’s performance contributed to our performance and achievements, as well as other leadership accomplishments. These decisions are made as part of a unified process so that all components of pay are reviewed in concert with each other, and, as appropriate, decisions about one component can affect decisions regarding the other components of pay. This is intended to ensure that the Total Rewards package for the NEOs fits with our compensation objectives as described above. Additionally, individual performance is rewarded by providing executives with career growth through challenging assignments and, as positions become available, promotional opportunities. The Committee does not have a specific target for allocating the amount of compensation among the pay elements (base salary, annual incentive and equity grants), but seeks to apply a higher weighting to performance-based variable pay than to fixed pay. In addition, the Committee has weighted the equity grants more heavily toward performance stock units than restricted stock units or stock options. Each NEO’s total compensation opportunity is targeted to the level the Committee considers market competitive and reflective of individual performance.

  42. Data for “Other NEOs” is an Average for Other NEOs)

    | | Year-End | Target | Target | Total Target | | Name | Salary | AIP (%) | AIP ($) | Cash ($) | | John E. Gallina | $772,500 | 100% | $772,500 | $1,545,000 | | Brian T. Griffin | $772,500 | 100% | $772,500 | $1,545,000 | | Peter D. Haytaian | $772,500 | 100% | $772,500 | $1,545,000 | | Gloria M. McCarthy | $772,500 | 100% | $772,500 | $1,545,000 | | Joseph R. Swedish | $1,550,000 | 175% | $2,712,500 | $4,262,500 |

  43. Data for “Other NEOs” is an Average for Other NEOs)

    | | Payout Range | | | Performance | | Total | | Performance Measure | Threshold | Target | Maximum | Target | Actual | Payout | | Adjusted EPS(1) | 0% | 80% | 160% | $11.50 | $12.04 | 136.4% | | Consumer Centricity | | | | | | | | Net Promoter Score (absolute and relative performance) | 0% | 10% | 20% | Statistically meaningful improvement over 2016 performance | At Target | 10.0% | | Provider Collaboration | | | | | | | | Measures value-based provider payment arrangements | 0% | 5% | 10% | 47.8% | 49% | 8.3% | | Quality of Care | | | | | | | | Performance in our Medicare, Medicaid, and Commercial segments | 0% | 5% | 10% | Statistically meaningful improvement over 2016 performance | Exceeded Target | 10.0% | | Calculated Results | | | | | | 164.7% | | Negative Discretion for all NEOs other than Ms. McCarthy | | | | | | -12.1% | | Total Award for each NEO other than Ms. McCarthy | 0% | 100% | 200% | | | 152.6% | | Calculated Results | | | | | | 164.7% | | Positive Discretion for Ms. McCarthy | | | | | | 10.3% | | Total Award for Ms. McCarthy | 0% | 100% | 200% | | | 175.0% |

  44. Data for “Other NEOs” is an Average for Other NEOs)

    | | 2017 Salary | Target | 2017 Target | Actual AIP | Actual | | Name | Received | AIP (%) | AIP Award ($) | (% of target) | AIP ($) | | John E. Gallina | $768,173 | 100% | $768,173 | 152.6% | $1,172,232 | | Brian T. Griffin | $768,169 | 100% | $768,169 | 152.6% | $1,172,226 | | Peter D. Haytaian | $768,170 | 100% | $768,170 | 152.6% | $1,172,227 | | Gloria M. McCarthy | $758,557 | 100% | $758,557 | 175.0% | $1,327,476 | | Joseph R. Swedish | $1,540,385 | 175% | $2,695,673 | 152.6% | $4,113,597 |

  45. Data for “Other NEOs” is an Average for Other NEOs)

    AIP is earned based on salary paid during the year. Since merit-based increases (and the promotional increase for Ms. McCarthy) occurred in March 2017, actual salary paid in 2017 does not equal year-end salary. AIP awards earned by NEOs as a percent of target from 2013 to 2017 have ranged from 86% to 176%, with an average payout of 128% over this same period. Equity Awards The Committee granted regular time-based RSUs and stock option awards to the NEOs (other than Ms. Boudreaux) to coincide with the Committee’s Total Rewards review of our NEOs’ compensation. The date of the Committee meeting is set in advance and is the first business day of March every year. As explained below, while the value of the awards were determined as of March 1, 2017, PSU awards were not granted to such NEOs until August 1, 2017 after our business optimization goals were reviewed and approved. All of these awards were granted to encourage retention, reward performance, promote a long-term business focus and align the interests of associates and shareholders. In addition, Ms. McCarthy received an equity award granted on April 3, 2017 in connection with her promotion to EVP and Chief Administrative and Transformation Officer.

  46. Data for “Other NEOs” is an Average for Other NEOs)

    | Tar | | | | | | | Name | Value of Target LTIP Award Approved On March 1, 2017 | Promotion LTIP Grant On April 3, 2017 | | Total Target LTIP Granted for 2017 ($) | | | John E. Gallina | $3,250,000 | | | | $3,250,000 | | Brian T. Griffin | $3,250,000 | | | | $3,250,000 | | Peter D. Haytaian | $3,250,000 | | | | $3,250,000 | | Gloria M. McCarthy | $2,500,000 | | $750,000 | | $3,250,000 | | Joseph R. Swedish | $11,875,000 | | | | $11,875,000 |

  47. Data for “Other NEOs” is an Average for Other NEOs)

    For 2017, the Committee retained the equity award structure mix for our executives, including our NEOs. One half of the total award continues to be structured as PSUs, and one-quarter of the total awards are delivered in stock options and in RSUs. The weightings in the chart below are based on the value targeted by the

  48. Data for “Other NEOs” is an Average for Other NEOs)

    Committee, which differs from the grant date fair value calculated in accordance with ASC Topic 718 (as explained in the performance stock unit section below). 2017 Time-Based RSU Vesting Schedule and Dividend Equivalents The RSUs granted are subject to time-based vesting. The RSUs vest in three equal annual installments, beginning on the first anniversary of the grant date. Restricted stock units accrue cash dividend equivalents equal to the cash dividends paid to shareholders during the vesting period. These cash payments are distributed with the underlying shares to the participants upon vesting, and are cancelled if the underlying units do not vest. To formalize past practice in relation to equity award vesting, effective January 1, 2018, the 2017 Anthem Incentive Plan was amended to require a minimum vesting schedule of one (1) year for restricted stock awards granted on or after January 1, 2018. 2017 Stock Options The stock option exercise price is the closing price of our common stock on the NYSE on each grant date. Stock options gain value when our stock price rises over the exercise price. The term of all stock options granted during 2017 was ten years, with vesting in six equal semi-annual installments over the first three years. In 2015, we extended the stock option term from seven years to ten years to conform to common competitive practices. The purpose of providing vesting every six months is to stagger inducements for remaining with the Company over the course of any year. More specifically, incumbents must be employed on March 1st and September 1st of each year for their stock option grants to vest. To formalize past practice in relation to equity award vesting, effective January 1, 2018, the 2017 Anthem Incentive Plan was amended to require a minimum vesting schedule of six (6) months for options granted on or after January 1, 2018. 2017 Performance Stock Units (“PSU”) — Measures, Vesting Schedule and Dividend Equivalents In recent years, we have granted PSUs that provide an opportunity to earn from 0% to 200% of target based on pre-defined three-year cumulative operating revenue, defined as the total of premiums, administrative fees and other revenue (“Operating Revenue”) and Adjusted EPS targets. The threshold, target, and maximum goals in the program have been anchored on the Company’s long-term strategic plan.

  49. Data for “Other NEOs” is an Average for Other NEOs)

    In 2017 we embarked on a multi-year business optimization initiative designed to create meaningful new revenue opportunities, increase membership revenue through more competitive products, streamline customer service, improve the customer experience, substantially modernize our systems, and achieve cost efficiency. We have identified multiple work streams as part of the process to optimize performance, and while a number of employees have been dedicated to these work streams full-time, many will continue to have day-to-day responsibilities in addition to the effort required to produce optimal results. Importantly, the NEOs are responsible for leading the organization and ensuring a successful result by spending substantial time on this intensive initiative and increasing accountability beyond the long-term planning and execution of near term objectives. The Committee sought to recognize the NEOs’ efforts, and tie this recognition to the success of this business optimization initiative through adjustments to the 2017 and 2018 PSU cycles that together will span a four year period (2017 through end of 2020). The nature and mechanics of the 2017 PSU grants are largely consistent with PSU grants awarded since 2015, but the Committee increased the risk and reward profile this year to align with the results across the multi-year business optimization period. More specifically, the Committee lowered the payout for meeting business-as-usual results but provided an increased upside opportunity to 400% of target for meeting significant and meaningful business optimization goals. The Committee believes this approach is reasonable given that the business optimization efforts aim to deliver accretive and incremental revenues, grow the core business through stronger customer satisfaction and improved retention rates, and create a more productive organization to drive sustained profits. In aggregate, we believe that achieving these outcomes can change the growth and profit profile for the Company and create substantial shareholder value. The 2017 PSU grant will track and measure performance against these goals through the end of 2019. The Committee initially reviewed business-as-usual threshold, target, and maximum goals in March 2017. Consistent with the approach to increase the risk and reward profile, the Committee then reduced (i) the payout opportunity to 75% of target for achieving target performance against the business-as-usual goals and (ii) the maximum payout opportunity to 150% of target for achieving maximum performance. The rationale for this adjustment was to create balance between the expected business-as-usual performance and the increased upside. More clearly, this adjustment will result in lower payouts for the NEOs if we do not meet any business optimization goals but meet our business-as-usual goals.

  50. Data for “Other NEOs” is an Average for Other NEOs)

    | Payout and Performance Schedule for 2017 PSUs (2017 to 2019 Performance): | | | | | | Performance Measures | Weighting | Threshold | Target | Maximum | | Three-year Cumulative Operating Revenue | 25% | 0% | 75% | 150% | | Three-year Cumulative Adjusted Net Income | 75% | 0% | 75% | 150% |

  51. Data for “Other NEOs” is an Average for Other NEOs)

    The Committee reviewed several factors when assessing the performance requirement for the additional +250% upside opportunity, including, but not limited to: (1) the relative earnings growth run rate compared to the historical and forward looking expectations of top quartile performance against the S&P100 and our EBIT peer group, (2) the potential share price and value creation for shareholders with the underlying incremental earnings with the potential for an expanding multiple, and (3) improvements in the overall cost of care and customer experience. The Committee retains discretion to adjust payouts downward if core strategic business measures, including overall cost of care and customer experience, are not met. The Committee granted the 2017 PSU awards on August 1, 2017 when the business optimization goals were reviewed and approved. These goals were not known on March 1, 2017; therefore, the grant was not made until August 1, 2017, but the value of the award was determined as of March 1, 2017. Ms. Boudreaux received a sign-on award of PSUs with the same performance conditions as the other NEOs. The target grant date fair value of this award was approximately $2,000,000.

  52. Data for “Other NEOs” is an Average for Other NEOs)

    | | Value of | Target Number of | Value of Target | | | Target PSU | Shares Determined | Shares on Grant | | | Award Approved | By March 1, 2017 Price | Date of August 1, 2017 | | Name | March 1, 2017 | ($166.97) | ($186.67) | | John E. Gallina | $1,625,000 | 9,732 | $1,816,672 | | Brian T. Griffin | $1,625,000 | 9,732 | $1,816,672 | | Peter D. Haytaian | $1,625,000 | 9,732 | $1,816,672 | | Gloria M. McCarthy | $1,625,000 | 9,732 | $1,816,672 | | Joseph R. Swedish | $5,937,500 | 35,560 | $6,637,985 |

  53. Data for “Other NEOs” is an Average for Other NEOs)

    To formalize past practice in relation to equity award vesting, effective January 1, 2018, the 2017 Anthem Incentive Plan was amended to require a minimum vesting schedule of one (1) year for PSU awards granted on or after January 1, 2018. In late 2017 after we granted the PSUs with additional upside opportunity, Congress approved the Tax Cuts and Jobs Act that reduced the corporate tax rate and changed other items impacting the financial outlook for the Company going forward. The Committee will assess performance for these PSUs on a post-tax reform basis -- in essence maintaining the same underlying growth rates and likelihood of achievement while ensuring that there is no additional windfall from the expected increase in earnings simply from the change in law (i.e., the resulting Adjusted Net Income goals and any incremental business optimization performance will be measured against higher targets than initially reviewed by the Committee).

  54. Data for “Other NEOs” is an Average for Other NEOs)

    Payout of the 2015-2017 PSU Cycle Prior to 2015, our performance stock unit awards were based on one year’s performance and paid over three years. In 2015, the Committee changed the performance stock unit awards to be based on three-year cumulative Adjusted EPS and three-year cumulative Operating Revenue. The purpose of this change was to better align rewards with our stated long-term strategy, and to balance compensation based upon both short-term and long-term results. Operating Revenue was selected as a measure of growth and success in the marketplace. Adjusted EPS was selected because it demonstrates whether the top-line growth was profitable and is a primary measure considered by many of our shareholders in assessing our ongoing performance. In addition, earnings-based measures are the most prevalent performance measure used by our direct peers. The payout scale for each measure detailed below provided for a minimum award of 0% of the units granted and a maximum award of 200% of the units granted. The targets for each of these measures were developed based on our 2014-2018 long-term plan, which was communicated to the investment community during March 2014.

  55. Data for “Other NEOs” is an Average for Other NEOs)

    | | Payout Range | | | Performance Goals | | | Actual | Measure | Total | | Performance Measure | Threshold | Target | Maximum | Threshold | Target | Maximum | Performance | Weighting | Payout | | Adjusted EPS | 0% | 75% | 150% | $31.38 | $32.47 | $33.52 | $33.20 | 75% | 127.0% | | • 2015-2017 Cumulative Adjusted EPS (1) | | | | | | | | | | | Operating Revenue ($ in billions) | 0% | 25% | 50% | $240.30 | $249.00 | $257.70 | $251.70 | 25% | 32.7% | | • 2015-2017 Cumulative Operating Revenue | | | | | | | | | | | Total Award for each Named Executive Officer | 0% | 100% | 200% | — | — | — | | | 159.7% |

  56. Data for “Other NEOs” is an Average for Other NEOs)

    Ms. Boudreaux will be subject to certain restrictive covenants including confidentiality, non-competition, non-solicitation and non-disparagement during her employment and for specified periods of time after the termination of her employment. Transition Agreement with Mr. Swedish On November 5, 2017, Mr. Swedish accepted a written offer letter from the Company establishing his transition from Chief Executive Officer to Executive Chair and, subsequently, as Senior Advisor to the Chief Executive Officer. Mr. Swedish will remain employed by the company as Executive Chair until the earlier of (1) our 2018 annual meeting of shareholders and (2) May 31, 2018 (“Transition Date”). As Executive Chair, Mr. Swedish will continue to receive his current rate of base salary and remain eligible to earn a bonus for 2017, a prorated bonus for 2018 and continue in our employee welfare, retirement and perquisite plans. Mr. Swedish will be employed by the Company as the Senior Advisor to the Chief Executive Officer and Consultant, reporting to the Chief Executive Officer, from the Transition Date until May 1, 2020, for which he will receive $4,500,000 per year and be eligible to participate in our employee welfare, retirement and perquisite plans, and his previously granted equity awards will continue vesting. Mr. Swedish is not eligible for equity awards in 2018. Aggregate and Individual Grant Sizes When determining the aggregate size of our equity awards, the Committee considers the impact of stock-based compensation expense and the share dilution run rate, in order to strike a balance between promoting our cost competitiveness and maintaining employee incentives at market-competitive levels. The size or amount of equity awards granted to each NEO is based upon position and job level, Company and individual performance, the importance of retaining the services of the executive and the potential for his or her performance to help us attain our long-term goals. Broad-Based Employee Benefits Our NEOs generally participate in the broad-based employee benefits programs under the same terms and conditions as other associates. These benefit offerings include a medical plan with higher associate contributions for more highly compensated associates such that in 2017, NEOs paid in excess of 50% of the cost of the coverage, as compared with entry level associates who generally paid between 5% and 25% of the cost of their coverage. Other broad-based employee benefits include a dental and vision plan, disability benefits, wellness benefits, life and accidental death and dismemberment insurance, business travel accident insurance, the Anthem 401(k) (the “401(k) Plan”), adoption assistance benefits and paid time off for holidays, vacations, illnesses, bereavement leave, jury duty and military service. Although no longer offered to new associates, retiree health care benefits exist for associates who met age and service criteria at the time they were discontinued. A cash balance pension plan was also offered and has since been frozen to new participants. Both Mr. Gallina and Ms. McCarthy have vested benefits in the cash balance pension plan. Messrs. Swedish, Gallina and Griffin have vested retiree health care benefits. Executive Benefits Executives, including the NEOs, participate in a deferred compensation program that is subject to Section 409A of the Tax Code. Under this program, described on page 63, a participant may defer receipt of salary and AIP and continue to receive pension and 401(k) Plan credits for compensation above Tax Code earnings limits. We offer this program to provide executives with the same Company-paid retirement savings opportunities, denominated as a percent of eligible earnings, as the rest of the workforce, and under the same terms and conditions as the underlying all-associate plans. Participants choose among a subset of the market-based investments provided to all associates in the 401(k) Plan, and their account balances increase or decrease in accordance with the performance of the selected investments.

  57. Determination of Compensation

    Compensation Consultant Independence Semler Brossy does not provide any services to us other than those detailed above. At our February 2017 and February 2018 meetings, the Committee determined that no conflicts of interest exist with respect to Semler Brossy continuing to serve as an advisor to the Committee. In making this determination, the Committee considered various factors, including those set forth in the SEC’s and NYSE’s rules. Among other items, the Committee reviewed Semler Brossy’s policy on Consultant Independence, and certifications made by each of our executive officers and directors that he or she did not have a business or personal relationship with Semler Brossy or any of the individuals at Semler Brossy working on our engagement. Role of Management In general, the Committee meets with our CEO at the beginning of each year to agree upon the CEO’s performance objectives (both individual and Company) for the year. The Board also reviews these performance objectives. At the beginning of the following year, the CEO provides to the Committee a self-assessment, and the Committee evaluates the CEO’s performance based on this self-assessment and performance updates. The Committee meets in executive session to review the performance of the CEO based on achievement of the agreed-upon objectives, contribution to our performance and other leadership accomplishments. The results of the evaluation by the Committee are an important metric in evaluating CEO performance. This evaluation is shared with the CEO and the compensation consultant and is used by the Committee in setting the CEO’s compensation. Our CEO and our other executive officers do not set their own compensation nor are they present when the Committee sets their specific individual compensation. Our CEO collects specific feedback from the Board with respect to the performance of our other executive officers, including our NEOs, provides his or her own evaluation of each executive officer’s performance to the Committee, and makes recommendations with respect to base salary and target AIP adjustments, AIP awards and equity awards for each executive officer. This recommendation is considered by the Committee, which makes its own ultimate determinations. All NEOs participate in the annual and long-term business planning processes and in recommending to the Committee the AIP and performance stock unit measures and targets that result from these processes. These measures and targets impact the compensation of the associates who participate in our AIP and who are granted performance stock units. Pay Positioning and Comparator Groups The Committee has designed our executive compensation program to target total compensation (salary plus target AIP award plus long-term equity grant cost on the date of grant) at the median for comparable positions in our comparator groups. Individuals new to their roles may be paid below median. High performing individuals who demonstrate superior performance over a long period of time may have pay positioned above the median of the compensation paid by the companies in the comparator groups. In setting compensation, the Committee compares base salaries, annual incentive opportunities and long-term compensation for the NEOs to two distinct comparator groups. The first group includes our five largest direct health insurance competitors. The second group represents a sample of 43 similarly-sized companies from general industry based on earnings before income tax (“EBIT Group”), with a filter for market capitalization. The Committee uses two groups as there are a limited number of direct industry competitors and many are substantially smaller than us. The Committee determines which companies should be in the comparator groups with the assistance of Semler Brossy. Companies are selected on the basis of whether they compete with us in the executive labor market and whether they had comparable revenue in the prior full fiscal year. The Committee, with the assistance of Semler Brossy, set the comparator groups for 2017 as follows:

  58. Determination of Compensation

    For purposes of pay comparisons, target total compensation for our NEOs includes annualized base salary as of April 1, 2017, target 2017 AIP award amounts, and the ASC Topic 718 expense of 2017 equity awards. The Committee reviewed each NEO’s target total compensation package, compared to both our direct peers and the broader EBIT Group using available pay data. When setting 2017 compensation, the Committee focused on trying to set pay levels, in the aggregate, within a competitive range around the median for the EBIT Group. Some roles may be higher or lower in the competitive range based on performance, tenure in role, or other internal considerations. In setting 2017 compensation, the Committee reviewed the available data from each of these comparator groups to better understand the practices of companies in our size category and our direct peers. Where possible, the data that was used to make compensation decisions in March 2017 was taken from surveys of 2016 compensation of our comparator groups prepared by third-party survey companies and from the latest annual proxy statements and other public filings of these companies. In instances where a company listed above did not participate in the surveys or pay data was not available for a comparable position, the company was not included in the comparator group data for that position. In instances where our positions are structured in ways that do not match well with survey positions, the Committee compares based on target annual compensation pay rank, instead of role, as reported in the surveys. We draw competitive compensation information from a number of nationally recognized surveys, as well as public filings and disclosures, to determine pay practices and levels of peers. The Committee’s consultant either reviews or develops this information for the benefit of the Committee.

  59. Determination of Compensation

    Competitive market data is only one of several resources made available to the Committee to assist it in setting executive compensation levels. The Committee does not use the median described above as a formula to determine compensation or as a fixed target. The Committee establishes an individual target opportunity for each NEO based on the Committee’s evaluation of the executive’s experience, level and scope of responsibility and individual performance. Actual cash compensation may be more or less than the target opportunity as a result of performance under the AIP. Realized compensation from our equity-based awards may be more or less than the target opportunity as a result of our performance relative to the performance stock unit measures and our stock price performance. The Committee reviews actual base salaries, as well as target and actual prior year annual incentive awards to compare total target and actual cash compensation. The Committee also reviews actual ASC Topic 718 expense of the equity grants as the metric comparing long-term compensation with comparable positions, as well as the value of unvested equity awards held by the NEOs. Benefits and perquisites represent a small proportion of the Total Rewards program for our NEOs.

  60. Additional Compensation Policies

    Additional Compensation Policies Stock Ownership Guidelines and Holding Requirements We have stock ownership guidelines for all executive officers, including the NEOs, which is a multiple of the executive’s base salary. An executive has five years to meet the guideline, and the sale of our stock is restricted for executives who have not met their ownership requirements. The stock ownership guideline is five (5) times base salary for the Executive Chair and CEO, and three (3) times base salary for the other NEOs. For the purposes of this program, all shares directly owned and unvested restricted stock units are included in the calculation. Unexercised stock options and unvested performance stock units are not included in the calculation. The Committee reviews the extent to which our executive officers have complied with the guidelines. With the exception of Ms. Boudreaux, who was hired during 2017 and has five years to meet the guideline, our NEOs each owned sufficient shares to meet his or her ownership guidelines as of year-end, based on the average closing stock price of $185.62 during 2017.

  61. Additional Compensation Policies

    Recoupment Policy We operate under a clawback/recoupment policy for incentive compensation. This policy provides that if we are required to restate our financial statements as a result of material noncompliance with a financial reporting requirement due to misconduct, the CEO, CFO and all other Section 16 officers (our executive officers and the Chief Accounting Officer) must repay any bonus or other incentive-based or equity-based compensation received during the 12 months after the inaccurate reporting, and any profits realized from the sale of stock during that 12‑month period. The Board of Directors will determine, on a case by case basis, if it is in the best interest of the Company and our shareholders to pursue recoupment in individual cases. Severance and Change in Control Arrangements All of our NEOs are eligible for severance benefits pursuant to the Executive Agreement Plan as described beginning on page 65. We believe that a severance program is needed to attract and retain the executives that we need to achieve our business goals. To be eligible for these benefits, executives generally agree to restrictive covenants including non-competition, non-solicitation of associates or customers, non-disparagement and confidentiality provisions, which protect us from the competitive disadvantage that would result from losing executive talent to competitors. Additionally, in order to receive benefits, executives are generally required to release any prior claims against us. Change in control severance benefits are subject to a double-trigger, which means that to receive such benefits there must be both: (1) a qualifying termination of employment and (2) termination occurring when a change of control is imminent or has occurred as detailed in the Executive Agreement Plan described above and in “Compensation Plans — Executive Severance Arrangements.” The Executive Agreement Plan does not provide for tax gross-up of any regular or excise taxes imposed on severance payments in connection with a change in control pursuant to Section 4999 of the Tax Code.

  62. Assessment of Compensation-Related Risks

    Assessment of Compensation-Related Risks In February 2018, several members of our management team, including our Chief Accounting Officer and our Chief Risk Officer, conducted an assessment of the risks related to or arising from our compensation policies and practices, assisted by human resources personnel. Additionally, external consulting firm, Willis Towers Watson, was engaged to provide consultation on risk assessment practices. The management team reviewed and discussed the various incentive designs, plan governance and associated behaviors, together with the performance metrics of our Company-wide compensation policies and programs. This group also reviewed the approval mechanisms of all Total Rewards programs for all associates, including salaries, incentive plans, sales incentives, stock options, performance stock units and restricted stock units. In its review and assessment, the team took into consideration the elements of our Total Rewards program for our senior executives, including the performance measures used for the AIP, performance stock unit awards and other incentive compensation arrangements, and the elements of our compensation programs for our other employees. In March 2018, the Compensation Committee reviewed and discussed the management team’s risk assessment. As part of its review, the Compensation Committee also noted the following factors that reduce the likelihood of excessive risk-taking by executives:

  63. Assessment of Compensation-Related Risks

    | · | Our compensation mix is balanced among (i) fixed components like salary and benefits, (ii) annual incentives that reward total Company financial performance and individual performance, and (iii) a portfolio approach for stock awards with a balance among stock options, performance stock units and time-based restricted stock units. |

  64. Assessment of Compensation-Related Risks

    | · | We retained the three-year measurement period for our performance stock unit grants to balance compensation based on short- and long-term results. Having a mix of short- and long-term goals allows us to better align our compensation program with the interests of our shareholders. |

  65. Assessment of Compensation-Related Risks

    | · | Incentive programs use financial measures with sliding scales, with amounts interpolated for awards between $0, target and maximum. Awards are capped for all annual incentives and performance stock units. |

  66. Assessment of Compensation-Related Risks

    | · | Payouts, if applicable, for the AIP and performance stock units are based on results audited by the Internal Audit department. |

  67. Summary Compensation Table

    Summary Compensation Table The following table sets forth the compensation paid to or earned by each of our NEOs for the years ended December 31, 2017 and, where applicable, December 31, 2016 and December 31, 2015.

  68. Summary Compensation Table

    | | | | | | | | Change in | | | | | | | | | | | Pension | | | | | | | | | | | Value & | | | | | | | | | | Non-Equity | Non-qualified | | | | | | | | | | Incentive | Deferred | | | | | | | | | | Plan | Compensation | All Other | | | | | Salary | Bonus | Stock | Option | Compensation | Earnings | Compensation | Total | | Name & Principal Position(1) | Year | ($) (2) | ($) | Awards ($) (3) | Awards ($) (4) | ($) (5) | ($) (6) | ($) (7) | ($) | | Gail K. Boudreaux | 2017 | $161,538 | $0 | $2,000,215 | $0 | $0 | $0 | $4,500 | $2,166,253 | | President and | | | | | | | | | | | Chief Executive Officer | | | | | | | | | | | John E. Gallina | 2017 | $768,173 | $0 | $2,629,315 | $812,445 | $1,172,232 | $11,190 | $85,628 | $5,478,983 | | EVP and | 2016 | $623,918 | $0 | $1,293,813 | $431,215 | $601,511 | $4,429 | $69,123 | $3,024,009 | | Chief Financial Officer | | | | | | | | | | | Brian T. Griffin | 2017 | $768,169 | $0 | $2,629,315 | $812,445 | $1,172,226 | $0 | $30,000 | $5,412,155 | | EVP and President, | 2016 | $740,368 | $0 | $2,250,090 | $749,918 | $803,152 | $0 | $30,000 | $4,573,528 | | Commercial and | | | | | | | | | | | Specialty Division | | | | | | | | | | | Peter D. Haytaian | 2017 | $768,170 | $0 | $2,629,315 | $812,445 | $1,172,227 | $0 | $40,800 | $5,422,957 | | EVP and President, | 2016 | $740,371 | $0 | $2,250,090 | $749,918 | $803,154 | $0 | $40,600 | $4,584,133 | | Government Business | 2015 | $703,848 | $0 | $2,250,086 | $749,943 | $998,760 | $0 | $40,600 | $4,743,237 | | Division | | | | | | | | | | | Gloria M. McCarthy | 2017 | $758,557 | $0 | $2,629,442 | $812,394 | $1,327,476 | $136,880 | $151,937 | $5,816,686 | | EVP and Chief | 2016 | $699,999 | $0 | $1,875,112 | $624,905 | $759,359 | $142,838 | $130,299 | $4,232,512 | | Administrative and | 2015 | $721,154 | $0 | $1,687,638 | $562,365 | $556,226 | $105,931 | $141,985 | $3,775,299 | | Transformation Officer | | | | | | | | | | | Joseph R. Swedish | 2017 | $1,540,385 | $0 | $9,606,879 | $2,968,683 | $4,113,597 | $0 | $323,773 | $18,553,317 | | Executive Chair, Former | 2016 | $1,451,923 | $0 | $8,906,253 | $2,968,750 | $2,756,331 | $0 | $372,440 | $16,455,697 | | President and CEO | 2015 | $1,298,077 | $0 | $7,800,073 | $2,599,957 | $1,668,678 | $0 | $237,896 | $13,604,681 |

  69. Summary Compensation Table

    | See “Executive Officers of the Company” on page 28 for principal position information as of March 2018.(1) |

  70. Summary Compensation Table

    | In a typical year, such as 2017 and 2016, Anthem's employees are paid on a bi-weekly 26 pay period schedule. 2015 included an extra pay period, resulting in salaries approximately 3.8 percent higher than in a typical year.(2) |

  71. Summary Compensation Table

    | The amounts in this column reflect the grant date fair value of stock awards issued during the respective fiscal years pursuant to our Incentive Plan (except disregarding the estimated forfeitures related to service-based vesting conditions) in accordance with ASC Topic 718. The grant date fair value of any performance-based awards was computed based on the level of performance that was deemed probable on the grant date. Dividend equivalents on the stock awards are factored into the grant date fair value.(3) |

  72. Summary Compensation Table

    The amounts in the "Stock Awards" column include the grant date fair values for time-based restricted stock units and performance stock units. The grant date fair value for the performance stock units was computed based on the target level of performance being achieved. The table below sets forth the grant date fair value of the restricted stock units granted in 2017 and the performance stock units granted in 2017 at the target level of performance and the maximum level of performance.

  73. Summary Compensation Table

    | | Restricted Stock | Performance Stock Units | | | Name | Units Granted | Target | Maximum | | Gail K. Boudreaux | $0 | $2,000,215 | $8,000,860 | | John E. Gallina | $812,643 | $1,816,672 | $7,266,690 | | Brian T. Griffin | $812,643 | $1,816,672 | $7,266,690 | | Peter D. Haytaian | $812,643 | $1,816,672 | $7,266,690 | | Gloria M. McCarthy | $812,770 | $1,816,672 | $7,266,690 | | Joseph R. Swedish | $2,968,894 | $6,637,985 | $26,551,941 |

  74. Summary Compensation Table

    | Anthem, Inc. 2018 Proxy Statement | 51 |

  75. Summary Compensation Table

    | The amounts in the "Option Awards" column reflect the grant date fair value of stock option awards issued during the respective fiscal years pursuant to our equity incentive plans (except disregarding the estimated forfeitures related to service-based vesting conditions) in accordance with ASC Topic 718.(4) |

  76. Summary Compensation Table

    The assumptions used in the calculation of the grant date fair value of the options were as follows:

  77. Summary Compensation Table

    | | Dividend | | Expected | | Risk-Free | | | Yield | Volatility | Life | | Interest Rate | | 2017 | 1.60% | 32.00% | 4.0 | years | 2.31% | | 2016 | 2.00% | 32.00% | 4.1 | years | 1.76% | | 2015 | 1.70% | 31.00% | 3.9 | years | 1.96% |

  78. Summary Compensation Table

    | The amounts in the "Non-Equity Incentive Plan Compensation" column represent cash AIP awards earned during the reported year, but paid in the following year. Based on Company performance, Committee discretion and individual adjustments, the awards earned as a percentage of their respective target awards for 2017 (and paid in 2018) were 152.6% for each of Messrs. Gallina, Haytaian, Griffin and Swedish and 175.0% for Ms. McCarthy.(5) |

  79. Summary Compensation Table

    | The amounts in the "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column reflect the increase in the actuarial present value of the NEO’s benefits under all pension plans established by us between such pension plans’ applicable measurement dates used for financial statement reporting purposes with respect to our audited financial statements. These amounts were determined using discount rate, lump sum interest rate, post-retirement mortality rate and payment distribution assumptions consistent with those used in our financial statements and include amounts which the NEOs may not currently be entitled to receive because such amounts are not vested. We do not provide any above market returns on deferred compensation so no deferred compensation earnings are included.(6) |

  80. Summary Compensation Table

    | The amounts in the "All Other Compensation" column for 2017 include:(7) |

  81. Summary Compensation Table

    | Ÿ | tax equalization payment of $76,835 for Mr. Swedish, to reimburse him for the additional nonresident state income taxes owed outside his home state for time worked in other states, and to offset the increased tax liability to Mr. Swedish as a result of the state income tax reimbursement; |

  82. Summary Compensation Table

    | Ÿ | $1,040 for the cost of an executive physical for Mr. Gallina; |

  83. Summary Compensation Table

    | Ÿ | a supplemental pension benefit contribution to the Deferred Compensation Plan for Ms. McCarthy in the amount of $61,420 in addition to the deferred compensation match shown in the table below; |

  84. Summary Compensation Table

    | Ÿ | cash as part of the Anthem Directed Executive Compensation Plan (“DEC”), as described under “Compensation Plans — Anthem Directed Executive Compensation Plan,” and matching contributions made by us under the applicable 401(k) Plan and deferred compensation plan in 2017 as follows: |

  85. Summary Compensation Table

    | | DEC | | Deferred Comp | | Name | Cash | 401 (k) Match | Match | | Gail K. Boudreaux | $4,500 | $0 | $0 | | John E. Gallina | $30,000 | $10,800 | $43,788 | | Brian T. Griffin | $30,000 | $0 | $0 | | Peter D. Haytaian | $30,000 | $10,800 | $0 | | Gloria M. McCarthy | $30,000 | $10,800 | $49,717 | | Joseph R. Swedish | $54,000 | $10,800 | $160,869 |

  86. Summary Compensation Table

    In addition to the perquisites and benefits described above, the amounts in this column include the following items received by Mr. Swedish in 2017:

  87. Summary Compensation Table

    | Ÿ | a $10,000 matching charitable contribution made by the Anthem Foundation pursuant to the Directors' Matching Gift Program; |

  88. Summary Compensation Table

    | Ÿ | personal security benefits of $2,776; |

  89. Summary Compensation Table

    | Ÿ | $8,493 for the net aggregate incremental cost to us related to aircraft usage in 2017. The incremental cost for the use of corporate aircraft is calculated based on the variable operating costs, including cost per flight hour, fuel charges, catering and landing fees, and does not include fixed operating costs such as management and lease fees. In each case, the travel undertaken by Mr. Swedish was primarily business related, but originated or terminated at a personal location. |

  90. Summary Compensation Table

    | 52 | Anthem, Inc. 2018 Proxy Statement |

  91. Grants of Plan Based Awards

    Grants of Plan Based Awards

  92. Grants of Plan Based Awards

    | | | | | | | | | All Other | All Other | | | | | | | | | | | | Stock | Option | Exercise | Grant Date | | | | Estimated Future Payouts | | | Estimated Future Payouts | | | Awards: # of | Awards: # of | Price of | Fair Value | | | | Under Non Equity Incentive | | | Under Equity Incentive | | | Shares of | Securities | Option | of Stock | | | | Plan Awards ($) (1) | | | Plan Awards (#) | | | Stock or | Underlying | Awards | and Option | | Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | Units (#) | Options (#) | ($/Share) (2) | Awards (3) | | Gail K Boudreaux | | $0 | $0 | $0 | | | | | | | | | | 12/1/2017(4) | | | | 0 | 8,609 | 34,436 | | | | $2,000,215 | | John E. Gallina | | $0 | $768,173 | $1,536,346 | | | | | | | | | | 3/1/2017(5) | | | | | | | 4,867 | | | $812,643 | | | 3/1/2017(6) | | | | | | | | 19,908 | $166.97 | $812,445 | | | 8/1/2017(4) | | | | 0 | 9,732 | 38,928 | | | | $1,816,672 | | Brian T. Griffin | | $0 | $768,169 | $1,536,338 | | | | | | | | | | 3/1/2017(5) | | | | | | | 4,867 | | | $812,643 | | | 3/1/2017(6) | | | | | | | | 19,908 | $166.97 | $812,445 | | | 8/1/2017(4) | | | | 0 | 9,732 | 38,928 | | | | $1,816,672 | | Peter D. Haytaian | | $0 | $768,170 | $1,536,339 | | | | | | | | | | 3/1/2017(5) | | | | | | | 4,867 | | | $812,643 | | | 3/1/2017(6) | | | | | | | | 19,908 | $166.97 | $812,445 | | | 8/1/2017(4) | | | | 0 | 9,732 | 38,928 | | | | $1,816,672 | | Gloria M. McCarthy | | $0 | $758,557 | $1,517,115 | | | | | | | | | | 3/1/2017(5) | | | | | | | 3,744 | | | $625,136 | | | 3/1/2017(6) | | | | | | | | 15,314 | $166.97 | $624,964 | | | 4/3/2017(5) | | | | | | | 1,127 | | | $187,634 | | | 4/3/2017(6) | | | | | | | | 4,606 | $166.49 | $187,430 | | | 8/1/2017(4) | | | | 0 | 9,732 | 38,928 | | | | $1,816,672 | | Joseph R. Swedish | | $0 | $2,695,673 | $5,391,347 | | | | | | | | | | 3/1/2017(5) | | | | 0 | | | 17,781 | | | $2,968,894 | | | 3/1/2017(6) | | | | | | | | 72,744 | $166.97 | $2,968,683 | | | 8/1/2017(4) | | | | | 35,560 | 142,240 | | | | $6,637,985 |

  93. Grants of Plan Based Awards

    | These columns show the range of payouts targeted for 2017 performance under the AIP. The cash payouts for 2017 performance were made in March 2018 and are shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.” The plan includes various measures of our performance, which each have a different weight and independent threshold, target and maximum performance levels. Adjusted earnings per share is weighted at 80%, Consumer Centricity is weighted 10% and Provider Collaboration and Quality of Care are weighted 5% each. Each measure has a payout from 0% to 100% for performance between the threshold and target level and up to 200% for maximum performance. Payouts may be adjusted up or down based on individual performance. The maximum total payment is 200% of target.(1) |

  94. Grants of Plan Based Awards

    | All options were granted at an exercise price equal to the fair market value based on the closing market value of our common stock on the NYSE on the date of grant.(2) |

  95. Grants of Plan Based Awards

    | The grant date fair value of these awards was calculated in accordance with ASC 718. There is no assurance that the value realized by an executive, if any, will be at or near the amounts shown in this column.(3) |

  96. Grants of Plan Based Awards

    | Represents the performance stock units granted to each NEO under the Incentive Plan. The final number of shares received depends on our performance versus our 3-year performance goals, as detailed in the CD&A on page 31. The final number of shares received will be from 0% to 75% of target for performance between the threshold and target level (additional stretch performance is required to receive 100% of target as discussed in the CD&A) and up to 400% of target for maximum performance. These shares vest on March 1, 2020, except the performance stock units granted to Ms. Boudreaux will vest on December 1, 2020. The Compensation Committee will determine the payout, based on our performance against the performance goals, after the end of the 2017-2019 performance period.(4) |

  97. Grants of Plan Based Awards

    | Represents the number of restricted stock units granted to each NEO on the date shown under the Incentive Plan. The shares will vest in equal installments on the first three anniversaries of the grant date.(5) |

  98. Grants of Plan Based Awards

    | Represents the number of stock options granted to each NEO as an annual grant under the Incentive Plan. These shares vest in equal semi-annual installments at the end of each six-month period following the grant date.(6) |

  99. Grants of Plan Based Awards

    | Anthem, Inc. 2018 Proxy Statement | 53 |

  100. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End

  101. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | Stock Awards | | | | | | | | | | | | | Equity | | | | | | | | | Equity | Incentive Plan | | | | | | | | | Incentive Plan | Awards: | | | | | | | | | Awards: | Market or Payout | | | Number of | Number of | | | | Market | Number of | Value of | | | Securities | Securities | | | Number of | Value of | Unearned | Unearned | | | Underlying | Underlying | | | Shares or | Shares or | Shares, Units or | Shares, Units or | | | Unexercised | Unexercised | Option | | Units of Stock | Units of Stock | Other Rights | Other Rights | | | Options | Options | Exercise | Option | That Have Not | That Have | That Have Not | That Have Not | | | Exercisable | Unexercisable | Price | Expiration | Vested | Not Vested | Vested | Vested | | Name | (#) | (#)(1) | ($/Share) | Date | (#)(2) | (#)(3) | (#)(2) | (#)(3) | | Gail K. Boudreaux | | | | | 0 | $0 | 8,609 | $1,937,111 | | John E. Gallina | | | | | 7,483 | $1,683,750 | 18,892 | $4,250,889 | | | 3,948 | 0 | $61.88 | 3/1/20 | | | | | | | 6,466 | 0 | $89.44 | 3/3/21 | | | | | | | 4,812 | 963 | $146.93 | 3/2/25 | | | | | | | 2,940 | 2,943 | $131.80 | 3/1/26 | | | | | | | 4,036 | 4,038 | $132.51 | 6/1/26 | | | | | | | 3,318 | 16,590 | $166.97 | 3/1/27 | | | | | | Brian T. Griffin | | | | | 9,641 | $2,169,321 | 26,987 | $6,072,345 | | | 9,756 | 0 | $61.88 | 3/1/20 | | | | | | | 14,830 | 0 | $89.44 | 3/3/21 | | | | | | | 6,240 | 1,249 | $146.93 | 3/2/25 | | | | | | | 3,582 | 1,792 | $152.78 | 8/3/25 | | | | | | | 12,174 | 12,174 | $131.80 | 3/1/26 | | | | | | | 3,318 | 16,590 | $166.97 | 3/1/27 | | | | | | Peter D. Haytaian | | | | | 10,363 | $2,331,779 | 31,322 | $7,047,763 | | | 1,936 | 0 | $60.15 | 9/28/19 | | | | | | | 3,762 | 0 | $61.88 | 3/1/20 | | | | | | | 11,409 | 0 | $89.44 | 3/3/21 | | | | | | | 10,127 | 0 | $100.77 | 5/1/21 | | | | | | | 18,627 | 3,726 | $146.93 | 3/2/25 | | | | | | | 12,174 | 12,174 | $131.80 | 3/1/26 | | | | | | | 3,318 | 16,590 | $166.97 | 3/1/27 | | | | | | Gloria M. McCarthy | | | | | 9,334 | $2,100,243 | 26,942 | $6,062,219 | | | 13,968 | 2,794 | $146.93 | 3/2/25 | | | | | | | 9,129 | 9,132 | $131.80 | 3/1/26 | | | | | | | 724 | 1,451 | $122.90 | 10/3/26 | | | | | | | 2,552 | 12,762 | $166.97 | 3/1/27 | | | | | | | 767 | 3,839 | $166.49 | 4/3/27 | | | | | | Joseph R. Swedish | | | | | 38,697 | $8,707,212 | 116,000 | $26,101,160 | | | 17,803 | 0 | $67.44 | 4/1/20 | | | | | | | 114,100 | 0 | $89.44 | 3/3/21 | | | | | | | 64,579 | 12,916 | $146.93 | 3/2/25 | | | | | | | 48,193 | 48,195 | $131.80 | 3/1/26 | | | | | | | 12,124 | 60,620 | $166.97 | 3/1/27 | | | | |

  102. Outstanding Equity Awards at Fiscal Year-End

    | The vesting schedule is shown below based on the expiration dates of the above grants:(1) |

  103. Outstanding Equity Awards at Fiscal Year-End

    | Option | | | Expiration | | | Date | Vesting Schedule | | 3/2/25 | All shares vest on March 2, 2018. | | 8/3/25 | Vest in equal installments on February 3, 2018, and August 3, 2018. | | 3/1/26 | Vest in equal installments on March 1, 2018, September 1, 2018 and March 1, 2019. | | 6/1/26 | Vest in equal installments on June 1, 2018, December 1, 2018 and June 1, 2019. | | 10/3/26 | Vest in equal installments on April 3, 2018, October 3, 2018, April 3, 2019 and October 3, 2019. | | 3/1/27 | Vest in equal installments on March 1, 2018, September 1, 2018, March 1, 2019, September 1, 2019 and March 1, 2020. | | 4/3/27 | Vest in equal installments on April 3, 2018, October 3, 2018, April 3, 2019, October 3, 2019 and April 3, 2020. |

  104. Outstanding Equity Awards at Fiscal Year-End

    | 54 | Anthem, Inc. 2018 Proxy Statement |

  105. Outstanding Equity Awards at Fiscal Year-End

    | The amounts in the "Number of Shares or Units of Stock That Have Not Vested" column represent the number of shares of common stock underlying unvested restricted stock units granted in 2015, 2016 and 2017.(2) |

  106. Outstanding Equity Awards at Fiscal Year-End

    The amounts in the "Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested" column represent the target number of performance shares granted to our Named Executive Officers in 2015, 2016 and 2017. The final number of shares earned will depend on our performance versus our performance goals over a three year period, as detailed in the CD&A beginning on page 31. The payout of the 2015-2017 PSU Cycle is described on page 43, and resulted in the following PSUs, adjusted for performance, being earned at 159.7% of target: Mr. Gallina – 4,211; Mr. Griffin –9,381; Mr. Haytaian – 16,304; Ms. McCarthy – 12,228; and Mr. Swedish – 56,519. These unvested stock grants are detailed by vesting date in the table below.

  107. Outstanding Equity Awards at Fiscal Year-End

    | | | Restricted | Performance Stock | Performance Stock | Performance Stock | | Name | Vesting Date | Stock Units | Units Granted in 2015 | Units Granted in 2016 | Units Granted in 2017 | | Gail K. Boudreaux | 12/1/2020 | | — | — | 8,609 | | John E. Gallina | 3/1/2018 | 2,081 | — | — | — | | | 3/2/2018 | 440 | 2,637 | — | — | | | 6/1/2018 | 629 | — | — | — | | | 3/1/2019 | 2,081 | — | 2,750 | — | | | 6/1/2019 | 629 | — | 3,773 | — | | | 3/1/2020 | 1,623 | — | — | 9,732 | | Brian T. Griffin | 3/1/2018 | 3,519 | — | — | — | | | 3/2/2018 | 570 | 3,420 | — | — | | | 8/3/2018 | 410 | 2,454 | — | — | | | 3/1/2019 | 3,519 | — | 11,381 | — | | | 3/1/2020 | 1,623 | — | — | 9,732 | | Peter D. Haytaian | 3/1/2018 | 3,519 | — | — | — | | | 3/2/2018 | 1,702 | 10,209 | — | — | | | 3/1/2019 | 3,519 | — | 11,381 | — | | | 3/1/2020 | 1,623 | — | — | 9,732 | | Gloria M. McCarthy | 3/1/2018 | 2,671 | — | — | — | | | 3/2/2018 | 1,277 | 7,657 | — | — | | | 4/3/2018 | 375 | — | — | — | | | 10/3/2019 | 170 | — | — | — | | | 3/1/2019 | 2,671 | — | 8,536 | — | | | 4/3/2019 | 376 | — | — | — | | | 10/3/2019 | 170 | — | 1,017 | — | | | 3/1/2020 | 1,248 | — | — | 9,732 | | | 4/3/2020 | 376 | — | — | — | | Joseph R. Swedish | 3/1/2018 | 13,435 | — | — | — | | | 3/2/2018 | 5,899 | 35,391 | — | — | | | 3/1/2019 | 13,436 | — | 45,049 | — | | | 3/1/2020 | 5,927 | — | — | 35,560 |

  108. Outstanding Equity Awards at Fiscal Year-End

    | These amounts are calculated by multiplying $225.01, the closing price of our common stock on December 29, 2017, by the applicable number of shares.(3) |

  109. Outstanding Equity Awards at Fiscal Year-End

    | Anthem, Inc. 2018 Proxy Statement | 55 |

  110. Option Exercises and Stock Vested in 2017

    Option Exercises and Stock Vested in 2017

  111. Option Exercises and Stock Vested in 2017

    | | Option Awards | | Stock Awards(1) | | | | Number of Shares | Value | Number of Shares | Value | | | Acquired on Exercise | Realized Upon Exercise | Acquired on Vesting | Realized On Vesting | | Name | (#) | ($) | (#) | ($) (2) | | Gail K. Boudreaux | 0 | $0 | 0 | $0 | | John E. Gallina | 0 | $0 | 4,648 | $812,091 | | Brian T. Griffin | 0 | $0 | 12,192 | $2,113,051 | | Peter D. Haytaian | 0 | $0 | 10,529 | $1,854,397 | | Gloria M. McCarthy | 14,271 | $1,097,901 | 11,128 | $1,920,431 | | Joseph R. Swedish | 84,500 | $11,811,737 | 50,118 | $8,627,770 |

  112. Option Exercises and Stock Vested in 2017

    | The table includes the following shares:(1) |

  113. Option Exercises and Stock Vested in 2017

    | Ÿ | Shares that vested pursuant to the 2014 annual grant: Mr. Gallina – 792 restricted stock units and 2,329 performance stock units; Mr. Griffin – 1,212 restricted stock units and 3,562 performance stock units; Mr. Haytaian – 932 restricted stock units and 2,739 performance stock units; Ms. McCarthy – 2,097 restricted stock units and 6,164 performance stock units; Mr. Swedish – 9,318 restricted stock units and 27,393 performance stock units. |

  114. Option Exercises and Stock Vested in 2017

    | Ÿ | Shares that vested pursuant to the 2015 annual grant: Mr. Gallina – 440 restricted stock units; Mr. Griffin – 570 restricted stock units; Mr. Haytaian – 1,702 restricted stock units; Ms. McCarthy – 1,276 restricted stock units; Mr. Swedish – 5,899 restricted stock units. |

  115. Option Exercises and Stock Vested in 2017

    | Ÿ | Shares that vested pursuant to the 2016 annual grant: Mr. Gallina – 458 restricted stock units; Mr. Griffin – 1,897 restricted stock units; Mr. Haytaian – 1,897 restricted stock units; Ms. McCarthy – 1,422 restricted stock units; Mr. Swedish – 7,508 restricted stock units. |

  116. Option Exercises and Stock Vested in 2017

    | Ÿ | Mr. Griffin had 4,542 restricted stock units vested pursuant to a 2014 promotion grant and 409 restricted stock units vested pursuant to a 2015 promotion grant. |

  117. Option Exercises and Stock Vested in 2017

    | Ÿ | Mr. Haytaian had 827 restricted stock units and 2,432 performance stock units vested pursuant to a May 2014 promotion grant. |

  118. Option Exercises and Stock Vested in 2017

    | Ÿ | Ms. McCarthy had 169 restricted stock units vested pursuant to a 2016 promotion grant. |

  119. Option Exercises and Stock Vested in 2017

    | Ÿ | Mr. Gallina had 629 restricted stock units vested pursuant to a 2016 promotion grant. |

  120. Option Exercises and Stock Vested in 2017

    | Amounts are calculated by multiplying the number of shares vesting by the market value of our common stock on the vesting date. The amounts also include dividend equivalents, if any, paid upon vesting.(2) |

  121. Pension Benefits

    Pension Benefits The table below shows the present value of accumulated benefits payable to each of our NEOs, including the number of years of service credited to each such NEO, under each of the specified plans, computed as of December 31, 2017, the same pension plan measurement date used for financial reporting purposes with respect to our 2017 audited financial statements. Information regarding the specified plans can be found under the heading “Compensation Plans” beginning on page 61.

  122. Pension Benefits

    | | | Number of | | Payments | | | | Years of | Present Value of | During the | | | | Credited | Accumulated | Last | | Name | Plan Name | Service (#) | Benefit ($) (1) | Fiscal Year ($) | | Gloria M. McCarthy | Anthem Cash Balance Plan B | 43.58 | $1,260,151 | — | | | Empire Blue Cross and Blue Shield Supplemental Cash Balance Pension Plan | 43.58 | $2,124,681 | — | | | Total | | $3,384,832 | — | | John E. Gallina | Anthem Cash Balance Plan A(2) | 11.58 | $188,812 | — | | | Total | | $188,812 | — |

  123. Pension Benefits

    | Assumptions used in the calculation of the amounts in this column are included in Note 10 to our audited consolidated financial statements for the year ended December 31, 2017 included in our Annual Report on Form 10-K filed with the SEC on February 21, 2018.(1) |

  124. Pension Benefits

    | The NEOs years of actual service are greater than the credited service, because the predecessor plans were frozen for certain participants. There is no resulting increase in benefits, because the NEO did not meet the Rule of 65.(2) |

  125. Pension Benefits

    | 56 | Anthem, Inc. 2018 Proxy Statement |

  126. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation

  127. Nonqualified Deferred Compensation

    | | Executive | Anthem | Aggregated | | Aggregated | | | Contributions in | Contributions in | Earnings in | Aggregated | Balance at | | | Last Fiscal | Last Fiscal | Last Fiscal | Withdrawals/ | Last Fiscal | | Name | Year (1) | Year (2) | Year | Distributions | Year End (3) | | Gail K. Boudreaux | — | — | — | — | — | | John E. Gallina | $161,119 | $43,788 | $210,569 | — | $1,595,264 | | Brian T. Griffin | — | — | — | — | — | | Peter D. Haytaian | — | — | — | — | — | | Gloria M. McCarthy | $232,476 | $111,137 | $790,161 | — | $6,366,531 | | Joseph R. Swedish | $196,836 | $160,868 | $42,848 | $(275,781) | $394,702 |

  128. Nonqualified Deferred Compensation

    | These amounts are also included in the "Salary" and "Non-Equity Incentive Plan Compensation" columns of the Summary Compensation Table.(1) |

  129. Nonqualified Deferred Compensation

    | These amounts are also included in the "All Other Compensation" column of the Summary Compensation Table.(2) |

  130. Nonqualified Deferred Compensation

    | Amounts in this column reflect all nonqualified deferred compensation for each NEO. Portions of such amounts are included in the "Salary", "Non-Equity Incentive Plan Compensation" and "All Other Compensation" columns of the Summary Compensation Table for all applicable years for each NEO.(3) |

  131. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The following table describes the potential additional payments and benefits under our compensation and benefit plans and arrangements to which the NEOs would be entitled upon termination of employment. The NEOs would also be entitled to vested benefits and generally available benefits under our various plans and arrangements, as discussed after the following table. The following includes the various types of circumstances that would trigger payments and benefits under plans, agreements and arrangements currently in effect, but it is always possible that different arrangements could be negotiated in connection with an actual termination of employment or change in control. Further, the amounts shown are estimates and are based on numerous assumptions, including that employment terminated on December 29, 2017 (i.e., the last business day in 2017 on which securities were traded on the NYSE). Therefore, the actual amounts of the payments and benefits that would be received by the NEOs could be more or less than the amounts set forth below, and can only be determined at the time of an actual termination of employment event.

  132. Potential Payments Upon Termination or Change in Control

    | Anthem, Inc. 2018 Proxy Statement | 57 |

  133. Potential Payments Upon Termination or Change in Control

    | | | | Acceleration or | | | | Total Post | | | | AIP Award for | Continuation of | Continuation of | Continuation of | Post | Termination | | | Cash | Year of | Equity | Executive | Health & Life | Termination | Payment & | | | Severance | Termination | Awards (1) | Benefits | Coverage (2) | Benefits (3) | Benefit Value | | Gail K. Boudreaux | | | | | | | | | Company initiated (not for cause) or good reason termination by employee following a change in control(4) | $12,012,000 | $0 | $1,937,111 | $162,000 | $29,576 | $14,210 | $14,154,897 | | Company initiated (not for cause) or good reason termination by employee(5) | $7,700,000 | $0 | $1,937,111 | $108,000 | $19,717 | $14,210 | $9,779,038 | | Retirement(6) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Resignation(7) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Death | $0 | $0 | $1,937,111 | $0 | $0 | $0 | $1,937,111 | | Long Term Disability | $0 | $0 | $1,937,111 | $0 | $0 | $0 | $1,937,111 | | For Cause | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | John E. Gallina | | | | | | | | | Company initiated (not for cause) or good reason termination by employee following a change in control(4) | $4,820,400 | $1,172,232 | $7,620,545 | $90,000 | $29,576 | $14,210 | $13,746,963 | | Company initiated (not for cause) or good reason termination by employee(5) | $3,090,000 | $1,172,232 | $7,620,545 | $60,000 | $19,717 | $14,210 | $11,976,704 | | Retirement(6) | $0 | $1,172,232 | $7,620,545 | $0 | $0 | $0 | $8,792,777 | | Resignation(7) | $0 | $1,172,232 | $7,620,545 | $0 | $0 | $0 | $8,792,777 | | Death | $0 | $1,172,232 | $7,620,545 | $0 | $0 | $0 | $8,792,777 | | Long Term Disability | $0 | $1,172,232 | $7,620,545 | $0 | $0 | $0 | $8,792,777 | | For Cause | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Brian T. Griffin | | | | | | | | | Company initiated (not for cause) or good reason termination by employee following a change in control(4) | $4,820,400 | $1,172,226 | $10,566,247 | $90,000 | $29,576 | $14,210 | $16,692,659 | | Company initiated (not for cause) or good reason termination by employee(5) | $3,090,000 | $1,172,226 | $0 | $60,000 | $19,717 | $14,210 | $4,356,153 | | Retirement(6) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Resignation(7) | $0 | $1,172,226 | $0 | $0 | $0 | $0 | $1,172,226 | | Death | $0 | $1,172,226 | $10,566,247 | $0 | $0 | $0 | $11,738,473 | | Long Term Disability | $0 | $1,172,226 | $10,566,247 | $0 | $0 | $0 | $11,738,473 | | For Cause | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Peter D. Haytaian | | | | | | | | | Company initiated (not for cause) or good reason termination by employee following a change in control(4) | $4,820,400 | $1,172,227 | $11,768,090 | $90,000 | $29,576 | $14,210 | $17,894,503 | | Company initiated (not for cause) or good reason termination by employee(5) | $3,090,000 | $1,172,227 | $0 | $60,000 | $19,717 | $14,210 | $4,356,154 | | Retirement(6) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Resignation(7) | $0 | $1,172,227 | $0 | $0 | $0 | $0 | $1,172,227 | | Death | $0 | $1,172,227 | $11,768,090 | $0 | $0 | $0 | $12,940,317 | | Long Term Disability | $0 | $1,172,227 | $11,768,090 | $0 | $0 | $0 | $12,940,317 | | For Cause | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Gloria M. McCarthy | | | | | | | | | Company initiated (not for cause) or good reason termination by employee following a change in control(4) | $5,052,150 | $1,327,476 | $10,345,338 | $90,000 | $29,576 | $14,210 | $16,858,750 | | Company initiated (not for cause) or good reason termination by employee(5) | $3,090,000 | $1,327,476 | $10,345,338 | $60,000 | $19,717 | $14,210 | $14,856,741 | | Retirement(6) | $0 | $1,327,476 | $10,345,338 | $0 | $0 | $0 | $11,672,814 | | Resignation(7) | $0 | $1,327,476 | $10,345,338 | $0 | $0 | $0 | $11,672,814 | | Death | $0 | $1,327,476 | $10,345,338 | $0 | $0 | $0 | $11,672,814 | | Long Term Disability | $0 | $1,327,476 | $10,345,338 | $0 | $0 | $0 | $11,672,814 | | For Cause | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Joseph R. Swedish | | | | | | | | | Company initiated (not for cause) or good reason termination by employee following a change in control(4) | $13,299,000 | $4,113,597 | $43,827,494 | $162,000 | $29,576 | $14,210 | $61,445,877 | | Company initiated (not for cause) or good reason termination by employee(5) | $8,525,000 | $4,113,597 | $43,827,494 | $108,000 | $19,717 | $14,210 | $56,608,018 | | Retirement(6) | $0 | $4,113,597 | $43,827,494 | $0 | $0 | $0 | $47,941,091 | | Resignation(7) | $0 | $4,113,597 | $43,827,494 | $0 | $0 | $0 | $47,941,091 | | Death | $0 | $4,113,597 | $43,827,494 | $0 | $0 | $0 | $47,941,091 | | Long Term Disability | $0 | $4,113,597 | $43,827,494 | $0 | $0 | $0 | $47,941,091 | | For Cause | $0 | $0 | $0 | $0 | $0 | $0 | $0 |

  134. Potential Payments Upon Termination or Change in Control

    | 58 | Anthem, Inc. 2018 Proxy Statement |

  135. Potential Payments Upon Termination or Change in Control

    | For all NEOs, all unvested equity awards vest immediately upon termination following a change in control or due to death or long-term disability. Upon an eligible retirement, unvested equity awards generally continue to vest on the existing vesting schedule. Mr. Swedish, Ms. McCarthy, and Mr. Gallina are currently retirement eligible under the Incentive Plan. The amounts in this column represent (1) for stock option awards, the amount that could be realized from the exercise of all unvested stock options held by the NEO that would immediately vest or continue to vest upon the indicated termination, which is calculated by subtracting the exercise price of the option from the market price of a share of our common stock on December 29, 2017, and multiplying the result by the total number of shares that could be acquired on exercise at that exercise price, and (2) for restricted stock units and performance stock units, the value of the unvested restricted stock units held by the NEO that would vest upon the indicated termination, which is calculated by multiplying the number of such units by the market price of a share of our common stock on December 29, 2017.(1) |

  136. Potential Payments Upon Termination or Change in Control

    | Estimate based on the average Company cost per employee for these coverages.(2) |

  137. Potential Payments Upon Termination or Change in Control

    | Represents outplacement services available under our policy.(3) |

  138. Potential Payments Upon Termination or Change in Control

    | These amounts apply to a termination following a change in control that is a Company initiated termination not for cause, or a good reason termination by the employee, as defined in our Executive Agreement Plan. All current NEOs are participants in the Executive Agreement Plan which provides the following benefits for this termination event: (1) a severance benefit of 300% of annual base salary plus target AIP award, (2) a payment equal to 4% of this amount to cover the value of the Company match under the 401(k) Plan and supplemental plan on this payment for all NEOs except Ms. McCarthy, who is eligible for a payment equal to 9% of this amount to cover the value of the Company match under the 401(k) Plan, pension contribution and supplemental plan contributions on this payment, (3) an annual AIP award equal to the greater of the annual target AIP award or AIP award earned under the normal terms of the AIP plan for the year, (4) a payment equal to 300% of the annual value of executive benefits, and (5) a three year continuation of health and life insurance coverage.(4) |

  139. Potential Payments Upon Termination or Change in Control

    | Executive is a participant in our Executive Agreement Plan, which provides the following benefits for this termination event: (1) a severance benefit of 200% of annual base salary plus target AIP award, (2) a two year continuation of health and life insurance coverage, and (3) a payment equal to 200% of the annual value of executive benefits. In accordance with Ms. Boudreaux’s employment agreement, her sign-on PSU grant shall continue to vest in accordance with the terms of the grant, subject to the achievement of applicable performance vesting conditions, upon the occurrence of this termination event.(5) |

  140. Potential Payments Upon Termination or Change in Control

    | Mr. Swedish, Ms. McCarthy, and Mr. Gallina are eligible for retirement treatment under the AIP and Incentive Plan. No other NEOs are currently retirement eligible.(6) |

  141. Potential Payments Upon Termination or Change in Control

    | Participants in the AIP plan are eligible for a bonus payment if they work through the end of the plan year, which was December 29 in 2017. Since this table assumes a resignation on December 29, a full AIP payout is earned for all NEOs except Ms. Boudreaux. If the executive had resigned earlier in 2017, he or she would not be eligible for a bonus payment under the AIP.(7) |

  142. Potential Payments Upon Termination or Change in Control

    The NEOs would also be entitled to the vested benefits included in the Outstanding Equity Awards at Fiscal Year-End table, the Nonqualified Deferred Compensation table and the Pension Benefits table. In addition, the amounts shown in the table above do not include payments and benefits to the extent they are provided on a non-discriminatory basis to salaried employees generally upon termination of employment. These include accrued salary and vacation pay, health benefits and distribution of account balances under the 401(k) Plan.

  143. Potential Payments Upon Termination or Change in Control

    | Anthem, Inc. 2018 Proxy Statement | 59 |

  144. CEO Pay Ratio

    CEO Pay Ratio We are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of our Chief Executive Officer (CEO). For purposes of this disclosure and to reflect the CEO transition discussed earlier in the CD&A, we have combined the compensation amounts we paid to each of Mr. Swedish and Ms. Boudreaux for the time he and she respectively served as our CEO during 2017. For 2017:

  145. CEO Pay Ratio

    | · | The annual total compensation of the median employee of our Company, as described below, was $70,867. |

  146. CEO Pay Ratio

    | · | The combined annual total compensation of our previous CEO, Mr. Swedish, and our current CEO, Ms. Boudreaux, as reported in the Summary Compensation Table included on page 51 of this proxy statement (and in the case of Mr. Swedish only, pro-rated for the 46 weeks of 2017 that he served as our CEO) was $18,578,802. |

  147. CEO Pay Ratio

    | · | Based on this information for 2017, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 262:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K. |

  148. CEO Pay Ratio

    As of December 31, 2017, our employee population including all full-time, part-time and temporary workers, consisted of approximately 57,404 individuals. We elected to exclude all of our employees in India (2 employees) and Ireland (120 employees) from our determination of the median employee. The median employee was selected from an adjusted employee population of 57,281 employees in the United States (excluding our CEO), who were employed on December 31, 2017. To identify the median employee, as well as determine the annual total compensation of the median employee, we used the following methodology and consistently applied material assumptions, adjustments and estimates:

  149. CEO Pay Ratio

    | · | We identified the median compensated employee based on payroll data as of December 31, 2017. |

  150. CEO Pay Ratio

    | · | We compared the payroll data for the 57,281 employees described above using a compensation measure consisting of total base pay related wages paid during 2017. Base pay related wages include the amount of base salary the employee received during the year and all other pay elements related to base pay including, but not limited to holiday pay, paid time off, overtime and shift differentials. We did not include cash bonuses, commissions, equity grants or any adjustment for the value of benefits provided. |

  151. CEO Pay Ratio

    | · | Based on the total base pay related wages of each employee, we identified a cohort of 101 employees, consisting of the median employee and the 50 employees above and the 50 employees below the median base pay value. After evaluating the pay characteristics of each employee in the cohort, we removed employees who appeared to have anomalous pay characteristics (such as a hire date during the year, grandfathered in a pension benefit not offered to new hires, or recipient of a one-time bonus that is not expected in future years) that could significantly distort the pay ratio calculation. |

  152. CEO Pay Ratio

    | · | We then selected the employee with total base pay related wages closest to the median compensated employee who did not have anomalous pay characteristics and calculated that employee’s annual total compensation. We determined annual total compensation, including any perquisites and other benefits, in the same manner that we determine the annual total compensation of our named executive officers for purposes of the Summary Compensation Table disclosed above. |

  153. CEO Pay Ratio

    The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  154. CEO Pay Ratio

    | 60 | Anthem, Inc. 2018 Proxy Statement |

  155. CEO Pay Ratio

    Compensation Plans

  156. Anthem, Inc. Comprehensive Non-Qualified Deferred Compensation Plan

    Anthem, Inc. Comprehensive Non-Qualified Deferred Compensation Plan Eligible participants may begin participation in the Anthem, Inc. Comprehensive Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) once the participant reaches the maximum contribution amount for the 401(k) Plan. An eligible participant may defer a percentage not to exceed 60% of his or her eligible earnings and may defer a percentage of his or her award under the AIP, but only to the extent that his or her aggregate base salary and AIP award deferral does not exceed 80% of his or her compensation, into the Deferred Compensation Plan. Those contributions were matched by us at the same rate as they would have been in the 401(k) Plan. The annual incentive deferral option allows an additional deferral of amounts under the AIP and is matched at the same rate as the rate for the 401(k) Plan. Investment options for the Deferred Compensation Plan mirror those for the 401(k) Plan other than our common stock and the Vanguard Brokerage Option are not available. The frequency and manner of changing investment options also mirrors the 401(k) Plan. The Deferred Compensation Plan includes a supplemental pension benefit contribution program which in general credits eligible participants quarterly with a contribution equal to the difference between the amount which was actually credited to his or her account under the Anthem Cash Balance Plan (the “Pension Plan”) and the amount which would have been credited to his or her account had the amount not been limited as a result of Section 401(a)(17) or Section 415 of the Tax Code. None of the NEOs received contributions under either the Pension Plan or the supplemental pension provision of the Deferred Compensation Plan except Ms. McCarthy. Account balances in the Deferred Compensation Plan are payable at the election of the participant in a single lump sum or installments.