Allstate (ALL)

Executive Compensation Philosophy

        Our compensation philosophy follows our belief that total compensation for executives should vary with Allstate's performance in achieving its strategic near and long-term business goals. Long-term compensation opportunities should be closely aligned with shareholders' interests to grow long-term value in Allstate stock.

        While we believe it is appropriate to extend a "pay for performance" philosophy to all management-level employees, the executive compensation program is built on a recognition that a more significant amount of compensation should be at risk for executives who bear higher levels of responsibility for Allstate's performance. At the same time, we also believe that the design of our executive compensation program for executives who bear higher levels of responsibility should include incentive compensation components that are based on multi-year periods of company performance to take into account the fact that our business, by its nature, is subject to volatile periods of performance that heighten the challenges for company executives to successfully execute company strategies in any one period.

        To assist us in maintaining an executive compensation program that meets our philosophy, we directly retain the services of an outside compensation consultant. Part of the services we receive from our compensation consultant is a competitive assessment that benchmarks Allstate's executive pay levels, practices, overall program and internal compensation philosophy with a competitive peer group of large U.S. public insurance companies. We use this competitive assessment as a tool to set total target compensation levels at between the 60^th and 65^th percentiles of this competitive peer group.

Executive Compensation Philosophy

        Our compensation philosophy follows our belief that total compensation should vary with Allstate's performance in achieving its strategic near- and long-term business goals. Long-term compensation opportunities should be closely aligned with shareholders' interests to grow long-term value in Allstate stock. While we believe this philosophy extends to all levels of Allstate's compensation practices, the executive compensation program is built on a recognition that a more significant amount of compensation should be at risk for executives who bear higher levels of responsibility for Allstate's performance.

        To assist us in maintaining an executive compensation program that meets our philosophy, we directly retain the services of an outside compensation consultant to conduct a competitive review of Allstate's executive compensation program. An important part of the process includes a competitive assessment that benchmarks Allstate's executive pay levels, practices, overall program and internal compensation philosophy with a competitive peer group of large U.S. public insurance companies. We set total target compensation at between the 60^th and 65th percentile of this peer group.