This excerpt taken from the ALL DEF 14A filed Apr 2, 2008.
Other Elements of Compensation
To remain competitive with other employers and to attract, retain, and motivate highly talented executives and other employees, we provide the benefits listed in the following table. We do not provide executives with separate dining or other facilities, or individually owned life insurance policies, and we do
not maintain real property for the exclusive personal use or enjoyment by executives. Our Board encourages the chairman and CEO to use our corporate aircraft in order to deal with job responsibilities and time constraints and to avoid the risks of commercial air travel.
Each named executive officer participates in two different defined benefit pension plans. The Allstate Retirement Plan (ARP) is a tax qualified defined benefit pension plan available to all of our regular full-time and regular part-time employees who meet certain age and service requirements. The purpose of the ARP is to provide an assured retirement income related to an employee's level of compensation and length of service at no cost to the employee. This benefit can supplement other sources of income such as our 401(k) plan, social security, personal savings, and other assets. As the ARP is a tax qualified plan, federal tax law places limits on (1) the amount of an individual's compensation that can be used to calculate plan benefits and (2) the total amount of benefits payable to a participant under the plan on an annual basis. These limits may result in a lower benefit under the ARP than would have been payable if the limits did not exist for certain of our employees. Therefore, the Allstate Insurance Company Supplemental Retirement Income Plan (SRIP) was created for the purpose of providing ARP-eligible employees whose compensation or benefit amount exceeds the federal limits with an additional defined benefit in an amount equal to what would have been payable under the ARP if the federal limits described above did not exist.
In addition to the ARP and SRIP, Mr. Liddy has a supplemental nonqualified retirement benefit agreement which provides for additional years of vesting and credited service. Mr. Liddy was provided with a pension enhancement to compensate for retirement benefits that he was foregoing in changing employers.
Change-in-Control and Post-Termination Benefits
We do not view the change-in-control benefits or post-termination benefits as additional elements of compensation due to the fact that a change-in-control or other triggering event may never occur. However, the use and structure of our changein-control and post-termination plans are consistent with our compensation objectives to attract, motivate and retain highly talented executives. In addition, we believe the change-in-control arrangements preserve morale and productivity, provide a long-term commitment to job stability and financial security, and encourage retention in the face of the possibly disruptive impact of an actual or potential change-in-control of Allstate. Our change-in-control policies ensure that the interests of our executives will be materially consistent with the interests of our shareholders when considering corporate transactions.
Our change-in-control arrangements are intended to reassure executives that they will receive previously deferred compensation and that prior equity grants will be honored because decisions as to whether to provide these amounts are not left to management and the directors in place after a change-in-control. We also provide certain protections for annual and long-term incentive awards, and benefits if an executive's employment is terminated within a specific period after a change-in-control. These benefits following a change-in-control are intended to provide executives with sufficient incentive to stay with Allstate in the event of a change-in-control, and provide executives with some measure of job and financial security so that they are not distracted from working on behalf of stockholders prior to or after a change-in-control. The change-in-control and post-termination arrangements which are described in the "Potential Payments as a Result of Termination or Change-in-Control" section are not provided exclusively to the named executives. With the exception of the pension benefit enhancement for Mr. Liddy, a larger group of management employees, and with respect to certain cash severance benefits all regular full-time and regular part-time employees, are eligible to receive the post-termination benefits described in this section.
In 2007, the Compensation and Succession Committee directed its executive compensation consultant to review the change-in-control arrangements afforded Allstate's officers relative to competitive practice, generally and within the industry. The resulting analysis showed that Allstate's arrangements were generally consistent with market practice. However, the analysis did identify certain benefits, related to potential payments upon change-in-control, that were not aligned with current market practice. In addition, Allstate identified various provisions of the change-in-control agreements that required revision to comply with new Internal Revenue Service regulations. In November 2007, the Committee approved amended agreements effective December 31, 2007, which Messrs. Ruebenson, Simonson and Wilson executed on or after February 26, 2008. The following is a summary of the more significant changes:
Both Mr. Hale and Mr. Liddy elected to terminate their change-in-control agreements on February 26, 2008 in light of their retirements on March 31, 2008 and April 30, 2008, respectively.
This excerpt taken from the ALL DEF 14A filed Apr 2, 2007.
Other Elements of Compensation
To remain competitive with other employers and to attract, retain, and motivate highly talented executives, we provide the retirement benefits described on pages 38 - 42 and we make health and welfare benefits such as medical, dental, vision, disability, group life, accidental death and group legal insurance available to all employees through a cafeteria plan without regard to the employees' specific positions.
For the named executives, we provide or pay for the use of cell phones, tax preparation services, financial planning services, ground transportation, and tax gross-ups in limited circumstances. We also provide and pay for physicals as we believe the continued good health of these executives is vital to Allstate and a business necessity. We do not provide executives with separate dining or other facilities, country club memberships, special medical insurance coverage, or individually owned life insurance policies, and we do not maintain real property for the exclusive personal use or enjoyment by executives. Our Board encourages the chairman and chief executive officer to use our corporate aircraft in order to deal with emergency and special situations and to avoid the risks of commercial air travel. In limited circumstances approved by the chief executive officer, members of our senior management team are permitted to use our corporate aircraft for personal purposes.