Allstate (ALL)

Salary

        Executive salaries are set by the Board based on the recommendations of the Compensation and Succession Committee.

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In recommending executive salary levels, the Committee uses the 50^th percentile of our peer insurance companies as a guideline to align Allstate's pay philosophy for competitive positioning in the market for executive talent.



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The average enterprise-wide merit increase and any promotional increases are based on market data of U.S. industry and the insurance industry and are set at levels intended to be competitive.



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An annual merit increase for the CEO is based on an evaluation of his performance by the Committee and the Board. Annual merit increases for the named executives other than the CEO are based on evaluations of their performance by the CEO, the Committee, and the Board, using the average enterprise-wide merit increase as a guideline.



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Promotional increases are based on the increased responsibilities of the new position, and the skills and experience of the executive being promoted. Promotional increases are determined by the Committee and the Board for the CEO position. For other senior executive positions, promotional increases are determined by the Committee, the Board and the CEO.



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Mr. Liddy has not received any merit or promotional salary increases since Mr. Wilson succeeded him as CEO.

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Salary

        Allstate provides salaries for our executives that are intended to keep us competitive in the market for executive talent. Executive salaries are set by the Board based on the recommendations of the

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Compensation and Succession Committee. In recommending executive salary levels, the Committee uses the 50^th percentile of our peer insurance companies as a guideline. This practice reflects our belief in providing competitive levels of compensation for competitive levels of performance. However, the Committee recommends salaries in excess of the 50^th percentile for the senior executives most crucial to Allstate's success. The Committee and the Board review the salaries of the named executives on an annual basis and at the time of any promotion or change in responsibilities. The salary increase plan is set each year. The salary increase plan includes both merit and promotional increases. The average enterprise-wide merit increase and any promotional increases are based on market data of U.S. industry and the insurance industry and are set at levels intended to be competitive. Annual merit increases for the named executives are based on evaluations of their performance by the chief executive officer, the Committee, and the Board, using the enterprise-wide merit increase. Promotional increases are based on the increased responsibilities of the new position, and the skills and experience of the executive being promoted, as evaluated by the chief executive officer, the Committee, and the Board.