DEF 14A: Lincoln National Corporation Sets Date for 2024 Annual Shareholder Meeting, Outlines Key Proposals

Lincoln National Corporation's proxy statement details proposals for the upcoming virtual annual meeting, including director elections, auditor ratification, executive compensation, and an incentive plan amendment.

Summary

• Lincoln National Corporation will hold its 2024 Annual Meeting of Shareholders virtually on May 23, 2024.
• Shareholders of record as of March 18, 2024, are entitled to vote.
• The meeting agenda includes the election of twelve directors, ratification of Ernst & Young LLP as the independent accounting firm, an advisory vote on executive compensation, and approval of an amendment to the 2020 Incentive Compensation Plan.
• A shareholder proposal regarding an independent board chairman will also be considered.
• The Board recommends voting for the election of directors, ratification of the auditor, approval of executive compensation, and approval of the incentive plan amendment.
• The Board recommends voting against the shareholder proposal regarding an independent board chairman.
• The proxy statement highlights the company's governance practices, executive compensation philosophy, and shareholder engagement efforts.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While there are positive aspects like the RBC ratio and growth in annuities, there are also negative aspects like declining life insurance sales and below-expectation results in retirement plan services. The overall tone is cautiously optimistic, focusing on strategic repositioning for long-term growth.

Positives

• The company's risk-based capital (RBC) ratio finished the year at 407%, above the target of 400%.
• Annuities delivered 8% growth in sales year over year.
• Group Protection delivered record full-year earnings and strong top-line growth, with margin growing over 400 basis points year over year to 5.5%, excluding the benefit from the annual assumption review.
• Retirement Plan Services achieved its ninth consecutive year of positive flows, surpassing $100 billion in end-of-period account balances for the first time.
• The 2023 Annual Incentive Program (AIP) paid out above target, primarily as a result of the above-target performance of the Income from Operations per Share goal.

Negatives

• Life Insurance sales declined for the full year, driven by the strategic realignment to more accumulation products.
• Retirement Plan Services full-year results were below expectations.
• The 2021-2023 Long-Term Incentive (LTI) paid out at 0%, with all of the PSAs awarded under the 2021-2023 Long-Term Incentive Program forfeited.

Risks

• The document mentions operational, financial, legal and regulatory, cybersecurity, compensation, strategic and competitive risks.
• The document mentions environmental risks, including climate risk.
• The document mentions the risk of not achieving diversity, equity and inclusion goals.

Future Outlook

The company is repositioning for sustainable long-term growth by strengthening the balance sheet, driving profitable organic growth, positioning the Group Protection business, and building the leadership team.

Management Comments

• 2023 was a pivotal year for Lincoln as we began repositioning the company for sustainable long-term growth.
• Throughout the year, we took the necessary steps and have made substantial progress as we advanced on our key initiatives.

Industry Context

The document references peer companies for compensation benchmarking and TSR performance, indicating an awareness of industry standards and competition for talent and shareholder value.

Comparison to Industry Standards

• The document uses a compensation peer group derived from the Willis Towers Watson 2022 Diversified Insurance Study of Executive Compensation.
• The compensation peer group includes Aflac, Allianz Life Insurance, Brighthouse Financial, CNO Financial, Equitable Holdings, Genworth Financial, John Hancock, MetLife, Principal Financial, Protective Life Insurance, Prudential Financial, Sun Life Financial, Transamerica, Unum Group, and Voya Financial.
• The document compares the company's TSR to the S&P Life & Health Insurance Index.
• The document compares the company's performance to the top 15 competitors in its core businesses (Annuities, Life Insurance, Group Protection, Retirement Plan Services).

Management Changes

Corporate Governance

Related Party Transactions

• Our subsidiaries have agreements with subsidiaries of BlackRock to distribute, and include in certain of our products, BlackRock funds.
• BlackRock provides sub-advisory and investment management services to our subsidiaries.
• Our subsidiaries have agreements with subsidiaries of Vanguard to distribute certain Vanguard products, including mutual funds.
• Our subsidiaries have agreements with subsidiaries of State Street for the provision of various services.
• Ms. Coopers son, Hanan Shandler, has been employed by the Company since 2018 and currently serves in the role of Consultant, Data Science.

Stakeholder Impact

• The document outlines potential impacts on shareholders through executive compensation, corporate governance changes, and financial performance.
• The document outlines potential impacts on employees through compensation programs, diversity and inclusion initiatives, and management changes.
• The document outlines potential impacts on customers through investments in technology and infrastructure to enhance the customer experience.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting of Shareholders on May 23, 2024.
• The Board will consider the voting results when determining future compensation policies and decisions.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, board of directors, corporate governance, shareholder proposal, incentive compensation, risk management, sustainability, diversity, equity, inclusion, financial performance, Lincoln National Corporation