2018 Annual Meeting of Stockholders

Grants of Plan-Based Awards at Fiscal Year-end 2017

The following table provides information about awards granted to our named executives during fiscal year 2017.

Name Grant
Date
Date of Committee Action for Equity Incentive Plan Awards Plan 
Awards
(1)

Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
(2)
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(3)
All Other Stock Awards: Number
of Shares of Stock or Units
(#)
(4)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Exercise
or Base
Price of
Option
Awards
($/Sh)
(5)
Grant Date
Fair Value ($)
(6)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Stock
Awards
Option
Awards
Mr. Wilson Annual cash incentive 1,863,494 3,726,987 10,000,000                
02/09/2017 02/09/2017 PSAs       0 68,922 137,844       5,400,039  
02/09/2017 02/09/2017 Stock options               248,447 78.35   3,599,997
Mr. Shebik Annual cash incentive 666,919 1,333,838 7,056,000                
02/09/2017 02/09/2017 PSAs       0 25,463 50,926       1,995,026  
02/09/2017 02/09/2017 Stock options               91,787 78.35   1,329,994
Mr. Civgin Annual cash incentive 498,083 996,165 7,056,000                
02/09/2017 02/09/2017 PSAs       0 17,920 35,840       1,404,032  
02/09/2017 02/09/2017 Stock options               64,596 78.35   935,996
Mr. Dugenske Annual cash incentive 379,882 759,764 7,056,000                
03/03/2017 02/09/2017 PSAs       0 15,942 31,884       1,305,012  
03/03/2017 02/09/2017 Stock options               57,540 81.86   870,005
04/05/2017 09/28/2016 RSUs             49,128     4,000,002  
Mr. Winter Annual cash incentive 999,556 1,999,112 9,408,000                
02/09/2017 02/09/2017 PSAs       0 23,692 47,384       1,856,268  
02/09/2017 02/09/2017 Stock options               85,404 78.35  

1,237,504

  1. Awards under the Annual Executive Incentive Plan and the 2013 Equity Incentive Plan.

  2. The amounts in these columns consist of the threshold, target, and maximum annual cash incentive awards for the named executives. The threshold amount for each named executive is 50% of target, as the minimum amount payable (subject to individual performance) if threshold performance is achieved. If the threshold is not achieved, the payment to the named executives would be zero. The target amount is based upon achievement of the performance measures listed under the Earned Annual Cash Incentive Awards caption on page 47. The maximum amount is based on the maximum amount that could be paid to a named executive to qualify the annual cash incentive award as deductible under section 162(m) as in effect prior to the passage of the Tax Legislation. The maximum amount payable to any named executive who served as CFO during the year is an amount equal to 15% of the 162(m) Pool described on pages 64-65. The maximum amount payable to the CEO and the three most highly compensated executives, excluding any named executive who served as CFO during the year, is the lesser of a stockholder-approved maximum of $10 million under the Annual Executive Incentive Plan or a percentage, which varies by executive, of the award pool. The award pool is equal to 1.0% of Performance Net Income with award opportunities capped at 35% of the pool for Mr. Wilson, 20% for Mr. Winter, and 15% of the pool for each other named executive. Performance Net Income is defined on pages 64-65. For a description of the ranges of performance established by the committee for the 2017 annual incentive, which are lower than the section 162(m) limits, see page 48.

  3. The amounts shown in these columns reflect the threshold, target, and maximum PSAs for the named executives. The threshold amount for each named executive is 0% payout. The target and maximum amounts are based upon achievement of the performance measures listed under the Performance Stock Awards caption on page 48.

  4. Mr. Dugenske received a sign-on grant of restricted stock units on April 5, 2017. These RSUs will become 100% vested on April 4, 2020.

  5. The exercise price of each option is equal to the closing sale price on the New York Stock Exchange on the grant date or, if there was no such sale on the grant date, then on the last previous day on which there was a sale.

  6. The aggregate grant date fair value of the PSAs was $78.35 and stock option awards was $14.49, with the exception of Mr. Dugenske’s, which for the PSAs was $81.86, the stock option award was $15.12, and the RSUs was $81.42, computed in accordance with FASB ASC 718 based on the probable satisfaction of the performance conditions. The assumptions used in the valuation are discussed in footnotes 3 and 4 to the Summary Compensation Table on page 50.

Performance Stock Awards (“PSAs”)

PSAs represent our promise to transfer shares of common stock in the future if certain performance measures are met. For the awards granted in 2017, the actual number of PSAs that vest will vary from 0% to 200% of target PSAs based on Average Performance Net Income ROE (70%) and Earned Book Value (30%) results for a three-year measurement period. For a definition of how those measures are calculated, see pages 64-67. Each PSA represents Allstate’s promise to transfer one fully vested share in the future for each PSA that vests. Vested PSAs will be converted into shares of Allstate common stock and dividend equivalents accrued on these shares will be paid in cash. No dividend equivalents will be paid prior to vesting. PSAs will vest following the end of the three-year performance cycle if the performance conditions are met, subject to continued employment (other than in the event of death, disability, retirement, or a qualifying termination following a change in control).

Stock Options

Stock options represent an opportunity to buy shares of our stock at a fixed exercise price at a future date. We use them to align the interests of our executives with long-term stockholder value, as the stock price must appreciate from the grant date for the executives to profit.

Under our stockholder-approved equity incentive plan, the exercise price cannot be less than the closing price of a share on the grant date. Stock option repricing is not permitted. In other words, without an event such as a stock split, if the committee cancels an award and substitutes a new award, the exercise price of the new award cannot be less than the exercise price of the canceled award.

All stock option awards have been made in the form of non-qualified stock options. The options granted to the named executives beginning in 2014 become exercisable over three years. One-third of the stock options will become exercisable on the anniversary of the grant date for each of the three years. The change to the vesting schedule beginning in 2014 was made to reflect current market practice. For the vesting schedule for other option grants, see footnote 1 to the Outstanding Equity Awards at Fiscal Year-end 2017 table. All of the options expire ten years from the grant date, unless an earlier date has been approved by the committee in connection with certain change-in-control situations or other special circumstances such as termination, death, or disability.

Restricted Stock Units

Each restricted stock unit represents our promise to transfer one fully vested share of stock in the future if and when the restrictions expire (when the unit “vests”). Under the terms of the restricted stock unit award, the executive has only the rights of a general unsecured creditor of Allstate and no rights as a stockholder until delivery of the underlying shares. The restricted stock units granted to Mr. Dugenske in 2017 will become 100% vested on the day prior to the third anniversary of the grant date, except in certain change-in-control situations or under other special circumstances approved by the Committee. The restricted stock units granted to Mr. Dugenske include the right to receive previously accrued dividend equivalents payable in cash when the underlying restricted stock units vest.