Proposal
7

Stockholder Proposal on Lead Director Qualifications

The Board recommends a vote AGAINST this proposal.

  • This proposal seeks to establish a new independence standard that is inconsistent with public stock exchange listing standards.
  • The nominating and governance committee specifically evaluated the impact of Ms. Sprieser’s tenure and concluded it had no impact on her independence.
  • Allstate’s independent lead director is selected through a robust process, and her performance is evaluated annually.
  • The Board believes it is important to maintain a mix of director tenures.

Mr. William Steiner, 112 Abbottsford Gate, Piermont, NY 10968, beneficial owner of no less than 100 shares of Allstate common stock as of December 6, 2016, intends to propose the following resolution at the annual meeting.

Proposal 7 – Lead Director Qualifications

Shareholders request that our Board adopt a rule that whenever possible our Lead Director have less than 12-years tenure. A director with more than 12-years tenure is arguably not independent.

GMI Analyst said Judith Sprieser, our Lead Director, had long tenure of 17 years, which may compromise her ability to act as an effective and independent counterbalance to the CEO/chair. Ms. Sprieser had also been flagged for her service on a board that previously filed for bankruptcy. GMI said long-tenured directors can often form relationships that may compromise their independence and therefore hinder their ability to provide effective oversight. Independence in a Lead Director is especially important since Mr. Wilson serves the dual roles of CEO and Chairman.

Please vote to enhance shareholder value:

Lead Director Qualifications — Proposal 7


Board of Directors’ Statement in Opposition to the Stockholder Proposal on Lead Director Qualifications

The Board recommends that stockholders vote AGAINST this proposal for the following reasons:

THIS PROPOSAL SEEKS TO ESTABLISH A NEW INDEPENDENCE STANDARD THAT IS INCONSISTENT WITH PUBLIC STOCK EXCHANGE LISTING STANDARDS.

  • New York Stock Exchange listing standards for director independence do not cite tenure as a factor.
  • In our discussions with our top investors, none cite tenure as the sole reason to deem a director non-independent.
  • Our independence assessment considers the number of years of service as part of the annual evaluation of director nominees.

THE NOMINATING AND GOVERNANCE COMMITTEE SPECIFICALLY EVALUATED THE IMPACT OF MS. SPRIESER’S TENURE AND CONCLUDED IT HAD NO IMPACT ON HER INDEPENDENCE.

  • The Board weighed the potential impact of tenure on the independence of Ms. Sprieser. She has significant experience serving at Allstate under different operating environments and management teams, and has served on the Board under two CEOs. The independent directors concluded that she is a highly effective director capable of leading reasoned, balanced and thoughtful Board deliberations amongst the independent directors. Her experience with two CEOs in a variety of operating environments was determined to be a significant source of insight for effective governance.
  • The proposal cites Ms. Sprieser’s experience serving on the board of another company that successfully emerged from bankruptcy proceedings. The Board concluded this served to deepen and enhance her skill set.

ALLSTATE’S INDEPENDENT LEAD DIRECTOR IS SELECTED THROUGH A ROBUST PROCESS, AND HER PERFORMANCE IS EVALUATED ANNUALLY.

  • Each year, the nominating and governance committee recommends a director to the independent members of the Board to serve as the independent lead director. The lead director is elected annually by the independent directors but is generally expected to serve for more than one year.
  • In selecting the lead director, the independent directors consider evolving market, operational, and governance issues facing Allstate. They consider relevant leadership, operational and corporate governance experience, relationships with the other Board members and external commitments. In addition, the lead director is expected to have a thorough understanding of the company’s business operations and history.
  • The responsibilities of the lead director are reviewed annually in connection with the annual evaluation of the lead director’s performance.

THE BOARD BELIEVES IT IS IMPORTANT TO MAINTAIN A MIX OF DIRECTOR TENURES.

  • Our Board evaluates tenure for each individual and in aggregate because a mix of experience and tenure is critical to the effectiveness of our Board.
  • Our Board is committed to routine refreshment, and our current diversity of director tenures provides us with a mix of fresh perspectives and experienced insights derived from overseeing a business that has developed and changed through many different external operating environments.
  • Our Board’s current average tenure of 7 years is below the S&P 500 average of 8 years (according to a survey by a major executive search firm in 2016).
  • In addition to the variety of director tenures, the Board values and actively cultivates a mix of diversity and experience among our directors to enhance the range of perspectives on all issues.
  • Sufficient tenure gives the lead director the experience, institutional knowledge and understanding of Board and company dynamics needed to lead and oversee management effectively; this is balanced by other directors with a shorter tenure.