Aflac Incorporated : 2025 Annual Report 2025 Proxy Statement
AFL
About Aflac Incorporated
Aflac Incorporated (the "Company"), through its subsidiaries, provides financial protection to our millions of policyholders and customers worldwide. The Company's principal business is supplemental health and life insurance products with the goal to provide customers the best value in supplemental insurance products in the United States (U.S.) and Japan. For nearly seven decades, insurance policies of the Company's subsidiaries have given policyholders the opportunity to focus on recovery, not financial stress. In the U.S., Aflac is the number one provider of supplemental health insurance products.(1) Aflac Life Insurance Japan is the leading provider of cancer and medical insurance policies in force in Japan.
Our Long-Term Growth Strategy
Our strategy for growth in the U.S. and Japan has remained straightforward and consistent for many years. The Company develops relevant supplemental health insurance products offering financial protection from the rising out-of-pocket expenses associated with medical events that are not covered by the insureds' primary coverage. We also offer a complement of other voluntary and employer-paid health and life insurance products to fit the needs of our customers. Additionally, the Company aims to obtain more customers by selling where customers prefer to purchase protection, whether through an agent or broker, a distribution partner, or directly to the consumer.
Our Goal
To provide customers with the best value in supplemental insurance products in the United States and Japan.
In this Proxy Statement, the terms "Company," "we," or "our" refer to Aflac Incorporated. The Company's insurance business consists of two reporting segments: Aflac Japan and Aflac U.S. The primary insurance subsidiary in the Aflac Japan segment is Aflac Life Insurance Japan Ltd. (ALIJ). Aflac U.S. includes the insurance subsidiaries American Family Life Assurance Company of Columbus (Aflac); Continental American Insurance Company, branded as Aflac Group Insurance; American Family Life Assurance Company of New York (Aflac New York); and Tier One Insurance Company; as well as Aflac Benefits Solutions, Inc. (ABS), which provides a platform for Aflac Dental and Vision in the U.S. The term "Aflac Global Investments" refers to the Company's asset management subsidiary, Aflac Asset Management LLC, and its management subsidiary in Japan, Aflac Asset Management Japan Ltd. Aflac Re Bermuda Ltd. (Aflac Re) is a Bermuda domiciled insurer that reinsures certain policies issued by ALIJ.
References to websites included in this Proxy Statement are provided solely for convenience purposes. Content on the websites, including content on our Company website, is not, and shall not be deemed to be, part of this Proxy Statement or incorporated herein or into any of our other filings with the Securities and Exchange Commission.
2025 PROXY STATEMENT
1
NOTICE OF 2025 ANNUAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the Annual Meeting of Shareholders ("Annual Meeting") of Aflac Incorporated. This year's Annual Meeting will be held virtually.
You will be able to attend the Annual Meeting, vote, and submit your questions during the webcast. The Annual Meeting will be held for the following purposes, all of which are described in the accompanying Proxy Statement:
To elect as Directors of the Company the eleven nominees named in
Each of the eleven
the accompanying Proxy Statement to serve until the next Annual
director nominees
Meeting and until their successors are duly elected and qualified
See page 10
To consider a non-binding advisory proposal on the Company's
See page 36
executive compensation ("say-on-pay")
To ratify the appointment of KPMG LLP as the Company's
See page 76
independent registered public accounting firm for the year ending
December 31, 2025
In addition, any other business properly presented may be acted upon at the meeting and at any adjournments or postponements of the meeting.
The accompanying proxy is solicited by the Company's Board of Directors on behalf of the Company. The Proxy Statement and the Company's Annual Report on Form 10-K for the year ended December 31, 2024, are enclosed.(1) The record date for determining which shareholders are entitled to vote at the Annual Meeting is February 25, 2025. Only shareholders of record at the close of business on that date, or their duly appointed proxies, will be entitled to vote at the Annual Meeting and any adjournment thereof. For more information on how to attend the virtual Annual Meeting, please see Appendix B of the Proxy Statement.
Your vote is important! Even if you expect to attend the virtual Annual Meeting, please vote in advance. If you attend the Annual Meeting online, you may revoke your proxy by submitting a vote during the Annual Meeting.
We are making the Proxy Statement and the form of proxy first available on or about March 20, 2025.
By order of the Board of Directors,
J. Matthew Loudermilk
Corporate Secretary
March 20, 2025
Columbus, Georgia
Logistics
DATE AND TIME
May 5, 2025
10:00 a.m. Eastern Time
VIRTUAL (ONLINE ONLY)
www.virtualshareholdermeeting.com/ AFL2025 using your 16-digit control number included on your proxy card or notice
RECORD DATE
February 25, 2025
How to Vote
It is important that you vote your shares. We offer several easy and cost-effective voting methods for your convenience.
INTERNET
Visit www.proxyvote.com. You will need the 16-digit control number that appears on your proxy card or notice.
TELEPHONE
If your shares are held in the name of a broker, bank, or other nominee, follow the telephone voting instructions, if any, provided on your proxy card. If your shares are registered in your name, call 1-800-690-6903 and follow the telephone voting instructions. You will need the 16-digit control number that appears on your proxy card.
If you received a full package by mail,
complete and sign the proxy card and return it in the enclosed postage prepaid envelope.
TABLET OR SMARTPHONE
Scan the QR code that appears on your proxy card or notice using your mobile device.
LETTER FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
March 20, 2025
Dear Fellow Shareholders:
"We are well-positioned as we work toward achieving long-term growth while also ensuring we deliver on our promise to policyholders. "
Our goal is to provide customers with the best value in supplemental insurance products in the United States and Japan. I am very proud that 2024 was yet another year in our seven-decade history that our management, employees and sales distribution teams continued to be dedicated stewards of our business to accomplish this goal. In doing so, we have the privilege of bringing financial protection and peace of mind to millions of people during some of the most difficult times of their lives.
In 2024, we celebrated our 50th year of doing business in Japan (which represents 77% of our balance sheet and 71% of our pretax adjusted earnings) and 50th year as a publicly traded company on the NYSE. As we progress into 2025, we look forward to celebrating the 70th anniversary of the Company's founding, the 30th anniversary of what is now known as the Aflac Cancer and Blood Disorders Center of Children's Healthcare of Atlanta, and the 25th anniversary of the Aflac Duck. Even though these milestones are noteworthy, it's not the number of years that matters most - it's the privilege of benefiting the lives of millions of people.
Growth: While delivering value to our policyholders, the Company generated $5.4 billion in net earnings, or $9.63 per diluted share, in 2024. As a result, net earnings per diluted share rose 23.8%. Adjusted earnings per diluted share* were $7.21, the best year in history, and adjusted earnings per diluted share excluding the impact of foreign currency* were $7.39, which was an 18.6% increase
year over year. While our financial results were strong, we continue to think about evolving and improving our business. In Japan, we restructured the marketing and sales areas to align them with our product lines. There, we are pursuing growth with our efforts to reach new and younger consumers. Our efforts are being rewarded as our continued momentum with Tsumitasu, our latest life insurance product that offers an asset formation component and options such as nursing care, connects with the younger demographic and builds a bridge to introduce them to third sector products.
In the U.S., we continued to scale up group life, absence management and disability. We also transferred administration of network dental to a third party, which we believe will allow us to grow that business, as well as the voluntary benefits sold alongside it. In addition, we continued to focus on more profitable growth through our stronger underwriting discipline.
Strategic Capital Deployment: 2024 marked the 42nd consecutive year of dividend increases. We treasure our track record of dividend growth and remain committed to extending it, supported by the strength of our capital and cash flows. Last quarter, the Board put us on a path to continue this record when it increased the first quarter 2025 dividend 16% to $0.58. Additionally, we have remained tactical in our approach to repurchasing shares, deploying $2.8 billion in capital to repurchase more than 30 million of our shares in 2024. Combined with dividends,
this means we delivered $3.9 billion back to shareholders in 2024. At the same time, we have maintained our position among companies with the highest return on capital and lowest cost of capital in the industry.
We believe in the underlying strengths of our business and our potential for continued growth in Japan and the U.S. - two of the largest life insurance markets in the world. We are well-positioned as we work toward achieving long-term growth while also ensuring we deliver on our promise to policyholders.
We are privileged to be stewards of the trust and resources you, our owners, place in Aflac Incorporated every day. We thank you for your support. It is my pleasure to invite you to virtually attend the 2025 Annual Meeting of Shareholders on Monday, May 5, 2025, where you can learn more about Aflac Incorporated's recent business performance and strategy for the future.
I encourage you to review the proxy materials and Annual Report on Form 10- K, as well as Aflac Incorporated's most recent Business and Sustainability Report. Then, please vote your shares, even if you plan to attend the virtual Annual Meeting. We want to be sure your shares and your viewpoints are represented.
Sincerely,
Daniel P. Amos
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
2025 PROXY STATEMENT
3
LETTER FROM THE LEAD NON-MANAGEMENT DIRECTOR
March 20, 2025
Dear Fellow Shareholders:
"As we shape the Aflac of the future, we do so knowing the Company's success and financial performance are rooted in our commitment to our purpose."
It is an honor to serve you as Lead Non- Management Director, alongside a distinguished and dedicated team of Directors. These fellow Board members bring their skills, expertise and experience from a broad range of disciplines, industries and companies, weaving an unparalleled framework of perspective from which we can draw. As Directors, we take seriously our responsibility to represent the interests of you, our shareholders. In this letter, I want to highlight some of the key topics of oversight in 2024.
Risk Oversight: Our Board provided oversight of the more traditional risks for the industry and the Company, including those related to investments, products and capital. We spent time with Management reviewing their plan to transition the network dental administration to a third-party vendor. Given the current landscape, we also reviewed cybersecurity risks each quarter and remain pleased with Management's ability to navigate this dynamic risk, including the CrowdStrike outage in July. In addition, artificial intelligence ("AI") was a very frequent topic in our discussions in 2024 and remains so today. The Board has continued to oversee the Company's efforts on risk oversight through its quarterly updates.
Board Composition: The Board has worked hard to ensure that its members maintain significant business engagement and represent a diverse cross-sectionof knowledge, experience and backgrounds. Independent Board members average about six years of service, providing a balance of expertise for you, the shareholders. The Board engages in a regular self-evaluationto ensure we maintain a cohesive and well-constitutedboard of high integrity that exemplifies a wide range of disciplines, including public health, cybersecurity, investment and finance, insurance operations, the Japanese market, regulatory and risk management, and marketing and public
relations. By combining a diversified membership with such broad expertise and multi-disciplinary skills, we have established an adaptable, insightful and cohesive board that is equipped to pivot quickly to navigate ever-evolving markets. Given our desire to continually add new and relevant expertise to the Board, at the 2025 annual meeting, we nominated Michael Forrester to join the Board. Mr. Forrester brings decades of wide-ranging leadership and experience in strategic asset and investment management along with years of corporate and mutual fund board expertise.
Corporate Finance and Investments: In 2024, our investment portfolio continued to benefit from our disciplined strategic asset allocation. As you know, Aflac Global Investments refreshes its strategic asset allocation (SAA) every three years. As such, in 2024, the Finance and Investment Committee reviewed and approved the current SAA for 2025 - 2027. This approach serves as the core to managing long-termasset performance expectations to meet our objectives for capital, risk and liquidity. The Aflac Global Investments team has built a high-qualityportfolio that we believe provides a firm backing to our promise to our policyholders no matter the economic environment.
Strategic Initiatives: As we pursue new ways to meet the needs of consumers, businesses and shareholders, we will continue to monitor our long-termgrowth initiatives in both Japan and the U.S. We have also been pleased with the progress of the Company's internal reinsurance strategy through Aflac Re Bermuda Ltd., which was introduced in the fourth quarter of 2022. We believe this strategy is driving reduced risk, better balance sheet efficiency and ultimately a higher ROE for the group.
Commitment to working The Aflac Way: Most recently, Ethisphere recognized
Aflac Incorporated as one of the World's Most Ethical Companies for the 19th consecutive year, remaining the only insurance company in the world to receive this honor every year since this award was first introduced in 2007. In 2024, Aflac Incorporated also was included on the Dow Jones Sustainability North America Index for the 11th time. As a Director and a shareholder, I am proud to be associated with a company that has consistently delivered for its shareholders while also receiving such recognition for the way in which it operates.
Shareholder Engagement: As Lead Non- Management Director, I will continue to engage with our investors, seek insight into their perspectives, and explore the viewpoints and positions of those who invest in our business.
The Board looks forward to continuing its ongoing dialogue with investors and applying that feedback to help inform our decision making on strategic matters as they emerge. We thank you for your support and the privilege of representing you as shareholders of Aflac Incorporated.
With these vital topics in mind, I encourage you to review the accompanying Proxy Statement and associated materials and vote before our virtual Annual Meeting on May 5, 2025. It is my pleasure, and my privilege, to serve on Aflac Incorporated's Board. I can assure you, your Board is committed to serving you and ensuring your Company upholds our promises to our customers.
Sincerely,
W. Paul Bowers
LEAD NON-MANAGEMENT
DIRECTOR
TABLE OF CONTENTS
30 Chief Executive Officer and Executive Management Succession Planning
33 Retirement Plans
Named Executive Officer Compensation ("Say-on-Pay")
41 Compensation Design and Philosophy
44 Performance-Based Compensation: How Performance Goals Are Set
57 Additional Executive Compensation Plan Practice and Procedures
68 Potential Payments Upon Termination or Change in Control
70 2024 Potential Payments Upon Termination or Change in Control
76
Ratification of Auditors
76 Audit Fees and Other Fees
80 STOCK OWNERSHIP
85 OTHER MATTERS
87 APPENDIX A - DEFINITION OF NON-U.S. GAAP MEASURES AND RECONCILIATIONS TO CORRESPONDING U.S. GAAP MEASURES
93 APPENDIX B - ATTENDING THE VIRTUAL ANNUAL MEETING
2025 PROXY STATEMENT
5
2024 BUSINESS HIGHLIGHTS
In 2024, the Company delivered strong operating results.
NET EARNINGS
EARNINGS PER DILUTED
RETURN ON EQUITY (ROE)
$5.4B
SHARE (EPS)
22.6%
$9.63
16.8%p
23.8%p
ADJUSTED EARNINGS EX-FX(1)
ADJUSTED EPS EX-FX(1)
ADJUSTED RETURN ON
$4.2B
$7.39
EQUITY (AROE) EX-FX(1)
17.7%
11.8%p
18.6%p
NEW ANNUALIZED PREMIUM
NEW ANNUALIZED PREMIUM
SALES(2) - AFLAC JAPAN
SALES(2) - AFLAC U.S.
(IN YEN)
5.6%p
(1.0)%q
CASH DIVIDEND
REPURCHASED SHARES
3-YEAR TOTAL
SHAREHOLDER
19.0%p
$2.8B
RETURN ("TSR")
+90.0%
For more complete information regarding the Company's 2024 performance, please review the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
VOTING ROADMAP
Election of Directors
Each Director stands for election annually. The following provides summary information about the nominees, all of whom are named in this Proxy Statement. Our Board believes it is appropriate to maintain a balance of longer tenured members, who bring stability and valuable Company-specific knowledge with a historical perspective, and newer members, who bring fresh viewpoints and new ideas.
The Board of Directors recommends a vote FOR each of the eleven nominees named in this proxy statement.
See page 10
Executive Compensation ("Say-on-Pay")
We are committed to achieving a high level of total return for our shareholders and believe our executive compensation program is designed to strongly link executive pay to Company performance. From the end of August 1990, when Daniel P. Amos was appointed the Chief Executive Officer (CEO), through December 31, 2024, the Company's total return to shareholders, including reinvested cash dividends, has exceeded 19,812%, compared with 3,551% for the Dow Jones Industrial Average, 3,541% for the S&P 500 Index, and 1,790% for the S&P 500 Life & Health Insurance Index over the same period.
The Board of Directors recommends a vote FOR our executive compensation program.
See page 36
Ratification of Auditors
In February 2025, the Audit and Risk Committee voted to appoint KPMG LLP, an independent registered public accounting firm, to perform the annual audit of the Company's consolidated financial statements for fiscal year 2025, subject to ratification by its shareholders.
Please read the entire Proxy Statement before voting.
The Board of Directors and the Audit and Risk Committee recommend a vote FOR the ratification ofthe selection of KPMG LLP.
See page 76
This Proxy Statement and the accompanying proxy were first sent or made available to shareholders on or about March 20, 2025.
VOTING ROADMAP
Director Nominees Summary
2025 PROXY STATEMENT
7
DANIEL P. AMOS, 73
Chairman and Chief Executive
Officer,
Aflac Incorporated
Director Since 1983
Committees: E, FI
MIWAKO HOSODA, 55
Professor, Seisa University
Director Since 2023
Committees: CSR
NOBUCHIKA MORI, 68
Representative Director, Japan
Financial and Economic Research
Co. Ltd.
Director Since 2020
Committees: CG, FI
Lead Non-
Management
Director
W. PAUL BOWERS, 68
Retired Chairman and Chief
Executive Officer,
Georgia Power Co.
Director Since 2013
Committees: AR*, CD, CSR, E
THOMAS J. KENNY, 61
Former Partner and Co-Head of
Global Fixed Income, Goldman
Sachs Asset Management
Director Since 2015
Committees: CD, CSR, FI
JOSEPH L.
MOSKOWITZ, 71
Retired Executive Vice President,
Primerica, Inc.
Director Since 2015
Committees: AR*, C, CD, E
ARTHUR R. COLLINS, 65 Founder and Chairman of theGROUP
Director Since 2022 Committees: CG, CSR
GEORGETTE D. KISER, 57
Former Manager Director and
Chief Information Officer,
The Carlyle Group
Director Since 2019
Committees: AR*, C
KATHERINE T.
ROHRER, 71
Vice Provost Emeritus,
Princeton University
Director Since 2017
Committees: C, CG, E
MICHAEL A. FORRESTER, 57
Former Chief Executive Officer of
Copper Rock Capital Partners
Director Nominee
KAROLE F. LLOYD, 66 Certified Public Accountant and retired Ernst & Young LLP audit partner
Director Since 2017 Committees: AR*, CD, E, FI
Committee Key
AR
Audit & Risk
C
Compensation
CD
Corporate Development
CG
Corporate Governance
CSR
Corporate Social
E
Executive
FI
Finance & Investment
•
Chair
Responsibility
& Sustainability
Independent
*
Financial Expert
8 AFLAC INCORPORATED
VOTING ROADMAP
Tenure
Demographics
2025 Independent Director nominees (10):
n 3 Directors
0-3 Years
n 3 Directors
4-7 Years
n 4 Directors
8+ Years
Backgrounds, Skills, and Experiences
2025 all Director nominees (11):
6 of 10
Independent Director Nomineesare people of color and/or women
36%
27%
45%
Current or Former CEO
Marketing and Public Relations
Japanese Market Expertise
91%
91%
100%
Investment and Financial Expertise
Operations Experience
Regulatory and Risk Management Experience
54%
18%
45%
Industry Experience
Public Health Experience
Digital/Cybersecurity
Independence
2025 all Director nominees (11):
91%
Independent
Corporate Governance Highlights
Annual director elections
Majority vote standard for director elections Independent Lead Non-Management Director
Active and responsive shareholder engagement process
Annual Board evaluations, including individual director interviews
Shareholder ability to call special meetings Shareholder right of proxy access Robust CEO succession planning process Mandatory Independent Director retirement age
Disclaimer
Aflac Incorporated published this content on March 20, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 20, 2025 at 14:11:33.994.