Hartford Financial Services : Notice of 2025 Annual Meeting of Shareholders, Proxy Statement and 2024 Annual Report
HIG
2025 Proxy
Statement and
2024 Annual
Report
NOTICE OF 2025 ANNUAL MEETING OF SHAREHOLDERS
Date and Time Wednesday, May 21, 2025 12:30 p.m. EDT
Access*
www.virtualshareholdermeeting.com/HIG2025
Record Date
You may vote if you were a shareholder of record at the close of business on March 24, 2025.
Voting Items
Shareholders will vote on the following items of business:
Board
Recommendation
Page
1. Elect a Board of Directors for the coming year;
FOR
11
2. Ratify the appointment of Deloitte & Touche LLP as our
independent registered public accounting firm for the
FOR
32
fiscal year ending December 31, 2025;
3. Consider and approve, on a non-binding, advisory basis,
the compensation of our named executive officers as
FOR
34
disclosed in this proxy statement;
4.
Consider and approve the Company's 2025 Long Term
FOR
68
Incentive Stock Plan;
5.
Vote on shareholder proposal that the Company adopt
AGAINST
71
special meeting rights for shareholders; and
6. Act upon any other business that may properly come before the Annual Meeting or any adjournment thereof.
The Hartford's proxy materials are available via the internet at http://ir.thehartford.com** and www.proxyvote.com, which allows us to reduce printing and delivery costs and lessen adverse environmental impacts.
We hope that you will participate in the Annual Meeting, either by attending and voting at the virtual meeting or by voting through other means. For instructions on voting, please refer to page 76under "How do I vote my shares?"
We urge you to review the proxy statement carefully and exercise your right to vote.
Dated: April 10, 2025
By order of the Board of Directors
Terence Shields
Corporate Secretary
VOTING
By internet
www.proxyvote.com
By toll-free telephone 1-800-690-6903
By mail
Follow the instructions on your proxy card
At the Annual Meeting Follow the instructions on the virtual meeting site
IMPORTANT INFORMATION IF YOU PLAN TO ATTEND THE ANNUAL MEETING:
You are entitled to participate (i.e., submit questions and/or vote) in the Annual Meeting if you were a shareholder of record at the close of business on March 24, 2025, the record date, or hold a legal proxy for the meeting provided by your bank, broker, or nominee.
To participate, you will need the 16-digit control number provided on your proxy card, voting instruction form or notice.
Shareholders may also vote or submit questions in advance of the meeting at www.proxyvote.com using their 16-digit control number.
If you are not a shareholder or do not have a control number, you may still access the meeting as a guest, but you will not be able to participate.
If you have difficulty accessing the Annual Meeting, please call the number on the registration page of the virtual meeting site. Technicians will be available to assist you.
**References in this proxy statement to our website address are provided only as a convenience and do not constitute, and should not be viewed as, an incorporation by reference of the information contained on, or available through, the website. Therefore, such information should not be considered part of this proxy statement.
2025 Proxy Statement
1
LETTER FROM OUR
CHAIRMAN & CEO AND LEAD
DIRECTOR
Dear fellow shareholders:
For The Hartford, 2024 was another outstanding year of financial performance and achievement of our strategic objectives. As the 2025 Annual Meeting of Shareholders approaches, it is our privilege as Chairman and Lead Director to share details on the Board's 2024 activities, including its oversight of strategy, innovation, and board composition and management succession planning.
Strategy
Throughout the year, the Board remained highly engaged in overseeing the Company's execution of its strategy to drive superior peer-relative performance and maximize long-term value creation for you, our shareholders. In 2024 these strategies resulted in an outstanding year with a net income ROE of 19.9% and a core earnings ROE of 16.7%*, driven by sustained momentum in Business Insurance, which once again generated strong top-line growth at highly profitable margins, significant progress in Personal Insurance toward restoring target profitability in auto, continued strong margins in Employee Benefits, and a higher investment portfolio yield.
Innovation
Overseeing innovation is a core responsibility of the Board, and in 2024, the Board continued to focus on advancing the use of technology, including leveraging artificial intelligence ("AI") to improve the business and gain a competitive advantage while addressing the risks enabled by AI. Throughout the year, senior management provided "deep dive" presentations on growth and innovation, technology, data and AI, with specific strategy sessions focusing on leveraging these tools for business outcomes. Notable engagements also included visits and discussions with technology industry leaders to discuss these topics.
Board Composition and Management Succession Planning
Board composition and talent management remain critical areas of Board focus, as they have for the past several years, because the Board firmly believes that people are key to The Hartford achieving outstanding results. Following the identification of candidates who would best complement the skills and attributes of the existing directors and position the Board to oversee the company's long-term strategy, the Board appointed two seasoned and highly successful leaders: Kathleen Winters, the former CFO of ADP, and Annette Rippert, the former CEO of the Strategy and Consulting group at Accenture.
Additionally, the Board focused on management succession planning with increased emphasis on familiarity with, and talent development of, leaders one to two levels below the CEO. Directors have also engaged with members of management for exposure, development, and mentorship. We are proud to say these efforts continue to yield results, including naming Mo Tooker as the Company's President and the promotion of internal candidates to succeed the Company's Heads of Personal Insurance and Employee Benefits, General Counsel, and Chief Underwriting Officer. These key leadership appointments affirm the Company's strategic succession planning and executive development and showcase its exceptional talent pipeline.
The Board consistently operates at an exceptional level, collaborating closely with management and ensuring the Company is well- equipped to innovate, achieve profitable growth, and deliver sustained value to our shareholders. We appreciate your continued support.
Sincerely,
Christopher J. Swift
Trevor Fetter
Chairman and Chief Executive Officer
Lead Director
* Denotes a non-GAAP financial measure. For definitions and reconciliations to the most directly comparable GAAP measure, see Appendix A.
TABLE OF CONTENTS
PROXY SUMMARY
4
BOARD AND GOVERNANCE MATTERS
11
Item 1: Election of Directors
11
Governance Practices and Framework
11
Board Composition and Refreshment
14
Committees of the Board
16
The Board's Role and Responsibilities
19
Director Compensation
22
Certain Relationships and Related Party Transactions
24
Communicating with the Board
24
Director Nominees
25
AUDIT MATTERS
32
Item 2: Ratification of Independent Registered Public Accounting Firm
32
Fees of the Independent Registered Public Accounting Firm
32
Audit Committee Pre-Approval Policies and Procedures
33
Report of the Audit Committee
33
COMPENSATION MATTERS
34
Item 3: Advisory Vote to Approve Executive Compensation
34
Compensation Discussion and Analysis
35
Executive Summary
35
Components of the Compensation Program
40
Process for Determining Senior Executive Compensation (Including NEOs)
48
2024 Named Executive Officers' Compensation and Performance
48
Compensation Policies and Practices
50
Effect of Tax and Accounting Considerations on Compensation Design
51
Report of the Compensation and Management Development Committee
52
Executive Compensation Tables
53
CEO Pay Ratio
64
Pay Versus Performance
64
Item 4: Consideration and Approval of the 2025 Long Term Incentive Stock Plan
68
SHAREHOLDER PROPOSALS
71
Item 5: Vote on Shareholder Proposal that the Company Adopt Special Meeting Rights for Shareholders
71
INFORMATION ON STOCK OWNERSHIP
73
Directors and Executive Officers
73
Certain Shareholders
74
INFORMATION ABOUT THE HARTFORD'S ANNUAL MEETING OF SHAREHOLDERS
75
Householding of Proxy Materials
75
Frequently Asked Questions
75
Other Information
79
APPENDIX A: RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
80
APPENDIX B: Summary of the 2025 Long Term Incentive Stock Plan
85
APPENDIX C: 2025 Long Term Incentive Stock Plan
91
Certain statements made in this proxy statement should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford's future results of operations. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ, including those discussed in The Hartford's news release issued on January 30, 2025, our 2024 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms 10-Q, and the other filings we make with the U.S. Securities and Exchange Commission. We assume no obligation to update this document, which speaks as of the date of filing.
2025 Proxy Statement
3
PROXY SUMMARY
This summary highlights information contained elsewhere in this proxy statement. It does not contain all the information you should consider and you should read the entire proxy statement carefully before voting.
BOARD AND GOVERNANCE HIGHLIGHTS
ITEM 1
ELECTION OF DIRECTORS
Each director nominee has an established record of accomplishment in areas relevant to overseeing our businesses and possesses qualifications and characteristics that are essential to a well-functioning and deliberative governing body.
✓
The Board recommends a vote "FOR" each director nominee
Director Nominee, Current Age
Director
Current
(1)
Other Current
and Present or Most Recent Experience
Independent
since
Committees
Public Company Boards
Larry D. De Shon, 65
✓
2020
• Audit
• United Rentals, Inc.
Former President, CEO and COO,
• FIRMCo*
• Air New Zealand
Avis Budget Group
• NCG
Carlos Dominguez, 66
✓
2018
• Comp
None
Former Vice Chairman and Lead Evangelist,
• FIRMCo
Sprinklr
• NCG
Trevor Fetter,(2) 65
✓
2007
• Comp
None
Senior Lecturer,
• FIRMCo
Harvard Business School
Donna James, 67
✓
2021
• Audit*
• Victoria's Secret
President and CEO,
• FIRMCo
• American Electric
Lardon & Associates
• NCG
Power**
Annette Rippert, 59
✓
2025
• FIRMCo
• Open Text
Former CEO, Strategy and Consulting,
Corporation
Accenture plc
Teresa W. Roseborough, 66
✓
2015
• Comp
None
Executive Vice President, General Counsel and
• FIRMCo
Corporate Secretary, The Home Depot
• NCG*
Virginia P. Ruesterholz, 63
✓
2013
• Comp
None
Former Executive Vice President,
• FIRMCo
Verizon Communications
• NCG
Christopher J. Swift, 64
2014
• FIRMCo
•
Citizens Financial
Chairman and CEO,
Group
The Hartford
Matthew E. Winter, 68
✓
2020
• Comp*
• ADT
Former President,
• FIRMCo
• H&R Block
The Allstate Corporation
Kathleen Winters, 57
✓
2024
• Audit
•
Global Business
Former CFO,
• FIRMCo
Travel Group
Automatic Data Processing
•
Definitive Healthcare
PROXY SUMMARY
GOVERNANCE BEST PRACTICES
The Board and management regularly review best practices in corporate governance and modify our governance policies and practices as warranted. Our current best practices are highlighted below.
Independent
✓ All directors are independent, other than the CEO
✓ Independent key committees (Audit, Compensation, Nominating)
Oversight
✓ Empowered and engaged independent Lead Director
✓ All directors elected annually
✓ Majority vote standard (with plurality carve-out for contested elections)
✓ Proxy access right with market terms
✓ Director resignation policy
Engaged
✓
Over-boarding policy limits total public company boards, including The Hartford, to four for non-CEOs
Board /
and two for sitting CEOs
Shareholder
✓
Rigorous Board and committee self-evaluation conducted annually; third-party Board and individual
Rights
director evaluations conducted triennially
✓ Meaningful Board education and training on recent and emerging governance and industry trends
✓
Annual shareholder engagement program focused on governance, compensation and sustainability
issues
✓ Shareholder right to call special meeting
✓ Board diversity of experience, tenure, age, gender, race and ethnicity
✓ Mandatory retirement age of 75
✓
Policies to identify director candidates encompassing the right mix of experience, qualifications, skills
and backgrounds
Other
✓ Annual review of CEO succession plan by the independent directors with the CEO
Governance
Practices
✓
Annual Board review of long-term and emergency succession plans for senior management and the
CEO
✓ Stock-ownership requirements of 6x salary for CEO and 4x salary for other named executive officers
✓
Annual Nominating Committee review of The Hartford's political and lobbying policies and
expenditures
AUDIT HIGHLIGHTS
ITEM 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board is asking shareholders to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2025.
2025 Proxy Statement
5
PROXY SUMMARY
COMPENSATION HIGHLIGHTS
ITEM 3
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
The Board is asking shareholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. Our executive compensation program is designed to promote long-termshareholder value creation and support our strategy by: (1) encouraging profitable organic growth and ROE performance while maintaining an ethical culture, (2) providing market-competitive compensation opportunities designed to attract and retain talent needed for long-term success, and (3) appropriately aligning pay with short- and long-term performance.
✓
The Board recommends a vote "FOR" this item
The Hartford's mission is to provide people with the support and protection they need to pursue their unique ambitions, seize opportunity, and prevail through unexpected challenges. Our strategy to maximize value creation for all stakeholders remains consistent and focuses on:
We endeavor to maintain and enhance our position as a market leader by leveraging our core strengths of underwriting excellence, risk management, claims, product development and distribution.
An ethical, people, and performance-driven culture drives our values. We are committed to maintaining and enhancing our culture and are proud of our reputation for ethics and integrity.
PURPOSE AND STRATEGIC PRIORITIES
PROXY SUMMARY
2024 FINANCIAL RESULTS
Our 2024 financial results were excellent, primarily due to a higher P&C underwriting gain, driven by earned premium growth across all lines of business as well as 9.1 points of improvement in the Personal Insurance loss and loss adjustment expense ratio, higher net investment income, lower net realized losses, and improvement in the group life loss ratio, partially offset by a higher expense ratio and higher loss ratios on group disability and supplemental health products. Full year net income available to common stockholders and core earnings* were $3.1 billion ($10.35 per diluted share) and $3.1 billion ($10.30 per diluted share), respectively. Net income and core earnings return on equity ("ROE")*† were 19.9% and 16.7%, respectively.
Highlighted below are year-over-year comparisons of our net income available to common stockholders and core earnings performance and our three-year net income ROE and core earnings ROE results. Core earnings is the primary determinant of our annual incentive plan ("AIP") funding, as described on page 40, and average annual core earnings ROE over a three-year performance period is the metric used for two-thirds of performance shares granted to Senior Executives, as described on page 42(in each case, as adjusted for compensation purposes).
Net Income Available to Common
Core Earnings*
Net Income ROE†
19.9%
Core Earnings ROE*
Stockholders
$3,090
$2,483
$ (Millions)
$2,767
$ (Millions)
$3,076
17.5%
11.7%
14.5% 15.8% 16.7%
2023 2024
2023 2024
2022 2023 2024
2022 2023 2024
TOTAL SHAREHOLDER RETURN
The following chart shows The Hartford's total shareholder return ("TSR") relative to the 2024 Corporate Peer Group (provided on page 49), S&P 500 Insurance Composite, S&P P&C index and S&P 500.
69%
78%
57%
53%
37%
27%
26%
34%
26%
29%
ONE-YEAR (2024)
THREE-YEAR (2022-2024)
The Hartford (HIG)
2024 Corporate Peer Group
S&P 500 Insurance Composite
S&P 500 Property and Casualty
S&P 500
Includes reinvestment of dividends.
COMPONENTS OF COMPENSATION AND PAY MIX
NEO compensation is heavily weighted toward variable compensation (including both annual and long-term incentives), where actual amounts earned may differ from target amounts based on company and individual performance. Each NEO has a target total compensation opportunity that is reviewed annually by the Compensation Committee (in the case of the CEO, by the independent directors) to ensure alignment with our compensation objectives and market practice.
2025 Proxy Statement
7
PROXY SUMMARY
Compensation Component
Description
Base Salary
• Fixed level of cash compensation based on market data, internal pay equity, experience,
responsibility, expertise and performance
Annual Incentive Plan
• Variable cash award based primarily on annual company operating performance against a
predetermined financial target and achievement of individual performance goals aligned with
the company's strategic priorities
Long-Term Incentive Plan
• Variable awards granted based on individual performance and market data.
• Designed to drive long-term performance, align senior executive interests with shareholders,
and foster retention.
• Award mix (75% performance shares and 25% stock options) rewards stock price performance,
peer-relative shareholder returns (stock price and dividends) and operating performance.
Approximately 93% of CEO target annual compensation and approximately 80% of other NEO target annual compensation are variable based on performance, including stock price performance:
Target Pay Mix - CEO
Salary
Annual Incentive
Long-Term Incentive
7%
20%
73%
Variable with Performance: 93%
Target Pay Mix - Other NEOs
Salary
Annual Incentive
Long-Term Incentive
20%
31%
49%
Variable with Performance: 80%
2024 COMPENSATION DECISIONS
2024 Compensation Decisions
Rationale
The Compensation Committee
For 2024 LTI awards, the Compensation Committee updated the LTI award mix from 50%
updated the award mix for
performance shares and 50% options to 75% performance shares and 25% options. In addition,
2024 long-term incentive
the weighting of performance metrics within performance shares was changed from 50%
awards.
Compensation Core ROE and 50% TSR to two-thirds Compensation Core ROE and one-third
TSR.
The Compensation Committee approved an AIP funding level of 143% of target.
Performance against the pre-established Compensation Core Earnings target produced a formulaic AIP funding level of 143% of target (page 41). The Compensation Committee undertook its qualitative review of performance and concluded that the formulaic AIP funding level appropriately reflected 2024 performance. Accordingly, no adjustments were made.
The Compensation Committee certified a 2022-2024 performance share award payout at 180% of target.
The Company's average annual Compensation Core ROE during the performance period was 16.3%, resulting in a payout of 200% of target for the ROE component (50% of the award). The company's TSR during the period was at the 73rd percentile of the performance peers, resulting in a 160% payout for the TSR component (50% of the award). The combined performance metrics yielded a payout of 180% of target (page 43).
The Compensation Committee (and, in the case of the CEO, the independent directors) approved the following compensation for each NEO:
PROXY SUMMARY
Base Salary
AIP Award
LTI Award
Total Compensation
Change
Change
Change
Change
NEO
2024
from 2023
2024
from 2023
2024
from 2023
2024
from 2023
Christopher Swift
$
1,200,000
0.0 %
$4,719,000
22.2 %
$12,000,000
14.3 %
$17,919,000
15.2 %
Beth Costello
$
800,000
3.2 %
$1,930,500
22.2 %
$2,600,000
7.2 %
$ 5,330,500
11.5 %
A. Morris Tooker
$
750,000
NA*
$1,569,400
NA*
$1,700,000
NA*
$ 4,019,400
NA*
Deepa Soni
$
750,000
7.1 %
$1,561,100
66.8 %
$1,600,000
14.3 %
$ 3,911,100
28.8 %
Amy Stepnowski
$
600,000
0.0 %
$1,573,000
22.2 %
$1,400,000
27.3 %
$ 3,573,000
19.6 %
*Mr. Tooker was not previously an NEO.
This table provides a concise picture of compensation decisions made in 2024, and highlights changes from 2023. Another view of 2024 compensation for the NEOs is available in the Summary Compensation Table on page 53.
COMPENSATION BEST PRACTICES
Our current compensation best practices include the following:
WHAT WE DO
* Double-trigger vesting for equity awards applies if the awards are assumed or replaced with substantially equivalent awards.
WHAT WE DON'T DO
û No buy-outs of underwater stock options
SAY-ON-PAY RESULTS
At our 2024 annual meeting, we received approximately 91% support on Say-on-Pay. The Compensation Committee considered the vote to be an endorsement of The Hartford's executive compensation programs and policies, and recent program changes. They took this strong level of support into account in their ongoing review of those programs and policies. Management also discussed the vote, along with aspects of its executive compensation, sustainability and corporate governance practices, during our annual shareholder engagement program to gain a deeper understanding of shareholders' perspectives. Feedback regarding the compensation program remained generally positive, with many shareholders complimentary of our practices. For further discussion of our shareholder engagement program, see page 19.
2025 Proxy Statement
9
Disclaimer
The Hartford Insurance Group Inc. published this content on April 11, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 11, 2025 at 12:18 UTC.