Business Context and Reporting Period
This Form 8-K is a current report filed by Conseco, Inc. (noting the metadata reference to CNO Financial Group, Inc.) on March 2, 2010. The filing primarily addresses executive compensation matters, specifically the approval of 2009 performance-based bonuses and the establishment of the 2010 Pay for Performance (P4P) Incentive Plan.
Key Financial Metrics
The filing does not provide consolidated revenue, profit, cash flow, margin, debt, or liquidity metrics for the company. The only financial figures disclosed relate to executive compensation awards for the fiscal year ended December 31, 2009:
- C. James Prieur (CEO): $1,075,989 bonus (96% of target); no restricted stock awarded.
- Edward J. Bonach (CFO): $451,915 bonus (96% of target); 4,000 restricted shares; salary increased to $510,000.
- Eric R. Johnson (President, 40|86 Advisors): $468,865 bonus (94% of target); 3,000 restricted shares.
- Scott R. Perry (President, Bankers Life): $593,240 bonus (134% of target); 4,000 restricted shares.
- Steven M. Stecher (President, Conseco Insurance Group): $263,760 bonus (64% of target); 3,500 restricted shares.
Material Changes
The filing reports the following material changes regarding corporate governance and compensation:
- Compensation Adjustments: The CFO received a $37,500 annual salary increase.
- Plan Adoption: The Board approved the 2010 P4P Incentive Plan, which is substantially similar to the expiring 2005 plan but requires shareholder approval at the 2010 Annual Meeting.
- Performance Variance: Executive bonuses varied significantly against targets, ranging from 64% (Stecher) to 134% (Perry), indicating divergent performance across business units.
Guidance, Outlook, and Risks
Outlook and Plan Features: The 2010 P4P Plan allows for a maximum award of $5,000,000 per participant. Performance goals may include revenue, earnings, return on equity, stock price, and strategic criteria such as market penetration and risk-based capital. The plan includes a recapture provision allowing the company to reclaim payments if performance goals were achieved based on incorrect data.
Risks and Contingencies: The filing notes that the 2010 P4P Plan must be submitted to shareholders for approval. Additionally, the plan includes termination clauses where payouts are generally contingent on employment status at the time of payment, with exceptions for retirement, death, or disability.
Investor Verification Checklist
- Verify the shareholder approval status of the 2010 P4P Incentive Plan at the 2010 Annual Meeting.
- Review the specific performance metrics used to calculate the 134% bonus for Scott R. Perry versus the 64% bonus for Steven M. Stecher.
- Confirm the vesting schedule and conditions for the restricted stock awards granted to four of the five named executives.
- Check subsequent filings for the company's consolidated financial results for the year ended December 31, 2009, as they are not included in this 8-K.