Michel A. Khalaf
METLIFEAbout Michel A. Khalaf
President and CEO of MetLife since 2019; age 61; B.S. in Engineering and MBA in Finance from Syracuse University . Under his leadership in 2024, MetLife delivered Core Adjusted Earnings of $5.8B, Core Adjusted EPS of $8.11 (+11% YoY), Core Adjusted ROE of 15.2%, Core Free Cash Flow Ratio of 72%, Direct Expense Ratio of 12.1% (beat target), and Value of New Business of $3.2B (beat plan) . The company met and exceeded its five-year Next Horizon commitments (2019–2024) including ~$20.7B distributable cash and 15.2% Adjusted ROE in FY24; it launched the “New Frontier” strategy targeting double‑digit Adjusted EPS growth, 15–17% Adjusted ROE, and >$25B free cash flow (2025–2029) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| MetLife, Inc. | President & CEO | 2019–Present | Led execution of Next Horizon; launched New Frontier for 2025–2029 . |
| MetLife, Inc. | President, U.S. Business & EMEA | 2017–2019 | Oversaw key geographies/businesses pre-CEO . |
| MetLife, Inc. | President, EMEA | 2011–2017 | Drove regional growth and operations across EMEA . |
| Alico (acquired by MetLife in 2010) | Regional President, MEASA | 2008–2010 | Managed multi‑country insurance franchise . |
| AIG Philamlife (Philippines) | Deputy President & COO | 2006–2008 | Led operations in major Asian market . |
| AIG Amplico Life (Poland) | Regional SVP | 2001–2006 | Expanded CEE region presence . |
| Alico Egypt | General Manager | 1996–2001 | Country leadership and growth . |
| Alico Unionvita (Italy) | COO | 1994–1996 | Operations leadership in Italy . |
| Alico Bahamas | Deputy GM | 1992–1994 | Country operations . |
| Alico Paris | Regional Investment Manager | 1990–1992 | Investments role; began as investment officer in Wilmington, DE . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Public company boards | None | — | No other U.S. listed directorships; focuses on MetLife . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,387,500 | 1,475,000 | 1,500,000 |
| All Other Compensation ($) | 277,238 | 279,916 | 322,044 |
| Change in Pension Value ($) | — | 1,088,180 | 636,545 |
Notes: CEO pay ratio for 2024 was ~246:1 (CEO total comp $20,344,574 vs median employee $82,703) .
Performance Compensation
Annual Incentive (AVIP)
| Item | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non‑Equity Incentive Plan (Cash) ($) | 5,000,000 | 4,800,000 | 4,600,000 |
| Company AVIP funding factor | — | — | 101.4% of target (global AVIP population) |
- AVIP design uses Adjusted Earnings with a Variable Investment Income (VII) collar (±10%) to avoid undue volatility; 2024 review retained the collar and refined corridor mechanics for 2025 .
Long‑Term Incentives (LTI) – Structure and 2024 Awards
| Element | 2024 Grant Detail | Vesting/Performance |
|---|---|---|
| Performance Shares (PSUs) | Threshold 37,955; Target 151,822; Max 265,688 (granted 2/27/2024) | 3‑year performance; 50% Adjusted ROE vs Business Plan and 50% TSR vs global TSR peer group; payout 0–175%; overall cap at 100% if absolute TSR ≤ 0 . |
| Restricted Stock Units (RSUs) | 32,534 units (2/27/2024) | Time‑vest over 3 years; value depends on share price . |
| Stock Options | 97,614 options @ $69.16 strike (2/27/2024) | 10‑year term; prior grants vest over time; MetLife will cease granting options from 2025; mix shifts to 70% PSUs / 30% RSUs . |
Realized outcomes and vesting:
- 2022–2024 PSU performance factor = 114.3% (applied to deliverable shares; vested 12/31/2024) .
- 2024 vestings/exercises: 181,609 shares vested (value $14,510,286) and 51,319 options exercised (value realized $1,494,603) .
CEO Total Compensation Mix (Performance Year 2024)
| Item | Amount ($) | Note |
|---|---|---|
| Base Salary Earned | 1,500,000 | 2024 base . |
| AVIP Award (paid 2025) | 4,600,000 | For 2024 performance . |
| LTI Granted in 2025 (face value) | 16,100,000 | 70% PSUs / 30% RSUs policy; face value basis . |
| Total Compensation (company framework) | 22,200,000 | Sum of above . |
| SCT “Total” (SEC) for 2024 | 20,321,179 | Includes grant‑date fair values and pension change . |
Equity Ownership & Alignment
Beneficial Ownership (as of 3/31/2025)
| Holder | Common Stock (#) | Exercisable Options (#) | Deferred Shares (#) | Total Beneficial (#) | % of Class |
|---|---|---|---|---|---|
| Michel A. Khalaf | 521,925 | 517,509 | 0 | 1,039,434 | * (<1%) |
- Executive ownership guideline: CEO must hold shares equal to 7x base salary; Khalaf is at/above guideline and compliant with 100% net‑share retention requirement .
- Hedging/pledging: Company prohibits hedging, short sales, options trading, and pledging by directors and employees, including officers .
Outstanding and Unvested Equity (12/31/2024)
| Type | Quantity | Estimated Value ($) |
|---|---|---|
| Unvested RSUs | 62,249 | 5,096,948 |
| Unearned PSUs (at target) | 513,318 | 42,030,478 |
Selected option tranches (exercise price/expiry):
- 56,981 exercisable + 28,491 unexercisable @ $68.96 exp. 2/21/2032 .
- 30,322 exercisable + 60,645 unexercisable @ $71.73 exp. 2/27/2033 .
- 97,614 unexercisable @ $69.16 exp. 2/26/2034 (granted 2024) .
Implication: Significant unvested equity over a multi‑year horizon supports retention and aligns realized pay with long‑term TSR/ROE performance; policies prohibit hedging/pledging, further reinforcing alignment .
Employment Terms
- No individual employment contract; MetLife states it does not offer employment contracts to U.S.-based executive officers .
- Clawbacks: Company‑wide performance‑based recoupment policy (misconduct causing harm/restatement) and Dodd‑Frank “erroneously awarded compensation” recovery apply to executive officers, regardless of fault in restatements .
- Ownership/retention: 7x salary CEO guideline; retain 100% net shares until compliant .
- Non‑compete/solicit: Awards subject to forfeiture for violations (e.g., non‑disparagement, interference, soliciting employees; executives also restricted from competing) .
Severance and Change‑in‑Control (CIC)
| Provision | Terms |
|---|---|
| Standard severance (no CIC) | Lump sum of 28 weeks base salary + 1 week per year of service (max 52 weeks); outplacement; some pro‑rata treatment for forfeited PSUs if Rule of 65 not met . |
| CIC equity treatment | Alternative award of equivalent value/terms if substituted; otherwise immediate vesting at target for PSUs/RSUs and options become exercisable or cashed out; payout timing depends on 409A status . |
| CIC severance eligibility | Double‑trigger (termination without cause or resignation for good reason in 3‑year “Employment Period” post‑CIC) . |
| CIC cash severance | 2x (base salary + average AVIP of prior 3 years), paid lump sum; benefits continuation up to 3 years; modified cutback to avoid 280G excise tax; no tax gross‑ups . |
Hypothetical 12/31/2024 termination values (Trigger Date share price $81.88):
| Scenario (as of 12/31/2024) | Accel. Options ($) | Shares Issued for Awards ($) | Severance Pay ($) | Benefits Cont. ($) | Outplacement ($) |
|---|---|---|---|---|---|
| Death | 2,225,301 | 29,114,399 | — | — | — |
| Severance‑Eligible (No CIC) | — | — | 1,240,385 | — | 3,071 |
| CIC (No Alternative Award) | 2,225,301 | 29,114,399 | — | — | — |
| CIC + Severance‑Eligible Termination | — | — | 12,633,333 | 148,584 | — |
Board Governance and Service
- Role: Management Director; Chair of the Executive Committee; not independent .
- Board structure: Independent Chairman (R. Glenn Hubbard) separates CEO/Chair roles; all principal standing committees (Audit, Compensation, Governance, Finance & Risk, Investment) are fully independent and chaired by independent directors .
- Attendance: In 2024, directors attended >75% of meetings; attendance at regular Board and Committee meetings was 100% for applicable directors .
- Independence: All non‑management directors are independent; majority‑independent board .
- Hedging/pledging prohibition and director ownership guidelines in place .
Compensation Committee Analysis and Design Notes
- Independent consultant: Meridian; committee determined no conflicts; Meridian did not provide other services to the company .
- 2024 program review for New Frontier: ceased stock option grants starting 2025; LTI mix set at 70% PSUs and 30% RSUs; comparator group refined (added Chubb; removed HSBC) .
- Risk mitigators: AVIP VII collar; multi‑year PSU design with absolute TSR cap; formal clawbacks; CRO annual incentive risk review concluded programs did not encourage excessive risk‑taking in 2024 .
Performance & Track Record
| Metric (FY2024) | Result |
|---|---|
| Core Adjusted Earnings | $5.8B |
| Core Adjusted EPS | $8.11; +11% YoY |
| Core Adjusted ROE | 15.2% |
| Core Free Cash Flow Ratio | 72% (two‑year average target 65–75%) |
| Direct Expense Ratio | 12.1% (beat 12.3% target) |
| Value of New Business | $3.2B (beat plan) |
| 2022–2024 PSU Payout Factor | 114.3% (delivered) |
Narrative achievements include strategy delivery (Next Horizon), launch of New Frontier with investor day, disciplined capital and risk management, and AI/digital execution to drive efficiency and customer experience .
Risk Indicators & Red Flags
- Pledging/hedging barred for insiders; mitigates misalignment risk .
- No excise tax gross‑ups; CIC severance capped via modified cutback; no single‑trigger CIC vesting if Alternative Awards are provided .
- Option repricing prohibited without shareholder approval .
- Large unvested equity overhang (PSUs ~$42.0M; RSUs ~$5.1M at 12/31/2024) can create future vesting‑related supply but supports retention and alignment; 2024 realized vesting and option exercises quantified above .
- Say‑on‑pay support characterized as consistently favorable; 2024 CEO pay ratio provided for context .
Equity Ownership & Director Service Guidelines
- CEO ownership at or above 7x salary; compliant with 100% net‑share retention .
- Board has independent Chair; CEO serves as a non‑independent director and Executive Committee Chair, with independent committees providing oversight and regular executive sessions without management .
Investment Implications
- Pay‑for‑performance alignment looks robust: 70% of LTI in PSUs with 50/50 Adjusted ROE and relative TSR, a negative TSR cap, and meaningful realized PSU payout (114.3% for 2022–2024) tie rewards to shareholder outcomes .
- Retention risk appears contained given substantial unvested equity ($47.1M in PSUs/RSUs at year‑end 2024) and competitive CIC protections (double‑trigger, 2x cash, no gross‑ups) .
- Potential near‑term selling pressure can arise around vesting dates; 2024 vesting/exercises were material (181,609 shares vested; 51,319 options exercised), but ongoing prohibition on hedging/pledging and ownership guidelines limit misalignment risks .
- Governance mitigants (independent Chair, fully independent committees, clawbacks, no option repricing) reduce agency risks as MetLife executes New Frontier growth/ROE targets under Khalaf’s leadership .