Andrew Sullivan
PRUDENTIAL FINANCIALAbout Andrew Sullivan
Andrew F. Sullivan, 54, became CEO and President of Prudential Financial, Inc. on March 31, 2025 and joined the Board the same day after leading International Businesses and Global Investment Management (PGIM). He joined Prudential in 2011, previously led U.S. Businesses and Workplace Solutions, and earlier held roles at CareFirst BlueCross BlueShield, Cigna, Diamond Technology Partners, and DaimlerChrysler; he is a U.S. Naval Academy graduate and former nuclear submarine officer awarded the Navy and Marine Corps Achievement Medal . Company performance context: 2024 TSR was 19% (1-yr), 26% (3-yr), 63% (5-yr), with 2024 adjusted EPS used for incentives at $13.73 and a 2024 Annual Incentive Final Performance Factor of 1.060 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Prudential Financial | CEO and President; Director | 2025–present | CEO transition with Executive Chairman structure; Board membership began Mar 31, 2025 . |
| Prudential Financial | EVP, Head of International Businesses and Global Investment Management (led International Insurance and PGIM) | 2024–2025 (prior) | Oversaw International Insurance across Asia/LatAm/Africa; led $1.4T AUM PGIM . |
| Prudential Financial | Head of U.S. Businesses; Head of Workplace Solutions | Pre-2024 | Led Group Insurance, Individual Life, Retirement Strategies, Retail Advice; ran underwriting, claims, service . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| U.S. Navy | Nuclear submarine officer | n/d | Awarded Navy and Marine Corps Achievement Medal for leadership/performance on USS Nebraska . |
| CareFirst BlueCross BlueShield | Leadership roles | pre-2011 | Health insurance operating experience . |
| Cigna | Leadership roles | pre-2011 | Health insurance operating experience . |
| Diamond Technology Partners | Leadership roles | pre-2011 | Consulting/technology experience . |
| DaimlerChrysler | Leadership roles | pre-2011 | Industrial/operations exposure . |
Fixed Compensation
Multi-year summary compensation (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $700,000 | $750,000 | $750,000 |
| All Other Compensation | $40,895 | $45,089 | $77,146 (perqs $49,446; PESP $11,500; SESP $16,200) |
| Change in Pension Value | $761 | $323,379 | $227,789 |
Notes:
- Effective March 31, 2025 base salary set at $1,200,000 for new CEO role .
Performance Compensation
2024 Annual Incentive (AIP) structure and outcome:
- Individual target and payout for 2024: Target $2,250,000; Payout $2,385,000 (Final Performance Factor 1.060) .
- Company scorecard and factors:
| Metric | Weight | Target/Scale | 2024 Result | Factor |
|---|---|---|---|---|
| EPS (AOI basis) | 30% | Target $14.20; Threshold $9.94; Max $18.46+ | $13.73 | 0.925 |
| Relative ROE vs Peer Median | 30% | Target 0.0%; Max +4.0% | +0.3% | 1.025 |
| Operating Expense vs Plan | 25% | Target plan; Max -$325M | +$11M | 1.000 |
| Change in Customer Experience (NPS) | 15% | Target +1; Max +5 | +5.27 | 1.500 |
| Final Performance Factor | — | Weighted average | — | 1.060 |
Long-Term Incentive (LTI) program:
- Mix and targets: Performance Shares (PS) 75% and RSUs 25% of LTI; Sullivan’s 2025 LTI target value $5,000,000 .
- PS metrics (3-year): 50% ROE vs peer median; 50% Adjusted BVPS Growth (with 2024 guardrails reducing threshold and excluding outsized rate impacts; BVPS factor capped to avoid windfalls) .
- 2022–2024 PS payout (paid Feb 2025): 0.815x target; Sullivan received 22,168 shares (from 27,199 target) .
- Vesting: RSUs vest in three equal annual installments; PS cliff-vest based on 3-year results .
2024 equity grant detail (SEC grant-date fair value, includes PS modification cost):
| Component | Amount |
|---|---|
| RSUs granted (2024) | $1,136,250 |
| PS at target (2024) | $3,408,653 |
| Incremental 2024 PS modification value (for 2021–2023 grants) | $3,080,592 |
| Total “Stock Awards” reported (SCT) | $7,625,495 |
Compensation program governance:
- 2024 say-on-pay support: 72.74% (below 3-year average 93.4%) following PS methodology adjustments; 2022–2024 PS paid at 81.5% of target; Committee committed to limit in-flight adjustments to extraordinary circumstances .
Equity Ownership & Alignment
Beneficial ownership and units (as of Mar 14, 2025):
| Item | Quantity / $ |
|---|---|
| Common Stock owned | 27,497 shares |
| Options exercisable | 5,828 shares |
| Total beneficially owned | 33,325 shares |
| Director Deferred Stock Units / Additional Underlying Units | 137,838 units (includes target PS and unvested RSUs per footnotes) |
| Total shares plus underlying units | 171,163 |
| Individual ownership as % outstanding | Each director/NEO <1% |
Outstanding awards (Dec 31, 2024):
- RSUs outstanding: 11,878 (2023 grant), 8,070 (2023), 3,023 (2022); vest one-third annually at end of February after each anniversary of grant .
- PS outstanding (max potential): 53,450 (2024–2026), 54,470 (2023–2025), 33,999 (2022–2024, paid at 0.815 in Feb 2025) .
- Options outstanding: various historical tranches with strikes ~$106–110 expiring 2027–2028 .
Policies and guidelines:
- Ownership guidelines: CEO 700% of base salary; EVP 300%; all NEOs in compliance as of Mar 1, 2025 .
- Retention: Section 16 officers must retain 50% of net shares until one year post-termination or acquisition .
- Hedging/pledging: Prohibited for Section 16 officers and directors .
Deferred comp and retirement:
| Plan | Executive Contributions 2024 | Company Contributions 2024 | Aggregate Balance |
|---|---|---|---|
| SESP | $16,200 | $16,200 | $260,394 |
| Deferred Compensation Plan | $115,100 | — | $1,012,938 |
| Pension PV (12/31/2024) | — | — | Merged Retirement $555,958; Supplemental Retirement $1,154,181 |
Employment Terms
- No individual employment agreement; rights governed by Company Severance Plan and Change in Control (CIC) Program .
- Severance (non-CIC): up to 18 months of base salary and annual incentive for involuntary termination without cause (executives generally; CEO/Executive Chairman not eligible for this plan after appointment) .
- CIC (double-trigger): lump sum 2x base salary + 2x average bonus; double-trigger equity vesting treatment; 18 months health benefits with tax gross-up for benefits; equity typically honored/assumed; if not, RSUs and PS paid as specified (PS at target) .
- Clawback: Recovery policy for restatements and improper conduct; applies to all incentive compensation for 3 years; disclosure required of any recovery decision .
- Forfeiture/notice: Resignation notice period tied to LTI awards; non-solicit/non-compete violations trigger forfeiture .
Estimated payouts for Sullivan (status as of 12/31/2024):
| Scenario | Severance | Annual Incentive | PS | RSUs | Health/Life | Additional Retirement Accruals | Total |
|---|---|---|---|---|---|---|---|
| Involuntary Termination (no cause) | $4,612,100 | $2,385,000 (2024 AIP) | $7,501,290 | $1,127,576 | — | $610,438 | $16,236,404 |
| Separation due to CIC (double-trigger) | $6,783,065 | $2,250,000 (target) | $11,751,657 | $2,722,753 | $60,328 | $198,000 | $23,765,803 |
| Disability | — | $2,324,700 | $11,751,657 | $2,722,753 | $1,436,558 | $2,403,881 | $20,639,549 |
| Death | — | $2,324,700 | $11,751,657 | $2,722,753 | — | $204,574 | $17,003,684 |
Board Governance
- Board service: Sullivan joined Prudential’s Board on March 31, 2025; he is a management (non-independent) director .
- Committees: All core committees are independent; executive directors typically do not serve on these (nominee table shows no committee assignments for Sullivan) .
- Structure and independence: Board had 9 nominees with 78% independent; Lead Independent Director in place; Charles Lowrey moved to Executive Chairman on Mar 31, 2025, splitting Chair/CEO roles .
- Meetings and attendance: 9 Board meetings in 2024; 99% director attendance .
- Say-on-pay 2024: 72.74% support; Board cites unique interest rate environment and disclosed guardrails for PS program; continued engagement with holders of >50% outstanding shares .
Dual-role implications:
- Sullivan serves as both CEO and Director; independence concerns are mitigated by split Chair/CEO structure (Executive Chairman) and the Lead Independent Director’s strong authority over agendas/materials and shareholder engagement .
Compensation Structure Analysis
- Performance emphasis: ~91% of NEO total direct compensation is performance-based; Sullivan’s 2024 AIP paid at 106% of target, while 2022–2024 PS paid at 81.5% of target .
- Program modification watch item: 2024 in-flight adjustments to PS BVPS component (with caps and exclusions) created an incremental accounting cost; NEO SCT adds $22M cumulatively for modifications, including $3.08M attributed to Sullivan’s awards; governance engagement disclosed .
- Mix shift and targets: As incoming CEO, Sullivan’s 2025 salary increased to $1.2M and LTI target set at $5.0M, indicating increased long-term equity alignment .
- Risk controls: Clawback policy strengthened for SEC/NYSE rules; hedging/pledging barred; 50% share retention; executive pay risk review annually .
Risk Indicators & Red Flags
- In-flight PS modification (2024) alters original terms; though capped and justified by rate shocks, it drew lower say-on-pay support (72.74%)—a governance watch item for 2025–2026 .
- CIC benefits are significant (2x pay plus equity at target if not assumed), and include a tax gross-up for benefit continuation only; equity is double-trigger if assumed—typical but material .
SAY-ON-PAY & SHAREHOLDER FEEDBACK
- 2024 say-on-pay: 72.74% support; Board implemented enhanced disclosure and guardrails on PS program, with continued investor engagement .
Compensation Peer Group (Benchmarking)
- Peer set (unchanged in 2024): 20 companies across life insurers (e.g., MetLife, Principal), asset managers/custody banks (e.g., BlackRock, State Street), consumer finance (e.g., AmEx), diversified banks (e.g., JPMorgan) .
Expertise & Qualifications
- Education: U.S. Naval Academy; naval nuclear leadership; recognized with Navy and Marine Corps Achievement Medal .
- Domain experience: Insurance and asset management (International Insurance, PGIM), U.S. retail and group insurance; technology/operations exposure .
WORK HISTORY & CAREER TRAJECTORY
- Joined Prudential in 2011; advanced through major P&L leadership (U.S. Businesses; Workplace Solutions), to Head of International Businesses and Global Investment Management; appointed CEO effective Mar 31, 2025 .
- Prior roles at CareFirst BlueCross BlueShield, Cigna, Diamond Technology Partners, DaimlerChrysler; earlier U.S. Navy service .
COMPENSATION COMMITTEE ANALYSIS
- Committee renamed Compensation and Human Capital; uses FW Cook as independent advisor; emphasizes formulaic frameworks with limited positive discretion; robust goal-setting and peer benchmarking .
Related Party Transactions
- No disclosures involving Sullivan; one disclosed related party transaction involved a family member of another executive (Falzon) with compensation <$760k .
Investment Implications
- Alignment: High proportion of at-risk pay (PS/RSU) and ownership/retention policies (700% CEO guideline; hedging/pledging ban) support long-term alignment and reduce hedging/pledging risk .
- Near-term supply: RSUs vest annually at end of February; PS cycles (2023–2025 and 2024–2026) could trigger share deliveries contingent on performance, implying periodic insider selling windows; 2022–2024 PS already settled at 0.815x in Feb 2025 .
- Governance monitor: 2024 PS methodology change and sub-75% say-on-pay vote suggest continued shareholder scrutiny; future program stability and performance against ROE/BVPS targets will be watched by investors .
- Retention/CIC: Material CIC economics (double-trigger) provide strong retention through uncertainty but could be criticized if payouts occur amid underperformance; the CEO’s exclusion from standard severance post-appointment modestly limits cash severance risk outside CIC .