Yanela Frias
PRUDENTIAL FINANCIALAbout Yanela Frias
Yanela C. Frias is Executive Vice President and Chief Financial Officer of Prudential Financial, appointed March 15, 2024 after serving as President of Group Insurance; she joined Prudential in 1997 and is 51 years old . She holds a B.S. in Accounting and an MBA in Finance from Rutgers University, is a CPA, and has led major businesses including Prudential Retirement and Investment & Pension Solutions (PRT and international reinsurance) . Company performance context under her CFO tenure includes 2024 adjusted EPS (AOI basis) of $13.73 and a 1-year TSR of 19% with peer percentile 16%; 3-year TSR 26% (50th percentile) and 5-year TSR 63% (49th percentile) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Prudential Financial | Executive Vice President & Chief Financial Officer | Mar 2024–present | Finance leadership for strategy to be higher-growth, less market-sensitive and more nimble |
| Prudential Financial | President, Group Insurance | Oct 2021–Feb 2024 | Led U.S. group benefits; operational execution |
| Prudential Financial | President, Prudential Retirement | Dec 2019–Oct 2021 | Oversaw retirement businesses and growth initiatives |
| Prudential Financial | Head, Investment & Pension Solutions, Prudential Retirement | Jun 2017–Dec 2019 | Led Pension Risk Transfer and International Reinsurance businesses |
| Prudential Financial | SVP & Head of Structured Settlements, Prudential Retirement | Nov 2016–Jun 2017 | Product execution in structured settlements |
| Prudential Financial | CFO, Prudential Annuities | Feb 2013–Nov 2016 | Financial leadership for annuities |
| Prudential Financial | VP Finance, Individual Life Insurance | Sep 2011–Feb 2013 | Financial leadership for life segment |
| Prudential Financial | Managing Director & Assistant Treasurer, Capital Markets & Corporate Finance | Jun 2008–Sep 2011 | Corporate finance and capital markets execution |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Rutgers University | Education | — | B.S. Accounting; MBA Finance; CPA; AICPA member |
Fixed Compensation
| Component | 2024 Terms | 2025 Update | Actual Paid (2024) |
|---|---|---|---|
| Base Salary | $600,000 effective upon CFO appointment (Mar 15, 2024) | Increased by $100,000 effective Mar 1, 2025 (to $700,000) | $572,917 accrued for 2024 |
| Target Annual Incentive | $1,500,000 (AIP target) | Unchanged in proxy text; funding by company factor | $1,590,000 paid for 2024 performance (106% of target) |
| Target Long-Term Incentive | $3,200,000 (value at target) | 75% PSUs / 25% RSUs structure | Stock awards reported $1,451,922 (includes $451,827 PS modification accounting) |
Performance Compensation
Annual Incentive Program (Company-Level Metrics Applied to NEOs)
| Metric | Weight | Target / Scale | 2024 Actual | Factor |
|---|---|---|---|---|
| Adjusted EPS (AOI basis) | 30% | Target $14.20; scale: 0.500 at $9.94, 1.000 at $14.20, 1.500 at $18.46 | $13.73 (after standard adjustments) | 0.925 |
| Relative ROE vs Peer Median | 30% | Target 0.0%; scale: 0.500 at −4.0%, 1.000 at 0.0%, 1.500 at +4.0% | +0.3% | 1.025 |
| Total Operating Expense vs Plan | 25% | Scale: 1.000 at plan; ranges ±$75M to ±$325M | +$11M vs plan | 1.000 |
| Customer Experience (NPS) Change | 15% | Target +1; max ≥+5 | +5.27 | 1.500 |
| Final Performance Factor | — | Weighted average | — | 1.060 (no discretionary adjustments) |
Resulting Frias payout: $1,590,000, consistent with 1.060 × $1,500,000 target .
Long-Term Incentive – Performance Shares (PSUs)
| Grant | Metric | Scale | 2024 Result | Earn-Out Factor | Frias Target Shares | Frias Actual Shares |
|---|---|---|---|---|---|---|
| 2022–2024 PSUs | ROE vs Peer (50%) | 0.500 at −4.0% to 1.500 at +4.0% | +0.3% | 1.025 component | 4,039 | 3,292 (0.815× target) |
| 2022–2024 PSUs | BVPS Growth (50%) | Modified threshold 2.0%; target ≥8.0% | 3.27% (modified) | 0.606 component | — | — |
| 2022–2024 Final | Weighted Average | — | — | 0.815 (post-modification) | — | 3,292 |
Program modifications in Jan 2024 excluded outsized rate impacts on BVPS, lowered thresholds and capped BVPS payouts to avoid windfalls; NEOs earned 81.5% for 2022–2024 and 94.8% for 2021–2023; incremental accounting cost $62M (Frias PS modification value $451,827 in SCT) .
RSUs
- 25% of LTI in RSUs vest in equal annual installments over three years .
- Frias 2024 RSU grant: 2,851 units (grant-date fair value $300,039) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 17,569 common shares; 3,942 exercisable options; total 21,511 shares beneficially owned . Individual executives own <1% of shares outstanding . |
| Ownership as % of Outstanding | ~0.006% of 354,427,086 diluted shares (21,511 ÷ 354,427,086) . |
| Deferred/Underlying Units | 42,526 director/underlying units; total shares plus underlying units 64,037 . |
| Outstanding RSUs (Unvested) | 2,851 (2024 grant; $337,929 MV), 1,356 (2023; $160,727), 577 (2022; $68,392) . |
| Outstanding PSUs (Unearned, Max Basis) | 9,978 (2024 cycle; $1,182,693 MV), 7,118 (2023; $843,697), 5,049 (2022; $598,458) . |
| Options | 3,942 options exercisable at $95.87, expiring Feb 11, 2030 . |
| Ownership Guidelines | EVPs required to hold stock equal to 300% of base salary; 50% post-vesting retention; all NEOs met guidelines as of Mar 1, 2025 . |
| Hedging/Pledging | Hedging prohibited for all employees; pledging prohibited for Section 16 officers and directors . |
Employment Terms
| Provision | Terms (Frias-specific amounts where disclosed) |
|---|---|
| Employment Agreement | No individual employment agreement; covered by Company plans . |
| Severance (No Cause) | Up to 18 months of base salary and annual incentive; Frias estimated severance $2,630,600; total package estimate $5,900,668 as of YE 2024 . |
| Change-in-Control (Double Trigger) | Lump-sum equal to 2× base salary + annual incentive (avg of last 3 years), plus present value of related retirement accruals; Frias estimated severance $3,916,356; total package $8,002,550; continued health benefits for 18 months with related tax gross-up . |
| AIP Treatment on Separation | AIP paid at target in CIC; otherwise based on performance year results . |
| Equity Treatment | Double-trigger vesting only if awards aren’t assumed; PSUs pay at target in CIC; RSUs vest in CIC if not assumed; pro-rata vesting for involuntary term without cause (no approved retirement) . |
| Retirement Eligibility | Frias does not qualify for approved retirement treatment upon voluntary resignation or involuntary termination without cause . |
| Clawback | Applies to restatements (mandatory recovery) and improper conduct (discretionary recovery) over prior 3 years; not applied in 2024 . |
| Resignation Notice/Restrictive Covenants | Long-term awards require resignation notice period; forfeiture for violation of non-solicit/non-compete terms . |
Performance Compensation – Detailed Mechanics
| Program Element | Design Details |
|---|---|
| AIP Standard Adjustments | Exclude actuarial assumption updates, limit variable investment income outside ±10% band, exclude impacts from certain reinsurance, divestitures, and specific one-off items; 2024 net positive effect $1.23 on EPS under AIP . |
| Peer Groups | Compensation peer group: 20 diversified financials, insurers, asset managers, and banks; Performance peer group includes major life insurers (AFLAC, MetLife, Principal, etc.) . |
| Pay Mix Emphasis | On average, 91% of NEO total direct compensation is performance-based; NEO AIP awards funded at 106% for 2024 . |
| Say-on-Pay | 2024 approval 72.74% for 2023 pay program; below prior 3-year average of 93.4%; driven by PS program modifications; extensive shareholder engagement disclosed . |
Compensation & Grants (Frias 2024 Summary)
| Metric | 2024 |
|---|---|
| Salary | $572,917 |
| Stock Awards (incl. PS modification accounting) | $1,451,922 |
| Non-Equity Incentive | $1,590,000 |
| Change in Pension Value | $84,169 |
| All Other Compensation | $44,211 (car/driver, PESP/SESP contributions) |
| Total | $3,743,219 |
Stock/Option vesting in 2024: 7,821 shares vested (RSUs/PSUs) with $831,013 realized; no option exercises reported for Frias in 2024 .
Say-on-Pay & Shareholder Feedback
- 2024 proposal to approve NEO compensation received 72.74% support; Board enhanced disclosure on PS guardrails and retentive objectives after engagement with holders of >50% of shares .
- Board recommends FOR 2025 Say-on-Pay; continued outreach noted .
Investment Implications
- Pay-for-performance alignment: Frias’ AIP paid at 106% precisely tracks the 1.060 company performance factor; PSUs paid at 81.5% for 2022–2024, indicating disciplined long-term calibration despite BVPS guardrail adjustments .
- Insider selling pressure: Upcoming RSU tranches (2,851/1,356/577 unvested) vest over 2025–2027 and PSUs across 2024–2026 cycles; combined with 3,942 options at $95.87 expiring in 2030, this creates scheduled equity events but hedging/pledging prohibitions and retention requirements mitigate misalignment and opportunistic sales .
- Retention risk economics: Double-trigger CIC protection and severance framework (~$5.9M no-cause; ~$8.0M CIC as of YE 2024) plus resignation notice requirements and clawbacks provide retention and conduct safeguards; Frias not eligible for approved retirement treatment, reducing accelerated vesting risk on departure .
- Governance signal: Mid-cycle modifications to PSUs were unusual and contributed to lower Say-on-Pay support; however, guardrails (caps, thresholds) and below-target outcomes (0.815) suggest responsiveness without windfalls; monitor future shareholder votes and any additional plan changes .
- Ownership alignment: Frias meets 300% salary ownership guideline and is subject to 50% share retention; beneficial ownership remains <1% of outstanding shares, but guidelines and prohibitions support alignment .