Alan Schnitzer
About Alan Schnitzer
Alan D. Schnitzer, age 59, is Chairman and Chief Executive Officer of The Travelers Companies, Inc. (TRV). He has served as a director since 2015, previously holding roles including Vice Chairman and Chief Legal Officer (joined in 2007) and CEO of Business and International Insurance (2014–2015) . Under his leadership, 2024 performance included net income of $5.0B, core income of $5.0B, ROE of 19.2%, core ROE of 17.2%, record underwriting income, and net written premiums up 8% to $43.4B . Over longer horizons, TRV delivered TSR of ~29% (1-year), 64% (3-year), 97% (5-year) and 575% since 1/1/2008, with ROE outperformance vs. P&C industry and rising book value per share while returning >$2.1B to shareholders in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Travelers | Chairman & CEO; Director | 2015–present | Leads strategy and execution; Executive Committee Chair; drove innovation, underwriting and efficiency initiatives tied to improved core ROE, expense ratio and premium growth . |
| Travelers | Vice Chairman & Chief Legal Officer | 2007–2014 | Senior legal and operating responsibilities; foundation for later segment CEO role . |
| Travelers | Vice Chairman & CEO, Business & International Insurance | 2014–2015 | Led TRV’s largest segment prior to CEO appointment . |
| Simpson Thacher & Bartlett LLP | Partner | Pre-2007 | Corporate law background; finance and legal expertise supporting executive leadership . |
External Roles
| Organization | Role | Years |
|---|---|---|
| University of Pennsylvania | Trustee | Current |
| Memorial Sloan Kettering Cancer Center | Trustee | Current |
| New York City Ballet | Director | Current |
| Business Roundtable | Director | Current |
Fixed Compensation
| Year | Base Salary ($) | Notes |
|---|---|---|
| 2022 | 1,300,000 | |
| 2023 | 1,450,000 | |
| 2024 | 1,450,000 | No change to CEO base salary in Feb 2025 review . |
Performance Compensation
| Component | Metric | Weighting | Target | Actual/Result | Payout / Outcome | Vesting |
|---|---|---|---|---|---|---|
| Annual Bonus (2024 performance) | Core ROE (principal factor among broad metrics) | Discretionary (non-formulaic) | 14.2% Core ROE (2024 plan) | 17.2% Core ROE (2024 actual) | $7.0M cash (up 17% YoY) | N/A (cash) |
| Annual Bonus (2024 performance) | Adjusted Core ROE (informing deliberations) | Discretionary | 20.7% Adjusted Core ROE (2024 plan) | Not disclosed | Incorporated in Committee judgment | N/A |
| Performance Shares (2022–2024 cycle) | Adjusted ROE | 100% of PSU schedule | Threshold 8% (50% vest), Target 11% (100%), Max 16% (200%) | 15.2% adjusted ROE (2022–2024) | 189.33% of target shares vested | 3-year performance period; vests per certified results |
| Long-term equity (2025 grants for 2024 perf.) | Mix | 60% PSUs / 40% Stock Options (grant-date value) | — | — | CEO grant-date value $15.25M (up from $14.0M prior year) | Options vest 3 years; PSUs over 3 years |
| PSU design change (2025 grants) | rTSR Modifier (vs S&P 500 Financials) | ±20 pp modifier | — | — | Applied to PSU vesting outcome (max overall 200%) | Applies to 2025 awards |
Additional elements and practices:
- CEO pay mix for 2024 performance: 6% salary, 30% bonus, 38% PSUs, 26% options (94% performance-based) .
- Bonus caps: CEO capped at $10M; starting 2025 performance year, cap applies to all NEOs (5x salary) .
- No time-vested RSUs in ongoing program; long-term equity is all performance-based PSUs and options .
Equity Ownership & Alignment
| Metric | 2023 (as of Mar 28, 2023) | 2024 (as of Mar 18, 2024) | 2025 (as of Mar 24, 2025) |
|---|---|---|---|
| Shares Owned Directly/Indirectly (#) | 241,137 | 281,061 | 270,850 |
| Options Exercisable ≤60 days (#) | 900,442 | 874,884 | 1,019,391 |
| Total Stock-Based Ownership (#) | 1,141,579 | 1,155,945 | 1,290,241 |
- Ownership guidelines: CEO required to hold 600% of base salary; all NEOs were in compliance as of Dec 31, 2024 .
- Hedging and pledging: Hedging prohibited; pledging prohibited without consent; the company reports “no pledges have been made” .
- Outstanding awards (12/31/2024):
- Exercisable options: 874,884; Unexercisable options: 144,507 (2022 grant), 119,292 (2023 grant), 99,207 (2024 grant) .
- Unearned PSUs: 94,240 (2023 grant; $22.70M at $240.89) and 80,327 (2024 grant; $19.35M at $240.89) .
- Option exercises/stock vested (2024): Exercised 222,901 options for $21.10M; 90,394 PSUs vested for $21.78M value .
Ownership concentration (context): TRV had 226,557,683 shares outstanding as of Mar 24, 2025 . Based on disclosed beneficial ownership, Mr. Schnitzer’s total stock-based ownership of 1,290,241 equates to ~0.57% of shares outstanding (calculation using and ).
Employment Terms
| Term | Detail |
|---|---|
| Employment letter | Dated Aug 4, 2015; governs CEO terms . |
| Severance (no CIC) | If terminated without “cause” or resigns for “good reason”: 2x base salary + 2x the greater of (average of last two bonuses) or (250% of base salary); up to 24 months medical benefits . |
| Change-in-control (CIC) equity | Upon CIC: performance-vesting awards convert to time-based based on actual performance through most recent fiscal year (or deemed target if <1 year outstanding). If terminated without cause or for good reason within 24 months post-CIC, all outstanding equity fully vests (after conversion) . |
| Non-compete | Company can impose a 6-month non-compete post-termination; if imposed and complied with, lump-sum equals six months’ base salary + 50% of average prior two-year bonus + 50% of average prior two-year equity grant-date value; health benefit reimbursement during non-compete . Scope applies in the U.S. and other countries where TRV operates . |
| CIC trigger type | Double-trigger for full equity vesting (termination within 24 months after CIC); conversion of PSUs to time-vesting upon CIC is single-trigger feature specific to CEO agreement . |
| Excise tax gross-up | None for NEOs . |
Illustrative potential payments (12/31/2024):
- CEO: $26.69M cash severance if involuntary termination without cause/good reason; incremental $32.38M equity acceleration if such termination follows a CIC; $39.86M equity value upon death; see full table for scenarios .
Retirement, Deferred Compensation, and Perquisites
| Item | Detail |
|---|---|
| Pension (present value) | Pension Plan: $261,288; Pension Restoration Plan: $4,593,338 (as of 12/31/2024) . |
| Non-qualified pension account balance | Pension Restoration Plan account: $5,000,259 (12/31/2024) . |
| Deferred compensation | CEO balance: $13,137,027 (no 2024 contributions) . |
| 2024 perquisites | Personal car/driver and other ground transport: $16,757; personal security (incl. cyber): $29,968; financial/tax planning: $17,905; aircraft incremental cost over FAA limit reimbursed to company: $31,538 . |
Board Governance
- Role and service: Chairman and CEO; Director since 2015; Chairs the Executive Committee .
- Dual-role implications: Board retains flexibility to combine/split Chair/CEO; with combined role, the Board emphasizes robust Lead Independent Director authority to counterbalance management influence .
- Lead Independent Director: Todd C. Schermerhorn; authorities include setting agendas, leading executive sessions, liaising between independent directors and management .
- Committee independence: All committees other than Executive Committee comprised solely of independent directors .
- Meetings and attendance: Board met five times in 2024; each director attended ≥75% of Board and committee meetings .
- Director pay: Employees (including the CEO) do not receive compensation for Board service .
Say-on-Pay, Shareholder Engagement, and Peer Group
- Say-on-pay 2024: Received support from a substantial majority but lower vs. prior years; prompted expanded bonus caps (to all NEOs) and addition of a relative TSR modifier to PSUs starting in 2025 .
- Engagement: TRV engaged with holders representing ~45% of outstanding shares in 2024; discussed comp metrics, rTSR, bonus caps, and discretion in annual bonus .
- Compensation Comparison Group (select): AIG, Allstate, Chubb, Hartford, Progressive; plus broader financials (e.g., Marsh & McLennan, MetLife, Prudential) . Base salary philosophy near median of peers; total pay intended to vary with performance .
Compensation Structure Analysis
- Mix and rigor: 94% of CEO total direct compensation is performance-based; long-term equity is 60% PSUs and 40% options—no time-based RSUs in ongoing program .
- Program changes: Added rTSR modifier to PSUs in 2025; broadened annual bonus caps to all NEOs from 2025 performance year .
- Discretion vs. formula: Committee maintains a non-formulaic annual bonus approach to avoid unintended incentives in P&C underwriting; detailed rationale disclosed .
- Shareholder-friendly guardrails: No option repricing; no excise tax gross-ups; clawbacks in place (including Dodd-Frank policy); anti-hedging/anti-pledging policies; robust ownership requirements .
Performance & Track Record
- 2024 highlights: Net income $5.0B; core income $5.0B; ROE 19.2%; core ROE 17.2%; record underwriting income; NWP up 8% to $43.4B; strong NII up 23% .
- Long-term execution: Accelerated premium growth, improved expense ratio (to 28.5%), underlying underwriting income tripled over ~8 years; strong cash flow and invested assets growth .
- TSR: ~29% (1-yr), 64% (3-yr), 97% (5-yr); 575% since 1/1/2008, exceeding peer groups and indices .
- ROE leadership: 2024 ROE 19.2% vs. domestic P&C industry ~13.3%; 10-year average TRV ROE 12.5% vs. industry 7.5% and peer 11% with lower volatility .
Risk Indicators & Red Flags
- Clawbacks: Restatement and misconduct-based clawback; Dodd-Frank-compliant financial restatement policy also adopted .
- Hedging/pledging: Hedging prohibited; pledging requires consent; reported no pledges .
- Option repricing: Prohibited without shareholder approval; fixed grant-date pricing; controlled off-cycle grant dates .
- Related-party transactions: 2025 proxy discloses related-person transactions, none involving the CEO; primary disclosed item relates to another executive’s family relationship (GJ Sullivan Co. Reinsurance) .
- Shareholder proposals: 2025 ballot includes “Ratification of Golden Parachutes” proposal; Board recommends against .
Compensation Committee Analysis
- Members: Clarence Otis Jr. (Chair), Thomas B. Leonardi, Elizabeth E. Robinson, Rafael Santana; all independent .
- Consultant: FW Cook serves as independent advisor; Committee evaluated and found no conflicts of interest .
- Responsibilities: Approves CEO/NEO goals, pay, equity grants; oversees ownership guidelines, clawbacks, and plan design .
Investment Implications
- Pay-for-performance alignment: Heavy performance equity and ownership requirements tie CEO wealth to long-term ROE, TSR and stock outcomes; addition of rTSR modifier addresses relative under/over-performance risk .
- Low pledging/hedging risk and robust clawbacks reduce governance risk; no option repricing, no excise tax gross-ups .
- Potential selling pressure from option exercises is a consideration (222,901 options exercised, $21.1M value realized in 2024), but substantial unvested PSUs and strict ownership guidelines support continued alignment .
- Retention: Competitive severance/CIC protections (double-trigger vesting; six-month non-compete consideration) and ownership guidelines mitigate retention risk while preserving shareholder protections .
- Performance momentum: Strong 2024 fundamentals (ROE, underwriting, premium growth) and decade-long value creation support confidence in management execution, though the Committee’s continued use of discretion in annual bonuses may attract proxy-advisor scrutiny if outcomes diverge from disclosed targets .