Richard McKenney
UnumAbout Richard McKenney
Richard P. McKenney is President & CEO of Unum Group and has served as a director since 2015; he previously served as Unum’s EVP & CFO (2009–2015) and Sun Life Financial’s EVP & CFO (2007–2009) and EVP (2006–2007) . He is age 56 as of the 2025 Annual Meeting and also serves on the board of U.S. Bancorp (since 2017) . Under his leadership, Unum delivered after-tax adjusted operating income of $1.59 billion in 2024 with revenues of $12.9 billion and 66% total shareholder return in 2024; 3-year TSR of 228% and 5-year TSR of 207% outperformed peers and indices . Pay-versus-performance disclosures show CEO compensation actually paid tracking strong TSR, net income, and adjusted operating EPS momentum (2024 CAP $27.0M; TSR index value 307.2; net income $1,779M; adjusted operating EPS $8.44) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Unum Group | President & CEO | 2015–present | Led profitable growth, digital investments, capital return, and stabilizing Closed Block LTC; achieved industry-leading shareholder returns . |
| Unum Group | EVP & CFO | 2009–2015 | Strengthened capital and financial flexibility; deep knowledge of operations, risk, and public policy . |
| Sun Life Financial, Inc. | EVP & CFO | 2007–2009 | Senior financial leadership in global insurance . |
| Sun Life Financial, Inc. | EVP | 2006–2007 | Executive leadership prior to CFO role . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| U.S. Bancorp | Director | 2017–present | Current public company board seat . |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | 1,100,000 | 1,100,000 | 2025 base increased to $1,135,000 . |
| Annual Incentive Paid ($) | 4,331,251 | 2,956,251 | Calculated at 100% company performance and 107.5% strategic modifier . |
| CEO Annual Incentive Target (%) | 250% | 250% | Target of base salary earnings . |
| Approved LTI Grant ($) | 10,687,500 | 11,287,500 | 50% RSUs / 50% CIUs; 2025 target raised to $11.3M pre-modifier . |
Mr. McKenney receives no additional compensation for Board service .
Performance Compensation
| Metric | Weight | Threshold | Target | Max | 2024 Actual/Result |
|---|---|---|---|---|---|
| After-tax adjusted operating EPS | 50% | $6.27 | $8.36 | $9.61 | $8.44 |
| Earned Premium (Core Ops) ($mm) | 20% | 8,228.3 | 9,680.3 | 11,616.4 | 9,616.6 |
| Sales ($mm) | 10% | 1,596.2 | 2,128.3 | 2,660.4 | 2,086.1 |
| Customer Experience (%) | 10% | 70.0 | 100.0 | 120.0 | 98.8 |
| Adjusted Other Operating Expense Ratio (%) | 10% | 21.5 | 19.5 | 17.5 | 19.6 |
- Company performance achievement approved at 100% for 2024 after standard exclusions; CEO’s strategic objectives modifier was 107.5%, yielding annual incentive of $2,956,251 .
- Long-term incentives: 50% RSUs (time-vested over 3 years) and 50% CIUs (cash units) linked to adjusted book value growth plus dividends, with relative TSR modifier; 2022 CIUs paid at 186.2% of target (shareholder return measures 155.2% and relative TSR at 100th percentile) resulting in $7,820,400 settlement for the CEO .
Vesting Schedule and Upcoming Deliveries (Selected)
| Vesting Date | Grant Date | McKenney Units | Notes |
|---|---|---|---|
| Mar 1, 2025 | Mar 1, 2022 | 53,125 | RSUs; cash dividends accrue and pay at vest . |
| Mar 1, 2025 | Mar 1, 2023 | 32,587 | RSUs . |
| Mar 1, 2025 | Mar 1, 2024 | 35,769 | RSUs . |
| Mar 1, 2026 | Mar 1, 2023 | 33,575 | RSUs . |
| Mar 1, 2026 | Mar 1, 2024 | 35,769 | RSUs . |
| Aug 24, 2026 | Aug 24, 2020 | 63,365 | SSUs; six-year term with potential accelerated vesting on performance . |
| Mar 1, 2027 | Mar 1, 2024 | 36,854 | RSUs . |
| Total Outstanding Unvested | Various | 291,044 | Includes RSUs and SSUs; accrued cash dividends ~$872,465 . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Shares) | 742,490; less than 1% of class . |
| Unvested RSUs (Shares) | 174,782 not deemed beneficial within 60 days; SSUs 63,365 outstanding . |
| Stock Ownership Guideline | 6x base salary; CEO requirement . |
| Ownership vs Guideline | $73.54M total (common + RSUs/SSUs) vs requirement; 66.9x multiple, exceeding guideline . |
| Hedging/Pledging | Prohibited for directors and executive officers . |
| Retention | Must hold net after-tax shares until guideline met; all NEOs exceeded as of 12/31/2024 . |
| Insider Trading | Window periods and pre-clearance; policy on file (10-K exhibit) . |
Employment Terms
| Provision | CEO Terms |
|---|---|
| Severance (non-CIC) | 2x base + average prior 3 annual bonuses; prorated annual incentive; up to two years health & welfare; outplacement to $50k; confidentiality, non-solicit, non-compete, non-disparagement required . |
| Change-in-Control (CIC) | 3x base + average prior 3 bonuses; prorated annual incentive; up to 3 years health & welfare; outplacement to $50k; double-trigger for accelerated vesting of CIUs/CSUs/equity; 280G cutback if beneficial; no excise tax gross-ups . |
| CIC Performance Treatment | CIC date deemed last day of cycle solely for CIU performance calculation; awards settle based on actual performance . |
| RSU/CIU Distribution Timing | RSUs distributed 6 months post-termination to comply with 409A; CIUs based on actual cycle performance . |
Termination Sensitivities (Illustrative at 12/31/2024)
| Scenario | CEO Total ($) |
|---|---|
| Without Cause / Good Reason | 44,291,816 |
| Disability | 34,972,289 |
| Death | 35,013,709 |
| CIC Termination | 56,173,013 |
| Retirement | 31,184,016 |
Board Governance
- Board service: Director since 2015; not independent; no committee memberships .
- Leadership structure: Independent non-executive Chairman (Kevin T. Kabat), serving as Lead Independent Director; five executive sessions in 2024; mitigates CEO/director dual-role concerns via strong independent oversight .
- Meeting attendance: Board and committee attendance exceeded 99% in 2024; each incumbent director attended at least 94% .
- Director compensation: Non-employee directors receive retainers and RSUs; CEO receives no additional pay for board service .
Compensation Structure Analysis
- At-risk pay: 92% of CEO targeted total direct compensation is at risk (short-term and long-term incentives), aligning pay with performance .
- Metric design: Annual plan weights EPS (50%), earned premium (20%), sales (10%), customer experience (10%), and expense ratio (10); exclusions preserve goal integrity and discourage undesired behaviors (e.g., asset impairments, FX, unplanned M&A) .
- LTI emphasis: Shifted to RSUs and CIUs; CIUs link to adjusted book value growth + dividends with relative TSR modifier; strong 2022 CIU payout (186.2%) underscores value creation .
- Clawbacks: NYSE Rule 10D-1 compliant clawback plus additional misconduct recoupment policy covering time and performance awards .
- Perquisites and tax: Limited perqs; company provides nonresident state tax payments and related gross-ups; no golden parachute excise tax gross-ups (uses 280G cutback) .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay support: 93% approval in 2024; prior approvals 94% (2023) and 95% (2022) .
- Engagement: Outreach to holders representing ~86% of institutional shares; feedback favorable on compensation design and governance .
Equity Ownership & Upcoming Vests (Insider Selling Pressure Signals)
- Significant unvested tranches vesting Mar 1, 2025/2026/2027 and SSUs maturing Aug 24, 2026; accrued cash dividends on outstanding RSUs/SSUs ~$872k as of 12/31/2024 .
- Anti-pledging/hedging and retention rules reduce misalignment risk; CEO exceeds ownership guideline by a wide margin (66.9x), supporting alignment but enabling potential discretionary sales post-vesting given retention compliance is already met .
Investment Implications
- Alignment: High at-risk mix, robust stock ownership (66.9x salary), and strict anti-hedging/pledging/clawback policies indicate strong pay-performance alignment and downside governance protection .
- Performance leverage: Annual incentive metrics and CIU design tie payouts to core profitability, premium growth, and TSR—historically delivering outsized CIU realizations (186.2% for 2022 CIUs), a positive signal on execution confidence .
- Retention risk: Severance and CIC protections (double-trigger, 3x multiple) plus long-dated SSUs (maturing 2026) and continued RSU cadence mitigate near-term flight risk; non-compete/non-solicit covenants further protect continuity .
- Trading signals: Upcoming RSU and SSU vests (2025–2027) create mechanical vest-driven events; while retention rules are satisfied, monitoring Form 4s for net-share sales around March and August vest dates is prudent given substantial vest schedules . Strong buybacks ($971M) and dividends ($296.6M) complement incentive design and may continue to support TSR under current strategy .
UNUM operating and financial context for 2024: Revenues $12.9B and after-tax adjusted operating income $1.59B, with capital returns via $971.0M repurchases and $296.6M dividends; 2024 TSR 66.3% and multi-year TSR outperform peers, validating compensation metric targets and achieved payouts .