UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.    )

 

 

Filed by the Registrant:  ☒                    Filed by a Party other than the Registrant:  ☐

Check the appropriate box:

 

☒		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Pursuant to §240.14a-12

ATHENE HOLDING LTD.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒		No fee required.
☐		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
		(1)		Title of each class of securities to which transaction applies:
		(2)		Aggregate number of securities to which transaction applies:
		(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
		(4)		Proposed maximum aggregate value of transaction:
		(5)		Total fee paid:
☐		Fee paid previously with preliminary materials.
☐		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
		(1)		Amount Previously Paid:
		(2)		Form, Schedule or Registration Statement No.:
		(3)		Filing Party:
		(4)		Date Filed:

 

 

 

ATHENE HOLDING LTD.

Chesney House, 96 Pitts Bay Road,

Pembroke, HM08, Bermuda

NOTICE OF 2019 ANNUAL GENERAL MEETING OF SHAREHOLDERS

OF ATHENE HOLDING LTD.

 

 

Hamilton, Bermuda

April [    ], 2019

Dear Shareholder:

Notice is hereby given that the annual general meeting of the holders of Class A and Class B common shares (the “Shareholders”) of Athene Holding Ltd. (“AHL” and together with its consolidated subsidiaries, the “Company,” “our,” “us,” or “we”) is to be held at The Langham Hotel, 1c Portland Place, Regent Street, London, W1B 1JA, United Kingdom on June 4, 2019 at [8:30] a.m. Greenwich Mean Time for the following purposes:

 

1.

to elect the directors of Athene Holding Ltd. named in the accompanying proxy statement;

 

2.

to authorize the election of the directors of Athene Life Re Ltd. (“ALRe”) named in the accompanying proxy statement;

 

3.

to authorize the election of the directors of Athene Bermuda Employee Company Ltd. named in the accompanying proxy statement;

 

4.

to authorize the election of the directors of Athene IP Holding Ltd. named in the accompanying proxy statement;

 

5.

to authorize the election of the directors of Athene IP Development Ltd. named in the accompanying proxy statement;

 

6.

to appoint PricewaterhouseCoopers LLP (“PwC”), an independent registered accounting firm, as the Company’s independent auditor to serve until the close of the Company’s next annual general meeting in 2020;

 

7.

to refer the determination of the remuneration of PwC to the audit committee of the board of directors of the Company;

 

8.

to vote on a non-binding advisory resolution to approve the compensation paid to the Company’s named executive officers (“Say on Pay”);

 

9.

to approve the Twelfth Amended and Restated Bye-laws of the Company; and

 

10.

to approve the Company’s 2019 Share Incentive Plan.

The board of directors recommends a vote FOR each of Items 1 through 10. The Company will also present the Company’s audited consolidated financial statements for the year ended December 31, 2018 at the annual general meeting pursuant to the Bermuda Companies Act 1981, as amended, and Bye-law 78 of the Company’s Eleventh Amended and Restated Bye-laws (the “Bye-laws”).

Only Shareholders of record, as shown by the Register of Shareholders and the records of Computershare and the Company at the close of business on April 5, 2019 (the “Record Date”) are entitled to receive notice and only those Shareholders as of the Record Date able to affirmatively make certain representations contained in the accompanying proxy card are entitled to vote at the annual general meeting. CERTAIN HOLDERS OF THE COMPANY’S CLASS A COMMON SHARES MAY NOT BE ENTITLED TO VOTE OR MAY HAVE THEIR VOTING RIGHTS LIMITED OR OTHERWISE ADJUSTED IN ACCORDANCE WITH THE BYE-LAWS AND AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. IN ACCORDANCE WITH THE BYE-LAWS, THE BOARD OF DIRECTORS RETAINS THE

AUTHORITY, IN ITS SOLE AND ABSOLUTE DISCRETION, TO DETERMINE WHETHER A HOLDER’S SHARES CARRY NO VOTING RIGHTS, REDUCED VOTING RIGHTS OR ADJUSTED VOTING RIGHTS. PLEASE SEE “IMPORTANT VOTING INFORMATION” IN THE ACCOMPANYING PROXY STATEMENT FOR A DESCRIPTION OF THE VOTING RIGHTS APPLICABLE TO HOLDERS OF CLASS A AND CLASS B COMMON SHARES, TO THE EXTENT THEY ARE ENTITLED TO VOTE.

The proxy statement and accompanying materials are first being made available to Shareholders on or about April [    ], 2019.

Under Bermuda law, if an item set out in this Notice is no longer applicable at the time of the meeting, the Chairman of the meeting may decide not to put such resolution to a vote at the meeting.

YOU MAY COMPLETE YOUR PROXY BY INTERNET OR MAIL AS SET FORTH ON THE ENCLOSED PROXY CARD, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. PROXIES SUBMITTED BY THE INTERNET MUST BE RECEIVED BY 9:00 A.M., ATLANTIC DAYLIGHT TIME, ON JUNE 3, 2019. YOU MAY ALSO ATTEND THE MEETING AND VOTE IN PERSON. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT. YOUR SHARES WILL BE VOTED PURSUANT TO THE INSTRUCTIONS CONTAINED IN YOUR COMPLETED PROXY. IF YOU RETURN A SIGNED PROXY CARD AND NO INSTRUCTIONS ARE GIVEN, YOUR SHARES WILL BE VOTED “FOR” ITEMS 6 THROUGH 10.

Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting to be Held on June 4, 2019: the proxy statement for Shareholders is also available at www.investorvote.com/ATH.

 

TABLE OF CONTENTS		PAGE
IMPORTANT INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND PROXY PROCEDURES			1
IMPORTANT VOTING INFORMATION			3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS			7
CORPORATE GOVERNANCE			12
MANAGEMENT			22
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS			29
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			49
PROPOSAL 1:			63
ELECTION OF DIRECTORS OF THE COMPANY			63
PROPOSAL 2:			63
AUTHORIZATION OF THE ELECTION OF DIRECTORS OF ATHENE LIFE RE LTD. AT THE 2019 ANNUAL GENERAL MEETING OF ATHENE LIFE RE LTD.			63
PROPOSAL 3:			63
AUTHORIZATION OF THE ELECTION OF DIRECTORS OF ATHENE BERMUDA EMPLOYEE COMPANY LTD. AT THE 2019 ANNUAL GENERAL MEETING OF ATHENE BERMUDA EMPLOYEE COMPANY LTD.			63
PROPOSAL 4:			64
AUTHORIZATION OF THE ELECTION OF DIRECTORS OF ATHENE IP HOLDING LTD. AT THE 2019 ANNUAL GENERAL MEETING OF ATHENE IP HOLDING LTD.			64
PROPOSAL 5:			65
AUTHORIZATION OF THE ELECTION OF DIRECTORS OF ATHENE IP DEVELOPMENT LTD. AT THE 2019 ANNUAL GENERAL MEETING OF ATHENE IP DEVELOPMENT LTD.			65
PROPOSAL 6:			65
APPOINTMENT OF INDEPENDENT AUDITOR			65
PROPOSAL 7:			65
REMUNERATION OF INDEPENDENT AUDITOR			65
PROPOSAL 8:			66
SAY ON PAY VOTE			66
PROPOSAL 9:			66
APPROVAL OF TWELFTH AMENDED AND RESTATED BYE-LAWS OF THE COMPANY			66
PROPOSAL 10:			68
APPROVAL OF THE COMPANY’S 2019 SHARE INCENTIVE PLAN			68
ADDITIONAL INFORMATION AND MATTERS			77

ATHENE HOLDING LTD.

PROXY STATEMENT

FOR

THE ANNUAL GENERAL MEETING OF HOLDERS OF CLASS A AND CLASS B COMMON SHARES

TO BE HELD ON JUNE 4, 2019

 

 

IMPORTANT INFORMATION ABOUT THE ANNUAL GENERAL MEETING

AND PROXY PROCEDURES

The accompanying proxy is solicited by the board of directors of Athene Holding Ltd. (“AHL” and together with its consolidated subsidiaries, the “Company,” “our,” “us,” or “we”) to be voted at the annual general meeting (“Annual General Meeting”) of holders of the Company’s Class A and Class B common shares (the “Shareholders” and the “Shares,” respectively) to be held at The Langham Hotel, 1c Portland Place, Regent Street, London, W1B 1JA, United Kingdom on June 4, 2019 at [8:30] a.m. Greenwich Mean Time, and any adjournments thereof. This proxy statement and the accompanying materials are first being made available to Shareholders on or about April [    ], 2019.

The Purpose of the Annual General Meeting

At the Annual General Meeting, the Shareholders will vote in person or by proxy on the following matters as set forth in the notice of the meeting:

 

1.

to elect the directors of Athene Holding Ltd. named in this proxy statement;

 

2.

to authorize the election of the directors of Athene Life Re Ltd. (“ALRe”) named in this proxy statement;

 

3.

to authorize the election of the directors of Athene Bermuda Employee Company Ltd. named in this proxy statement;

 

4.

to authorize the election of the directors of Athene IP Holding Ltd. named in this proxy statement;

 

5.

to authorize the election of the directors of Athene IP Development Ltd. named in this proxy statement;

 

6.

to appoint PricewaterhouseCoopers LLP (“PwC”), an independent registered accounting firm, as the Company’s independent auditor to serve until the close of the Company’s next annual general meeting in 2020;

 

7.

to refer the determination of the remuneration of PwC to the audit committee of the board of directors of the Company;

 

8.

to vote on a non-binding advisory resolution to approve the compensation paid to the Company’s named executive officers (“Say on Pay”);

 

9.

to approve the Twelfth Amended and Restated Bye-laws of the Company; and

 

10.

to approve the Company’s 2019 Share Incentive Plan.

Presentation of Financial Statements

In accordance with the Bermuda Companies Act 1981, as amended, and Bye-law 78 of the Company’s Eleventh Amended and Restated Bye-laws (the “Bye-laws”), the Company’s audited consolidated financial statements for the year ended December 31, 2018 prepared in accordance with accounting principles generally accepted in the United States will be presented at the Annual General Meeting and will be made available not

 

1

later than five (5) business days prior to the Annual General Meeting. The board of directors of the Company has approved these financial statements. There is no requirement under Bermuda law that these financial statements be approved by Shareholders, and no such approval will be sought at the Annual General Meeting.

Shareholders Entitled to Vote at the Annual General Meeting

Shareholders of record as of the close of business on April 5, 2019 (the “Record Date”) that are eligible to vote will be entitled to vote at the Annual General Meeting. As of the Record Date, there were 161,700,595 outstanding Class A common shares and 25,433,465 outstanding Class B common shares. Each Class A common share or Class B common share entitles the holder of record thereof to vote at the Annual General Meeting, subject to certain adjustments and limitations, including those set forth in the Company’s Bye-laws and as described herein under “IMPORTANT VOTING INFORMATION—Adjustments to Voting Rights of Class A Common Shares” and “—Voting Rights of Class B Common Shares.” CERTAIN HOLDERS OF THE COMPANY’S CLASS A COMMON SHARES MAY NOT BE ENTITLED TO VOTE IN ACCORDANCE WITH THE BYE-LAWS AND AS DESCRIBED HEREIN. IN ACCORDANCE WITH THE BYE-LAWS, THE BOARD OF DIRECTORS RETAINS THE AUTHORITY, IN ITS SOLE AND ABSOLUTE DISCRETION, TO DETERMINE WHETHER A HOLDER’S SHARES CARRY NO VOTING RIGHTS, REDUCED VOTING RIGHTS OR ADJUSTED VOTING RIGHTS. See “IMPORTANT VOTING INFORMATION—Adjustments to Voting Rights of Class A Common Shares.”

 

2

IMPORTANT VOTING INFORMATION

Voting Procedures; Quorum

You can ensure that your Shares are properly voted at the meeting by completing, signing, dating and returning the enclosed proxy card to Proxy Services, c/o Computershare Investor Services, P.O. Box 505008, Louisville, KY 40233-9814. Shareholders may also complete their proxy via the internet in accordance with the instructions on your proxy card. Proxies submitted by the internet must be received by 9:00 a.m., Atlantic Daylight Time, on June 3, 2019.

A Shareholder has the right to appoint another person (who need not be a Shareholder) to represent the Shareholder at the Annual General Meeting by completing an alternative form of proxy which can be obtained from the Corporate Secretary or by notifying the Inspectors of Election. See “—Inspectors of Election” below. Every Shareholder entitled to vote has the right to do so either in person or by one or more persons authorized by a written proxy executed by such Shareholder and filed with the Corporate Secretary. Any proxy duly executed will continue in full force and effect unless revoked by the person executing it in writing or by the filing of a subsequent proxy. See “—Revocation of Proxies” below.

A Shareholder of record can vote their Shares at the Annual General Meeting by attending the meeting and completing a ballot or by proxy in one of two ways: (1) by dating, signing and completing the proxy card and returning it in accordance with the instructions provided on the proxy card; or (2) electronically via the internet as described in the proxy card. Proxy cards must be either returned by mail or electronically by 9:00 a.m. Atlantic Daylight Time on June 3, 2019.

Each of Items 1 through 7, 9 and 10 to be voted upon at the Annual General Meeting requires the affirmative vote of a majority of the total voting power attributable to all shares of the Company cast at the Annual General Meeting, in each case provided there is a quorum (consisting of Shareholders present in person or by proxy entitled to cast a majority of the total votes attributable to all shares of the Company issued and outstanding). Shares owned by Shareholders electing to abstain from voting with respect to any proposal and “broker non-votes” will be counted towards the presence of a quorum but, other than with respect to Item 10, will not be considered votes cast with respect to matters to be voted upon at the Annual General Meeting. Therefore, assuming a quorum is achieved, other than with respect to Item 10, abstentions and “broker non-votes” will have no effect on the outcome of the matters to be voted upon at the Annual General Meeting. With respect to Item 10, abstentions will be considered a vote against Item 10. A “broker non-vote” occurs when a nominee, such as a broker, holding Shares in “street name” for a beneficial owner, does not vote on a particular proposal because that nominee does not have discretionary voting power with respect to a proposal and has not received instructions from the beneficial owner. A Shareholder of Shares held in “street name” that would like to instruct their broker how to vote their Shares should follow the directions provided by their broker.

Item 8 to be voted upon at the Annual General Meeting is an advisory vote, and the result will not be binding. However, our compensation committee will consider the outcome of the vote with respect to Item 8 when evaluating the effectiveness of our compensation principles and in connection with its compensation decisions. With respect to Item 8, shares owned by Shareholders electing to abstain from voting and “broker non-votes” will be counted towards the presence of a quorum but will not be considered votes cast. Therefore, assuming a quorum is achieved, abstentions and “broker non-votes” will have no effect on the outcome of Item 8.

If you hold your Shares through a broker, bank or other financial institution, in order for your vote to be counted on any matter, you must provide specific voting instructions to your broker, bank or financial institution by following your broker, bank or financial institution’s instructions for completing and returning the proxy card to your broker, bank or financial institution or following your broker, bank or financial institution’s instructions to vote your Shares via the Internet. Voting deadlines vary by institution. Please check with your broker, bank or other financial institution for its voting cut-off date for the Annual General Meeting.

 

3

Revocation of Proxies

Any Shareholder giving a proxy has the power to revoke it prior to its exercise by: (1) giving notice of such revocation in writing to the Corporate Secretary of the Company at Athene Holding Ltd., Chesney House, 96 Pitts Bay Road, Pembroke, HM08, Bermuda; (2) by attending and voting in person at the Annual General Meeting; or (3) by executing a subsequent proxy, provided that any such action is taken in sufficient time to permit the necessary examination and tabulation of the subsequent proxy or revocation before the votes are taken. Sending in a signed proxy will not affect your right to attend the meeting and vote. If a Shareholder attends the meeting and votes in person, any previously submitted proxy will be considered revoked. If a Shareholder holds their Shares in “street name” by a broker and has directed its broker to vote its Shares, such Shareholder should instruct its broker to change its vote or obtain a proxy to vote its Shares if such Shareholder wishes to cast its vote in person at the Annual General Meeting.

Adjustments to Voting Rights of Class A Common Shares

The Bye-laws generally provide that Shareholders are entitled to vote, on a non-cumulative basis, at all annual general and special meetings of Shareholders with respect to matters on which Class A common shares are eligible to vote. The Class A common shares collectively represent 55% of the total voting power of all of the Shares, subject to certain voting restrictions and adjustments described below. This allocation of 55% of the total voting power to the Class A common shares applies regardless of the number of Class A common shares that may be issued and outstanding.

In general, the Bye-laws provide that the board of directors may determine that certain shares shall carry no voting rights or shall have reduced voting rights to the extent that it reasonably determines that it is necessary to do so to avoid any adverse tax consequences to the Company or, upon the request of certain Shareholders, to avoid adverse regulatory consequences to such Shareholder. In addition, the board of directors has the authority under the Bye-laws to request information from any Shareholder for the purpose of determining whether a Shareholder’s voting rights are to be adjusted pursuant to the Bye-laws. IF A SHAREHOLDER FAILS TO RESPOND TO ANY REQUEST FOR INFORMATION OR SUBMITS INCOMPLETE OR INACCURATE INFORMATION IN RESPONSE TO A REQUEST BY THE COMPANY, THE BOARD OF DIRECTORS, IN ITS SOLE AND ABSOLUTE DISCRETION, MAY REDUCE OR ELIMINATE THE SHAREHOLDER’S VOTING RIGHTS.

The Bye-laws also include several specific restrictions and adjustments to the voting power of the Class A common shares. If a holder is subject to the restrictions described below, their Class A common shares may be deemed to be non-voting or the voting power attributable to such Class A common shares may be reduced or otherwise adjusted. Such restrictions depend on the identity and characteristics of the holder of the shares as of the Record Date; for example, Class A common shares that are deemed non-voting for the 2019 Annual General Meeting may be entitled to vote at a later meeting of Shareholders as a result of a subsequent transfer to a different holder. The specific Class A common share voting restrictions are as follows:

 

•

Class A common shares shall be deemed non-voting if the Shareholder (or any person related to the Shareholder within the meaning of Section 953(c) of the Internal Revenue Code (the “Code”) or to whom the ownership of such Shareholder’s shares is attributed under Section 958 of the Code, each, a “Tax-Attributed Affiliate”) (1) owns, directly indirectly or constructively, Class B common shares, (2) owns, directly, indirectly or constructively, an equity interest in Apollo Global Management, LLC (“AGM” and together with its affiliates, “Apollo”) or AP Alternative Assets, L.P. (“AAA”) or (3) is a member of the Apollo Group (defined below) at which time any member of the Apollo Group holds Class B common shares.

 

•

The voting power of those Class A common shares that are entitled to vote shall be adjusted so that no Shareholder or Tax-Attributed Affiliate (other than a member of the Apollo Group, defined below) holds more than 9.9% of the total voting power of common shares. “Apollo Group” means, (A) AGM,

 

4

(B) AAA Guarantor—Athene, L.P., (C) any investment fund or other collective investment vehicle whose general partner or managing member is owned, directly or indirectly, by AGM or by one or more of AGM’s subsidiaries, (D) BRH Holdings GP, Ltd. and its shareholders, (E) any executive officer of AGM whom AGM designates, in a written notice delivered to the Company, as a member of the Apollo Group for purposes of the Bye-laws (which designation shall continue in effect until such designee ceases to be an executive officer of AGM) and (F) any affiliate of a person described in clauses (A), (B), (C), (D) or (E) above; provided, none of the Company or its subsidiaries, nor any person employed by the Company, its subsidiaries or Athene Asset Management LLC (“AAM”), shall be deemed to be a member of the Apollo Group. For avoidance of doubt, any person managed by AGM or one or more of AGM’s subsidiaries pursuant to a managed account agreement (or similar arrangement) without AGM or by one or more of AGM’s subsidiaries controlling such person as a general partner or managing member shall not be part of the Apollo Group.

 

•

The aggregate votes conferred by the shares held by employees of the Company and its subsidiaries, employees of AAM and employees of the Apollo Group may constitute collectively no more than 3% of the total voting power of the Company.

The amount of any reduction in voting power that occurs by operation of the adjustments described above will generally be allocated proportionately among all other Class A common shares entitled to vote. If such reallocation in turn triggers one of the adjustments described above, the adjustments will be reapplied serially until additional adjustments are not necessary.

THE ACCOMPANYING PROXY CARD CONTAINS REQUIRED REPRESENTATIONS IN ORDER TO DETERMINE WHETHER YOUR CLASS A COMMON SHARES ARE SUBJECT TO THE ADJUSTMENTS DESCRIBED ABOVE. A FAILURE TO COMPLETE THESE REQUIRED REPRESENTATIONS MAY RENDER YOUR SHARES INELIGIBLE FOR VOTING.

Restrictions on Holding Class A Common Shares

The Bye-laws also contain certain restrictions on holders of Class A common shares. Bye-law 5.1 provides that no Shareholder (including certain affiliates and related persons) may:

 

•

acquire any interests in AAA or AGM;

 

•

knowingly permit itself (or, to its actual knowledge, any direct or indirect beneficial owner of itself) to be (directly or indirectly) insured or reinsured by any subsidiary of the Company or any ceding company specified in Schedules 1 and 2 to this proxy statement, if such Shareholder is a “United States shareholder” of the Company within the meaning of Section 953(c) of the Code;

 

•

knowingly permit itself (or to its actual knowledge, any direct or indirect beneficial owner of itself) to own (directly, indirectly or constructively under Section 958 of the Code) stock of the Company possessing more than 50% of the total voting power or total value of the Company; or

 

•

make any investment or enter into a transaction that, to the actual knowledge of such Shareholder at the time such person becomes bound to make the investment or enter into the transaction, would cause such person to own (directly, indirectly or constructively within the meaning of Section 958 of the Code) stock of the Company possessing more than 50% of the total voting power or total value of the Company.

Voting Rights of Class B Common Shares

The Class B common shares represent, in aggregate, 45% of the total voting power of the Shares, subject to certain adjustments that are described below and in our Bye-laws. Generally, only members of the Apollo Group may own Class B common shares.

 

5

The Bye-laws provide that the voting power of the Class B common shares shall be allocated on a pro rata basis among all holders of Class B common shares, provided that if certain conditions are met (described in detail in Bye-Law 4.2(b)(iii) and defined therein as a “Class B Adjustment Condition”) then the voting power of Class B common shares shall be adjusted as follows:

 

(1)

First, the voting power of the Class B common shares directly held by the Shareholder(s) (i) with the highest Relative Class B Ownership Percentage (as defined in the Bye-laws) as of such time and (ii) whose Class B common shares have voting power as of such time (the “Adjustment Shareholder(s)”) that are attributable to the Smallest Class B 9.9% U.S. Person (as defined in the Bye-laws) shall be reduced (but not below zero (0)) until the Class B Adjustment Condition is no longer met or such Smallest Class B 9.9% U.S. Person is no longer a Class B 9.9% U.S. Person (taking into account any reallocation of voting power pursuant to clause (2) below), whichever requires the smallest reduction in voting power;

 

(2)

Second, the aggregate voting power reduced in clause (1) above shall be reallocated pro rata among the Class B common shares (other than any Transferred Class B Common Shares, as defined in the Bye-laws) directly held by all other Shareholders;

 

(3)

Third, the adjustments described in clause (1) above and the reallocation described in clause (2) above shall be reapplied serially to the next Smallest Class B 9.9% U.S. Person until the Class B Adjustment Condition is no longer met; and

 

(4)

Any excess voting power that cannot be reallocated pursuant to clauses (1), (2) and (3) above shall be transferred pursuant to the Bye-laws, and thereafter clause (3) above shall not apply.

Pursuant to the Bye-laws, the pro rata reallocation of voting power of the Class B common shares provided for above shall not be permitted to the extent such reallocation would cause (i) a U.S. Person to become a Class B 9.9% U.S. Person (determined after such reallocation) or (ii) the Voting Ratio (as defined below) with respect to any Class B Common Share to be greater than fifteen (15). Any voting power that cannot be reallocated on a pro rata basis among all of the Class B common shares (other than any Transferred Class B Common Shares) directly held by all other Shareholders due to the reallocation discussed above shall nonetheless be reallocated to such shares to the maximum extent possible without violating the limitations described herein. “Voting Ratio” means, with respect to any share in the Company, a fraction (i) the numerator of which is the percentage of the total voting power represented by such share and (ii) the denominator of which is a fraction (expressed as a percentage) (a) the numerator of which is the value of that share and (b) the denominator of which is the total value of all outstanding shares in the Company.

If after providing for the reduction of voting power as set forth herein, clause (1) of the Class B Adjustment Condition continues to be met, the total voting power of the Class B common shares shall be reduced (and the total voting power of the Class A common shares shall be correspondingly increased) until such Class B Adjustment Condition is no longer met, unless all Affected Class B Shareholders (as defined in the Bye-laws) agree otherwise.

Inspectors of Election

Computershare Trust Company, N.A., P.O. Box 505000, Louisville, KY 40233-5000, United States of America, has been appointed as Inspectors of Election for the Annual General Meeting. Representatives of Computershare will be available during the Annual General Meeting to facilitate the voting of ballots and determine the results of the vote.

Availability of Proxy Materials

Proxy materials for the Annual General Meeting, including the Notice of 2019 Annual General Meeting and this proxy statement are available online for viewing and downloading at: www.investorvote.com/ATH.

 

6

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Principal Shareholders

The following table sets forth information as of March 1, 2019 regarding the beneficial ownership of our Class A common shares and our Class B common shares by (1) each person or group who is known by us to own beneficially more than 5% of our outstanding Class A common shares or our Class B common shares (including any securities convertible or exchangeable within 60 days into Class A common shares or Class B common shares, as applicable), (2) each of our named executive officers (“NEOs”), (3) each of our directors and (4) all of our current executive officers and directors as a group.

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Our Class B common shares are convertible into Class A common shares at any time at the option of the holder, with prior notice to the Company, on a one-for-one basis. Accordingly, for the purposes of this table each holder of Class B common shares is deemed to be the beneficial owner of an equal number of Class A common shares (in addition to any other Class A common shares beneficially owned by such holder), which is reflected in the table entitled “Amount and Nature of Beneficial Ownership” under the columns “Number of Shares” and “Percent” for the Class A common shares. In addition, the voting power of our shareholders may be restricted or adjusted as described in “IMPORTANT VOTING INFORMATION” above. Additionally, in some cases, certain Class A common shares may be deemed non-voting. See “IMPORTANT VOTING INFORMATION—Adjustments to Voting Rights of Class A Common Shares.” See “—Voting Power” for an illustration of the voting power of certain shareholders who beneficially own more than 5% of our Class A common shares and Class B common shares. Such illustration includes shareholders who may own non-voting Class A common shares who, to our knowledge, beneficially own more than 5% of our outstanding Class A common shares and Class B common shares.

 

7

To our knowledge, each person named in the table below has sole voting and investment power with respect to all of the Class A common shares, Class B common shares and Class M common shares convertible into Class A common shares within 60 days shown as beneficially owned by such person, except as otherwise set forth in the notes to the table and pursuant to applicable community property laws. Unless otherwise indicated in the table or footnotes below, the address for each officer and director listed in the table is c/o Athene Holding Ltd., Chesney House, First Floor, 96 Pitts Bay Road, Pembroke, HM08, Bermuda.

 

Amount and Nature of Beneficial Ownership

Class A Common Shares Beneficially Owned(1)

Class B Common Shares Beneficially Owned

Number of Shares

Percent(2)

Number of Shares

Percent

Apollo Holders(3)(4)

19,731,735

10.9

%

19,731,735

77.6

%

The Vanguard Group(5)

13,495,263

8.4

%

—

—

Wellington Management Group LLP(6)

10,118,742

6.3

%

BlackRock, Inc.(7)

8,996,678

5.6

%

California Public Employees Retirement System(8)

8,652,105

5.4

%

Executive Officers and Directors

James R. Belardi(9)

5,353,074

3.2

%

—

—

William J. Wheeler(10)

1,824,185

1.1

%

—

—

Grant Kvalheim(11)

1,771,731

1.1

%

—

—

Martin P. Klein(12)

210,386

*

—

—

John Rhodes(13)

75,010

*

—

—

Marc Rowan(14)

1,681,075

1.0

%

1,681,075

6.6

%

Marc Beilinson(15)

68,161

*

—

—

Gernot Lohr(16)

1,672,719

1.0

%

—

—

Matthew R. Michelini(17)

128,267

*

—

—

Robert Borden(18)

59,992

*

—

—

Hope Taitz(19)

63,852

*

—

—

Lawrence J. Ruisi(20)

55,760

*

—

—

Dr. Manfred Puffer(21)

10,249

*

—

—

H. Carl McCall(22)

15,383

*

—

—

Brian Leach(23)

15,363

*

—

—

Arthur Wrubel(24)

15,383

*

—

—

Fehmi Zeko(25)

2,142

*

—

—

Mitra Hormozi(26)

—

—

—

—

Scott Kleinman(27)

257,258

*

—

—

All directors and executive officers as a group (20 persons)(28)

14,603,091

8.7

%

1,681,075

6.6

%

 

*	Represents less than 1%.

(1)

Class M common shares are subject to time- or performance-based vesting and once vested are convertible into Class A common shares. The number of Class M common shares included in the table represents the number of Class M common shares that vest as of April 30, 2019, the date that is 60 days after March 1, 2019. We assume for purposes of the table that Class M common shares convert into Class A common shares on a one-for-one basis.

(2)	The percentage of beneficial ownership of our Class A common shares is based on 161,389,532 Class A common shares outstanding as of March 1, 2019.

(3)

Consists of shares held of record by the following members of the Apollo Group (the “Apollo Holders”): 605,555 Class B common shares held of record by AAA Guarantor—Athene, L.P., 80,096 Class B common shares held of record by Apollo Palmetto Advisors, L.P., 17,350,643 Class B common shares held of record by Apollo Principal Holdings III, L.P., 43,327 Class B common shares held of record by AAA Associates, L.P., 1,569,625 Class B common shares held of record by AAA Holdings, L.P., one Class B common share held of record by Athene Asset Management LLC and 82,488 Class B common shares that have been granted to employees of Athene Asset Management LLC and are held of record by Apollo Management Holdings, L.P. as custodian. The percentage of beneficial ownership of the Class A common shares above assumes the conversion of all 19,731,735 Class B common shares held by the Apollo Holders as of March 1, 2019 into Class A common shares.

 

8

AAA Investments, L.P. is the general partner of AAA Guarantor—Athene, L.P. AAA Associates, L.P. is the general partner of AAA Investments, L.P. AAA MIP Limited is the general partner of AAA Associates, L.P. Apollo Alternative Assets, L.P. provides investment services to AAA Guarantor—Athene, L.P., AAA Investments, L.P., AAA Associates, L.P. and AAA MIP Limited. Apollo International Management, L.P. is the managing general partner of Apollo Alternative Assets, L.P. Apollo International Management GP, LLC is the general partner of Apollo International Management, L.P. AAA Holdings GP, Ltd. is the general partner of AAA Holdings, L.P.

Apollo Palmetto Management, LLC is the general partner of Apollo Palmetto Advisors, L.P. Apollo Principal Holdings IV, L.P. is the sole member of Apollo Palmetto Management, LLC. Apollo Principal Holdings IV GP, Ltd. is the general partner of Apollo Principal Holdings IV, L.P.

The sole member of Athene Asset Management LLC is AAM Holdings, L.P. The general partner of AAM Holdings, L.P. is AAM GP Ltd. The sole shareholder of AAM GP Ltd. is Apollo Life Asset Ltd. Apollo Capital Management, L.P. is the sole shareholder of Apollo Life Asset Ltd. The general partner of Apollo Capital Management, L.P is Apollo Capital Management GP, LLC. Apollo Management Holdings, L.P. is the sole member and manager of Apollo International Management GP, LLC and Apollo Capital Management GP, LLC, and the sole shareholder of AAA Holdings GP, Ltd. Apollo Management Holdings GP, LLC is the general partner of Apollo Management Holdings, L.P.

Apollo Principal Holdings III GP, Ltd. is the general partner of Apollo Principal Holdings III L.P.

Leon Black, Joshua Harris and Marc Rowan are executive officers and the managers or directors of Apollo Management Holdings GP, LLC, Apollo Principal Holdings III GP, Ltd. and Apollo Principal Holdings IV GP, Ltd. and as such may be deemed to have voting and dispositive control of the shares of Athene common shares that are held by the Apollo Holders.

 

(4)

The address of each of Apollo Principal Holdings III, L.P., Apollo Principal Holdings III GP, Ltd., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings IV GP, Ltd., AAM GP Ltd., and Apollo Life Asset Ltd. is c/o Walkers Corporate Limited, Cayman Corporate Center, 27 Hospital Road, Georgetown, KY1-9008, Grand Cayman, Cayman Islands. The address of AAA Investments, L.P., Apollo Alternative Assets, L.P., and Apollo Palmetto Management, LLC is One Manhattanville Road, Suite 201, Purchase, New York 10577. The address of AAA Associates, L.P., AAA MIP Limited, AAA Holdings, L.P. and AAA Holdings GP Limited is Trafalgar Court, Les Banques, GY1 3QL, St. Peter Port, Guernsey, Channel Islands. The address of Athene Asset Management LLC and AAM Holdings, L.P. is 2121 Rosecrans Ave., Suite 5300, El Segundo, CA 90245. The address of each of Apollo Palmetto Advisors, L.P., AAA Guarantor—Athene, L.P., Apollo International Management, L.P., Apollo International Management GP, LLC, Apollo Capital Management, L.P., Apollo Capital Management GP, LLC, Apollo Management Holdings, L.P. and Apollo Management Holdings, GP, LLC, and Messrs. Black, Harris and Rowan is 9 West 57th Street, 43rd Floor, New York, New York 10019.

(5)	The number of shares listed for The Vanguard Group is based on the Schedule 13G filed by The Vanguard Group on February 11, 2019. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

(6)	The number of shares listed for Wellington Management Group LLP is based on the Schedule 13G filed by Wellington Management Group LLP on February 12, 2019. The address of Wellington Management Group LLP is c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210.

(7)	The number of shares listed for BlackRock, Inc. is based on the Schedule 13G filed by BlackRock, Inc. on February 4, 2019. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.

(8)	The number of shares listed for California Public Employees Retirement System is based on the Form 13F filed by California Public Employees Retirement System on February 8, 2019. The address of California Public Employees Retirement System is 400 Q Street, Suite 4800, Sacramento, CA 95811.

(9)

Consists of (1) 969,236 Class A common shares held of record by the James and Leslie Belardi Family Trust, (2) 1,750 Class A common shares held of record by the Belardi Family Irrevocable Trust, (3) options to acquire 194,922 Class A common shares vested as of April 30, 2019, (4) 1,741,661 Class M common shares held of record by the James and Leslie Belardi Family Trust vested as of April 30, 2019 which are convertible into Class A common shares, (5) 2,093,583 Class M common shares held of record by the Belardi 2018 GRAT vested as of April 30, 2019 which are convertible into Class A common shares and (6) 351,922 Class M common shares held of record by the Belardi Family Irrevocable Trust vested as of April 30, 2019 which are convertible into Class A common shares. Excludes 71,590 restricted Class A common shares, 37,129 Class A restricted stock units and options to acquire 66,279 Class A common shares which are unvested as of April 30, 2019. Mr. Belardi disclaims beneficial ownership of all common shares of Athene held by the Belardi Family Irrevocable Trust and the members of the Apollo Group.

(10)

Consists of (1) 386,763 Class A common shares, (2) options to acquire 104,089 Class A common shares vested as of April 30, 2019 and (3) 1,333,333 Class M common shares vested as of April 30, 2019 which are convertible into Class A common shares. Excludes 23,414 restricted Class A common shares, 22,279 Class A restricted stock units, options to acquire 39,768 Class A common shares and 1,166,667 Class M common shares which are unvested as of April 30, 2019.

 

9

(11)

Consists of (1) 1,584,672 Class A common shares, (2) options to acquire 58,984 Class A common shares vested as of April 30, 2019 and (3) 128,076 Class M common shares vested as of April 30, 2019 which are convertible into Class A common shares. Excludes 13,268 restricted Class A common shares, 12,625 Class A restricted stock units, options to acquire 22,536 Class A common shares and 205,333 Class M common shares which are unvested as of April 30, 2019.

(12)

Consists of (1) 77,168 Class A common shares, (2) options to acquire 58,673 Class A common shares vested as of April 30, 2019 and (3) 74,545 Class M common shares vested as of April 30, 2019 which are convertible into Class A common shares. Excludes 15,609 restricted Class A common shares, 14,853 Class A restricted stock units, options to acquire 26,513 Class A common shares and 121,333 Class M common shares which are unvested as of April 30, 2019.

(13)

Consists of (1) 5,907 Class A common shares, (2) options to acquire 15,906 Class A common shares vested as of April 30, 2019 and (3) 53,197 Class M common shares vested as of April 30, 2019 which are convertible into Class A common shares. Excludes 9,366 restricted Class A common shares, 8,912 Class A restricted stock units, options to acquire 15,908 Class A common shares and 106,667 Class M common shares which are unvested as of April 30, 2019.

(14)

Consists of Class B common shares held by entities directly or indirectly controlled by Mr. Rowan. The reported amount does not include, and Mr. Rowan disclaims beneficial ownership of, Class B common shares owned by the Apollo Holders, as well as AAA, which is a limited partner of AAA Investments, L.P. Mr. Rowan does not have the power to vote or dispose of any Athene common shares that may from time to time be held by AAA or the Apollo Holders and therefore is not deemed to beneficially own such shares.

(15)	Excludes 9,610 restricted Class A common shares which are unvested as of April 30, 2019.

(16)

Mr. Lohr disclaims beneficial ownership of all common shares of Athene held of record or beneficially owned by the Apollo Holders or any other member of the Apollo Group. In addition to his ownership of our Class A common shares, Mr. Lohr also owns interests in AAA, which is a limited partner of AAA Investments, L.P. Mr. Lohr does not have the power to vote or dispose of any Athene common shares that may be held from time to time by AAA and therefore is not deemed to beneficially own such shares. 1,103,589 Class A common shares owned by Mr. Lohr have been pledged as security to a financial institution.

(17)

Mr. Michelini disclaims beneficial ownership of all common shares of Athene held of record or beneficially owned by the Apollo Holders or any other member of the Apollo Group. Mr. Michelini owns interests in AAA, which is a limited partner of AAA Investments, L.P. Mr. Michelini does not have the power to vote or dispose of any Athene common shares that may be held from time to time by AAA and therefore is not deemed to beneficially own such shares.

(18)	Consists of (1) 37,147 Class A common shares held of record by PENSCO Trust Co. Custodian FBO Robert L. Borden IRA and (2) 22,845 Class A common shares held of record by Mr. Borden individually. Excludes 9,167 restricted Class A common shares which are unvested as of April 30, 2019.

(19)	Excludes 9,251 restricted Class A common shares which are unvested as of April 30, 2019.

(20)	Excludes 9,210 restricted Class A common shares which are unvested as of April 30, 2019.

(21)	Excludes 9,180 restricted Class A common shares which are unvested as of April 30, 2019.

(22)	Excludes 9,063 restricted Class A common shares which are unvested as of April 30, 2019.

(23)	Excludes 9,053 restricted Class A common shares which are unvested as of April 30, 2019.

(24)	Excludes 9,063 restricted Class A common shares which are unvested as of April 30, 2019.

(25)	Excludes 3,701 restricted Class A common shares which are unvested as of April 30, 2019.

(26)	Excludes 3,701 restricted Class A common shares which are unvested as of April 30, 2019.

(27)

Mr. Kleinman disclaims beneficial ownership of all common shares of Athene held of record or beneficially owned by the Apollo Holders or any other member of the Apollo Group. Mr. Kleinman owns interests in AAA, which is a limited partner of AAA Investments, L.P. Mr. Kleinman does not have the power to vote or dispose of any Athene common shares that may be held from time to time by AAA and therefore is not deemed to beneficially own such shares.

(28)	Totals include restricted common shares and options held by such individuals which have vested or will vest as of April 30, 2019.

Voting Power

The aggregate and respective voting power of our Class A common shares and Class B common shares is determined in accordance with our Bye-laws. The Class A common shares collectively represent 55% of the total voting power of our common shares and the Class B common shares represent, in aggregate, 45% of the total voting power of our common shares, each subject to certain adjustments, as described in “IMPORTANT VOTING INFORMATION” above.

The voting rights exercisable by Class A shareholders other than Apollo are limited so that certain persons or groups (other than the Apollo Group) (“Control Groups”) are deemed not to hold more than 9.9% of the total voting power conferred by our shares. The percentage reduction of votes that occurs by operation of the foregoing limitation will generally be reallocated proportionately among other Class A common shareholders who are not members of these groups so long as such reallocation does not cause a Control Group to hold more than 9.9% of the total voting power of our shares. In addition, certain Class A common shares may be deemed non-voting when owned by a shareholder if such shareholder (or certain of its affiliates) (1) owns, directly, indirectly or constructively, Class B common shares, (2) owns, directly, indirectly or constructively, an equity

 

10

interest in AGM or AAA or (3) is a member of the Apollo Group at which time any member of the Apollo Group holds Class B common shares, subject to certain exceptions. See “IMPORTANT VOTING INFORMATION—Adjustments to Voting Rights of Class A Common Shares” above. As such, certain of our Class A common shareholders hold voting shares, but such shares are non-voting when being held by such holder due to these restrictions. If such holder sold any such shares to another holder that would not be subject to these restrictions, such Class A common shares would be voting shares.

Pursuant to our Bye-laws, the total voting power of Class A common shares held by members of our management and employees of the Apollo Group that are shareholders is limited to 3% of the total voting power of our common shares.

The following table sets forth the voting power as of March 1, 2019 of each person or group who is known by us to own beneficially more than 5% in voting power of our outstanding Class A common shares and Class B common shares (including any securities convertible or exchangeable within 60 days into Class A common shares or Class B common shares, as applicable).

 

		Number of Class A Common Shares Owned				Number of Class B Common Shares Owned				Number of Shares Owned				Percent of Total Outstanding Class A Common Shares and Class B Common Shares Owned				Total Voting Power of Class A Common Shares and Class B Common Shares Taken Together(1)
Apollo Holders			—				19,731,735				19,731,735				10.6	%			34.9	%

 

(1)

The Class B common shares represent, in aggregate, 45% of the total voting power of our common shares, subject to certain adjustments. The Bye-laws provide that the voting power of the Class B common shares shall be allocated on a pro rata basis among all holders of Class B common shares, subject to certain adjustments. See “IMPORTANT VOTING INFORMATION—Voting Rights of Class B Common Shares” above. The voting power percentage set forth in the table does not take into account the impact of any such adjustments.

 

11

CORPORATE GOVERNANCE

Corporate Governance

Our business and affairs are managed under the direction of our board of directors. Our board of directors currently consists of 15 members. Six of our directors are employees of or consultants to Apollo or its affiliates (including Mr. Belardi, our Chairman, Chief Executive Officer and Chief Investment Officer, who is also Chairman, Chief Executive Officer and Chief Investment Officer of AAM). We believe that it is appropriate, given Mr. Belardi’s in-depth knowledge of the Company and our business and industry and his ability to formulate and implement strategic initiatives, that the offices of Chief Executive Officer and Chairman have been vested in Mr. Belardi.

Under our Bye-laws, our board of directors may consist of not less than two and not more than 17 directors. Our board size is currently set at 15 members. If there is a vacancy on our board of directors due to the death, disability, disqualification, removal or resignation of a director, or there is an increase in the number of our directors or a failure to elect a director at a shareholder meeting, the board of directors may appoint any person as a member of the board of directors on an interim basis until the next annual general meeting provided that such person has been approved by a majority of the nominating and corporate governance committee. At the next annual general meeting, the newly appointed director will be put to a shareholder vote. Persons appointed by the board of directors to fill vacancies must be approved by a majority of the board of directors.

Director Independence

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that Messrs. Beilinson, Borden, Leach, McCall, Ruisi, Wrubel, Zeko and Ms. Hormozi do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors meets the independence requirements of the NYSE listing rules. Consequently, a majority of our directors are independent directors. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director and non-Apollo director has with our Company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our common shares by such director and any transactions involving them described under “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS” herein.

Ms. Taitz was a member of our audit committee and our nominating and corporate governance committee during a portion of 2018. Ms. Taitz resigned from these committees, effective February 24, 2018. Mr. Beilinson and Mr. Borden were appointed as a member of the nominating and corporate governance committee and the audit committee, respectively, on February 24, 2018. Ms. Taitz was appointed as a member of the risk committee on March 2, 2018.

Board Meetings and Committees; Attendance at Annual General Meeting

The board of directors held eight meetings in 2018 consisting of regularly scheduled, full agenda meetings and special, limited agenda meetings held on short notice, all of which were held outside of the U.S. in accordance with our operating guidelines. During 2018, the audit committee met nine times, the compensation committee met three times, the nominating and corporate governance committee met six times, the risk committee met four times, the executive committee did not meet and the conflicts committee met ten times. Each director attended at least 75% of his or her board and committee meetings other than Mr. Rowan and Mr. Lohr, each of whom attended 100% of all regularly scheduled meetings. Agenda items at special meetings of the board of directors held during 2018 included matters for which directors affiliated with Apollo were required to recuse themselves.

 

12

One director of the Company attended the 2018 annual general meeting. As a public company, the Company encourages directors to use best efforts to attend all annual general meetings.

Classified Board of Directors

Our Bye-laws provide for our board of directors to be divided into three classes with members of each class serving staggered three-year terms. Only one class of directors will be elected at each annual general meeting of Shareholders, with directors in other classes continuing for the remainder of their respective three-year terms. Our current directors are divided among the three classes as follows:

 

•

our Class I directors are Messrs. Belardi, Michelini, Leach, Lohr and Rowan and their terms will expire at our annual general meeting to be held in 2019;

 

•

our Class II directors are Messrs. Wrubel, Ruisi, Zeko and Kleinman, and Ms. Taitz and, subject to the paragraph below regarding Mr. Kleinman, their terms will expire at our annual general meeting to be held in 2020; and

 

•

our Class III directors are Messrs. Borden, McCall and Beilinson and Dr. Puffer and Ms. Hormozi and, subject to the paragraph below regarding Ms. Hormozi, their terms will expire at our annual general meeting to be held in 2021.

Mr. Kleinman and Ms. Hormozi have been appointed to the board of directors subject to being nominated and elected by Shareholders at the Annual General Meeting. If elected at the Annual General Meeting, Mr. Kleinman will be a Class II director whose term will expire at our annual general meeting to be held in 2020 and Ms. Hormozi will be a Class III director whose term will expire at our annual general meeting to be held in 2021.

Our directors hold office until their successors have been elected and qualified or until the earlier of their death, resignation or removal. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

The classification of our board of directors may have the effect of delaying or preventing changes of control of our Company.

Lead Independent Director

Ms. Taitz served as Lead Independent Director through February 24, 2018 when Mr. Beilinson was appointed as Lead Independent Director. In this role, the Lead Independent Director, among other things, presides at executive sessions of the independent directors, serves as liaison between the chairman and the independent directors, reviews board meeting schedules and agendas, reviews information sent to the board and is authorized to call meetings of the independent directors.

 

13

Committees of the Board of Directors

Our board of directors has the authority to appoint committees to perform certain management and administration functions. Our board of directors has six standing committees: audit, compensation, nominating and corporate governance, conflicts, executive and risk. The table below shows the membership for each of the board of directors’ standing committees.

 

Audit Committee		Compensation Committee		Conflicts Committee
Lawrence J. Ruisi (Chair)*		Marc Beilinson (Chair)*		Marc Beilinson*
Brian Leach*		H. Carl McCall*		Robert Borden*
Robert Borden*		Arthur Wrubel*		Hope Taitz
Executive Committee		Nominating and Corporate Governance Committee		Risk Committee
James R. Belardi		Arthur Wrubel (Chair)*		Manfred Puffer (Chair)
Marc Rowan		Marc Beilinson*		Robert Borden*
Matthew Michelini		H. Carl McCall*		Matthew Michelini
				Lawrence J. Ruisi*
				Brian Leach*
				Hope Taitz

 

*	Independent director for purposes of the NYSE corporate governance listing requirements.

Audit Committee

The audit committee’s duties include, but are not limited to, assisting the board of directors with its oversight and monitoring responsibilities regarding:

 

•

the integrity of the Company’s consolidated financial statements and financial and accounting processes;

 

•

compliance with the audit, accounting and internal controls requirements by AHL and its subsidiaries;

 

•

the independent auditor’s qualifications, independence and performance;

 

•

related party transactions other than transactions between AHL and its subsidiaries and Apollo and its affiliates (other than AHL and its subsidiaries) and other related party transactions ancillary thereto that are required to be reviewed by the conflicts committee or by the disinterested directors on our board of directors as described under “—Conflicts Committee” below, or are expressly exempt from such review under our internal policies;

 

•

the performance of the Company’s internal control over financial reporting and its subsidiaries’ internal control over financial reporting (including monitoring and reporting by subsidiaries) and the function of the Company’s internal audit department;

 

•

the Company’s legal and regulatory compliance and ethical standards;

 

•

procedures to receive, retain and treat complaints regarding accounting, internal controls over financial reporting or auditing matters and to receive confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and

 

•

the review of the Company’s financial disclosure and public filings.

Our audit committee is currently comprised of Messrs. Leach, Ruisi and Borden. Mr. Ruisi is the chair of the audit committee.

The board of directors has determined that each of Messrs. Ruisi, Leach and Borden meet the independence requirements of the NYSE rules and the criteria for independence set forth in Rule 10A-3(b)(1) under the

 

14

Exchange Act of 1934, as amended. The board of directors has determined that each member of our audit committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and the NYSE. The chair of our audit committee, Mr. Ruisi, is an independent director and an “audit committee financial expert” as that term is defined in the rules and regulations of the SEC. Our board of directors has approved a written charter under which the audit committee will operate. A copy of the charter of our audit committee is available on our principal corporate website at www.athene.com. Information contained on our website or connected thereto does not constitute a part of, and is not incorporated by reference into, this proxy statement.

Pre-Approval Policies and Procedures of the Audit Committee

The audit committee has adopted procedures for pre-approving all audit and permissible non-audit services provided by the Company’s independent auditor. The audit committee will, on an annual basis, review and pre-approve the audit, review, attestation and permitted non-audit services to be provided during the next audit cycle by the Company’s independent auditor. To the extent practicable, the audit committee will also review and approve a budget for such services. Services proposed to be provided by the independent auditor that have not been pre-approved during the annual review and the fees for such proposed services must be approved by the audit committee. All requests or applications for the independent auditor to provide services to the Company over certain thresholds shall be submitted to the audit committee or the Chairman thereof. The audit committee considered whether the provision of non-audit services performed by the Company’s independent auditor is compatible with maintaining the independent auditor’s independence during 2018. The audit committee concluded in 2018 that the provision of these services was compatible with the maintenance of the independent auditor’s independence in the performance of its auditing functions during 2018. All services were approved by the audit committee or were pre-approved under the audit committee’s pre-approval policy.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The following Report of the Audit Committee of the Board of Directors of the Company does not constitute soliciting material and should not be deemed filed or incorporated by reference into any future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act, except to the extent the Company specifically incorporates this Report by reference.

The audit committee has reviewed and discussed the audited consolidated financial statements of the Company for the year ended December 31, 2018 with management and the independent auditors. The audit committee has discussed with the independent auditors the matters required to be discussed by Auditing Standard No. 1301, as adopted by the Public Company Accounting Oversight Board.

The audit committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board in Rule 3526 regarding the independent auditors’ communications with the audit committee concerning independence. The audit committee has discussed with the independent auditors the independent auditors’ independence. The independent auditors and the Company’s internal auditors had full access to the audit committee, including meetings without management present as needed.

Based on the audit committee’s review and discussions referred to above, the audit committee recommended to the board of directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

AUDIT COMMITTEE

Lawrence J. Ruisi, Chairman

Brian Leach

Robert Borden

 

15

Compensation Committee

The purposes of the compensation committee are generally to:

 

•

review and approve annually corporate goals and objectives, including financial and other performance targets, relevant to Chief Executive Officer and executive officer compensation;

 

•

review and approve annually corporate goals and objectives, including financial and other performance targets, relevant to compensation paid to the other executive officers and key employees of the Company and its subsidiaries;

 

•

review, approve and, when necessary, make recommendations to the board of directors regarding the Company’s compensation plans for executive officers and key employees, including with respect to incentive compensation plans and share-based plans, policies and programs;

 

•

review and administer the Company’s share incentive plans and any other share-based plan and any incentive-based plan of the Company and its subsidiaries, including approving grants and/or awards of restricted stock, stock options and other forms of equity-based compensation under any such plans to executive officers, and, at its discretion, delegate authority to senior management to administer such plans for employees of the Company who are not executive officers and key employees;

 

•

review and approve, for the Chief Executive Officer and other executive officers of the Company, when and if appropriate, employment agreements, severance agreements, consulting agreements and change in control or termination agreements and any benefits or perquisites not broadly applicable to the employee population;

 

•

prepare the compensation committee report to be included in an annual report or proxy statement, as required by applicable SEC and NYSE rules;

 

•

review periodically the Company’s compensation plans, policies and programs to assess whether such policies encourage excessive or inappropriate risk-taking or earnings manipulation;

 

•

review the results of any advisory stockholder votes on executive compensation and consider whether to recommend adjustments to the Company’s executive compensation policies and practices as a result of such vote; and

 

•

monitor compliance with stock ownership guidelines for the Chief Executive Officer and other executive officers of the Company.

Our compensation committee is comprised of Messrs. Beilinson, McCall, and Wrubel. Mr. Beilinson is the chair of the compensation committee. The board of directors has determined that each of Messrs. Beilinson, McCall and Wrubel meet the independence requirements of the NYSE rules and therefore all members of the compensation committee are independent directors. Our board of directors has approved a written charter under which the compensation committee will operate. A copy of the charter of our compensation committee is available on our principal corporate website at www.athene.com. Information contained on our website or connected thereto does not constitute a part of, and is not incorporated by reference into, this proxy statement.

 

16

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

The compensation committee has reviewed and discussed “COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS” with executive management. Based on its review, the compensation committee recommended to the board of directors that “COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS” be included in this proxy statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

COMPENSATION COMMITTEE

Marc A. Beilinson, Chairman

H. Carl McCall

Arthur Wrubel

Nominating and Corporate Governance Committee

The purposes of the nominating and corporate governance committee are to:

 

•

identify, evaluate and recommend individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors;

 

•

select, or recommend that our board of directors select, the director nominees to stand for election at each annual general meeting of shareholders of the Company or to fill vacancies on our board of directors;

 

•

develop and recommend to our board of directors a set of corporate governance guidelines applicable to the Company and its subsidiaries; and

 

•

oversee the annual performance evaluation of our board of directors and each of its committees.

The nominating and corporate governance committee recommends directors eligible to serve on the committees of our board of directors. The nominating and corporate governance committee also reviews and evaluates, in accordance with our Bye-laws, all shareholder director nominees. All shareholder director nominations must be made in accordance with the requirements of our Bye-laws, which specify the appropriate period of notice (as described below in “MORE INFORMATION—Shareholders’ Proposals and Director Nominees for the 2020 Annual General Meeting”) and enumerate certain required disclosures the shareholder must include with his or her notice of intent to the Company when making a director nomination.

In recommending directors and evaluating shareholder director nominees, the nominating and corporate governance committee as a general matter seeks to compose the Company’s board to be of effective size and composition with a diversity of backgrounds, skills and experiences. The nominating and corporate governance committee, considers several additional factors, including the potential directors’:

 

•

fitness and propriety for the position, including a high level of professional ethics, integrity, leadership values and the ability to exercise sound judgment;

 

•

useful qualifications, industry experience, technical expertise; education and other skills and expertise, as well as the interplay of those factors with the qualifications and experience of incumbent directors;

 

•

a willingness and ability to devote the time necessary to carry out the duties and responsibilities of board membership;

 

•

a desire to oversee that the operations and financial reporting are effected in an accurate and transparent manner and in compliance with applicable laws, rules and regulations; and

 

•

a dedication to the representation of the best interests of the Company and its shareholders.

Our nominating and corporate governance committee is comprised of Messrs. Wrubel, McCall, and Beilinson. Mr. Wrubel is the chair of the nominating and corporate governance committee. The board of

 

17

directors has determined that each of Messrs. Wrubel, McCall, and Beilinson meet the independence requirements of the NYSE rules and therefore all members of our nominating and corporate governance committee are independent directors. A copy of the charter of our nominating and corporate governance committee is available on our principal corporate website at www.athene.com. Information contained on our website or connected thereto does not constitute a part of, and is not incorporated by reference into, this proxy statement.

Conflicts Committee

Because the Apollo Group has a significant voting interest in AHL, and because AHL and its subsidiaries have entered into, and will continue in the future to enter into, transactions with Apollo and its affiliates, our Bye-laws require us to maintain a conflicts committee designated by our board of directors, currently consisting of three directors of the Company who are not officers or employees of any member of the Apollo Group. The conflicts committee meets at least quarterly and consists of Messrs. Beilinson and Borden and Ms. Taitz. The conflicts committee reviews and approves material transactions by and between AHL and its subsidiaries, on the one hand, and members of the Apollo Group, on the other hand, including any modification or waiver of the IMAs (as defined herein) with AAM, subject to certain exceptions. The conflicts committee is also responsible for the review and approval of related party transactions that are incidental or ancillary to the foregoing transactions. For a description of the functions of the conflicts committee and such exceptions, see “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS—Related Party Transaction Policy.”

Executive Committee

The executive committee is responsible for facilitating the approval of certain actions that do not require consideration by the full board of directors or that are specifically delegated by the board of directors to the executive committee. The executive committee possesses and may exercise all powers of the board of directors in the management and direction of the Company’s business consistent with our Bye-laws, applicable law (including any applicable rule of any stock exchange or quotation system on which our common shares are then listed) and our operating guidelines, except that the executive committee shall not perform such functions that are expressly delegated to other committees of the board of directors. The executive committee does not have the power to:

 

•

declare dividends on or distributions of or in respect of shares of the Company;

 

•

issue shares or authorize or approve the issuance or sale, or contract for sale, of shares or determine the designation and relative rights, preferences and limitations of a series or class of shares unless specifically delegated by action of the board of directors to the executive committee or a subcommittee of the executive committee;

 

•

recommend to Shareholders any action that requires Shareholder approval;

 

•

recommend to Shareholders a dissolution or winding up of the Company or a revocation of a dissolution or winding up of the Company;

 

•

amend or repeal any provision of the memorandum of association or Bye-laws;

 

•

agree to the settlement of any litigation, dispute, investigation or other similar matter with respect to the Company that is not within the scope of authority previously delegated to the executive committee by the board of directors;

 

•

approve the sale or lease of real or personal property assets with a fair value greater than a threshold amount specifically delegated to the executive committee by the board of directors;

 

•

authorize mergers (other than a merger of any wholly-owned subsidiary with the Company), acquisitions, joint ventures, consolidations or dispositions of assets or any business of the Company or any investment in any business or Company by the Company with a fair value in excess of a threshold

 

18

amount specifically delegated to the committee by the board of directors; or approve the sale, lease, exchange or encumbrance of any material asset of the Company that, in each case, is not within the scope of authority previously delegated to the executive committee by action of the board of directors; or

 

•

amend, alter or repeal, or take any action inconsistent with any resolution or action of the board of directors.

Our executive committee is comprised of Messrs. Belardi, Michelini and Rowan.

Risk Committee

The risk committee’s duties are to oversee the development and implementation of systems and processes designed to identify, manage and mitigate reasonably foreseeable material risks to the Company; assist our board of directors and our board committees in fulfilling their oversight responsibilities for the risk management function of the Company; approve the stress test assumption and limits utilized in our stress test scenario analyses and engage in such activities as it deems necessary or appropriate in connection with the foregoing. In assessing risk, the risk committee assesses the risk of the Company and its subsidiaries as a whole. The risk committee’s role is one of oversight. Management of the Company is responsible for developing and implementing the systems and processes designed to identify, manage and mitigate risk. Members of the risk committee are selected for their experience in managing risks in financial and/or insurance enterprises. Our risk committee meets quarterly and is comprised of Messrs. Borden, Leach, Michelini and Ruisi, Ms. Taitz and Dr. Puffer. Dr. Puffer is the chair of the risk committee.

Management Committees

An integral component of our corporate governance structure is our management committees. Management committees report to our senior officers, including our Chief Executive Officer, President, Chief Financial Officer, and Chief Risk Officer and to committees of our board of directors. Management committees are comprised of members of senior management and are designed to oversee business initiatives and to manage business risk and processes, with each committee focused on a discrete area of our business. The following is a description of certain of our management committees:

 

•

Management Executive Committee: oversees all of our strategic initiatives and our overall financial condition.

 

•

Management Risk Committee: oversees overall corporate risk, including credit risk, interest rate risk, equity risk, business risk, operational risk and other risks we confront. The committee reports to the board risk committee.

 

•

Operational Risk Committee: a subcommittee of the Management Risk Committee which oversees operational risk, including information security, disaster recovery, trading activities and operational management of our annuity portfolio.

 

•

Management Investment Committee: focuses on strategic decisions involving our investment portfolio, such as approving investment limits, new asset classes and our allocation strategy, reviewing large asset transactions as well as monitoring our credit risk and the management of our assets and liabilities. The committee reports to the board risk committee.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2018, Messrs. Wrubel, McCall and Beilinson each served on our compensation committee.

 

19

None of our executive officers currently serves, or has served during the last completed fiscal year, as a member of the board of directors or compensation committee of any entity that has an executive officer serving as a member of our compensation committee or as a director on our board of directors.

Corporate Governance Guidelines and Code of Business Conduct and Ethics

We have adopted corporate governance guidelines and a code of business conduct and ethics that applies to all of our directors, officers and employees. These documents are available at www.athene.com. Information contained on our website or connected thereto does not constitute a part of, and is not incorporated by reference into, this proxy statement.

Communications with the Board of Directors

Shareholders and other interested parties may communicate with members of the board of directors (either individually or as a body) by addressing correspondence to that individual or body to Athene Holding Ltd., Chesney House, First Floor, 96 Pitts Bay Road, Pembroke, HM08, Bermuda.

Shareholders and other interested parties may specifically direct their communications to any of the independent directors, including the Committee Chairs and the Lead Independent Director, by addressing correspondence to that individual or body to Athene Holding Ltd., Chesney House, First Floor, 96 Pitts Bay Road, Pembroke, HM08, Bermuda.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, requires our directors, officers and holders of more than 10% of our common shares to file reports with the SEC regarding their ownership and changes in ownership of our securities. Based upon our examination of the copies of Forms 3, 4, and 5, and amendments thereto furnished to us and the written representations of our directors, officers and 10% stockholders, we believe that, during fiscal 2018, our directors, officers and 10% stockholders complied with all Section 16(a) filing requirements.

Risk Management Oversight

The Company has implemented an enterprise-wide approach to risk management and has specifically established a risk committee of the board of directors charged with the oversight of the development and implementation of systems and processes designed to identify, manage and mitigate reasonably foreseeable material risks and with the duty to assist the board of directors and other board committees with fulfilling their oversight responsibilities for the Company’s risk management function.

As noted above in “Management Committees,” management committees oversee business initiatives and manage business risk and processes.

The audit committee assists the risk committee in its responsibility for oversight of risk management. In particular, the audit committee focuses on major financial risk exposures and the steps management has taken to monitor and control such risks, and discusses with our independent auditor the policies governing the process by which senior management and the various units of the Company assess and manage our financial risk exposure and operational/strategic risk. The compensation committee also assists the risk committee in overseeing risk management by reviewing the Company’s compensation plans, policies and programs to ensure that such plans, policies and programs do not encourage excessive or inappropriate risk-taking.

With respect to cybersecurity, we have developed a program, overseen by our Chief Information Security Officer and our Information Security, Risk, and Compliance group, that is designed to protect and preserve the confidentiality, integrity and continued availability of all information that we own or that is otherwise in our care.

 

20

This program includes a cyber incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incident. The audit committee and the risk committee meet periodically with our Chief Information Officer, Chief Information Security Officer and certain other members of senior management to review our information technology and cybersecurity risk profile and discuss our activities to manage those risks. Our Operational Risk Committee maintains a cybersecurity subcommittee, which provides regular updates that, together with updates provided by other subcommittees, form a basis for periodic reporting to the risk committee. These updates and updates to the audit committee include the results of exercises and response readiness assessments led by outside advisors who provide a third-party independent assessment of our technical program and our internal response preparedness.

 

21

MANAGEMENT

Below is a list of the names and ages of our directors and executive officers and a description of the business experience of each of them.

 

Name		Age		Position
James R. Belardi		62		Chairman of the Board, Chief Executive Officer, and Chief Investment Officer
William J. Wheeler		57		President
Grant Kvalheim		62		Executive Vice President—Athene, Chief Executive Officer and President—Athene USA
Martin P. Klein		59		Executive Vice President and Chief Financial Officer
Frank L. Gillis		67		Executive Vice President—Athene, Chief Executive Officer—ALRe
John M. Rhodes		47		Executive Vice President and Chief Risk Officer
Marc Beilinson		60		Director*
Robert L. Borden		56		Director*
Mitra Hormozi†		50		Director*
Scott Kleinman†		46		Director
Brian Leach		60		Director*
Gernot Lohr		50		Director
H. Carl McCall		83		Director*
Matthew R. Michelini		37		Director
Dr. Manfred Puffer		55		Director
Marc Rowan		56		Director
Lawrence J. Ruisi		70		Director*
Hope Schefler Taitz		54		Director
Arthur Wrubel		53		Director*
Fehmi Zeko		60		Director*

 

*	Independent director for purposes of the NYSE corporate governance listing requirements.

†	Mr. Kleinman and Ms. Hormozi have been appointed subject to being nominated and elected by shareholders at the 2019 Annual General Meeting.

Executive Officers

James R. Belardi is our co-founder, and has served as our Chairman, Chief Executive Officer and Chief Investment Officer since May 2009. In addition, Mr. Belardi is the founder, Chairman, Chief Executive Officer and Chief Investment Officer of AAM, our investment manager. He is a member of our executive committee and AAM’s executive committee. Mr. Belardi is responsible for our overall strategic direction and management and the day-to-day management of our investment portfolio. Prior to founding our Company and AAM, Mr. Belardi was President of SunAmerica Life Insurance Company and was also Executive Vice President and Chief Investment Officer of AIG Retirement Services, Inc., where he had responsibility for an invested-asset portfolio of $250 billion. Mr. Belardi has a Bachelor of Arts degree in economics from Stanford University and a Master of Business Administration from the University of California, Los Angeles. He currently serves on the board of directors of AAM, Paulist Productions, where he chairs the investment committee, Aris Mortgage Holding Company LLC (“Aris Holdco”), which is the parent company of AmeriHome Mortgage Company, LLC (“AmeriHome”), and Southern California Aquatics. Mr. Belardi swam in the 1976 and 1980 Olympic Swimming Trials and is a nine-time Masters Swimming World Record Holder. Mr. Belardi was selected to serve on our board of directors as a result of his demonstrated track record in and deep knowledge of the financial services business, including having founded both our Company and AAM, and his extensive experience in the insurance industry.

William J. Wheeler has served as our President since September 2015. Together with Mr. Belardi, Mr. Wheeler is responsible for our overall strategic direction. In particular, Mr. Wheeler oversees all of our

 

22

business units, which includes our retail and institutional operations, and also our corporate development and risk activities. Prior to joining our Company, Mr. Wheeler was President of the Americas group for MetLife Inc. (“MetLife”) where he oversaw the insurance and retirement business in the United States and Latin America. Previously, Mr. Wheeler had been Executive Vice President and Chief Financial Officer at MetLife. Prior to joining MetLife, Mr. Wheeler was an investment banker at Donaldson, Lufkin & Jenrette. Mr. Wheeler has an AB from Wabash College, where he is now a member of the board of trustees, and an MBA from Harvard Business School. He currently serves on the boards of Evercore Inc., Athora Holding Ltd., Venerable Holdings, Inc. and the American Council of Life Insurers.

Grant Kvalheim has served as the Chief Executive Officer of Athene USA Corporation since June 2015 and served as our President from January 2011 until September 2015, served as the Chief Financial Officer from January 2011 until April 2013 and served as a director from January 2012 until February 2014. Mr. Kvalheim is responsible for the oversight of our U.S. operating companies with a focus on our retail annuity channel, including growth initiatives and new product development. Prior to joining our Company, Mr. Kvalheim was a senior executive of Barclays Capital (“Barclays”) from early 2001 to the end of 2007, becoming Co-President in September 2005. During his time at Barclays he converted a European cash investment grade business into a leading global cash and derivatives business across both securitized and non-securitized credit products, and significantly expanded Barclays’ investment banking platform. Prior to joining Barclays, Mr. Kvalheim held senior executive positions in the investment banks of Deutsche Bank and Merrill Lynch. Mr. Kvalheim has a Bachelor of Arts degree in economics from Claremont McKenna College and a Master of Business Administration in finance from the University of Chicago. He currently serves on the board of directors of LIMRA, Mottahedeh & Co., Sol Health and United Way of Central Iowa.

Martin P. Klein has served as our Executive Vice President and Chief Financial Officer since November 2015. Mr. Klein also serves as a director of several of our insurance subsidiaries. Mr. Klein is responsible for overseeing our financial management, including our enterprise finance, tax, actuarial and internal audit functions. He also helps to develop and execute strategic operating decisions across our Company. Prior to joining our Company, Mr. Klein was employed by Genworth Financial, Inc. (“Genworth”) from May 2011 through October 2015, where he most recently served as Executive Vice President & Chief Financial Officer and, from May through December 2012, also served as Genworth’s Acting President & Chief Executive Officer. Prior to joining Genworth in 2011, Mr. Klein served as a Managing Director and Senior Relationship Manager of Barclays, after its acquisition of the U.S. operations of Lehman Brothers Holdings, Inc. (“Lehman Brothers”). Mr. Klein joined Lehman Brothers in 1998, where he served as a Managing Director and the head of the Insurance Solutions Group and the Pension Solutions Group. Prior to Lehman Brothers, Mr. Klein had been with Zurich Insurance Group from 1994 to 1998 and was a Managing Director of Zurich Investment Management. Prior to Zurich, Mr. Klein served in finance and actuarial roles in other insurance organizations. Mr. Klein currently serves on the boards of Aris Holdco and Athora Holding Ltd., as well as Caritas, a non-profit organization in Richmond, Virginia. Mr. Klein is a Fellow of the Society of Actuaries and a Chartered Financial Analyst. He received his Bachelor of Arts in mathematics and business administration from Hope College and a Master of Science in statistical and actuarial sciences from University of Iowa.

Frank L. Gillis is a co-founder of our Company and served on our board of directors from May 2009 to February 2014. Mr. Gillis has served as Chief Executive Officer of ALRe since June 2009 and serves as a director of ALRe. Mr. Gillis is responsible for our growth through our reinsurance channel and is responsible for the oversight of ALRe. Prior to founding our Company, Mr. Gillis was a Senior Managing Director at Bear Stearns & Co. Inc. (“Bear Stearns”) and was the head of the Bear Stearns Insurance Solutions Group. In this position, he led Bear Stearns’ entry into the funding agreement-backed note business and created the turn-key Premium Asset Trust Series. Prior to Bear Stearns, Mr. Gillis spent over three years at GenRe Financial Products providing ALM hedging solutions to U.S. life insurance companies. Mr. Gillis serves on the boards of Bermuda International Long Term Insurers and Reinsurers and the Association of Bermuda International Companies. Mr. Gillis has a Bachelor of Arts in English from the University of Richmond.

 

23

John M. Rhodes has served as our Executive Vice President and Chief Risk Officer since August 2016. Mr. Rhodes is responsible for overseeing our enterprise risk management functions, as well as providing key support in connection with strategic operating decisions across our Company. Prior to joining our Company, Mr. Rhodes was the Chief Risk Officer of Allstate from November 2015 to June 2016. Prior to joining Allstate, Mr. Rhodes was the Chief Risk Officer of Lincoln Financial Group from July 2012 to October 2015. Prior to that he served as the Head of Equity Risk Management at Lincoln Financial Group from 2009 to 2012. Prior to joining Lincoln Financial Group, Mr. Rhodes was the Head of Hedging Operations and Performance Management at ING US Financial Services from 2006 to 2009. From 1999 to 2006, Mr. Rhodes served in a variety of roles at JPMorgan Chase and GE Capital focusing primarily on market risk and valuation. Mr. Rhodes also served in the U.S. Navy as a commissioned officer. Mr. Rhodes received a Bachelor of Science degree in Oceanography from the United States Naval Academy and a Master of Business Administration from New York University, Leonard Stern School of Business.

Directors

We believe our board of directors should be composed of a diverse group of individuals with sophistication and experience in many substantive areas that impact our business. We believe experience, qualifications and skills in the following areas are most important: insurance industry; accounting, finance and capital structure; strategic planning and leadership of complex organizations; legal/regulatory and government affairs; personnel management; and board practices of other major corporations. We believe that all of our current board members possess the professional and personal qualifications necessary for service on our board, and have highlighted particularly noteworthy attributes for each board member in the individual biographies below, or above in the case of our Chairman and Chief Executive Officer.

Marc Beilinson has served as a director of our Company since 2013, and is the lead independent director, the chair of our compensation committee and a member of our conflicts committee and nominating and corporate governance committee. Since August 2011, Mr. Beilinson has been the Managing Director of Beilinson Advisory Group, a financial restructuring and hospitality advisory group that specializes in assisting distressed companies. Most recently, Mr. Beilinson served as Chief Restructuring Officer of Newbury Common Associates LLC (and certain affiliates) from December 2016 to June 2017. Mr. Beilinson previously served as Chief Restructuring Officer of Fisker Automotive from November 2013 to August 2014 and as Chief Restructuring Officer and Chief Executive Officer of Eagle Hospitality Properties Trust, Inc. from August 2011 to December 2014 and Innkeepers USA Trust from November 2008 to March 2011. Mr. Beilinson oversaw the Chapter 11 reorganization of Innkeepers USA, Fisker Automotive and Newbury Common Associates in his interim management roles as the Chief Restructuring Officer of those companies. Mr. Beilinson currently serves on the boards of directors of MFG Assurance Company Limited and Monitronics, as well as the audit committee of MFG Assurance Company Limited. Mr. Beilinson has previously served on the boards of directors and audit committees of a number of public and privately held companies, including Westinghouse Electric, Caesars Acquisition Company, Wyndham International, Inc., Apollo Commercial Real Estate Finance, Inc. (“ARI”), Innkeepers USA Trust, Gastar Inc. and American Tire. Mr. Beilinson has a Bachelor of Arts in political science from the University of California, Los Angeles and a Juris Doctor from the University of California Davis Law School. Mr. Beilinson was selected to serve on our board of directors as a result of having over thirty years of service to the boards of both public and private companies, and his extensive knowledge of legal and compliance issues, including the Sarbanes-Oxley Act of 2002.

Robert L. Borden has served as a director of our Company and our Company’s subsidiary, ALRe, since 2010, and is a member of our risk, audit and conflicts committees. Mr. Borden has served as Managing Partner and Chief Investment Officer of Delegate Advisors, LLC since January 2012. From April 2006 to January 2012, Mr. Borden served as the Chief Executive Officer and Chief Investment Officer of the South Carolina Retirement System Investment Commission (“SCRSIC”), which is responsible for investing and managing all assets of the South Carolina Retirement Systems. Prior to his role at SCRSIC, Mr. Borden served as the Executive Director and Chief Investment Officer of the Louisiana State Employees Retirement System, where he was responsible for

 

24

investment management, benefits administration, finance and operations. Mr. Borden has also served as Vice Chairman and Chairman of the Fund Evaluation Committee for the Louisiana Deferred Compensation Commission and as a member of the South Carolina Deferred Compensation Committee. Prior to that, Mr. Borden served as Treasurer and Senior Manager for Financial Services at the Texas Workers’ Compensation Insurance Fund after serving as VP of Treasury and Interest Rate Risk Manager at Franklin Federal Bancorp. Mr. Borden serves on the board of directors of Delegate Advisors, LLC, Apollo Senior Floating Rate Fund, Inc. and Apollo Tactical Income Fund Inc. Mr. Borden has a Bachelor of Business Administration with a major in finance from the University of Texas at Austin and received a Master of Science degree in finance from Louisiana State University. Mr. Borden holds both the Chartered Financial Analyst and Chartered Alternative Investment Analyst professional designations. Mr. Borden was selected to serve on our board of directors as a result of his extensive experience in leadership positions, and in particular, his experiences as Chief Executive Officer and Chief Investment Officer at several companies.

Mitra Hormozi has served as a director of our Company since December 2018. Ms. Hormozi is also a director of a number of our US subsidiaries. Ms. Hormozi is Executive Vice President and General Counsel of Revlon, Inc., where she is responsible for overseeing Revlon’s legal affairs worldwide. Ms. Hormozi has extensive experience in both the public and private sectors of the legal field. Prior to joining Revlon in April 2015, she was a litigation partner at two major law firms from 2011 to 2015 and served as Deputy Chief of Staff to then New York State Attorney General, Andrew Cuomo. She also served as an Assistant United States Attorney prosecuting high-profile complex racketeering cases in the Eastern District of New York. Currently, she sits on the Board of New York University School of Law’s Program on Corporate Compliance and Enforcement. Ms. Hormozi received a Bachelor of Arts in history from the University of Michigan and a Juris Doctor from the New York University School of Law. Ms. Hormozi was selected to serve on our board of directors as a result of her extensive legal counsel experience.

Scott Kleinman has served as a director of our Company since December 2018. Mr. Kleinman serves as Co-President of Apollo Global Management, LLC, sharing responsibility for all of Apollo’s revenue-generating and investing activities with a focus on Apollo’s equity and opportunistic business. Mr. Kleinman joined Apollo in 1996, and in 2009 he was named Lead Partner for Private Equity. Prior to joining Apollo, Mr. Kleinman was a member of the Investment Banking Division at Smith Barney Inc. Mr. Kleinman currently serves on the board of directors of Constellis Holdings and Momentive Performance Materials Holdings, Inc. In 2014, Mr. Kleinman founded the Kleinman Center for Energy Policy at the University of Pennsylvania. He also is a member of the Board of Overseers at the University of Pennsylvania School of Design. Mr. Kleinman received a Bachelor of Arts in Russian studies and a Bachelor of Science in finance from the University of Pennsylvania and the Wharton School of Business, respectively, graduating magna cum laude, Phi Beta Kappa. Mr. Kleinman was selected to serve on our board of directors as a result of his extensive experience in the financial services sector.

Brian Leach has served as a director of our Company since August 2016, and is a member of our risk and audit committees. From 2013 to 2015, Mr. Leach served as Head of Franchise Risk & Strategy at Citigroup with responsibility for managing all of Citibank’s global risk, audit, compliance and strategy. From 2008 to 2012, Mr. Leach served as the Chief Risk Officer of Citibank. In 2005, Mr. Leach, together with several former colleagues from Morgan Stanley, formed Old Lane and from 2005 to 2008, Mr. Leach served as Old Lane’s co-Chief Operating Officer and Chief Risk Officer. Prior to that, Mr. Leach worked his entire post-graduate career at Morgan Stanley encompassing running a successful proprietary trading business and culminating as the Risk Manager of the Institutional Securities Business reporting directly to its President. During his time with Morgan Stanley, Mr. Leach was seconded to Long-Term Capital Management (“LTCM”) for approximately one year. During that time, he was one of six managers selected by a consortium of 14 global financial institutions to manage the liquidation of LTCM. Mr. Leach serves on the Advisor Investment Committee of Mountain Capital. Mr. Leach has a Bachelor of Arts degree in economics from Brown University and a Master of Business Administration from Harvard Business School. Mr. Leach has been awarded Risk Manager of the Year on two separate occasions: the first by Risk Magazine for his work in restructuring the hedge fund LTCM and the second by the Global Association of Risk Professionals for his work in restructuring Citigroup after the global financial

 

25

crisis. Mr. Leach was selected to serve on our board of directors as a result of his extensive experience in risk management.

Gernot Lohr has served as a director of our Company and our subsidiary, ALRe, since 2009. Mr. Lohr has served as a director of AAM, our investment manager, since 2009. Mr. Lohr is a Senior Partner and Global Head of the Financial Institutions Group at Apollo, which he joined in May 2007. Prior to joining Apollo, Mr. Lohr was a founding partner at Infinity Point LLC, Apollo’s joint venture partner for the financial services industry since 2005. Before that time, Mr. Lohr spent eight years in financial services investment banking at Goldman, Sachs & Co. in New York and also worked at McKinsey & Company and B. Metzler Corporate Finance in Frankfurt. Currently, Mr. Lohr serves on the board of directors of Athora Holding Ltd., Catalina Holdings, Oldenburgische Landesbank and Tranquilidade. Mr. Lohr has a joint Master’s Degree in economics and engineering from the University of Karlsruhe, Germany, and received a Master of Business Administration from the MIT Sloan School of Management. Mr. Lohr was selected to serve on our board of directors as a result of his extensive experience in the financial services sector.

H. Carl McCall has served as a director of our Company since August 2016, and is a member of our nominating and corporate governance and compensation committees. Since October 2011, Mr. McCall has served as the Chairman of the Board of Trustees of the State University of New York. From 2002 to 2015, Mr. McCall served as a board member or trustee of several organizations, including Ariel Investment, Tyco International, New Plan Realty Corporation and the New York Stock Exchange. Since 2004, Mr. McCall has served as a principal of Covenant Capital, LLC. From 1993 to 2002, Mr. McCall served as the Comptroller of the State of New York, a position in which he was the sole trustee of the second largest public pension fund in the United States. From 1991 to 1993, Mr. McCall served as the President of the New York City Board of Education. From 1986 to 1991, Mr. McCall served as Commissioner of the Port Authority of New York and New Jersey. From 1985 to 1993, Mr. McCall served as a Vice President of Citicorp, Inc. From 1980 to 1981, Mr. McCall served as an ambassador to the United Nations. From 1975 to 1980, Mr. McCall served as a state senator of New York. Mr. McCall received a Bachelor of Arts degree in government from Dartmouth College and a Masters of Arts from Andover Newton Theological Seminary. Mr. McCall was selected to serve on our board of directors as a result of his extensive leadership experience in various sectors, and his experience serving on the boards of a number of public and private companies.

Matthew R. Michelini has served as a director of our Company and certain of our subsidiaries since 2010, and is a member of our executive and risk committees. Mr. Michelini serves as a director of AAM, our investment manager. Mr. Michelini is a Partner at Apollo. He joined Apollo in July 2006. Prior to joining Apollo, Mr. Michelini was a member of the mergers and acquisitions group of Lazard Frères & Co. from 2004 to 2006. Mr. Michelini serves on the board of directors of Aleris Corporation, OneMain Holdings and Venerable Holdings, Inc. He has previously served on the boards of Metals USA Holdings (formerly NYSE listed under “MUSA”), Noranda Aluminum Holding Corporation (formerly NYSE listed under “NOR”) and Warrior Met Coal, Inc. At Apollo, Mr. Michelini has executed deals across the world including in North America, Europe, and Asia. Mr. Michelini graduated from Princeton University with a B.S. in mathematics and a Certificate in Finance and received his M.B.A. from Columbia University. Mr. Michelini was selected to serve on our board of directors as a result of his extensive experience in the financial services sector.

Dr. Manfred Puffer has served as a director of our Company since 2012, and is the chair of our risk committee. Dr. Puffer has served as a Senior Advisor to Apollo since October 2008. From 2006 to 2008, Dr. Puffer was a senior managing director in the Financial Institutions Group of Bear Stearns International, Head of Germany, Austria and Eastern Europe and a Member of the European Executive Committee. From 2002 to 2005, Dr. Puffer was a member of the managing board of WestLB AG and Head of the Investment Bank, Fixed Income, Equities and Structured Finance. Currently, Dr. Puffer is a member of the supervisory board of Infineon Technologies AG. Dr. Puffer holds a Ph.D. and a Master of Business Administration from the University of Vienna. Dr. Puffer was selected to serve on our board of directors as a result of his extensive experience in the financial services sector.

 

26

Marc Rowan has served as a director of our Company since 2009, and is a member of our executive committee. Mr. Rowan has served as a director of AAM, our investment manager, since 2009. Mr. Rowan is a co-founder and Senior Managing Director of Apollo, a leading alternative asset manager focused on contrarian and value-oriented investments across private equity, credit-oriented capital markets and real estate. Mr. Rowan currently serves on the boards of directors of, among others, Apollo, Athora Holding Ltd. and VA Capital LLC. He has previously served on the boards of directors of, among others, the general partner of AAA, AMC Entertainment, Inc., Beats Music, CableCom Gmbh., Caesars Entertainment Corporation, Countrywide PLC, Culligan Water Technologies, Inc., Furniture Brands International, Mobile Satellite Ventures, National Cinemedia, Inc., National Financial Partners, Inc., New World Communications, Inc., New York City Police Foundation, Norwegian Cruise Lines, Quality Distribution, Inc., Samsonite Corporation, SkyTerra Communications, Inc., Unity Media SCA, Vail Resorts, Inc., Wyndham International, Inc. and RCS Capital Corporation. Mr. Rowan is a founding member and Chairman of Youth Renewal Fund, Chairman of the Board of Overseers of The Wharton School at the University of Pennsylvania, a member of the University of Pennsylvania’s Board of Trustees and a member of the board of Jerusalem U and several technology-oriented companies. Mr. Rowan graduated summa cum laude from the University of Pennsylvania’s Wharton School of Business with a Bachelor of Science and a Master of Business Administration in finance. Mr. Rowan was selected to serve on our board of directors as a result of his service on the boards of numerous public and private companies and his demonstrated track record of success and extensive experience in the financial services sector.

Lawrence J. Ruisi has served as a director of our Company since 2013, and is the chair of our audit committee and is a member of our risk committee. Mr. Ruisi is also a director of a number of our US subsidiaries. As an operating executive, Mr. Ruisi held various senior level positions in the entertainment business, including President & Chief Executive Officer of Loews Cineplex Entertainment Corporation, a movie theatre operator with 400 locations worldwide, and as Executive Vice President and Chief Financial Officer of Columbia Pictures Entertainment. As a non-executive, Mr. Ruisi served on numerous boards including Hughes Communications Inc., UST Inc., InnKeepers USA Trust, Wyndham International, Inc. and Adaptec, Inc. During his tenure on these boards, Mr. Ruisi was Chairman of various audit committees, named designated financial expert and served on both compensation and nominating and corporate governance committees. Mr. Ruisi was Chairman of the Independent Committee of the board of InnKeepers, which oversaw its restructuring, and was Chairman of Special Committees at both Wyndham and Adaptec. Mr. Ruisi began his career at Price Waterhouse & Co., where he was a Senior Manager. He is a Certified Public Accountant and received a Bachelor of Science degree in accounting and a Master of Business Administration in finance from St. John’s University. Mr. Ruisi is currently an adjunct professor of accounting at St. John’s University. Mr. Ruisi was selected to serve on our board of directors as a result of his extensive leadership experience in various sectors, his expertise in accounting and financial reporting matters and his experience serving on the boards of numerous public and private companies.

Hope Schefler Taitz has served as a director of our Company and our subsidiary, ALRe, since 2011, and is a member of our risk and conflicts committees. Ms. Taitz is also a director of a number of our US subsidiaries. Ms. Taitz has served as the CEO of ELY Capital since 2014. Now acting as an investor and advisor with expertise in media, technology and the consumer, she helps innovative enterprises grow through financial leadership and connections to established corporations. Ms. Taitz, a strong advocate of women on boards, currently serves on the board of MidCap Finco Holdings Limited, Greenlight Capital Re, Ltd. and Summit Hotel Properties, Inc. She has previously served on the boards of Apollo Residential Mortgage, Inc., Diamond International Resorts, Inc., as well as Lumenis Ltd. From 1995 to 2003, Ms. Taitz was Managing Partner of Catalyst Partners, L.P., a money management firm. From 1990 to 1992, Ms. Taitz was a Vice President at The Argosy Group (now part of the Canadian Imperial Bank of Commerce (NYSE: CM)) specializing in financial restructuring before becoming a Managing Director at Crystal Asset Management, from 1992 to 1995. From 1986 to 1990, Ms. Taitz was at Drexel Burnham Lambert, first as a mergers and acquisitions analyst and then as an associate in the leveraged buyout group. On the not for profit side, Ms. Taitz focuses on education and is an advocate for STEM. She is a founding executive member of YRF Darca, an emeritus board member of Pencils of Promise, a member of the undergraduate executive board of The Wharton School at the University of

 

27

Pennsylvania and a member of the Center for Social Innovation. Ms. Taitz is a former board member of Girls Who Code and is now a board member of the New York City Foundation for Computer Science. Ms. Taitz graduated with honors from the University of Pennsylvania with a Bachelor of Arts degree in economics. Ms. Taitz was selected to serve on our board of directors as a result of her extensive experience in the financial services sector as well as her experience serving on the governance committees of other public companies.

Arthur Wrubel has served as a director of our Company since August 2016, and is the chair of our nominating and corporate governance and a member of our compensation committee. In 2001, Mr. Wrubel formed Wesley Capital Management, a long/short investment fund focused on real estate securities. Since its inception, Wesley Capital has been among the largest investment funds in the real estate securities sector. In 1993, Mr. Wrubel joined Dickstein & Co., a bankruptcy and event-driven investment fund as a partner. His focus was on real estate and asset backed securities. At Dickstein, Mr. Wrubel was involved in many high-profile real estate corporate restructurings including Olympia & York, Cadillac Fairview, Rockefeller Center Properties, Bramalea, and Trizec. Mr. Wrubel began his career in 1987 at JMB Realty Corporation, where he was an associate in the acquisitions group. Mr. Wrubel currently serves as a member of the Wharton Undergraduate Board at the University of Pennsylvania. Mr. Wrubel received a Bachelor of Science in economics from The Wharton School at the University of Pennsylvania. Mr. Wrubel was selected to serve on our board of directors as a result of his extensive experience in the financial services sector.

Fehmi Zeko has served as a director of our Company since March 2018. Mr. Zeko currently serves as CEO of Zeko Partners LLC and a Senior Advisor at both MC Credit Partners LP and CDX Advisors. From 2015 to March 2018, Mr. Zeko served as Vice Chairman, Global Technology, Media and Telecommunications Investment Banking Group at Bank of America Merrill Lynch. In this role he helped organize and execute the strategic plan to reposition the entire Technology, Media and Telecom franchise for large cap coverage globally. Prior to Bank of America, Mr. Zeko was Senior Managing Director, Group Head North America and Global Chairman, Telecom, Media, Entertainment and Technology (“TMET”) at Macquarie Capital, where he led the firm’s Global TMET Investment Banking and Principal Investing Practice. Prior to joining Macquarie Capital, Mr. Zeko was Vice Chairman and Co-Founder of the Foros Group, where he led the firm’s Media and Communication Advisory Practice. Prior to that, Mr. Zeko held senior investment banking positions at Deutsche Bank and Citigroup. He received his Bachelor of Business Administration and Master of Business Administration in Finance from Texas Christian University’s Neeley School of Business. Mr. Zeko was selected to serve on our board of directors as a result of his extensive financial and global experience.

 

28

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

Compensation Discussion and Analysis

Introduction

Our NEOs, comprised of our principal executive and financial officers and the three highest paid executive officers other than our principal executive and financial officers, are James R. Belardi, Chairman, Chief Executive Officer and Chief Investment Officer; Martin P. Klein, Executive Vice President and Chief Financial Officer; William J. Wheeler, President; Grant Kvalheim, Executive Vice President, Athene and Chief Executive Officer and President, Athene USA Corporation; and John M. Rhodes, Executive Vice President and Chief Risk Officer.

Compensation Framework

Goals, Principles and Process

Our compensation committee believes that our executive compensation program should reward actions and behaviors that support policyholder protection, drive long-term and profitable revenue growth, and create sustainable shareholder value. The compensation committee has sought to foster these objectives through a compensation system that focuses on increasing our executives’ personal interest in our growth and success through performance-based annual incentive awards and ownership of our Class A common shares. We believe that these awards create a balanced focus on our short-term and long-term strategic and financial goals. Our executive compensation program is designed to:

 

•

attract, retain and motivate high-performing talent;

 

•

reward outstanding performance;

 

•

align executive compensation elements with both short-term and long-term company performance; and

 

•

align the interests of our executives with those of our stakeholders.

Our compensation committee has the responsibility for overseeing and approving the compensation of all of our executive officers. Our compensation committee also receives input from the compensation committee’s independent compensation consultant and recommendations from Mr. Belardi regarding the compensation arrangements for executive officers other than himself. None of our NEOs participated in the determination of their own compensation.

In 2018, our compensation committee conducted a review of the Company’s executive compensation program, with the assistance of the compensation committee’s independent compensation consultant, Willis Towers Watson. Willis Towers Watson provided input on the Company’s overall incentive design and a benchmarking analysis with respect to our executive officer compensation program. When setting 2018 NEO compensation, our compensation committee considered survey data from the 2017 Willis Towers Watson CDB Financial Services Executive Compensation Database, as well as compensation data from a group of peer companies (the “Peer Group”) to evaluate compensation arrangements against those of the Company. The companies in the Peer Group were selected based on one or more of the following characteristics: the companies are similar in size to the Company; the companies are industry competitors; or the companies are considered a source of talent. Even though some of the Peer Group companies have larger revenues and market capitalization than the Company, the compensation committee determined that each company was an appropriate peer based on such company being an industry competitor or a source of talent. The Peer Group used to evaluate 2018 compensation decisions consisted of the following nine publicly-traded insurance companies:

 

Aflac Incorporated Lincoln National Corporation Principal Financial Group, Inc.		Prudential Financial, Inc. Reinsurance Group of America Sun Life Financial Inc.		Torchmark Corporation Unum Group Voya Financial, Inc.

 

29

While our compensation committee considers relevant market pay practices when setting executive compensation, it does not believe it appropriate to establish compensation levels based only on market practices. Our compensation committee believes that compensation decisions are complex and require a deliberate review of Company performance and peer compensation levels. The factors that influence the amount of compensation awarded include market competition for a particular position, an individual’s experience and past performance inside or outside the Company, compensation history, role and responsibilities within the Company, tenure with the Company and associated institutional knowledge, long-term potential with the Company, contributions derived from creative and innovative thinking and leadership, industry expertise, past and future performance objectives and the value of the position within the Company.

In addition to executive compensation consulting services, for which the Company paid $192,576 in the aggregate for 2018, Willis Towers Watson provided other services during 2018 for which the Company paid $3,890,842 in the aggregate. These other services consisted of (i) risk and financial services and (ii) benefits services.

The decision to engage Willis Towers Watson for the other services was made by management. Although the compensation committee did not approve such other services, the compensation committee assessed the independence of Willis Towers Watson pursuant to the SEC rules and the NYSE listing standards and concluded that Willis Towers Watson’s work did not raise any conflict of interest.

2018 Compensation Elements

Base Salary

Base salaries for our NEOs are determined annually, based on a number of factors, including the size, scope and impact of their role, the market value associated with their role, leadership skills, length of service, and individual performance and contributions.

Annual Incentive Awards

As further discussed below in “ —2018 Compensation Decisions,” we grant annual cash incentive awards to our NEOs based on the achievement of financial, operational and personal objectives. In general, these objectives are communicated to our NEOs at the beginning of the year, and the compensation committee determines the amount of the awards after the completion of the performance period. The annual incentive award payout for each NEO is subject to a personal performance modifier that allows for an adjustment in payout based on a holistic assessment of each NEO’s individual performance.

Equity and Long-Term Incentive Awards

In general, the Company’s equity and long-term incentive compensation program is designed to recognize the scope of an individual’s responsibilities, reward demonstrated performance and leadership, further align the interests of award recipients with those of the Company’s shareholders and retain award recipients through the vesting period. Important factors in determining the amount of grants awarded to each NEO include the size of past grant amounts, individual performance and expected future contributions to the Company.

Following our initial public offering, we began issuing annual long-term incentive awards to our executive officers, consisting of time-based stock options, time-based restricted share units (“RSUs”) and performance-based equity awards. The 2018 long-term incentive awards to executive officers were structured as 50% performance-based restricted share awards (“RSAs”) (based on target), 25% time-based RSUs and 25% time-based stock options, each by grant date value. The structure and annual amount of the awards are determined by the compensation committee with input from Willis Towers Watson. We use grants of stock options to focus our executives on delivering long-term value to shareholders because options have intrinsic value only to the extent

 

30

that the price of our stock on the date of exercise exceeds the stock price on the grant date. We also use stock options to retain executives, since the stock options vest ratably over a three-year period, provided the recipient remains employed through the applicable vesting date. We believe that time-based RSUs further align the interests of our executives with those of our shareholders and also serve to retain executives, as these RSUs also vest ratably over a three-year period, provided the recipient remains employed through the applicable vesting date.

The performance-based RSAs included in our 2018 long-term incentive award program have a three-year performance period (2018-2020) and vest and are payable following the three-year performance period only if we achieve specified goals based on two equally weighted performance metrics: average annual adjusted return on equity and cumulative adjusted operating income for the three-year period. The target levels of these goals were designed to be reasonably achievable with strong management performance. These performance-based RSAs also serve to retain executives as they generally require the recipient to be continuously employed during the performance period.

Other Compensation Practices

Employment Agreements

We have entered into employment agreements with certain of our NEOs, as follows:

Belardi Agreement

As Mr. Belardi also serves as AAM’s Chairman, Chief Executive Officer and Chief Investment Officer, he has separate employment agreements with both the Company and with AAM. Under these agreements, Mr. Belardi is entitled to receive, among other benefits, a base salary and is eligible to receive an incentive award each fiscal year during the term of employment. For 2018, AAM and the compensation committee of AHL consulted with each other to determine Mr. Belardi’s total base salary, incentive award targets and actual incentive awards. Pursuant to an understanding between AHL and AAM, AHL has agreed that AHL is responsible for paying half of his base salary and incentive award, and AAM agreed to be responsible for paying the remaining amount. Either party, at its sole discretion, may pay its portion of the incentive award in the form of cash or equity. The target incentive award is 100% of Mr. Belardi’s base salary, but the actual incentive award is determined by our compensation committee and AAM’s compensation committee, based on non-alternative investment performance relative to the Barclays US Aggregate Bond Index, aggregate alternative investment net performance relative to the Company’s underwriting target, and other corporate performance targets established by the compensation committee. We report our portion of Mr. Belardi’s total annual salary and incentive award in our 2018 Summary Compensation Table. In addition, AAM retains discretion to pay other elements of compensation under the employment agreement with AAM or otherwise as it deems appropriate in its sole discretion.

Mr. Belardi’s employment agreement with us has a three-year initial term that expired on November 3, 2016 which automatically extends for subsequent one-year terms unless one party gives notice of non-renewal prior to expiration of the then current term. Pursuant to his employment agreement, severance is payable to Mr. Belardi in the event of a termination of employment by the Company without cause, by the Company by reason of non-renewal, by Mr. Belardi for good reason, or due to Mr. Belardi’s death or disability. Mr. Belardi is entitled to receive severance payments in an amount equal to the sum of his then-annual base salary and a pro rata incentive award for the year of termination based, in part, on the incentive award and annual salary paid to him in the year preceding his termination. In the event of involuntary termination other than due to death or disability, Mr. Belardi is entitled to receive an additional severance payment equal to his then-annual base salary multiplied by a bonus percentage, calculated based on the bonus paid to him in the year preceding his termination and divided by his annual base salary in the year preceding his termination. In the event of involuntary termination other than due to non-renewal by the Company, any outstanding and unvested time-based restricted shares that

 

31

were scheduled to vest during the one-year period following the termination date will immediately vest, and a portion of each tranche of outstanding and unvested Class M performance-based restricted shares shall remain outstanding and eligible to vest pursuant to their terms for a period of 18 months following the termination date. As a condition to his receipt of the severance payments and benefits described above, Mr. Belardi must timely execute (and not revoke) a general release of claims against the Company and its affiliates. Mr. Belardi’s employment agreement with the Company also contains customary restrictive covenants, including confidentiality and nondisclosure covenants, a covenant not to compete with, or solicit customers of, the Company or AAM for 12 months following termination, and a covenant not to solicit employees of the Company or AAM for 24 months following termination.

Wheeler Agreement

Pursuant to his employment agreement, Mr. Wheeler is entitled to receive a minimum base salary of $1,250,000 and is eligible to receive an annual incentive award each fiscal year he is employed. The annual incentive award opportunity and payouts are determined by the compensation committee in its sole discretion, with payouts determined based on performance objectives (which may include corporate, financial, strategic, individual or other objectives) established by the compensation committee. His employment is at will and may be terminated by him or by the Company at any time by giving two months’ notice.

In addition to termination by Mr. Wheeler or the Company at any time by giving two months’ notice, the Company has the right, in its discretion, to terminate the agreement with a payment in lieu of notice. The Company may also terminate the agreement without notice or payment in lieu of notice if Mr. Wheeler is guilty of any gross default or misconduct, or any repeated misconduct after due warning, in connection with the Company or in the event of any serious or repeated breach or non-observance with any of the provisions in the agreement. The employment agreement contains customary restrictive covenants, including confidentiality and nondisclosure covenants and covenants not to solicit customers or employees of the Company or any affiliate of the Company for 12 months following termination.

Klein Agreement

Pursuant to his employment agreement, Mr. Klein is entitled to receive a minimum base salary of $550,000 and is eligible to receive an annual incentive award each fiscal year he is employed. The annual incentive award opportunity and payouts are determined by the compensation committee in its sole discretion, with payouts determined based on performance objectives (which may include corporate, financial, strategic, individual or other objectives) established by the compensation committee. His employment is at will and may be terminated by him or by the Company at any time by giving two months’ notice.

In addition to termination by Mr. Klein or the Company at any time by giving two months’ notice, the Company has the right, in its discretion, to terminate the agreement with a payment in lieu of notice. The Company may also terminate the agreement without notice or payment in lieu of notice if Mr. Klein is guilty of any gross default or misconduct, or any repeated misconduct after due warning, in connection with the Company or in the event of any serious or repeated breach or non-observance with any of the provisions in the agreement. The employment agreement contains customary restrictive covenants, including confidentiality and nondisclosure covenants and covenants not to solicit customers or employees of the Company or any affiliate of the Company for 12 months following termination.

Kvalheim Agreement

Pursuant to his employment agreement which terminated in accordance with its terms effective as of March 3, 2018, Mr. Kvalheim was entitled to receive a minimum base salary of $750,000 and was eligible to receive an incentive award each fiscal year he is employed. The annual incentive award opportunity and payouts were determined by the compensation committee in its sole discretion, with payouts determined based on

 

32

performance objectives (which may include corporate, financial, strategic, individual or other objectives) established by the compensation committee.

Stock Ownership Guidelines

We require management at the Senior Vice President level and above, including our NEOs, to own significant amounts of our Class A common shares. The value of Class A common shares that must be held will be set at a multiple of the individual’s base salary. Covered executives will have five years from the adoption of the stock ownership guidelines or, if later, the appointment to a covered position to satisfy the applicable stock ownership guideline.

 

Position		Multiple
Chief Executive Officer/President			6X
Executive Vice President			3X
Senior Vice President			2X

Purchased and restricted Class A common shares, shares acquired upon the vesting of Class A RSUs, vested Class M common shares and vested stock options will count toward this requirement. Covered executives must retain at least 75% of all equity holdings in the Company until they meet their respective stock ownership requirements. As of the Record Date, each of our NEOs either met the applicable guideline or were projected to meet the guideline within the five-year period.

Anti-Hedging and Anti-Pledging Policies

Covered executives, including all of our executive officers, are not permitted to engage in any transactions that are designed to offset a decrease in the market value of our Class A common shares. Covered executives are not permitted to pledge their equity holdings in AHL without the permission of the Company. In addition, covered executives may not pledge their equity holdings in AHL as collateral if they are counting those holdings towards their respective stock ownership requirements.

Review of Compensation Policies and Practices Related to Risk Management

Effective risk management is central to our success, and compensation is carefully designed to be consistent with our risk management framework and controls. If the Company’s performance is obtained in a manner inconsistent with this framework or these controls, then the compensation committee has the discretion, with input from the risk committee, if necessary, to decrease or not award any bonuses to our NEOs and other executive officers. In addition, the performance objectives for our Chief Risk Officer and the other employees in our risk management function are based in part on the effectiveness of our risk management policies and procedures. We have determined that the risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

Consideration of Say On Pay Vote

As part of its ongoing review of the Company’s executive compensation program, the compensation committee considered the approval by approximately 99% of the votes cast for the Company’s “say on pay” vote at the Company’s 2018 Annual General Meeting of Shareholders. After considering the 2018 “say on pay” results, the compensation committee determined that the Company’s executive compensation objectives and compensation elements continued to be appropriate and did not make any specific changes to the Company’s executive compensation program in response to the 2018 “say on pay” vote.

2018 Compensation Decisions

Base Salary

Mr. Belardi’s base salary decreased from $925,000 in 2017 to $863,750 in 2018 to offset $61,250 in fees for estate planning services paid by the Company to ensure the orderly transition of Mr. Belardi’s shares. Mr. Klein’s

 

33

base salary increased from $550,000 in 2017 to $625,000 in 2018 in recognition of Mr. Klein’s leadership in improving the Company’s public close process, consummating the Company’s senior notes offering and implementing solutions to realize efficiencies. Our other NEOs’ base salaries in 2018 remain unchanged from 2017 levels.

Annual Incentive Awards

Our NEOs’ annual incentive awards in 2018 were based on a combination of four overall corporate financial and operational goals, which comprised 50% of the award for Mr. Belardi and 75% of the award for our other NEOs, and individualized performance goals, which comprised 50% of the award for Mr. Belardi and 25% of the award for our other NEOs. We believe the targets were designed to be reasonably achievable with strong management performance and the coordinated, cross-functional focus and effort of the NEOs, and did not reflect unrealistic targets that may encourage excessive risk-taking. The targets for the corporate financial and operational measures were determined in relation to the Company’s internal business plan for the year. For 2018, the compensation committee established target incentive award opportunities of approximately 100%, 126%, 173%, 188% and 150% of base salary for Mr. Belardi, Mr. Wheeler, Mr. Kvalheim, Mr. Klein and Mr. Rhodes, respectively. The overall payout opportunity for incentive awards for our NEOs, other than Mr. Belardi, ranged from 0% to 200% of each participant’s target award opportunity, with a payout range of 0% to 170% for the corporate performance component of the incentive award. The overall payout opportunity for Mr. Belardi’s incentive award ranged from 0% to 140% of his target award opportunity, with a payout range of 0% to 170% for the corporate performance component of his incentive award. The corporate performance measurements, their respective weightings, 2018 performance and achievement with respect to these measurements, and payout level were as follows:

 

Objectives		Weight				Measurement		Target				2018 Performance/ Achievement		Payout   Level
Overall profitability			40	%		Adjusted operating income		$	1.18B			$1.14B			85	%
Expense management			20	%		Expense targets			—			Exceeded			109	%
Organic growth			20	%		Organic deposits(1)		$	12.5B			$13.0B			116	%
New business profitability			20	%		Underwritten IRR			—			Exceeded			115	%

 

(1)	Organic deposits include retail IMO, retail financial institution, funding agreements, pension risk transfer and flow reinsurance.

Based on the Company’s 2018 performance with respect to these four objectives, the payout level was 102% of the corporate target opportunity. Total amounts of awards were also based on the assessment of individual performance factors, as discussed below.

Mr. Belardi

In addition to the four objectives above, which collectively comprised 50% of his award, Mr. Belardi’s annual incentive plan award in 2018 was based on two individualized performance objectives. The first objective, weighted at 25%, compared the Company’s non-alternative investment performance to the Barclays US Aggregate Bond Index over a three-year period. The second objective, also weighted at 25%, compared the Company’s alternative investment performance relative to a 50-50 blended index of the S&P 500 and the BofA Merrill Lynch US High Yield Index over a three-year period, subject to maintaining a minimum return on alternative investment performance since the inception of the Company.

For the objective based on the Company’s non-alternative investment performance, the committee compared the Company’s results of 4.96% for the three-year period ended December 31, 2018 (as calculated by AAM, based on information provided by the Company, and reviewed by the compensation committee) to 2.30% for the Barclays US Aggregate Bond Index for the same period and determined to pay out 100% of the award for this objective. For the objective based on the Company’s alternative investment performance, the committee

 

34

compared the Company’s results of 8.86% for the three-year period ended December 31, 2018 (as calculated by AAM, based on information provided by the Company, and reviewed by the compensation committee) to 8.68% for the 50-50 blended index described above and determined to pay out 102% of the award for this objective.

Other NEOs

For purposes of determining the payout with respect to the portion of the bonus tied to individual performance for the other NEOs, our compensation committee assessed individual performance against the 2018 personal performance objectives established for each NEO at the beginning of 2018. These personal objectives were designed to generally align with the Company’s strategic and operating initiatives (both short-term and long-term) and included goals relating to execution on key strategic initiatives, leadership and team-related objectives and other objectives tied to the executives’ areas of responsibilities. The compensation committee reviews and approves the individual performance objectives (including the objectives’ relative weightings) for each of the other NEOs. In early 2019, the compensation committee evaluated the NEOs’ individual performance, with input from Mr. Belardi. Based on this evaluation, the compensation committee certified the achievement by each of the other NEOs of his individual performance objectives and assigned each NEO an individual performance payout percentage (potentially ranging from 0% to 200%), which is weighted 25% in the annual incentive payout formula. The payout amounts are reported under “Non-Equity Incentive Plan Compensation” in the 2018 Summary Compensation Table.

Equity and Long-Term Incentive Awards

The compensation committee determined the value of 2018 annual long-term incentive awards for the NEOs based on competitive market data, input from the committee’s compensation consultant, Willis Towers Watson, and our overall philosophy of aligning pay with performance. The total target value of these long-term incentive awards for each NEO was allocated among the awards as follows: approximately 25% of the target value in stock options, 25% of the target value in time-based RSUs, and 50% of the target value in performance-based RSAs. The target values of the 2018 long-term incentive awards granted to our NEOs are shown in the following table (the target values reported in this table may differ from the value reported in the compensation tables that follow because the value of equity awards reported in the compensation tables that follow are based on the grant date fair value determined in accordance with applicable accounting rules and, in the case of performance-based RSAs, the probable achievement of the underlying performance goal at the time of grant):

 

Named Executive Officer		Time-Based Stock Options				Time-Based RSUs				Performance- Based RSAs(1)				Total
James R. Belardi		$	625,000			$	625,000			$	1,250,000			$	2,500,000
William J. Wheeler		$	375,000			$	375,000			$	750,000			$	1,500,000
Grant Kvalheim		$	212,500			$	212,500			$	425,000			$	850,000
Martin P. Klein		$	250,000			$	250,000			$	500,000			$	1,000,000
John M. Rhodes		$	150,000			$	150,000			$	300,000			$	600,000

 

(1)	Performance-based RSAs were issued to the NEOs at maximum value, with shares to be forfeited if the maximum level of performance is not achieved. The numbers in this column represent the target value of the performance-based RSAs.

 

35

2018 Summary Compensation

The following table contains 2018, 2017 and 2016 compensation information for our NEOs.

2018 Summary Compensation Table

 

Name and Principal Position		Year				Salary				Stock Awards(1)				Option Awards(2)				Non-Equity Incentive Plan Compensation				All Other Compensation(3)				Total
James R. Belardi (4)			2018			$	863,750			$	2,716,318	(5)		$	625,002			$	—	(5)		$	70,239			$	4,275,309
Chairman, Chief Executive Officer and Chief Investment Officer			2017			$	925,000			$	2,522,695			$	625,002			$	—			$	712			$	4,073,408
			2016			$	900,000			$	2,216,047			$	5,355,807			$	—			$	—			$	8,471,854	(6)
William J. Wheeler			2018			$	1,250,000			$	1,066,406			$	375,003			$	1,700,000			$	50,062			$	4,441,472
President			2017			$	1,250,000			$	851,250			$	375,003			$	2,106,563			$	65,473			$	4,648,289
			2016			$	1,250,000			$	750,023			$	375,003			$	1,575,000			$	102,240			$	4,052,266
Grant Kvalheim			2018			$	750,000			$	604,307			$	212,505			$	1,460,000			$	147,627			$	3,174,439
Executive Vice President—Athene, and Chief Executive Officer and President—Athene USA Corporation			2017 2016			$ $	750,000 750,000			$ $	482,377 425,054			$ $	250,008 5,916,839			$ $	1,738,750 1,420,250			$ $	140,090 135,472			$ $	3,323,721 8,647,615	(7)
Martin P. Klein			2018			$	625,000			$	710,912			$	250,008			$	1,116,300			$	118,168			$	2,820,388
Executive Vice President and Chief Financial Officer			2017			$	550,000			$	567,528			$	250,008			$	1,337,500			$	109,670			$	2,814,706
			2016			$	550,000			$	375,012			$	187,504			$	1,000,000			$	111,286			$	2,223,802
John M. Rhodes			2018			$	500,000			$	426,574			$	150,003			$	750,000			$	142,668			$	1,969,246
Executive Vice President and Chief Risk Officer

 

(1)

This column includes the grant date fair value of the performance-based RSAs and time-based RSUs granted to our NEOs in 2018. For the time-based RSUs, grant date fair value is calculated by multiplying the number of RSUs by the closing share price on the date of grant. For the performance-based RSAs, we have reported the grant date fair value assuming the probable outcome of satisfying the performance conditions. Assuming the probable outcome of performance conditions will be achieved, the grant date fair value of the 2018 performance-based RSAs would be as follows: $1,152,284; $691,376; $391,782; $460,908; and $276,562, for Messrs. Belardi, Wheeler, Kvalheim, Klein and Rhodes, respectively. Assuming the highest level of performance conditions will be achieved, the grant date fair value of the 2018 performance-based RSAs would be as follows: $1,875,055; $1,125,043; $637,527; $750,012; and $450,036, for Messrs. Belardi, Wheeler, Kvalheim, Klein and Rhodes, respectively.

(2)

This column represents the aggregate grant date fair value of stock options granted in 2018. With respect to the stock options, the Company measures the fair value of each stock option grant at the date of grant using a Black-Scholes option pricing model. For information on the valuation assumptions with respect to these awards, refer to note 12 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC.

(3)

For 2018, these amounts include the Company’s 401(k) matching payment of $14,000 for Messrs. Wheeler, Klein and Rhodes, and $13,500 for Mr. Kvalheim; housing allowances of $33,000 for Mr. Kvalheim, $55,094 (which includes a tax gross-up of $25,302) for Mr. Klein, and $56,844 (which includes a tax gross-up of $27,220) for Mr. Rhodes for their residences in Iowa; taxable amounts of $36,062, $101,127, $49,073 and $71,825 (which amounts include tax gross-ups of $23,293, $45,861, $22,537, and $33,872) for Messrs. Wheeler, Kvalheim, Klein, and Rhodes, respectively, for travel expenses from their principal residences to the Company’s office in Iowa; $8,989 for Mr. Belardi related to his use of the Company aircraft for personal purposes; and $61,250 in fees for estate planning services paid to an estate planning services provider by the Company to ensure the orderly transition of Mr. Belardi’s shares. Each of these amounts, other than the amounts related to personal use of the Company aircraft and amounts paid directly to an estate planning services provider, were valued on the basis of amounts paid directly to the NEO. The value of the personal use of the Company aircraft is calculated based on the incremental cost to the Company, including fuel costs, ground services, catering, crew travel expenses, and other miscellaneous variable costs. Fixed costs that do not change based on usage, such as pilot salaries and depreciation of the aircraft, are excluded.

(4)

Pursuant to an understanding between the Company and AAM, the Company and AAM have each agreed to pay 50% of Mr. Belardi’s annual salary and incentive plan award. The amounts reported for each period reflect only those amounts for which the Company is responsible. The fees for Mr. Belardi’s estate planning services that were paid by the Company are counted towards the amounts for which the Company is responsible.

(5)

In accordance with the terms of Mr. Belardi’s annual incentive award, Mr. Belardi received his annual incentive award of $939,000 for 2018 performance in the form of restricted Class A common shares. The restricted Class A common shares, which are included in the Stock Awards column, were awarded in 2018 as Mr. Belardi’s annual incentive opportunity but were granted in the form of restricted shares in 2019 following the conclusion of and determination of achievement for the 2018 performance period and vest ratably over a two-year period.

 

36

(6)	Amount includes an IPO-related award—the incremental grant date fair value of the 2016 modification to the performance-based Class M-1, M-2 and M-3 share agreements to vest all performance-based Class M-1, M-2 and M-3 shares before the IPO and to amend the conversion option for these classes.

(7)	Amount includes the following IPO-related awards: (1) the incremental grant date fair value of the 2016 modification to the performance-based Class M-1, M-2 and M-3 shares, and (2) a one-time grant of Class M-4 Prime common shares.

2018 Grants of Plan-Based Awards

The following table provides information about awards granted to the NEOs in 2018: (1) the grant date; (2) the threshold, target and maximum estimated future payouts under annual incentive plan awards; (3) the number of stock options, RSAs and RSUs granted to the NEOs under the Company’s 2016 Share Incentive Plan; (4) the exercise price of the stock options; and (5) the grant date fair value of the share and option awards, computed in accordance with applicable SEC rules.

2018 Grants of Plan-Based Awards Table

 

Name of Executive		Grant Date				Estimated Future Payouts Under Annual Incentive Plan Awards(1)												Estimated Future Payouts Under Equity Incentive Plan Awards: (2) (#)												All Other Stock Awards: Number of Shares or Units(3) (#)				All Other Option Awards: Number of Securities Underlying Options(4) (#)				Exercise Price of Option Awards ($/Sh)				Grant Date Fair Value of Share and Option Awards(5)
						Threshold				Target				Maximum				Threshold				Target				Maximum
James R. Belardi			2/27/18																13,008				26,015				39,023															$	1,152,284
			2/27/18																												13,008											$	625,034
			2/27/18																																66,278			$	48.05			$	625,002
			2/20/18																—	(6)			21,078	(6)			—	(6)														$	939,000	(6)
William J. Wheeler			2/27/18																7,805				15,609				23,414															$	691,376
			2/27/18																												7,805											$	375,030
			2/27/18																																39,767			$	48.05			$	375,003
			2/20/18				—			$	1,575,000			$	3,150,000
Grant Kvalheim			2/27/18																4,423				8,845				13,268															$	391,782
			2/27/18																												4,423											$	212,525
			2/27/18																																22,535			$	48.05			$	212,505
			2/20/18				—			$	1,300,000			$	2,600,000
Martin P. Klein			2/27/18																5,203				10,406				15,609															$	460,908
			2/27/18																												5,203											$	250,004
			2/27/18																																26,512			$	48.05			$	250,008
			2/20/18				—			$	1,175,000			$	2,350,000
John M . Rhodes			2/27/18																3,122				6,244				9,366															$	276,562
			2/27/18																												3,122											$	150,012
			2/27/18																																15,907			$	48.05			$	150,003
			2/20/18				—			$	750,000			$	1,500,000

 

(1)

The 2018 annual incentive awards for our NEOs other than Mr. Belardi were based on a combination of four overall corporate financial and operational goals, which comprised 75% of the award, as well as individualized performance goals, which comprised the other 25% of the award. The corporate performance component of the awards has a payout range between 0% and 170% of the corporate performance component. The overall payout range of the awards, including both the corporate performance component and the personal performance component of the award, is between 0% and 200% of the target amount.

(2)

All equity incentive plan awards reported in this column with a grant date of 2/27/18 represent performance-based RSAs. The performance-based RSAs cliff-vest after the 2018-2020 performance period provided the recipient is continuously employed during the period and are payable only if the Company achieves specified goals based on two equally weighted performance metrics: average annual adjusted return on equity and cumulative adjusted operating income, each for the three-year period.

(3)	The time-based RSUs vest ratably over three years provided the recipient remains employed through the applicable vesting date.

(4)	The stock options vest ratably over a three-year period provided the recipient remains employed through the applicable vesting date.

 

37

(5)	For valuation methodology, see notes 1 and 2 to the 2018 Summary Compensation Table.

(6)

The award to Mr. Belardi with a grant date of 2/20/18 represents a 2018 annual incentive award that is dollar-denominated but by its terms is payable in restricted Class A common shares, which vest ratably over a two-year period provided that Mr. Belardi remains employed through the applicable vesting date. Mr. Belardi’s annual incentive award was issued with a target value of $925,000 and was based on a combination of four overall corporate financial and operational goals, which comprised 50% of the award, as well as individualized performance goals, which comprised the other 50% of the award. The corporate performance component of the award has a payout range between 0% and 170% of the corporate performance component. The overall payout range of the award, including both the corporate performance component and the personal performance component of the award, is between 0% and 140% of the target amount. 21,078 restricted Class A common shares were issued to Mr. Belardi on 2/28/19 following the compensation committee’s determination of the payout amount of the annual incentive award, which represents the amount of the annual incentive award payout, $939,000, divided by the closing price of the Class A common shares on the date of issuance.

 

38

2018 Outstanding Equity Awards at Fiscal Year-End

The following table provides information on the holdings of the Company’s equity awards by the NEOs (as of December 31, 2018). This table includes vested Class M common shares, which are similar to vested, unexercised options; unvested Class A common shares; and unvested Class M time-based and performance-based common shares with vesting conditions that were not satisfied as of December 31, 2018. Each equity grant is shown separately for each NEO. The vesting schedule for each outstanding award is shown in the notes to this table.

2018 Outstanding Equity Awards at Fiscal Year-End Table

 

		Option Awards																								Stock Awards
Name of Executive		Grant Date				Stock Class or Option Class				Number of Securities Underlying Unexercised Options (Exercisable)				Number of Securities Underlying Unexercised Options (Unexercisable)				Option Conversion Price				Option Expiration Date(1)				Number of Shares of Stock or Units of Stock that Have Not Vested				Market Value of Shares of Stock or Units of Stock That Have Not Vested(2)				Number of Unearned Shares of Stock or Units of Stock that Have Not Vested(6)				Market Value of Unearned Shares of Stock or Units of Stock that Have Not Vested(2)
James R. Belardi(3)			7/15/09				M-1				2,346,155							$	10.00				—
			10/15/12				M-2				841,011							$	10.78				—
			4/28/14				M-3				1,000,000							$	13.46				—
			2/3/16				RSA																				6,986	(7)		$	278,252
			3/7/17				RSA																				11,489	(8)		$	457,607	(8)
			2/20/18				RSA																				21,078	(9)		$	839,537	(9)
			6/6/16				Options (2016)				85,763				42,882			$	33.95				6/6/2026
			3/21/17				Options (2017)				22,092				44,186			$	51.25				3/21/2027
			2/27/18				Options (2018)								66,278			$	48.05				2/27/2028
			6/6/16				RSU	(4)																			7,364			$	293,308
			6/6/16				RSU	(5)																											44,183			$	1,759,809
			3/21/17				RSU	(4)																			8,131			$	323,858
			3/21/17				RSU	(5)																											24,391			$	971,494
			2/27/18				RSU	(4)																			13,008			$	518,109
			2/27/18				RSA	(10)																											26,015			$	1,036,177
William J. Wheeler			10/1/15				M-4 Prime				1,333,333				1,166,667			$	27.83				10/1/2025
			6/6/16				Options (2016)				42,882				21,441			$	33.95				6/6/2026
			3/21/17				Options (2017)				13,255				26,512			$	51.25				3/21/2027
			2/27/18				Options (2018)								39,767			$	48.05				2/27/2028
			6/6/16				RSU	(4)																			3,682			$	146,654
			6/6/16				RSU	(5)																											22,092			$	879,924
			3/21/17				RSU	(4)																			4,879			$	194,331
			3/21/17				RSU	(5)																											14,635			$	582,912
			2/27/18				RSU	(4)																			7,805			$	310,873
			2/27/18				RSA	(10)																											15,609			$	621,706
Grant Kvalheim			5/23/16				M-4 Prime				107,644				234,667			$	34.23				5/23/2026
			6/6/16				Options (2016)				24,300				12,150			$	33.95				6/6/2026
			3/21/17				Options (2017)				7,511				15,024			$	51.25				3/21/2027
			2/27/18				Options (2018)								22,535			$	48.05				2/27/2028
			6/6/16				RSU	(4)																			2,087			$	83,125

 

39

										Option Awards																Stock Awards
Name of Executive		Grant Date				Stock Class or Option Class				Number of Securities Underlying Unexercised Options (Exercisable)				Number of Securities Underlying Unexercised Options (Unexercisable)				Option Conversion Price				Option Expiration Date(1)				Number of Shares of Stock and Units that Have Not Vested				Market Value of Shares or Units of Stock That Have Not Vested(2)				Number of Unearned Shares and Units of Stock that Have Not Vested(6)				Market Value of Unearned Units of Stock that Have Not Vested(2)
			6/6/16				RSU	(5)																											12,519			$	498,632
			3/21/17				RSU	(4)																			2,765			$	110,130
			3/21/17				RSU	(5)																											8,293			$	330,310
			2/27/18				RSU	(4)																			4,423			$	176,168
			2/27/18				RSA	(10)																											8,845			$	352,296
Martin P. Klein			11/15/15				M-4 Prime				74,545				121,333			$	27.83				11/15/2025
			6/6/16				Options (2016)				21,441				10,721			$	33.95				6/6/2026
			3/21/17				Options (2017)				8,837				17,675			$	51.25				3/21/2027
			2/27/18				Options (2018)								26,512			$	48.05				2/27/2028
			6/6/16				RSU	(4)																			1,841			$	73,327
			6/6/16				RSU	(5)																											11,046			$	439,962
			3/21/17				RSU	(4)																			3,253			$	129,567
			3/21/17				RSU	(5)																											9,757			$	388,621
			2/27/18				RSU	(4)																			5,203			$	207,235
			2/27/18				RSA	(10)																											10,406			$	414,471
John M. Rhodes			8/15/16				M-4 Prime				53,197				106,667			$	36.40				7/1/2026
			3/21/17				Options (2017)				5,302				10,605			$	51.25				3/21/2027
			2/27/18				Options (2018)								15,907			$	48.05				2/27/2028
			3/21/17				RSU	(4)																			1,952			$	77,748
			3/21/17				RSU	(5)																											5,854			$	233,165
			2/27/18				RSU	(4)																			3,122			$	124,349
			2/27/18				RSA	(10)																											6,244			$	248,699

 

(1)

This column reports the expiration date for Class M common shares and stock options. Once vested, Class M common shares may remain outstanding until converted into Class A common shares. Class M-4 prime shares that do not vest by the tenth anniversary of the grant date will be forfeited to the Company. Class M time-based common shares vest ratably over a five-year period. Time-based stock options vest ratably over a three-year period.

(2)	As of December 31, 2018, the fair market value of a Class A common share was $39.83.

(3)	All outstanding equity awards for Mr. Belardi have been transferred to a trust, other than for value, for estate planning purposes.

(4)	This row shows the number of time-based RSUs, which vest ratably over a three-year period.

(5)	This row shows the number of performance-based RSUs, which cliff-vest after a three-year period, assuming performance conditions have been met.

(6)

The number of performance-based RSUs or RSAs that ultimately vest is based on actual performance during the three-year performance period. The number of performance-based RSUs or RSAs reflected in this column is based on the number of performance-based RSUs or RSAs that would vest assuming the target level of performance is achieved. Final payouts under the performance-based RSUs or RSAs will not be known until the respective performance period is completed.

(7)

This award to Mr. Belardi with a grant date of 2/3/16 represents a 2016 annual incentive award that is dollar-denominated but by its terms is payable in restricted Class A common shares which vest ratably over a two-year period provided that Mr. Belardi remains employed through the applicable vesting date.

(8)

The award to Mr. Belardi with a grant date of 3/7/17 represents a 2017 annual incentive award that is dollar-denominated but by its terms is payable in restricted Class A common shares which vest ratably over a two-year period provided that Mr. Belardi remains employed through the applicable vesting date. Mr. Belardi’s annual incentive award was issued with a target value of $925,000. The amount reported represents the number of restricted Class A common shares granted in 2018 after the committee’s determination of the achievement of the 2017 performance goals.

 

40