Allstate CEO Wilson Sees Pay Rise 20% As Cash Bonus Doubles

Allstate Corp. (ALL) Chief Executive Tom Wilson saw his compensation for 2011 rise 20% to $11.2 million as his cash bonus more than doubled.

Wilson's total pay rose from $9.3 million for 2010, in part because his bonus rose to $2.3 million from $1.1 million, according to Allstate's preliminary proxy statement filed with regulators Friday.

The rise in pay comes a year after the 2010 pay package got about 58% support among votes cast by shareholders, a relatively low figure for a company of Allstate's prominence. Wilson himself was re-elected to the board with 68% of the votes, the lowest margin last year for any CEO of a company in the Standard & Poor's 500-stock index, according to proxy adviser Institutional Shareholder Services.

The company's board of directors said in the proxy late Friday that they had adjusted the way it calculated some elements of executive pay after meetings with shareholders. Some of the changes won't go into effect until this year, according to the proxy filing.

"Those of our stockholders who felt changes to our compensation program were warranted supported the program changes we presented," the filing said.

The changes to the compensation program include a lowering of the benchmarks Allstate uses in measuring its executive pay against its insurance peers. The company previously targeted pay to land within the 50th to 75th percentiles; now, it aims to be at the 50th percentile.

But the board said the target it set for the cash portion of Wilson's salary was "substantially below the guideline of the 50th percentile," which caused them to increase the potential bonus he could earn.

The cash bonus was calculated based on whether Allstate hit three performance metrics. The company exceeded one target, a measure of profitability; just missed on a second; and didn't come close on a third, which measured the number of products purchased by customers. That figure fell in 2011, as it had in 2010, because Allstate was focused on improving returns instead of adding customers.

"The focus on improving returns in the homeowners line made this goal unattainable despite dramatic improvements in geographies not burdened by this conflicting objective," according to the regulatory filing.

The filing noted that Allstate had completed the acquisition of online car-insurer Esurance and that profit at its life-insurance unit had jumped tenfold to $586 million. But overall net income dropped to $788 million as a long string of natural disasters weighed on returns at its home-and-auto insurance unit.

Wilson's stock and option awards also rose slightly in 2011. His base salary was unchanged from $1.1 million, a level that was set during 2010.

The preliminary proxy was filed in advance of Allstate's annual shareholder meeting on May 22.

-By Erik Holm, Dow Jones Newswires; 212-416-2892; [e-mail]