DEF 14A
Table of Contents
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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.)
 
 
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Preliminary Proxy Statement
  
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Definitive Additional Materials
  
Soliciting Material under
§240.14a-12
 
LOGO
Brighthouse Financial, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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  Fee paid previously with preliminary materials
  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
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Table of Contents

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Table of Contents

 

LOGO


Table of Contents
Notice of Annual Meeting of Stockholders     i

 

Notice of Annual Meeting of Stockholders

On behalf of the Board of Directors, I am honored to invite you to attend the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Brighthouse Financial, Inc. (“Brighthouse Financial” or the “Company”)

 

 

Brighthouse Financial® will hold its Annual Meeting solely by means of remote communication via the internet (a “virtual meeting”). All stockholders as of April 10, 2023 (the “Record Date”) will be able to attend, vote, and participate in the meeting by remote communication. For additional information about participating in the Annual Meeting, see “Attending the Annual Meeting in the accompanying Proxy Statement.

 

Date and Time

Thursday, June 8, 2023, at 8:00 a.m., Eastern Time

Meeting Website

www.virtualshareholdermeeting.com/BHF2023

Agenda

At the Annual Meeting, stockholders will consider and vote on the following matters:

 

  1.

Proposal 1: Election of nine (9) Directors to serve a one-year term ending at the 2024 Annual Meeting of Stockholders;

  2.

Proposal 2: Ratification of the appointment of Deloitte & Touche LLP as Brighthouse Financial’s independent registered public accounting firm for fiscal year 2023;

  3.

Proposal 3: Advisory vote to approve the compensation paid to Brighthouse Financial’s Named Executive Officers;

  4.

Proposal 4: Approval of amendments to the Company’s Amended and Restated Certificate of Incorporation (“Charter”) to remove (i) supermajority voting requirements currently required to amend certain provisions of the Charter and the Amended and Restated Bylaws (“Bylaws”) and (ii) obsolete provisions related to classes of Directors;

  5.

Proposal 5: Approval of an amendment to the Charter to limit the liability of certain officers of the Company, as permitted by recent amendments to Delaware law; and

  6.

Any such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Our Board of Directors recommends that you vote “FOR” the election of each of the nominees named in Proposal 1 and “FOR” Proposals 2, 3, 4, and 5. Information about the matters to be acted upon at the Annual Meeting is contained in the accompanying Proxy Statement.

Voting Your Shares

Stockholders of record who hold shares of Brighthouse Financial common stock, par value $0.01 per share (“shares”), as of the close of business on the Record Date are entitled to vote at the Annual Meeting.

You may submit a proxy to vote your shares in advance of the Annual Meeting by any of the following means:

 

LOGO   Internet
  Please log on to www.ProxyVote.com and submit a proxy to vote your shares by 11:59 p.m., Eastern Time, on Wednesday, June 7, 2023.
LOGO   Telephone
  Please call 1-800-690-6903 until 11:59 p.m., Eastern Time, on Wednesday, June 7, 2023.

 

LOGO

  Mail
  If you received printed copies of the proxy materials and prefer to submit a proxy to vote your shares by mail, please complete, sign, date, and return your proxy card by mail so that it is received by Brighthouse Financial, Inc., c/o Broadridge Financial Solutions, Inc., prior to the Annual Meeting.

 

2023 Proxy Statement  |  Brighthouse Financial


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ii     Notice of Annual Meeting of Stockholders

 

You may also attend and vote at the Annual Meeting.

 

LOGO   Annual Meeting
 

You may attend the Annual Meeting and cast your vote at

www.virtualshareholdermeeting.com/BHF2023.

Beneficial owners whose shares are held at a brokerage firm, or by a bank or other nominee, should follow the voting instructions that they received from the nominee (see information in the Proxy Statement under “Beneficial Owners or Holders in Street Name”). Participants in retirement and savings plans should refer to the voting instructions in the Proxy Statement under “Voting by Participants in Retirement Plan.

This notice is being delivered to the holders of shares as of the close of business on April 10, 2023, the record date fixed by the Board of Directors for the purposes of determining the Brighthouse Financial stockholders entitled to receive notice of, and to vote at, the Annual Meeting, and constitutes notice of the Annual Meeting under Delaware law.

By Order of the Board of Directors,

 

 

LOGO

Jacob M. Jenkelowitz

Corporate Secretary

Charlotte, North Carolina

April 27, 2023

 

 

 

 

Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders to be Held on June 8, 2023, at 8:00 a.m., Eastern Time

 

The accompanying Proxy Statement, our 2022 Annual Report to Stockholders, and additional information about
our Annual Meeting are available at http://investor.brighthousefinancial.com by selecting the appropriate link under “
Financial Information” or “News & Events.”

 

 

Brighthouse Financial  |  2023 Proxy Statement


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Chairman’s Letter to Our Stockholders     iii

 

    

Chairman’s Letter to Our Stockholders

Dear Fellow Stockholders:

On behalf of the Board of Directors (the “Board”), it is my pleasure to present you with the 2023 Proxy Statement of Brighthouse Financial, Inc. (the “Company” or “Brighthouse Financial”) and cordially invite you to our 2023 Annual Meeting of Stockholders. We are honored to serve as your Board and sincerely thank you for placing your trust in us to oversee the Company on your behalf.

I am proud to share that, despite the challenging economic environment in 2022, Brighthouse Financial achieved significant strategic and operational milestones and delivered strong results. Among many accomplishments last year, the Company:

 

   

maintained robust capital and liquidity positions;

   

continued to return capital to our stockholders;

   

delivered record annuity sales; and

   

launched a new annuity product, expanding its flagship Shield® Level Annuities Product Suite.

In addition, the Company completed the implementation of its future state operations and technology platform, a key achievement that allows Brighthouse Financial to further increase its focus on growth, the evolution of its business mix, and supporting its distribution franchise. For more information on these and other 2022 highlights, please see the accompanying Proxy Statement.

2022 was also a special year for Brighthouse Financial as it marked its fifth anniversary as an independent, publicly traded company. Since its establishment, Brighthouse Financial has become a strong franchise trusted by over 2 million customers(1) and one of the largest providers of annuities and life insurance in the United States.(2) The Board is incredibly proud of the Company’s many accomplishments as management continues to execute its strategy.

The following are some highlights of the Board’s work in 2022 and our priorities for 2023:

Strategy and Risk Management Oversight. The Board actively oversees Brighthouse Financial’s focused strategy to grow the Company and deliver sustainable, long-term value for our stockholders. The Board devotes at least one entire meeting each year to a review of the Company’s strategy, and throughout the year, management presents us with updates against the Company’s strategy. In 2022, our strategic focus areas included the Company’s product, sales, and marketing and distribution strategy and plans; financial plan; human capital management strategy; culture; future state operations and technology platform; investment strategy; and financial and risk profiles in various market scenarios. As part of the Board’s oversight of risks to the Company’s strategy, the Board and its committees receive regular reports from management on key risk topics, including operational risk management; market, credit, macroeconomic, and liquidity risks; third-party risk; and emerging and Environmental, Social, and Governance (“ESG”)-related risks, including with respect to climate and cybersecurity. The Board continues to monitor and discuss with management the uncertain market and macroeconomic environments and believes that Brighthouse Financial remains well positioned to continue executing its strategy and delivering on its mission.

Our Commitment to Sustainable Growth. The Company and this Board view our responsibility to our stockholders as delivering long-term, sustainable financial performance. Our commitment to sustainability of performance is reflected in the Company’s policies, its advancement of diversity, equity, and inclusion (“DEI”) in its human capital management strategy, and its management of ESG-related risks. The Board and its Committees oversee the Company’s sustainability program and its assessment and management of ESG factors, including those related to human capital management; regulatory compliance; cybersecurity; enterprise risk, including with respect to climate risk; and its investment portfolio, including assessment of the Company’s exposures to ESG risk and consideration of ESG factors in its asset management program. The Board proudly supports management’s deep, ongoing commitment to fostering Brighthouse Financial’s strong culture as it seeks to ensure that the Company remains a great place to work. These efforts include management’s dedication to continuing to advance Brighthouse

 

  1 

Customer count data is as of September 30, 2022.

  2 

Ranked by 2021 admitted assets. Best’s Review®: Top 200 U.S. Life/Health Insurers. AM Best, 2022.

 

    

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
iv     Chairman’s Letter to Our Stockholders

 

Financial’s DEI initiatives including, in 2022, the Company’s launch of employee network groups to help foster an inclusive workplace and its establishment of Brighthouse Scholar Connections, Inc., a non-profit organization focused on educational scholarship opportunities for students who are members of underrepresented groups.

 

    

In 2022, the Company published its inaugural Corporate Sustainability Report, which provided an update on its progress toward integrating a focused approach to ESG factors across Brighthouse Financial. If you have not done so already, I encourage you to read this informative report. The Company will provide stakeholders with additional updates on its sustainability progress in its 2022 Corporate Sustainability Report, which it plans to publish later this year.

Stockholder Engagement. As part of the Board’s and management’s efforts to solicit and carefully review the feedback of our stockholders, we maintain a robust and proactive stockholder engagement program. Our engagements provide us with insight into a variety of topics of importance to our stockholders, and we greatly appreciate the perspectives that our stockholders continue to share with us. Taking into consideration support for certain corporate governance initiatives from several stockholders, our Board determined in early 2023 to amend our Amended and Restated Bylaws (“Bylaws”) to adopt a majority voting standard for uncontested Director elections and is recommending that our stockholders approve amendments to our Amended and Restated Certificate of Incorporation (“Charter”) to remove supermajority voting requirements currently required to amend certain provisions of our Charter and Bylaws.

Board Composition and Refreshment. The Board believes that it is critical that it routinely assess its composition to ensure that our Directors are qualified to oversee management’s development and execution of the Company’s business strategy. Our Board continues to believe that it is composed of Directors who possess the necessary skills and experience to effectively oversee Brighthouse Financial’s strategy and risks. In addition, the Board continues to recruit Directors who enhance our effectiveness as a Board. In March 2023, we welcomed Philip V. (“Phil”) Bancroft to the Board and to the Audit Committee and Investment Committee. Phil has extensive executive, financial, and insurance industry experience, including most recently as the chief financial officer of Chubb, the world’s largest publicly traded property and casualty insurance company, from which he retired in 2021. We look forward to his contributions.

Lastly, I would like to acknowledge our friend and colleague Patrick J. (“Pat”) Shouvlin on the occasion of his retirement from our Board. Pat has served on the Board, and chaired our Audit Committee, since Brighthouse Financial became an independent, publicly traded company in 2017. On behalf of the Board, I want to thank him for his years of service and his many significant contributions to our Board and the Company. I wish him all the best.

Thank you for your continued support and investment in Brighthouse Financial. We look forward to engaging with you at the Annual Meeting. Whether or not you plan to attend, your views are important to us. We encourage you to read these proxy materials and to vote your shares “FOR” each proposal.

 

LOGO   

Sincerely,

 

LOGO

 

Chuck Chaplin

Chairman of the Board

Brighthouse Financial, Inc.

 

April 27, 2023

 

    

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Contents     1

 

Proxy Statement

The Board of Directors (the “Board” or the “Board of Directors”) of Brighthouse Financial, Inc. (“Brighthouse Financial” or the “Company”) is providing this Proxy Statement in connection with the Annual Meeting of Stockholders to be held on June 8, 2023, at 8:00 a.m., Eastern Time (the “Annual Meeting”) and at any adjournment or postponement thereof. Stockholders holding shares of common stock, par value $0.01 per share, of the Company (“shares”) as of the close of business on April 10, 2023 (the “Record Date”) are entitled to vote at the Annual Meeting. Proxy materials or a Notice of Internet Availability were first made available, sent, or given to the Company’s stockholders on or about April 27, 2023.

Contents

 

  3       Proxy Summary
    3     Proposals for Your Vote
    3     The Brighthouse Financial Story
    4     2022 Highlights – Delivering Strong Results and Achieving Significant Milestones Despite a Challenging Year
    6     Our Board of Directors: Composition, Qualifications, and Diversity
    10     Stockholder Engagement Highlights
    10     Corporate Governance Highlights
    11     Our Sustainability Journey
    12     Executive Compensation Program Overview
  15      

Proposal 1 – Election of nine (9) Directors to
serve a one-year term ending at the 2024
Annual Meeting of Stockholders
    16     The Board of Directors
  25       Board and Corporate Governance Practices
    25     Investor Stewardship Group Principles
    27     Building Our Board of Directors
    29     Board Leadership Structure
    29     Director Independence
    30     Executive Sessions
    30     Stockholder Engagement
    32     Succession Planning and Talent Management
    32     Risk Oversight
    33     Information About Our Board Committees
    35     Director Compensation
    36     2022 Director Compensation Table
    36     Director Stock Ownership Guidelines
    37     Compensation Committee Interlocks and Insider Participation
    37     Codes of Conduct
  38      


Proposal 2 – Ratification of the appointment of
Deloitte & Touche LLP as Brighthouse
Financial’s independent registered public
accounting firm for fiscal year 2023
    39     Fees Paid to Deloitte & Touche LLP
    39     Audit Committee Pre-Approval Policy
    40     Audit Committee Report
  42      

Proposal 3 – Advisory vote to approve the
compensation paid to Brighthouse Financial’s
Named Executive Officers
  43       Compensation Discussion and Analysis
    43     Named Executive Officers
    43     CD&A Contents
    43     Section 1 – Executive Summary
    43    

The Brighthouse Financial Story

    44    

2022 Highlights – Delivering Strong Results and Achieving Significant Milestones Despite a Challenging Year

    45    

Human Capital Management

    45    

Compensation Philosophy

    45    

What’s New With Our 2022 Compensation Program

    46    

2022 Say-on-Pay Vote and Stockholder Engagement

    47    

Compensation Highlights

    48    

CEO Compensation

    48    

Planned Changes for 2023

    48     Section 2 – Our 2022 Executive Compensation Program
    48    

2022 Compensation Planning Process

    49    

Role of the Compensation and Human Capital Committee and Others in Determining Compensation

    50    

Elements of 2022 Compensation

 

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
2     Contents

 

    51    

2022 Target Total Direct Compensation

    53    

2022 Short-Term Incentive Awards

    56    

2022 Long-Term Incentive Awards

    58    

2020 PSU Payouts

    59    

Equity Retention Award – Mr. Lambert

    59     Section 3 – Additional Compensation Practices and Policies
    59    

Stock Ownership and Retention Guidelines

    59    

Benefit Plans

    60    

Termination and Change of Control Benefits

    61    

Stock-Based Award Timing Practices

    61    

Tax Deductibility of Executive Compensation

    61    

Hedging and Pledging Prohibition

    62    

Clawback Policy

    62    

Risk Assessment

    62     Section 4 – 2023 Compensation Program Overview
    62    

2022 Say-on-Pay Vote and Stockholder Engagement

    63    

2023 STI Program

    63    

2023 LTI Program

    64    

2023 Target TDC

    64     Compensation Committee Report
  65       Compensation Tables
    65     Summary Compensation Table for 2022
    68     Grants of Plan-Based Awards in 2022
    69     Outstanding Equity Awards at 2022 Fiscal Year End
    73     Option Exercises and Stock Vested in 2022
    73     Nonqualified Deferred Compensation in 2022
    75     Potential Payments Upon Termination or Change in Control
    78     Equity Compensation Plan Information as of December 31, 2022
  78       CEO Pay Ratio
  79       Pay Versus Performance
  83      




Proposal 4 – Approval of amendments to the
Charter to remove (i) supermajority voting
requirements currently required to amend
certain provisions of the Charter and Bylaws
and (ii) obsolete provisions related to classes
of Directors
  85      


Proposal 5 – Approval of an amendment to the
Charter to limit the liability of certain officers
of the Company, as permitted by recent
amendments to Delaware law
  87      
Certain Relationships and Related Person
Transactions
    87    

Related Person Transaction Approval Policy

    87    

Security Ownership of Certain Beneficial Owners and Management

    89    

Delinquent Section 16(a) Reports

  90      
The Annual Meeting, Voting, and Other
Information
    90     Overview
    90     Attending the Annual Meeting
    91     Directors’ Attendance at the Annual Meeting
    91     Shares Outstanding and Holders of Record Entitled to Vote at the Annual Meeting
    91     Your Vote is Important
    92     Quorum Requirement
    92     Voting Your Shares
    93     Changing Your Vote or Revoking Your Proxy
    94     Vote Required for Each Proposal
    95     Matters to be Presented
    95     Delivery of Proxy Materials
    96     Proxy Solicitation Costs
    96     Vote Tabulation
    96     Inspector of Election
    96     Results of the Vote
    96     Other Information
  98       Forward-Looking Statements
  98       Website References
  99       Non-GAAP and Other Financial Disclosures
  A-1      




Appendix A – Proposal 4 – Proposed
amendments to the Charter to remove
(i) supermajority voting requirements currently
required to amend certain provisions of the
Charter and the Bylaws and (ii) obsolete
provisions related to classes of Directors
  B-1      



Appendix B – Proposal 5 – Proposed
amendment to the Charter to limit the liability
of certain officers of the Company, as
permitted by recent amendments to Delaware
law
 

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Proxy Summary     3

 

Proxy Summary

This section summarizes important information contained in this Proxy Statement and in our 2022 Annual Report to Stockholders (the “2022 Annual Report”), but it does not contain all the information that you should consider when casting your vote. Please review the entire Proxy Statement and 2022 Annual Report carefully before voting.

Proposals for Your Vote

 

Proposal

      

Board Recommendation

      

Page

1.  Election of nine (9) Directors to serve a one-year term ending at the 2024 Annual Meeting of Stockholders;

   

FOR each of the

Board’s nominees

    15

 

   

 

   

 

2.  Ratification of the appointment of Deloitte & Touche LLP as Brighthouse Financial’s independent registered public accounting firm for fiscal year 2023;

   

FOR

    38

 

   

 

   

 

3.  Advisory vote to approve the compensation paid to Brighthouse Financial’s Named Executive Officers (the “Say-on-Pay” vote);

   

FOR

    42

 

   

 

   

 

4.  Approval of amendments to the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) to remove (i) supermajority voting requirements currently required to amend certain provisions of the Charter and the Amended and Restated Bylaws (the “Bylaws”) and (ii) obsolete provisions related to classes of Directors; and

   

FOR

    83

 

   

 

   

 

5.  Approval of an amendment to the Charter to limit the liability of certain officers of the Company, as permitted by recent amendments to Delaware law.

   

FOR

    85

 

The Brighthouse Financial Story

 

 

 

 

LOGO

 

  

Who We Are

Brighthouse Financial is one of the largest providers of annuities and life insurance in the United States(1), trusted by over 2 million customers(2). Brighthouse Financial became an independent, publicly traded company in August 2017, following our separation (the “Separation”) from MetLife, Inc. (“MetLife”) and the listing of our common stock on The Nasdaq Stock Market LLC (“Nasdaq”). In 2019, we became a member of the Fortune® 500, which lists the top 500 U.S. companies by total revenue.

 

 

LOGO

  

Our Purpose

We are on a mission to help people achieve financial security. We specialize in products that are designed to help people protect what they’ve earned and ensure it lasts. We are built on a foundation of experience and knowledge, which allows us to keep our promises and provide value to our distribution partners and the clients they serve.

LOGO   

Our Strategy

We believe our focused strategy will generate long-term stockholder value. Our strategy consists of the following core elements, which are fully aligned with our risk appetite and our approach to managing our business:

•  Offering a targeted set of annuity and life insurance solutions that are simpler, more transparent, and provide value to our distribution partners and the clients they serve. We aim to continue to shift our business mix profile over time, with the addition of more cash flow-generating and less capital-intensive new business, along with the runoff of less profitable legacy business.

•  Selling our products through a diverse, well-established network of distribution partners, continuing to build strategic distribution relationships, and entering new channels as we further expand our distribution footprint in the United States.

•  Effectively managing our expenses by adopting and maintaining an operating model designed to drive our statutory expense ratio down over time.

(1)  Ranked by 2021 admitted assets. Best’s Review®: Top 200 U.S. Life/Health Insurers. AM Best, 2022.

(2)  Customer count data is as of September 30, 2022.

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
4     Proxy Summary

 

Board Oversight of Our Strategy. One of the Board’s most important duties is to oversee our strategy to grow the Company and deliver long-term value for our stockholders. The Board devotes at least one entire meeting annually to a review of the Company’s strategy, and throughout the year, discusses key strategy topics with management. In 2022, the Board and senior management engaged in constructive dialogue regarding our multiyear strategic and financial plan, including the following key topics:

 

 

our product, sales, and marketing and distribution strategy and plans, as well as the competitive landscape in which we operate;

 

our financial plan, including capital return and other financial drivers and goals;

 

our human capital management strategy, including talent development and succession planning;

 

strengthening our culture, including programs to advance Diversity, Equity, and Inclusion (“DEI”);

 

our future state operations and technology platform;

 

our investment strategy; and

 

our financial and risk profile in various market scenarios.

2022 Highlights – Delivering Strong Results and Achieving Significant Milestones Despite a Challenging Year

Brighthouse Financial achieved significant strategic and operational milestones in 2022 and delivered strong results despite a challenging economic environment. Additionally, we remained disciplined in our financial and risk management as we executed our focused strategy, which we believe will enable us to generate long-term value for our stockholders.

 

 

LOGO

  

Financial and Capital Strength

 

Prudent Financial Management – we continued to manage the Company using a multiyear, multiscenario framework to evaluate capital, liquidity, and subsidiary dividend plans. We maintained a strong capital position at both our holding company and our operating companies despite the uncertain market and macroeconomic environments.

 

Normalized Statutory Earnings – generating normalized statutory earnings remains a focus of our financial management strategy. Normalized statutory earnings is used by management to measure our insurance companies’ ability to pay future distributions and is reflective of whether our hedging program functions as intended. For the full year 2022, we had normalized statutory earnings of $1.0 billion, driven by strong core performance in the variable annuity (“VA”) business.

 

Capital Return – we repurchased $488 million of our common stock in 2022 and reduced shares outstanding by 12% relative to year-end 2021. As of year-end 2022, we reduced the number of shares outstanding by 43% since we began our common stock repurchase program in August 2018.

 

Capital and Liquidity Management – we continued to optimize statutory capital to further strengthen our balance sheet and ended 2022 with holding company liquid assets of $1.0 billion.

 

Statutory Capital – we ended 2022 with $8.1 billion of combined statutory total adjusted capital and with a combined risk-based capital (“RBC”) ratio of 441% (at the high end of our target of 400% to 450% in normal market conditions). RBC ratio is a method of measuring an insurance company’s capital, taking into consideration its relative size and risk profile, to ensure compliance with minimum regulatory capital requirements.

 

Ratings – we maintained our operating companies’ strong financial strength ratings.

 

 

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LOGO   

Products and Sales

 

Annuity Sales – we achieved record annuity sales of approximately $11.5 billion, exceeding our 2022 target and representing an increase of 26% over 2021.

 

Life Insurance Sales – our life insurance sales were $80 million. As a result of the prevailing macroeconomic headwinds, life insurance sales decreased 28% over 2021.

 

New Products – we launched a new annuity product, Brighthouse Shield Level Pay PlusSM, expanding our flagship Shield® Level Annuities Product Suite. This product is designed to help meet an important need in retirement planning: income that lasts for life. We plan to introduce a new life insurance product in 2023 to further diversify and strengthen our life product suite.

LOGO   

Expenses

 

Corporate Expenses – corporate expenses were $869 million for full year 2022, a reduction from 2021 corporate expenses of $890 million. We remain focused on maintaining our disciplined expense management.

LOGO   

Technology

 

Future State Platform – we completed all our major system conversions. This marks the full implementation of our future state operations and technology platform, which is foundational to our ability to grow our sales in the future.

For the definition of certain terms and metrics used here and in this Proxy Statement, see “Non–GAAP and Other Financial Disclosures.”

 

2023 Proxy Statement  |  Brighthouse Financial


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Our Board of Directors: Composition, Qualifications, and Diversity

The fundamental duty of our Board is to oversee the management of Brighthouse Financial for the benefit of our stockholders. It is essential that the Board be composed of directors (“Directors”) who are qualified to oversee the development and execution of our business strategy by management. The Board seeks Directors who possess a broad range of skills, experience, and perspectives and who contribute to the gender and racial or ethnic diversity of our Board. The composition of our Board, as reflected in the table and chart below, is one way we demonstrate our commitment to these principles.

Board Composition Summary

 

           

Name (1)

  Age       Demographic  
Information
  Selected Skills and
Qualifications
  Principal Professional
Experience
  Independent     Committee
Memberships
             

Phil Bancroft

Director since 2023

  64   •  Male

•  White/
Caucasian

 

•  Senior Leadership

•  Accounting/Financial Reporting

•  Insurance Industry

•  Investments

  Executive Vice President and Chief Financial Officer, Chubb Limited (Retired)   Yes  

•  Audit (Expected Chair)

•  Investment

             

Irene Chang Britt

Director since 2017

  60   •  Female

•  Asian

 

•  Senior Leadership

•  Brand and Marketing

•  Public Company Board Experience

•  Human Capital Management

  Senior Vice President, Campbell Soup Company, and President, Pepperidge Farm Inc. (Retired)   Yes  

•  Compensation and Human Capital

•  Investment

•  Nominating and Corporate Governance (Chair)

             

Chuck Chaplin

Chairman of the Board

Director since 2017

  66   •  Male

•  Black/
African
American

 

•  Senior Leadership

•  Insurance Industry

•  Financial Services Industry

•  Accounting/Financial Reporting

•  Public Company Board Experience

  President, Chief Financial Officer, and Chief Administrative Officer, MBIA Inc. (Retired)   Yes  

•  Audit

•  Executive

•  Finance and Risk (Chair)

             

Steve Hooley

Director since 2020

  60   •  Male

•  White/
Caucasian

 

•  Senior Leadership

•  IT/Cybersecurity

•  Financial Services Industry

•  Public Company Board Experience

  Chairman, Chief Executive Officer, and President, DST Systems (Retired)   Yes  

•  Audit

•  Investment

             

Carol Juel

Director since 2021

  50   •  Female

•  White/
Caucasian

 

•  IT/Cybersecurity

•  Financial Services Industry

•  Risk Management

•  Regulation

  Executive Vice President, Chief Technology and Operating Officer, Synchrony Financial   Yes  

•  Audit

•  Finance and Risk

             

Eileen Mallesch

Director since 2018

  67   •  Female

•  White/
Caucasian

 

•  Accounting/Financial Reporting

•  Insurance Industry

•  Financial Services Industry

•  Investments

  Senior Vice President and Chief Financial Officer of the property and casualty business of Nationwide Mutual Insurance Company (Retired)   Yes  

•  Compensation and Human Capital

•  Investment (Chair)

•  Nominating and Corporate Governance

 

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Name (1)

  Age       Demographic  
Information
  Selected Skills and
Qualifications
  Principal Professional
Experience
  Independent     Committee
Memberships
             

Diane Offereins

Director since 2017

  65   •  Female

•  White/
Caucasian

 

•  IT/Cybersecurity

•  Financial Services Industry

•  Human Capital Management

•  Regulation

  Executive Vice President and President – Payment Services, Discover Financial Services (Retiring effective June 30, 2023)   Yes  

•  Compensation and Human Capital (Chair)

•  Finance and Risk

•  Nominating and Corporate Governance

             

Eric Steigerwalt

Director since 2016

  61   •  Male

•  White/
Caucasian

 

•  Senior Leadership

•  Insurance Industry

•  Financial Services Industry

•  Investments

•  Risk Management

  President and Chief Executive Officer, Brighthouse Financial, Inc.   No  

•  Executive (Chair)

             

Paul Wetzel

Director since 2017

  63   •  Male

•  White/
Caucasian

 

•  Senior Leadership

•  Financial Services Industry

•  Regulatory

•  Risk Management

  Chairman of the Global Financial Institutions Group, Deutsche Bank Securities Inc. (Retired)   Yes  

•  Compensation and Human Capital

•  Finance and Risk

•  Nominating and Corporate Governance

 

(1)

Pat Shouvlin is not standing for reelection at the Annual Meeting pursuant to our mandatory retirement age policy and, accordingly, is not included in this table.

 

2023 Proxy Statement  |  Brighthouse Financial


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Board Skills and Experience

Our Board is composed of Directors who possess a mix of skills and experience that we believe align with, and facilitate effective oversight of, Brighthouse Financial’s strategy and risks, including skills and experience related to the financial services and insurance industries; senior leadership; accounting/financial reporting; information technology and cybersecurity; brand and marketing; public company board service; risk management; investments; human capital management; and regulation. The following charts present the number of Director nominees who possess substantive skills or experience in these areas and are based on each Director’s self-evaluation.

 

LOGO  

Senior Leadership

Provides Directors with valuable organizational, strategic planning, and risk management skills to oversee and advise management

  LOGO  

Insurance

Aids in Director oversight of our strategy, including product development, sales, and financial management

LOGO  

Financial Services

Supports Director oversight of various aspects of our business, including product development, marketing, and distribution

  LOGO  

Accounting/Financial Reporting

Enables Directors to oversee our financial reporting processes and controls

       
LOGO  

Brand and Marketing

Supports oversight of the development and execution of our strategy to build our brand and market our products

  LOGO  

Human Capital Management

Supports oversight of our talent management, succession planning, and executive compensation practices, as well as our DEI activities

LOGO  

Information Technology/Cybersecurity

Enables Directors to manage and oversee our technology-related strategic objectives and to oversee cybersecurity risk

  LOGO  

Investments

Facilitates effective management and oversight of our investment portfolio to drive returns and manage investment risk

       
LOGO  

Regulation

Enables Director oversight of our compliance programs and assists the Company in navigating the complex and highly regulated environment in which we operate

  LOGO  

Risk Management

Facilitates Director oversight of management’s policies and practices to identify, monitor, and manage the complex risks facing our Company

LOGO  

Other Public Company Board Experience

Exposes Directors to diverse perspectives, trends, and governance practices that can enhance oversight

       

 

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Board Diversity

The Board believes that a diverse board is better able to effectively oversee the Company’s management and strategy and better positions Brighthouse Financial to deliver long-term value for our stockholders. Our Board recognizes that gender and racial or ethnic diversity add to the overall mix of perspectives of our Board as a whole. The following charts and table present the diversity profile of our currently serving Board(1).

 

LOGO

 

Board Diversity Matrix (as of April 27, 2023) (1)
 

Total Number of Directors

   10
       
     Female    Male    Non-Binary    Did Not
Disclose
Gender

Part I: Gender Identity

Directors

   4    6    0    0

Part II: Demographic Background

African American or Black

   0    1    0    0

Alaskan Native or Native American

   0    0    0    0

Asian

   1    0    0    0

Hispanic or Latinx

   0    0    0    0

Native Hawaiian or Pacific Islander

   0    0    0    0

White

   3    5    0    0

Two or More Races or Ethnicities

   0    0    0    0

LGBTQ+

   0

Did Not Disclose Demographic Background

   0

 

(1)

Table and graphics include Mr. Shouvlin, who identifies as Male and White. Mr. Shouvlin is not standing for reelection at the Annual Meeting.

Directors who are diverse with respect to gender, race, or ethnicity serve in a majority of our Board leadership positions.

Chuck Chaplin, who is Black/African American, serves as:

 

Chairman of the Board (the “Chairman”); and

 

Chair of the Finance and Risk Committee.

 

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Women, including one who is Asian, serve as chairs of the following committees:

 

Compensation and Human Capital Committee;

 

Investment Committee; and

 

Nominating and Corporate Governance Committee.

Stockholder Engagement Highlights

In 2022, we continued our robust stockholder engagement program. In the second half of 2022, we reached out to 28 stockholders representing approximately 58% of our shares (at that time) and met with seven stockholders representing approximately 31% of our shares (at that time). Discussions during our engagements focused on our strategy, sustainability program, human capital management, DEI, Board composition, governance practices, and executive compensation program. While the engagements are primarily conducted by senior management, our Chairman is available to engage with stockholders, and he has met with a number of stockholders in recent years.

Feedback from our stockholder engagements can inform our compensation and governance programs as well as our disclosures. For example, in response to stockholder feedback, we expanded our Director skills disclosures (see “Our Board of Directors: Composition, Qualifications, and Diversity”). In addition, taking into consideration support for certain corporate governance initiatives by several stockholders (among other factors) and after careful review and consideration, our Board determined to:

 

 

Adopt a majority voting standard for uncontested Director elections via amendment of our Bylaws in January 2023; and

 

Recommend stockholders approve the Company’s proposal to remove provisions in our Charter that currently require a supermajority of outstanding shares to amend certain provisions of our Charter and Bylaws (see Proposal 4).

For additional information about our stockholder engagement program, see “Stockholder Engagement.”

Corporate Governance Highlights

Brighthouse Financial is committed to good governance practices that are intended to protect and promote the long-term value of the Company for our stockholders. The Board regularly reviews our governance profile to ensure that it reflects the evolving governance landscape and appropriately supports and serves the best interests of the Company and our stockholders.

 

     
Independent Oversight     LOGO   Independent Chairman of the Board
  LOGO   Majority of our Board is independent (nine of ten current Directors – and eight of nine Directors standing for reelection)
    LOGO   All committees of the Board (other than the Executive Committee) (each a “Committee” and collectively, the “Committees”) are composed solely of Independent Directors (as defined below; see “Director Independence”)
     
Board Effectiveness     LOGO   Directors possess a deep and diverse set of skills and experience relevant to oversight of our business strategy
  LOGO   Proactive assessment of Director skills and commitment to Director refreshment to ensure the Board continues to meet the Company’s evolving oversight needs
    LOGO   Robust risk oversight framework to assess and manage risks
    LOGO   Comprehensive annual self-assessment of the Board and Committees, including an action plan to implement Directors’ suggestions
    LOGO   Commitment to Board diversity of perspective, gender, and race or ethnicity
    LOGO   Regular executive sessions of the Independent Directors

 

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Responsiveness and Accountability

 

 

NEW    

    LOGO   Robust annual stockholder engagement program
      LOGO   Recommending that stockholders approve Charter amendments to remove provisions that currently require a supermajority vote to amend certain provisions of the Charter and Bylaws
   
      LOGO   Adopted a majority vote standard for uncontested Director elections
    LOGO   Development and regular review of succession plans for the Chief Executive Officer (the “CEO”) and other members of senior management
    LOGO   Annual assessment of Committee charters and the Board’s Corporate Governance Principles
    LOGO   Annual election of Directors

Proposed Changes to Our Corporate Governance Practices

Our Board has adopted, and recommends that our stockholders approve, amendments to our Charter to (i) remove supermajority voting requirements currently required to amend certain provisions of the Charter and Bylaws and obsolete provisions related to classes of Directors (see Proposal 4), and (ii) add a provision to limit the liability of certain officers of the Company, as permitted by recent amendments to Delaware law (see Proposal 5).

Our Sustainability Journey

We believe that sustainability is inherent in Brighthouse Financial’s mission to help people achieve financial security and that strengthening our approach to integration of Environmental, Social, and Governance (“ESG”) across our organization and culture will better position us to deliver sustainable, long-term value for our stockholders and keep our promises to our consumers. To inform our sustainability strategy, the Company’s Chief Sustainability Officer and members of the Office of Sustainability conduct ongoing stakeholder engagement, enabling the Board and management to consider the expectations and interests of various stakeholders, including stockholders, employees, community partners, policymakers, and our distribution partners and their clients.

In 2022, we released the inaugural Brighthouse Financial Corporate Sustainability Report, which is available under the Corporate Responsibility section of our website. Reflecting the Company’s commitment to transparency and accountability, the report highlights our key accomplishments throughout 2021; provides comprehensive insights related to our ESG priorities and related practices; and includes data that is aligned with the Sustainability Accounting Standards Board (“SASB”) and Task Force on Climate-related Financial Disclosures (“TCFD”) frameworks. In addition, to further enhance our sustainability program in 2022, the Company and the Office of Sustainability strengthened its sustainability governance practices and strategy by establishing formal ESG policies and procedures, including an ESG Strategic Framework and the integration of ESG risk considerations into our corporate risk management processes.

ESG Priorities

 

 

Diversity, Equity, and Inclusion (DEI): At Brighthouse Financial, we are committed to advancing DEI across our organization and culture through various business policies and practices, including our talent acquisition strategy; employee learning, development, and engagement initiatives; procurement decisions; and strategic partnerships.

 

Being a Great Place to Work: We recognize that our employees are one of our most valuable assets. We continue to adapt, as needed, our activities, policies, and practices to attract, engage, develop, and retain employees and to ensure that Brighthouse Financial remains a great place to work. These efforts include our commitment to continually enhance our culture, which is rooted in our three core values of collaboration, adaptability, and passion.

 

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Advancing Financial Security: Our mission is to help people achieve financial security. As one of the largest providers of annuities and life insurance in the United States, we believe that annuities and life insurance play an essential role in financial security. Our products are designed to uphold three core pillars: simplicity, transparency, and competitive value for our customers. Recognizing the various risks that can surface across our Company’s value chain – from our marketing practices to our product disclosures – we are committed to responsible product governance, marketing, and communications.

 

Promoting Business Resilience Through Sustainable Operations: Our ability to deliver on our commitments to our stakeholders begins with responsible business practices. Through effective governance, compliance, and risk management; proactive cybersecurity and data privacy programs; and our ongoing commitment to responsible investment, we believe our approach to operating sustainably promotes business resilience across our value chain.

 

Climate Change and the Environment: Climate change continues to impact communities, economies, and natural ecosystems worldwide. We recognize that climate change poses various risks to our Company, global financial markets, society, and our planet. We are committed to enhancing our efforts to identify, measure, assess, and manage material climate-related risks to Brighthouse Financial, as well as the environmental impact of our operations.

Board and Committee Oversight. The Board has delegated to the Nominating and Corporate Governance Committee broad oversight of our sustainability program. Our Chief Sustainability Officer reports on an annual basis to each of the Board and the Nominating and Corporate Governance Committee, providing updates on enhancements to our sustainability strategy, assessment and management of ESG factors, and our disclosure initiatives. Due to the fact that ESG issues can manifest as business risks and opportunities in different ways, oversight of specific ESG topics is distributed across various Board committees, depending on the nature of the issue and potential impacts.

For example, our other Committees oversee the following aspects of Brighthouse Financial’s sustainability program:

 

 

Compensation and Human Capital Committee – oversees Brighthouse Financial’s human capital matters, including pay equity, DEI, leadership development, culture, and succession planning for the CEO and other executives.

 

Audit Committee – oversees Brighthouse Financial’s regulatory compliance and cybersecurity program.

 

Finance and Risk Committee – oversees Brighthouse Financial’s enterprise risk program, including climate risk and its related impacts on the Company’s risk profile.

 

Investment Committee – oversees Brighthouse Financial’s investment portfolio, including assessment of our exposures to ESG risk and consideration of ESG factors in our asset management program.

The full Board continues to be engaged on certain ESG issues, including the Company’s culture; human capital management; vendor and supplier diversity; cybersecurity; and the Company’s ESG and DEI initiatives. The Audit Committee and/or the Board generally meet on a quarterly basis with our Chief Technology Officer (“CTO”) and Chief Information Security Officer (“CISO”) to review our information technology and cybersecurity risk profile and to discuss our activities to manage those risks. In addition, our Chief Compliance Officer regularly reports to the Audit Committee and the Board regarding the Company’s compliance with applicable regulations relating to information technology and cybersecurity.

Incorporation of DEI Factors into Our Executive Compensation Program. In recognition of the importance of DEI to the Company’s strategy and ability to deliver sustainable growth, beginning in 2021 the Compensation and Human Capital Committee considered the achievements of each Named Executive Officer (“NEO”) with respect to DEI as part of its assessment of each NEO’s individual performance and approval of their short-term incentive (“STI”) awards. For more information, see the “Compensation Discussion and Analysis.”

Executive Compensation Program Overview

Executive Compensation Philosophy

The Compensation and Human Capital Committee has established an executive compensation program rooted in a pay-for-performance philosophy and guided by the following general principles and objectives:

 

 

Paying for performance: a majority of executive compensation is in the form of variable elements that are based on individual and Company performance results that drive increases in stockholder value;

 

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Proxy Summary     13

 

 

Providing competitive Target Total Direct Compensation (“Target TDC”) opportunities (defined as base salary plus STI and long-term incentive (“LTI”) compensation opportunities): we aim to offer compensation that enables Brighthouse Financial to attract, motivate, and retain high-performing executives;

 

Aligning executives’ interests with stockholders’ interests: a majority of our CEO’s Target TDC and a significant portion of our other NEOs’ Target TDC is delivered in the form of stock-based incentives;

 

Encouraging long-term decision-making: our long-term incentive compensation program includes awards with multiyear, overlapping performance or restriction periods;

 

Avoiding problematic pay practices: we do not provide excessive perquisites, excessive change-of-control severance pay, or excise tax gross-ups, and we will not reprice stock options without stockholder approval; and

 

Reinforcing strong risk management: our compensation program is designed to avoid providing our executives with incentives to take excessive risks.

2022 Executive Compensation Program

The Compensation and Human Capital Committee considered stockholder feedback and the results of our 2021 Say-on-Pay vote in designing our 2022 executive compensation program. Our program is guided by our pay-for-performance philosophy and aligns our NEOs’ compensation opportunities with achievement of the Company’s short- and long-term business goals, as approved by the Board as part of its annual review of Brighthouse Financial’s strategy. Our 2022 executive compensation program remained largely consistent with our 2021 program. Changes to the program are described in the “Compensation Discussion and Analysis.”

Key Components of Our 2022 Executive Compensation Program

 

   
Base Salary    

•  Fixed compensation for service during the year.

   
Short-Term Incentive Awards    

•  Annual cash award based on Company and individual performance.

 

•  Performance metrics measure our achievement of three strategically important corporate goals for the 2022 performance period (weighting):

 

•  Expense Target (40%) – aligns with our strategic goal of adopting and maintaining an operating model that reduces our run-rate expenses.

 

•  Sales (40%) – key driver of growth and the strength of our franchise.

 

•  Normalized Statutory Earnings (20%) – important indicator of financial strength that is used by management to measure our insurance companies’ ability to pay future distributions and is reflective of whether our hedging program functions as intended.

 

•  DEI achievements are factored into individual qualitative performance assessments.

   
Long-Term Incentive Awards    

•  LTI vehicle mix is weighted more toward performance-based compensation – 70% Performance Share Units (“PSUs”) and 30% Restricted Stock Units (“RSUs”) for the CEO; 60% PSUs and 40% RSUs for our other NEOs.

 

•  PSU metrics measure our achievement of two strategic goals over the 2022-2024 performance period (weighting):

 

•  Statutory Expense Ratio (60%) – operating efficiency metric that measures both expense management and sales growth, two of our key strategic drivers.

 

•  Net Cash Flow to the Holding Company (40%) – measures net capital distributions from Brighthouse Financial’s operating companies, which strengthen our holding company balance sheet and provide management with flexibility to deploy our capital for various purposes, including return of capital to stockholders.

 

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Executive Compensation Practices

We are committed to building a compensation program with strong governance features that reflect best practices in the market and are responsive to stockholder feedback. The table below provides a summary of our executive compensation governance practices.

 

     
What We Do     LOGO   Pay-for-Performance. A substantial portion of our NEOs’ Target TDC is in the form of variable, at-risk elements that reward our executives only if we achieve performance goals that we believe are linked to long-term value creation.
 

 

LOGO

 

 

Stock Ownership Guidelines. We have established stock ownership and retention guidelines that require our NEOs to maintain significant stock ownership, thereby aligning their interests with those of our stockholders.

 

 

LOGO

 

 

Clawback Policy. We adopted a robust compensation recoupment policy (the “Clawback Policy”) that allows the Company to recoup incentive compensation earned by executive officers or other employees in the event of a material restatement of the Company’s financial statements or certain misconduct.

 

 

LOGO

 

 

Minimum Vesting Periods. Equity awards that are subject to achievement of performance goals or that vest based solely on continued service generally have three-year vesting periods (the latter generally at a rate not greater than one-third per year).

 

 

LOGO

 

 

Stockholder Engagement. We actively engage with our stockholders on various topics, including our executive compensation program. We recognize the importance of our stockholders’ perspectives in the compensation-setting process and consider their feedback in the design of our compensation program.

 

 

LOGO

 

 

Independent Compensation Consultant. Our Compensation and Human Capital Committee has retained Semler Brossy Consulting Group (“Semler Brossy”) as its independent compensation consultant to advise it on our executive compensation program.

 

 

LOGO

 

 

Double-Trigger Vesting of Equity Awards Upon a Change of Control. Outstanding awards that are substituted or assumed in a change of control only vest if the NEO is terminated or resigns with good reason.

 

     
What We Don’t Do    

 

LOGO

 

 

Gross-ups on Excise Taxes. We do not provide tax gross-up benefits in connection with payments upon a change of control.

 

 

LOGO

 

 

Reprice Stock Options. Our equity incentive plans prohibit us from repricing stock options or stock appreciation rights without stockholder approval.

 

 

LOGO

 

 

Excessive Perquisites. We provide limited perquisites to our executive officers.

 

 

LOGO

 

 

Hedging and Pledging. Our insider trading policy prohibits all employees and Directors from engaging in hedging or pledging transactions in Brighthouse Financial securities.

 

Brighthouse Financial  |  2023 Proxy Statement


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Proposal 1 – Election of Directors     15

 

Proposal 1

Election of nine (9) Directors to serve a one-year term ending at the 2024 Annual Meeting of Stockholders

Our Board has been carefully and thoughtfully built with a diverse mix of individuals who possess the necessary skills and experience to effectively oversee our business. The Board has nominated the following nine currently serving Directors for election at the Annual Meeting: Philip V. Bancroft; Irene Chang Britt; C. Edward Chaplin; Stephen C. Hooley; Carol D. Juel; Eileen A. Mallesch; Diane E. Offereins; Eric T. Steigerwalt; and Paul M. Wetzel.

Pursuant to our mandatory retirement policy, Patrick J. Shouvlin will retire from the Board as of our 2023 Annual Meeting of Stockholders. In anticipation of Mr. Shouvlin’s retirement, the Board commenced a thorough director search process, which included consideration of a diverse slate of candidates. On March 27, 2023, the Board increased the size of the Board to ten Directors and elected Mr. Bancroft to serve on the Board. Mr. Bancroft brings valuable skills and experience to the Board, including extensive experience in the insurance industry, former service as the chief financial officer of a large, publicly traded insurance company, as well as accounting and financial expertise. Following Mr. Shouvlin’s retirement from the Board, the Board expects to appoint Mr. Bancroft to succeed Mr. Shouvlin as Chair of the Audit Committee. Mr. Shouvlin will assist Mr. Bancroft in the transition of his duties as Chair of the Audit Committee. The Board has reduced the size of the Board to nine Directors effective as of the expiration of Mr. Shouvlin’s term at the Annual Meeting.

Biographical information for each nominee, including a description of each Director’s skills and qualifications, follows this proposal. For information about our policies and practices related to our Board, see “Board and Corporate Governance Practices.” All nominees serving at the time of our 2022 annual meeting of stockholders attended that meeting.

If elected, all nominees will serve one-year terms that expire at the next annual meeting of stockholders. Unless otherwise instructed, the proxyholders will vote proxies “FOR” the nominees of the Board. Each nominee has consented to being named in this Proxy Statement and agreed to serve if elected. The Board has no reason to believe that any of its nominees will be unable or unwilling to serve if elected. However, if any of the Board’s nominees is unable to serve as Director at any point prior to the Annual Meeting or any adjournment or postponement thereof, the Board may reduce the size of the Board or nominate another candidate for election. If the Board nominates a new candidate, unless otherwise provided, the form of proxy attached to this Proxy Statement permits the proxyholders to use their discretion to vote for that candidate.

The Board recommends that you vote “FOR” the election of each of the Director nominees.

 

2023 Proxy Statement  |  Brighthouse Financial


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16     Proposal 1 – Election of Directors

 

The Board of Directors

Nominees for Election as Directors for Terms Expiring in 2024

 

 

 

LOGO

 

Age: 64

Director since: 2023

Committees:

•  Audit (Expected Chair)

•  Investment

  

Philip V. (“Phil”) Bancroft

 

Independent Director

 

Skills and Qualifications

Mr. Bancroft is qualified to serve on our Board on the basis of his extensive experience in the insurance industry, service as the chief financial officer of a large, publicly traded insurance company, as well as accounting and financial expertise.

 

Career Highlights

•  Chubb Limited, a property and casualty insurance company (2016 – 2021)

•  Chief Financial Officer and Executive Vice President

•  ACE Limited, a property and casualty insurance company (acquired Chubb in 2016) (2002 – 2016)

•  Chief Financial Officer (2002 – 2016)

•  PricewaterhouseCoopers (PwC), an accounting and professional services firm (1982 – 2001)

•  Partner-In-Charge, New York Regional Insurance Group (1996 – 2001)

•  Partner (1991 – 1996)

•  Manager (1982 – 1991)

 

Other Public Company Directorships

•  Regional Management Corp. (2022 – present)

 

Past Public Company Directorships

None

 

Other Experience and Service

•  Certified Public Accountant

•  American Institute of Certified Public Accountants, Member

•  Pennsylvania Institute of Certified Public Accountants, Member

 

Education

•  BA, Temple University

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Proposal 1 – Election of Directors     17

 

LOGO

 

Age: 60

Director since: 2017

Committees:

•  Compensation and Human Capital

•  Investment

•  Nominating and Corporate Governance (Chair)

  

Irene Chang Britt

 

Independent Director

 

Skills and Qualifications

Ms. Chang Britt is qualified to serve on our Board on the basis of her brand and marketing expertise, corporate governance expertise, and experience leading multibillion-dollar divisions of Fortune 500 companies.

 

Career Highlights

•  Campbell Soup Company, a food and beverage company (2005 – 2015)

•  President, Pepperidge Farm Inc. and Senior Vice President, Global Baking and Snacking (2012 – 2015)

•  Global Chief Strategy Officer (2010 – 2012)

•  President, North America Foodservice; General Manager, Sauces and Beverages; and other senior positions in multiple brand divisions (2005 – 2010)

•  Kraft Foods and Kraft/Nabisco, a food and beverage company (1999 – 2005)

•  Kimberly-Clark, a consumer products company (1986 – 1999)

 

Other Public Company Directorships

•  Victoria’s Secret & Co., a specialty retail company (2021 – present)

 

Past Public Company Directorships

•  Dunkin’ Brands Group, Inc. (2014 – 2020)

•  Tailored Brands, Inc. (2015 – 2020)

•  TerraVia Holdings, Inc. (2016 – 2018) (non-executive chairperson from 2017)

 

Other Experience and Service

•  National Association of Corporate Directors, Board Leadership Fellow

•  Amica Senior Lifestyles, Chairperson of the Board (2017 – present)

•  Peloton Capital Management, Limited Partner and member of the Advisory Board (2019 - present)

•  MikMak, Member, Board of Directors (2021 – present)

•  Higher Ambition Leadership Alliance, Member, Board of Directors (2021 – present)

•  Partake Foods, Member, Board of Directors (2021 – present)

•  W.O.M.E.N. in America, Member, Board of Directors (2022 – 2023)

 

Education

•  BA, University of Toronto

•  MBA, Ivey Business School – Western University, University of Western Ontario

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
18     Proposal 1 – Election of Directors

 

LOGO

 

Age: 66

Director since: 2017

Committees:

•  Audit

•  Executive

•  Finance and Risk (Chair)

  

C. Edward (“Chuck”) Chaplin

 

Chairman of the Board

Independent Director

 

Skills and Qualifications

Mr. Chaplin is qualified to serve on our Board on the basis of his leadership skills, financial expertise, and deep experience in the insurance industry.

 

Career Highlights

•  MBIA, Inc., a provider of financial guarantee insurance (2006 – 2017)

•  President, Chief Financial Officer, and Chief Administrative Officer (2008 – 2016)

•  Vice President and Chief Financial Officer (2006 – 2008)

•  Prudential Financial, Inc., a global insurance and financial services firm (1983 – 2006)

•  Positions of increasing responsibility, culminating with Senior Vice President and Treasurer

 

Other Public Company Directorships

•  MGIC Investment Corp. (2014 – present)

 

Past Public Company Directorships

None

 

Other Experience and Service

•  Rutgers University Foundation, Trustee

•  Executive Leadership Council, Member

 

Education

•  BA, Rutgers College

•  Master of City and Regional Planning, Harvard University

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Proposal 1 – Election of Directors     19

 

LOGO

 

Age: 60

Director since: 2020

Committees:

•  Audit

•  Investment

  

Stephen C. (“Steve”) Hooley

 

Independent Director

 

Skills and Qualifications

Mr. Hooley is qualified to serve on our Board on the basis of his experience as a chief executive officer, expertise in technology and financial services, and public company board experience.

 

Career Highlights

•  DST Systems, Inc., a provider of information processing software and services (2009 – 2018)

•  Chairman, Chief Executive Officer and President (2014 – 2018)

•  President and Chief Executive Officer (2012 – 2014)

•  President and Chief Operating Officer (2009 – 2012)

•  State Street Corporation, a financial services company (1992 – 2009)

•  Various leadership positions, culminating as Chief Executive Officer and President, Boston Financial Data Services Corporation, a financial services company which was a joint venture between State Street Corporation and DST Systems (2004 – 2009)

 

Other Public Company Directorships

•  Q2 Holdings, Inc. (2020 – present)

•  Stericycle Inc. (2019 – present)

 

Past Public Company Directorships

•  Legg Mason Inc. (2019 – 2020)

•  DST Systems, Inc. (2012 – 2018)

 

Education

•  BS, Worcester Polytechnic Institute

 

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20     Proposal 1 – Election of Directors

 

LOGO

 

Age: 50

Director since: 2021

Committees:

•  Audit

•  Finance and Risk

  

Carol D. Juel

 

Independent Director

 

Skills and Qualifications

Ms. Juel is qualified to serve on our Board on the basis of her experience as a senior technology and operations executive with deep technology, cybersecurity, and financial services experience.

 

Career Highlights

•  Synchrony Financial, a financial services company (2014 – present)

•  Executive Vice President, Chief Technology and Operating Officer (2021 – present)

•  Executive Vice President, Chief Information Officer (2014 – 2021)

•  General Electric Company, a multinational conglomerate (2004 – 2014)

•  Chief Information Officer, GE Capital Retail Finance (2011 – 2014)

•  Vice President, Information Technology, GE Money (2004 – 2011)

•  Accenture, a professional services and consulting company (1995 – 2004)

•  Senior Manager, Financial Services

 

Other Public Company Directorships

None

 

Past Public Company Directorships

None

 

Other Experience and Service

•  Girls Who Code, Chair, Board of Directors

 

Education

•  BA, College of the Holy Cross

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Proposal 1 – Election of Directors     21

 

LOGO

 

Age: 67

Director since: 2018

Committees:

•  Compensation and Human Capital

•  Investment (Chair)

•  Nominating and Corporate Governance

  

Eileen A. Mallesch

 

Independent Director

 

Skills and Qualifications

Ms. Mallesch is qualified to serve on our Board on the basis of her financial expertise, experience in the insurance industry, and public company board experience.

 

Career Highlights

•  Nationwide Mutual Insurance Company, a U.S. insurance and financial services company (2005 – 2009)

•  Senior Vice President and Chief Financial Officer of property and casualty insurance business

•  General Electric, a multinational conglomerate (1998 – 2005)

•  Senior Vice President and Chief Financial Officer of Genworth Financial Life Insurance Company (2003 – 2005)

•  Vice President and Chief Financial Officer of GE Financial Employer Services Group (2000 – 2003)

•  Controller, GE Americom (1998 – 2000)

•  Asea Brown Boveri, Inc., a multinational power and automation technologies company (1993 – 1998)

•  International Business Area Controller, Energy Ventures

•  PepsiCo, Inc., a multinational food and beverage company (1988 – 1993)

•  Arthur Andersen, a professional services firm (1985 – 1988)

 

Other Public Company Directorships

•  Arch Capital Group Ltd. (2021 – present)

•  Fifth Third Bancorp (2016 – present)

 

Past Public Company Directorships

•  State Auto Financial Corporation (2010 – 2021)

•  Libbey Inc. (2016 – 2020)

•  Bob Evans Farms, Inc. (2008 – 2018)

 

Other Experience and Service

•  Certified Public Accountant

•  American Institute of Certified Public Accountants, Member

 

Education

•  BS, City University of New York (CUNY)

 

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22     Proposal 1 – Election of Directors

 

LOGO

 

Age: 65

Director since: 2017

Committees:

•  Compensation and Human Capital (Chair)

•  Finance and Risk

•  Nominating and Corporate Governance

  

Diane E. Offereins

 

Independent Director

 

Skills and Qualifications

Ms. Offereins is qualified to serve on our Board on the basis of her deep financial services, information technology, and cybersecurity experience.

 

Career Highlights

•  Discover Financial Services, a direct banking and payment services company (1998 –present, retiring effective June 30, 2023)

•  Executive Vice President and President, Payment Services (2010 – present)

•  Executive Vice President, Payment Services (2008 – 2010)

•  Executive Vice President and Chief Technology Officer (1998 – 2008)

 

Other Public Company Directorships

•  Flywire Corporation (2023 – present)

 

Past Public Company Directorships

•  West Corporation (2015 – 2017)

 

Other Experience and Service

•  The Chicago Network, former Chair

•  Children’s Home + Aid, Member, Board of Trustees

 

Education

•  BBA, Loyola University, New Orleans

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Proposal 1 – Election of Directors     23

 

LOGO

 

Age: 61

Director since: 2016

Committees:

•  Executive (Chair)

  

Eric T. Steigerwalt

 

President and Chief Executive Officer

 

Skills and Qualifications

Mr. Steigerwalt is qualified to serve on our Board on the basis of his deep knowledge of our business, extensive experience in the insurance industry, leadership skills, and broad knowledge of corporate strategy, finance, and investments.

 

Career Highlights

•  Brighthouse Financial, Inc. (2016 – present)

•  President and Chief Executive Officer

•  MetLife, Inc., a global insurance and financial services company (1998 – 2017)

•  Executive Vice President, U.S. Retail (2012 – 2017)

•  Executive Vice President and Interim Chief Financial Officer (2011 – 2012)

•  Executive Vice President, Chief Financial Officer of U.S. Business (2010 – 2011)

•  Senior Vice President and Chief Financial Officer of U.S. Business (2009 – 2010)

•  Senior Vice President and Treasurer (2007 – 2009)

•  Senior Vice President and Chief Financial Officer of Individual Business (2003 – 2007)

•  Vice President, Financial Management (1998 – 2003)

•  AXA S.A., a financial services and insurance company (1993 – 1998)

 

Other Public Company Directorships

None

 

Past Public Company Directorships

None

 

Other Experience and Service

•  American Council of Life Insurers (2018 – present)

•  Member, Board of Directors

•  Member, Consumer and Tax Steering Committees

•  Wells Fargo Champions for Education, Member, Board of Directors (2017 – present)

 

Education

•  BA, Drew University

 

2023 Proxy Statement  |  Brighthouse Financial


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24     Proposal 1 – Election of Directors

 

LOGO

 

Age: 63

Director since: 2017

Committees:

•  Compensation and Human Capital

•  Finance and Risk

•  Nominating and Corporate Governance

  

Paul M. Wetzel

 

Independent Director

 

Skills and Qualifications

Mr. Wetzel is qualified to serve on our Board on the basis of his extensive experience advising financial services firms and knowledge of investment banking and corporate strategy.

 

Career Highlights

•  Deutsche Bank Securities Inc., a subsidiary of global investment bank and financial services firm Deutsche Bank AG (“Deutsche Bank”) (2009 – 2016)

•  Chairman, Global Financial Institutions Group (2013 – 2016)

•  Head of the Japan Investment Banking Coverage and Advisory Group (2011 – 2013)

•  Other positions of increasing responsibility at Deutsche Bank or its subsidiaries

•  Merrill Lynch & Co., Inc., a global investment bank and financial services firm (1992 – 2009)

•  Positions of increasing responsibility in investment banking with a focus on financial institutions

 

Other Public Company Directorships

None

 

Past Public Company Directorships

None

 

Other Experience and Service

•  Eleven Canterbury, Consultant (2021 – present)

•  Rockefeller Capital Management, Consultant (2018 – present)

•  National Association of Corporate Directors, Board Leadership Fellow

 

Education

•  BS, Business Administration, State University of New York at Buffalo

•  MBA, Finance and Accounting, University of Chicago Graduate School of Business

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Board and Corporate Governance Practices — Investor Stewardship Group Principles     25

 

Board and Corporate Governance Practices

We believe effective corporate governance policies and practices will help Brighthouse Financial deliver sustainable, long-term value for our stockholders.

These policies and practices are contained in our governance documents, including our Charter, Bylaws, Corporate Governance Principles, and Committee charters. This section describes the key features of our Board practices and corporate governance program. The Board believes a balanced governance profile will help the Company deliver sustainable, long-term value for our stockholders. The Board continually assesses our governance profile to ensure that it remains appropriate as we continue to evolve over time.

 

Investor Stewardship Group Principles

Brighthouse Financial’s practices align with the Investor Stewardship Group’s (“ISG”) corporate governance framework for U.S.-listed companies, as described below.

 

 

ISG Principle

   Brighthouse Financial Practice
 

Principle 1:

Boards are accountable to shareholders

  

•  All Directors are elected annually for one-year terms.

•  Majority voting standard for uncontested Director elections.

•  The Company has not adopted a shareholder rights plan (“poison pill”).

•  The Chairman’s letter to stockholders provides our stockholders with insight into Board strategy and oversight objectives.

•  Recommending that stockholders approve Charter amendments to remove provisions that currently require a supermajority vote to amend certain provisions of the Charter and Bylaws (see Proposal 4).

 

Principle 2:

Shareholders should be entitled to voting rights in proportion to their economic interest

  

•  We have one class of common stock, and all stockholders have one vote per share.

 

Principle 3:

Boards should be responsive to shareholders and be proactive in order to understand their perspectives

  

•  We invited stockholders representing approximately 58% of our shares (at that time) to engage with us, meeting with stockholders representing 31% of our shares (at that time) (see “Stockholder Engagement”).

•  Engagement topics included Brighthouse Financial’s strategy, sustainability program, human capital management, DEI, Board composition, governance practices, and executive compensation program.

•  The Board considers stockholder feedback as part of its annual review of our governance and executive compensation policies and practices.

•  Taking into consideration support for certain corporate governance initiatives by several stockholders (among other factors) and after careful review and consideration, our Board determined in early 2023 to adopt a majority voting standard for uncontested Director elections and to recommend that stockholders approve Charter amendments to remove provisions that currently require a supermajority vote to amend certain provisions of the Charter and Bylaws (see Proposal 4).

 

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26     Board and Corporate Governance Practices — Investor Stewardship Group Principles

 

 

 

ISG Principle

   Brighthouse Financial Practice
 

Principle 4:

Boards should have a strong, independent leadership structure

  

•  Our Board is led by an independent Chairman, with robust and clearly defined duties and responsibilities (see “Board Leadership Structure”).

•  All Committees (other than the Executive Committee) are chaired by Independent Directors.

•  The Board evaluates and considers the appropriateness of its leadership structure as Brighthouse Financial evolves over time.

 

Principle 5:

Boards should adopt structures and practices that enhance their effectiveness

  

•  Directors possess a deep and diverse set of skills and experience relevant to oversight of our strategy.

•  Nine of our ten currently serving Directors (all except our President and CEO) are independent.

•  Five of our nine currently serving Independent Directors are diverse, including four women and two Directors who are racially or ethnically diverse (one of whom is also a woman).

•  All Committees have written charters that set forth robust and clearly defined oversight responsibilities, and all (except for the Executive Committee) are composed solely of Independent Directors.

•  Our Board overboarding policy helps ensure that all Directors are able to commit the time necessary to meet their duties and responsibilities (see “ Building Our Board of Directors – Director Criteria and Nomination Process – Other Directorships”).

•  Proactive assessment of Director skills, mandatory retirement policy, and a commitment to Director refreshment help to ensure that the Board meets the Company’s evolving oversight needs.

•  The Board conducts an annual self-assessment process that considers the effectiveness of the Board (collectively), each Committee, and each individual Director.

•  In 2022, each Director attended at least 75% of the meetings of the Board and the Committees on which he or she served.

 

Principle 6:

Boards should develop management incentive structures that are aligned with the long-term strategy of the company

  

•  Our Say-on-Pay proposal received approximately 98.5% stockholder support in 2022 (including abstentions).

•  The Compensation and Human Capital Committee annually reviews and approves our incentive program design, goals, and objectives for alignment with compensation and business strategies.

•  Our incentive compensation performance metrics are directly tied to, and derived from, our financial plan.

•  Our compensation program is rooted in a pay-for-performance philosophy that incentivizes and rewards our management for achievement of performance metrics that are aligned with key strategic goals (see “Compensation Discussion and Analysis”).

•  Short- and long-term incentive programs are designed to reward financial and operational performance that supports our strategic objectives.

 

Brighthouse Financial  |  2023 Proxy Statement


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Board and Corporate Governance Practices — Building Our Board of Directors     27

 

Building Our Board of Directors

The Board oversees Brighthouse Financial on behalf of our stockholders. The Board has adopted the following key policies and practices to guide it in building a skilled and well-qualified body that we believe is able to effectively fulfill its duties and responsibilities to our stockholders.

Director Criteria and Nomination Process

 

Board Membership Criteria – The Nominating and Corporate Governance Committee leads the search for, and recommends, candidates to serve on the Board based on their business and professional experience, judgment, diversity, age, skills, and background. All candidates must possess high integrity and be able to meet the demands of serving on our Board.

 

 

Director Qualifications – In seeking qualified director candidates, the Nominating and Corporate Governance Committee, in consultation with the Chairman, the CEO, and the other members of the Board, seeks individuals who possess the skills, experience, and background appropriate for overseeing the development and execution of Brighthouse Financial’s business strategy. The Board has identified the following qualifications, among others, in considering director candidates: financial services or insurance industry experience; senior management leadership experience; accounting and financial reporting experience; information technology and cybersecurity expertise; brand management and marketing experience; public company board experience; risk management expertise, including in the areas of market, liquidity, and cybersecurity risk; investments expertise, including oversight of strategic asset allocation and portfolio construction; experience in human capital management; regulatory expertise; commitment to Brighthouse Financial’s values; and diversity, including gender and racial or ethnic diversity.

 

 

Board Diversity – The Board believes a diverse board is better able to effectively oversee the Company’s management and strategy and to position Brighthouse Financial to deliver long-term value for our stockholders. The Board seeks Directors who possess a broad range of skills, experience, and perspectives, and who contribute to the gender and racial or ethnic diversity of our Board. While the Company does not have a formal Board diversity policy, our Corporate Governance Principles place an emphasis on diversity. The Nominating and Corporate Governance Committee and the Board consider diversity when recruiting and nominating directors for election and when assessing the effectiveness of the Board. In recent Board candidate searches, the Nominating and Corporate Governance Committee has instructed the third-party search firms it has engaged to include candidates who would contribute to the gender and racial or ethnic diversity of our Board in the initial pool from which it selects director candidates. We believe the current composition of the Board reflects those efforts and the importance of diversity to the Board.

 

 

Director Independence – At least a majority of the Board must be Directors who satisfy applicable independence standards. To determine independence, the Nominating and Corporate Governance Committee and the Board consider independence requirements under Nasdaq listing rules, applicable rules promulgated by the U.S. Securities and Exchange Commission (“SEC”), as well as other factors that contribute to effective oversight and decision-making by the Board.

 

 

Other Directorships – Directors must confirm the absence of, or disclose, any material actual or potential conflict of interest, and receive the consent of the Chair of the Nominating and Corporate Governance Committee before accepting an invitation to serve on the board or committee of another public company. Directors are also required to inform the Chair of the Nominating and Corporate Governance Committee before joining the board of a private, non-profit, or other type of organization. To ensure that Directors have requisite time to devote sufficient attention to their duties and responsibilities and to avoid overboarding concerns, the Board believes that: (1) Directors should not serve on more than three other public company boards; (2) Independent Directors who serve as chief executive officer of another public company and also serve on that company’s board of directors should not serve on any additional public company board other than our Board; and (3) Directors who serve on more than three public company audit committees should not serve on our Audit Committee if their ability to effectively serve on our Audit Committee is impaired, as determined by the Chair of the Nominating and Corporate Governance Committee and the Board.

 

 

Director Nomination Process – Nominations for election as a Director at our annual meetings may be made by our Board in the Company’s notice of meeting or any supplement thereto, or by a stockholder or stockholders in compliance with

 

2023 Proxy Statement  |  Brighthouse Financial


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28     Board and Corporate Governance Practices — Building Our Board of Directors

 

 

the stockholder nomination requirements set forth in our Bylaws. Our Board nominates Director nominees upon the recommendation of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee and the Board may identify potential nominees through a variety of means, including recommendations and referrals from current Directors, management, and stockholders. The Nominating and Corporate Governance Committee also uses professional search firms to help identify and assess potential nominees. Mr. Bancroft is being nominated for election as Director for the first time at the Annual Meeting and was originally proposed to us as a Director nominee by a third-party search firm engaged by the Nominating and Corporate Governance Committee to identify potential director candidates. In recommending candidates for nomination by the Board, the Nominating and Corporate Governance Committee takes into consideration the candidate’s skills and qualifications, Nasdaq listing requirements, the ability of candidates to enhance the diversity of our Board as a whole, and any other criteria the Board may establish from time to time. The Nominating and Governance Committee will consider candidates recommended by stockholders, and our stockholders may bring Director nominations before an annual meeting of our stockholders by following the procedures described in our Bylaws. For more information on how and when to submit a nomination for future annual meetings, see “Other stockholder proposals and director nominations.”

Board Refreshment, Assessment, and Ongoing Education

 

Board Refreshment – The Board recognizes it must refresh its composition to address Brighthouse Financial’s oversight needs as the Company evolves over time. The Nominating and Corporate Governance Committee and Board annually review the skills and experience the Board needs to best oversee Brighthouse Financial’s strategy. The Nominating and Corporate Governance Committee leads a Director self-evaluation process in which each Director ranks his or her expertise and experience in a number of key skill areas that are relevant to service on our Board. The Nominating and Corporate Governance Committee considers the Directors’ self-evaluations in analyzing the aggregate representation of skills on the Board. Our Board includes four Directors added since 2018, including Mr. Bancroft in March 2023. In accordance with our mandatory retirement policy, one Director retired from the Board as of the 2020 annual meeting, and one Director will retire from the Board as of the 2023 Annual Meeting.

 

 

Assessing the Board’s Performance – The Board views its annual self-assessment as an important tool for candid evaluation of its composition, performance, and proper functioning, as well as an important component of our Board refreshment strategy. The Nominating and Corporate Governance Committee oversees the assessment process, including the topics and areas to be addressed during the assessment. For 2022, each Director completed assessments of the Board’s and each Committee’s effectiveness, including with respect to Board and Committee composition; the quality of meeting materials and discussions during Board and Committee meetings; appropriateness of meeting agenda topics; and interactions with management. Each Director also provided feedback on the other Directors. The Nominating and Corporate Governance Committee reviewed and reported the results of the assessments to the full Board and to management. The Board continues to address any issues and implement constructive suggestions raised in the self-assessments to further enhance its effectiveness.

 

 

Mandatory Retirement Age – Our Corporate Governance Principles state that Directors may not stand for reelection or be appointed to the Board after reaching the age of 72. The Board may approve exceptions to this policy. We have not adopted term limits for our Directors.

 

 

Significant Changes in Director Commitments – Under our Corporate Governance Principles, if a Director’s employment status, principal professional position or other substantial business commitments change, such Director is required to tender his or her resignation for consideration by the Nominating and Corporate Governance Committee, which evaluates such change and makes a recommendation to the Board. This process was followed in connection with Ms. Offereins’s expected retirement from Discover Financial Services on June 30, 2023, with the Board determining, upon the recommendation of the Nominating and Corporate Governance Committee (other than Ms. Offereins, who abstained from that committee’s deliberations and recommendation), to decline her resignation based upon her exceptional qualifications for service on our Board.

 

 

Director Orientation and Continuing Education – The Board views orientation and continuing education as vital tools for building an effective Board. We provide all new Directors with an orientation program when they join the Board.

 

Brighthouse Financial  |  2023 Proxy Statement


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Board and Corporate Governance Practices — Board Leadership Structure; Director Independence     29

 

 

The orientation consists of presentations by our senior management to familiarize the Directors with our business, operations, financial condition, risk management, and governance, as well as Directors’ legal duties and requirements. We also encourage, and will provide funding for, both new and longer-serving Directors to attend continuing education programs delivered by third parties to develop and enhance their skills and knowledge. We also incorporate continuing education into our regular Board and Committee meetings from time to time.

 

 

Attendance at Meetings – Directors are expected to regularly attend meetings of the Board and the Committees of which they are members, and to spend the time needed outside of meetings to keep themselves informed about Brighthouse Financial’s business and operations. In 2022, the Board held five meetings and the Committees held a total of 34 meetings. Each Director attended at least 75% of the meetings of the Board and the Committees on which he or she served.

Board Leadership Structure

The Board has determined that having an independent Chairman leading the Board is the best board leadership structure for Brighthouse Financial at this time. This structure enhances the Board’s ability to exercise independent oversight of Brighthouse Financial’s management on behalf of its stockholders. Separating the roles of the Chairman and the CEO allows each to focus on their respective duties.

The Board has elected Mr. Chaplin to serve as Chairman on the basis of his independence from management; experience as president, chief financial officer, and chief administrative officer of a major financial services company; experience as a director of a public company; leadership skills; and ability to devote the time and effort to effectively oversee Brighthouse Financial.

Mr. Steigerwalt, Brighthouse Financial’s President and CEO, also serves as a Director. Mr. Steigerwalt works closely with the Chairman to help focus the Board on matters of strategic importance for Brighthouse Financial.

The Board believes it is important to retain its flexibility to allocate the responsibilities of the Chairman and will continue to evaluate the best leadership structure for Brighthouse Financial as it evolves.

Our Chairman’s duties and responsibilities focus on promoting sound corporate governance practices, fostering a culture of effective oversight on behalf of our stockholders, and overseeing management’s development and execution of the Company’s business strategies as well as the Company’s enterprise risk program. These duties and responsibilities include:

 

providing thought leadership for the Board through understanding the views of our Directors, stockholders, and management;

 

representing the Board in engagements with our stockholders;

 

setting the agenda for Board meetings, with input from the CEO;

 

presiding over Board meetings and executive sessions of the Independent Directors;

 

promoting effective communication and serving as the primary conduit among the Board as well as the CEO and other members of management;

 

setting the tone of Board discussions to promote a Board culture of the highest level of integrity, active engagement, open communication, constructive debate, and effective decision-making;

 

establishing a close relationship of trust with the CEO by providing support and advice while respecting the executive responsibility of the CEO;

 

consulting with the Compensation and Human Capital Committee in its oversight of CEO and senior management succession planning; and

 

together with the Chair of the Nominating and Corporate Governance Committee, reviewing Committee and Committee chair assignments, leading recruitment of Director candidates, and overseeing annual evaluations for the Board and its Committees.

Director Independence

Our Board annually considers whether our Directors are independent in accordance with applicable Nasdaq and SEC rules. An “Independent Director” is a Director whom the Board has affirmatively determined (i) is independent of

 

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30     Board and Corporate Governance Practices — Executive Sessions; Stockholder Engagement

 

management and free from any material relationship with the Company and its subsidiaries (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company or its subsidiaries) that would interfere with the exercise of the Director’s independent judgment as a member of the Board and (ii) meets the independence standards for directors set forth in the Nasdaq listing standards and applicable SEC rules. Our Board has determined that all our Directors, except for Mr. Steigerwalt, our President and CEO, are Independent Directors. In making this determination, the Board considers relevant information provided by the Directors about their and their family members’ business and professional relationships with Brighthouse Financial and with entities that have business interactions with Brighthouse Financial.

Executive Sessions

As part of our Board meetings, the Independent Directors meet regularly (and at least twice annually) in executive session without management present. The Chairman presides over these executive sessions. In addition, each Committee typically holds an executive session as part of its regular meeting, which is presided over by the Committee Chair.

Stockholder Engagement

Management has worked with our Board, and our Nominating and Corporate Governance Committee in particular, to develop a robust and proactive stockholder engagement program. Our Chairman is available to engage with stockholders and has met with several stockholders in recent years. In our engagements, we aim to foster constructive dialogue in which we communicate the perspectives of management and the Board on the issues that are important to our stockholders and solicit our stockholders’ insights and feedback, which the Board considers in developing our governance and compensation practices. Our stockholder engagement program comprises a year-round cycle of communication, feedback, and action, which is described in the following diagram.

 

 

   

 

LOGO

   

Stage 1

Assessment
and Engagement Planning

   

•  Our Board and Committees review the outcome of votes on proposals during our annual meeting, as well as feedback received from our stockholders.

 

•  Our Board and Committees review governance and compensation trends at peer and other comparable companies.

 

•  The Board and Committees discuss our stockholder engagement plan, including topics for discussion and areas for stockholder feedback.

   

 

Stage 2

Engagement

   

 

•  We invite stockholders and proxy advisory firms to engage with us.

 

•  During our meetings, we discuss and solicit feedback on our strategy, governance, executive compensation, sustainability program, and other areas of importance to our stockholders.

   

 

Stage 3

Review Feedback
and Take Action

   

•  The Board and Committees consider stockholder feedback as part of their annual review of our governance and compensation policies and practices, as well as their oversight of our strategy, sustainability program, and other areas that are important to our stockholders. Potential changes are discussed and may be implemented.

 

•  We aim to enhance our sustainability disclosures to communicate our activities in areas that are most significant to our Company and to address stockholder feedback.

   

 

Stage 4

Proxy Statement
and Annual Meeting

   

 

•  We draft our proxy statement to disclose and communicate our governance and compensation practices, elect Directors, and seek stockholder approval of certain matters.

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Board and Corporate Governance Practices — Stockholder Engagement     31

 

2022-2023 Engagement – In the second half of 2022, we invited 28 of our stockholders, representing approximately 58% of our shares (at that time), to engage with us and met with seven of those stockholders, representing approximately 31% of our shares (at that time). In each engagement, we discussed and solicited feedback on our strategy, Board composition, governance practices, and executive compensation program. We also discussed our sustainability journey, including how we are assessing the areas that are most significant to our Company and our plans to enhance our sustainability disclosures, particularly in the areas of human capital management and DEI.

The following table highlights feedback we received from our stockholders, which our Corporate Secretary and other members of management discussed with the Board, the Nominating and Corporate Governance Committee, and the Compensation and Human Capital Committee, and how we have addressed it (for a detailed discussion of stockholder feedback regarding our executive compensation program, see “Compensation Discussion and Analysis – Section 4 – 2023 Compensation Program Overview”).

 

Topic     What we heard     What we’re doing
     
Sustainability and ESG    

•  Brighthouse Financial continues to advance in its sustainability journey, including substantive disclosures in important areas.

•  Brighthouse Financial should focus on enhancing its disclosures and sustainability program in areas that are most significant to the Company and in line with stakeholder expectations, particularly with respect to human capital management, DEI, and climate risk.

   

•  We have enhanced our disclosures related to human capital management, DEI, and climate risk in our 2022 Annual Report.

•  Our inaugural Corporate Sustainability Report, which is located on our Corporate Responsibility webpage at www.brighthousefinancial.com/about-us/corporate-responsibility, was published in 2022. The Corporate Sustainability Report aligns with SASB and TCFD frameworks and includes comprehensive information about our sustainability program (see “Proxy Summary – Our Sustainability Journey”).

     
Board Composition    

•  Our Board composition reflects our strong focus on diversity, including an appropriate mix of skills, experiences, backgrounds, and demographic diversity traits, which support generating diversity of thought.

   

•  We continue to recruit Directors whose skills enable them to effectively oversee the execution of Brighthouse Financial’s strategy and who add to the overall diversity of our Board (see “ Building Our Board of Directors”).

     
Governance    

•  Brighthouse Financial has a reasonable and balanced governance profile.

•  Brighthouse Financial should regularly assess its governance practices to ensure that they remain appropriate over time.

•  Several stockholders expressed support for certain corporate governance initiatives, including:

•  the adoption of a majority voting standard for uncontested Director elections; and

•  the removal of supermajority voting provisions from the Charter in order to allow certain provisions of our Charter and Bylaws to be amended by a majority of the outstanding shares, as opposed to the 6623% currently required.

   

•  Our Board regularly reviews our governance practices and considers whether to adopt any changes.

•  In January 2023, the Board amended our Bylaws to adopt a majority voting standard for uncontested director elections (among other things).

•  Our Board is asking stockholders to approve the Company’s proposals to amend the Charter to (i) remove provisions in our Charter that currently require a supermajority of outstanding shares to amend certain provisions of our Charter and Bylaws (see “Proposal 4”) and (ii) to limit the liability of certain officers of the Company, as permitted by recent amendments to Delaware law (see “Proposal 5”).

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
32     Board and Corporate Governance Practices — Succession Planning and Talent Management; Risk Oversight

 

2022 Vote Results and Our Response. While all of our Directors continued to receive strong support, support for our Directors serving on the Nominating and Corporate Governance Committee (78.0% on average) lagged the level of support received for our other Directors (98.8% on average). We believe this lower level of support to be largely attributable to our current supermajority voting provisions that require the approval of 6623% of outstanding shares to amend certain provisions of our Charter and Bylaws. The Nominating and Corporate Governance Committee has assessed the appropriateness of these provisions for the Company, along with other corporate governance provisions, as part of its annual review of our governance profile. In performing its assessment, the Nominating and Corporate Governance Committee was advised by internal and external counsel. The Nominating and Corporate Governance Committee considered, among other factors, the views of its stockholders, the totality of our governance practices, and the length of time the Company has been public. Following a comprehensive review, the Nominating and Corporate Governance Committee determined that it is in the best interests of the Company to amend the Charter to remove the supermajority voting provisions and recommended that the Board propose such amendment to the stockholders. The Board affirmed the Nominating and Corporate Governance Committee’s determination and agreed to propose the removal of the supermajority voting provisions as described in Proposal 4. The Nominating and Corporate Governance Committee and the Board will continue to engage with our stockholders and consider their feedback in their regular assessment of our governance practices.

Succession Planning and Talent Management

Succession planning and oversight of our talent management practices, including our actions to advance diversity at all levels of the organization, are central to the Board’s responsibilities. The Compensation and Human Capital Committee oversees the Company’s succession plans for the CEO and other members of senior management, including management’s development of a strong, diverse pipeline of potential successors for leadership positions. The full Board discusses, at least annually, the Company’s succession plans for the CEO and other key executives, including identifying potential candidates to succeed the CEO, both in cases of orderly succession and in the event of an emergency or unexpected departure. To support talent development and allow the Board to meet and assess potential successors, non-executive officers and mid-level management regularly participate and make presentations in Board and Committee meetings. The Board also meets in executive session to discuss whether the Company has the managerial talent to replace current executives should the need arise.

Risk Oversight

We believe effective risk oversight is fundamental to our strategy to deliver sustainable, long-term value for our stockholders. Our Board, with the assistance of the Committees, oversees the development and execution of our business strategies to help ensure that risks are appropriately assessed and mitigated, and that our business plans align with our risk appetite. The Board and the Committees review and approve our risk appetite statement, review our significant risk policies, and regularly discuss with management our performance against risk targets and limits.

Our Board and committees use an integrated approach to overseeing risk and share oversight of certain risks, including the following:

 

 

Strategic Risk – in connection with its annual review of our strategy and ongoing oversight of our performance against such strategy, the Board oversees the management of strategic risks. In its discussions with the Board, senior management, including the CEO, Chief Financial Officer (“CFO”), Chief Investment Officer, Chief Risk Officer (“CRO”), and Chief Distribution and Marketing Officer, reviews the key risks relating to the execution of our strategy and describes management’s activities to identify, assess, and mitigate such risks.

 

Enterprise Risk – in connection with each regular meeting of the Board and the Committees, the CRO prepares an enterprise risk report that communicates our risk profile and our performance against targets and limits in key risk areas, including macro, credit, market, liquidity, operational, model, information technology and cybersecurity, third-party, and emerging risks. The CRO, or the CRO’s designee, also periodically reports to the Board on key risks and to the Committees on risk topics within the scope of the Committees’ respective responsibilities.

 

Cybersecurity Risk – the Audit Committee is primarily responsible for overseeing information technology and cybersecurity risks (as part of its oversight of operational risk), and the Board continues to be actively engaged with

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Board and Corporate Governance Practices — Information About Our Board Committees     33

 

 

respect to these risks. The Audit Committee and/or the Board meet quarterly with our CTO and CISO to review our information technology and cybersecurity risk profile and to discuss our activities to manage these risks. Our CTO has overall responsibility for our information technology program, which includes the Company’s cybersecurity program. Our CISO is directly responsible for the Company’s cybersecurity program, which is designed to protect and preserve the integrity, confidentiality, and continued availability of the information owned by, or in the care of, the Company. The Company’s cybersecurity program also establishes procedures that are designed to enable us to effectively identify, evaluate, and respond to events that have the potential to negatively impact our operations. In addition, our Chief Compliance Officer regularly reports to the Audit Committee and the Board regarding the Company’s compliance with applicable regulations relating to information technology and cybersecurity.

 

Human Capital Management – the Board recognizes the importance of maintaining a highly skilled and engaged workforce, guided by a strong corporate culture and set of values. As described in its charter, the Compensation and Human Capital Committee has broad oversight of the Company’s human capital matters, including DEI, pay equity, leadership development, culture, and succession planning. At least annually, the Board discusses human capital issues with our Human Resources organization, including succession planning for the CEO and certain executive positions, and key human capital metrics. The Board and Committees discuss with management its activities to attract, motivate, and retain high-performing employees. The Board and Committees also assess employee engagement, turnover, and workloads to help ensure that the Company has adequate resources to execute its strategy.

 

Climate Risk – the Board recognizes that climate risk could pose a systemic risk to the financial system and could have direct and indirect impacts on our Company. In addition to the Finance and Risk Committee’s oversight of climate risk, the Investment Committee oversees climate risk related to our investment portfolio.

The Board has delegated oversight of certain risk areas to the Committees, as follows:

 

 

Audit Committee – risks relating to financial statements, including, but not limited to, financial reporting processes, internal control over financial reporting, compliance, and auditing; and operational risks, including, but not limited to, risks related to cybersecurity and information technology.

 

Compensation and Human Capital Committee – broad oversight of human capital management strategy, including initiatives to advance DEI, the design and operation of Brighthouse Financial’s compensation arrangements to confirm that incentive compensation does not encourage unnecessary risk-taking, as well as the relationship between risk management policies and practices, corporate strategy, and the compensation of senior executives.

 

Finance and Risk Committee – broad oversight of capital and risk management, including regular review of reports from management regarding significant risks, including, but not limited to, macro, market, liquidity, product, enterprise, and emerging risk, as well as the Company’s risk governance framework; review of the Company’s hedging strategy; approval of Brighthouse Financial’s Risk Appetite Statement; and coordination with the Compensation and Human Capital Committee Chair to oversee compensation-related risk matters.

 

Investment Committee – risks associated with our investment portfolio, including credit risk, portfolio allocation, and diversification risk; counterparty risk; the potential implications of our investment portfolio’s exposure to ESG-related risks, including climate-related physical and transition risks; as well as risks associated with our investments operating model and the selection and monitoring of our external asset managers.

 

Nominating and Corporate Governance Committee – risks relating to Brighthouse Financial’s governance, our sustainability program (including environmental stewardship and corporate social responsibility), related person transaction policy, government relations, and the development and implementation of Brighthouse Financial’s codes of conduct. The Office of Sustainability regularly updates the Nominating and Corporate Governance Committee regarding ESG topics most relevant to our business, including climate risk, progress against our ESG strategy and goals, and plans to disclose our ESG performance.

Information About Our Board Committees

The Board has established six standing Committees to assist it in carrying out its duties: Audit; Compensation and Human Capital; Executive; Finance and Risk; Investment; and Nominating and Corporate Governance. Each Committee has a Board-approved, written charter that describes such Committee’s roles and responsibilities. Copies of the charters

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
34     Board and Corporate Governance Practices — Information About Our Board Committees

 

of the Audit, Compensation and Human Capital, and Nominating and Corporate Governance Committees are posted on Brighthouse Financial’s website at http://investor.brighthousefinancial.com/corporate-governance/governance-overview. The Audit, Compensation and Human Capital, and Nominating and Corporate Governance Committees all comply with applicable SEC and Nasdaq requirements, and are chaired by, and consist solely of, Independent Directors. The Committee Chairs approve the meeting agendas for their respective Committees.

Each Committee regularly reports on the matters discussed during its meetings to the full Board and presents recommendations on actions requiring Board approval. On an annual basis, each Committee conducts an evaluation of its performance and reviews the adequacy of, and proposes any applicable changes to, its charter for Board approval. Each Committee has full authority to retain, at Brighthouse Financial’s expense, independent advisors or consultants.

Additional information about our Committees follows, including their composition, the number of meetings they held in 2022, and their primary roles and responsibilities.

 

   

Committee

   Members    Description

Audit Committee (1)

 

Meetings held

in 2022: 10        

  

Pat Shouvlin (Chair)            

Chuck Chaplin

Steve Hooley

Carol Juel

Phil Bancroft (2)

   The Audit Committee oversees the Company’s accounting and financial reporting processes; internal control over financial reporting and disclosure and controls procedures; and the work of internal audit and the independent auditor, including their respective audit plans and results. The Audit Committee also oversees the engagement and continued independence of the Company’s independent auditor, assesses its performance, and approves its compensation. The Audit Committee oversees our legal and regulatory compliance processes and programs; information technology, data privacy, and cybersecurity; and issues relating to the integrity of management and compliance with the Company’s codes of conduct.

Compensation and Human Capital Committee (3)

 

Meetings held

in 2022: 7

  

Diane Offereins (Chair)

Irene Chang Britt

Eileen Mallesch

Paul Wetzel

   The Compensation and Human Capital Committee oversees the Company’s compensation and benefits policies and programs for our executives, including equity and non-equity incentive compensation plans and arrangements, awards under such plans, severance benefits, stock ownership guidelines, and hedging, pledging, and clawback policies. The Compensation and Human Capital Committee also oversees human capital matters, including pay equity, DEI, leadership development, culture, and succession planning for the CEO and other executives. For additional information on the responsibilities and activities of the Compensation and Human Capital Committee, including the Committee’s processes for determining executive compensation, see “Compensation Discussion and Analysis.”

Executive Committee

 

Meetings held

in 2022: None

  

Eric Steigerwalt (Chair)

Chuck Chaplin

Pat Shouvlin

   The Executive Committee acts on behalf of the entire Board with respect to certain exigent matters between meetings of the Board.

Finance and Risk Committee (4)

 

Meetings held

in 2022: 7

  

Chuck Chaplin (Chair)

Carol Juel 

Diane Offereins

Paul Wetzel

   The Finance and Risk Committee oversees Brighthouse Financial’s financial plan, policies, and strategies (including capital and liquidity management strategies, the capitalization of Brighthouse Financial and its subsidiaries, and our hedging strategy) and measures Brighthouse Financial’s performance against its business and financial plans. The Finance and Risk Committee oversees and approves actions and policies relating to equity and debt issuances, share repurchase programs, dividends, and mergers and acquisitions.

Investment Committee (4)

 

Meetings held

in 2022: 5

  

Eileen Mallesch (Chair)

Irene Chang Britt

Steve Hooley

Pat Shouvlin

Phil Bancroft (2)

   The Investment Committee oversees, on a consolidated basis, the activities and performance of Brighthouse Financial and its subsidiaries’ general accounts and consolidated separate accounts. The Investment Committee also oversees the enterprise investment strategy, including the review and approval of Enterprise Investment Authorities (“EIAs”) relating to our general accounts and consolidated separate accounts, and the compliance of our investments with our EIAs. In addition, the Investment Committee oversees the execution of our investments operating model, which includes oversight of our engagement of external asset managers.

Nominating and Corporate Governance Committee (4)

 

Meetings held

in 2022: 5

  

Irene Chang Britt (Chair)

Eileen Mallesch

Diane Offereins

Paul Wetzel

   The Nominating and Corporate Governance Committee oversees Brighthouse Financial’s corporate governance policies and practices, including the Board and Committees’ structure and composition, recruitment and recommendation of Director nominees, Committee assignments, and determinations of Director independence. The Nominating and Corporate Governance Committee develops and oversees the annual self-evaluations for the Board and Committees, as well as the Director orientation process and continuing education programs. The Nominating and Corporate Governance Committee also oversees Brighthouse Financial’s codes of conduct, related person transaction policy (coordinating with the Audit Committee where appropriate), our government relations activities, and our sustainability program, including our activities related to environmental stewardship and corporate social responsibility.

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Board and Corporate Governance Practices — Director Compensation     35

 

(1)

All Audit Committee members are independent under applicable SEC and Nasdaq rules and are “financially literate.” The Board has determined that Pat Shouvlin, the Committee’s Chair in 2022, Phil Bancroft, and Chuck Chaplin each qualifies as an “audit committee financial expert” under applicable SEC rules.

 

(2)

Mr. Bancroft joined the Board in March 2023 and was appointed to the Audit Committee and Investment Committee at such time.

 

(3)

All Compensation and Human Capital Committee members are independent under applicable SEC and Nasdaq rules and are “non-employee directors” for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(4)

All Finance and Risk Committee, Investment Committee, and Nominating and Corporate Governance Committee members are independent under applicable SEC and Nasdaq rules.

Director Compensation

Our director compensation program is designed in a manner intended to fairly compensate our non-management Directors for their work as members of the Board and to align their interests with those of our stockholders by delivering over half of the annual retainer in the form of equity-based awards. In designing the Director compensation program, compensation was targeted at the median of the same comparator group we used for our NEOs (see “Compensation Discussion and Analysis – Section 2 – Our 2022 Executive Compensation Program – 2022 Compensation Planning Process – Compensation Comparator Group”). The Nominating and Corporate Governance Committee regularly reviews director compensation and recommends changes to the Board as necessary. The following table sets forth the compensation program for our non-management Directors.

 

   

 

Description

 

  

 

Amount

 

    

 

Form

 

 Pay for Board Service

     

 Annual retainer

     $285,000      $120,000 cash and $165,000 equity

 Additional Pay for Service as Chairman or Committee Chair

     

 Chairman of the Board

     $200,000      50% cash and 50% equity

 Audit Committee Chair

   $   35,000      100% cash

 Other Committee Chairs (Compensation and Human Capital; Nominating and  Corporate Governance; Finance and Risk; Investment)

   $   22,000      100% cash

Annual Equity Awards

The Board approved annual RSU awards as part of our director compensation program. Annual awards to non-management Directors generally vest on the earlier of the one-year anniversary of the grant date or the date of the next annual meeting of stockholders. The number of RSUs to be granted to each non-management Director is determined by dividing the intended value of the equity award by the closing price of the Company’s common stock on the grant date, rounded down to the nearest whole number of RSUs. In the case of a new Director appointed in between annual meetings of stockholders, the RSU award is pro-rated. The RSU grants are made pursuant to the Brighthouse Financial, Inc. 2017 Non-Management Director Stock Compensation Plan (the “Director Plan”), which was approved by stockholders at the 2018 Annual Meeting.

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
36     Board and Corporate Governance Practices — 2022 Director Compensation Table; Director Stock Ownership Guidelines

 

Compensation paid to our non-management Directors in 2022 is presented in the following table.

2022 Director Compensation Table

 

     

Name

 

     Fees Earned or     
     Paid in Cash
(1)     

 

     Stock Awards (2)     

 

Total    

 

Irene Chang Britt

$142,000     

$164,991     

$306,991    

Chuck Chaplin

$242,000     

$264,988     

$506,988    

Steve Hooley

$120,000     

$164,991     

$284,991    

Carol Juel

$120,000     

$164,991     

$284,991    

Eileen Mallesch

$142,000     

$164,991     

$306,991    

Diane Offereins

$142,000     

$164,991     

$306,991    

Pat Shouvlin

$155,000     

$164,991     

$319,991    

Paul Wetzel

$120,000     

$164,991     

$284,991    

 

(1)

Fees Earned or Paid in Cash. Each non-management Director is entitled to receive an annual cash retainer of $120,000, or a prorated amount for a shorter period of service. We provide additional retainers to the Chairman and to each Director who serves as the Chair of a standing Committee, the amounts of which are set forth above under the heading “Director Compensation.” All cash retainers are paid in quarterly installments, unless deferred.

 

(2)

Stock Awards. As part of their annual retainers for 2022, each non-management Director was granted an equity award of 3,361 RSUs on June 8, 2022, with an aggregate grant date fair value equal to $164,991. For his service as Chairman, Mr. Chaplin was granted an additional equity award of 2,037 RSUs on June 8, 2022, with an aggregate grant date fair value equal to $99,996. Amounts in this column represent the aggregate grant date fair value of each applicable award of RSUs, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For a description of the methodology and assumptions made in determining the aggregate grant date fair value of equity awards, see Note 10 of the Notes to the Consolidated Financial Statements in our annual report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). As of December 31, 2022, the Directors listed in the above table held the following number of outstanding, unvested RSUs: Britt (3,361); Chaplin (5,398); Hooley (3,361); Juel (3,361); Mallesch (3,361); Offereins (3,361); Shouvlin (3,361); and Wetzel (3,361).

Deferred Compensation Plan

The Board adopted the Brighthouse Services, LLC Deferred Compensation Plan for Non-Management Directors (the “Director Deferred Compensation Plan”), effective December 1, 2019. The purpose of the Director Deferred Compensation Plan is to provide Directors with the opportunity to defer receipt of all or a portion of their cash or equity compensation to a later date, at which time payment of the compensation will be made after adjustment for the simulated investment experience of such compensation. Directors were able to make their initial deferral elections in 2019 with respect to compensation earned in 2020 and later years. Some Non-Management Directors have chosen to defer the receipt of all or part of their annual retainer fees under the Director Deferred Compensation Plan.

Director Stock Ownership Guidelines

In February 2018, the Board, on the recommendation of the Nominating and Corporate Governance Committee, established stock ownership and retention guidelines for Independent Directors. Pursuant to these guidelines, each Independent Director is expected to acquire a number of shares equal to at least four times the equity portion of the Director’s annual retainer. For Mr. Chaplin this includes the portion of his annual retainer for service as Chairman that is paid in the form of RSUs. Directors are expected to achieve the applicable ownership level within five years from the

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Board and Corporate Governance Practices — Compensation Committee Interlocks and Insider Participation; Codes of Conduct     37

 

later of the date the guidelines became effective (January 1, 2018) or the date the Director commences service. For Directors who have elected to participate in the Director Deferred Compensation Plan, deferred shares count toward the applicable ownership level. Directors are required to retain at least 50% of the net shares acquired upon vesting of equity awards until the ownership guidelines are satisfied. All Directors who have served on the Board for more than five years are currently in compliance with the Company’s stock ownership and retention guidelines, and all other Directors are on track to satisfy the ownership requirement within the compliance period. As of the Record Date, no Director has sold any vested equity.

Compensation Committee Interlocks and Insider Participation

There are no interlocking relationships between any member of our Compensation and Human Capital Committee and any of our executive officers that require disclosure under applicable rules.

Codes of Conduct

Brighthouse Financial’s strength depends on the trust of our employees, distribution partners, customers, and stockholders. We strive to adhere to the highest standards of business conduct at all times, and put honesty, fairness, and trustworthiness at the center of all that we do. We have adopted three codes of conduct that reflect these values and enshrine them in our corporate culture: the Code of Conduct for Financial Management, which is a “code of ethics” (as defined under SEC rules) that applies to Brighthouse Financial’s CEO, CFO, Chief Accounting Officer, Chief Auditor, Corporate Controller, and all other Brighthouse Financial employees who perform similar functions or who may obtain access to any financial records covered by the Code of Conduct for Financial Management; the Code of Conduct for Employees, which applies to all Brighthouse Financial officers and employees; and the Code of Conduct for Directors, which applies to members of the Board. Current versions of these codes of conduct are available on Brighthouse Financial’s website at http://investor.brighthousefinancial.com/corporate-governance/governance-overview. We intend to post on our website all disclosures that are required by law or Nasdaq’s listing standards concerning any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics.

 

2023 Proxy Statement  |  Brighthouse Financial


Table of Contents
38     Proposal 2 – Ratification of the appointment of independent registered public accounting firm

 

Proposal 2

Ratification of the appointment of Deloitte & Touche LLP as Brighthouse Financial’s independent registered public accounting firm for fiscal year 2023

The Audit Committee is responsible for the appointment, compensation, retention, and oversight of our independent registered public accounting firm (“independent auditor”). To execute this responsibility, the Audit Committee annually evaluates the independent auditor’s qualifications, performance, and independence. In considering the appointment of the independent auditor, the Audit Committee annually evaluates the independent auditor’s performance relative to various qualifications, including (i) the quality of services and sufficiency of resources provided by the independent auditor firm and engagement team, (ii) communication and interaction with the independent auditor, and (iii) the independent auditor’s independence, objectivity, and professional skepticism.

The Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the Company’s independent auditor for the fiscal year ending December 31, 2023. Deloitte’s background knowledge of Brighthouse Financial and its subsidiaries, combined with its industry expertise, has enabled it to carry out its audits of the Company’s consolidated financial statements and the effectiveness of the Company’s internal control over financial reporting with effectiveness and efficiency. The members of the Audit Committee believe that the continued retention of Deloitte as the Company’s independent auditor is in the best interest of the Company and its stockholders.

In addition, the Audit Committee is involved in the selection of the lead audit partner and ensures that the lead partner’s engagement is limited to no more than five consecutive years of service (in accordance with SEC rules). The current lead Deloitte partner’s engagement began with the 2022 audit, and he is eligible to serve in that capacity through the end of the 2026 audit. The process for selecting the Company’s lead audit partner includes the vetting of the independent auditor’s candidates by management and the Audit Committee Chair, including one-on-one meetings with the lead engagement partner candidate prior to the final selection.

We request that our stockholders ratify the appointment of Deloitte as the Company’s independent auditor for fiscal year 2023. If the stockholders do not ratify such appointment, the Audit Committee will take note and may reconsider its retention of Deloitte. If such appointment is ratified, the Audit Committee will still have the discretion to replace Deloitte at any time during the year. Representatives of Deloitte are expected to be present at the Annual Meeting and will have the opportunity to make a statement. They will also be available to respond to questions from stockholders regarding their audit of our consolidated financial statements for fiscal year 2022.

The Board of Directors recommends that stockholders vote “FOR” the ratification of the appointment of Deloitte as our independent registered public accounting firm for fiscal year 2023.

 

Brighthouse Financial  |  2023 Proxy Statement


Table of Contents
Proposal 2 – Ratification of the appointment of independent registered public accounting firm — Audit Committee Pre-Approval Policy     39

 

Fees Paid to Deloitte & Touche LLP

The following table shows the fees incurred by the Company for professional services rendered by Deloitte for the fiscal years ended December 31, 2022 and December 31, 2021. All services provided to the Company were approved by the Audit Committee.

 

   
  Fees (in thousands) 2022   2021  

  Audit Fees (1)

$12,181   $11,856  

  Audit-Related Fees (2)

  1,163        367  

  Tax Fees (3)

         0          61  

  All Other Fees (4)

         2            2  

  Total

$13,346   $12,286  

 

(1)

Audit Fees. Fees billed for professional services for the integrated audit of the consolidated financial statements of the Company and its subsidiaries (as required), including the annual financial statement audit, the reviews of the interim financial statements included in quarterly reports on Form 10-Q for the Company and its subsidiaries (as required), statutory audits or other financial statement audits of subsidiaries, the audit of the effectiveness of our internal control over financial reporting, assistance with and review of documents filed with the SEC, and other services that enable the independent auditor to form an opinion of the consolidated financial statements of the Company and its subsidiaries (as required).

 

(2)

Audit-Related Fees. Fees billed for assurance and related services that are reasonably related to the audit or review of the financial statements of the Company and its subsidiaries (as required) and for other services that are traditionally performed by the independent auditor. Such services consist of fees for employee benefit plan audits, assessments and testing of internal controls, and accounting consultations not directly associated with the annual audit or quarterly reviews.

 

(3)

Tax Fees. Fees billed for permitted tax services, including tax compliance, tax advice, and tax planning.

 

(4)

All Other Fees. Fees billed for this category primarily represent accounting research subscription fees.

Audit Committee Pre-Approval Policy

The Audit Committee has established a policy requiring its pre-approval of all audit and non-audit services provided by the independent auditor, and this policy is designed to ensure that the independent auditor’s independence is not impaired. In considering whether to pre-approve the provision of non-audit services by the independent auditor, the Audit Committee will consider whether the services are compatible with the maintenance of the independent auditor’s independence.

The pre-approval policy provides for the Audit Committee’s general pre-approval, on an annual basis, of audit, audit-related, and permissible non-audit services up to amounts reasonably determined by the Audit Committee to be appropriate. The Audit Committee must specifically pre-approve (i) any proposed services that exceed such general pre-approval limits, (ii) tax services, and (iii) any additional services that have not been generally pre-approved by the Audit Committee. The independent auditor is required to periodically report to the Audit Committee the extent of the services that it has provided to the Company and the fees for the services performed to date. The Audit Committee annually reviews the policy to ensure its continued appropriateness and compliance with applicable laws and Nasdaq listing standards.

The policy delegates to the Audit Committee Chair the authority to pre-approve audit, audit-related, or non-audit services between meetings for individual projects up to $250,000 (up to a total annual maximum of $750,000) if

 

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management deems it reasonably necessary to begin the services before the next scheduled meeting of the Audit Committee. The Audit Committee Chair must report any pre-approval decisions to the Audit Committee at its next scheduled meeting.

Audit Committee Report*

The Audit Committee currently consists of four Independent Directors and operates under a written charter adopted by the Board. The Board has determined that Pat Shouvlin and Chuck Chaplin each have the requisite experience to be designated an audit committee financial expert as such term is defined under Item 407(d)(5) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”), and the applicable Nasdaq standards.

Management is responsible for the preparation and presentation of the Company’s financial statements, the reporting process, the accounting policies and procedures, and the establishment of effective internal controls and procedures.

The primary duties of the Audit Committee are to assist the Board in its oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the Company’s internal controls regarding finance, accounting, legal compliance, and ethics, (iv) the independence and qualifications of the Company’s independent auditor, (v) the Company’s operational risks, including information technology and cybersecurity risks, and (vi) the performance of the Company’s internal audit function and independent auditor. As part of its meetings, the Audit Committee regularly meets in executive session without management present. Prior to the filing of each quarterly report on Form 10-Q, annual report on Form 10-K, and earnings press release, the Audit Committee discusses such documents with management, the Company’s Chief Auditor, and the Company’s independent auditor. The Audit Committee also discusses the Company’s combined statutory financial results and reviews the Company’s internal control over financial reporting.

The Chief Auditor regularly attends meetings of the Audit Committee and reports directly to the Audit Committee Chair, which supports her independence from management and the objectivity of her work. The Audit Committee regularly discusses with the Chief Auditor, both in general session and executive session, the adequacy and effectiveness of the Company’s financial reporting processes, internal control over financial reporting, and disclosure controls and procedures, as well as the performance of the internal audit function.

The independent auditor is responsible for performing an independent audit of our financial statements and, as required, of our internal control over financial reporting, in each case, in accordance with standards established by the Public Company Accounting Oversight Board (“PCAOB”), and the independent auditor issues a report with respect to each of the foregoing items. The independent auditor must also express an opinion as to the conformity of the Company’s financial statements with generally accepted accounting principles (which includes the critical audit matters required to be reported and communicated to the Audit Committee) and the effectiveness of its internal control over financial reporting. The independent auditor regularly affirms to the Audit Committee that it remains independent from the Company. The Audit Committee regularly meets with the independent auditor, both in general session and in executive session, to discuss the Company’s financial reporting processes, internal control over financial reporting, disclosure controls and procedures, required communications to the Audit Committee, fraud risks, and any other matters that the Audit Committee or the independent auditor deem appropriate.

More information on the Audit Committee and its responsibilities is included in the Audit Committee Charter, which is available on our website at http://investor.brighthousefinancial.com/corporate-governance/governance-overview. In accordance with the requirements set forth in the Audit Committee Charter, the Audit Committee has (i) reviewed the Audit Committee Charter, (ii) approved the charter governing the internal audit function, and (iii) established the procedures for the confidential submission of complaints to the Audit Committee regarding accounting, internal control over financial reporting, or audit matters (the “Audit Committee Complaint Procedures”). A copy of the Audit Committee Complaint Procedures is also available on our website.

 

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In the performance of its oversight function, the Audit Committee has reviewed and discussed the audited consolidated financial statements for fiscal year 2022 with each of management and the independent auditor. The Audit Committee and the independent auditor have also discussed the matters required to be discussed by them under the applicable PCAOB rules.

The Audit Committee has received from the independent auditor the written disclosures and the letters required by the applicable PCAOB rules, as currently in effect, regarding the firm’s communications with the Audit Committee relating to independence, and has discussed the independent auditor’s independence with the independent auditor.

Based on the review and discussions described in this Audit Committee Report, the Audit Committee recommended to the Board of Directors that the audited financial statements for fiscal year 2022 be included in our 2022 Form 10-K, for filing with the SEC.

Audit Committee

Pat Shouvlin (Chair)

Chuck Chaplin

Steve Hooley

Carol Juel

 

*

The foregoing report does not reflect the addition of Phil Bancroft as a member of the Audit Committee in March 2023, after our 2022 Form 10-K was filed with the SEC.

 

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Proposal 3

Advisory vote to approve the compensation paid to Brighthouse Financial’s Named Executive Officers

In accordance with the requirements of Section 14A of the Exchange Act, we are providing our stockholders with an advisory (non-binding) Say-on-Pay vote on the compensation paid to our NEOs. Our compensation approach is described in the “Compensation Discussion and Analysis”, including the compensation tables and accompanying narrative discussion contained therein.

The Compensation Discussion and Analysis summarizes our executive compensation program. Our Board and the Compensation and Human Capital Committee have implemented an executive compensation program that is intended to align the interests of our executive officers with those of our stockholders. The vast majority of our NEOs’ compensation is in the form of variable, at-risk compensation and utilizes metrics in our short- and long-term incentive programs that are tied to strategic goals that we believe will enhance stockholder value.

We have engaged our stockholders in discussions about our executive compensation program, philosophy, and objectives. In late 2022, we solicited feedback from stockholders on our 2021 executive compensation program and on our 2022 executive compensation program that we previewed in our 2022 proxy statement. The feedback we received was generally positive, and the Board and the Compensation and Human Capital Committee considered that feedback in designing our 2023 compensation program.

We are asking stockholders to approve the following resolution:

RESOLVED, that the compensation paid to Brighthouse Financial’s NEOs, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative disclosure, is hereby APPROVED.

Although this vote is advisory, the Board and the Compensation and Human Capital Committee intend to consider the results of the vote, as well as other relevant factors, as we continue to develop our executive compensation program. At our 2018 annual meeting of stockholders, a majority of stockholders voted to have an annual advisory Say-on-Pay vote. The Board has considered the stockholder vote on Say-on-Pay frequency and has determined to conduct an advisory Say-on-Pay vote annually at least until the next stockholder advisory vote on Say-on-Pay frequency, which will take place no later than our 2024 annual meeting of stockholders.

The Board of Directors recommends that stockholders vote FOR the approval of the compensation of our Named Executive Officers, as disclosed in this Proxy Statement.

 

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy, policies, practices, and objectives in the context of our compensation decisions for our NEOs for 2022.

Named Executive Officers

For 2022, our NEOs are our CEO, CFO, and next three most highly compensated executive officers as of the end of 2022, and one former executive officer who was not serving as of the end of 2022.

 

 
  Name   Title

  Eric Steigerwalt

  President and Chief Executive Officer

  Ed Spehar

  Executive Vice President and Chief Financial Officer

  Vonda Huss

  Executive Vice President and Chief Human Resources Officer

  Myles Lambert

  Executive Vice President and Chief Marketing and Distribution Officer

  John Rosenthal

  Executive Vice President and Chief Investment Officer

Conor Murphy (1)

  Former Executive Vice President and Chief Operating Officer

 

(1)

Mr. Murphy ceased serving as Executive Vice President and Chief Operating Officer effective March 18, 2022, and departed the Company on June 15, 2022.

CD&A Contents

The CD&A is organized into four sections:

 

Section 1 – Executive Summary

 

Section 2 – Our 2022 Executive Compensation Program

 

Section 3 – Additional Compensation Practices and Policies

 

Section 4 – 2023 Compensation Program Overview

Section 1 – Executive Summary

The Brighthouse Financial Story

Who We Are. Brighthouse Financial is one of the largest providers of annuities and life insurance in the United States, trusted by over 2 million customers. Brighthouse Financial became an independent, publicly traded company in August 2017, following the Separation and the listing of our common stock on Nasdaq.

Our Purpose. We are on a mission to help people achieve financial security. We specialize in products that are designed to help people protect what they have earned and ensure it lasts. We are built on a foundation of experience and knowledge, which allows us to keep our promises and provide value to our distribution partners and the clients they serve.

Our Strategy. We believe our focused strategy will generate long-term stockholder value. Our strategy consists of the following core elements, which are fully aligned with our risk appetite and our approach to managing our business:

 

Offering a targeted set of annuity and life insurance solutions that are simpler, more transparent, and provide value to our distribution partners and the clients they serve. We aim to continue to shift our business mix profile over time, with the addition of more cash flow-generating and less capital-intensive new business, along with the runoff of less profitable legacy business.

 

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Selling our products through a diverse, well-established network of distribution partners, continuing to build strategic distribution relationships, and entering new channels as we further expand our distribution footprint in the United States.

 

Effectively managing our expenses by adopting and maintaining an operating model designed to drive our statutory expense ratio down over time.

2022 Highlights – Delivering Strong Results and Achieving Significant Milestones Despite a Challenging Year

Brighthouse Financial achieved significant strategic and operational milestones in 2022 and delivered strong results despite a challenging economic environment. Additionally, we remained disciplined in our financial and risk management as we executed our focused strategy, which we believe will enable us to generate long-term value for our stockholders.

 

 

 

LOGO

 

Financial and Capital Strength

 

Prudent Financial Management – we continued to manage the Company using a multiyear, multiscenario framework to evaluate capital, liquidity, and subsidiary dividend plans. We maintained a strong capital position at both our holding company and our operating companies despite the uncertain market and macroeconomic environments.

 

Normalized Statutory Earnings – generating normalized statutory earnings remains a focus of our financial management strategy. Normalized statutory earnings is used by management to measure our insurance companies’ ability to pay future distributions and is reflective of whether our hedging program functions as intended. For the full year 2022, we had normalized statutory earnings of $1.0 billion, driven by strong core performance in the VA business.

 

Capital Return – we repurchased $488 million of our common stock in 2022 and reduced shares outstanding by 12% relative to year-end 2021. As of year-end 2022, we reduced the number of shares outstanding by 43% since we began our common stock repurchase program in August 2018.

 

Capital and Liquidity Management – we continued to optimize statutory capital to further strengthen our balance sheet and ended 2022 with holding company liquid assets of $1.0 billion.

 

Statutory Capital – we ended 2022 with $8.1 billion of combined statutory total adjusted capital and with a combined RBC ratio of 441% (at the high end of our target of 400% to 450% in normal market conditions). RBC ratio is a method of measuring an insurance company’s capital, taking into consideration its relative size and risk profile, to ensure compliance with minimum regulatory capital requirements.

 

Ratings – we maintained our operating companies’ strong financial strength ratings.

 

 

LOGO

 

Products and Sales

 

Annuity Sales – we achieved record annuity sales of approximately $11.5 billion, exceeding our 2022 target and representing an increase of 26% over 2021.

 

Life Insurance Sales – our life insurance sales were $80 million. As a result of the prevailing macroeconomic headwinds, life insurance sales decreased 28% over 2021.

 

New Products – we launched a new annuity product, Brighthouse Shield Level Pay PlusSM, expanding our flagship Shield® Level Annuities Product Suite. This product is designed to help meet an important need in retirement planning: income that lasts for life. We plan to introduce a new life insurance product in 2023 to further diversify and strengthen our life product suite.

 

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Compensation Discussion and Analysis — Section 1 – Executive Summary     45

 

 

 

LOGO

 

Expenses

 

Corporate Expenses – corporate expenses were $869 million for full year 2022, a reduction from 2021 corporate expenses of $890 million. We remain focused on maintaining our disciplined expense management.

LOGO

 

Technology

 

Future State Platform – we completed all our major system conversions. This marks the full implementation of our future state operations and technology platform, which is foundational to our ability to grow our sales in the future.

 

Human Capital Management

Our culture is rooted in three core values, which guide how we work together and deliver on our mission – collaboration, adaptability, and passion. We believe these values help us build an organization where talented people from all backgrounds can make meaningful contributions to our success while growing their careers. Our success also depends on the trust of our employees, distribution partners, customers, and stockholders. We strive to adhere to the highest standards of business conduct at all times, and put honesty, fairness, and trustworthiness at the center of all that we do. For more about our human capital management practices and policies, please refer to the 2022 Form 10-K and our Corporate Responsibility webpage, including our Corporate Sustainability Report.

Compensation Philosophy

The Compensation and Human Capital Committee has established a compensation program rooted in a pay-for-performance philosophy and guided by the following general principles and objectives:

 

Paying for performance: a majority of executive compensation is in the form of variable elements that are based on individual and Company performance results that drive increases in stockholder value;

 

Providing competitive Target TDC opportunities (defined as base salary plus STI and LTI compensation opportunities): we aim to offer compensation that enables Brighthouse Financial to attract, motivate, and retain high-performing employees;

 

Aligning executives’ interests with stockholders’ interests: a majority of our CEO’s Target TDC and a significant portion of our NEOs’ Target TDC is delivered in the form of stock-based incentives;

 

Encouraging long-term decision-making: our long-term incentive compensation program includes awards with multiyear, overlapping performance or restriction periods;

 

Avoiding problematic pay practices: we do not provide excessive perquisites, excessive change-of-control severance pay, or excise tax gross-ups, and we will not reprice stock options without stockholder approval; and

 

Reinforcing strong risk management: our compensation program is designed to avoid providing our employees with incentives to take excessive risks.

What’s New With Our 2022 Compensation Program

We made one important change to our 2022 executive compensation program, as follows:

Changes to STI Metrics – Definition of Normalized Statutory Earnings. As described in our 2022 Form 10-K, beginning with the first quarter of 2022, the calculation of normalized statutory earnings has been revised to better align with the framework for VA reserve and capital reform adopted by the National Association of Insurance Commissioners and, therefore, our combined RBC ratio, where the relevant CTE measure is CTE98 rather than CTE95 (for the definition of CTE98 and CTE95, see “Non-GAAP and Other Financial Disclosures – Other Financial Disclosures”).

 

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Other than the above change, our 2022 compensation program is substantially the same as our 2021 compensation program, as described in the table below.

 

STI Program

    

  STI Metric

 

 

  Weighting    

 

  

    

Performance Link

 

Expense

Target

  40%    Effectively managing our expenses by adopting and maintaining an operating model that reduces our run-rate expenses is a core element of our strategy.

Sales

  40%    Key driver of revenues and an important indicator of our growth prospects and the strength of our franchise.

Normalized Statutory Earnings

  20%    Key metric used by management to measure our insurance companies’ ability to pay future distributions and is reflective of whether our hedging program functions as intended.

 

LTI Program

    

  LTI Metric

 

 

  Weighting    

 

  

    

Performance Link

 

Statutory Expense

Ratio

  60%    An operating efficiency metric that measures the ratio of statutory operating expenses to statutory premiums and fee income; measures our performance in key strategic areas of expense management and sales growth.

Net Cash Flow to the Holding Company

  40%    Measures net capital distributions from Brighthouse Financial’s operating companies, which strengthen our holding company balance sheet and provide management with flexibility to deploy our capital for various purposes, including return of capital to stockholders.

STI Awards and LTI Awards were issued under the Brighthouse Financial, Inc. 2017 Stock and Incentive Compensation Plan, as amended (the “Employee Plan”), and its subplans. For more information about our 2022 Compensation Program, see “Compensation Discussion and Analysis – Section 2 – Our 2022 Executive Compensation Program.”

2022 Say-on-Pay Vote and Stockholder Engagement

Our stockholders have expressed strong support for our compensation program during our engagement meetings and through their strong approval of our 2022 Say-on-Pay proposal (approximately 98.5% in favor, including abstentions). The Compensation and Human Capital Committee considered stockholder feedback and the Say-on-Pay vote results in reviewing our 2022 executive compensation program and making compensation decisions for our NEOs.

 

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Compensation Highlights

2022 STI Awards. The table below presents our 2022 metrics for STI Awards (“STI Metrics”), which measure our performance in the areas that are critical to meeting our strategic goals for the year. Brighthouse Financial performance in 2022 resulted in an aggregate Company Performance Factor of 123%. For additional information about our STI Awards, see “Compensation Discussion and Analysis – Section 2 – Our 2022 Executive Compensation Program – Elements of 2022 Compensation” and “ 2022 Short-Term Incentive Awards.” STI Awards are made under the Amended and Restated Brighthouse Services, LLC Short-Term Incentive Plan.

 

   
  2022 STI Metrics

 

 

  Results  

 

   

  Payout Percentage (1)  

 

Expense Target (40%)

   $ 869M     150%

Sales (40%)

      80%

Annuity (75%)

   $ 11.488B     107%                            

Life (25%)

   $ 80M         0%                            

Normalized Statutory Earnings (20%)

   $ 1.001B     150%

2022 Company Performance Factor

          123%

 

(1)

Rounded up to the nearest whole number.

2022 LTI Awards. In February 2022, the Independent Directors (with respect to the CEO) and the Compensation and Human Capital Committee (with respect to the other NEOs) awarded LTI awards to each of the NEOs at their respective Target LTI levels. The 2022 LTI Awards were a mix of RSUs and PSUs. The 2022 PSUs will reward our NEOs for Brighthouse Financial’s performance over the 2022-2024 performance period. The number of shares issued, if any, at the end of the performance period will depend on the Company’s performance. For information about our 2022 LTI, see Compensation Discussion and Analysis – Section 2 – Our 2022 Executive Compensation Program – Elements of 2022 Compensation” and “– 2022 Long-Term Incentive Awards

2020 PSU Payouts. In March 2023, the NEOs received payouts with respect to PSUs granted as part of the 2020 LTI program. The value of these PSUs was based on the Company’s performance for the 2020-2022 performance period against PSU metrics approved by the Compensation and Human Capital Committee and described below. For information about our 2020 PSU Payouts, see “Compensation Discussion and Analysis – Section 2 – Our 2022 Executive Compensation Program – 2020 PSU Payouts.”

 

   
  2020 PSU Metrics (weighting)

 

 

  Results  

 

   

  Payout Percentage (1)  

 

Statutory Expense Ratio (60%)

    7.97   122%

Net Cash Flow to the Holding Company (40%)

    $1.941B       98%

2020 PSU Payout

          113%

 

(1)

Rounded up to the nearest whole number.

 

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CEO Compensation

2022 Target TDC. In January 2022, as part of the annual compensation planning process, the Independent Directors, on the recommendation of the Compensation and Human Capital Committee, approved an increase to Mr. Steigerwalt’s 2022 Target TDC to reflect individual and Company performance, as well as to align more closely with market median in accordance with our pay positioning strategy. His Target TDC is described in the following table (changes from his 2021 Target TDC are indicated, where applicable).

 

       
  Name   Base Salary  

Target STI

(as % of Base Salary)

 

Target LTI

(as % of Base Salary)

  Target TDC

  Eric Steigerwalt

 

$1,000,000

(+$75,000)

  200%  

600%

(+70% of base salary)

 

$9,000,000

(+$1,322,500)

2022 STI Award. Mr. Steigerwalt’s individual goals for 2022 were a mix of strategic and operational objectives that measured his performance in leading Brighthouse Financial, developing and executing Brighthouse Financial’s strategy, and delivering positive financial results. In setting the STI payout percentage at the Company Performance Factor of 123%, the Independent Directors considered Brighthouse Financial’s performance against the 2022 STI Metrics and Mr. Steigerwalt’s achievements against his 2022 goals. The following table highlights Mr. Steigerwalt’s 2022 STI Award for performance in 2022, as approved by the Independent Directors in January 2023.

 

     
  Name   2022 STI Target   2022 STI Payout
Percentage
  2022 STI Award

  Eric Steigerwalt

  $2,000,000   123%   $2,460,000

2022 LTI Award. In January 2022, the Independent Directors approved a 2022 LTI Award for Mr. Steigerwalt at his LTI target of $6,000,000, consisting of 70% PSUs and 30% RSUs. The number of PSUs issued will depend on Brighthouse Financial’s performance against the 2022 PSU Metrics over the 2022-2024 performance period. Additional information about Mr. Steigerwalt’s STI and LTI Awards is presented in “Compensation Discussion and Analysis – Section 2 – Our 2022 Executive Compensation Program” and “2022 Compensation Tables.”

Planned Changes for 2023

We have committed to a regular review of our compensation program to help ensure that it evolves with our maturing organization and continues to motivate and reward our employees for performance that supports our strategic goals. To this end, and in consideration of stockholder feedback, the Compensation and Human Capital Committee has approved changes to our compensation program, including adjustments to STI and LTI metric weightings (but utilizing the same metrics) and to certain NEOs’ Target TDC. These are described in detail in “Compensation Discussion and Analysis – Section 4 – 2023 Compensation Program Overview.”

Section 2 – Our 2022 Executive Compensation Program

2022 Compensation Planning Process

Benchmarking Process. Our Human Resources organization (“HR”) led our 2022 market benchmarking process. We use benchmarking to provide context for the 2022 compensation recommendations for our Senior Leadership Management Group (the “SLMG”), which includes our NEOs and other members of our senior management team. In developing its recommendations, HR consulted with Willis Towers Watson (“WTW”), which serves as management’s compensation consultant.

In setting Target TDC for the members of the SLMG, we have adopted a pay positioning strategy that generally seeks to position Target TDC in reference to market median. We modify the pay positioning of individual SLMG members due to a variety of factors, including criticality of role, performance, experience, and retention. We also review the positioning of discrete elements of SLMG members’ compensation, including base salary, target STI, total cash compensation (base salary plus target STI), and LTI. To determine pay positioning, we primarily use WTW’s proprietary

 

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database of executive compensation at large diversified insurers, which we supplement with a select compensation comparator group, as described below.

Compensation Comparator Group. For compensation benchmarking purposes, we also used a group of peer companies within our industry that are similar to us in terms of assets and revenues and with which we compete for executive talent (the “Comparator Group”). HR, with input from WTW, constructed the Comparator Group and used the companies in the Comparator Group as a second market reference for benchmarking and setting context for pay recommendations for our NEOs and other members of the SLMG. In constructing the Comparator Group, we aimed to select the most appropriate companies against which Brighthouse Financial’s compensation-related performance should be measured. The Comparator Group consists of thirteen publicly traded companies in the insurance industry with assets and/or revenues between approximately 0.5 to 2.0 times those of Brighthouse Financial. As Brighthouse Financial exclusively sells individual life and annuities products in the U.S., comparably sized insurers with a meaningfully different business mix or with significant global operations were excluded from the Comparator Group.

Applying these criteria, in August 2022, the Compensation and Human Capital Committee, in consultation with the Committee’s independent compensation consultant, Semler Brossy: added Jackson Financial Inc. to the Comparator Group; removed Athene Holding Ltd. (due to the delisting of such company’s common stock in connection with its merger with Apollo in January 2022); and approved a Comparator Group consisting of the following companies:

 

•  American Equity Investment Life Holding Company

•  Ameriprise Financial, Inc.

•  Assurant, Inc.

•  CNO Financial Group, Inc.

•  Equitable Holdings, Inc.

•  Globe Life Inc.

  

•  Jackson Financial Inc.

•  Lincoln National Corporation

•  Principal Financial Group, Inc.

•  Reinsurance Group of America, Incorporated

•  Sun Life Financial Inc.

•  Unum Group

•  Voya Financial, Inc.

The Compensation and Human Capital Committee will continue to annually review the Comparator Group to include companies of a similar size and business mix and with which Brighthouse Financial competes in the talent market.

Role of the Compensation and Human Capital Committee and Others in Determining Compensation

Management’s Role. As discussed above, HR, in consultation with WTW, is primarily responsible for preparing Target TDC recommendations for our SLMG. As part of our year-end compensation planning process, our CEO led the review of each SLMG member’s performance during 2022, participated in developing recommendations for all elements of pay for the members of the SLMG (other than himself), and discussed these recommendations with the Compensation and Human Capital Committee. Based on the CEO’s assessment of each SLMG member’s performance, HR prepared compensation recommendations for each SLMG member (other than the CEO) and presented them for Compensation and Human Capital Committee approval. With respect to CEO compensation, the Compensation and Human Capital Committee and the Independent Directors reviewed the Company’s and Mr. Steigerwalt’s performance, as well as Mr. Steigerwalt’s self-assessment of his performance. The Compensation and Human Capital Committee recommended the CEO’s compensation, including Target TDC and STI and LTI awards, for approval by the Independent Directors.

Compensation and Human Capital Committee’s Role. The Compensation and Human Capital Committee is responsible for establishing and implementing our executive compensation philosophy and structure. Pursuant to its written charter, the Compensation and Human Capital Committee:

 

assisted the Board in fulfilling its responsibility to oversee the development and administration of compensation programs for our executives and other employees;

 

approved the goals and objectives relevant to our CEO’s compensation, evaluated our CEO’s performance in light of such goals and objectives, and recommended, for approval by the Independent Directors, the CEO’s annual compensation based on such evaluation;

 

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reviewed and approved the compensation of Brighthouse Financial’s other executive officers;

 

reviewed and approved our equity and non-equity incentive compensation plans and arrangements and, where appropriate or required, recommended such plans and arrangements for approval by the Board and/or our stockholders; and

 

reviewed our incentive compensation arrangements to confirm that incentive pay does not encourage our executive officers to take unnecessary risks, as well as reviewed and discussed the relationship between our risk management policies and practices, corporate strategy, and senior executive compensation.

Compensation Consultants’ Role. Under its written charter, the Compensation and Human Capital Committee has the authority to retain advisers to assist in the discharge of its duties. The Compensation and Human Capital Committee has retained Semler Brossy as its independent compensation consultant since November 2017. The Compensation and Human Capital Committee annually assesses Semler Brossy’s independence in accordance with SEC standards and has determined that no conflicts of interest or independence concerns exist. Semler Brossy reports directly to the Compensation and Human Capital Committee, and the Compensation and Human Capital Committee has the sole authority to approve the fees and other terms of the retention of Semler Brossy as its independent compensation consultant. Semler Brossy generally attends all Compensation and Human Capital Committee meetings. Semler Brossy advises the Compensation and Human Capital Committee on all aspects of the Company’s executive compensation program, including our compensation philosophy, policies, and practices; the form, mix, and amount of Target TDC; our STI and LTI programs, including the STI and LTI metrics for 2022 and the forms of equity-based incentives awarded to members of the SLMG in 2022; and trends and best practices relating to executive compensation.

Elements of 2022 Compensation

 

   

Component

  Form   Purpose
Base Salary   Cash (Fixed)   Base salary provides a fixed amount of compensation for service during the year. Base salary is determined based upon a variety of factors, including scope of responsibilities, individual performance, and market data. In line with our pay-for-performance philosophy, Target TDC has been structured so that base salary is the smallest component of pay for our NEOs.
Short-Term Incentive (STI) Awards   Cash (Variable)   STI awards are annual cash incentive awards that reward NEOs for their performance in 2022. Payout amounts were based both upon the Company’s performance against the 2022 STI Metrics approved by the Compensation and Human Capital Committee and upon the NEO’s individual performance.
Long-Term Incentive (LTI) Awards   Equity (Variable)   LTI awards are stock-based awards that reward NEOs for their contributions to Brighthouse’s long-term success. 2022 LTI awards consisted of PSUs, which will be paid out at the end of a three-year performance period based on Brighthouse Financial’s performance against quantitative goals, and RSUs, which vest annually in thirds. For the CEO, the LTI Award mix is 70% PSUs and 30% RSUs. For all other NEOs, the LTI Award mix is 60% PSUs and 40% RSUs.

In exceptional circumstances, the Compensation and Human Capital Committee may offer special incentive or retention awards if such action is determined to be necessary to achieve the Company’s goals. For information on a special retention restricted stock unit award made to Mr. Lambert in 2022, see “Equity Retention Award – Mr. Lambert” in this Section 2. Awards of restricted stock units for retention purposes under the Employee Plan are not part of Target TDC.

 

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2022 Target Total Direct Compensation

In January 2022, as part of the annual compensation planning process, the Independent Directors (in the case of the CEO) and the Compensation and Human Capital Committee (in the case of the other NEOs) approved the Target TDC for all NEOs. 2022 Target TDC for our NEOs is described in the following table.

 

  Name     Base Salary (1)      

Target STI

  (as % of Base Salary) (1)  

 

Target LTI

  (as % of Base Salary)  

    Target TDC  

  Eric Steigerwalt

    $1,000,000          200%   600%   $9,000,000

  Ed Spehar (2)

    $600,000          150%   290%   $3,240,000

  Vonda Huss (3)

    $450,000          110%   160%   $1,665,000

  Myles Lambert (4)

    $600,000          140%   200%   $2,640,000

  John Rosenthal

    $550,000          195%   250%   $2,997,500

  Conor Murphy

    $600,000          145%   190%   $2,610,000

 

(1)

Increases (if any) were effective March 5, 2022.

 

(2)

Changes from Mr. Spehar’s 2021 Target TDC included an increase to Target LTI from 225% to 290% of base salary, resulting in an increase in Target TDC from $2,850,000 to $3,240,000.

 

(3)

Changes from Ms. Huss’s 2021 Target TDC included (i) a salary increase from $440,000 to $450,000, (ii) an increase to Target STI from 85% to 110% of base salary, and (iii) an increase to Target LTI from 150% to 160% of base salary, resulting in an increase in Target TDC from $1,474,000 to $1,665,000.

 

(4)

Changes from Mr. Lambert’s 2021 Target TDC included (i) a salary increase from $575,000 to $600,000, (ii) an increase to Target STI from 125% to 140% of base salary, and (iii) an increase to Target LTI from 175% to 200% of base salary, resulting in an increase in Target TDC from $2,300,000 to $2,640,000.

As shown in the following graphs, our CEO’s Target TDC and the average Target TDC for our other NEOs (excluding Mr. Murphy), is heavily weighted toward variable, at-risk elements.

 

 

LOGO

2022 STI Metrics. The Compensation and Human Capital Committee established metrics for the 2022 STI Awards that are linked to Brighthouse Financial’s strategic goals. This is consistent with our pay-for-performance philosophy and helps ensure that the NEOs are compensated for their contributions to the Company’s achievement of the business goals set forth in the strategic plan. In establishing the STI metrics, the Compensation and Human Capital Committee was guided by the following principles:

 

 

metrics should consist of operational or financial drivers of financial performance that are aligned with Brighthouse Financial’s long-term strategy;

 

metrics should be objective and measurable;

 

executive officers should have the ability to directly impact Brighthouse Financial’s performance; and

 

metrics should not incent management to engage in inappropriately risky behavior.

 

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For each STI Metric, the Compensation and Human Capital Committee approved a payout curve that includes threshold (payout of 50% of target value), target (100% of target value), and maximum (150% of target value) performance levels based on its evaluation of the likelihood of management achieving those performance levels. STI Awards are based upon the Company’s achievement of these metrics, as well as qualitative factors the Compensation and Human Capital Committee deemed appropriate, including each NEO’s performance and accomplishments during 2022. For each STI metric, there will be a 0% payout if the Company does not achieve the threshold performance level. The Compensation and Human Capital Committee retains discretion to adjust payout levels upward or downward if such adjustment is aligned with the Company’s strategic goals. The discretion to make any such adjustment is expected to be exercised infrequently. The Compensation and Human Capital Committee’s authority to make positive adjustments to payout amounts is limited, as follows: if threshold performance level is not achieved, then the payout can only be adjusted up to 55% of a metric’s target; if threshold performance is achieved, then the payout can only be adjusted up to 20 percentage points above the Company’s actual performance against that metric. The Compensation and Human Capital Committee made no such discretionary adjustments to payouts for fiscal 2022 performance. The Compensation and Human Capital Committee believes the underlying target goals for each STI metric were appropriately rigorous and represented a significant challenge for management to achieve.

A summary of our 2022 STI Metrics and the rationale for their selection follows.

 

     

STI Metric

  Weighting       Definition   Performance Link
Expense Target   40%      Corporate expenses includes functional department expenses, public company expenses, certain investment expenses, retirement funding, and incentive compensation; establishment costs are excluded.  

Effectively managing our expenses is a core element of our strategy. Key challenges to meeting our expense target included prudently exiting a number of our transition services agreements with MetLife and transitioning to new service providers.

 

Sales   40%     

Annuity sales (75%) – measured as total deposits for annuity products.

 

Life sales (25%) – includes annualized new premium for term life; first-year paid premium for whole life, universal life, and variable universal life; and total paid premium for indexed universal life.

 

Annuities represent the greatest portion of our business. Since our establishment, annuity sales have been a key driver of our revenues and value. We view growth of life insurance sales as important to Brighthouse Financial’s growth prospects and the strength of our distribution franchise. Meeting our sales goals involves achievement by organizations across the Company. Key challenges to achieving our sales goals included the challenging macroeconomic environment.

 

Normalized Statutory Earnings   20%      As described in our 2022 Form 10-K, this metric is calculated as follows: statutory pre-tax net gain (loss) from operations adjusted for the favorable or unfavorable impacts of (i) net realized capital gains (losses), (ii) the change in total asset requirement at CTE98, net of the change in our variable annuity reserves, and (iii) unrealized gains (losses) associated with our variable annuities and Shield hedging programs and other equity risk management strategies. Normalized statutory earnings (loss) may be further adjusted for certain unanticipated items that impact our results in order to help management and investors better understand, evaluate, and forecast those results.  

Normalized Statutory Earnings is a key metric used by management to measure our insurance companies’ ability to pay future distributions and is reflective of whether our hedging program functions as intended. It also reflects factors that a broad population of STI participants directly impact and influence. This metric is the product of performance across key aspects of management’s strategy, including sales, capital, and expenses. In the long term, normalized statutory earnings contribute to our capacity to generate free cash flow from our operating companies to the parent holding company. Key challenges to achieving our normalized statutory earnings goals included managing the volatility of market performance and interest rates, prudently managing our hedging strategy, and corporate expenses.

 

 

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The Compensation and Human Capital Committee reviewed Brighthouse Financial’s actual performance to confirm that Brighthouse Financial’s actions to achieve these results were appropriate and did not create unwarranted risk for the Company. In addition, our Internal Audit department reviewed and certified the Company’s actual performance results for each metric and the 2022 Company Performance Factor.

The following table reflects the Company’s performance against each STI metric (payout percentages were rounded to the nearest whole number) and the 2022 Company Performance Factor approved by the Compensation and Human Capital Committee.

 

   
    Performance Level         
     

STI Metrics (weighting)

  Threshold
(50% Payout)
 

Target

(100% Payout)

  Maximum
(150% Payout)
  Actual Results   Payout Percentage (1)
 

Expense Target (40%)

  $970M    $925M   $880M   $    869M   150%

Sales (40%)

            80%

Annuity (75%)

  $  7.8B    $11.1B   $13.3B   $11.488B   107%                        

Life (25%)

  $  98M    $140M   $168M   $      80M   0%                    

Normalized Statutory Earnings (20%)

  ($900M)   $100M   $700M   $  1.001B   150%

2022 Company Performance Factor

   

 

   

 

   

 

   

 

  123%

 

(1)

Rounded up to the nearest whole number.

2022 Short-Term Incentive Awards

CEO Compensation. Mr. Steigerwalt, with input from organizations including HR and Finance, developed corporate performance goals (“CEO Goals”), which consisted of a mix of strategic and operational objectives, that would be used to assess his performance during 2022. In February 2022, the Compensation and Human Capital Committee reviewed the quantitative and qualitative metrics to measure the CEO’s performance and approved the CEO Goals. In January 2023, the Compensation and Human Capital Committee and the Independent Directors considered the Company’s performance overall, Mr. Steigerwalt’s performance against the CEO Goals, his other accomplishments in 2022, and Mr. Steigerwalt’s self-assessment of his performance. The following table describes the 2022 CEO Goals and Mr. Steigerwalt’s key accomplishments.

 

 

CEO Goal

   2022 Accomplishments

Reduce corporate expenses

  

•  Managed corporate expenses of $869 million, which was $56 million below plan and $21 million less than full-year 2021.

 

Increase annuity and life insurance sales

  

•  Generated approximately $11.5 billion in annuity sales, exceeding our target.

•  Generated approximately $80 million in life insurance sales, which was below target.

 

Deliver normalized statutory earnings and EPS growth

  

•  Delivered normalized statutory earnings of $1 billion for full-year 2022, significantly exceeding our plan.

•  Delivered $10.93 in adjusted earnings, less notable items per common share (for information regarding this non-GAAP financial measure and a reconciliation to the most directly comparable GAAP measure, see “Non-GAAP and Other Financial Disclosures”).

 

Achieve significant progress toward future state platform

  

•  Oversaw critical projects that led to the full implementation of our future state platform, including technological transitions and management of service providers.

•  Delivered significant growth capabilities to support product development, client solutions, and distribution on schedule and within budget.

 

 

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CEO Goal

   2022 Accomplishments

Continue focus on maturing sustainability program

  

•  Further expanded cross-functional approach to sustainability across the organization.

•  Continued to enhance and align sustainability disclosures, including through the publication of Brighthouse Financial’s inaugural Corporate Sustainability Report, which includes comprehensive information about our sustainability program and is aligned with TCFD and SASB frameworks.

•  Strengthened sustainability focus across Brighthouse Financial organizations by continuing to monitor, assess, and address emerging, material ESG-related risks and opportunities.

 

Maintain strong culture and talent management

  

•  Completed succession plans for all SLMG members and critical roles, including a focus on diversity in succession pipelines, and implemented and monitored development plans for successors.

•  Drove significant progress in meeting goals of increasing representation of underrepresented groups across the Company.

•  Drove DEI initiatives to foster our inclusive culture through the development of numerous programs and the launch of seven employee network groups.

•  Sustained strong engagement among employees, as demonstrated by results of the Company’s employee engagement survey and our flexible, hybrid work model.

•  Conducted executive coaching and leadership training for senior leaders and focused manager training for all managers.

 

Continue to shift the business portfolio

  

•  Continually assessed potential strategic transactions to drive value creation.

•  Launched Brighthouse Shield Level Pay PlusSM Annuities.

•  Achieved 2022 administrative implementation milestones in support of BlackRock LifePath PaycheckTM as well as significant progress toward development of key product growth initiatives.

•  Grew our institutional spread margin business, which reached $10 billion of outstanding liabilities at year-end 2022.

 

Mr. Steigerwalt delivered meaningful achievements against all 2022 CEO Goals despite a challenging economic environment. Based on the Company’s performance and Mr. Steigerwalt’s accomplishments, the Compensation and Human Capital Committee recommended, and the Independent Directors approved, the following STI Award to Mr. Steigerwalt.

 

     

Name

    2022 STI Target       2022 STI Payout  
Percentage
    2022 STI Award  

Eric Steigerwalt

 

$2,000,000

 

123%

 

$2,460,000

Compensation of the Other NEOs. In January 2023, the Compensation and Human Capital Committee considered each NEO’s overall performance and achievements in 2022 in relation to Brighthouse Financial’s goals (other than with respect to Mr. Murphy, who was not serving as of end of 2022). Mr. Steigerwalt also provided the Compensation and Human Capital Committee with his assessment of the NEOs’ 2022 performance. As part of its assessment of each NEO’s individual performance, the Compensation and Human Capital Committee considered each NEO’s achievements with respect to DEI, including increasing representation among officers and in the succession pipeline; developing diverse employees; fostering an inclusive environment; and other actions to support and advance Brighthouse Financial’s DEI strategy.

While each NEO’s performance was assessed on an individual basis against goals established early in 2022, the Compensation and Human Capital Committee generally aims to recognize that Brighthouse Financial’s performance is the result of the SLMG’s collective efforts to drive performance. Our NEOs’ 2022 performance highlights are summarized below.

 

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Ed Spehar, Executive Vice President and Chief Financial Officer

 

 

Drove financial strategy, focusing on maintaining strong holding company cash and operating company capital positions to return $488 million of capital to stockholders and reduce shares outstanding by 12% in 2022.

 

Achieved combined RBC ratio of 441%, at the high end of our target range of 400% to 450% in normal market conditions.

 

Completed actuarial transformation.

 

Optimized corporate expenses, with full-year corporate expenses of $869 million, which was $56 million below plan and $21 million less than full-year 2021.

 

DEI achievements include: continued to leverage and deepen partnerships with the International Association of Black Actuaries and the Organization of Latino Actuaries; served as executive sponsor of the Company’s Asian American and Pacific Islander employee network group; and prioritized diverse-owned firms for transactions.

 

 

Vonda Huss, Executive Vice President and Chief Human Resources Officer

 

 

Created successful flexible, hybrid work model through effective use of office real estate, value-added in-office and in-person gatherings, national hiring and compensation strategy, and companywide social and recognition activities.

 

Created retention and career-advancement initiatives that resulted in an increase in internal hiring and promotions.

 

Renegotiated medical/pharmacy contract to drive pharmacy savings and minimize employee cost share on medical premiums.

 

Supported significant community advocacy efforts through donations of needed materials, volunteer time, and monetary support, as well as the establishment of Brighthouse Scholar Connections, Inc. (a non-profit organization established in 2022 through which scholarships are provided to expand educational opportunities for students who are members of historically underrepresented or disadvantaged populations due to race, ethnicity, socioeconomic status or similar factors).

 

DEI achievements include: developed companywide processes, policies, learning opportunities, and accountability structures that resulted in increased diverse representation of employees and officers companywide; supported the launch of seven employee network groups; served as executive sponsor of the Company’s Hispanic and Latino/a and employees with disabilities employee network groups; increased representation of underrepresented employees in the HR and Communications organization.

 

 

Myles Lambert, Executive Vice President and Chief Marketing and Distribution Officer

 

 

Led development of Brighthouse Financial’s corporate strategy, including oversight of strategy presentation to the Board.

 

Exceeded annuity sales plan.

 

Launched Brighthouse Shield Level Pay PlusSM Annuities.

 

Added Brighthouse SmartCare® to new life distributor platforms, providing access to an additional 17,000 financial professionals.

 

DEI achievements include: increased DEI development opportunities in key programs; served as executive sponsor of the Company’s Black and African American employee network group; activated DEI subcouncils within Distribution and Marketing organization; increased external diversity-branding efforts.

 

 

John Rosenthal, Executive Vice President and Chief Investment Officer

 

 

Achieved full-year adjusted net investment income of $4.2 billion, which was above plan (for information regarding this non-GAAP financial measure and a reconciliation to the most directly comparable GAAP measure, see “Non-GAAP and Other Financial Disclosures”).

 

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56     Compensation Discussion and Analysis — Section 2 – Our 2022 Executive Compensation Program

 

 

Repositioned the investment portfolio to reduce risk and avoid losses due to the uncertain macroeconomic environment; took actions before large movements in interest rates and credit spreads; avoided significant losses by selling Russian holdings before the Russian invasion of Ukraine; and altered new-money strategy to complement repositioning.

 

Realized credit losses that were materially below plan.

 

Grew institutional spread margin business, which reached $10 billion of outstanding liabilities at year-end 2022.

 

DEI achievements include: increased investments in women- and diverse-owned business; supported the Financial Women’s Association externally and Women in Investments Network internally; served as executive sponsor of the Company’s women’s employee network group.

 

 

 

The Compensation and Human Capital Committee considered the foregoing accomplishments and, based on Mr. Steigerwalt’s recommendations, approved the following STI Awards to our other NEOs (STI Payout Percentage may be rounded to the nearest whole number).

 

   

Name

      STI Payout Percentage           2022 STI Award    

Ed Spehar

  123%   $1,107,000

Vonda Huss

  123%   $   608,850

Myles Lambert

  123%   $1,033,200

John Rosenthal

  123%   $1,319,175

The 2022 STI amounts paid to all of our NEOs are reported in the “Non-Equity Incentive Compensation Plan” column of the “Summary Compensation Table.”

2022 Long-Term Incentive Awards

In early 2022, the Independent Directors, on the recommendation of the Compensation and Human Capital Committee, approved an LTI Award for Mr. Steigerwalt, and the Compensation and Human Capital Committee approved LTI awards for our other NEOs. The following table shows the breakdown of award vehicles chosen for the 2022 LTI Awards.

 

Type of Award

 

 

  Percentage
of LTI Award
 

 

 

Vesting Schedule

Performance Share Units (PSUs)

    CEO: 70%

Other NEOs: 60%

   

Cliff vest after year 3; the number of shares issued, if any, is subject to achievement of preestablished performance goals over the 2022-2024 performance period

 

Restricted Stock Units (RSUs)

    CEO: 30%

Other NEOs: 40%

   

Ratable vesting over 3 years (1/3rd vests at each anniversary)

 

 

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Our 2022 LTI Awards were issued on March 1, 2022 (the “Grant Date”). The number of RSUs and PSUs awarded were determined by multiplying the dollar amount of the 2022 LTI Award by (i) 70% in the case of PSUs for the CEO or 60% for other NEOs or (ii) 30% in the case of RSUs for the CEO or 40% for other NEOs, and then dividing each product by the closing price of a share on the Grant Date (rounded down to the nearest whole share). The following table shows each NEO’s target 2022 LTI Award based on the value (rounded) of the LTI Award on the Grant Date.

 

Name

      LTI Award Value      

 

    Number of PSUs    

      Number of RSUs    

Eric Steigerwalt

  $6,000,000   87,390   37,453

Ed Spehar

  $1,740,000   21,722   14,481

Vonda Huss

  $   720,000     8,988     5,992

Myles Lambert

  $1,200,000   14,981     9,987

John Rosenthal

  $1,375,000   17,166   11,444

Conor Murphy

  $1,140,000   14,232     9,488

Detailed information on the 2022 LTI Awards for each NEO is reported in the “Grants of Plan-Based Awards” table.

The 2022 PSUs will reward our NEOs for Brighthouse Financial’s performance over the 2022-2024 performance period. The number of shares issued, if any, at the end of the performance period will depend on the Company’s performance. This is consistent with our pay-for-performance philosophy and helps ensure that the NEOs are compensated for their contributions to the Company’s achievement of the business goals set forth in the strategic plan. In establishing the PSU compensation metrics (“PSU Metrics”), the Compensation and Human Capital Committee was guided by the following principles:

 

 

metrics should consist of key results-oriented financial measures that reflect the success of Brighthouse Financial’s long-term strategy;

 

metrics should be objective and measurable;

 

executive officers should have the ability to directly impact Brighthouse Financial’s performance; and

 

metrics should not incent management to engage in inappropriately risky behavior.

Each PSU Metric has a payout curve that includes threshold (payout of 50% of target value), target (100% of target value), and maximum (150% of target value) performance levels. For each PSU metric, there will be a 0% payout if the Company does not achieve the threshold performance level. The Compensation and Human Capital Committee retains discretion to adjust payouts only where performance has been impacted by a significant, non-recurring event and such adjustment is aligned with the Company’s strategic goals. Any such adjustment is expected to be exercised infrequently. The Compensation and Human Capital Committee believes the underlying target goals for each PSU Metric are appropriately rigorous and represent a significant challenge for management to achieve.

 

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The following table presents a summary of our PSU Metrics.

 

       

2022 PSU Metrics

 

 

  Weighting  

 

 

Definition

 

 

 

Performance Link

Statutory Expense Ratio

    60%    

Statutory expense ratio is calculated by dividing operating expenses by direct premiums, assumed premiums (from sales of our fixed indexed annuities sold by MassMutual), and fee income.

   

An operating efficiency metric that measures the ratio of statutory operating expenses to statutory premiums and fee income; measures our performance in key strategic areas of expense management and sales growth.

Net Cash Flow to the Holding Company

    40%    

Net cash flow to the holding company measures net capital distributions from Brighthouse Financial’s operating companies.

   

Key metric that measures our cash flow, which strengthens our balance sheet and provides management with flexibility to deploy our capital for various purposes, including return of capital to stockholders.

The treatment of outstanding equity awards upon a termination of employment or a change of control is described below under the heading “Potential Payments Upon Termination or Change in Control.”

2020 PSU Payouts

In March 2023, the NEOs received payouts with respect to PSUs granted as part of the 2020 LTI program. The value of these PSUs was based on the Company’s performance for the 2020-2022 performance period against PSU metrics approved by the Compensation and Human Capital Committee, as described below.

 

   

2020 PSU Metric (weighting)

      Performance Level       Actual
Results
      Payout
Percentage
 (1)
     

  Threshold  

(50%
Payout)

 

Target

(100%
Payout)

 

  Maximum  

(150%
Payout)

Statutory Expense Ratio (60%)

       9.5%   8.5%   7.5%        7.97% (2)        122%

Net Cash Flow to the Holding Company (40%)

   

 

  $500M   $2B   $3B    

 

  $1.941B    

 

  98%

2020 PSU Payout

   

 

   

 

   

 

   

 

   

 

   

 

   

 

  113%

 

(1)

Rounded up to the nearest whole number.

 

(2)

As disclosed in our quarterly report on Form 10-Q for the quarter ended June 30, 2022, during the second quarter of 2022, the Company settled a reinsurance-related matter with a third party for $140 million on a pre-tax basis. The Compensation and Human Capital Committee exercised its discretion to exclude this settlement from the calculation of the statutory expense ratio for the 2020 PSU payouts, as such settlement represented a significant, non-recurring event. The Compensation and Human Capital Committee determined that the application of the reinsurance expenses to the STI metrics for prior applicable performance periods would not have had a material impact on the amount earned for such periods. No adjustment related to this settlement is expected in future PSU performance periods.

 

    

In addition, in 2022, Brighthouse Financial implemented a change to its statutory reporting to report certain investment-related rebate fees as deductions from investment income (whereas they were previously reported as investment expenses, which are included in operating expenses). The calculation of the statutory expense ratio is intended to reflect the Company’s operating efficiency and does not include this category of fees. The Compensation and Human Capital Committee considered this reporting change in its assessment of the Company’s performance against the metric’s target payout levels established in 2020 and determined that calculating performance implementing the change to the Company’s statutory reporting would have a negligible impact on the Company’s statutory expense ratio for the performance period; and that the achieved payout

 

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  percentage of 122% based on the original target was appropriate and required no adjustment. The Compensation and Human Capital Committee expects to consider the reporting change in its assessment of the Company’s performance against this metric when determining 2021 and 2022 PSU awards payouts (which, like the 2020 award, were based on the previous statutory reporting method).

 

    

The Compensation and Human Capital Committee did not use its discretionary authority to adjust payouts under the Net Cash Flow to the Holding Company metric.

Equity Retention Award – Mr. Lambert

The Compensation and Human Capital Committee approved a special retention RSU award to Mr. Lambert with a grant date fair value of approximately $1.0 million, which was granted on July 1, 2022. The RSUs will cliff vest on the third anniversary of the grant date (unlike RSUs granted under the annual LTI program, which vest ratably over a three-year period). In granting the award, the Compensation and Human Capital Committee consulted with Semler Brossy and took into account Mr. Lambert’s experience and his leadership in driving the Company’s marketing and distribution strategy, as well as the competitive landscape for executive talent.

Section 3 – Additional Compensation Practices and Policies

Stock Ownership and Retention Guidelines

Our stock ownership and retention guidelines apply to all members of the SLMG, which includes our NEOs. The guidelines are intended to align the interests of SLMG members with those of our stockholders by requiring SLMG members to achieve and maintain significant ownership in our stock. The ownership guidelines were set as a multiple of the officer’s current base salary. SLMG members must achieve their ownership levels within five years of becoming an SLMG member. For purposes of calculating the value of an SLMG member’s current ownership, the value of a share is based on the unweighted average of the closing prices of our common stock over the prior twelve-month period. Ownership includes shares owned outright (or jointly with a spouse or in a trust over which an executive has investment control), shares received through any Company award (e.g., option exercises, RSUs, and PSUs), unvested RSUs, and shares purchased through the Brighthouse Employee Stock Purchase Plan. PSUs are not included in determining an officer’s ownership level until they are converted to shares based on the Company’s performance at the end of the applicable performance period. SLMG members must retain at least 50% of the net after-tax shares acquired from settlement or exercise of stock-based awards until the applicable ownership level is achieved. All of our NEOs are in compliance with the Company’s stock ownership and retention guidelines, and no currently serving NEO has sold any shares since becoming a member of the SLMG. The ownership guidelines applicable to our current NEOs are described in the following table. The guidelines are based on base salaries in effect on April 1, 2023, and ownership levels are as of April 10, 2023.

 

   

Name

  Ownership Guideline       Status    
      Multiple of Base Salary           Ownership Level     

Eric Steigerwalt

 

6x

 

$6,000,000

  Achieved

Ed Spehar

 

3x

 

$1,800,000

  Achieved

Vonda Huss

 

1x

 

$   470,000

  Achieved

Myles Lambert

 

3x

 

$1,800,000

  Achieved

John Rosenthal

 

3x

 

$1,725,000

  Achieved

Benefit Plans

Brighthouse Savings Plan and Auxiliary Savings Plan. Our employees, including our NEOs, are eligible to participate in the Brighthouse Services, LLC Savings Plan and Trust (the “Brighthouse Savings Plan”), which is a tax-qualified 401(k) plan. In addition, certain employees, including our NEOs, are eligible to participate in the Brighthouse Services, LLC Auxiliary Savings Plan (the “Auxiliary Plan”). Participants in the Auxiliary Plan receive Company matching and Company non-discretionary contributions that cannot be made to the Brighthouse Savings Plan because a

 

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60     Compensation Discussion and Analysis — Section 3 – Additional Compensation Practices and Policies

 

participant’s compensation exceeds certain tax qualified plan contribution limits imposed under the Internal Revenue Code of 1986, as amended (the “Code”). For the Company matching and Company non-discretionary contributions under the Brighthouse Savings Plan and Auxiliary Plan earned in 2022, see the “All Other Compensation” column in the Summary Compensation Table. Company matching and Company non-discretionary contributions in the Brighthouse Savings Plan and the Auxiliary Plan become 100% vested after the participant completes two years of service. Under the Auxiliary Plan, in the event of a change of control, all participants will be fully vested in all contributions, including earnings, under the Auxiliary Plan. In addition, no amendments can be made to the Auxiliary Plan after a change of control that would decrease the value of benefits accrued to any participant under the Auxiliary Plan as of the date of the change of control or change the time or form of distribution under the Auxiliary Plan to eliminate lump sum distributions or further defer the timing of payment. See the narrative following the “Nonqualified Deferred Compensation in 2022” table for additional information about the Auxiliary Plan.

Voluntary Deferred Compensation Plan. The Brighthouse Services, LLC Voluntary Deferred Compensation Plan (“VDCP”), a nonqualified deferred compensation plan, allows a select group of highly compensated employees the opportunity to defer between 10% and 50% of eligible base salary and from 10% to 80% of STI awards. Amounts deferred are notionally invested in investment tracking funds selected by the participant. Participants can elect to have deferred compensation accounts paid, or begin to be paid, in a specific year, which cannot be earlier than May of the third calendar year following the year the compensation was earned and may elect to receive distributions in either a single lump sum or up to 15 annual installments. In the event of a participant’s death before distributions commence or are completed, the participant’s account balance will be paid in a single lump sum to the participant’s beneficiary. In the event of a change of control, no amendments can be made to the VDCP after a change of control that would decrease the amount in a participant’s deferred compensation account accrued under the VDCP as of the date of the change of control or modify the time or form of distributions under the VDCP. None of our NEOs currently participate in the VDCP.

Limited Death Benefit Plan. Brighthouse Services, LLC (“Brighthouse Services”), a Brighthouse Financial subsidiary, maintains the Brighthouse Services, LLC Limited Death Benefit Plan (the “Limited Death Benefit Plan”) to provide a benefit to the participants who die while employed by Brighthouse Services or its designated affiliates. The participants are employees of Brighthouse Financial who are entitled to a “traditional formula” benefit upon retirement under the MetLife, Inc. Auxiliary Retirement Plan (the “MetLife ARP”) and whose employment transferred from MetLife Group, Inc. to Brighthouse Services in connection with the Separation from MetLife, Inc. Participants who die while employed by Brighthouse Financial are not entitled to a traditional formula benefit under the MetLife ARP. The Limited Death Benefit Plan provides the participants with a benefit in the form of a final wage payment that approximates the MetLife ARP benefit that would be lost should they die while employed by Brighthouse Financial. As of December 31, 2022, the Limited Death Benefit Plan had 10 participants, of whom one, John Rosenthal, is an NEO. The potential amount of the benefit to be paid to Mr. Rosenthal is described in the “Potential Payments Upon Termination or Change in Control” table. As an offset to Brighthouse Services’ potential liabilities under the Limited Death Benefit Plan, Brighthouse Services maintains a company-owned life insurance (“COLI”) policy on the life of this NEO participant. Brighthouse Services is the beneficiary under the policy and will receive the COLI proceeds upon the insured’s death.

Supplemental Death Benefit Only Plan. In December 2022, Brighthouse Life Insurance Company purchased an insurance company-owned life insurance (“ICOLI”) policy covering the lives of all eligible employees of Brighthouse Services that consented to such coverage. Brighthouse Life Insurance Company is the beneficiary under the policy and will receive the ICOLI proceeds upon the insured’s death. Effective January 1, 2023, Brighthouse Services established the Brighthouse Services, LLC ICOLI Supplemental Death Benefit Only Plan (“Supplemental Death Benefit Only Plan”) to provide a taxable, single lump sum death benefit of $350,000 to the designated beneficiary of any such consenting employee who dies while employed by Brighthouse Services. Each of the continuing NEOs is covered under the ICOLI policy and the Supplemental Death Benefit Only Plan. The potential amount of the death benefit potentially payable to these beneficiaries is described in the “Potential Payments Upon Termination or Change in Control” table.

Termination and Change of Control Benefits

The Brighthouse Services, LLC Executive Severance Pay Plan, as amended and restated in November 2019 (the “Severance Plan”), provides severance pay and related benefits to certain terminated executive officers in

 

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consideration of a release of employment-related claims and subject to compliance with certain restrictive covenants. See the “Potential Payments Upon Termination or Change in Control” table for additional information about amounts that would be payable to our NEOs under the Severance Plan.

The Brighthouse Services, LLC Change of Control Severance Pay Plan (the “Change of Control Plan”) provides a means to help us retain our senior executive officers while a transaction is pending or during the two-year transition period following the close of a transaction. We believe that the Change of Control Plan aligns the interests of such executives with those of our stockholders and promotes maximum stockholder value without limiting the Company’s flexibility to engage in, or successfully transition after, a transaction. Under the terms of the Change of Control Plan, a covered participant is eligible to receive severance payments if within two years following a change of control the participant (i) is terminated involuntarily without cause or (ii) discontinues employment for “good reason;” or if following the occurrence of a potential change of control the participant is terminated involuntarily without cause within six months prior to a change of control. See the “Potential Payments Upon Termination or Change in Control” table for additional information about amounts that would be payable to our NEOs under the Change of Control Plan.

As of December 31, 2022, we had no employment agreements or offer letters with any of our currently employed NEOs that provide for individual severance or change of control benefits. On March 31, 2022, Mr. Murphy entered into a Separation Agreement, Waiver and General Release with Brighthouse Services in connection with his separation from Brighthouse Financial, pursuant to which he received payments consistent with the Severance Plan. Payments made pursuant to these individual agreements are described in footnote (4) to the “Summary Compensation Table.”

Equity awards held by our NEOs may vest and become payable in the event of termination or a change of control in accordance with the terms of the Employee Plan and the applicable award agreement (including the award agreement supplement).

In addition, certain amounts credited to our NEOs under the Employee Plan may vest and become payable in the event of the NEO’s death or termination on or following the NEO’s “Rule of 65 Date,” which is the date that the sum of a participant’s age plus years of service (which for Brighthouse Financial employees at the time of the Separation includes MetLife service) equals or exceeds 65, provided the participant has at least five years of service. See the “Potential Payments Upon Termination or Change in Control” table for additional information about amounts that would be payable to our NEOs under the Employee Plan.

Stock-Based Award Timing Practices

Stock-based LTI awards are expected to be granted on an annual basis to our executive officers, including the NEOs, in connection with Board and Compensation and Human Capital Committee meetings occurring in the first quarter of each year, although stock-based awards may be granted from time to time in connection with other circumstances, including the hiring or change of responsibilities of an executive officer.

Tax Deductibility of Executive Compensation

Section 162(m) of the Code generally provides that compensation payable to any of our NEOs in excess of $1 million will not be deductible, except to the extent paid pursuant to a grandfathered “performance-based compensation” arrangement in place as of November 2, 2017. While the Company and the Compensation and Human Capital Committee consider the availability of Section 162(m) deductions in the design of our executive compensation program, the Company and the Compensation and Human Capital Committee reserve the right to pay non-deductible compensation if necessary or appropriate to retain and incent key executives whose performance is important to our success. Notwithstanding the absence of the Section 162(m) exclusion for performance-based compensation, the Compensation and Human Capital Committee expects to continue to place performance conditions on our STI and LTI Awards granted to our NEOs consistent with our pay-for-performance compensation philosophy.

Hedging and Pledging Prohibition

Our insider trading policy prohibits all Directors and employees, including our NEOs, from engaging in speculative transactions, including short sales, hedging, and trading in put and call options, with respect to the Company’s securities. The insider trading policy also prohibits Directors and employees, including our NEOs, from pledging Company securities.

 

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62     Compensation Discussion and Analysis — Section 4 – 2023 Compensation Program Overview

 

Clawback Policy

Our Board believes that it is in the best interests of the Company and its stockholders to create and maintain a culture that emphasizes integrity and accountability, and that reinforces the Company’s pay-for-performance compensation philosophy. In August 2018, the Board approved and adopted a Clawback Policy that allows Brighthouse Financial to seek recoupment of incentive compensation in the circumstances described in the following table. The Board delegated to the Compensation and Human Capital Committee authority to administer the Clawback Policy, including authority to determine in its judgment and sole discretion whether to seek recoupment of any compensation. The Board intends to revise the Clawback Policy to comply with requirements established under Nasdaq listing standards following finalization of such standards.

 

       

Conduct or Event

   

Covered Persons

   

Compensation Subject to
Recoupment

   

Covered Period

Fraud or misconduct causing a material financial restatement

   

CEO, CFO, Chief Accounting Officer, or any employee who materially contributed to the fraud or misconduct

   

Any incentive compensation

   

Three years prior to the date the Company determines a restatement is necessary

Conduct, or failure to supervise, which results in material financial or reputational harm

   

Any employee who engaged in the misconduct

   

Any incentive compensation

   

Period of misconduct

Material inaccuracy in performance metrics

   

Executive officers and any employee who materially contributed to, or failed to supervise with respect to, the material inaccuracy

   

Excess incentive compensation that was, or will be, paid based on the inaccurate metric

   

Three years prior to achievement of the performance metric

Risk Assessment

At the Compensation and Human Capital Committee’s March 2023 meeting, Semler Brossy presented a compensation risk assessment report that it prepared and developed in consultation with Brighthouse Financial’s management, including our Chief Risk Officer, based on its review of our compensation programs. Semler Brossy highlighted the compensation governance policies and Board-level controls in place to manage compensation-related risk and the risk-balancing and risk-mitigating features of our 2022 compensation program, including our strong Clawback Policy, balanced pay mix, caps on incentive payouts, and the Compensation and Human Capital Committee’s ability to exercise discretion. Following a discussion of Semler Brossy’s assessment and findings, the Compensation and Human Capital Committee concluded that the risks arising from the Company’s compensation programs are not reasonably likely to have a material adverse impact on the Company.

Section 4 – 2023 Compensation Program Overview

This section provides an overview of our 2023 executive compensation program, including changes we have made from our 2022 executive compensation program. The 2023 executive compensation program will be more fully discussed in next year’s proxy statement (in connection with our 2024 annual meeting of stockholders).

2022 Say-on-Pay Vote and Stockholder Engagement

At our 2022 Annual Meeting, approximately 98.5% of our stockholders (including abstentions) voted “FOR” our Say-on-Pay proposal to approve the compensation paid to our NEOs. The Compensation and Human Capital Committee considered the results of this vote in reviewing our 2022 executive compensation program and making compensation decisions for our NEOs. The Compensation and Human Capital Committee also considered

 

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stockholders’ views and feedback they shared during our 2022-2023 stockholder engagement program, as discussed above (see “Stockholder Engagement”). During our engagements, stockholders overwhelmingly expressed approval of our 2021 compensation program and the quality of our compensation-related disclosures. Our stockholders also expressed support for our 2022 executive compensation program, including our use of quantitative compensation metrics that are aligned with the Company’s strategy to drive long-term value creation.

The following table describes the feedback we received related to our compensation program and how we have addressed it.

 

   

What we heard

      What we’re doing

Stockholders did not identify any substantive or significant concerns with our compensation program or pay practices

   

•  The Compensation and Human Capital Committee values feedback from our stockholders and considers it in its oversight of our executive compensation program.

Disclosure about compensation practices was robust

   

•  It is important for us to be transparent about our compensation program. We aim to provide useful disclosure about our compensation practices.

Incentive compensation metrics are aligned with the Company’s strategy; stockholders are interested in staying updated on compensation program/metric design for future years

   

•  The Compensation and Human Capital Committee annually reviews our incentive compensation metrics to ensure that they align with our strategy and incentivize behaviors that we believe will create long-term value for our stockholders. See “Proxy Summary – The Brighthouse Financial Story” and “Compensation Discussion and Analysis – Section 1 – Executive Summary.” We describe certain changes to the 2023 STI and LTI Programs in this “Section 4.”

Provide disclosure about how ESG factors, including DEI, have been incorporated into our compensation program

   

•  The Compensation and Human Capital Committee has incorporated DEI factors into its assessment of each NEO’s performance. See “Compensation Discussion and Analysis – Section 2 – Our 2022 Executive Compensation Program – 2022 Short-Term Incentive Awards.”

2023 STI Program

Our 2023 STI program is generally consistent with our 2022 program. The Compensation and Human Capital Committee continues to believe that our STI metrics are linked to Brighthouse Financial’s strategic goals and incentivize behaviors that drive the Company’s success. Our 2023 STI Metrics are unchanged from 2022, except for a change to the weighting, as follows.

Changes to STI Metrics – Change to Weighting. For our 2023 STI Program, the Compensation and Human Capital Committee determined to change the weighting of the components of the sales metric. Weighting of the 2023 STI metrics is as follows: Corporate Expenses 40%; Sales 40%, composed of Annuity 80% (previously 75%) and Life 20% (previously 25%); and Normalized Statutory Earnings 20%.

2023 LTI Program

Our 2023 LTI program is generally consistent with our 2022 program. 2023 LTI Awards consist of the same mix of PSUs and RSUs as our 2022 LTI Awards. Our 2023 PSU Metrics are unchanged from 2022, except for the changes described below. The Compensation and Human Capital Committee continues to believe that our PSU metrics are linked to Brighthouse Financial’s strategic goals and incentivize behaviors that drive long-term value creation. The 2023 PSU metrics measure Brighthouse Financial’s performance over the 2023-2025 performance period. The actual number of shares issued pursuant to the PSUs, if any, at the end of the performance period will depend on the Company’s actual performance.

Changes to PSU Metrics – Change to Weighting. For our 2023 LTI Program, the Compensation and Human Capital Committee determined to change the weighting of the PSU metrics. Weighting of the 2023 PSU metrics is as follows: Net Cash Flow to the Holding Company 60% (previously 40%); Statutory Expense Ratio 40% (previously 60%).

 

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64     Compensation Discussion and Analysis — Compensation Committee Report

 

2023 Target TDC

In January and February 2023, the Independent Directors (in the case of the CEO) and the Compensation and Human Capital Committee (in the case of the other NEOs) approved the Target TDC for each NEO, as described in the following table.

 

       

Name

  Base
Salary 
(1)
  Target STI
(as % of Base Salary)
  Target LTI
(as % of Base Salary)
  Target TDC

Eric Steigerwalt

 

$1,000,000

 

200%

 

600%

 

$  9,000,000

Ed Spehar

 

$   600,000

 

150%

 

290%

 

$  3,240,000

Vonda Huss (2)

 

$   470,000

 

125%

 

175%

 

$  1,880,000

Myles Lambert

 

$   600,000

 

140%

 

200%

 

$  2,640,000

John Rosenthal (3)

 

$   575,000

 

195%

 

250%

 

$  3,133,750

 

(1)

Increases (if any) were effective March 4, 2023.

 

(2)

Changes from Ms. Huss’s 2022 Target TDC include: (i) a base salary increase from $450,000 to $470,000, (ii) an increase in Target STI from 110% to 125%, and (iii) an increase in Target LTI from 160% to 175% of base salary, resulting in an increase in Target TDC from $1,665,000 to $1,880,000.

 

(3)

Changes from Mr. Rosenthal’s 2022 Target TDC include a base salary increase from $550,000 to $575,000, resulting in an increase in Target TDC from $2,997,500 to $3,133,750.

Compensation Committee Report

The Compensation an