Aflac's Amos: 'If It's Broke, Fix It'

Aflac CEO Dan Amos yesterday told shareholders they can expect changes to the insurer's executive compensation process if they reject his pay package in the only U.S. say-on-pay vote this year, according to a Bloomberg News report.

Results of a shareholder vote on the $14.8 million in total compensation paid to Amos last year are to be announced May 5. Amos is betting Aflac's 36-percent share surge in 2007 will convince investors to approve his comp package.

If "it's broke, you gotta fix it," Amos said yesterday in a teleconference about the ballot question. "If the 'no' vote is 51 percent or more, then we have to go back and change things."

The worst U.S. housing slump in 25 years prompted $245 billion in losses and writedowns mostly tied to the mortgage meltdown has turned up the heat on executive compensaation.

"Pay for failure is a big problem" in the U.S., Stephen Davis of the Yale School of Management's Millstein Center for Corporate Governance and Performance and editor of Global Proxy Watch (owned by Directorship) told Bloomberg News. "Where say-on-pay exists, it has proven to be a catalyst for dialogue between boards and investors.''

Columbus, Georgia-based Aflac, the world's largest seller of supplemental health insurance, was the best performer in the 24- member KBW Insurance Index last year as net income climbed 10 percent. Amos, 56, has produced a 22 percent annual return since taking over as CEO in 1990, double the rate of the S&P 500 index, according to Bloomberg data.