Connecting for a Healthier Future
THE CIGNA GROUP 2023 PROXY STATEMENT
Key Developments
Our Board and management are committed to principles of good corporate governance consistent with prudent management and enhancement of shareholder value. These principles emphasize transparency, accountability, fairness and independence. Throughout this Proxy Statement, we seek to highlight key elements of our governance framework that underscore our commitment. Below, we highlight key developments throughout 2022 that we believe are important to our shareholders where we have focused on or will continue to focus in 2023.
Board Governance
In 2022, one of our Board members (John Partridge) retired from service. Today, our Board composition is 40% female and 30% ethnically/racially diverse, with a 6-year average tenure and approximately 70% of our Board below that average. These are differentiators among S&P 500 companies. Additionally, 2022 was the first year that we implemented our combined Chair/CEO structure with Eric Wiseman serving as our lead independent director. Starting in the third quarter of 2022, the Board engaged in a robust self-assessment process, led by the Corporate Governance Committee Chair, which included an assessment of whether the structure was effective, the performance of the Chair/CEO and the performance of the lead independent director. Factors that were considered include: the quality of information provided to directors, access to management, effectiveness of Board meetings and focus of the Board on critical topics (such as strategy and CEO succession). At the end of the year, the process culminated in meaningful engagement and review by the Board on what was working well and what could be improved, including specific feedback for the Chair/CEO, the lead independent director and the committee chairs. As part of the discussions, the Board affirmed its continued support for the Chair/CEO structure on an ongoing basis.
Shareholder Engagement
Throughout 2022, in addition to normal course engagement of our Investor Relations team with shareholders, we invited holders of 74% of our outstanding stock, including our 100 largest shareholders, to engage with us to discuss corporate governance topics. This resulted in engagement with holders of 42% of our outstanding stock on a range of topics including: shareholder rights; Board composition and refreshment; executive compensation and human capital matters; and ESG initiatives, including diversity, equity and inclusion efforts. Summaries of these discussions were shared with our senior most leaders,
as well as the Board and its committees.
Executive Compensation
Our Board is focused on retaining and appropriately rewarding our co-workers in a competitive talent environment while ensuring alignment with shareholder interests. To that end, at-risk,performance-based incentive compensation requiring performance against pre- established metrics represents the vast majority of the compensation opportunity for all of our NEOs, with long- term results weighted more heavily than short-term results.
In furtherance of these efforts, in 2022, the Board increased the SPS proportion of Mr. Cordani’s long-term incentive award to 60% from the 50% that had been awarded in prior
years. SPSs are awards paid out in Company stock based on earnings, growth and relative shareholder performance over a three-year period. Additionally, beginning with 2023 grants, the TSR component of SPS awards will be capped at target if absolute TSR is negative over the performance period.
A new section added to this Proxy Statement, in compliance with the newly-required Pay Versus Performance disclosures, provides information regarding Compensation Actually Paid for our NEOs, and how it relates to certain financial performance metrics of the company. This analysis demonstrates that our NEOs’ compensation is correlated with earnings and total shareholder return, further demonstrating the strong alignment between
the interests of management and shareholders.
ESG
Throughout 2022, we continued to evolve our ESG framework. Specifically, we:
- Completed a materiality assessment and used the results as a guide to set our ESG priority topics (13 total) based on what is most important to our stakeholders and where the Company has the greatest capacity
to make a positive impact – all organized under four pillars: Healthy Environment, Healthy Society, Healthy Workforce, and Healthy Company. - Benchmarked our programs, reporting, goals, and governance for each material topic against peers, best practices, and prioritized metrics.
- Identified our rating and ranking priorities based on shareholder focus and industry relevance.
- Received recognition from prioritized raters and rankers, including improved ratings from MSCI (from A to AA) and EcoVadis (from Gold to Platinum).
Earning, building and maintaining the trust of our shareholders is critical to the success and sustainability of our business. This is why we actively review policy voting guidelines of our large shareholders and proxy advisory services firms and maintain frequent and constructive dialogue with our shareholders related to corporate governance. We also actively engage with proxy advisory services firms to ensure the accuracy of our governance scoring, such as our recent engagement with ISS to address a drop in our Governance QualityScore in December 2022. As a result of our engagement with ISS, our score has since been restored to its previous value, and we anticipate that disclosures in this Proxy Statement will further improve our Governance scoring for 2023 beyond its value last year.
March 17, 2023
900 Cottage Grove Road
Bloomfield, Connecticut 06002
Dear Fellow Shareholders:
We are proud of the growth and results we delivered in 2022, coupled with strong service and clinical quality. Our Cigna team of 70,000 dedicated colleagues around the world stayed focused on our mission: to improve the health and vitality of those we serve. We have continued to strengthen and evolve our capabilities, and we also have refreshed our brands to reflect the unique value we bring with our broad-based portfolio. The Cigna Group is the new name of our corporation, and we harness the differentiated capabilities across our two growth platforms – Evernorth Health Services and Cigna Healthcare – as we work to keep our commitments and promises today and remain well-positioned to drive positive change in health care into the future.
Financial Performance
The Cigna Group delivered on our overall financial commitments for Fiscal Year 2022:
- Grew full-year total revenues and adjusted revenues* by 4% each to $180.5 billion and $180.6 billion, respectively;
- Achieved full-year shareholders’ net income per share of $21.30, representing growth of 35% as compared with 2021, and adjusted income from operations per share* of $23.27, representing 14% growth as compared with 2021, above the high-end of our 10% to 13% on average long-term EPS growth target;
- Returned $9 billion to shareholders through a combination of share repurchases and dividends; and
- Sharpened the health services focus of our international business through the divestiture of our life, accident, and supplemental benefits businesses across seven markets.
Advancing Our Strategy
We believe our performance demonstrates how well our Evernorth Health Services and Cigna Healthcare platforms are strategically positioned for sustained, attractive growth.
- Evernorth Health Services, comprising services and capabilities in Pharmacy Benefits, Home Delivery Pharmacy, Specialty Pharmacy, Distribution and Care Delivery and Management Solutions, delivered top- and bottom-line growth. Over the past two years, Evernorth achieved a compounded annual growth rate for adjusted revenues* of 10%, and 7% for pre-tax adjusted income from operations*, as our innovation, market-leading clinical capabilities, and track record of delivering for clients and customers all continue to resonate in the market. Demonstrating our partnership orientation, we established new multi-year relationships with Kaiser Permanente, Centene Corporation (Centene) and VillageMD. Evernorth also continued to drive a digital-first approach to care with MDLIVE. Last year alone, our virtual care visits grew by about 20%. Today, MDLIVE offers virtual primary, urgent, dermatological and behavioral care, which is expanding access, enhancing experiences and improving affordability for customers.
- Cigna Healthcare, which includes our U.S. Commercial, U.S. Government, and International Health businesses, achieved both customer growth and margin expansion in 2022. We ended the year with growth in our medical customer base of 5%, or 923,000 lives, to 18 million total customers, while improving full-year,pre-tax adjusted margin* to 9%, a year-over-year improvement of 90 basis points. Our U.S. Commercial business had a standout performance for the year, achieving outsized customer growth while maintaining pricing discipline and driving margin improvement. Together, the businesses in the Cigna Healthcare portfolio are delivering products and services that meet the needs of employers of all sizes, as well as individuals.
- Our businesses are also designed to work together to create and capture additional value by broadening and deepening client relationships, leveraging our data and insights to accelerate innovation and generating sustainable free cash flow. As an example, with our Cigna Pathwell programs, we are able to integrate Cigna Healthcare’s high-performing provider networks and benefits management with Evernorth Health Services’ analytics, clinical expertise and personalized digital support. This equips Cigna Pathwell to lower costs while connecting patients with the right care, anticipating their future needs and helping them recover more quickly.
Driving Better Health With Environmental, Social and Governance
Our commitment to improve the health and vitality of those we serve guides how we operate our business, as well as how we engage and support our communities. In 2022, we continued to make strides across the four pillars that are at the cornerstone of our Environmental Social and Governance framework: Healthy Environment, Healthy Society, Healthy Workforce and Healthy Company.
We continue working to create an ecosystem of health that is well-functioning, sustainable, accessible and equitable so that we are able to advance better health for all. We have maintained a long-standing focus on reducing disparities, addressing social determinants of health and creating a more sustainable health care system. We partner with health care providers and community organizations, and an example of our approach is the launch of our pre-term birth program in Baltimore, Houston and Memphis focused on reducing disparities in pregnancy-related complications among African American women.
With continued leadership of our Diversity, Equity and Inclusion (DEI) Council, we made significant strides forward and ranked No. 24 on DiversityInc’s 2022 Top 50 Companies For Diversity, a nine-place jump forward from 2021. We are also honored to be listed on the Dow Jones Sustainability Indices for a sixth consecutive year, and ranking No. 1 within health care among America’s Most JUST companies by JUST Capital and CNBC.
We also have a deep and long-held commitment to strong governance, as well as ethical and resilient business practices. The strength of our Board of Directors contributes meaningfully to upholding these commitments. Approximately 70 percent of our directors have served on our Board for fewer than six years, which complements the diversity of experience on our Board, and helps our company continue to grow and thrive long-term. In 2022, our Board composition was above average on S&P benchmarks on median age, tenure, and gender and ethnic diversity.
Annual Meeting of Shareholders
On behalf of The Cigna Group Board of Directors, we invite you to attend our 2023 Annual Meeting of Shareholders, to be held April 26, 2023. The attached Notice of 2023 Annual Meeting of Shareholders and Proxy Statement contains important information about the business to be conducted.
The Cigna Group is well-positioned to continue to improve care experiences, outcomes and value, allowing us to serve the needs of our customers, clients and partners, as well as sustaining our growth and delivering on our commitments to our shareholders. On behalf of our more than 70,000 employees around the world, and the entire Board, we thank you for your support and investment in Cigna.
Sincerely,
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/s/ David M. Cordani |
/s/ Eric C. Wiseman |
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David M. Cordani |
Eric C. Wiseman |
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Chairman and Chief Executive Officer (CEO) |
Lead Independent Director |
- Consolidated adjusted revenues and adjusted income from operations per share are non-GAAP measures. See Annex A to the Proxy Statement for a reconciliation of GAAP to non-GAAP measures, as well as a reconciliation of segment metrics to their comparable consolidated metrics.
NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS
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Date and Time: |
Virtual Meeting Site: |
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Wednesday, April 26, 2023 |
www.virtualshareholdermeeting.com/ |
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9:30 a.m., Eastern Time |
CI2023 |
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Items of Business |
Our Board of Directors |
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recommends you vote |
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Proposal 1: |
Election of eleven director nominees named in this Proxy |
FOR the election of each director |
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Statement for one-year terms to expire at the next annual |
nominee |
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meeting of shareholders. |
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Proposal 2: |
Advisory approval of executive compensation. |
FOR |
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Proposal 3: |
Advisory approval of the frequency of future advisory votes |
FOR |
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on executive compensation. |
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Proposal 4: |
Ratification of the appointment of PricewaterhouseCoopers |
FOR |
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LLP as the Company’s independent registered public |
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accounting firm for 2023. |
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Proposal 5: |
Approval of an amendment to our Restated Certificate of |
FOR |
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Incorporation to limit the liability of certain officers of the |
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Company as permitted pursuant to recent amendments to |
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the Delaware General Corporation Law. |
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Proposal 6: |
Shareholder Proposal – Special shareholder meeting |
AGAINST |
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improvement, if properly presented. |
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Proposal 7: |
Shareholder Proposal – Political contributions report, if |
AGAINST |
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properly presented. |
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Consideration of any other business properly brought before |
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the meeting. |
The Board of Directors has fixed March 7, 2023 as the record date for determining shareholders entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Only shareholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting.
Your vote is very important, regardless of the number of shares you own. We urge you to promptly vote by telephone, by using the internet, or, if you received a proxy card or instruction form, by completing, dating, signing and returning it by mail.
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March 17, 2023 |
By order of the Board of Directors, |
/s/ Kari Knight Stevens
Kari Knight Stevens
Corporate Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 26, 2023
The Notice of Annual Meeting, Proxy Statement and Annual Report for
the fiscal year ended December 31, 2022 are available at www.proxyvote.com.
Attachments
Disclaimer
CIGNA Corporation published this content on 17 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2023 21:15:24 UTC.