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April 11, 2023

You are cordially invited to attend the Annual Meeting of Shareholders of Voya Financial, Inc. (the “Company” or “Voya”), on Thursday, May 25, 2023, at 11:00 a.m., Eastern Time. The meeting will be held as a virtual meeting only, accessible at the following website address: www.virtualshareholdermeeting.com/VOYA2023. The proxy statement describes the items of business that we will conduct at the meeting in more detail, and also provides you with important information about our Company, including our practices in the areas of corporate governance and executive compensation. I strongly encourage you to read these materials and then vote your shares. Additional details regarding how to attend the meeting, submit questions and what to do in the event of technical difficulties are included in the proxy statement.

 

Your vote is important to us. Please exercise your right to vote.

Important Notice Regarding the Availability of Proxy Materials for our Annual Meeting to be held on May 25, 2023. Our Proxy Statement, 2022 Annual Report to Shareholders and other materials are available at www.proxyvote.com.

By Order of the Board of Directors,

 

My Chi To

Executive Vice President, Chief Legal Officer

and Corporate Secretary

This summary highlights certain information contained elsewhere in our proxy statement. You should read the entire proxy statement carefully before voting.

Our proxy statement contains information about the matters to be voted on at our 2023 Annual Meeting of Shareholders (which we refer to in this proxy statement as the “Annual Meeting”), as well as information about our corporate governance practices, the compensation we pay our executives, and other information about the Company. Our principal executive offices are located at 230 Park Avenue, New York, New York 10169.

Please note that we are furnishing proxy materials to our shareholders via the Internet, instead of mailing printed copies of those materials to each shareholder. By doing so, we save costs and reduce our impact on the environment. A Notice of Internet Availability of Proxy Materials, which contains instructions about how to access our proxy materials and vote online or by mail, will be mailed to our shareholders beginning on or about April 11, 2023.

Environmental, Social and

Governance (ESG) Highlights (continued)

Each member of the executive committee (EC) and their direct reports are required to have a Diversity Action Plan that focuses on five areas that strengthen and reinforce the overall DEI strategy for our enterprise based on colleagues, clients and community.

At Voya, we believe we are stronger because of our differences: race, color, sex, national origin, religion, age, disability, veteran status, sexual orientation, gender identity, genetic information, marital status, creed, citizenship status, as well as perspective of thoughts, beliefs, education, background and experiences.

We are committed to a diverse and inclusive workforce where all of these differences are purposefully brought together and are dedicated to ensuring that historically marginalized and/or underserved communities have an opportunity for a better financial future including, but not limited to, African American/Black, Asian, Hispanic/Latino, Indigenous Peoples, LGBTQ+, People with Disabilities, Veterans, Women, and Millennials and Gen Z populations.

Voya’s DEI Task Force is tasked with increasing equity and inclusion and is comprised of 60+ professionals who are 58% female and 64% people of color and aligns to the strategic focus areas of Colleagues, Clients and Communities.

We have improved our rate of hiring underrepresented talent by mitigating bias in job descriptions, expanding sources for candidates and requiring diverse slates and interview panels.

Talent Acquisition drives performance through an approach that focuses on three areas:

In 2022, Voya hired employees to fill 38 leadership roles, of which 50% were diverse hires.

 

We believe that our director nominees bring a well-rounded variety of skills, qualifications and experiences, and represent an effective mix of deep company knowledge and fresh perspectives. Our Board believes that our nominees’ varying tenures, breadth of experience and mix of attributes strengthen our Board’s independent leadership and effective oversight of management given Voya’s, businesses, the operating environment in our industries, and our Company’s long-term strategy.

Corporate Governance Highlights  (continued)

 

We believe that strong and sustainable corporate governance is essential to the effective oversight of the Company. As such, we periodically review and strive to improve our corporate governance practices. We list below our current key corporate governance practices:

Below are the key elements related to our Executive Compensation in 2022:

Corporate Governance Highlights  (continued)

Recorded full-year 2022 after-tax adjusted operating earnings of $835 million, or $7.58 per diluted share, compared with $1,053 million, or $8.37 per diluted share in full-year 2021.

 

Our Board consists of 12 directors, who are elected annually by our shareholders for one-year terms - independent directors, the Executive Chairman of our Board and former Chief Executive Officer (CEO), Rodney O. Martin, Jr. and our current President and CEO, Heather Lavallee.

At our Annual Meeting, our shareholders will be asked to elect 12 nominees to our Board (collectively, the “Director Nominees”).

Board Recommendation: Our Board unanimously recommends that our shareholders elect each of our Director Nominees described below under “Our Director Nominees”.

We believe that our director nominees bring a well-rounded variety of skills, qualifications and experiences, and represent an effective mix of deep company knowledge and fresh perspectives. Our Board believes that our Director Nominees' varying tenures, breadth of experience and mix of attributes strengthen our Board's independent leadership and effective oversight of management given Voya's businesses, the operating environment in our industries, and the Company's long-term strategy.

Our Director Nominees have significant skills and experience in the following areas:

 

The Nominating, Governance and Social Responsibility Committee is responsible for identifying individuals believed to be qualified to become Board members, consistent with criteria approved by our Board, and to select, or recommend to the Board, the nominees to stand for election as directors at the annual meeting of shareholders or, if applicable, at a special meeting of shareholders. The Committee does not set specific minimum qualifications that directors must meet in order to recommend them to our Board, but specific characteristics considered by the Committee when evaluating candidates for the Board include:

 

We also appreciate the importance of critically evaluating individual directors and their contributions to our Board in connection with re-nomination decisions. In considering whether to recommend re-nomination of a director for election at our annual meeting, the Nominating, Governance and Social Responsibility Committee considers factors such as:

It is the policy of the Nominating, Governance and Social Responsibility Committee to consider candidates recommended by shareholders in the same manner as other candidates. Shareholders wishing to submit potential director candidates for consideration should submit the names of their nominees, a description of their qualifications and background and the signed consent of the nominee to be so considered, to our Nominating, Governance and Social Responsibility Committee, care of the Corporate Secretary, Voya Financial, Inc., 230 Park Avenue, New York, New York 10169. For more information on how and when to submit a nomination, see “Part V: Other information — Frequently Asked Questions About our Annual Meeting — How do I submit a shareholder proposal or director nominations for the 2024 Annual Meeting?”.

If elected by our shareholders, the 12 Director Nominees, all of whom are currently members of our Board, will serve for a one-year term expiring at our 2024 Annual Meeting of Shareholders. Each duly elected director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal.

Each of our Director Nominees has been approved and nominated for election by our Board. All of our directors are elected by a majority vote of our shareholders, excluding abstentions.

Below is biographical information about our Director Nominees. This information is current as of the date of this proxy statement and has been confirmed by each of the Director Nominees for inclusion in this proxy statement.

The Board does not have a policy on whether the offices of the Chairperson of the Board (“Chairperson”) and the Chief Executive Officer (CEO) should be separate or combined. The Board believes that it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairperson and the CEO in such a manner as the Board considers in the best interests of the Company at the time, after considering all relevant circumstances. The Board will periodically consider the advantages of having an independent Chairperson or having a combined Chairperson and CEO and is open to different structures as circumstances may warrant. Following the appointment of Heather Lavallee as president and CEO-elect, our Nominating, Governance and Social Responsibility Committee considered the leadership structure of our Board and recommended the separation of the Chairperson and CEO roles to the Board as being in the best interest of the Company at this time. Our Board adopted the Committee's recommendation.

The separate roles for the Chairperson and CEO allow the Chairperson to focus on leading the Board in its oversight and governance responsibilities and allows the CEO to focus on setting and executing the Company’s strategic plans and initiatives, and on leading the operations of the Company. It is the policy of our Board that, during any period where the Chairperson is not “independent” for purposes of the NYSE listing rules, the Board will appoint a Lead Director who is an independent director. David Zwiener currently serves as our Lead Director.

We believe that effective independent board leadership is a key component of good corporate governance and long-term value creation. As such, our Board believes that an effective Lead Director must:

The following table outlines the key functions and responsibilities of our Lead Director:

Our Corporate Governance Guidelines encourage directors to attend director continuing education courses by providing reimbursement of such courses sponsored by recognized organizations for up to $15,000 per year per director. In addition to such reimbursement, we provide directly, and with the assistance of outside advisors, presentations to the Board on current issues or topics relevant to the Board, including corporate governance trends and practices, cybersecurity, enterprise risk management, remote work and external perspectives and views of analysts and investors. For new directors, we provide a half-day orientation where senior management provides detailed presentations on our strategies and operations.

Our Board carries out its risk oversight function through its regularly scheduled meetings, through its committees (including the Audit Committee, which, consistent with NYSE rules, has a central role in risk oversight), and through informal interactions and discussions between our directors and our senior management. In particular, the Committees of our Board focus on overseeing the following risks:

The Board receives regular reports from the Risk, Investment and Finance Committee, the management risk committee of the Company and the Company’s Chief Risk Officer on the Company’s ongoing adherence to the Board’s risk-related policies and the status of the Company’s risk management programs.

Our directors are actively engaged inside and outside of Board meetings.

No directors attended fewer than 75% of the aggregate number of meetings of the Board and of the Committees on which the director served during 2022, which is the threshold for disclosure under SEC rules. In 2022, our directors attended 98% of the combined total meetings of the full Board and Committees on which they served. In addition, we encourage our directors to attend each of our annual meetings and, in 2022, 6 of 10 directors serving at the time attended the Annual Meeting of Shareholders.

The chairs of our Committees meet and speak regularly with members of our management between Board meetings. The chairs of our Committees have regular meetings with our management prior to Committee meetings to review meeting agendas, time allocated to each agenda item and meeting materials, and to discuss specific agenda items in order to ensure that the meeting will sufficiently fulfill the information needs of Committee members and that the Committees are carrying out in full the responsibilities set forth in their charters. After each meeting and on an ad hoc basis as needed, Committee chairs provide feedback to management in preparation for future meetings. Our Lead Director conducts similar meetings with our Executive Chairman and our CEO with respect to Board meetings. In addition, directors have discussions with each other and our senior management team and other key employees outside of Board meetings as needed.

Our directors also receive weekly analyst reports on the Company and its peers, and, on a quarterly basis, they receive feedback from senior management on our meetings and interactions with investors.

Our Board is committed to enhancing its performance. Pursuant to NYSE requirements, our Corporate Governance Guidelines and the Committee charters, the Board, and each of its Committees, are required to conduct a self-evaluation on annual basis. To meet this requirement, the Nominating, Governance and Social Responsibility Committee solicits feedback using a written questionnaire and through one-on-one discussions with each director.

Our processes enable directors to provide confidential feedback on topics including:

While this formal self-evaluation is conducted on an annual basis, directors share perspectives, feedback and suggestions with management and each other year-round.

As required by NYSE rules, our Board considers annually whether each of its members is “independent” for purposes of NYSE rules. Those rules provide that a director is “independent” if our Board determines that the director does not have any direct or indirect material relationship with Voya.

Our Board has determined that each of Mses. Biggar, Butler, Chwick, DeRose and Gillis, and Messrs. Bowman, Ersek, Lewis, Tripodi and Zwiener are independent. This determination was based, in part, on detailed information that each director provided our Board regarding his or her business and professional relationships, and those of his or her family members, with Voya and those entities with which we have significant business or financial interactions.

In making its independence determinations, our Board considered both the “bright line” independence criteria set forth in NYSE rules, as well as other relationships that, although not expressly inconsistent with independence under NYSE rules, may nevertheless have been determined to constitute a “material direct or indirect relationship” that would prevent a director from being independent. The Board considered certain ordinary course business, customer, or client transactions, ordinary course charitable donations, and other relationships and transactions, and ultimately did not consider such relationships or transactions material. Our Board considers transactions to be in the ordinary course of business when such transactions are on terms substantially equivalent to those prevailing at the time for comparable transactions, that fall below the threshold levels set forth in our independence standards, and that do not impact a director’s independence.

Our Board has the following Committees: Audit; Compensation, Benefits and Talent Management; Nominating, Governance and Social Responsibility; Risk, Investment and Finance; Technology, Innovation and Operations; and Executive. The current members of the Board and the Committees of the Board on which they currently serve are identified below.

Management of the Company is led by the Management Executive Committee, which comprises all of the executive officers set forth below. The Management Executive Committee is tasked with setting corporate strategy, managing overall operating performance, building a cohesive culture and establishing our organizational structure. The following table presents information regarding our executive officers as of the date of this proxy statement.

Voya’s shareholder engagement strategy is built on the pillars of transparency, trust and accountability. We have developed a robust shareholder engagement program that leverages active, year-round, open dialogue with our diverse shareholder base, in an effort to seek valuable feedback from key stakeholders and reinforce our commitment to incorporate shareholder feedback into various decisions made by the Board and management. Through these discussions, we aim to strengthen the long-term relationships we have established with our shareholders, reflect feedback in our corporate governance processes and communications, while promoting transparency and accountability.

These efforts are complementary to the outreach conducted by Voya’s Investor Relations department and accompanying members of our Management Executive Committee in regularly meeting with shareholders and participating in investor conferences and roadshows throughout the year, while consistently seeking feedback from the investment community to share with our management team and Board to deepen their understanding of shareholder perspectives.

Investor presentations are made available in the Investors — Events and Presentations section of Voya investor relations website at https://investors.voya.com.

Our success lies in earning the trust of our customers every day. Through our human capital strategy, we attract, retain and reward talent across our enterprise in support of this mission. We have prioritized our efforts to build and maintain a diverse, inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by competitive compensation, benefits, health and wellness programs.

Voya is committed to fostering a work environment where the differences that we are born with — and those we acquire throughout our lives—are understood, valued and intentionally pursued. Bringing our differences together to positively influence our culture, service our clients and enrich our communities is essential to living our purpose to fight for everyone’s opportunity for a better financial future and aligns with our vision to clear your path to financial confidence and a more fulfilling life.

We believe that superior human capital management is a key component to a high level of corporate performance. We seek to differentiate Voya through our talent review process, leadership development, succession planning, mentoring programs, performance management process, coaching and feedback. Because we are committed to developing employees, we maintain robust learning programs through Voya’s Learning Center to help employees develop as they advance their careers and/or transition into different roles within Voya.

We have a One Voya platform for talent evaluations, discussion, development plans and succession plans across all Voya businesses and functions. Management Executive Committee members, other senior leaders and business partners lead talent reviews at least annually across various teams resulting in succession plans for the top three layers across the Company. We identify our very top performers to whom we offer additional education, training, and exposure opportunities, including the accelerated development of diverse employees.

Our Total Rewards offering is made up of the entire employee experience. It is delivered in the form of direct compensation (base salary and annual and/or long-term incentives), company-sponsored benefits (retirement savings, health and welfare plans, paid time off and work-life balance programs) and development opportunities. We provide a robust Total Reward offering that is market-competitive and equitable in order to attract, retain and motivate a talented and diverse workforce.

ESG is a business imperative woven throughout our enterprise. It is an investment in society and in the success of the Company. We implement initiatives that integrate responsible and sustainable thinking into our operations, positively impact our communities and minimize our impact on the planet. Our work is guided by our fiduciary duties to our shareholders and clients and informed by analysis of key impacts, identification of risks and opportunities, ESG best practices and stakeholder input. We report publicly in our annual impact report and on our website the progress on our ESG commitments, and disclose our data to investors on an ongoing basis.

ESG strategy and execution are managed at the business and functional level, with enterprise management and reporting responsibility led by our ESG steering committee which consists of our Chief Financial Officer, Chief Legal Officer, Chief Risk Officer, and Chief Risk Officer for Voya Investment Management, which reports to the CEO. In addition, to ensure complete alignment with our business goals, Voya maintains an Executive Council for Corporate Responsibility and Diversity & Inclusion (“Executive Council”) that is composed of the top leaders in the Company. Led by our CEO, this governing body meets quarterly to review strategy and performance regarding ESG integration activities, employee engagement and charitable sponsorships. Critical topics are brought to the Executive Council during these meetings with recommendations for actions to remediate. The body makes determinations, guided by the nature of the issue, as to whether those topics should be discussed with the Nominating, Governance and Social Responsibility Committee or other directors of the Board.

Additionally, the Board’s Nominating, Governance and Social Responsibility Committee Charter includes the review of ESG matters of significance to the Company. The Nominating, Governance and Social Responsibility Committee is engaged in ESG in the following ways, including reporting to the full Board as necessary:

Senior leaders bring ESG-related risk matters of significance and topics raised by shareholders to the Nominating, Governance and Social Responsibility Committee as necessary and deemed appropriate by the Executive Council. The Nominating, Governance and Social Responsibility Committee will collaborate with the Risk, Investment and Finance Committee, as appropriate. This includes matters relating to our ESG Risk Policy, which reflects the Company’s commitment to conducting business in a way that is ethically, economically, socially and environmentally responsible.

Our Nominating, Governance and Social Responsibility Committee, a committee comprised solely of independent directors, provides oversight of the Company’s political contributions and lobbying expenses. As part of its oversight role, it reviews our political activity policy and monitors our ongoing political strategy as it relates to the overall public policy objectives for the Company. The Nominating, Governance and Social Responsibility Committee also reviews an annual report on our political contributions and lobbying expenses. This report is available at https://investors.voya.com/financials/annual-reports-and-proxy/default.aspx. The purpose of the Voya Financial Political Action Committee (PAC) is to promote good citizenship and further business interests that are of concern to the shareholders and employees of Voya. PAC disbursement decisions are made by the officers of the PAC, consistent with the PAC’s Bylaws and based upon a candidate’s State or Congressional District, committee assignment, legislative and work experience, expertise, and other similar factors. Candidates are vetted by Voya employees and by the Company's outside legal and legislative consultants. The PAC relies on a combination of its employees and its outside consultants to identify new or emerging issues to be addressed. The PAC relies on an outside vendor for the administration of the PAC.

Outside of Voya, we have and continue to build connections between our employees and the communities in which they live and serve through support of employee volunteerism and giving. We conduct our community investment work through Voya Foundation whose primary work focuses on financial resilience: STEM (science, technology, engineering and mathematics) education for K-8th graders; financial literacy for 9-12th graders; teacher training and employee matching gifts. Through Voya Foundation, employees receive dollar-for-dollar matches to eligible nonprofits of their choice. The annual maximum match is $5,000 for employees and $25,000 for our senior management and directors. In 2022, more than 50% of employees volunteered in the community throughout the year and 78% of employees made contributions to charity. Employee donations to nonprofits, together with Voya Foundation’s match, totaled approximately $5.5 million in the U.S. In addition, full-time employees receive 40 hours of paid volunteer-time-away at eligible nonprofits per year and part-time employees receive 20 hours per year. Voya employees volunteered nearly 30,500 hours in 2022. During Voya’s National days of Service, a company-wide volunteer initiative, 50% of employees volunteered more than 10,000 hours for both virtual and in-person activities.

Our Nominating, Governance and Social Responsibility Committee oversees the CEO succession planning process and together with our independent Lead Director facilitates, at least annually, the Board’s discussion of CEO succession planning. Our CEO provides the Board with recommendations for and evaluations of potential CEO successors and reviews with the Board development plans for these successors. Directors engage with potential CEO candidates and senior management talent at Board and Committee meetings and in less formal settings to enable directors to personally assess candidates. The Board reviews management succession in the ordinary course of business throughout the year as well as contingency planning in the event of an emergency or unanticipated event.

Our Nominating, Governance and Corporate Responsibility Committee oversaw the CEO succession planning that led to the appointment of Heather Lavallee as President and CEO-elect on July 7, 2022, and as CEO on January 1, 2023. Concurrently, our former CEO, Rodney O. Martin, Jr. transitioned to his current role as Executive Chairman of the Board, which he will hold through February 2024.

Section 14A of the U.S. Securities Exchange Act of 1934 (Exchange Act) requires that shareholders be given the opportunity to cast an advisory vote on the compensation of our named executive officers, or NEOs. Our NEO compensation for 2022 is disclosed and discussed in detail below.

We believe that the success of our business is based on our ability to attract, retain and motivate the executive officers who determine our strategy and provide the leadership necessary to ensure we execute our business plan and foster long-term value creation for our shareholders. To support the achievement of these objectives, we focus our executive compensation programs on the principle of pay-for-performance. Consistent with this principle, our programs condition a significant portion of the compensation our executives receive on the achievement of business and individual performance results. We also believe that the optimal way for shareholders to measure our company’s and our executives’ performance is to take both a short- and long-term view.

This year’s Advisory Vote to Approve Executive Compensation comes at a unique time in Voya’s journey when Voya has been executing its thoughtful CEO transition plan. Effective January 1, 2023, our Board appointed Heather Lavallee as our new President and CEO, and our former CEO Rodney O. Martin, Jr. as Executive Chairman of the Board. In this context, Voya’s executive compensation practices take on an especially important role as a means to incentivize our executive leadership to ensure a smooth transition, position the Company for ongoing operational and financial success, and maximize long-term shareholder value.

Accordingly, the following resolution will be presented at our Annual Meeting:

RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.

This vote is only advisory and will not be binding on the Compensation, Benefits and Talent Management Committee of the Board, which is responsible for determining the compensation of our NEOs. The results of the vote will be taken into account, however, by the Committee when considering our compensation policies and procedures. We have determined that this vote will occur annually, and so the next advisory vote will take place at our 2024 Annual Meeting of Shareholders.

Board Recommendation: Our Board unanimously recommends that shareholders vote FOR the resolution approving the compensation paid to the NEOs.

The Compensation Discussion and Analysis describes our compensation objectives and reviews compensation decisions for our NEOs. For 2022, our NEOs were as follows:

We generated significant growth in adjusted operating EPS, excluding notable items, for both fourth-quarter and full-year 2022, with results exceeding our annual growth target of 12% to 17%. Fourth-quarter and full-year 2022 after-tax adjusted operating earnings per share, excluding notables, increased 31% and 24%, respectively, over the prior-year periods and reflect continued execution of Voya's net revenue growth, margin expansion and capital management initiatives.

For full-year 2022 (and compared with full-year 2021), Wealth Solutions full service recurring deposits grew 10.3% to $13.3 billion; Health Solutions annualized in-force premiums grew 10.8% to $2.8 billion; and Investment Management generated positive net flows of $1.1 billion.

We maintained robust capital with excess capital as of December 31, 2022, of $0.9 billion, which is the amount above the Company’s holding company liquidity target of $200 million, and estimated statutory surplus in excess of a 375% combined risk-based capital (RBC) ratio. As of December 31, 2022, Voya’s estimated RBC ratio was 488%. In 2022, we continued to provide value to shareholders by deploying a record $1.2 billion in excess capital through a combination of share repurchases, the redemption of debt and dividends — bringing the total amount of capital returned to shareholders since our initial public offering in 2013 to approximately $8.6 billion.

We did not change any compensation metrics used in our annual or long-term incentive plans in 2022.

The following principles help guide and inform the Compensation, Benefits and Talent Management Committee in delivering effective executive compensation programs that drive performance, mitigate risks and foster the attraction, motivation and retention of top leadership talent to enable us to execute our business plan and ultimately deliver shareholder value.

Attract and retain talent: Our success depends on the quality of our executive team. Our compensation program needs to be market-competitive in order to attract and retain a talented and diverse workforce. We regularly review peer group compensation data to inform competitive and reasonable compensation decisions to help grow and sustain our business in a changing and challenging environment.

Pay for performance: A significant portion of the annual compensation of our executive officers should vary with annual business performance and each individual’s contribution to that performance. The performance metrics and goals are reviewed and challenged by the Compensation, Benefits and Talent Management Committee before they are approved and the goals are rigorous and challenging to motivate and reward stretch performance.

Transparency with and feedback from shareholders: We believe that transparency with shareholders relating to our executive compensation program is essential. We are continuously improving the disclosure of our programs for shareholders to provide enough information and context to assess the effectiveness of our programs. We proactively engage with shareholders and take actions to improve our compensation programs based on feedback from shareholders.

Integrate risk management and compensation: Risk management and claw back policies need to be robust to deter imprudent risk taking. We conduct a rigorous annual review of the features of our compensation program that guard against excessive risk-taking.

Voya’s successful approach to rewarding strong results over many years may not consistently fit with external pay-for-performance “say on pay” voting models. 2022 provides an example of this circumstance, due to a lag in stock price performance that directly affected our 3-year Total Shareholder Return (TSR) measure. This was in contrast to the exceptional financial results delivered for the year in the face of strong economic headwinds, as we successfully executed on our strategy and against our financial targets. Voya has a history of sustained absolute and relative TSR performance. Since 2016 and until the most recent 3-year period, Voya’s 3-year TSR was well above the median of our peer group.

The following table presents the principal elements of the compensation programs that applied to our NEOs for 2022. The elements of compensation were designed to provide a variety of fixed and variable compensation elements related to the achievement of the Company’s short-term and long-term objectives.

We believe that the performance metrics in our compensation program are appropriate to motivate our executives to achieve outstanding short-term results, and, at the same time, help build long-term value for shareholders. We describe why we use these metrics in detail below.

We believe that these metrics indicate the financial performance of the total Company and the underlying profitability factors, and exclude items that are not indicative of ongoing trends. For example, these metrics exclude the effect of period-to-period volatility that can be caused by deferred policy acquisition costs (DAC), value of business acquired (VOBA) and other intangibles unlocking that are not indicative of our ongoing performance. We measure EPS on an absolute basis to minimize the complications associated with relative EPS, such as having to adjust peer companies’ EPS for exclusions. Adjusted Operating Earnings and Adjusted Operating Earnings per Share are non-GAAP financial measures. See Exhibit A — Non-GAAP Financial Measures.

This metric provides a relative performance measure to our program and provides a direct correlation between total shareholder return results and our compensation decisions, which strengthens the alignment of pay-for-performance outcomes with shareholder interests. Our peer group is periodically updated to be current with how investors view relative performance.

We introduced this metric into our compensation program in 2018 to allow for a more diverse set of compensation metrics which we believe better reflect our overall financial health and performance. We believe that the Adjusted Operating Return on Allocated Capital metric focuses our leaders and employees on achieving competitive returns on the capital allocated to our businesses and rewards them accordingly. Adjusted Operating Return on Allocated Capital is a non-GAAP financial measure. See Exhibit A — Non-GAAP Financial Measures.

Adjusted Operating ROE excludes the effect of period-to-period volatility that can be caused by DAC/VOBA and other intangibles unlocking that are not indicative of our financial performance and the financial performance of the underlying profitability factors. We believe that Adjusted Operating ROE is a good metric by which to measure management’s performance and base compensation decisions because it indicates the underlying financial performance of our ongoing business while excluding items that are not indicative of ongoing trends. Importantly, it measures how effectively we use equity capital. Adjusted Operating ROE is a non-GAAP financial measure. See Exhibit A — Non-GAAP Financial Measures.

The strategic indicators are a portfolio of quantitative indicators that drive growth and margin expansion. The indicators include net flows growth, in-force premium growth and cost savings from our strategic investment program. We believe that, taken together, these are useful compensation measures as they align compensation decisions with measures and strategies that contribute to the achievement of our ROE goal.

The Committee is responsible to our Board for:

For the CEO, the Compensation, Benefits and Talent Management Committee also receives input from all of the independent directors in assessing CEO performance and reviewing CEO compensation.

The Compensation, Benefits and Talent Management Committee has established a comparison group of peer companies, with the assistance and advice of the Company’s management and Pay Governance. The Committee uses this comparison group, in part, to evaluate the Company’s compensation policies and practices, and as a means by which to measure the compensation packages of its executives. In establishing the comparison group, the Committee considers certain factors, including whether potential member companies competed with us in the same competitive labor market or in similar lines of business, the potential member company’s market capitalization and various other factors, including the revenues, workforce size and assets under management or assets under administration of potential member companies, and ensures that the group is consistent with how investors assess relative performance.

The Committee reviews the comparison group periodically to ensure the relevance of the group and reflect changes in the Company’s own business mix as well as those of the peer companies.

For 2022, the comparison group of companies considered by the Committee (Comparison Group) for competitive data for all of our NEOs included the following companies:

As part of its 2022 compensation review, the Compensation, Benefits and Talent Management Committee also considered compensation data provided by a number of surveys and sources to determine the relative competitiveness of compensation programs as well as competitive levels of pay. These surveys included a diversified study of executive compensation in the insurance industry prepared by Willis Towers Watson (Willis Towers Watson Survey) and a survey of investment management companies prepared by McLagan (McLagan Survey), a consulting firm that provides market pay and performance information in the financial services industry.

The Committee takes into consideration the Willis Towers Watson Survey and the McLagan Survey when making decisions on base salary, annual cash incentive and long-term equity incentive opportunities for NEOs except the CEO. For the CEO, the Committee solely takes into consideration proxy data of the Comparison Group.

Pay Mix Shows Significant Variable Pay. Approximately 91% of the total compensation delivered to our CEO and 83% delivered to our other NEOs in 2022 was variable. By variable, we mean that there is no guarantee that executives will actually realize the originally intended “target” compensation values. This variable feature demonstrates management’s alignment with shareholders’ interests, as the delivery of the variable compensation is dependent on performance, including our stock price.

 

In early 2022, the Compensation, Benefits and Talent Management Committee met multiple times to consider the compensation opportunity that would be provided to the Company’s NEOs and other senior executives during 2022. These considerations included an assessment of the Company’s compensation practices and compensation packages against those of the Comparison Group, including in particular an assessment of the total target compensation opportunity for each NEO. In addition, the Committee considered the vote result of our say-on-pay proposal in 2022 and took into account the outcome of the vote in reviewing our

executive compensation programs and policies. Shareholders voted 96% in favor of the Company’s 2022 say-on-pay proposal on executive compensation (based on shares voted). The Compensation, Benefits and Talent Management Committee considered the vote to be an endorsement of the Company’s executive compensation programs and policies, and took into account the outcome of the vote in reviewing those programs and policies.

While our financial results in 2022 were strong, our 3-year TSR was adversely impacted by Voya’s 7% stock price decline in 2022. This was due in large part to what we believe to have been investor hesitancy that often accompanies a CEO succession and a related uncertainty around our continuity of capital management priorities. With the benefit of time to affirm with investors that our strategy remains consistent under our new leadership, we believe that those concerns have been addressed.

However, the resulting decreases in our 2022 incentive payouts for NEOs and the lower 2023 stock grant for Mr. Martin reflect Voya’s disciplined commitment to a strong pay-for-performance model and alignment with shareholders. Our 2022 Annual Compensation Incentive Plan (ACIP) for Mr. Martin paid out at $2.8 million, which reflected 104% of his target bonus. This is a reduction of 39% from his 2021 ACIP payout of $4.58 million, which was 170% of his target bonus. For 2020-2022, our Performance Share Units (PSUs) paid out at 87.5% of the target grant. Mr. Martin’s stock grant for 2022 performance (granted in February 2023) of $9.99 million is down from his 2021 grant of $10.57 million.

The lower incentive payouts reflect the deliberately intended shareholder alignment. Following is a detailed review of how the Committee established, for purposes of the NEOs’ annual cash incentive awards opportunities, performance measures and targets that would apply for the 2022 performance year.

Mr. Martin’s salary is set in accordance with his employment agreement. The 2022 base salary for our other NEOs was reviewed taking into account several factors, including the NEOs’ experience, responsibilities, 2021 performance, 2021 base salary and the competitiveness of that base salary as compared to internal peers and similarly situated executives at companies that compete with us for executive talent including those companies that participate in the Willis Tower Watson Survey and/or the McLagan Survey. Ms. Lavallee's salary increased from $500,000 to $835,000 in connection with her promotion to President and CEO-Elect. The base salaries of Ms. Hurtsellers, Mr. Nelson and Mr. Smith were unchanged from their respective 2021 salaries. Mr. Templin's base salary of $800,000 was established in connection with his hire.

Our annual cash incentive program is designed to reward participants based on critical financial results and for their annual contributions to those results. Individual incentive awards are based on an annual evaluation of business performance and each NEO’s individual performance.

In this CD&A (as defined below), references to 2022 annual cash incentive compensation awards are to the annual cash incentive compensation amounts that were paid to NEOs in March 2023, which were designed to recognize individual and Company performance during 2022. As described in more detail below, an NEO’s annual cash incentive award is determined after taking into account the performance of the Company under several financial measures and based on a qualitative assessment of individual performance and other factors considered relevant by the Compensation, Benefits and Talent Management Committee.

The Compensation, Benefits and Talent Management Committee determined 2022 annual cash incentive compensation for our NEOs by applying a multi-step process:

 

Each of these steps is described in more detail below:

Target annual cash incentive award opportunities for the NEOs in 2022, as a percentage of 2022 base salary, were as follows:

Unchanged from our 2019 approach, the maximum 2022 incentive opportunity was capped at two times the target award opportunity for all NEOs except for Mr. Martin, whose maximum incentive opportunity is set forth in his employment agreement.

For 2022 annual cash incentive awards, preliminary annual compensation amounts were based on the target annual cash incentive compensation amounts for each of our NEOs, and on the Company financial performance under three financial measures: Adjusted Operating Earnings, Adjusted Operating Return on Allocated Capital and Strategic Indicators. Each of Adjusted Operating Earnings and Adjusted Operating Return on Allocated Capital is a non-GAAP financial measure. See Exhibit A — Non-GAAP Financial Measures.