This Proxy Statement contains information about the 2010 Annual Meeting of MetLife, Inc. (MetLife or the Company), which will be held in the MetLife Auditorium at the 23rd Floor Conference Center, 1095 Avenue of the Americas, New York, New York on Tuesday, April 27, 2010 at 1:00 p.m., Eastern Daylight Time.

This Proxy Statement and the accompanying proxy card, which are furnished in connection with the solicitation of proxies by MetLife’s Board of Directors, are being mailed and made available electronically to shareholders on or about March 23, 2010.

 

Matters to be voted on at the Annual Meeting.

 

The following three proposals will be presented for shareholder consideration and voting at the 2010 Annual Meeting:

 

 

 

The Board of Directors recommends that you vote FOR proposals one and two, and AGAINST proposal three.

 

The Board did not receive any notice prior to the deadline for submission of additional business that any other matters might be presented for a vote at the 2010 Annual Meeting. However, if another matter were to be presented, the proxies would use their own judgment in deciding whether to vote for or against it.

 

Your vote is important.

 

Whether or not you plan to attend the 2010 Annual Meeting, please take the time to vote your shares as soon as possible. If you wish to return your completed proxy card by mail, the Company has

included a postage-paid, pre-addressed envelope for your convenience. You also may vote your shares on the Internet or by using a toll-free telephone number (see the proxy card for complete instructions).

 

If your shares are held in “street name” in a stock brokerage account or by a bank or other nominee, you must provide your broker with instructions on how to vote your shares in order for your shares to be voted. Under recent amendments to New York Stock Exchange rules, brokers no longer have discretion to vote their clients’ shares on a number of important matters, including the election of directors. If you do not instruct your broker how to vote on the election of directors this year, your shares will not be counted.

 

Holders of record of MetLife common stock are entitled to vote.

 

All holders of record of MetLife common stock at the close of business on the March 1, 2010 record date are entitled to vote at the 2010 Annual Meeting.

 

If you are the beneficial owner, but not the record owner, of MetLife common stock, you will receive instructions about voting from the bank, broker or other nominee that is the shareholder of record of your shares. Contact your bank, broker or other nominee directly if you have questions. You must provide your broker with instructions on how to

vote your shares in order for your shares to be voted. Under recent amendments to New York Stock Exchange rules, brokers no longer have discretion to vote their clients’ shares on a number of important matters, including the election of directors. If you do not instruct your broker how to vote on the election of directors this year, your shares will not be counted.

 

Voting your shares.

 

Attending the 2010 Annual Meeting.

 

MetLife shareholders of record or their duly appointed proxies are entitled to attend the 2010 Annual Meeting. If you are a MetLife shareholder of record and wish to attend the meeting, please so indicate on the proxy card or as prompted by the telephone or Internet voting systems and an admission card will be sent to you. On the day of the meeting, please bring your admission card with you to present at the entrance to the MetLife Auditorium at the 23rd Floor Conference Center, 1095 Avenue of the Americas, New York, New York.

 

Beneficial owners also are entitled to attend the meeting. However, because the Company may not have evidence that you are a beneficial owner, you will need to bring proof of your ownership to be admitted to the meeting. A recent statement or letter from your bank, broker or other nominee that is the record owner confirming your beneficial ownership would be acceptable proof.

 

Changing or revoking your proxy after it is submitted.

 

You may change your vote or revoke your proxy by:

 

Voting by participants in retirement and savings plans.

 

The Bank of New York Mellon, as trustee for the Savings and Investment Plan for Employees of Metropolitan Life and Participating Affiliates Trust, the New England Life Insurance Company 401(k) Savings Plan and Trust, the New England Life Insurance Company Agents’ Retirement Plan and Trust, and the New England Life Insurance Company Agents’ Deferred Compensation Plan and Trust, will vote the MetLife shares in these plans in accordance with the voting instructions given by plan participants to the trustee. Instructions on voting appear on the voting instruction form distributed to plan participants. The trustee must receive the voting instructions of a plan participant no later than 6:00 p.m., Eastern Daylight Time, April 23, 2010. The trustee will generally vote the shares held by each plan for which it does not receive voting instructions in the same proportion as the shares held by such plan for which it does receive voting instructions.

 

Voting of shares held in the MetLife Policyholder Trust.

 

The beneficiaries of the MetLife Policyholder Trust may direct Wilmington Trust Company, as trustee, to vote their shares held in the trust on certain matters that are identified in the trust agreement governing the trust, including approval of mergers and contested directors’ elections. On all other matters, which would include the three proposals described in this Proxy Statement that are to be voted on at the 2010 Annual Meeting, the trust agreement directs the trustee to vote the shares held in the trust as recommended or directed by the Company’s Board of Directors.

 

Shares of MetLife common stock outstanding and entitled to vote at the 2010 Annual Meeting.

 

There were 822,290,495 shares of MetLife common stock outstanding as of the March 1, 2010 record date. Each of those shares is entitled to one vote on each matter to be voted on at the 2010 Annual Meeting.

Quorum.

 

To conduct business at the 2010 Annual Meeting, a quorum must be present. A quorum will be present if shareholders of record of one-third or more of the shares of MetLife common stock entitled to vote at the meeting are present in person or are represented by proxies.

 

Vote required to elect Directors and to approve other proposals.

 

If a quorum is present at the meeting, a plurality of the shares voting will be sufficient under Delaware corporation law to elect the Class II Director nominees. This means that the nominees who receive the largest number of votes cast are elected as Directors, up to the maximum number of Directors to be elected at the meeting. However, the Board has established a majority voting standard in Director elections, which is described below.

 

Subject to exceptions set forth in the Company’s Certificate of Incorporation, a majority of the shares voting will be sufficient to approve any other matter properly brought before the meeting, including the ratification of the appointment of Deloitte & Touche LLP as MetLife’s independent auditor and the shareholder proposal regarding cumulative voting in the election of Directors.

 

Majority voting standard in Director elections.

 

The Company’s By-Laws provide that in an uncontested election, such as the election of Directors at the 2010 Annual Meeting, any incumbent Director who is a nominee for election as Director who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will promptly tender his or her resignation. The Governance Committee of the Board will promptly consider the offer to resign and recommend to the Board whether to accept or reject it. The Board of Directors will decide within 90 days following certification of the shareholder vote whether to accept or reject the tendered resignation. The Board’s decision and, if applicable, the reasons for rejecting the tendered resignation, will be disclosed in a Current Report on

Form 8-K filed with the Securities and Exchange Commission (SEC).

 

Tabulation of abstentions and broker non-votes.

 

If a shareholder abstains from voting as to a particular matter, the shareholder’s shares will not be counted as voting for or against that matter. If brokers or other record holders of shares return a proxy card indicating that they do not have discretionary authority to vote as to a particular matter, those shares will not be counted as voting for or against that matter. Under recent amendments to New York Stock Exchange rules, brokers no longer have discretion to vote their clients’ shares on a number of important matters, including the election of directors. If you do not instruct your broker how to vote on the election of directors this year, your shares will not be counted. Abstentions and broker non-votes will be counted to determine whether a quorum is present.

 

Inspector of Election and confidential voting.

 

The Board of Directors has appointed Lawrence E. Dennedy, Executive Vice President, MacKenzie Partners, Inc., to act as Inspector of Election at

the 2010 Annual Meeting. The Company’s By-Laws provide for confidential voting.

 

Directors’ attendance at annual meetings.

 

Directors are expected to attend annual meetings of shareholders. All 14 Directors attended the 2009 Annual Meeting, including one Director who was newly elected to the Board at the 2009 Annual Meeting.

 

Cost of soliciting proxies for the 2010 Annual Meeting.

 

The Company has retained Georgeson Inc. to assist with the solicitation of proxies from the Company’s shareholders of record. For these services, the Company will pay Georgeson Inc. a fee of approximately $12,500, plus expenses. The Company also will reimburse banks, brokers or other nominees for their costs of sending the Company’s proxy materials to beneficial owners. Directors, officers or other MetLife employees also may solicit proxies from shareholders in person, or by telephone, facsimile transmission or other electronic means of communication, but will not receive any additional compensation for such services.

 

Shareholder proposals — deadline for submission of shareholder proposals for the 2011 Annual Meeting.

 

Rule 14a-8 of the Securities Exchange Act of 1934, as amended (Exchange Act), establishes the eligibility requirements and the procedures that must be followed for a shareholder’s proposal to be included in a public company’s proxy materials. Under the Rule, proposals submitted for inclusion in MetLife’s 2011 proxy materials must be received by MetLife, Inc. at 1095 Avenue of the Americas, New York, NY 10036, Attention: Corporate Secretary, on or before the close of business on November 23, 2010. Proposals must comply with all the requirements of Rule 14a-8.

 

A shareholder who wishes to present a matter for action at MetLife’s 2011 Annual Meeting, but chooses not to do so under Rule 14a-8, must deliver to the Corporate Secretary of MetLife on or before December 28, 2010, a notice and accompanying disclosure questionnaire containing the information required by the advance notice and other provisions of the Company’s By-Laws. Copies of the By-Laws and disclosure questionnaire may be obtained by directing a written request to MetLife, Inc., 1095 Avenue of the Americas, New York, NY 10036, Attention: Corporate Secretary. The By-Laws and disclosure questionnaire also are available on MetLife’s website at www.metlife.com/corporategovernance by selecting the appropriate category under the heading “Related Links.”

 

Where to find the voting results of the 2010 Annual Meeting.

 

The preliminary voting results will be announced at the 2010 Annual Meeting. The final voting results will be published in a Form 8-K filed by the Company with the SEC within four business days following the 2010 Annual Meeting.

 

Electronic delivery of the Proxy Statement and Annual Report to Shareholders.

 

If you are a shareholder of record, you may elect to receive future annual reports to shareholders and proxy statements electronically by consenting to electronic delivery online at: www.bnymellon.com/ shareowner/isd. If you choose to receive your proxy materials electronically, your choice will remain in effect until you notify MetLife that you wish to discontinue electronic delivery of these documents. You may provide your notice to MetLife via the Internet at www.bnymellon.com/shareowner/isd or by writing to MetLife, Inc., c/o BNY Mellon Shareowner Services, P.O. Box 3523, South Hackensack, NJ 07606-9223. In the United States, you also may provide such notice by calling toll free 1-800-649-3593.

 

If you hold your MetLife shares through a bank, broker or other holder of record, refer to the information provided by that entity for instructions on how to elect this option.

 

Principal executive offices.

 

The principal executive offices of MetLife, Inc. are located at 200 Park Avenue, New York, NY 10166.

 

MetLife’s Annual Report on Form 10-K.

 

To obtain without charge a copy of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, address your request to MetLife Investor Relations, MetLife, Inc., 1095 Avenue of the Americas, New York, NY 10036, or call 1-800-753-4904. The 2009 Form 10-K may also be accessed on the Internet at http://investor.metlife.com by selecting Financial Information, SEC Filings, MetLife, Inc. View SEC Filings, and at the SEC’s website at www.sec.gov.

Communications with the Company’s Directors.

 

The Board of Directors provides procedures through which security holders may send written communications to individual Directors or the Board of Directors, as well as procedures through which interested parties may submit communications to the Non-Management

Directors and the Audit Committee of the Board of Directors. Information about these procedures is available on MetLife’s website at www.metlife.com/corporategovernance by selecting Corporate Conduct and then the appropriate link under the “Corporate Conduct” section.

At the 2010 Annual Meeting, four Class II Directors will be elected for a term ending at the Company’s 2013 Annual Meeting. Each Class II nominee is currently serving as a Director of MetLife and has agreed to continue to serve if elected. The Board of Directors has no reason to believe that any nominee would be unable to serve if elected; however, if for any reason a nominee should become unable to serve at or before the 2010 Annual Meeting, the Board could reduce the size of the Board or nominate someone else for election. If the Board were to nominate someone else to stand for election at the 2010 Annual Meeting, the proxies could use their discretion to vote for that person.

 

Burton A. Dole, Jr., a Class II Director, and William C. Steere, Jr., a Class III Director, are retiring from the Board of Directors effective as of the commencement of the 2010 Annual Meeting (see page 31 for a discussion of the Board’s retirement policy and a waiver of the policy that permitted Mr. Steere to continue as a Director until the 2010 Annual Meeting). As a result, the size of the Board is being set at 13 members effective as of the commencement of the 2010 Annual Meeting and biographies for Mr. Dole and Mr. Steere are not presented below.

 

For additional information about the classes of Directors, see “Information About the Board of Directors — Classification of the Board” beginning on page 17.

 

The Board of Directors recommends that you vote FOR the election of each of the following Class II Director Nominees:

 

R. Glenn Hubbard, Ph.D., age 51, has been the Dean of the Graduate School of Business at Columbia University since 2004 and the Russell L. Carson Professor of Economics and Finance since 1994. Dr. Hubbard has been a professor of the Graduate School of Business at Columbia University since 1988 and a professor of the Faculty of Arts and Sciences of Columbia

University since 1997. From 2001 to 2003, Dr. Hubbard served as Chairman of the President’s Council of Economic Advisers and Chairman of the Economic Policy Committee of the Organization for Economic Cooperation and Development. He was Deputy Assistant Secretary of the Treasury for Tax Analysis from 1991 to 1993. Dr. Hubbard is a member of the Boards of Directors of Automatic Data Processing, Inc., BlackRock Closed-End Funds and KKR Financial Holdings LLC. He also is a member of the Panel of Economic Advisors for the Federal Reserve Bank of New York, Trustee and Chairman of the Economic Club of New York, member of the Council on Foreign Relations, and a member of the Advisory Board of the National Center on Addiction and Substance Abuse, and serves as an Elder of Fifth Avenue Presbyterian Church, New York. He previously served as a Director of Capmark Financial Corporation (2006-2008), Information Services Group, Inc. (2006-2008), Duke Realty Corporation (2004-2008), Dex Media, Inc. (2004-2006), and R.H. Donnelly Corporation (2006). Dr. Hubbard holds a Ph.D. and master’s degree in economics from Harvard University, and a bachelor of arts degree and a bachelor of sciences degree from the University of Central Florida. He has been a Director of MetLife and Metropolitan Life Insurance Company since February 2007.

 

Dr. Hubbard’s experience as an economic policy advisor to the highest levels of governmental, academic and financial regulatory bodies demonstrates his recognized deep knowledge and understanding of the significance and impact of regulatory and economic policy on business operations and management, which is relevant to the Board’s understanding of the impact of global economic conditions and economic and regulatory policies on MetLife, a global provider of insurance and financial products and services.

Alfred F. Kelly, Jr., age 51, is President of American Express Company, where he has day-to-day responsibility for the company’s global consumer businesses, which include consumer and small business cards, customer service, global banking, prepaid products, consumer travel and risk and information management. He has announced his retirement from this position, effective April 10, 2010. Prior to his current position, he was a Group President responsible for several key businesses, including U.S. consumer and small business cards, U.S. customer service and risk management. From 1985 to 1987, Mr. Kelly served as head of information systems at the White House where he oversaw the information processing functions for several government agencies that comprise the Executive Office of the President. Prior to that, he held various positions in information systems and strategic and financial planning at PepsiCo. Mr. Kelly holds bachelor of arts and masters degrees in business administration from Iona College. He is a member of the Boards of Trustees of New York-Presbyterian Hospital and St. Joseph’s Seminary and College, and a member of the Board of Directors of Concern Worldwide USA. He also serves as Vice Chairman of the Wall Street Charity Golf Classic, an event that benefits the Cystic Fibrosis Foundation. He previously served as a Director of The Hershey Company from 2005 to 2007. Mr. Kelly has been a Director of MetLife and Metropolitan Life Insurance Company since June 2009.

 

Mr. Kelly’s experience as a senior executive of a global financial services business together with his government service have given him a sophisticated understanding of risk management and mitigation, marketing, information technology and data management and the considerations of shareholder value creation that are relevant to the Board’s oversight of the management of an insurance company with global businesses and operations.

 

James M. Kilts, age 62, has been a Partner, Centerview Partners Management, LLC, a private equity and financial advisory firm, since October 2006. He had been Vice Chairman of the Board of The Procter & Gamble Company from October 2005, following the merger of The Gillette

Company with Procter & Gamble, until October 2006. Previously and, until October 2005, he had served as Chairman of the Board, Chief Executive Officer and President of Gillette since January 2001, February 2001 and November 2003, respectively. Prior to joining Gillette, Mr. Kilts was President and Chief Executive Officer of Nabisco Group Holdings Corp. from December 1999 until it was acquired in December 2000 by Philip Morris Companies Inc., now Altria Group Inc. He was President and Chief Executive Officer of Nabisco Holdings Corp. and Nabisco Inc. from January 1998 to December 1999. Before that, he was an Executive Vice President, Worldwide Food, Philip Morris, from 1994 to 1997 and served as President of Kraft USA from 1989 to 1994. Previously, he served as President of Kraft Limited in Canada and as Senior Vice President of Kraft International. Mr. Kilts began his business career with General Foods Corporation in 1970. Mr. Kilts is a member of the Boards of Directors of Pfizer, Inc. and MeadWestvaco Corporation, and Chairman of the Supervisory Board of the Nielsen Company, a leading global and information media company. He also is a member of the Board of Overseers of Weill Cornell Medical College. He serves on the Boards of Trustees of Knox College and the University of Chicago and is a member of the Advisory Council of the University of Chicago Booth School of Business. Mr. Kilts previously served as a Director of Whirlpool Corporation from 1999 to 2005, Director of May Department Stores Company from 1998 to 2005, and Director of The New York Times Company from 2005 to 2008. He also is a past Chairman of the Grocery Manufacturers Association. He is a graduate of Knox College and earned a master of business administration degree from the University of Chicago. Mr. Kilts has been a Director of MetLife and Metropolitan Life Insurance Company since 2005.

 

Mr. Kilts’ experience as a senior executive of several major consumer product companies with global sales and operations together with his experience as the founding partner of a private equity and financial advisory firm have given him a perspective on and a deep understanding of the business challenges and opportunities of diversified global enterprises and the related financial, risk management and shareholder value creation

considerations that are relevant to the Board’s oversight of the management of an insurance company with global businesses and operations.

 

David Satcher, M.D., Ph.D., age 69, is the Director of the Satcher Health Leadership Institute and the Center of Excellence on Health Disparities at the Morehouse School of Medicine (MSM), where he also occupies the Poussaint-Satcher-Cosby Chair in Mental Health. From December 2004 to July 2006, Dr. Satcher served as the President of MSM. From September 2002 to December 2004, Dr. Satcher was the Director of the National Center for Primary Care at MSM. Dr. Satcher completed his four-year term as the 16th Surgeon General of the United States in February 2002, after which he served as a Senior Visiting Fellow with the Kaiser Family Foundation until he assumed the post of Director of the National Center for Primary Care. Dr. Satcher served as the U.S. Assistant Secretary for Health from 1998 to January 2001, and from 1993 to 1998, he was the Director of the Centers for Disease Control and Prevention and the administrator of the Agency for Toxic Substances and Disease Registry. Dr. Satcher is a member of the Boards of Directors of Johnson & Johnson, the Kaiser Family Foundation, the Community Foundation of Greater Atlanta and the United Way of Metropolitan Atlanta. Dr. Satcher has been a Director of MetLife and Metropolitan Life Insurance Company since February 2007.

 

Dr. Satcher’s background in public health issues and administration and his business and government service provide him with a broad knowledge of health matters from a public policy perspective, with expertise in fields that include the study of aging and mortality profiles, which are relevant to the Company’s operations as a provider of life and dental insurance, and to an understanding of the impact of governmental health and insurance initiatives.

 

The following Class III Directors have previously been elected to terms that expire as of the 2011 Annual Meeting:

 

Sylvia Mathews Burwell, age 44, is President of the Global Development Program at The Bill and Melinda Gates Foundation. Ms. Burwell joined the Foundation in 2001 as Executive Vice

President and served as its Chief Operating Officer from 2002 to April 2006. Prior to joining the Foundation, she served as Deputy Director of the Office of Management and Budget in Washington, D.C. from 1998. Ms. Burwell served as Deputy Chief of Staff to President Bill Clinton from 1997 to 1998, and was Chief of Staff to Treasury Secretary Robert Rubin from 1995 to 1997. She also served as Staff Director for the National Economic Council from 1993 to 1995. Ms. Burwell was Manager of President Clinton’s economic transition team. Prior to that, she was an Associate at McKinsey and Company from 1990 through 1992. She is a member of the Board of Directors of the Council on Foreign Relations, a member of the Aspen Strategy Group, the Trilateral Commission and the Nike Foundation Advisory Group, a member of the Board of the Alliance for a Green Revolution in Africa, an Advisory Board member for the Next Generation Initiative and the Peter G. Peterson Foundation, and a member of the Professional Advisory Board for the ALS Evergreen Chapter. Ms. Burwell received a bachelor’s degree in government, cum laude, from Harvard University in 1987 and a bachelor’s degree in philosophy, politics and economics from Oxford University, where she was a Rhodes Scholar. Ms. Burwell has been a Director of MetLife and Metropolitan Life Insurance Company since 2004.

 

Ms. Burwell’s unique combination of experience in financial consulting, government service and as a senior executive of a charitable foundation with activities around the world give her an informed perspective on global financial, business and philanthropic activities and diverse cultural considerations that may impact MetLife as a global provider of insurance and financial products and services. Her background and experience also enhance her understanding of the Company’s and MetLife Foundation’s contributions to civic, educational and charitable organizations.

 

Eduardo Castro-Wright, age 55, is Vice Chairman of Wal-Mart Stores, Inc. Mr. Castro-Wright joined Wal-Mart in 2001 and worked in Mexico through 2005, first as President and later as Chief Executive Officer of Wal-Mart de Mexico. He then joined Wal-Mart in the U.S. as Chief Operating Officer of the Wal-Mart Stores division in early 2005 and was

promoted later that year to President and Chief Executive Officer of the Wal-Mart Stores division. In November 2008, he was appointed Vice Chairman of Wal-Mart Stores, Inc. Previously, he was the President and Chief Executive Officer of Honeywell Transportation and Power Systems Worldwide. Prior to that, he was President of Honeywell Asia/Pacific. Mr. Castro-Wright also held several leadership positions at Nabisco, Inc., including President of Nabisco Asia/Pacific, as well as President and Chief Executive Officer of the company’s businesses in Venezuela and Mexico. Mr. Castro-Wright is a member of the Boards of Directors of the Hispanic Scholarship Fund, the Retail Industry Leaders Association, and CARE USA. He previously served as a Director of Dow Jones & Company from 2006 to 2007. He received a bachelor of science degree in mechanical engineering from Texas A&M University. Mr. Castro-Wright has been a Director of MetLife and Metropolitan Life Insurance Company since March 2008.

 

Mr. Castro-Wright’s experience as a senior executive of one of the world’s largest companies and as a leader of businesses in a variety of countries and industries has given him global experience and an understanding of issues, challenges and risks of doing business in multiple jurisdictions in the United States and internationally. In addition, as a senior executive of a corporation with hundreds of thousands of employees, he is knowledgeable about employee benefits. His particular combination of knowledge and experience is relevant to the Board’s oversight of the management of the Company, which is a major global provider of insurance and employee benefit products and services.

 

Cheryl W. Grisé, age 57, was Executive Vice President of Northeast Utilities, a public utility holding company, from December 2005 until her retirement effective June 2007, Chief Executive Officer of its principal operating subsidiaries from September 2002 to January 2007, President of the Utility Group of Northeast Utilities Service Company from May 2001 to January 2007, President of the Utility Group of Northeast Utilities from May 2001 to December 2005, and Senior Vice President, Secretary and General Counsel of Northeast Utilities from 1998 to

2001. Ms. Grisé is a Director of Pall Corporation and Pulte Homes, Inc. She also serves on the Boards of the University of Connecticut Foundation and the Kingswood-Oxford School, and is a Senior Fellow of the American Leadership Forum. She previously served as a Director of Dana Corporation from 2002 to 2008. She received a bachelor of arts degree from the University of North Carolina at Chapel Hill and a law degree from Thomas Jefferson School of Law, and has completed the Yale Executive Management Program. Ms. Grisé has been a Director of MetLife and Metropolitan Life Insurance Company since 2004.

 

Ms. Grisé’s experience as the chief executive officer of a major enterprise subject to complex and multiple regulatory requirements and constraints provided her with a substantive understanding of the challenges of managing a highly regulated business such as MetLife. The combination of her executive experience and her earlier experience as a general counsel and corporate secretary provide her with a unique perspective on the Board’s responsibility for overseeing the management of a regulated business with global operations as well as the Board’s roles and responsibilities with respect to the effective functioning of the Company’s corporate governance structures.

 

Lulu C. Wang, age 65, is Chief Executive Officer of Tupelo Capital Management LLC, an investment management firm which she founded in 1997. Ms. Wang has been engaged in professional money management since 1972. Prior to founding Tupelo Capital Management, she served as Director and Executive Vice President of Jennison Associates Capital Corporation. Before joining Jennison in 1988, Ms. Wang oversaw equities management at Equitable Capital Management as Senior Vice President and Managing Director. Ms. Wang serves on the Boards of the Asia Society, Columbia Business School, Metropolitan Museum of Art, Rockefeller University, WNYC Public Radio and the Committee of 100. She also serves as Trustee Emerita of Wellesley College and as a Consulting Director of the New York Community Trust. Ms. Wang received her bachelor of arts degree from Wellesley College and a masters in business administration from Columbia Business School.

She is a chartered financial analyst. Ms. Wang has been a Director of MetLife and Metropolitan Life Insurance Company since March 2008.

 

Ms. Wang’s extensive experience in investment management and financial services, her knowledge and understanding of global markets for financial products, particularly in Asia, and her service on the boards and investment committees of major educational and civic organizations have given her a perspective that is particularly relevant to the MetLife Board of Directors’ oversight of the Company, a global provider of insurance and financial products and services, as well as a deep understanding of the importance of MetLife’s and MetLife Foundation’s contributions to community institutions.

 

The following Class I Directors have previously been elected to terms that expire as of the 2012 Annual Meeting:

 

C. Robert Henrikson, age 62, has been Chairman, President and Chief Executive Officer of MetLife and Metropolitan Life Insurance Company since April 25, 2006. Previously, he was President and Chief Executive Officer of MetLife and Metropolitan Life Insurance Company from March 1, 2006, President and Chief Operating Officer of the Company from June 2004, and President of its U.S. Insurance and Financial Services businesses from July 2002 to June 2004. He served as President of Institutional Business of MetLife from September 1999 to July 2002 and President of Institutional Business of Metropolitan Life Insurance Company from May 1999 to June 2002. During his more than 37-year career with MetLife, Mr. Henrikson has held a number of senior positions in the Company’s Individual, Group and Pension businesses. Mr. Henrikson is a Director and Chairman of the American Council of Life Insurers, former Chairman and current Board member of the Financial Services Forum, a Director Emeritus of the American Benefits Council, Chairman of the Board of the Wharton School’s S.S. Huebner Foundation for Insurance Education, and a Trustee of the American Museum of Natural History. He also serves on the Board of Trustees of Emory University and the Boards of Directors of The New York Philharmonic, The New York Botanical Garden, and the Partnership for New

York City. Mr. Henrikson received a bachelor’s degree from the University of Pennsylvania and a law degree from Emory University School of Law. In addition, he is a graduate of the Wharton School’s Advanced Management Program. He has been a Director of MetLife since April 26, 2005 and a Director of Metropolitan Life Insurance Company since June 1, 2005.

 

Mr. Henrikson’s more than 37 years of experience with the Company, which includes diverse positions of increasing responsibility, leading to his role as Chief Executive Officer, have provided him with an in-depth understanding of the Company’s businesses and global operations and given him insight into the Company’s strategic direction and leadership selection.

 

John M. Keane, age 67, is a Senior Partner of SCP Partners, a venture capital firm, and President of GSI, LLC, an independent consulting firm. General Keane served in the U.S. Army for 37 years. He was Vice Chief of Staff and Chief Operating Officer of the Army from 1999 until his retirement in October 2003. He is a Director of General Dynamics Corporation, MacAndrews & Forbes Holdings, Inc. and Cyalume Technologies Holdings, Inc. He also is a military contributor and analyst with ABC News, member of the United States Department of Defense Policy Board, member of the Council on Foreign Relations, and Chairman of the Senior Executive Committee of the Army Aviation Association of America. He also serves on the Boards of the Knollwood Foundation, the Army Heritage Foundation, the George C. Marshall Foundation, the Rand Corporation, the Welcome Back Veterans Foundation, American Corporate Partners, the Center for Strategic and Budgetary Assessments, and the Institute for the Study of War. He previously served as a member of the Board of Managers of Allied Security Holdings LLC from 2005 to 2008. General Keane received a bachelor’s degree in accounting from Fordham University and a master’s degree in philosophy from Western Kentucky University. General Keane has received honorary doctorate degrees in law and public service from Fordham University and Eastern Kentucky University, respectively. General Keane has been a Director of MetLife and Metropolitan Life Insurance Company since 2003.

General Keane’s roles as chief operating officer of one of the world’s largest military organizations and as an advisor to high levels of government demonstrate and reflect his recognized ability to understand, assess and communicate the strategic leadership, organizational dynamics and managerial capabilities which are particularly relevant to the Board’s role in overseeing the process for selecting, developing and assuring appropriate continuity of the senior executive leadership which is responsible for managing the Company’s businesses and operations.

 

Catherine R. Kinney, age 58, retired from NYSE Euronext in March 2009. She had served in Paris, France from July 2007 until 2009, responsible for overseeing the company’s global listing program, marketing and branding. She was President and Co-Chief Operating Officer of the New York Stock Exchange from 2002 to 2008. Ms. Kinney joined the New York Stock Exchange in 1974 and held management positions in several divisions, including responsibility for all client relationships from 1996 to 2007, trading floor operations and technology from 1987 to 1996, and regulation from 2002 to 2004. Ms. Kinney serves on the Boards of Directors of NetSuite, Inc., MSCI, Inc., Georgetown University, Catholic Charities, The New York City Ballet, and Sharegift USA. She served on the Board of Directors of Depository Trust Company from 2003 to 2007. She is a member of the Economic Club of New York. Ms. Kinney graduated Magna Cum Laude from Iona College and completed the Advanced Management Program, Harvard Graduate School of Business. She has received honorary degrees from Georgetown University, Fordham University, and Rosemont College. Ms. Kinney became a Director of MetLife and Metropolitan Life Insurance Company in April 2009 after having previously served on those Boards from 2002 to 2004.

 

Ms. Kinney’s experience as a senior executive and chief operating officer of a multinational regulated entity and her key role in transforming the New York Stock Exchange to a publicly held company together with her leadership in developing and establishing the NYSE corporate governance standards for its listed companies, including the Company, demonstrate a knowledge of and experience with issues of corporate development

and transformation and corporate governance that are relevant to assuring that the Board establishes and maintains effective governance structures that are appropriate for a global provider of insurance and financial products and services.

 

Hugh B. Price, age 68, has been the John L. Weinberg/Goldman Sachs Visiting Professor of Public and International Affairs at the Woodrow Wilson School of Princeton University since August 2008. He also has been a Senior Fellow of the Brookings Institution since February 2006. Previously, he was a Senior Advisor to the law firm of DLA Piper Rudnick Gray Cary US LLP from September 2003 until September 2005 and served as President and Chief Executive Officer of the National Urban League, Inc. from 1994 to April 2003. Mr. Price is a Director of Verizon Communications, Inc. He is a Trustee of the Mayo Clinic and a Director of the Jacob Burns Film Center. Mr. Price received a bachelor’s degree from Amherst College and received a law degree from Yale Law School. He has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1994.

 

Mr. Price’s management and leadership positions as the chief executive officer of an historic civil rights organization and at for-profit business enterprises and his prominence as an advisor and expert on the development of positive community values promoting achievement, diversity and inclusion as business imperatives have provided Mr. Price with expertise in enterprise management and corporate responsibility that is relevant to the Board’s oversight of the Company’s business management as well as its historic and current commitment to community and civic values and development.

 

Kenton J. Sicchitano, age 65, was a Global Managing Partner of PricewaterhouseCoopers LLP, an audit/assurance, business advisory and tax services firm, until his retirement in June 2001. Mr. Sicchitano joined Price Waterhouse LLP, a predecessor firm of PricewaterhouseCoopers LLP, in 1970, and after becoming a partner in 1979, held various leadership positions within the firm until he retired in 2001. He is a Director of PerkinElmer, Inc. and Analog Devices, Inc. At various times from

1986 to 1995, he served as a Director and/or officer of a number of not-for-profit organizations, including as President of the Harvard Business School Association of Boston, Director of the Harvard Alumni Association and the Harvard Business School Alumni Association, Director and Chair of the Finance Committee of New England Deaconess Hospital and a Trustee of the New England Aquarium. Mr. Sicchitano received a bachelor’s degree from Harvard College and a master’s degree in business administration from Harvard Business School. Mr. Sicchitano has been a Director of MetLife and Metropolitan Life Insurance Company since 2003.

Mr. Sicchitano’s experience as a managing partner in a global advisory services firm and his oversight of the firm’s audit practices as well as his oversight of the firm’s Audit/Assurance, Business Advisory and Tax Services have provided him with an understanding of the challenges and opportunities of managing a global business enterprise and a broad knowledge of the accounting and tax issues that are relevant to the Board’s oversight of the management of MetLife, a global insurance and financial services firm.

The Board of Directors recommends that you vote to ratify the appointment of Deloitte & Touche LLP as MetLife’s independent auditor for the fiscal year ending December 31, 2010.

 

The Audit Committee has appointed Deloitte & Touche LLP (Deloitte) as the Company’s independent auditor for the fiscal year ending December 31, 2010, subject to shareholder ratification. Deloitte has served as independent auditor of MetLife and most of its subsidiaries, including Metropolitan Life Insurance Company, for many years. Its long term knowledge of the MetLife group of companies, combined with its insurance industry expertise, has enabled it to carry out its audits of the Company’s financial statements with effectiveness and efficiency.

 

In considering Deloitte’s appointment, the Audit Committee reviewed the firm’s qualifications and competencies, including the following factors:

 

 

The Audit Committee assures the regular rotation of the audit engagement team partners as required by law.

 

The Audit Committee approves Deloitte’s audit and non-audit services in advance as required under

Sarbanes-Oxley and Securities and Exchange Commission rules. Each year before the annual engagement of the independent auditor, and under procedures adopted by the Audit Committee, the Audit Committee reviews a schedule of particular audit services that the Company expects to be performed in connection with the audit of the Company’s financial statements for the current fiscal year and an estimated amount of fees for each particular audit service. The Audit Committee also reviews a schedule of audit-related, tax and other permitted non-audit services that the Company may engage the independent auditor to perform during the twelve month period following such review and an estimated amount of fees for each of those services.

 

Based on this information, the Audit Committee pre-approves the audit services that the Company expects to be performed by the independent auditor in connection with the audit of the Company’s financial statements for the current fiscal year, and the audit-related, tax and other permitted non-audit services that management may desire to engage the independent auditor to perform during the twelve month period following such pre-approval. In addition, the Audit Committee approves the terms of the engagement letter to be entered into by the Company with the independent auditor.

 

If the audit, audit-related, tax and other permitted non-audit fees for a particular period exceed the amounts previously approved, the Audit Committee determines whether or not to approve the additional fees. The Audit Committee or a designated member of the Audit Committee to whom authority has been delegated may, from time to time, pre-approve additional audit and non-audit services to be performed by the Company’s independent auditor.

 

Representatives of Deloitte will attend the 2010 Annual Meeting. They will have an opportunity to make a statement if they desire to do so, and they will be available to respond to appropriate questions.

 

 

Mrs. Evelyn Y. Davis, with an office at the Watergate Office Building, 2600 Virginia Avenue, N.W., Washington, D.C. 20037, the holder of 200 shares of the Company’s common stock, has proposed the adoption of the following resolution and has furnished the following statement in support of her proposal:

 

“RESOLVED: That the stockholders of MetLife, assembled in Annual meeting in person and by proxy, hereby request the Board of Directors to take the necessary steps to provide for cumulative voting in the election of directors, which means each stockholder shall be entitled to as many votes as shall equal the number of shares he or she owns multiplied by the number of directors to be elected, and he or she may cast all of such votes for a single candidate, or any two or more of them as he or she may see fit.

 

REASONS:  Many states have mandatory cumulative voting, so do National Banks. In addition, many corporations have adopted cumulative voting. A Director elected through cumulative voting might be more open to having a better date for the annual meeting, which now is on one of the busiest dates of the year, where many other cos. including several TARP financial service companies meet.

 

If you AGREE, please mark your proxy FOR this resolution.”

 

The Board of Directors recommends that you vote AGAINST this proposal for the following reasons:

 

The Board of Directors believes that cumulative voting would not be in the best interests of the Company or its shareholders.

Each share of MetLife common stock has always been entitled to one vote for each nominee for Director. The Board of Directors believes that this approach produces a Board that represents the interests of the Company’s shareholders as a whole rather than a special interest. However, cumulative voting could allow a small number of shareholders with a small ownership interest in the Company to have a disproportionate effect on the election of Directors, possibly leading to the election of Directors who advocate the special interests of the groups responsible for their election, rather than positions which are in the best interests of all shareholders. As a result, cumulative voting could lead to factionalism within the Board of Directors, undermining its ability to work effectively on behalf of all shareholders. The Board of Directors believes that cumulative voting would not be in the best interests of the Company or its shareholders.

 

The Board already has acted to enhance the voice of our shareholders in Director elections by adopting majority voting.  (See “Majority voting standard in Director elections” on page 3.) We believe that the combination of a majority voting standard and the fact that each share of common stock is entitled to one vote for each nominee standing for election is a better way for shareholders to demonstrate their voting preferences than cumulative voting would be.

 

For the reasons stated above, the Board of Directors recommends that you vote AGAINST the adoption of this shareholder proposal.

 

 

The Board of Directors has adopted Corporate Governance Guidelines that set forth the Board’s policies on a number of governance-related matters. Topics covered by the Guidelines include:

 

 

A printable version of the Corporate Governance Guidelines may be found on MetLife’s website at www.metlife.com/corporategovernance under the link “Corporate Governance Guidelines.”

 

Responsibilities, Independence and Composition of the Board of Directors.  The Directors of MetLife are individuals upon whose judgment, initiative and efforts the success and long-term value of the Company depend. As a Board, these individuals review MetLife’s business policies and strategies and oversee the management of the Company’s businesses by the Chief Executive Officer and the other most senior executives of the Company (Executive Officers or Executive Group). The Board currently consists of

15 Directors, 14 of whom are both Non-Management Directors and Independent Directors. Effective as of the commencement of the 2010 Annual Meeting, two Directors are retiring and the size of the Board will be set at 13 members, 12 of whom will be both Non-Management Directors and Independent Directors. A Non-Management Director is a Director who is not an officer of the Company or of any entity in a consolidated group with the Company. An Independent Director is a Non-Management Director who the Board of Directors has affirmatively determined has no material relationships with the Company or any of its consolidated subsidiaries and is independent within the meaning of the New York Stock Exchange Corporate Governance Standards. An Independent Director for Audit Committee purposes meets additional requirements of Rule 10A-3 under the Exchange Act.

 

The Board of Directors has adopted categorical standards to assist it in making determinations regarding Director independence. The Board has determined that the Independent Directors satisfy all applicable categorical standards. The categorical standards are included in the Corporate Governance Guidelines of the Company, which are available on MetLife’s website at www.metlife.com/corporategovernance under the link “Corporate Governance Guidelines.”

 

The Board has affirmatively determined that Sylvia Mathews Burwell, Eduardo Castro-Wright, Burton A. Dole, Jr., Cheryl W. Grisé, R. Glenn Hubbard, John M. Keane, Alfred F. Kelly, Jr., James M. Kilts, Catherine R. Kinney, Hugh B. Price, David Satcher, Kenton J. Sicchitano, William C. Steere, Jr. and Lulu C. Wang are all Independent Directors who do not have any material relationships with the Company or any of its consolidated subsidiaries.

 

Classification of the Board.  The Company’s Board of Directors is divided into three classes. One class is elected each year to hold office for a

term of three years. Of the 15 current Directors, five are Class I Directors with terms expiring at the 2012 Annual Meeting, five are Class II Directors with terms expiring at the 2010 Annual Meeting, and five are Class III Directors with terms expiring at the 2011 Annual Meeting. As a result of the retirement of two Directors and the setting of the size of the Board at 13 members, effective as of the commencement of the 2010 Annual Meeting, the size of Class II and Class III will be reduced to four Directors each.

 

Plan to Declassify the Board and Elect All Directors Annually.  At the 2011 Annual Meeting, the Company expects to seek shareholder approval to amend the Company’s Certificate of Incorporation in order to declassify the Board and provide for the annual election of all Directors. Declassifying the Board would be phased in so that Directors could serve the full terms to which they would have been elected before the change to annual elections; however, beginning with the Company’s 2014 Annual Meeting, all Directors would be elected for terms that would end at the following year’s Annual Meeting.

 

Board Leadership Structure.  After careful consideration, in 2006, the Board of Directors determined that the best leadership structure for MetLife is a Chairman of the Board who also is the Company’s Chief Executive Officer and a separate empowered Lead Director. The Board believes that its experience with this structure over the course of the last four years has confirmed that it made the right decision. Experience has shown that the Chairman of the Board and Chief Executive Officer has partnered effectively with the Lead Director.

 

The Company’s Chief Executive Officer is responsible for the day-to-day operations of the Company and setting its strategic business direction. The performance of his responsibilities as Chairman of the Board is informed by his in-depth knowledge of the business, its opportunities and challenges and the capabilities and talents of the Company’s senior leadership team. Establishing the complementary roles of Lead Director and Chairman of the Board and Chief Executive Officer has brought assurance to MetLife Directors that they will be provided with the information about the Company’s businesses and operations, have the access to senior management of MetLife and have robust and appropriate

corporate governance processes and procedures that they need in order to effectively oversee the management of the Company and to perform their roles and responsibilities as Directors of a global provider of insurance products and services.

 

Mr. William C. Steere, the Company’s first Lead Director from January 2006 through January 2010, and Ms. Cheryl W. Grisé, the Company’s second Lead Director since February 1, 2010, were each appointed as Lead Director by the Company’s Independent Directors, as provided by the Company’s Corporate Governance Guidelines. The Guidelines establish an empowered independent Lead Director whose responsibilities include:

 

 

The Board of Directors has six standing committees (described on pages 20 through 25): Audit, Compensation, Executive, Finance and Risk Policy, Governance, and Corporate Responsibility and Compliance. Each of those Committees, other than the Executive Committee, is chaired by an Independent Director. The Investment Committee of Metropolitan Life Insurance Company is also chaired by an Independent Director.

Executive Sessions of Non-Management Directors.  At each regularly scheduled meeting of the Board of Directors, the Non-Management Directors of the Company (all of whom were also Independent Directors of the Company during 2009) meet in executive session without the presence of the Company’s management. The Lead Director presides at the executive sessions of the Non-Management Directors.

 

Director Nomination Process.  Under the Company’s Corporate Governance Guidelines, the following specific, minimum qualifications must be met by any candidate whom the Governance Committee would recommend for election to the Board of Directors:

 

 

In recommending candidates for election as Directors, the Governance Committee will take into consideration the need for the Board to have a majority of Directors that meet the independence requirements of the New York Stock Exchange Corporate Governance Standards, the ability of candidates to devote the time necessary for service on the MetLife Board, their ability to enhance the perspective and experience of the Board as a whole, and such other criteria as shall be established from time to time by the Board of Directors.

 

Potential candidates for nomination as Directors are identified by the Governance Committee and the Board of Directors through a variety of means, including search firms, Board members, Executive Officers and shareholders. Potential candidates for nomination as Director provide information about their qualifications and participate in interviews conducted by individual Board members. Candidates are evaluated based on the information supplied by the candidates and information obtained from other sources.

 

The Governance Committee will consider shareholder recommendations of candidates for nomination as Director. To be timely, a shareholder recommendation must be submitted to the Governance Committee, MetLife, Inc., 1095 Avenue of the Americas, New York, NY 10036, Attention: Corporate Secretary, not later than 120 calendar days prior to the first anniversary of the previous year’s annual meeting. Recommendations for nominations of candidates for election at the 2011 Annual Meeting must be received by the Corporate Secretary no later than December 28, 2010.

The Governance Committee makes no distinctions in evaluating nominees based on whether or not a nominee is recommended by a shareholder. Shareholders recommending a nominee must satisfy the notification, timeliness, consent and information requirements set forth in the Company’s By-Laws concerning Director nominations by shareholders.

 

The shareholder’s recommendation must set forth all the information regarding the person recommended that is required to be disclosed in solicitations of proxies for election of Directors pursuant to Section 14 of the Exchange Act and related regulations, and must include the recommended nominee’s written consent to being named in the Proxy Statement as a nominee and to serving as a Director if elected. The recommendation must also be accompanied by a completed disclosure questionnaire on a form posted on the Company’s website. In addition, the shareholder’s recommendation must include (i) the name and address of, and class and number of shares of the Company’s securities owned beneficially and of record by, the recommending shareholder and any other person on whose behalf the shareholder is acting or with whom the shareholder is acting in concert; (ii) a description of all arrangements or understandings between any shareholder and the person being recommended and any other persons (naming them) pursuant to which the nominations are to be made by the shareholder; (iii) satisfactory evidence that each shareholder is a beneficial owner, or a representation that the shareholder is a holder of record, of the Company’s stock entitled to vote at the meeting, and a representation that the shareholder intends to appear in person or by a qualified representative at the meeting to propose the nomination; and (iv) if the recommending shareholder intends to solicit proxies, a statement to that effect.

 

Board Meetings and Director Attendance in 2009.  In 2009, there were 14 regular and special meetings of the Board of Directors. All Directors attended more than 75% of the aggregate number of meetings of the Board of Directors and the Committees on which they served during 2009.

 

The Board of Directors has allocated responsibilities for overseeing risks associated with the Company’s business among the Board as a whole and the Committees of the Board. In performing its risk oversight functions, the Board of Directors:

 

 

In addition, as a financial holding company, MetLife is subject to the “umbrella” jurisdiction of the Federal Reserve Bank of New York (FRBNY). In this role, the FRBNY evaluates the risk management control processes of MetLife and its key business lines and monitors MetLife’s risk profile and financial performance. The MetLife Board of Directors receives an annual report from the FRBNY regarding the FRBNY’s detailed risk management assessment of the Company, including an assessment of Board and senior management oversight, risk policies, procedures and limits, risk monitoring and management information systems and internal controls.

 

Risk oversight functions performed by Board Committees are included in the discussions of Committee roles and responsibilities set forth in the next section under “Board Committees”.

 

MetLife’s Board of Directors has designated six standing Board Committees. These Committees perform essential functions on behalf of the Board. The Committee Chairs review and approve agendas for all meetings of their respective Committees. The responsibilities of each of these Committees are summarized below. Only Independent Directors may be members of

the Audit, Compensation, Governance, and Finance and Risk Policy Committees. Metropolitan Life Insurance Company also has designated Board Committees, including an Investment Committee. Each Committee of the Board of Directors has a Charter that defines the Committee’s purposes and responsibilities. The Charters for the Audit, Compensation and Governance Committees incorporate the requirements of the SEC and the New York Stock Exchange to the extent applicable. Current, printable versions of these Charters are available on MetLife’s website at www.metlife.com/corporategovernance by selecting Board of Directors and then the appropriate link under the heading “Board Committee Information.”

 

The Audit Committee

 

The Audit Committee, which consists entirely of Independent Directors,

 

 

The Audit Committee also oversees management’s development and implementation of policies and procedures related to the following matters and the management and mitigation of the associated risks:

 

 

The Audit Committee met eleven times during 2009. A more detailed description of the role and responsibilities of the Audit Committee is set forth in the Audit Committee Charter.

 

Financial Literacy and Audit Committee Financial Expert.  The Board of Directors has determined that the members of the Audit Committee, all of whom are Independent Directors and meet the additional independence requirements of Rule 10A-3 under the Exchange Act, are financially literate, as such qualification is interpreted by the Board of Directors. The Board of Directors has also determined that the following members of the Audit Committee would qualify as “audit committee financial experts,” as such term is defined by the SEC: Kenton J. Sicchitano, the Chair of the Committee, Burton A. Dole, Jr., Cheryl W. Grisé, John M. Keane and Catherine R. Kinney.

The Compensation Committee

 

The Compensation Committee, which consists entirely of Independent Directors,

 

 

The Compensation Committee also oversees the management and mitigation of risks associated with (i) the development and administration of the Company’s compensation and benefit

programs, and (ii) assuring that the Company’s incentive plans do not encourage or reward excessive risk taking.

 

A more detailed description of the role and responsibilities of the Compensation Committee is set forth in the Compensation Committee Charter. Under its Charter, the Compensation Committee may delegate to a subcommittee or to the Chief Executive Officer or other officers of the Company any portion of the Committee’s duties and responsibilities, if the Committee believes such delegation is in the best interests of the Company and the delegation is not prohibited by law, regulation or the New York Stock Exchange Corporate Governance Standards. Management’s delegated authority does not include granting salary increases or incentive compensation to any Executive Officer or Section 16 officer of the Company or to the Company’s Chief Risk Officer.

 

To assist the Committee in carrying out its responsibilities, the Compensation Committee, at its sole initiative without seeking a recommendation from MetLife management, selected and retained Hewitt Associates, Inc. (Hewitt) as its executive compensation consultant. Hewitt has provided the Committee with competitive market compensation data and overall market trends about executive compensation, has advised the Committee about the overall design and implementation of MetLife’s executive compensation programs, and has advised the Committee about regulatory, governance and accounting developments that may affect the Company’s executive compensation programs. Hewitt has provided similar consulting services to the Governance Committee regarding compensation and benefits provided to Non-Management Directors (see page 25 for additional information). The fees paid to Hewitt for providing such consulting services to the Compensation Committee and Governance Committee in 2009 were $416,308.

 

With the knowledge and concurrence of the Committee, management had previously retained a separate and distinct unit of Hewitt to provide recordkeeping and call center services for the Company’s retirement programs, as well as benefits analyses, communications, and other

general human resources consulting. The bulk of these services are provided under a written contract between the Company and Hewitt. In light of this contract, the Committee did not adopt a formal resolution approving the provision of these services by Hewitt in 2009. However, the Committee was informed of the services being performed in 2009 and the estimated fees expected to be incurred for such services. The aggregate fees for Hewitt’s services to the Company and its affiliates (other than those for consulting services to the Compensation Committee and Governance Committee) for 2009 were $7,826,553.

 

The Committee believes that its compensation consultant must be able to provide candid, direct, independent and objective advice to the Committee that is not influenced by any other relationship that the consultant might have with the Company. To that end:

 

 

The Committee annually has received information relating to all services that Hewitt has provided to the Company and the fees that Hewitt has received for such services. The Committee closely examined the steps that were taken by Hewitt to ensure the independence of its executive compensation consulting practice. The Committee was informed that:

 

 

For these reasons, the Committee believes that it has received independent and objective executive compensation advice from Hewitt.

 

After 2009 year end, but prior to the filing of this proxy statement, Hewitt announced that it had spun off a portion of its executive compensation practice into a separate, entirely independent entity named Meridian Compensation Partners, LLC. In light of this development, the Compensation Committee has retained Meridian going forward as its independent executive compensation consultant.

 

To help ensure that the Committee continues to receive independent and objective advice in the future, the Company’s Corporate Governance Guidelines provide that from and after August 2011, any consultant retained to advise the Compensation Committee on executive compensation matters should not be retained to provide any other services to the Company. Meridian Compensation Partners, LLC does not provide any services to the Company other than executive compensation consulting services to the Compensation Committee.

 

For information about the key factors that the Compensation Committee considers in determining the compensation of the members of the Executive Group, as well as the role of the Chief Executive Officer in setting such compensation, see “Compensation Discussion and Analysis” beginning on page 36. Also see the Compensation Discussion and Analysis for information about compensation paid to the persons listed in the Summary Compensation Table (Named Executive Officers) on page 52.

The Compensation Committee met seven times during 2009.

 

Compensation Committee Interlocks and Insider Participation

 

No member of the Compensation Committee has ever been an officer or employee of MetLife or any of its subsidiaries. During 2009, no Executive Officer of MetLife served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers is or has been a Director of MetLife or a member of MetLife’s Compensation Committee.

 

The Executive Committee

 

The Executive Committee may exercise the powers and authority of the Board of Directors during intervals between meetings of the Board of Directors. The Executive Committee did not meet during 2009.

 

The Finance and Risk Policy Committee

 

The Finance and Risk Policy Committee, which consists entirely of Independent Directors,

 

 

The Finance and Risk Policy Committee also oversees the Company’s policies and procedures to manage and mitigate risks related to

 

 

The Finance and Risk Policy Committee met six times during 2009.

 

The Governance Committee

 

The Governance Committee, which consists entirely of Independent Directors,

 

 

The Governance Committee also oversees the management and mitigation of risks related to failure to comply with required or appropriate corporate governance standards.

A more detailed description of the role and responsibilities of the Governance Committee is set forth in the Governance Committee Charter.

 

The Governance Committee reviews the compensation and benefits provided to Non-Management Directors, with the assistance of its independent compensation consultant. The Committee engaged Hewitt in 2009 to advise the Committee on its review of the current compensation program for Non-Management Directors, including Director compensation levels and amounts paid to Directors for service as a Committee Chair or as the Lead Director. Hewitt also provided the Committee with market data on director compensation at comparator companies. For additional information about compensation paid to Non-Management Directors in 2009, see “Compensation of Non-Management Directors — 2009 Director Compensation Table” and the accompanying narrative beginning on page 28.

 

The Governance Committee met five times during 2009.

 

The Corporate Responsibility and Compliance Committee

 

The Corporate Responsibility and Compliance Committee

 

The Corporate Responsibility and Compliance Committee also oversees management’s policies and procedures to manage and mitigate risk related to the Company’s compliance with laws and regulations and the Company’s contributions to charitable, civic and cultural organizations.

 

The Corporate Responsibility and Compliance Committee met three times during 2009.

 

The Investment Committee of Metropolitan Life Insurance Company

 

The Investment Committee of Metropolitan Life Insurance Company

 

 

At the request of MetLife, the Investment Committee also oversees the management and mitigation of risks associated with the investment portfolios of MetLife and certain of MetLife’s

subsidiaries, including

 

 

The Investment Committee met nine times during 2009.

The following discussion will assist in understanding the information reported in the 2009 Director Compensation Table:

 

Directors’ Retainer Fees.  The Company pays each Non-Management Director an annual retainer in the amount of $225,000, 50% of which is paid in shares of the Company’s common stock and 50% of which is paid in cash. In addition, the Company pays an annual cash retainer fee of $25,000 to each Non-Management Director who serves as Chair of a Board Committee, the Company’s Lead Director, and the Non-Management Director who serves as Chair of the Metropolitan Life Insurance Company Investment Committee.

 

Annual retainer fees are paid in advance at the time of the Company’s Annual Meeting. A Non-Management Director who serves for only a portion of the year is paid a prorated retainer fee in advance at the time of commencement of service to reflect the period of such service.

 

The Company paid a one-time $20,000 cash retainer in 2009 to each of R. Glenn Hubbard, Catherine R. Kinney and John M. Keane for additional service on a Special Committee of the Board of Directors.

 

Director Fee Deferrals.  A Non-Management Director may defer the receipt of all or part of his or her fees payable in cash or shares (and any imputed dividends on those shares) until a later date or until after he or she ceases to serve as a Director. From 2000 to 2004, such deferrals could be made under the terms of the 2000 Directors Stock Plan (share awards) or the MetLife Deferred Compensation Plan for Outside Directors (cash

awards). Since 2005, any such deferrals are made under the terms of the MetLife Non-Management Director Deferred Compensation Plan, which was adopted in 2004 and amended in 2005, and is intended to comply with Internal Revenue Code Section 409A.

 

Directors’ Benefit Programs.  Non-Management Directors who joined the Board on or after January 1, 2003 receive $200,000 of group life insurance. Non-Management Directors who joined the Board prior to January 1, 2003 are eligible to continue to receive $200,000 of individual life insurance coverage under policies then in existence, for which MetLife would pay the Directors a cash amount sufficient to cover the cost of premiums. MetLife provides each Non-Management Director with business travel accident insurance coverage for travel on MetLife business. Non-Management Directors are also eligible to participate in MetLife’s Long Term Care Insurance Program on a fully contributory basis.

 

The Board of Directors has established stock ownership guidelines for Non-Management Directors. Each is expected to own MetLife common stock-based holdings equal in value to at least three times the cash component of the MetLife Non-Management Directors annual retainer. Each Non-Management Director is expected to achieve this level of ownership by December 31 of the year in which occurs the third anniversary of his or her election to the Board.

 

 

The retirement policy adopted by the Board of Directors provides that no Director may stand for election as a member of MetLife’s Board after he or she reaches the age of 72, and that a Director may continue to serve until the Annual Meeting coincident with or immediately following his or her 72nd birthday. The Board of Directors waived its retirement policy to permit Mr. Steere, who reached the age of 72 prior to the 2009 Annual Meeting, to continue as a Director until the 2010 Annual Meeting. No Director who is also an officer of MetLife may serve as a Director after he or she retires as an officer of MetLife or Metropolitan Life Insurance Company. In addition, each Director must offer to resign from the Board upon a change or discontinuance of his or her principal occupation or business responsibilities. The Director’s retirement policy is set forth in the Company’s Corporate Governance Guidelines.

 

The Company’s By-Laws provide for the Company to indemnify, and advance expenses to, a person

who is threatened with litigation or made a party to a legal proceeding because of the person’s service as a Director of the Company. In addition, the Company’s Director Indemnity Plan affirms that a Director’s rights to this indemnification and expense advancement are contract rights. The indemnity plan also provides for expenses to be advanced to former Directors on the same basis as they are advanced to current Directors. Any amendment or repeal of the rights provided under the indemnity plan would be prospective only and would not affect a Director’s rights with respect to events that have already occurred.

 

 

The Company has established written procedures for the review, approval or ratification of related person transactions. A related person transaction includes certain financial transactions, arrangements or relationships in which the Company is or is proposed to be a participant and in which a Director, Director nominee or Executive Officer of the Company or any of their immediate family members has or will have a

material interest. Related person transactions may include:

 

 

Under the procedures, Directors, Director nominees and Executive Officers of the Company are required to report related person transactions in writing to the Company. The Governance Committee reviews, approves or ratifies related person transactions involving Directors, Director nominees and the Chief Executive Officer or any of their immediate family members. A vote of a majority of disinterested Directors of the Governance Committee is required to approve or ratify a transaction. The Chief Executive Officer reviews, approves or ratifies related person transactions involving Executive Officers of the Company (other than the Chief Executive Officer) or any of their immediate family members. The Chief Executive Officer may refer any such transaction to the Governance Committee for review, approval or ratification if he believes that such referral would be appropriate.

 

The Governance Committee or the Chief Executive Officer will approve a related person transaction if it is fair and reasonable to the Company and consistent with the best interests of the Company, taking into account the business purpose of the transaction, whether the transaction is entered into on an arm’s-length basis on terms fair to the Company, and whether the transaction is consistent with applicable codes of conduct of the Company. If a transaction is not approved or ratified, it may be referred to legal counsel for review and consultation regarding possible further action by the Company. Such action

may include terminating the transaction if not yet entered into or, if it is an existing transaction, rescinding the transaction or modifying it in a manner that would allow it to be ratified or approved in accordance with the procedures.

 

Financial Management Code of Professional Conduct.  The Company has adopted the MetLife Financial Management Code of Professional Conduct, a “code of ethics” as defined under the rules of the SEC, that applies to the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Corporate Controller and all professionals in finance and finance-related departments. A current, printable version of the Financial Management Code of Professional Conduct is available on the Company’s website at www.metlife.com/corporategovernance by selecting Corporate Conduct and then the appropriate link under the heading “Codes of Conduct.” No amendments to, or waivers of, any provisions of the Financial Management Code of Professional Conduct that apply to the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or Corporate Controller were entered into or made in 2009. If any such amendments or waivers were entered into or made, the Company would post information about them on the Company’s website at the address given above.

 

Employee Code of Business Conduct and Ethics and Directors’ Code of Business Conduct and Ethics.  The Company has adopted the Employee Code of Business Conduct and Ethics, which is applicable to all employees, including the Executive Officers of the Company, and the Directors’ Code of Business Conduct and Ethics, which is applicable to the Directors of the Company. A current, printable version of the Employee Code and the Directors’ Code is available on the Company’s website at www.metlife.com/corporategovernance by selecting Corporate Conduct and then the appropriate link under the heading “Codes of Conduct.”

 

In September 1999, the Company adopted a stockholder rights plan. The rights plan is scheduled to expire at the close of business on April 4, 2010. The Board of Directors does not currently intend to renew it.

This report is submitted by the Audit Committee of the MetLife Board of Directors. No portion of this Audit Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, through any general statement incorporating by reference in its entirety the Proxy Statement in which this Report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be “soliciting material” or to be “filed” under either the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

 

The Audit Committee, on behalf of the Board, is responsible for overseeing management’s conduct of MetLife’s financial reporting and internal control processes. For more information on the Audit Committee, see “Board Committees — The Audit Committee” on page 21.

 

Management has the responsibility for the preparation of MetLife’s consolidated financial statements and the reporting process. Deloitte & Touche LLP (Deloitte), as MetLife’s independent auditor, is responsible for auditing MetLife’s consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board (PCAOB).

 

Deloitte has discussed with the Audit Committee those matters described in the PCAOB Standard, Communications with Audit Committees (AU 380), Statement on Auditing Standards No. 114, and Rule 2-07 of Regulation S-X promulgated by the Securities and Exchange Commission. Deloitte has also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Deloitte its independence from MetLife.

During 2009, management updated its internal control documentation for changes in internal control and completed its testing and evaluation of MetLife’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. The Audit Committee was kept apprised of the progress of the evaluation and provided oversight and advice to management during the process. In connection with this oversight, the Audit Committee received updates provided by management and Deloitte at each regularly scheduled Audit Committee meeting. The Audit Committee also reviewed the report of management’s assessment of the effectiveness of internal control over financial reporting contained in the Company’s 2009 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission. The Audit Committee also reviewed Deloitte’s report regarding its audit of the effectiveness of the Company’s internal control over financial reporting.

 

The Audit Committee reviewed and discussed with management and with Deloitte MetLife’s audited consolidated financial statements for the year ended December 31, 2009 and Deloitte’s Report of Independent Registered Public Accounting Firm dated February 26, 2010 regarding the 2009 audited consolidated financial statements included in the Company’s 2009 Annual Report on Form 10-K. The Deloitte report states that MetLife’s 2009 audited consolidated financial statements present fairly, in all material respects, the consolidated financial position of MetLife and its subsidiaries as of December 31, 2009 and 2008 and the results of their operations and cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America and includes an explanatory paragraph on the adoption of certain recently issued accounting standards. In reliance upon the reviews and discussions with

management and Deloitte described in this Audit Committee Report, and the Board of Directors’ receipt of the Deloitte report, the Audit Committee recommended to the Board that

MetLife’s 2009 audited consolidated financial statements be included in the Company’s 2009 Annual Report on Form 10-K.

This report is furnished by the Compensation Committee of MetLife’s Board of Directors. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that is set forth on pages 36 through 51 of this Proxy Statement and, based on such review and discussion, the Compensation Committee has recommended to the Board of Directors that such Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, through any general statement incorporating by reference in its entirety the Proxy Statement in which this Report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be “soliciting material” or to be “filed” under either the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

 

This Compensation Discussion and Analysis describes the objectives and policies underlying MetLife’s executive compensation program. It also describes key factors that the Compensation Committee considered in determining the compensation of the members of the Executive Group. The Executive Group includes the Named Executive Officers as well as the other Executive Officers of the Company.

 

Executive Summary and Overview of 2009 Compensation

 

Beginning in 2008 and continuing through 2009, MetLife, the life insurance industry and the broader financial services industry faced an environment of global economic recession, turbulent capital markets, and an uncertain regulatory and legal environment. Despite these challenges, MetLife continued to maintain its focus on creating long-term shareholder value and growing its businesses without taking excessive risks during 2009.

 

MetLife’s Operating Earnings for 2009 were $2.365 billion, reflecting strong operating performance in a number of areas. MetLife:

 

 

In light of the above achievements and others, compensation for MetLife’s Executive Group members for 2009 performance reflects the Company’s solid operational performance balanced with marginal shareholder return. MetLife has maintained its commitment to its compensation philosophy and objectives, and has continued to emphasize variable performance-based compensation. For 2009, variable

compensation to Executive Group members was nearly six times fixed compensation, and stock-based incentive compensation for 2009 performance to Executive Group members was nearly double cash incentive compensation.

 

As a result, Executive Group members’ interests are aligned with those of shareholders, as much of their compensation depends on increases in the price of MetLife, Inc. common stock (Shares) that benefit shareholders. For example, Share prices had a significant impact on the final payment of Shares to the Executive Group and others resulting from the grant of Performance Shares for the 2006-2008 performance period. Although the number of Shares paid was slightly above target (based on three-year performance relative to competitors), the price of Shares at payout was considerably lower than on the date of grant due to the tumultuous stock market. As a result, the payment value was 57% of original target value.

 

Further, the Company’s Share ownership guidelines align executives’ interests with those of shareholders and reinforce the focus on long-term shareholder value. The Named Executive Officers have maintained significant Share ownership.

 

During 2009, the Compensation Committee conducted a thorough review of the Company’s executive compensation practices. This analysis showed that MetLife’s program aligns with Company strategies and has a number of features that contribute to prudent decision making and avoid providing executives with an incentive to take excessive risks. One important feature is the use of Operating Earnings as a metric in incentive programs. Operating Earnings excludes investment gains and losses, which removes incentives to take excessive risk in MetLife’s investment portfolio. In addition, the Company uses three-year performance periods and vesting for long-term incentive compensation, so that time horizons for compensation reflect the extended time horizons for the results of many business decisions.

Even so, based on the review, MetLife made several changes to its executive compensation programs in light of current and emerging trends in market practices. Specifically, the Company:

 

 

Compensation Philosophy and Objectives

 

MetLife’s executive compensation program is designed to:

 

 

The program motivates Executive Group members to achieve the Company’s business goals, and rewards executives for achieving these goals. At the same time, the program is designed to avoid providing incentives for Executive Group members to make business decisions that expose the Company to excessive risk. Each Executive Group member’s Total Compensation reflects the

Compensation Committee’s assessment of performance and competitive market data. However, the Compensation Committee does not structure particular elements of compensation to relate to separate individual goals or performance.

 

The Company’s Chief Risk Officer has advised the Compensation Committee that risks arising from the compensation policies and practices for employees of the Company and its affiliates are not reasonably likely to have a material adverse effect on the Company as a whole, in light of the features of those policies and practices and the controls in place to limit and manage risk.

 

Overview of Compensation Program

 

MetLife uses a competitive total compensation structure that consists of base salary, annual incentive awards and stock-based long-term incentive award opportunities. For purposes of this discussion and MetLife’s compensation program, Total Compensation for an Executive Group member means the total of those three elements. The Independent Directors approve the Total Compensation for the Chief Executive Officer and the other Executive Group members.

 

The Compensation Committee reviews each Executive Group member’s Total Compensation and recommends Total Compensation amounts for approval by the Independent Directors. When determining an Executive Group member’s Total Compensation, the Committee considers the three elements of Total Compensation together. As a result, decisions on the award or payment amount of one element impact the decisions on the amount of other elements.

 

The Compensation Committee also reviews other compensation and benefit programs, such as retirement benefits and potential payments that would be made were an Executive Group member’s employment to end. Benefits such as retirement and medical programs do not impact Total Compensation decisions since they apply to substantially all employees. As a result, decisions about those benefits do not vary based on decisions

about an Executive Group member’s base salary or annual or stock-based awards.

 

Generally, the forms of compensation and benefits provided to the Executive Group members are similar to those provided to other officer-level employees. None of the Executive Group members is a party to any agreement with the Company that governs the executive’s employment.

 

The Compensation Committee engaged an independent compensation consultant, Hewitt, to

assist it in its design and review of the Company’s compensation program. For more information on the role of Hewitt regarding the Company’s executive compensation program, see “Board Committees — The Compensation Committee” beginning on page 22.

 

A substantial portion of the Executive Group members’ Total Compensation for 2009 performance was variable and dependent upon the attainment of performance objectives or the value of Shares.

 

VARIABLE VS. FIXED COMPENSATION

 

 

To align executive and shareholder interests, the Compensation Committee allocated a greater portion of the Executive Group members’ variable compensation to stock-based incentives than it allocated to annual cash incentives as part of their overall Total Compensation for 2009 performance:

 

STOCK-BASED INCENTIVES VS. ANNUAL CASH INCENTIVES

 

 

For purposes of the above calculations, Performance Shares were valued at the closing price of Shares on the date of the grants and each Stock Option was valued at one-third of that price. See “Stock-Based Long-Term Incentive Awards” beginning on page 46. All of the long-term incentive compensation awarded to the Executive Group members consisted of Stock Options that vest over three years (or later) and awards normally payable in the form of Shares that cannot be acquired by the executive for at least three years.

Benchmarking Compensation

 

The Compensation Committee periodically reviews the competitiveness of MetLife’s Total Compensation structure using benchmark data reflecting a comparator group of companies in the insurance and broader financial services industries with which MetLife competes for executive talent (Comparator Group). Likewise, the Compensation Committee reviews the composition of the Comparator Group from time to time to assure that it remains an appropriate benchmark for the Company. The Compensation Committee reviewed and modified the Comparator Group in 2009 in light of the significant changes in the financial services industry. The following changes were made:

 

 

The current Comparator Group consists of the 15 insurance companies and 9 financial services companies listed under “Comparator Group” below. Companies were chosen for the Comparator Group in light of their size relative to MetLife, or their similarity to MetLife in the

importance of investment and risk management to their business, or both. MetLife was above the 80th percentile of the insurance companies in the Comparator Group, and between the 50th and 75th percentile of the Comparator Group as a whole, in each of assets (as of year-end 2008), revenue (for 2008), and market capitalization (as of June, 2009).

 

The Compensation Committee has determined that Total Compensation opportunities are competitive if they fall between the 75th percentile of insurance companies in the Comparator Group and the 50th percentile of the entire Comparator Group, based on Comparator Group data from recent periods. The percentile for insurance companies is in recognition of MetLife’s size and market position in the insurance industry. The Compensation Committee does not benchmark compensation on a separate element-by-element basis, but rather focuses on Total Compensation.

 

Comparator Group data is used to develop a Total Compensation opportunity range for each Executive Group member’s grade level. An Executive Group member’s Total Compensation is expected to fall within this range. For 2009 performance, the Total Compensation of Mr. Wheeler and Mr. Kandarian fell within the upper-third of the range for their respective grade levels, and the Total Compensation of Mr. Toppeta and Mr. Mullaney fell within the approximate middle third of the range for their respective grade levels. Mr. Henrikson’s Total Compensation was above the market data range for his level. The Compensation Committee considered the fact that the range for Chief Executive Officer Total Compensation in the financial services industry had been temporarily affected by the credit crisis, and that it expected future compensation ranges to be higher.

 

Setting Compensation

 

CEO Compensation.  At the beginning of 2009, the Chief Executive Officer and the Compensation Committee established goals and objectives that were designed to drive Company performance. For a description of these goals, see “Annual Incentive Awards” beginning on page 42.

 

In early 2010, the Compensation Committee recommended to the Independent Directors the Total Compensation for the Chief Executive Officer, including annual and stock-based awards for 2009. The Committee’s Total Compensation recommendations for 2009 reflected its assessment of Mr. Henrikson’s performance relative to his established goals and objectives in his role as Chief Executive Officer, and took into account Mr. Henrikson’s performance relative to additional business challenges and opportunities that arose during the year. The Committee also considered competitive market data provided by the Compensation Committee’s independent compensation consultant. The consultant’s report included a comparison and analysis of Mr. Henrikson’s compensation to chief executive officer compensation at Comparator Group companies. The comparison included historical information on Comparator Group companies’ size (measured by revenue, market capitalization and assets) and performance (measured by 3-year and 1-year growth in operating earnings, book value, operating return on equity, and total

shareholder return) compared to MetLife. The application of these practices and processes for 2009 resulted in relatively higher compensation being awarded to Mr. Henrikson than to other Executive Group members due to Mr. Henrikson’s broader responsibilities and higher levels of accountability as the most senior executive in the Company, as well as competitive market data.

 

Compensation of Other Executive Group Members.  At the beginning of 2009, the Chief Executive Officer and each Executive Group member agreed on the respective executive’s goals. In early 2010, the Chief Executive Officer provided to the Compensation Committee an assessment of the other Executive Group members’ performance during 2009 relative to their goals and the additional business challenges and opportunities that arose during the year. He also recommended to the Committee Total Compensation amounts for each Executive Group member taking into account performance during the year as well as available competitive data and compensation opportunities for each position. The Committee reviewed these recommendations and endorsed the components of each Executive Group member’s Total Compensation to the Board of Directors. Other than the Chief Executive Officer, no Executive Group member played a role in determining the compensation of any of the other Executive Group members. The Chief Executive Officer did not take part in the Board’s consideration of his own compensation.

 

Base Salary.  The base salaries earned by the Named Executive Officers in 2009 are reported in the Summary Compensation Table on page 52. In February, 2009 the Compensation Committee approved the following base salary increases for the following Named Executive Officers in light of their levels of responsibility, their performance, and the competitive market:

 

 

Annual Incentive Awards.  The MetLife Annual Variable Incentive Plan (AVIP) provides eligible employees, including the Executive Group members, the opportunity to earn annual cash incentive awards. AVIP is administered as a Cash-Based Awards program under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan (Stock and Incentive Plan).

 

Determining the Amount Available for Awards.  Each year, the Compensation Committee approves the maximum amount available for AVIP awards to all 23,000 covered employees, including the Named Executive Officers. In January 2009, the

Compensation Committee approved a methodology it would use to determine the amount available for 2009, subject to its exercise of discretion. This methodology is as follows:

 

The amount available for AVIP awards is determined by multiplying the sum of all target-performance planned awards by an AVIP performance factor. The AVIP performance factor is based primarily on the Company’s Operating Earnings for 2009 compared to the Company’s business plan. Achievement of the business plan target Operating Earnings results in an AVIP performance factor of 100%. For each 1% by which the Company’s Operating Earnings is above or below the business plan target, the AVIP performance factor is adjusted up or down by 1%. For this purpose, Operating Earnings is adjusted by eliminating the impact of the Company’s after-tax variable investment income available to common shareholders to the extent that such income is more than 10% higher or lower than the business plan target. If the Company’s Operating Earnings does not exceed 40% of the business plan target, the AVIP performance

factor is zero. The maximum possible AVIP performance factor related to the Company’s Operating Earnings is 150%.

 

In addition, the AVIP performance factor is increased if the Company’s Return on Equity for 2009 exceeds the Company’s business plan. For each 0.1% by which the Return on Equity exceeds the business plan, 0.3% is added to the AVIP performance factor, up to a maximum possible increase of 15%. The highest possible AVIP performance factor is 165%.

 

The formula avoids providing employees with an incentive to take excessive risk in several ways. Operating Earnings does not include investment gains or losses. In addition, the impact of after-tax variable investment income is limited to no more than a 10% variation from the business plan. As a result, the formula does not provide any incentive to take additional risk in the Company’s investment portfolio. Nor is the formula an unlimited function of revenues; rather, the formula caps the amount that can be generated for AVIP awards, and is a function of financial measures that account for the Company’s costs and liabilities.

 

The Committee ultimately reviewed and followed this methodology with respect to AVIP, with the following results. The Company’s 2009 Operating Earnings was 91% of the Company’s 2009 business plan, after adjustment to eliminate the impact of after-tax variable investment income that was lower than the business plan target by more than 10%. The Company’s Return on Equity did not exceed the Company’s business plan, so no adjustment on account of Return on Equity was made. As a result, the AVIP performance factor was 91%, which was multiplied by the total target-performance planning amount of all awards of $319 million to produce the amount available for AVIP awards of $290 million. The maximum amount available was higher for 2009 than it had been for 2008, when $246 million was available for AVIP awards to all covered employees, determined under a substantially different method than the one used for 2009.

Section 162(m) of the United States Internal Revenue Code limits the deductibility of compensation paid to four of the Company’s most highly-compensated executives, but exempts certain “performance-based” compensation from those limits. Early in 2009, the Compensation Committee established limits for awards under the AVIP to the Company’s Executive Group members. These limits were established for the purpose of qualifying AVIP awards to four of the Company’s most highly-compensated executives for 2009 for tax deductibility under Section 162(m), and were based on the Company’s net income for 2009. Since the Company had negative net income, the Committee was precluded from making deductible AVIP awards to four of the Company’s most highly-compensated executives. However, for the reasons discussed below, the Compensation Committee approved annual incentive awards for Executive Group members for 2009 (the 2009 Annual Awards) that were not made under AVIP and, with respect to those four executives, will not be deductible. The estimated value of the lost deduction is approximately $2 million.

 

The Committee took into account the Company’s and each Named Executive Officer’s performance against the performance goals discussed below, as well as the fact that the Company would have derived positive net income but for a net investment loss of $3.2 billion that was related largely to derivative positions the Company held as part of its overall risk management and asset-liability management strategies. The risk management derivatives are part of the Company’s risk-mitigation strategy to hedge interest rate, equity, currency, and credit risks. If the Company had not used the risk management derivatives, management believes the Company may have been exposed to excessive risks and may not have been managing its risks in a prudent manner. Accordingly, the Committee concluded that these net losses were significantly related to prudent risk management.

Other Performance Goals.  The Executive Group members’ performance goals are aligned with the Company’s performance objectives. The achievement of these goals drives the Company to meet its business objective of providing insurance and employee benefits products and services that meet customers’ financial needs. The Company accomplishes this through prudent risk-taking, investment portfolio management, and effectively deploying capital resources to ensure that the enterprise meets its obligations to policyholders while promoting and enhancing shareholder value.

 

The Executive Group led the Company through a difficult and challenging environment in 2009. In addition to the common financial goals described above, Executive Group members’ goals included maintaining the Company’s solid financial performance with appropriate liquidity and capital levels. All of the Executive Group members were also focused on sound risk management and mitigation in order to prevent the Company from being exposed to excessive risk.

At the same time, the Executive Group members’ objectives also included adapting the Company’s strategies and market position to changing market conditions, through product development, senior executive talent development, innovation, and a focus on strategic growth and cost savings. Each of the Executive Group members’ goals also included effective representation of MetLife and its interests (or the broader perspective of the life insurance industry generally) to key regulators, analysts, investors, customers, sales personnel, and other stakeholders.

 

Under the leadership of Mr. Henrikson and the other members of the Executive Group, MetLife’s premiums, fees and other revenues increased to $34 billion from $32.9 billion in 2008. In addition, net after-tax investment losses continued to decline in 2009, the value of separate account balances continued to recover, and variable annuity sales increased. MetLife maintained its leading market share in group life and variable annuities, and continued to have strong market share in group

dental and disability. MetLife also achieved strong results on the Federal Reserve’s Supervisory Capital Assessment of the 19 largest financial holding companies. As a result of MetLife’s successful management of its capital and liquidity, the Company was the only one of 19 companies subject to the Federal Reserve’s assessment not to participate in the Troubled Asset Relief Program.

 

For 2009, key goals for Mr. Henrikson also included refining and implementing strategic growth and expense reduction initiatives to sustain financial strength and business operational excellence, drive growth, and enhance long-term shareholder value. These goals included the achievement of cumulative expense savings of $300 million on a pre-tax basis. Through the Executive Group’s attention to improving efficiency and business processes, MetLife exceeded the $300 million goal and achieved annual expense savings of $400 million on a pre-tax basis, which was a year ahead of plan. In addition, MetLife simplified its business processes and strengthened its strategic planning processes. Under Mr. Henrikson’s leadership, MetLife also formed a unified U.S. Business organization to accelerate growth, expand margins, eliminate redundancies, reduce costs, take advantage of distribution capabilities and synergies within the business, and leverage talent.

 

Mr. Henrikson’s objectives also included development of leadership to assure executive succession consistent with promoting and sustaining leadership excellence. During 2009, Mr. Henrikson refined a senior leadership structure that promotes effective teamwork while also preserving individual accountability. Mr. Henrikson also sponsored and endorsed the development of programs to attract and retain associates who will provide the future senior leadership for the Company and maintained and improved MetLife’s corporate governance structure, including by recruiting two new Board members with extensive experience in financial services and international markets.

 

Mr. Henrikson employed strategic communications with associates to promote common objectives and shared values, including ethical standards and compliance with laws. During 2009, Mr. Henrikson successfully communicated to

internal and external stakeholders about many issues, including MetLife’s favorable results on the Federal Reserve’s stress test, the Company’s decision not to participate in the Troubled Asset Relief Program, and the formation of the U.S. Business organization. Mr. Henrikson also served as the chairman of the Financial Services Forum during a very challenging time for the financial services industry, and began service as the Chairman of the American Council of Life Insurers. Finally, Mr. Henrikson effectively presented MetLife’s perspective and interests to regulators and other government leaders whose decisions could affect MetLife’s businesses.

 

For 2009, other key goals for Mr. Wheeler included continued development and financial performance of MetLife Bank, maintenance of appropriate capital levels, sustained excellence in accounting practices, and sound risk management. Under Mr. Wheeler’s leadership, MetLife Bank’s financial performance exceeded its goals of $731 million in operating revenue, $63 million in operating earnings, and return on equity of 13%. In addition, MetLife Bank completed the acquisition and integration of two key businesses, transforming the bank’s business strategy to emphasize mortgage and reverse mortgage business. At the same time, MetLife divested several non-core businesses during 2009. MetLife, through its insurance subsidiaries, achieved a strong consolidated risk-based capital position and completed securities issuances and borrowing arrangements with an aggregate value of $4.7 billion. Mr. Wheeler also recruited a new Chief Accounting Officer to lead the Company’s financial reporting organization, and who maintained and improved the Company’s disclosure practices and transparency and clarity in its financial reporting. Mr. Wheeler directed the Company’s risk management and asset-liability management strategies to hedge interest rate, equity, currency, and credit risks, avoiding exposure to excessive risk and managing those risks prudently. Under Mr. Wheeler’s leadership, the Financial Management organization achieved savings of just under its goal of $36 million.

 

Mr. Kandarian’s other key goals in 2009 included effectively managing MetLife’s investment portfolio to meet changing market conditions, producing net

investment income without taking excessive risk, managing the investment portfolio’s liquidity, and establishing the Company’s Enterprise Strategy Group and continuing to lead the Company’s enterprise strategic initiative. In addition, Mr. Kandarian assumed responsibility for the Company’s Global Brand and Marketing Services. During 2009, under Mr. Kandarian’s leadership, the Company’s investment portfolio was successfully rebalanced to maintain appropriate portfolio liquidity and moderate the recession’s impact. Net investment income was down in 2009 primarily due to the low interest rate environment, while strong securities lending and hedge fund returns partially offset negative returns on real estate funds. A continued focus on lower-leveraged, quality commercial mortgages enabled the company’s commercial mortgage portfolio to perform better than the overall market. In Global Brand and Marketing Services, a new mix of advertising and non-traditional promotional vehicles increased brand preference for the Company. Under Mr. Kandarian’s leadership, Investments and Global Brand and Marketing exceeded their combined goal of $19.6 million in cost savings.

 

For 2009, Mr. Toppeta’s additional key goals included financial performance of the International business unit. Mr. Toppeta also focused on continuing the development of International to take advantage of the Company’s growth opportunities outside the United States by evaluating strategic opportunities, developing market share, introducing new products, and maintaining prudent risk and financial management through product modifications, strategic pricing decisions, and careful management of foreign exchange volatility. Under Mr. Toppeta’s leadership, International maintained its position as the leading life insurance company in Mexico based on market share in direct premium life, medical and personal accident, expanded the dental business in Brazil, and met or exceeded its $28 million goal for pre-tax cost savings. However, International did not meet its goals for return on equity (goal of 13.9%), operating earnings (goal of $545 million), operating revenue (goal of $6.157 billion), premiums, fees and other revenues (goal of $4.79 billion), or sales (goal

without Japan of $5.320 billion and with Japan of $11.839 billion). Mr. Toppeta also completed a review of senior executive talent throughout the International business unit, identifying and developing potential leaders, appointing new management, acquiring new talent, and putting succession plans in place where appropriate. Finally, Mr. Toppeta took on an increasingly high-profile role representing MetLife in international insurance organizations and in international service trade organizations.

 

Mr. Mullaney’s additional goals for 2009 included maintaining and advancing Institutional Business’ market position in products such as group life, dental, and others. After the formation of the U.S. Business organization was announced, Mr. Mullaney successfully led the integration of various businesses into the new organization, determining its management structure and setting its strategic and operational plan. U.S. Business exceeded its pre-tax cost savings goal of $87 million, but did not meet its goals for premiums, fees, and other revenues (goal of $28.846 billion), expense ratio (goal of 18.7%), operating earnings (goal of $2.795 billion), or return on equity (goal of 11.9%). Mr. Mullaney also developed MetLife’s health care policy statement and advanced analysts’ and investors’ understanding of the Company.

 

The Compensation Committee considered each Named Executive Officer’s accomplishments in determining the Named Executive Officers’ 2009 Annual Awards. The 2009 Annual Awards are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 52.

 

Stock-Based Long-Term Incentive Awards.  The Company awards Stock Options and Performance Shares and determines the amount of such awards as part of its Total Compensation program.

 

Stock Options.  Stock Options are granted at an exercise price equal to the closing price of Shares on the date of grant. The ultimate value of Stock Options depends exclusively on increases in the price of Shares. One-third of each award of Stock Options vests on each of the first three anniversaries of the date of grant.

Performance Shares.  Performance Shares are units that may become payable in Shares at the end of a three-year performance period, depending on specified Company performance relative to MetLife’s competition over that time. MetLife’s competition is defined for this purpose as the Fortune 500^® companies included in the Standard & Poor’s Insurance Index (Insurance Index Comparators). These comparators were chosen to measure MetLife’s performance because insurance is the predominant portion of the Company’s overall business mix. The final number of Performance Shares paid is determined by the Company’s performance in total shareholder return and change in annual net operating earnings per share (as defined by the Company for each year) compared to the other comparators. The amount paid can be as low as zero and as high as twice the number of Performance Shares granted. For additional information about the Performance Share formula, see “Equity Incentive Plan Awards” beginning on page 60.

 

Beginning with the 2009-2011 performance period, MetLife added a further, non-discretionary, more restrictive performance condition to new grants of Performance Shares. If the Company does not produce a positive total shareholder return for the performance period, the number of Shares to be paid out, if any, will be reduced by 25%.

 

The Performance Shares for the 2006-2008 performance period became payable during 2009. Based on MetLife’s performance relative to the Insurance Index Comparators for that period, the Company paid 110% of each vested Performance Share award. For information about these payments, see the table entitled, “Option Exercises and Stock Vested in 2009” on page 65.

 

Vesting, Tax, and Accounting.  Performance Shares and Stock Options are normally forfeited if the executive leaves the Company voluntarily before the end of the applicable performance period or vesting period and is not Retirement Eligible, as defined in the Metropolitan Life Retirement Plan for United States Employees (Retirement Plan) or eligible for post-retirement medical benefits (Bridge Eligible). See “Pension

Program” beginning on page 48 for more information about the Retirement Plan.

 

The Company has designed Performance Shares and Stock Options to meet the Section 162(m) requirements for Performance-Based Compensation. As designed, these awards also qualify as equity-classified instruments whose fair value for determining compensation expense under current accounting rules is fixed on the date of grant. This allows the Company to provide stock-based incentive opportunities while limiting the volatility of the related accounting cost of such compensation. For information about the specific grants of Stock Options and Performance Shares to the Named Executive Officers in 2009, see the table entitled “Grants of Plan-Based Awards in 2009” on page 60.

 

Special Grants.  In early 2009, the Compensation Committee approved special grants of Stock Options and Performance Shares to Mr. Wheeler and Mr. Kandarian. The special grants were approved in recognition of their critical roles at the Company, their sustained high performance, and to encourage them to continue to provide a high level of performance that will create value for Company shareholders. The grants were in addition to grants determined under the Company’s general executive compensation practices. The special grant Stock Options will normally become exercisable on the third anniversary of their grant date, rather than at a rate of one-third on each of the first three anniversaries of their grant date as do the Stock Options determined under the Company’s general executive compensation practices.

 

Performance-Based Compensation Recoupment Policy

 

In December, 2009 the Compensation Committee and Board adopted a performance-based compensation recoupment policy. The policy applies to all officers and officer-equivalent employees of the Company and its affiliates and subsidiaries. The policy provides that the Company (and its affiliates or subsidiaries) will seek the recovery of performance-based compensation purportedly earned by or paid to such an employee where the compensation was based on Company financial results that were subsequently restated due to the employee’s fraudulent or other

wrongful conduct, and the restated financial results would have resulted in lower or no compensation. The policy was adopted in order to reinforce the Company’s intent to seek recovery of performance-based compensation under such circumstances.

 

Equity Award Timing Practices

 

The Committee grants Stock Options and Performance Shares to the Executive Group members at its regularly scheduled meeting in February of each year. This meeting is on the same day that the Compensation Committee and the Board of Directors approve annual incentive compensation awards and any base salary increases. The exercise price of these Stock Options is the closing price of a Share on the day the Stock Options are granted. The Company has never granted, and has no plans to grant, any stock-based awards to current or new employees in coordination with the release of non-public information about the Company or any other company. The Chief Executive Officer does not have any authority to grant stock-based awards of any kind to any Executive Group members, the Chief Accounting Officer, the Chief Risk Officer, or Directors of the Company.

 

Stock Ownership

 

To further promote alignment of management’s interests with shareholders, the Company has established minimum Share ownership guidelines for officers at the Senior Vice-President level and above, including the Executive Group members. Each is expected to own Shares in an amount that is equal to a percentage or multiple of annual base salary rate depending on position.

 

Employees may count toward these guidelines the value of Shares they or their immediate family members own directly or in trust. They may also count Shares held in the Company’s savings and investment program, Shares deferred under the Company’s nonqualified deferred compensation program and deferred cash compensation or auxiliary benefits measured in Share value.

 

Each employee subject to the guidelines is expected to retain the net stock acquired through the exercise of Stock Options or from long-term incentive plan award payments until the employee

meets the guidelines. The Company’s policy prohibits all employees, including the Executive Group members, from engaging in short swing sales, hedging, and trading in put and call options, with respect to the Company’s securities.

 

The Share ownership of the active Named Executive Officers, as a multiple of their respective annual base salary rates, is reported below as of December 31, 2009:

 

 

Mr. Kandarian’s and Mr. Mullaney’s Share ownership guidelines increased in 2009 from two times annual base salary rate to four times annual base salary rate.

 

Retirement and Other Benefits

 

MetLife recognizes the importance of providing comprehensive, cost-effective employee benefits to attract, retain and motivate talented associates. The Company reviews its benefits program from time to time and makes adjustments to meet these objectives and to remain competitive with other employers.

 

Benefits plans in which the Executive Group members participate will be amended in 2010 so that the 2009 Annual Awards will be included as part of the compensation used to determine benefits on the same basis as AVIP awards.

 

Pension Program.  The Company sponsors a pension program in which all eligible U.S. employees, including Executive Group members, participate after one year of service. The program includes the Retirement Plan and the MetLife Auxiliary Pension Plan (Auxiliary Pension Plan), an unfunded nonqualified plan.

 

The program rewards employees for the length of their service and, indirectly, for their job performance, because the amount of benefits increases with the length of employees’ service with the Company and the salary and annual bonuses they earn. Benefits under the Company’s

pension program are determined under two separate benefit formulas. For any given period of time, an employee’s benefit is determined under one or the other formula. In no event do benefits accrue for the same period under both formulas. The Traditional Formula is based on length of service and final average compensation. The Personal Retirement Account Formula is based on monthly contributions to an account for each employee based on the employee’s compensation, plus interest.

 

In early 2009, at Mr. Henrikson’s recommendation, the Auxiliary Pension Plan was amended to cap the final average compensation of each participant, including each Executive Group member. The purpose and effect of this change on Mr. Henrikson’s benefit is to reduce expected future pension accruals, thus limiting future increases in his benefit. Any increases in pension value beyond 2009 will primarily reflect Mr. Henrikson’s additional service, and will not reflect any increases in his final average compensation.

 

In addition, effective January 1, 2010, the Auxiliary Pension Plan was amended to change the final average compensation formula used for Traditional Formula benefits for officers at the Senior Vice-President level and above. The same formula that applies to qualified pension benefits for all eligible employees under the Retirement Plan will also apply to Traditional Formula benefits under the Auxiliary Pension Plan for these officers. This change was made in order to apply a common formula to all participants, reduce anticipated costs, and continue to provide a competitive level of benefits.

 

For additional information about pension benefits for the Named Executive Officers, see the table entitled “Pension Benefits” on page 66.

 

Savings and Investment Program.  The Company sponsors a savings and investment program for U.S. employees, in which each Executive Group member is eligible to participate. The program includes the Savings and Investment Plan for Employees of Metropolitan Life and Participating Affiliates (Savings and Investment Plan), a tax-qualified defined contribution plan under Internal Revenue Code Section 401(k), and the

Metropolitan Life Auxiliary Savings and Investment Plan (Auxiliary Savings and Investment Plan), an unfunded nonqualified deferred compensation plan.

 

Employee contributions to the Savings and Investment Plan may be made on a before-tax 401(k), Roth 401(k) or after-tax basis. The Company also provides a matching contribution to employees after one year of service in order to encourage and reward such savings. The Auxiliary Savings and Investment Plan provides additional Company contributions to employees who elect to contribute to the Savings and Investment Plan and who have compensation beyond Internal Revenue Code limits. Company contributions for the Named Executive Officers are included in the “All Other Compensation” column of the Summary Compensation Table on page 52. Because the Auxiliary Savings and Investment Plan is a nonqualified deferred compensation plan, the Company’s contributions to the Named Executive Officers’ accounts, and the Named Executive Officers’ accumulated account balances and any payouts made during 2009, are reported in the table entitled “Nonqualified Deferred Compensation” on page 69.

 

Nonqualified Deferred Compensation.  The Company sponsors a nonqualified deferred compensation program for officer-level employees, including the Executive Group members. Participants may choose from a range of simulated investments, according to which the value of their deferrals may go up or down. See the table entitled “Nonqualified Deferred Compensation” on page 69 for amounts of nonqualified deferred compensation reported for the Named Executive Officers.

 

Employees choose in advance the amount they want to defer, the date on which payment of their deferred compensation will begin and whether they want to receive payment in a lump sum or in up to 15 annual payments. If the employee becomes Retirement Eligible or Bridge Eligible, the employee’s choice of form and timing of payment are honored. Otherwise, the Company generally pays out the employee’s deferred compensation in a single lump sum after the end of the employee’s service. The continued deferral of income taxation and pre-tax simulated investment earnings through the

employee’s chosen payment dates encourage employees to remain with the Company.

 

Perquisites

 

The Company provides its Executive Group members with limited perquisites.

 

The Company leases an aircraft for purposes of efficient business travel by the Company’s executives. While the Chief Executive Officer may occasionally use the Company’s aircraft for personal travel, Company policy does not require him to use the Company’s aircraft for all personal and business travel. To maximize the accessibility of Executive Group members, the Company makes leased vehicles and drivers and outside car services available to them for commuting and personal use.

 

The Company sponsored a medical examination program that was terminated on December 31, 2009. The program was ended in order to eliminate special benefits for Executive Group members and in light of the coverage for such examinations and testing available under the group health program available to all employees. The purpose of the program was to promote the health of Executive Group members through annual comprehensive preventative medical examinations and paid the costs of the medical examinations and certain follow-up testing.

 

The Company made available to its Executive Group members financial planning services provided by a third party consultant, until the program was terminated on December 31, 2009. The program was designed to keep Executive Group members focused on running the Company’s business rather than on financial planning matters that can be handled by outside professionals. Ms. Weber, formerly President, Individual Business, is contractually entitled to these services during 2010.

 

For recordkeeping and administrative convenience of the Company, the Company also pays certain costs of travel and meals for family members accompanying Executive Group members on business functions, and costs for a vendor to make personal travel reservations for Executive Group members or their families.

 

The incremental cost of perquisites provided to the Named Executive Officers during 2009 is included

in the “All Other Compensation” column of the Summary Compensation Table on page 52.

 

Severance Pay and Related Benefits

 

If an Executive Group member’s employment with the Company ends involuntarily due to job elimination or, in limited circumstances, due to performance, he or she may be eligible for the severance program available to substantially all salaried employees. The program provides employees with severance pay, outplacement services and other benefits. Employees terminated for cause, as defined under the program, are not eligible.

 

The amount of severance pay reflects the employees’ salary grade, base salary rate and length of service, with longer-service employees receiving greater payments and benefits than shorter-service employees given the same salary grade and base salary. Employees who are not Retirement Eligible or Bridge Eligible and who receive severance pay also receive a prorata cash payment in consideration of their unvested Performance Shares and Restricted Stock Units. The Company also may enter into severance agreements that can differ from the general terms of the program, where business circumstances warrant.

 

On September 3, 2009, Ms. Weber resigned her executive officer position and all other positions with the Company. Under her separation agreement, Ms. Weber may not work for certain competitors of MetLife, interfere with MetLife’s business relationships, or solicit employees to leave MetLife through 2010. Ms. Weber also agreed to maintain the confidentiality of Company information and cooperate with the Company in any legal proceedings. Ms. Weber remained subject to the same fiduciary duties to the Company as she had as an executive officer through the end of her employment. In exchange, Ms. Weber remained employed and received her salary and employment-related benefits through December 30, 2009 and received severance pay and other benefits. For more details on Ms. Weber’s separation agreement, see the Summary Compensation Table on page 52.

Change-in-Control Arrangements

 

The Company has adopted arrangements that would impact the Executive Group members’ compensation and benefits upon a change-in-control of MetLife. None of the Executive Group members is entitled to any excise tax gross-up either on severance pay or on any other benefits payable in connection with a change-in-control of the Company.

 

Executive Severance Plan.  The Company established the MetLife Executive Severance Plan (Executive Severance Plan) in 2007 to replace individual change-in-control agreements. The Compensation Committee determined the terms of the plan on an overall program basis in light of its judgment of what is appropriate in order to maximize shareholder value should a change-in-control occur. The terms apply in the same manner to each Executive Group member. An Executive Group member who receives benefits under the Executive Severance Plan would not be eligible to receive severance pay under the Company’s severance plan that is available to substantially all salaried employees.

 

The Executive Severance Plan does not provide for any payments or benefits based solely on a change-in-control of MetLife. Rather, as described beginning on page 75 under “Termination with Severance Pay (Change-in-Control),” the executive’s employment must also terminate under certain circumstances in order for the executive to receive severance pay and related benefits.

During 2009, the Executive Severance Plan was amended to reduce the amount of severance pay that could be paid under the plan from three times annual pay to two times annual pay, and to eliminate the additional service credit of three years (or to age 65, if earlier) for which participants could qualify for purposes of Traditional Formula pension benefits. These changes are effective June 14, 2010 and were made to better align the Company’s practices with evolving market practices for change-in-control severance pay and benefits.

 

Additional Change-in-Control Arrangements.  The Company’s Stock Option,Performance Share, and Restricted Stock Unit agreements also include change-in-control arrangements. Under these arrangements, MetLife or its successor may substitute an alternative award of equivalent value and vesting provisions no less favorable than the award being replaced. Unless such substitution occurs, the awards vest immediately upon a change-in-control.

 

For additional information about change-in-control arrangements, including the Company’s definition of change-in-control for these purposes, see ‘‘Potential Payments Upon Termination or Change-in-Control” beginning on page 73. The Company determined the elements of its definition of change-in-control in light of the impact that a change in Board membership, a sale of substantially all assets, or the acquisition of a controlling interest in the Company by a single shareholder or group of shareholders would have on the Company.

Salary

 

The amount reported in the Salary column for 2009 represents the amount of base salary earned by each Named Executive Officer in 2009.

 

For 2009, the relationship of each Named Executive Officer’s base salary payments to the amount in the Total column, rounded to the nearest whole number, is:

 

 

Stock Awards

 

2009 Awards.  On February 24, 2009, the Compensation Committee awarded each Named Executive Officer Performance Shares, payable in Shares after the end of the three-year performance period from January 1, 2009 to December 31, 2011. These awards were made pursuant to the Stock and Incentive Plan.

 

Shares are payable to eligible award recipients following the completion of the performance period. In order for Performance Shares for the 2009-2011 performance period to be payable, the Company must generate positive net income available to common shareholders for either the third year of the performance period or for the performance period as a whole. The Company’s net income available to common shareholders will be determined with reference to the Company’s Annual Report on Form 10-K on file with the SEC for the third year of the performance period.

 

If net income is so generated, the number of Shares payable at the end of the performance period is calculated by multiplying the number of Performance Shares by a performance factor (from 0% to 200%). The performance factor is determined by reference to the Company’s performance relative to the Insurance Index Comparators. Such performance is measured on the basis of total shareholder return (TSR) and change in annual net operating earnings

available to common shareholders per share (Operating EPS).

 

The Company’s Operating EPS is measured year over year for each year of the performance period, as compared to the other companies in the Insurance Index Comparators (other than companies which adopt International Financial Reporting Standards before the Company does). For each year, Operating EPS will be defined in the Company’s Quarterly Financial Supplement for the fourth quarter of the prior year. The results for each of the three years of the performance period are averaged.

 

The Company’s TSR is compared to the composite return of the Insurance Index Comparators during the performance period. Total shareholder return will be determined using the change (plus or minus) from the initial closing price of a Share to the final closing price of a Share, plus reinvested dividends, for the performance period, divided by the initial closing price of a Share. For this purpose, the initial closing price is the average of the closing prices for the 20 trading days before the performance period, and the final closing price is the average of the closing prices for the 20 trading days prior to and including the final trading day of the performance period.

 

The following are some significant performance percentiles and their corresponding performance factors:

 

 

 

Each of the two performance elements (TSR and Operating EPS) is weighted equally and added together to produce a total performance factor. If, however, the Company’s TSR for the performance

period is zero percent or less, the total performance factor will be multiplied by 0.75 to produce the total performance factor.

 

As a result of Ms. Weber’s discontinuance of employment on December 30, 2009, she forfeited her 2009-2011 Performance Share awards. As a result, Ms. Weber did not and will not receive any payment for those Performance Share awards.

 

For a further discussion of the performance goals applicable to the Performance Share awards in 2009, see “Compensation Discussion and Analysis” beginning on page 36.

 

2008 and 2007 Awards.  The method for determining the performance factor for the Performance Share awards made to the Named Executive Officers in 2008 and 2007 will depend on the Company’s change in annual operating earnings and total shareholder return during the three-year performance period, as defined for each award. For a description of the material terms and conditions of these awards, see the table entitled, “Grants of Plan-Based Awards” in the applicable Company Proxy Statement.

 

Method for Determining Amounts Reported.  The amounts reported in this column were calculated by multiplying the number of Performance Shares by a grant date fair value per share of $20.70 for 2009, $57.95 for 2008, and $60.83 for 2007. Those amounts represent the aggregate grant date fair value of the Performance Shares awarded in each year under Financial Accounting Standards Board ASC Topic 718 (FAS 718), consistent with the estimate of aggregate compensation cost to be recognized over the service period. The amounts are based on target performance, which is a total performance factor of 100%. This is the “probable outcome” of the performance conditions to which Performance Share awards are subject, determined under FAS 718. The grant date fair values of the Performance Share awards assuming the highest level of performance conditions would be double the amounts reported in this column, as the same grant date fair value per share would be used but the total performance factor used would be 200%.

 

For a description of the assumptions made in determining the expenses, see Notes 1 and 18 in the Notes to Consolidated Financial Statements in

the Company’s Annual Report on Form 10-K for the applicable year. In determining these expenses, it was assumed that each Named Executive Officer would satisfy any service requirements for vesting or payment of the award. As a result, while a discount for the possibility of forfeiture of the award was applied to determine the expenses of these awards as reported in the Company’s Annual Reports on Form 10-K, no such discount was applied in determining the expenses reported in this column. In each case, the grant date of the awards was the date that the Compensation Committee approved the awards.

 

The amounts reported in this column for 2008 and 2007 differ from the amounts reported in the Company’s 2009 and 2008 Proxy Statements. The amounts reported in those Proxy Statements represented the Company’s accounting expense in 2008 and 2007, respectively, for all outstanding Stock awards. The method for determining the amounts reported in this column in this Proxy Statement reflects revised SEC rules effective on the date of this Proxy Statement.

 

No monetary consideration was paid by a Named Executive Officer for any Performance Shares. No dividends or dividend equivalents are earned on Performance Shares. For a description of the effect on the awards of a termination of employment or change-in-control of MetLife, see “Potential Payments Upon Termination or Change-in-Control” beginning on page 73.

 

Option Awards

 

2009, 2008, and 2007 Awards.  On February 24, 2009, the Compensation Committee awarded each Named Executive Officer Stock Options at a per Share exercise price equal to the closing price of a Share on that date ($23.30). In the case of the Stock Options awarded in 2008 and 2007, the exercise price was also equal to the closing price of Shares on the grant date ($60.51 and $62.80, respectively), which was the date that the Compensation Committee acted to award the Stock Options.

 

Each of the Stock Option awards was made pursuant to the Stock and Incentive Plan. The Stock Options will normally become exercisable at the rate of one-third of each grant on each of the first three anniversaries of that grant date, and

expire on the day before the tenth anniversary of that grant date (except for the special grants of 130,000 Stock Options to Mr. Wheeler and 120,000 Stock Options to Mr. Kandarian made in 2009, which will normally become exercisable on the third anniversary of their grant date, and which are discussed in further detail below). No monetary consideration was paid by a Named Executive Officer for the award of any Stock Option.

 

Method for Determining Amounts Reported.  The amounts reported in this column were calculated by multiplying the number of Stock Options by a grant date fair value per share of $8.22 for 2009 (except for the special grants to Mr. Wheeler and Mr. Kandarian, which had a grant date fair value per share of $8.55, and which are discussed in further detail below), $17.73 for 2008, and $17.66 for 2007. Those amounts represent the aggregate grant date fair value of the Stock Options awarded in each year under FAS 718, consistent with the estimate of aggregate compensation cost to be recognized over the service period.

 

For a description of the assumptions made in determining the expenses, see Notes 1 and 18 in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the applicable year. In determining these expenses, it was assumed that each Named Executive Officer would satisfy any service requirements for vesting or payment of the award. As a result, while a discount for the possibility of forfeiture of the award was applied to determine the expenses of these awards as reported in the Company’s Annual Reports on Form 10-K, no such discount was applied in determining the expenses reported in this column. In each case, the grant date of the awards was the date that the Compensation Committee approved the awards.

 

The amounts reported in this column for 2008 and 2007 differ from the amounts reported in the Company’s 2009 and 2008 Proxy Statements. The amounts reported in those Proxy Statements represented the Company’s accounting expense in 2008 and 2007, respectively, for all outstanding Stock Options. The method for determining the amounts reported in this column in this Proxy Statement reflects revised SEC rules effective on the date of this Proxy Statement.

No monetary consideration was paid by a Named Executive Officer for any Stock Options. For a description of the effect on the awards of a termination of employment or change-in-control of MetLife, see “Potential Payments Upon Termination or Change-in-Control” beginning on page 73.

 

Special Grants of Stock Awards and Stock Options in 2009

 

On February 24, 2009, the Compensation Committee approved special grants of Stock Options and Performance Shares to Mr. Wheeler and Mr. Kandarian. The grants were in addition to grants determined under the Company’s general executive compensation practices. Mr. Wheeler’s special grants were 130,000 Stock Options and 64,000 Performance Shares. Mr. Kandarian’s special grants were 120,000 Stock Options and 64,000 Performance Shares. The special grant Stock Options will normally become exercisable on the third anniversary of their grant date, rather than at a rate of one-third on each of the first three anniversaries of their grant date as do the Stock Options determined under the Company’s general executive compensation practices.

 

Non-Equity Incentive Plan Compensation

 

The amounts reported in the Non-Equity Incentive Plan Compensation column for 2009 are the 2009 Annual Awards made in February 2010 by the Compensation Committee to each of the Named Executive Officers, which are based on 2009 performance. The awards were payable in cash as of March 12, 2010. The factors considered and analyzed by the Compensation Committee in determining the awards are discussed in the Compensation Discussion and Analysis. For a description of the maximum award formula that applied to the awards for tax deductibility purposes, see the table entitled “Grants of Plan-Based Awards in 2009” on page 60.

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings

 

The amounts reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column for 2009 represent the aggregate increase during 2009 in the present value of

accumulated pension benefits for each of the Named Executive Officers. This increase reflects additional service in 2009, any increase in base salary compensation rate in 2009, and AVIP awards payable in March 2009 for services in 2008.

 

Mr. Henrikson and the other Named Executive Officers participate in the same retirement program that applies to other employees. For all employees in the Traditional Formula for their entire career who reach full benefit status (as Mr. Henrikson did in 2009), the program, when combined with social security benefits, generally replaces 60% of final average cash compensation upon retirement. For Mr. Henrikson, the increases in 2009, 2008 and 2007 were the result of the application of the same Traditional Formula rules for determining benefits that apply to other eligible senior officers.

 

In early 2009, at Mr. Henrikson’s recommendation, the Auxiliary Pension Plan was amended to cap the final average compensation of each participant, including each Executive Group member, at

$4.6 million. The purpose and effect of this change on Mr. Henrikson’s benefit is to reduce expected future pension accruals, thus limiting future increases in his benefit. Any increases in pension value beyond 2009 will primarily reflect Mr. Henrikson’s additional service, and will not reflect any increases in his final average compensation.

 

For a description of pension benefits, including the formula for determining benefits, see the table entitled “Pension Benefits” on page 66.

 

The Named Executive Officers’ earnings on their nonqualified deferred compensation in 2009 were not above-market or preferential. As a result, earnings credited on their nonqualified deferred compensation are not required to be, nor are they, reflected in this column. For a description of the Company’s nonqualified deferred compensation plans and the simulated investments used to determine earnings, see the table entitled “Nonqualified Deferred Compensation” on page 69.