Humana Inc

The proposal asks shareholders to approve the Humana Inc. 2026 Stock Incentive Plan, which would replace the Prior Plan for future grants and reserve 10.8 million shares (counting rules apply, with 2.86-for-1 counting for full-value awards). Management seeks approval to ensure the company has sufficient equity to attract and retain talent and align pay with long-term performance. The plan includes governance features intended to limit shareholder dilution and protect stockholder interests: no evergreen increases, limits on liberal share recycling, no repricing without stockholder approval, no dividends on options or SARs, and annual limits on non-employee director compensation. The Board recommends the plan arguing it balances dilution concerns (estimated fully-diluted overhang 5.2% to 10.2% depending on award type) with the need to provide competitive equity compensation tied to performance. Approval requires majority of votes cast; brokers lack discretionary authority so broker non-votes will have no effect. The Board’s rationale emphasizes competitiveness, retention, and explicit protections (clawback, change-in-control treatment, and plan limits) that it believes align management and shareholder interests.

The shareholder proposal, submitted by John Chevedden, asks the Board to require shareholder approval — via a non-binding vote — for any new or renewed Named Executive Officer severance/termination package estimated to exceed 2.99 times base salary plus target short-term bonus. The proponent argues this would provide a check on overly generous golden parachutes, citing Humana’s stock decline since 2020 and comparable support at other companies. The Board opposes the proposal, stating that existing severance and change-in-control policies provide appropriate limits and governance oversight and that the proposal would disadvantage Humana’s ability to attract and retain executives and is unnecessary given existing stockholder engagement and robust disclosure. The company highlights that its severance policy cash payouts are below the proposed 2.99x threshold, that equity acceleration largely requires death, disability or double-trigger termination post-change-in-control, and that the Compensation Committee — an independent board committee with an independent consultant — reviews separations on a case-by-case basis. The proposal would be precatory if passed. The corporate context includes detailed disclosure of current severance, CIC policies, and scenarios with estimated payouts in the proxy, showing the Board’s process for overseeing post-employment compensation and arguing the measure would reduce flexibility and harm competitiveness.