avatar Cigna Corporation Finance, Insurance, And Real Estate

Pages

  • Page 1

    20 PROXY 1 8 STATEMENT PEOPLE PURPOSE PERFORMANCE


  • Page 2

    45K+ EMPLOYEES WHO SERVE CUSTOMERS AROUND THE GLOBE 95M+ CUSTOMER RELATIONSHIPS AROUND THE WORLD 1M+ RELATIONSHIPS WITH HEALTH CARE PROVIDERS, CLINICS AND FACILITIES GLOBALLY CIGNA IS A GLOBAL HEALTH SERVICE COMPANY DEDICATED TO HELPING PEOPLE IMPROVE THEIR HEALTH, WELL-BEING AND SENSE OF SECURITY. $41.6B IN REVENUES $61.8B IN ASSETS $13.7B IN SHAREHOLDERS’ EQUITY


  • Page 3

    March 16, 2018 900 Cottage Grove Road Bloomfield, Connecticut 06002 Dear Cigna Shareholder: On behalf of the Cigna Corporation Board of Directors, our Enterprise Leadership Team and our colleagues around the globe, we are pleased to cordially invite you to attend our 2018 Annual Meeting of Shareholders to be held on April 25, 2018. The attached Notice of 2018 Annual Meeting of Shareholders and Proxy Statement contains important information about the business to be conducted at the Annual Meeting. 2017 marked another consecutive year of delivering strong, differentiated results, while generating considerable momentum for 2018 and the years ahead. This exceptional performance reflects the efforts of an exceptionally talented Cigna team – individuals who are proud to serve as champions on behalf of our customers and communities around the world. In support of Cigna’s belief that our communities play an essential role in meeting the health and wellness needs of individuals, we continue to take leadership roles to confront a number of societal challenges. Cigna is addressing the needs of our friends, families and neighbors through efforts such as combatting the opioid crisis in partnership with providers, empowering veterans to address difficult health and life circumstances and establishing a multi-city health improvement tour to bring free health screenings nationwide. We continue to be led by our Go strategy, which we adopted in 2009 and evolved in mid-2017 to Go Deeper, Go Local and Go Beyond to further accelerate our ability to drive significant value creation for our customers, clients, partners, communities and shareholders. By consistently and effectively executing on our Go strategy over this extended period of time, we have proven that we can actively align Cigna with the needs of our diverse stakeholders and succeed in an evolving, highly dynamic and disruptive global marketplace. Enhancing this strategy is our continued commitment to innovation, a relentless focus on serving our customers, and a drive to be a convener for both organizations and individuals across an increasingly complex landscape. Taken together with our unwavering mission to improve the health, well-being and sense of security of those we are privileged to serve, we are solidifying Cigna’s role as a partner of choice, and are creating value for stakeholders across the markets where we compete. Our ability to create and deliver this value is clearly reflected in our financial performance and in our ability to deliver competitively attractive top and bottom line growth, as well as earning the right to serve more than 95 million customer relationships around the world. As we enter 2018, Cigna’s strong capital position and flexibility further enable our organization to drive attractive earnings and customer growth both in 2018 and over the long-term. To position us for continued strong performance, this year we named five tenured and proven leaders to our enterprise leadership, allowing us to further emphasize our focus on customer engagement, local markets and value-based partnerships. Our Board of Directors, comprised of individuals with diverse experiences and skills, remains committed to strong corporate governance as a framework for financial integrity, shareholder transparency and competitively attractive performance. In consideration of the vote on the shareholder proposal regarding proxy access at the last annual meeting and following outreach to shareholders, in December 2017 the Board adopted proxy access, representing a significant enhancement of shareholder rights. Your vote is very important. Whether or not you plan to attend the 2018 Annual Meeting, we hope that you will cast your vote as soon as possible. As always, thank you for your continued support of Cigna. Sincerely, /s/ David M. Cordani /s/ Isaiah Harris, Jr. David M. Cordani Isaiah Harris, Jr. President and Chief Executive Officer Chairman of the Board


  • Page 4


  • Page 5

    NOTICE OF 2018 ANNUAL MEETING OF SHAREHOLDERS DATE AND TIME: Wednesday, April 25, 2018 at 8:00 a.m. PLACE: Delamar Hotel, Ballroom 1 Memorial Road West Hartford, Connecticut 06107 ITEMS OF BUSINESS: Proposal 1: Election of nine director nominees named in this Proxy Statement for one-year terms to expire at the next annual meeting of shareholders. Proposal 2: Advisory approval of executive compensation. Proposal 3: Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2018. Proposal 4: Approval of an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority voting requirement. Consideration of any other business properly brought before the meeting. RECORD DATE: You may vote on the matters presented at the Annual Meeting if you were a shareholder of record at the close of business on February 26, 2018. PROXY VOTING: Your vote is very important, regardless of the number of shares you own. We urge you to promptly vote by telephone, by using the Internet, or, if you received a proxy card or instruction form, by completing, dating, signing and returning it by mail. March 16, 2018 By order of the Board of Directors, /s/ Neil Boyden Tanner Neil Boyden Tanner Corporate Secretary Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders To Be Held on April 25, 2018 The Notice of Annual Meeting, Proxy Statement and Annual Report for the fiscal year ended December 31, 2017 are available at www.envisionreports.com/ci.


  • Page 6


  • Page 7

    TABLE OF CONTENTS PROXY STATEMENT SUMMARY 1 CORPORATE GOVERNANCE MATTERS 7 ELECTION OF DIRECTORS (PROPOSAL 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 PROCESS FOR DIRECTOR ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 PROCESS FOR SELECTING AND NOMINATING DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 BOARD OF DIRECTORS’ NOMINEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 CORPORATE GOVERNANCE POLICIES AND PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 PROXY ACCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 DIRECTOR INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 BOARD LEADERSHIP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 BOARD EVALUATIONS AND BOARD EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 RESPONSIBILITIES OF THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 BOARD MEETINGS AND COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 CODES OF ETHICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 CORPORATE RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 ANNUAL POLITICAL CONTRIBUTIONS AND LOBBYING ACTIVITY REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 NON-EMPLOYEE DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 DIRECTOR COMPENSATION PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 DIRECTOR COMPENSATION TABLE FOR 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 DIRECTOR OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 COMPENSATION MATTERS 29 ADVISORY APPROVAL OF EXECUTIVE COMPENSATION (PROPOSAL 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 COMPENSATION DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 EXECUTIVE COMPENSATION POLICIES AND PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 ELEMENTS OF COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 EMPLOYMENT ARRANGEMENTS AND POST-TERMINATION PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 PROCESSES AND PROCEDURES FOR DETERMINING EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . 49 OTHER PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 REPORT OF THE PEOPLE RESOURCES COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 EXECUTIVE COMPENSATION TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 2017 SUMMARY COMPENSATION TABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 GRANTS OF PLAN-BASED AWARDS IN 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 OUTSTANDING EQUITY AWARDS AT YEAR-END 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 OPTION EXERCISES AND STOCK VESTED IN 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 PENSION BENEFITS FOR 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 NONQUALIFIED DEFERRED COMPENSATION FOR 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 AUDIT MATTERS 71 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL 3) . . . 71 REPORT OF THE AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 PROPOSAL TO AMEND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPERMAJORITY VOTING REQUIREMENT (PROPOSAL 4) 75 OWNERSHIP OF CIGNA COMMON STOCK 76 STOCK HELD BY DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 STOCK HELD BY CERTAIN BENEFICIAL OWNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 ANNUAL MEETING INFORMATION 79 ANNEX A – NON-GAAP MEASURES A-1 ANNEX B – SURVEY DATA FOR PRESIDENT – INTERNATIONAL MARKETS B-1 ANNEX C – GENERAL INDUSTRY PEER GROUP C-1 APPENDIX A – RESTATED CERTIFICATE OF INCORPORATION Appendix-A


  • Page 8


  • Page 9

    PROXY STATEMENT SUMMARY We provide below highlights of certain information in this Proxy Statement. As it is only a summary, please refer to the complete Proxy Statement and 2017 Annual Report before you vote. Mission and Strategy Cigna’s mission is dedicated to improving the health, well-being and sense of security of the individuals we serve through our more than 95 million customer relationships around the globe. Since 2009, our strategic focus in support of our mission has been to Go Deep, Go Global and Go Individual. To further accelerate the differentiated value we deliver for our customers, clients, partners and communities, we have evolved this strategy to Go Deeper, Go Local and Go Beyond in order to expand avenues for growth and performance. Creating value for our customers, clients, partners, communities and in turn, our shareholders, is a direct result of the continued, effective execution of this proven strategy. Our Mission To improve the health, well-being and sense of security of the people we serve Our Strategy Go Deeper: To expand and deepen our customer, client and partner relationships; depth in targeted sub-segments, geographies Go Local: To ensure our solution suite and services meet customer, client and partner needs at a local market level Go Beyond: To innovate and further differentiate our businesses, the experiences we deliver, and overall social impact How We Will Win Be the Undisputed Partner of Choice Affordability Accelerating Next Customer Generation Value Integration Personalization Make the Complex Simpler Cigna is a growth company with a proven track record of strong top-line and bottom-line growth and a clear, focused strategy. We create value by delivering differentiated and innovative solutions to our customers, clients and partners. We have an attractive, long-term outlook, enabled by the significant opportunity in our existing businesses, our strong talent, capabilities and capital position. We also believe that our corporation has a social responsibility, and that we can work to actively address gaps in health and well-being to help individuals in the markets where we operate around the world. Our perspective is that companies like Cigna can partner more with communities to contribute and make a difference. On March 8, 2018, Cigna and Express Scripts Holding Company entered into a definitive agreement whereby Cigna will acquire Express Scripts. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 1


  • Page 10

    PROXY STATEMENT SUMMARY Business Performance In 2017, consolidated revenue increased 5% to $41.6 billion, as we continued to focus on our mission to improve the health, well-being and sense of security of the people we serve. Shareholders’ net income for 2017 was $2.2 billion, compared to $1.9 billion for 2016. Consolidated adjusted income from operations* for 2017 was $2.7 billion, compared to $2.1 billion in 2016, reflecting increased earnings contributions from each of our business segments. Our results included strong performance across each of our priority growth platforms – Commercial Employer, U.S. Seniors, Global Supplemental Benefits, and Group Disability and Life. These results provide us with momentum for continued growth in 2018. CONSOLIDATED REVENUES CONSOLIDATED ADJUSTED INCOME (IN BILLIONS) FROM OPERATIONS* (IN BILLIONS) $50 $41.6 $39.7 $40 $37.9 $3.0 $2.7 $34.9 $32.4 $2.3 $2.5 $2.1 $2.1 $2.1 $30 $2.0 $20 $1.5 $1.0 $10 $0.5 $0 $0.0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 * We encourage you to review our Annual Report on Form 10-K for the year ended December 31, 2017 for more complete financial information. Consolidated adjusted income from operations is a measure of profitability used by Cigna’s management because it presents the underlying results of operations of Cigna’s businesses and permits analysis of trends in underlying revenue, expenses and shareholders’ net income. This consolidated measure is not determined in accordance with accounting principles generally accepted in the United States (GAAP) and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders’ net income. Shareholders’ net income was $1.5 billion, $2.1 billion, $2.1 billion, $1.9 billion and $2.2 billion for the years ended December 31, 2013, 2014, 2015, 2016 and 2017, respectively. For a reconciliation of consolidated adjusted income from operations to shareholders’ net income, see Annex A. Total Shareholder Return The following chart shows our cumulative Total Shareholder Return (TSR) as of December 31, 2017, on a CUMULATIVE TOTAL one-, three- and five-year basis. Cigna’s three-year annual SHAREHOLDER RETURN compounded TSR was 25.5%, placing Cigna at the 78th 300% 280.6% percentile of its Strategic Performance Share (SPS) 250% performance peer group for the 2015–2017 performance period. For more information regarding our SPS program, 200% see “Long-Term Incentives – Strategic Performance Share 150% 97.5% Program” in the Compensation Discussion & Analysis 100% 52.3% (CD&A). 50% 0% One-Year Three-Year Five-Year 2 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 11

    PROXY STATEMENT SUMMARY Board of Directors CURRENT COMMITTEE DIRECTORS AGE OCCUPATION MEMBERSHIPS David M. Cordani 52 President and Chief Executive Officer of Cigna Executive Chairman, President and Chief Executive Officer Corporate Governance Eric J. Foss 59 of ARAMARK Corporation People Resources Former President and Chief Executive Officer of Chairman of the Board Isaiah Harris, Jr. 65 AT&T Advertising & Publishing — East Executive (Chair) Former Senior Vice President, Provost and Corporate Governance (Chair) Jane E. Henney, M.D.(1) 70 Professor of Medicine, University of Cincinnati Audit College of Medicine Executive Audit (Chair) Roman Martinez IV 70 Private Investor Executive Finance Finance (Chair) John M. Partridge 68 Former President of Visa, Inc. Executive People Resources Former Chairman, President and Chief Executive Audit James E. Rogers 70 Officer of Duke Energy Corporation Finance Former Executive Chairman, President and Chief Finance Eric C. Wiseman 62 Executive Officer of VF Corporation People Resources President and Chief Executive Officer of The Audit Donna F. Zarcone 60 Economic Club of Chicago Corporate Governance People Resources (Chair) Former Chairman, President and Chief Executive William D. Zollars 70 Executive Officer of YRC Worldwide, Inc. Corporate Governance (1) On March 12, 2018, Dr. Henney informed the Company of her intention to not seek re-election as a Director in light of her role as Lead Independent Director of AmerisourceBergen Corporation and Cigna’s announcement regarding the proposed acquisition of Express Scripts Holding Company. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 3


  • Page 12

    PROXY STATEMENT SUMMARY Corporate Governance Cigna is committed to ensuring strong corporate governance practices on behalf of our shareholders. We believe that strong corporate governance provides the foundation for financial integrity and shareholder confidence. The Office of the Corporate Secretary engages with shareholders on issues related to corporate governance, executive compensation and social responsibility. In 2017, the Office of the Corporate Secretary engaged in extensive outreach with shareholders, particularly regarding proxy access, as further described on page 16. During these meetings, shareholders also expressed an interest in learning more about our board refreshment plans and our corporate responsibility efforts. As a result, we have included additional disclosure on these topics, which can be found on pages 9 and 23, respectively. In 2017, the Board, after a full evaluation that included outreach to Cigna’s largest shareholders and consideration of the vote on the shareholder proposal regarding proxy access at the 2017 annual meeting of shareholders, implemented proxy access. As a result, a shareholder or a group of up to 20 shareholders owning 3% or more of Cigna’s outstanding common stock continuously for at least three years may nominate and include in the Company’s proxy materials director nominees constituting up to the greater of 20% of the Board or two individuals, provided the shareholder(s) and the nominee(s) satisfy the requirements specified in the By-Laws. The Board believes that this proxy access bylaw framework provides meaningful proxy access rights, reflects generally accepted governance practices around proxy access and is consistent with the overall feedback we received as part of our shareholder engagement. In February 2018, the Board approved an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority vote provision, subject to shareholder approval at this Annual Meeting. Following shareholder approval, the Board will amend the By-Laws to eliminate a similar supermajority voting requirement in our By-Laws. Thereafter, all supermajority voting provisions will have been removed and shareholders may amend all provisions of the Restated Certificate and the By-Laws by the affirmative vote of a majority of the Company’s outstanding common stock. At the 2016 annual meeting of shareholders, the phased implementation of the Board’s declassified structure began and, beginning with this Annual Meeting, all directors are elected to one-year terms and the classified structure is fully eliminated. KEY GOVERNANCE PRACTICES • Independent board of directors with diversity in • Separate Code of Business Conduct and Ethics for composition, skills and experience the Board • Independent Chairman of the Board • Independent Audit, Corporate Governance, Finance and People Resources Committees • Regular executive sessions of the Board and its committees, without management present • Annual self-evaluations of the Board, its committees and individual directors, including periodic • Directors elected by majority voting independent third party assessments • Annual election of all directors • Majority of director compensation delivered in • Proxy access right for shareholders Cigna common stock • Meaningful stock ownership guidelines for directors 4 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 13

    PROXY STATEMENT SUMMARY Executive Compensation Cigna’s executive compensation program is based on the philosophy that executive pay should strongly align with the interests of our shareholders, directly link to Company and individual performance and attract and retain executive talent. We believe the achievement of our enterprise goals will result in the creation of meaningful and sustained long-term value for our shareholders. Each of the measures in our performance-based plans are designed to align with and support our business strategy. We focus on driving enterprise profitability, growth and operating expense efficiency to support investment in innovation, customer loyalty and stock performance. In 2017, our shareholders cast advisory votes in favor of our executive compensation program, with approximately 93% of votes cast in favor. COMPENSATION GOVERNANCE AND CONTROLS • Management of Long-Term Incentive Plan annual • “Double trigger” requirement for change of control share usage (or burn rate) and total dilution by benefits setting an annual share usage limit, which is below • No tax gross-up of severance pay upon a change of the maximum permitted under the plan control • No excessive perquisites • Regular review of executive compensation • Oversight by the People Resources Committee of governance market practices, particularly when people development, policies and processes, considering the adoption of new practices or including consideration of assessments of executive changes to existing programs or policies officers and key senior management • Robust stock ownership guidelines and holding • CEO and executive officer succession plans requirements for equity awards to align executives’ overseen by the Board of Directors, with assistance interests with shareholders from the People Resources Committee • Prohibition of hedging of Cigna stock by all • An annual assessment by the People Resources directors, executive officers and employees, and Committee of any potential risks and associated restrictions on pledging of Cigna stock by directors internal controls in our incentive compensation and Section 16 officers programs and policies • A disgorgement of awards (clawback) policy beyond the mandates of Sarbanes-Oxley The target pay mix for the Chief Executive Officer and the other named executive officers during 2017 reflects our executive compensation philosophy that emphasizes performance-based compensation over fixed compensation. The percentages shown below are targets only and will not match the percentages calculable from the actual compensation paid as reflected in the Summary Compensation Table. CEO TARGET OTHER NEO AVERAGE PAY MIX TARGET PAY MIX 10% 21% 20% Salary Annual Incentive Long-Term Equity 22% 57% 70% Performance-Based Pay Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 5


  • Page 14

    PROXY STATEMENT SUMMARY Voting Matters and Board Recommendations BOARD PROPOSALS RECOMMENDATION Proposal 1. Election of Directors. The Board and the Corporate Governance Committee believe that the nine director FOR nominees named in this Proxy Statement bring a combination of diverse qualifications, skills each of the nominees and experiences that contribute to a well-rounded Board. As determined by the Board and Corporate Governance Committee as part of the most recent Board evaluation, each director nominee has proven leadership ability, good judgment and has been an active and valued participant on the Board during his or her tenure. Proposal 2. Advisory Approval of Executive Compensation. The Board believes that Cigna’s executive compensation program design effectively aligns the interests of our executive officers with those of our shareholders by tying a significant FOR portion of their compensation to Cigna’s performance and rewarding our executive officers for the creation of long-term value for Cigna’s shareholders. Because your vote is advisory, it will not be binding upon the Board. However, the Board and People Resources Committee value your opinion and will review and consider the voting results when making future executive compensation decisions. Proposal 3. Ratification of the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for 2018. The Audit Committee approved the appointment of PricewaterhouseCoopers LLP as Cigna’s FOR independent registered public accounting firm for 2018. The Audit Committee and the Board believe that the continued retention of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders. As a matter of good corporate governance, the Board is seeking shareholder ratification of the appointment. Proposal 4. Approval of an Amendment to the Company’s Restated Certificate of Incorporation to Eliminate the Supermajority Voting Requirement. FOR The Board recognizes that the elimination of the supermajority vote required to amend Section 2 of Article III of the Company’s By-Laws, which relates to the number, qualifications, election and term of office of the Board of Directors, aligns with best practices in corporate governance. 2018 Annual Meeting of Shareholders Wednesday, April 25, 2018 8:00 a.m. Delamar Hotel, Ballroom 1 Memorial Drive West Hartford, Connecticut 06107 6 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 15

    CORPORATE GOVERNANCE MATTERS Election of Directors (Proposal 1) Beginning with this Annual Meeting, the entire Board of of the Board (described in “Corporate Governance Policies Directors is elected annually by Cigna’s shareholders. and Practices — Board Evaluations and Board Based on input from shareholders, we began the phased Effectiveness”). When considering whether to nominate implementation of the Board’s declassified structure at the current directors for re-election, the Corporate 2016 annual meeting. The classified structure is now fully Governance Committee and the Board review the eliminated. At this Annual Meeting, the Board is individual director’s performance against the expectations nominating the nine directors named in this Proxy for Board membership (identified below under “Director Statement for one-year terms to expire at the next annual Expectations and Qualifications”). The Board considers its meeting of shareholders. The role of the Board, its composition as part of its annual evaluation. The Board leadership structure and governance practices are may nominate for election, and appoint to fill vacant or described in “Corporate Governance Policies and new Board positions, only those persons who agree to Practices.” This section describes the process for director adhere to the Company’s majority voting standard elections and director nominations, identifies the director (described above). expectations and qualifications considered by the Board From time to time, the Corporate Governance Committee and the Corporate Governance Committee in selecting and retains a third-party search firm to assist in identifying and nominating directors, discusses our board refreshment evaluating candidates for Board membership. In 2017, the activities and presents the biographies, skills and Corporate Governance Committee retained an outside firm qualifications of the director nominees. to assist the Committee and the Board with its board PROCESS FOR DIRECTOR ELECTIONS refreshment plan, as further described on page 9. The Corporate Governance Committee also considers Cigna has adopted a majority voting standard for the suggestions for Board nominees submitted by election of directors in uncontested elections. Under this shareholders, which are evaluated using the same criteria standard, each director must receive a majority of the as new director candidates and current director nominees. votes cast for him or her. This means that the number of votes cast “for” a director nominee must exceed the Once a potential candidate has been identified, the number of votes cast “against” that nominee for the Corporate Governance Committee reviews the director to be elected. Each director has agreed to tender, background of the new director candidate and presents and not withdraw, his or her resignation if he or she does him or her to the Board for consideration. When not receive a majority of the votes cast at the Annual considering director candidates and the current and future Meeting. The Corporate Governance Committee will make composition of the Board, the Corporate Governance a recommendation to the Board on whether to accept the Committee and the Board consider how each candidate’s resignation. The Board has discretion to accept or reject background, experiences, skills and/or prior board and the resignation. A director whose resignation is under committee service will contribute to the diversity of the consideration will not participate in the decisions of the Board. In addition, the Corporate Governance Committee Corporate Governance Committee or the Board and the Board consider the Company’s business strategy concerning his or her resignation. In a contested election, and how each director candidate’s background where the number of director nominees exceeds the complements that strategy. Candidates interview with the number of directors to be elected, the voting standard is a Chief Executive Officer, the Chair of the Corporate plurality of votes cast. Governance Committee and the Chairman of the Board, as well as other members of the Board, as appropriate. PROCESS FOR SELECTING AND Shareholders that want to nominate directors for inclusion NOMINATING DIRECTORS in our proxy statement or directly at an annual meeting in Director Selection and Nomination Process accordance with our By-Laws should follow the instructions described in “Annual Meeting Information.” The Corporate Governance Committee assesses the Board’s composition as part of the annual self-evaluation Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 7


  • Page 16

    CORPORATE GOVERNANCE MATTERS Director Expectations and Qualifications The Corporate Governance Committee, in consultation with the Board, has identified individual director expectations and qualifications, characteristics, skills and experience that it believes every member of the Board should have. In addition, the Corporate Governance Committee has identified areas of expertise that it believes support Cigna’s business strategy in the short- and long-term, enable the Board to exercise its oversight function and contribute to a well- rounded Board. These expectations and qualifications, as well as the identified areas of expertise, are considered and reviewed as part of the Board’s annual evaluation and as part of each individual Director’s evaluation. In developing these areas of expertise, the Board also considered the skills necessary to support the business strategy and the skills and experiences reflected on the boards of companies within Cigna’s peer group, as well as best practices among other large companies. The Board regularly reviews the identified areas to ensure they support changes in the Company’s strategy and the Board’s needs. The Corporate Governance Committee and the Board take into consideration these criteria and the mix of skills and experience as part of the director recruitment, selection, evaluation and nomination process. Expectations of Every Director • Understand Cigna’s businesses and the importance • Contribute effectively to the Board’s assessment of of the creation of shareholder value strategy and risk • Participate in an active, constructive and objective • Share expertise, experience, knowledge and insights way at Board and committee meetings on matters before the Board • Review and understand advance briefing materials • Advance Cigna’s business objectives and reputation • Contribute effectively to the Board’s evaluation of • Demonstrate an ongoing commitment to consult executive talent, compensation and succession and engage with the CEO and senior management planning outside of Board and committee meetings on matters impacting Cigna Qualifications, Characteristics, Skills and Experience of Every Director • Good judgment and strong commitment to ethics • Ability to assess different risks and impact on and integrity shareholder value • Ability to analyze complex business and public • Contribution to the Board’s overall diversity of policy issues and provide relevant input concerning thought the Company’s business strategy • High degree of achievement in their respective • Free from conflicts of interest fields While the Board does not have a formal policy with regard to diversity, the Board remains committed to diversity and the Corporate Governance Committee works to ensure that the Board is comprised of individuals with expertise in fields relevant to Cigna’s business, experience from different professions and industries, a diversity of age, ethnicity, gender and global experience and a range of tenures. The Board believes that a range of tenure allows both new perspective and continuity. This continuity has proven beneficial given the complexities of, and the significant change and uncertainty in, the health care industry over the past several years. Diversity Age Tenure 6 66 5 5 AVERAGE AGE 22% 4 44% 3 11.5 DIVERSE 3 AVERAGE TENURE 2 1 1 78% 0 Diverse Independent Directors (based on 10 years or less < 60 60-67 68-72 gender and/or ethnicity) The above tables show the diversity of our nine independent board members. 8 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 17

    CORPORATE GOVERNANCE MATTERS AREAS OF EXPERTISE REFLECTED ON CIGNA’S BOARD OF DIRECTORS Business Leader Directors who have served as a chief executive officer, a CEO-equivalent or a business unit leader of a large company bring a practical understanding of large organizations, processes, strategy and risk management. Finance An understanding of finance, capital markets and financial reporting processes is necessary for a well-rounded Board because of the importance we place on accurate financial reporting and robust financial controls and compliance. In addition, Cigna’s business involves complex financial transactions. Healthcare and Delivery Systems As we work to create a sustainable health care ecosystem, the Board values directors with experience on issues related to improving access to care and reducing health costs to patients through the provision of care management and the use of innovative delivery system solutions. Information Technology Effective information systems and the integrity and timeliness of data we use to serve our customers and health care professionals are integral to the operation of our business. For this reason, the Board benefits from directors with leadership experience related to the development, installation, implementation, security or maintenance of computer systems, applications and digital informatics. International/Global The Board values directors with leadership experience overseeing non-U.S. operations and working in diverse cultures around the globe. Marketing and Consumer Insights Our customer-focused strategy benefits from inclusion of directors with leadership experience in marketing, advertising and consumer insight functions. These directors also have experience with product development and brand building, particularly as it focuses on end-user consumers. Regulated Industry/Public Policy Our business is highly regulated at the federal, state, local and international levels. For this reason, the Board benefits from directors with experience in regulated industries and public policy to help us identify, assess and respond to new trends in the legislative and regulatory environment. Board Refreshment and Succession Planning The Corporate Governance Committee is responsible for identifying new director candidates, reviewing the composition of the Board and its committees and for making recommendations to the full Board on these matters. On an ongoing basis, the Corporate Governance Committee engages in Board succession planning, taking into account input from Board discussions and from the Board and committee evaluation process regarding the specific backgrounds, skills and experience that would contribute to overall Board and committee effectiveness. In 2017, the Corporate Governance Committee began a long-term board refreshment plan. The Corporate Governance Guidelines require that directors retire no later than the annual meeting of shareholders coinciding with or following his or her 72nd birthday. As a result, within the next five years, four of the directors nominated for election are expected to retire from the Board. To assist with board refreshment planning, the Corporate Governance Committee engaged Russell Reynolds Associates, Inc. to provide advisory services related to board succession planning and to assist with the recruitment of director candidates. The plan includes a needs assessment and an interview with each director to understand his or her perspective on Cigna’s strategy, the culture of the Board and the Board’s relationship with management, and to seek the Board’s views on the skills that may be relevant in the coming years and in light of upcoming retirements. The Corporate Governance Committee is focused on identifying candidates that possess skills and qualifications that will support the Company’s short- and long-term strategy, while being mindful of the skills that the retiring directors bring to the Board and the ongoing significant complexity and uncertainty within the health care industry. The goal of the refreshment plan is to balance the knowledge that results from long-term service on the Board with the new skills and experience that results from adding new directors to the Board, at a pace that allows the Board to maintain its high-performing and diverse culture. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 9


  • Page 18

    CORPORATE GOVERNANCE MATTERS Other Practices and Policies Related to Director Service In addition to working to ensure that the Board is comprised of diverse and qualified individuals, the Board has adopted the following governance policies and practices that contribute to a well-functioning Board. To ensure each director is able to devote sufficient time and attention to his or her responsibilities as a board member, the Board has established the following limits on outside directorships: • Each director who also is a chief executive officer of a public company may not serve on more than one other public company board in addition to Limits on Public Company Cigna’s Board and the board of his or her employer (for a total of three Directorships public company directorships); and • Each director who is not a chief executive officer of a public company may serve on no more than four boards of other public companies (for a total of five such directorships). All of our directors are in compliance with these limits on outside directorships. If a director changes his or her principal employment position, that director is Change in Director’s Principal required to tender his or her resignation from the Board to the Corporate Position Governance Committee. The Committee will then recommend to the Board whether to accept or decline the resignation. A director is required to retire no later than the annual meeting of shareholders Mandatory Retirement Age coinciding with or following his or her 72nd birthday. The Board is regularly updated on Cigna’s businesses, strategies, customers, operations and employee matters, as well as external trends and issues that affect the Company. Directors also are encouraged to attend continuing education courses relevant to their service on Cigna’s Board at Cigna’s Continuing Education for Directors expense. Cigna regularly makes the Board aware of continuing education opportunities that may be of interest. The Corporate Governance Committee oversees the continuing education practices, and the Company is kept apprised of director participation. BOARD OF DIRECTORS’ NOMINEES Upon the recommendation of the Corporate Governance Committee, the Board is nominating the nine directors listed below for re-election to one-year terms to expire at the next annual meeting of shareholders. All nominees have consented to serve, and the Board does not know of any reason why any nominee would be unable to serve. If a nominee becomes unavailable or unable to serve before the Annual Meeting, the Board may either reduce its size or designate another nominee. If the Board designates a nominee, your proxy will be voted for the substitute nominee. On March 12, 2018, Dr. Henney informed the Company of her intention to not seek re-election as a Director in light of her role as Lead Independent Director of AmerisourceBergen Corporation and Cigna’s announcement regarding the proposed acquisition of Express Scripts Holding Company. Dr. Henney will leave the Board at the expiration of her current term on April 25, 2018. The Board and Cigna’s management thank Dr. Henney for her many years of service. Below are biographies, skills and qualifications for each of the nominees. Each of the director nominees currently serves on the Board. The Board believes that the combination of the various experiences, skills and qualifications represented contributes to an effective and well-functioning Board and that the nominees possess the qualifications, based on the criteria described above, to provide meaningful oversight of Cigna’s business and strategy. The Board of Directors unanimously recommends that shareholders vote FOR the nominees listed below. 10 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 19

    CORPORATE GOVERNANCE MATTERS DAVID M. CORDANI ERIC J. FOSS President, Chief Executive Officer Chairman, President and Chief and Director of Cigna Executive Officer of ARAMARK Corporation AGE: 52 AGE: 59 DIRECTOR SINCE: 2009 DIRECTOR SINCE: 2011 COMMITTEES: Executive COMMITTEES: Corporate Governance, People Resources Mr. Cordani has served as Cigna’s Chief Executive Officer Mr. Foss has been Chairman of the Board of ARAMARK since December 2009 and as President since June 2008. He Corporation, a publicly traded provider of food services, served as Chief Operating Officer from June 2008 until facilities management and uniform services, since February December 2009; President, Cigna HealthCare from 2005 2015, and President and Chief Executive Officer since May until 2008; and Senior Vice President, Customer Segments & 2012. He served as Chief Executive Officer of Pepsi Marketing, Cigna HealthCare from 2004 until 2005. He has been employed by Cigna since 1991. He is a member of the Beverages Company, a beverage manufacturer, seller and Business Roundtable and serves on the U.S.-India Business distributor and a division of PepsiCo, Inc., from 2010 until Council Board of Directors. In 2017, he was also named December 2011. He was the Chairman and Chief Executive Chairman of the U.S. Chamber of Commerce’s U.S.-Korea Officer of The Pepsi Bottling Group, Inc. from 2008 until Business Council. In 2016, Mr. Cordani received the 2010; President and Chief Executive Officer from 2006 Leadership in the Nation’s Interest award from the until 2008; and Chief Operating Officer from 2005 until Committee for Economic Development, a nonprofit, 2006. Mr. Foss received his Bachelor of Science degree nonpartisan, business-led public policy organization. from Ball State University. Mr. Cordani was named one of Fortune Magazine’s Top Business Persons of the Year in 2015. Mr. Cordani received Other Public Company Directorships: ARAMARK his Bachelor of Business Administration from Texas A&M Corporation (2012-Present), UDR, Inc. (2003-2015), The University and his MBA from the University of Hartford. Pepsi Bottling Company (2006-2010) Other Public Company Directorships: General Mills, Inc. Business Leader. Mr. Foss has extensive leadership (2014-Present) experience through his roles as Chairman, President and CEO of ARAMARK Corporation, combined with his 30-year Business Leader. Mr. Cordani has extensive executive career at Pepsi Beverages Company and The Pepsi leadership and management experience, including through his Bottling Group, including his role as Chairman and CEO. current role as President and Chief Executive Officer of Cigna. Mr. Cordani has spearheaded Cigna’s transformation into a Finance. As Chairman, President and CEO of ARAMARK leading global health service company, more than doubling and as CEO of Pepsi Beverages Company and The Pepsi the size of the business since 2009. His prior role as Chief Bottling Group, his experience includes oversight of Operating Officer also encompassed broad responsibility for financial operations, financial reporting, merger and Cigna’s global business and corporate functions. acquisition activities and corporate restructurings. He led Finance. Mr. Cordani served as Business Financial Officer ARAMARK’s initial public offering in 2013 and was for Cigna’s healthcare division and in senior roles in instrumental in The Pepsi Bottling Group’s initial public corporate accounting and planning. He was formerly a CPA offering and oversaw its acquisition by PepsiCo. with public accounting experience at Coopers & Lybrand. International/Global. Mr. Foss’ responsibilities at Healthcare and Delivery Systems. Mr. Cordani’s long ARAMARK, Pepsi Beverages Company and The Pepsi tenure with Cigna, as President and Chief Executive Officer Bottling Group included international business leadership, and previously as President of the Cigna HealthCare managing the challenges of operating a global business business segment provides him with unique perspective of and strategic planning. At ARAMARK, he has oversight of the evolution of the healthcare service sector and the operations in 20 countries, and throughout his tenure at innovation of health delivery models. Pepsi Beverage Company and The Pepsi Bottling Group, Information Technology. Mr. Cordani manages Cigna’s had responsibilities for global operations including information technology investments in support of business international assignments. and strategic objectives. Marketing and Consumer Insights. Mr. Foss’ service as Marketing and Consumer Insights. As Chief Executive CEO of Pepsi Beverages Company and The Pepsi Bottling Officer, he leads the development and execution of Cigna’s Group provided him experience as an executive officer of a Go strategy to deliver value in more than 95 million consumer oriented company. customer relationships around the world. Regulated Industry/Public Policy. Mr. Cordani is actively engaged in public policy related to the highly regulated healthcare industry and other global business markets. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 11


  • Page 20

    CORPORATE GOVERNANCE MATTERS ISAIAH HARRIS, JR. ROMAN MARTINEZ IV Former President and Chief Private Investor Executive Officer of AT&T AGE: 70 Advertising & Publishing — East DIRECTOR SINCE: 2005 AGE: 65 COMMITTEES: Audit (Chair), DIRECTOR SINCE: 2005 Executive, Finance COMMITTEES: Executive (Chair) Mr. Harris has served as Cigna’s Chairman of the Board Mr. Martinez has been a private investor since 2003. In since December 2009 and served as Vice-Chairman of the 2003, he retired as Managing Director of Lehman Brothers, Board from July 2009 through December 2009. Mr. Harris an investment banking firm, following a 31-year career with the firm. He has served on the Board of Trustees of New served as President and Chief Executive Officer of AT&T York Presbyterian Hospital since 1996. Mr. Martinez Advertising & Publishing — East (formerly BellSouth received his Bachelor of Science degree from Boston Advertising & Publishing Group), a communications College and his MBA from the Wharton School of the services company, from 2005 until his retirement in 2007; University of Pennsylvania. as President, BellSouth Enterprises, Inc. from 2004 until Other Public Company Directorships: Orbital ATK, Inc. 2005 and as President, Consumer Services, BellSouth (2015-Present), Alliant Techsystems, Inc. (2004-2015) Corporation from 2000 until 2004. Mr. Harris has served as an Independent Trustee of Wells Fargo Advantage Funds, Finance. Mr. Martinez has over ten years of experience as a a provider of mutual funds, since 2008. Mr. Harris was private investor and serves on the Investment Committees of several non-profit organizations. He previously served nominated as NYSE 2014 Chairman of the Year. Mr. Harris on the Investment Advisory Council of the State of Florida, received his Bachelor of Science degree from Iowa State which provides independent oversight of the Florida University and his MBA from the University of Minnesota. Retirement System funds and other state funds, which aggregated in excess of $150 billion. He has extensive Other Public Company Directorships: Deluxe Corporation experience in investment banking through his 31-year (2004-2011) tenure with Lehman Brothers where he was involved in a broad spectrum of U.S. and international investment Business Leader. In his executive business leadership roles, banking activities covering financing, mergers and including as CEO of AT&T Advertising and Publishing, acquisitions and restructuring advisory assignments as well Mr. Harris managed large organizations, developed and as financing transactions for governments and executed business strategies and led transformational corporations. change initiatives in both domestic and international Healthcare and Delivery Systems. Through his over 20 operations. years serving on the Board of Trustees of New York Finance. Mr. Harris’ extensive finance experience includes Presbyterian Hospital, Mr. Martinez developed insights into the issues facing health care systems in a rapidly changing 19 years of corporate finance and operational experience in environment, including the provision of care management multi-national organizations, including as Vice President of and delivery systems. Finance, BellSouth Corporation, preceded by 13 years as a CPA with KPMG LLP. Through service on the board of directors of Deluxe Corporation, a provider of customized products and services including financial services and direct checks, and as a trustee of Wells Fargo Advantage Funds, he has insight into financial services-related issues. Marketing and Consumer Insights. As President, Consumer Services, BellSouth Corporation, Mr. Harris focused on marketing communication services to end-user consumers. Regulated Industry/Public Policy. Throughout his career at AT&T Advertising & Publishing, Mr. Harris navigated a heavily regulated and dynamic legal environment. 12 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 21

    CORPORATE GOVERNANCE MATTERS JOHN M. PARTRIDGE JAMES E. ROGERS Former President of Visa, Inc. Former Chairman, President and AGE: 68 Chief Executive Officer of Duke Energy Corporation DIRECTOR SINCE: 2009 COMMITTEES: Finance (Chair), AGE: 70 Executive, People Resources DIRECTOR SINCE: 2007 COMMITTEES: Audit, Finance Mr. Partridge served as President of Visa, Inc., a publicly Mr. Rogers served as Chairman of Duke Energy traded consumer credit company, from 2009 until 2013 and as Chief Operating Officer from 2007 to 2009. He joined Corporation, a publicly traded electric power company, Visa USA in October 1999 and served as President and Chief from 2007 until 2013 and as the President and Chief Executive Officer of Inovant (a Visa subsidiary) from 2000 to Executive Officer from 2006 until 2013. He was formerly 2007 and as Interim President of Visa USA in 2007. From the Chairman, President and Chief Executive Officer of 1998 until joining Visa USA, Mr. Partridge served as Senior CINERGY Corp. (which merged with Duke Energy Vice President and Chief Information Officer of Unum Corporation in 2006) from 1994 until 2006. Mr. Rogers has Provident Corp., a publicly traded disability insurance company. From 1989 to 1998, Mr. Partridge was Executive served as a senior operating partner of Stonepeak Vice President for Credicorp Inc., a commercial banking, Infrastructure Partners, a private equity firm focused on insurance and investment banking company, where he was infrastructure investments since October 2016. He responsible for consumer banking, technology and co-founded and has served as Chairman of Brightlight operations. Prior to joining Credicorp Inc., Mr. Partridge held Foundation, a non-profit provider of globally accessible various management positions with Wells Fargo Bank. and affordable energy solutions, since 2011. He has served Mr. Partridge has served as Chairman and Chief Executive as Chairman and Chief Executive Officer of Intrepid Energy Officer of Velo Payments, a global smart data network for business disbursements, since March 2017 and as an Partners LLC, an advisory business that specializes in operating partner of Corsair Capital, a private equity firm energy sector transactions, since 2014. Mr. Rogers received focused on the financial services industry, since October his Bachelor of Business Administration and his juris doctor 2015. Mr. Partridge received his Bachelor of Science degree from the University of Kentucky. from the University of California. Other Public Company Directorships: Global Payments, Other Public Company Directorships: Duke Energy Inc. (2013-Present) Corporation (2007-2013), Applied Materials, Inc. (2008- Business Leader. Mr. Partridge has extensive senior 2015), CINERGY Corp. (1994-2005), Fifth Third Bancorp leadership experience through his positions with Visa, Inc., (1995-2009) Visa USA, Inovant, Unum and Credicorp. Business Leader. Mr. Rogers has extensive senior Finance. As President and CEO of Inovant, he had direct leadership experience through his positions with Duke oversight of financial operations, financial reporting, merger and acquisition activities and corporate Energy and in the utility industry for 25 years. Over the restructurings. As President of Visa, he was involved with course of his career, he served on the boards of eight financial oversight and reporting and strategic Fortune 500 companies. transactions. His responsibilities at Credicorp provided significant financial services experience. Finance. As President and CEO of Duke Energy, he had Information Technology. Mr. Partridge has experience oversight of financial operations, financial reporting, managing and overseeing information technology merger and acquisition activities and corporate investments in support of business objectives which he restructurings. As a director of Fifth Third Bancorp, a gained through each of his executive leadership positions, regional banking corporation, Mr. Rogers developed a including as Chief Information Officer of Unum and as a deeper understanding of several facets of commercial and director of Global Payments, a provider of electronic consumer financial services. transaction processing services. As President of Inovant, he oversaw Visa’s electronic payment processing service. Regulated Industry/Public Policy. Throughout his career International/Global. As President of Visa, Mr. Partridge’s at Duke Energy and CINERGY, Mr. Rogers operated in a responsibilities included international business leadership. heavily regulated environment and oversaw and He also serves as a director of a large public company with implemented strategic policy initiatives. Before his extensive international operations. His responsibilities with Credicorp included international assignments. corporate career, he served as the Deputy General Counsel for the Federal Energy Regulatory Commission and as a Marketing and Consumer Insights. Through his tenure with Visa, Mr. Partridge focused heavily on consumer credit and partner in the law firm of Akin Gump Strauss Hauer & Feld oversaw marketing, product, client service, support and in Washington, D.C. processing services. As Executive Vice President of Credicorp, his responsibilities included consumer banking. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 13


  • Page 22

    CORPORATE GOVERNANCE MATTERS ERIC C. WISEMAN DONNA F. ZARCONE Former Executive Chairman, President and Chief Executive President and Chief Executive Officer of The Economic Club of Officer of VF Corporation Chicago AGE: 62 AGE: 60 DIRECTOR SINCE: 2007 DIRECTOR SINCE: 2005 COMMITTEES: Finance, People COMMITTEES: Audit, Corporate Resources Governance Mr. Wiseman served as Executive Chairman of VF Ms. Zarcone has been the President and Chief Executive Corporation, a publicly traded apparel and footwear Officer of The Economic Club of Chicago, a civic and company, from August 2008 until October 2017. He served business leadership organization, since February 2012. She as Chief Executive Officer from January 2008 until served as Interim President of The Economic Club of December 2016 and President from 2006 until June 2015. Chicago from October 2011 until February 2012 and as He served as Chief Operating Officer of VF Corporation President and Chief Executive Officer of D. F. Zarcone & from 2006 to 2008; Executive Vice President, Global Associates LLC, a strategic advisory firm, from 2007 until Brands from 2005 to 2006; and Vice President and February 2012. Ms. Zarcone served as the President and Chairman, Sportswear and Outdoor Coalitions from 2004 Chief Operating Officer of Harley-Davidson Financial until 2005. Mr. Wiseman received his Bachelor of Science Services, Inc., a provider of wholesale and retail financing, degree and MBA from Wake Forest University. insurance and credit card programs and a wholly owned subsidiary of Harley-Davidson, Inc., from 1998 until 2006. Other Public Company Directorships: VF Corporation She also served as Chairman of the Board of Eaglemark (2006-2017), Lowe’s Companies, Inc. (2011-Present) Savings Bank, a financial services provider, from 2002 to Business Leader. Mr. Wiseman has extensive senior 2006. She received recognition from the National leadership experience through his positions with VF Association of Corporate Directors as an NACD Corporation. Directorship 100 “Class of 2012” member. Ms. Zarcone is also an NACD Board Leadership Fellow. Ms. Zarcone Finance. As Chairman and CEO of VF Corporation, he has received her Bachelor of Science degree from Illinois State had oversight of financial operations, merger and University and her MBA from the University of Chicago acquisition activities and corporate restructurings. Booth School of Business. International/Global. Through leadership positions at VF Other Public Company Directorships: CDW Corporation Corporation, Mr. Wiseman oversaw operations and (2011-Present), The Jones Group (2007-2012) product sales in over 150 countries. Prior to joining VF Corporation, he held executive leadership roles at Sara Lee Finance. As an executive at Harley-Davidson Financial Corporation that included international business leadership Services and as the Chairman of the Board of Eaglemark and international assignments. Savings Bank, an FDIC-regulated entity, Ms. Zarcone oversaw end-user consumer financial services matters. She Marketing and Consumer Insights. Through leadership is also a certified public accountant. As President and CEO roles at VF Corporation, Mr. Wiseman oversaw marketing of The Economic Club of Chicago, she monitors social and of a variety of brands through all channels of distribution, economic issues facing the U.S. and global markets. both domestically and internationally. As a director of Lowe’s, a retail home improvement and appliances Information Technology. As a director of CDW, a leading company, he focuses on end-user consumer-related issues. provider of integrated information technology solutions, Ms. Zarcone oversees issues facing the information technology industry. Marketing and Consumer Insights. As President of Harley- Davidson Financial Services, Ms. Zarcone oversaw direct marketing initiatives to end-user consumers for a portfolio of financial products. As head of Enthusiast Services at Harley-Davidson, she oversaw brand loyalty initiatives. As a director of The Jones Group, a designer, marketer and wholesaler of branded clothing, she gained further insight into end-user consumer-related issues. 14 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 23

    CORPORATE GOVERNANCE MATTERS WILLIAM D. ZOLLARS Business Leader. Mr. Zollars’ role as Chairman, President Former Chairman, President and and Chief Executive Officer of YRC Worldwide and various Chief Executive Officer of YRC executive leadership positions with Yellow Transportation, Worldwide, Inc. Ryder Integrated Logistics and Eastman Kodak provided him extensive senior leadership experience. AGE: 70 Finance. As Chairman, President and CEO of YRC DIRECTOR SINCE: 2005 Worldwide, Mr. Zollars had oversight of financial COMMITTEES: People Resources operations, merger and acquisition activities and corporate (Chair), Executive, Corporate restructurings and led YRC’s comprehensive recovery plan Governance to reduce cost structure and improve operating results, cash flow from operations, liquidity and financial condition. Mr. Zollars served from 1999 to 2011 as Chairman, President and Chief Executive Officer of YRC Worldwide, Inc., a Healthcare and Delivery Systems. As a director of Cerner, holding company whose subsidiaries provide regional, a supplier of health care information technology, he national and international transportation and related oversees issues facing the healthcare industry, particularly services. Prior to that, Mr. Zollars was President of Yellow health information technology. Transportation, Inc., from September 1996 through International/Global. As President and CEO of YRC, November 1999. From 1994 to 1996, he was Senior Vice Mr. Zollars oversaw global operations and strategic President of Ryder Integrated Logistics. He also held planning, and he undertook international assignments at various executive positions with Eastman Kodak. Kodak. Mr. Zollars received his Bachelor of Arts degree from the University of Minnesota. Other Public Company Directorships: Cerner Corporation (2005-Present), ProLogis Trust (2001-2010; 2011-Present), YRC Worldwide, Inc. (1999-2011) Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 15


  • Page 24

    CORPORATE GOVERNANCE MATTERS Corporate Governance Policies and Practices Cigna is committed to ensuring strong corporate governance practices on behalf of our shareholders. We believe that strong corporate governance and an independent Board provide the foundation for financial integrity and shareholder confidence. The Corporate Governance Committee annually reviews Cigna’s governance program based on, among other things, developments in corporate governance, feedback received during shareholder engagement, legal or regulatory actions, proxy advisory firm positions, Securities and Exchange Commission (SEC) guidance and New York Stock Exchange (NYSE) requirements. The Board and the Corporate Governance Committee developed the Board Corporate Governance Guidelines (the Guidelines) which set forth the key governance principles that guide the Board. The Guidelines, together with the charters of the Audit, Corporate Governance, Finance, People Resources and Executive Committees, provide a framework of policies and practices for our effective governance. The Board and the Corporate Governance Committee review the Guidelines, and the committees review their respective charters, at least annually and update these governing documents as necessary to reflect changes in the regulatory environment, evolving practices and input from shareholders. The full text of the Guidelines and committee charters are available on our website at www.cigna.com/about-us/corporate-governance/ and are available to any shareholder who requests a copy.(1) Corporate Governance Highlights • Independent board of directors with diversity in • Separate Code of Business Conduct and Ethics for composition, skills and experience the Board • Independent Chairman of the Board • Independent Audit, Corporate Governance, Finance and People Resources Committees • Regular executive sessions of the Board and its committees without management present • Annual self-evaluations of the Board, its committees and individual directors, including periodic • Director elections by majority voting independent third party assessments • Annual election of all directors • Majority of director compensation delivered in • Proxy access right for shareholders Cigna common stock • Meaningful stock ownership guidelines for directors PROXY ACCESS of outstanding shares) and engaged with holders of approximately 40% of shares outstanding. During this At our 2017 Annual Meeting, shareholders voted on a engagement, shareholders provided feedback on their non-binding shareholder proposal regarding shareholder views of the shareholder proposal and proxy access proxy access. As we described in our 2017 proxy generally. At the 2017 Annual Meeting, just over 50% of the statement, the Cigna Board was not opposed to proxy votes cast supported the proxy access shareholder access, but at that time, due to the merger agreement with proposal. Anthem, Inc. (Anthem), we were restricted in our ability to amend our bylaws or propose or commit to any bylaw Following the 2017 Annual Meeting and after the Company amendment. The Board strongly believed that any proxy was no longer subject to the restrictions of the merger access framework should be thoughtfully and carefully agreement with Anthem, the Board resumed its evaluation considered. The Board committed to conducting a full of proxy access. As part of this review, the Corporate evaluation of proxy access in 2017, with a goal of Governance Committee evaluated and considered the implementing a proxy access bylaw amendment on terms terms of the bylaw proposed by the shareholder that reflected input from our shareholders and that the proponent as compared to current market practice, other Board believed were in Cigna’s shareholders’ best interests bylaw features not specified by the shareholder proponent in advance of the 2018 Annual Meeting. that are necessary to provide for a balanced and effective proxy access framework, the views of proxy advisory firms In advance of the 2017 Annual Meeting, at the direction of and the input of Cigna’s shareholders received in the Board, Cigna’s Office of the Corporate Secretary connection with Cigna’s outreach efforts. In the fall of 2017, reached out to discuss the shareholder proposal with our at the direction of the Board, the Office of the Corporate 50 largest shareholders (representing approximately 65% Secretary engaged again with our largest shareholders to Throughout this Proxy Statement, we reference information available on our website. The information on our website is not, and shall (1) not be deemed to be, part of this Proxy Statement or incorporated herein or into any of our other filings with the SEC. 16 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 25

    CORPORATE GOVERNANCE MATTERS further discuss proxy access and potential terms for a To be independent under Cigna and NYSE standards, the proxy access bylaw, as well as other areas of interest, such Board must affirmatively determine that a director has no as board refreshment and corporate responsibility. The material relationships with the Company directly or as an Office of the Corporate Secretary reached out to our top officer, shareholder or partner of an organization that has a 20 shareholders (representing approximately 50% of relationship with the Company. In making its assessment, outstanding shares) as well as the shareholders we had the Board considers all relevant facts and circumstances, engaged with in the spring of 2017 that had requested including the nature of transactions with such further discussions in connection with the Board’s organizations and/or the amount of such transactions (in consideration of the implementation of a proxy access aggregate or as a percentage of the organization’s bylaw. Holders of approximately 33% of shares revenues or assets). The Board also considers that, in the outstanding engaged with the Office of the Corporate ordinary course of business, the Company may sell Secretary as part of this shareholder outreach effort. products and services to, and/or purchase products and services from, organizations affiliated with our directors Shareholders indicated their support for a proposed proxy and may hold investments (generally, debt securities) in access bylaw incorporating a 3% ownership requirement, a organizations affiliated with our directors. three-year holding requirement, a cap of 20 shareholders that may form a group to meet the ownership requirement, Based on its review of director relationships, the Board has and a right to nominate directors in an amount equal to affirmatively determined that there are no material the greater of two or 20% of the Board — terms that are relationships between the non-employee directors and the consistent with current market practice. Several of the Company and all non-employee directors (Dr. Henney, shareholders that had voted for the shareholder proposal Ms. Zarcone and Messrs. Foss, Harris, Martinez, Partridge, at the 2017 Annual Meeting indicated that their vote was Rogers, Wiseman and Zollars) are independent as defined not intended as a vote on the specific terms proposed, but in both Cigna’s Guidelines and the NYSE listing standards. rather a vote in favor of the Company’s adoption of proxy In addition, at the committee level, all members of the access generally. Many shareholders also provided input Audit, Corporate Governance, Finance and People regarding other terms of proxy access. Resources Committees are independent and the members of the Audit Committee and the People Resources The Corporate Governance Committee discussed and Committee meet the NYSE’s heightened independence carefully considered all feedback when constructing the requirements for service on those committees. proxy access bylaw and, following this review, the Corporate Governance Committee recommended and the BOARD LEADERSHIP STRUCTURE Board approved amendments to our By-Laws to The Board is committed to the long-term growth of the implement proxy access in December 2017. As a result, a business and the successful execution of our mission to shareholder or a group of up to 20 shareholders owning improve the health, well-being and sense of security of the 3% or more of Cigna’s outstanding common stock people Cigna serves around the globe. To fulfill its continuously for at least three years may nominate and responsibilities to our shareholders, Cigna’s Board, both include in the Company’s proxy materials director directly and through its committees, regularly engages nominees constituting up to the greater of 20% of the with management, ensures management accountability Board or two individuals, provided the shareholder(s) and and reviews the most critical issues that face Cigna. The the nominee(s) satisfy the requirements specified in the Board is committed to meeting the dynamic needs of the By-Laws. The Board believes that this proxy access bylaw Company and focusing on the interests of its shareholders framework provides meaningful proxy access rights, and, as a result, regularly evaluates and adapts its reflects generally accepted governance practices around composition, role and relationship with management. proxy access and is consistent with the overall feedback received as part of our shareholder engagement. Independent Chairman of the Board We currently separate the roles of the Chairman of the DIRECTOR INDEPENDENCE Board and CEO. Our CEO sets the strategic direction for Cigna believes in the importance of a board comprised the Company, working with the Board, and provides largely of independent, non-employee directors. The day-to-day leadership, while our Chairman leads the Board current Board includes nine non-employee directors. On an in the performance of its duties and serves as the principal annual basis, the Board, through its Corporate Governance liaison between the independent directors and the CEO. Committee, reviews relevant relationships between We believe that having an independent Chairman assists directors, their immediate family members and the the Board in ensuring independent oversight of the Company, consistent with Cigna’s independence standards. Company and the management team. The Board regularly Cigna’s independence standards, which are detailed in the assesses the appropriateness of this leadership structure Guidelines, are consistent with the independence and has concluded that this structure best suits Cigna’s requirements set forth in the NYSE’s listing standards. needs at this time. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 17


  • Page 26

    CORPORATE GOVERNANCE MATTERS In February 2018, the Board re-elected Isaiah Harris, Jr. to serve as our independent Chairman. The Board elects the Chairman to a three-year term, expiring at the annual meeting occurring at the end of the third year. Mr. Harris’ current term as Chairman will expire in April 2021, subject to his annual election to the Board by shareholders. The full Board evaluates the Chairman’s performance on an annual basis as part of the annual Board evaluation. Chairman Responsibilities • Serve as principal representative of the Board • Act as liaison between Board and management • Facilitate discussion among independent directors • Lead the Board in CEO succession planning on key issues • Preside over Board and shareholder meetings • Advise the CEO on issues of concern for the Board • Engage in the director recruitment process • Develop agenda for Board meetings, in • Represent the Company in interactions with external consultation with the CEO and other directors stakeholders, as appropriate Access to Management and Advisors • board configuration, including size, diversity and skillset; A member of senior management is assigned to each • board dynamics, including individual director committee to act as a staff officer. The Chief Financial preparation and participation; Officer serves as the staff officer for the Audit and Finance Committees; the General Counsel serves as the staff officer • governance policies and practices; for the Corporate Governance Committee; and the • strategy and risk oversight; Executive Vice President — Human Resources and Services • interaction with management; and serves as the staff officer for the People Resources Committee. These executive officers work with their • progress achieved against prior year evaluation respective committee chair to assist in setting and initiatives. developing meeting agendas and materials and attend As set forth in its charter, the Corporate Governance meetings as appropriate. Committee chairs communicate Committee oversees the Board, committee and individual frequently with staff officers, the other executive officers director evaluation process. Annually, the Corporate and other members of management between scheduled Governance Committee and the Chairman of the Board Board meetings with respect to committee issues and determine the appropriate form of evaluation and consider management is expected to update the Board on any the design of the process to ensure it is both meaningful significant Company matters or competitive developments and effective. In 2017, each director was interviewed by between Board meetings. either the Chair of the Corporate Governance Committee The Board and its committees are able to access and or the Chairman of the Board. In response to feedback retain independent advisors as, and to the extent, they provided from directors regarding the Board evaluation deem necessary or appropriate. process, the Chairman of the Board and the Chair of the Corporate Governance Committee also interviewed BOARD EVALUATIONS AND BOARD various members of management to better understand EFFECTIVENESS management’s perspective on the Board. In addition, each member of the Board was able to submit anonymous Evaluation Process written feedback to the Corporate Secretary. A meaningfully designed director evaluation process The Chair of the Corporate Governance Committee allows the Board to gain insights into the effectiveness of summarized the feedback from the individual director and challenges facing the Board, its committees and its interviews in a report for the Chairman of the Board and individual members, with the goal of enhancing Board each of the Committee Chairs. The Chair of the Corporate performance and, as a result, increasing shareholder value. Governance Committee and the Chairman of the Board Cigna’s Board is committed to ongoing improvement and then presented the report to the full Board for review, the evaluation process is an important vehicle that fosters discussion and determination of action items. The chairs of and supports effectiveness. Our board evaluations are each committee led a similar self-assessment discussion designed to solicit input and perspective on various for their particular committee. matters, including: From time to time, the Board has engaged an independent • board leadership structure; third party to conduct the Board evaluation, most recently 18 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 27

    CORPORATE GOVERNANCE MATTERS in 2014. The Corporate Governance Committee and Board Resources Committees. The Audit Committee oversees have agreed to use an independent third party to facilitate Cigna’s enterprise risk management (ERM) framework. the Board evaluation process approximately every three to ERM is a Company-wide initiative that involves the Board, five years, or on an as needed basis. Cigna’s management, Cigna’s Chief Risk Officer and General Auditor (CRO) and internal audit function in an The results of the evaluation process support the Board’s integrated effort to (1) identify, assess, prioritize and belief that the Board and committees are operating monitor a broad range of risks and (2) formulate and effectively. execute plans to monitor and, to the extent possible, Board Refreshment and Succession Planning mitigate the effect of those risks. The CRO meets with the Audit Committee regularly during its executive sessions The Corporate Governance Committee is responsible for and reports to the Board at least annually. identifying new director candidates, reviewing the composition of the Board and its committees and for Cigna has implemented practices so that the Board and its making recommendations to the full Board on these committees are regularly briefed on issues related to the matters. As further described on page 9, in 2017, the Company’s risk profile. These briefings are designed to Corporate Governance Committee began a long-term provide visibility to the Board about the identification, board refreshment plan and engaged an outside firm to assessment and management of critical risks and provide advisory services related to succession planning management’s risk mitigation strategies. These briefings and to assist with the recruitment of director candidates. address strategic, operational, financial reporting, succession and compensation, cyber-security, compliance, RESPONSIBILITIES OF THE BOARD reputational, governance and other risks, as appropriate. Board Oversight of Risk and Enterprise Risk The Board, including its committees, oversees risks Management associated with their respective areas of responsibility, as summarized below. Each committee meets in executive The Board of Directors has the ultimate responsibility for session without management present and with key risk oversight under Cigna’s risk management framework. management personnel and representatives of outside The Board executes its duty both directly and through its advisors as necessary. Audit, Corporate Governance, Finance and People BOARD/COMMITTEE PRIMARY AREAS OF RISK OVERSIGHT Strategic, financial and execution risks and exposures associated with Cigna’s business strategy, including impact of changes to laws and regulations, significant litigation and regulatory Full Board exposures and other current matters that may present material risk to financial performance, operations, infrastructure, plans, prospects, reputation, acquisitions and divestitures. In addition to overseeing Cigna’s ERM framework, oversees risks related to the Company’s Audit financial statements, the financial reporting process, accounting, cyber-security and certain legal Committee and compliance matters. The Audit Committee also oversees the internal audit function and the Company’s ethics and compliance program. Oversees risks and exposures associated with director succession and refreshment planning, Corporate corporate governance and overall Board effectiveness. Also oversees the Company’s risks Governance related to political and charitable contributions. In exercising this oversight, the Corporate Committee Governance Committee reviews and discusses financial contributions to such organizations. Oversees the Company’s deployment of capital, technology and investment-related initiatives. In Finance exercising this oversight, the Finance Committee regularly reviews and discusses the Committee technology, financial market and capital management risks that are monitored through the Company’s ERM process. Oversees compensation related-risks and management succession planning. For additional People Resources information regarding the People Resources Committee’s role in evaluating the impact of risk on Committee executive compensation, see “Processes and Procedures for Determining Executive Compensation — Risk Oversight” in the Compensation Discussion & Analysis (CD&A). Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 19


  • Page 28

    CORPORATE GOVERNANCE MATTERS Oversight of Business Strategy Shareholder Interests Our directors provide unique insights into the strategic The Board and the Corporate Governance Committee issues facing the Company, including changes in the oversee the Company’s shareholder engagement practice. regulatory environment, changing market dynamics and The Office of the Corporate Secretary engages with the competitive landscape. As part of its oversight of shareholders on issues related to corporate governance, business strategy, the Board: executive compensation and social responsibility. In 2017, the Office of the Corporate Secretary engaged in • Formally reviews Cigna’s annual and longer-term extensive outreach with shareholders, particularly strategic plan, financial targets and strategies for regarding proxy access, as further described on page 16. achieving those targets; During these meetings, shareholders also expressed an • Regularly reviews and assesses Cigna’s results of interest in learning more about our board refreshment operations, financial performance, prospects and plans and our corporate responsibility efforts. As a result, competitive position; we have included additional disclosure on these topics, which can be found on pages 9 and 23, respectively. • Regularly discusses external factors that affect the Company, such as regulatory developments and Senior management and the Investor Relations team trends impacting the health care industry generally; regularly meet with shareholders and respond to their questions and feedback throughout the year. In June 2017, • Regularly reviews our performance compared to our Cigna hosted an Investor Day. During Investor Day, Cigna’s competitors; and management discussed our track record of delivering • Regularly evaluates potential strategic alternatives value and our growth path moving forward. Investor Day relating to Cigna and our business, including possible was a highly interactive event, providing the investment acquisitions, divestitures and business combinations. community with many formal and informal opportunities to further understand Cigna’s strategy to Go Deeper, Go Management Succession Planning Local and Go Beyond, as well as the depth and breadth of Cigna’s management team. At the direction of the Chairman, the Board oversees management succession planning, including for the CEO In addition, the Board has adopted a number of practices role. With the assistance of the People Resources that align the interests of the directors with those of the Committee, the Board reviews and approves regular and shareholders, including: emergency succession plans. The People Resources • a director compensation program whereby a majority Committee is responsible for overseeing the Company’s of compensation is delivered in common stock; policies and processes for people development in general. The People Resources Committee also ensures that • robust stock ownership requirements for directors; management succession planning meets the Board’s and expectations. Annually, the CEO presents to the Board a review of executive officers and key senior management, • no shareholder rights plan and, at this time, the Board including a discussion of those employees who are has no intention of adopting such a plan. considered to be potential successors to executive and Information regarding how our executive compensation senior level positions with regard to their readiness and policies and practices align with the interests of development opportunities. In 2017, succession planning shareholders can be found in the CD&A. related to the promotions of Brian C. Evanko, Christopher J. Hocevar, Alan M. Muney, Eric P. Palmer and Michael W. Triplett to executive officer roles, and the retirements of Thomas A. McCarthy and Matthew G. Manders. 20 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 29

    CORPORATE GOVERNANCE MATTERS BOARD MEETINGS AND COMMITTEES In 2017, the Board held 11 meetings and the committees of the Board held a total of 33 meetings. At all regular meetings held in 2017, the independent members of the Board met in executive session without management present. As part of all regularly scheduled Board meetings, the Chairman presides over all executive sessions of the Board. Each committee also met in executive session without management on a regular basis in connection with their respective meetings. Each director attended more than 75% of the aggregate of all meetings of the Board and committees on which he or she served during 2017. During 2017, Board and committee attendance averaged 93% for the Board as a whole. In addition to formal Board meetings, the Board engages with management regularly throughout the year. The Board expects directors to attend the annual meeting of shareholders. All directors attended the 2017 annual meeting and Mr. Harris chaired the meeting. All directors are expected to attend the Annual Meeting in 2018. The Board has five committees: Executive, Audit, Corporate Governance, Finance and People Resources. Complete copies of the committee charters are available on Cigna’s website at www.cigna.com/about-us/company-profile/corporate-governance/. The composition of the Audit, Corporate Governance, Finance and People Resources Committees is set forth below. Corporate People Audit* Governance Finance Resources Eric J. Foss ✓ ✓ Jane E. Henney, M.D. ✓ Chair Roman Martinez IV Chair # ✓ John M. Partridge Chair ✓ James E. Rogers ✓# ✓ Eric C. Wiseman ✓ ✓ Donna F. Zarcone ✓# ✓ William D. Zollars ✓ Chair Meetings in 2017 9 8 8 8 ✓ Committee member # Designated “audit committee financial expert” as defined in the SEC rules. * All members of the Audit Committee are financially literate within the meaning of the NYSE listing standards. The Executive Committee may exercise the power and authority of the Board as specifically delegated by the Board when convening a meeting of the full Board of Directors is impracticable. Mr. Harris is Chairman of the Executive Committee and Dr. Henney and Messrs. Cordani, Martinez, Partridge and Zollars serve on the Executive Committee. In 2017, the Board of Directors did not delegate any actions to the Executive Committee and, therefore, the Executive Committee did not meet in 2017. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 21


  • Page 30

    CORPORATE GOVERNANCE MATTERS Committee Responsibilities • Assesses the qualification and independence of, appoints, compensates, oversees the work of and removes, if appropriate, Cigna’s independent registered public accounting firm. • Represents and assists the Board in fulfilling its oversight responsibilities regarding the adequacy and effectiveness of internal controls and the integrity of financial statements. • Reviews annual and quarterly financial statements, earnings releases, earnings guidance and significant accounting policies with management and, if appropriate, the independent registered public accounting firm. Audit Committee • Oversees compliance with material legal and regulatory requirements, including those that apply to federal and state health care programs. • Oversees the Company’s enterprise risk management program and internal audit function and advises the Board on financial and enterprise risks, including risks related to the security of information technology systems. • Maintains procedures for and reviews the receipt, retention and treatment of complaints and concerns regarding accounting, controls, auditing, reporting and disclosure matters. • Reviews, advises and reports to the Board on the Board’s membership, structure, organization, governance practices and performance, as well as shareholder engagement activities. • Assists the Board in board refreshment planning. Corporate Governance • Reviews committee assignments and director independence. Committee • Oversees director nomination and compensation and develops specific director recruitment criteria. • Oversees communications with external stakeholders, including shareholders. • Oversees corporate political and charitable contributions and the Company’s corporate responsibility and sustainability efforts. • Oversees the structure and use of Cigna’s capital. • Oversees Cigna’s long-term financial objectives and progress against those objectives. Finance Committee • Reviews Cigna’s strategic operating plan and budget. • Oversees Cigna’s investment strategy and sets investment policies and guidelines. • Oversees information technology strategy and execution. • Oversees the policies and processes for people development and assists the Board in reviewing executive officer succession plans. • Establishes company goals and objectives relevant to the CEO’s compensation, evaluates the CEO’s performance in light of those established goals and objectives, and based on this evaluation, recommends the CEO’s compensation to the independent members of the Board for approval. People Resources • Reviews and approves compensation targets, base salaries, cash and equity-based incentive Committee compensation payments and arrangements, severance, and other compensation and benefits arrangements for any current or prospective executive officers other than the CEO, subject to required Board or shareholder approvals. • Establishes performance measures and goals and assesses whether these goals are met for awards under short-term and long-term cash-based and equity-based compensation plans. • Reviews and monitors the Company’s diversity program. 22 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 31

    CORPORATE GOVERNANCE MATTERS CODES OF ETHICS inclusion on the index was driven by our responsible business practices. Cigna is committed to conducting business in accordance with the highest standards of integrity, legal compliance The Corporate Governance Committee is responsible for and ethical conduct. In 2015, at the recommendation of the overseeing Cigna’s positions on, and policies with respect Corporate Governance Committee, the Board adopted a to, Cigna’s corporate responsibility efforts around the Director Code of Business Conduct and Ethics, available on globe. To support the Corporate Governance Committee’s Cigna’s website at www.cigna.com/about-us/corporate- responsibility, Cigna has established the Cigna Connects governance/. The Board believes that having a separate Corporate Responsibility Governance Council to provide code of conduct for the Board meaningfully enhances input on Cigna’s policies, initiatives and reporting relative Cigna’s governance framework by making Board-specific to corporate responsibility. Led by Cigna’s Director of policies clearer, while also addressing general shareholder Corporate Responsibility & Civic Affairs, this Council is a concerns over transparency of company and board cross-functional team of leaders from various areas of the practices. Company, including ethics and compliance, global real All directors and employees, including executive officers, estate, risk management, supply chain, human resources must comply with the Company’s Code of Ethics, available and the Cigna Foundation. on Cigna’s website at www.cigna.com/about-us/ Cigna annually publishes a corporate responsibility report, corporate-governance/. Both the Director Code of Cigna Connects, highlighting our corporate responsibility Business Conduct and Ethics and the Company Code of goals and initiatives. Cigna Connects covers areas such as Ethics, together with Cigna’s related policies and Cigna’s practices around ethics and governance, diversity, procedures, address major areas of professional conduct, environmental sustainability, and our Cigna Foundation. It including, among others, conflicts of interest, protection of also provides more information about our recent private, sensitive or confidential information, insider recognitions, including being named to Corporate trading and adherence to laws and regulations affecting Responsibility Magazine’s 100 Best Corporate Citizens List, the conduct of Cigna’s business. Directors and employees our listing on the MSCI Sustainability Index, and our affirm their adherence to the Code of Ethics and the “Innovation in Advancing Health Equity” award from the Director Code of Business Conduct and Ethics, as National Business Group on Health. Cigna Connects is applicable, annually. presented to the Corporate Governance Committee, which CORPORATE RESPONSIBILITY reviews the report with the Board. We encourage our shareholders to review our most current report, which is As a global health service company with the mission of available on Cigna’s website at www.cigna.com/about-us/ helping improve the health, well-being and sense of corporate-responsibility/report/. security of the people we serve, Cigna believes that its success depends on earning trust through responsible Cigna’s corporate responsibility efforts are focused on the business practices, corporate citizenship and providing following areas: superior services that meet our customers’ individual Health and Well-Being. Cigna’s goal is to make health care needs. Inspired by our mission, Cigna works to positively better for all, by striving to build a sustainable health care impact the health of people, communities and the system that lowers health risks, fosters health equality, environment. improves health status and promotes preventative health As evidence of this, in 2015, Cigna was the first U.S. health interventions. For example, Cigna is committed to being a insurance company to sign on to the United Nations Global national leader on modernizing the approach to the Compact (UNGC), a policy initiative for companies prevention, treatment and communication of substance committed to areas such as human rights, labor standards, use disorders, and pledged to reduce opioid usage among environmental responsibility and business integrity in our customers by 25% by 2019. Cigna is addressing the business operations. In 2017, Cigna became a member of needs of our communities through efforts such as the UNGC Health is Everyone’s Business action platform, empowering veterans to address difficult health and life which is a coalition working to develop a global business circumstances and establishing the free Cigna Health agenda to address goals related to good health and well- Improvement Tour. In 2017, we provided more than 10,000 being. free Cigna Health Improvement Tour biometric screenings In 2017, Cigna was named to the Dow Jones Sustainability (blood pressure, cholesterol, blood sugar and body-mass Index, a benchmark for investors who integrate index) and health coaching to participants in 100 locations. sustainability considerations into their portfolios. We Environment. As a health service company, Cigna takes a achieved the leading spot among the Health Care precautionary approach to its environmental sustainability Providers & Services industry sector. Cigna was recognized efforts, recognizing that environmental stewardship can in both the Dow Jones Sustainability World Index and the have a health impact and also make sound business sense. Dow Jones Sustainability North America Index. Our We currently have 16 LEED certified buildings and 25 sites Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 23


  • Page 32

    CORPORATE GOVERNANCE MATTERS are enrolled in the U.S. Environmental Protection Agency’s policy arena is important to our mission, business and ENERGY STAR® program. In 2017, Cigna’s greenhouse gas customers. Cigna has engaged with shareholders to gain emissions data was verified by an independent third party feedback regarding desired political contribution disclosure expert. Cigna considers managing the risks and and published its first annual political contributions and opportunities associated with climate change and resource lobbying activity report in 2011. The initial report provided scarcity as a significant aspect of our corporate information about Cigna’s political contributions, lobbying responsibility platform. Our Environmental Policy Statement, activities, trade association affiliations and related matters. which is described in greater detail in the Corporate Since then, we have significantly enhanced this report to Responsibility section of www.cigna.com, outlines our incorporate subsequent input from shareholders and to environmental sustainability policies and practices. provide greater clarity on our overall lobbying framework, Ethical and Inclusive Business Practices. We strive to including the areas in which we focus our advocacy efforts foster relationships with various stakeholders to help us and why we believe active engagement in the public policy better understand their priorities and to further Cigna’s arena is necessary to support the achievement of our goal of bringing positive changes in areas such as human mission, the success of our business and the well-being of capital, diversity and inclusion, supply chain management, our customers. The report also provides information about: stakeholder engagement and human rights. Cigna seeks to (1) direct political contributions that Cigna makes at a partner with organizations that are guided by similar corporate level; (2) contributions that Cigna makes through principles. Our Supplier Code of Ethics, with which all of the Cigna Political Action Committee; and (3) the total our suppliers are expected to comply, explicitly prohibits amount of dues paid to any industry trade association to the use of child or forced labor, and requests that our which Cigna pays $50,000 or more in annual dues, as well as suppliers demonstrate ethics, compliance and integrity in the portion of any such dues that such trade associations human rights, business conduct and the environment. The inform us are allocable to any non-deductible lobbying Supplier Code of Ethics is an important part of the internal expenses. The Corporate Governance Committee oversees control structure and helps promote ethical business Cigna’s political and lobbying activities. The Company practices. As an example of our focus on inclusive business updates the report annually and we encourage you to review practices, in 2017, we welcomed the inaugural class of our our 2017 report which is available on Cigna’s website at diverse supplier Mentor Protégé Program. This program, www.cigna.com/about-us/corporate-governance/. consisting of certified minority, veteran and LGBT business CERTAIN TRANSACTIONS enterprises, provides one-on-one mentoring with Cigna management, and insights into growth strategies and best Transactions with Related Persons practices to help grow their businesses. Cigna has not adopted a written policy concerning review, The Cigna Foundation approval or ratification of related person transactions. Cigna compiles information about transactions between The Cigna Foundation, established more than 50 years Cigna and Cigna’s directors, director nominees, executive ago, carries out our corporate philanthropy goals of officers and any immediate family members and affiliated bringing Cigna’s mission and brand promise to life for entities identified by directors, director nominees and individuals and communities around the globe. The Cigna executive officers as having any form of relationship with Foundation accomplishes these goals through strategically Cigna, as well as shareholders that identified themselves focused charitable grants to nonprofit organizations whose during 2017 as holding 5% of Cigna’s common stock. work enhances the health of individuals and families and Cigna’s Office of the Corporate Secretary analyzes the the well-being of their communities. Cigna’s World of nature of any transaction to determine whether the Difference grants center around collaborations with transaction may require disclosure under SEC rules as a nonprofits pursuing projects that help people overcome related person transaction. On an annual basis, the barriers to their health and well-being related to factors Corporate Governance Committee reviews the analysis such as ethnicity, race, gender, age, education, economic prepared by the Company, and presents its assessment to status or place of residence. In 2017, we added a focus on the full Board of Directors. community health workers. Cigna funded 27 Cigna Foundation Grants to address health disparities and Based on this review, there are no related person advance community health navigation in 2017. transactions requiring disclosure under SEC rules. ANNUAL POLITICAL CONTRIBUTIONS Compensation Committee Interlocks and AND LOBBYING ACTIVITY REPORT Insider Participation Cigna is committed to transparency and strives to provide The People Resources Committee is comprised of four clarity about our goals and positions related to the independent directors: William D. Zollars (Chair), Eric J. Company’s federal and state lobbying and advocacy efforts Foss, John M. Partridge and Eric C. Wiseman. There are no as well as why we believe active engagement in the public compensation committee interlocks. 24 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 33

    CORPORATE GOVERNANCE MATTERS Non-Employee Director Compensation OVERVIEW Cigna’s director compensation program is designed to attract and retain highly qualified independent directors, by addressing the time, effort, expertise and accountability required of active board membership. The Board believes that the current director compensation program: • aligns with shareholder interests because it includes a significant equity-based compensation component, the value of which is tied to Cigna’s stock price; and • is competitive based on the work required of directors serving on the board of an entity of the Company’s size, complexity and scope. The Corporate Governance Committee’s charter provides that it will periodically review director compensation and assist the Board in the administration of director compensation plans. The Board approves the amount and form of director compensation. The Corporate Governance Committee may from time to time engage an independent compensation consultant to assist in its review of director compensation. DIRECTOR COMPENSATION PROGRAM The Corporate Governance Committee reviews Cigna’s non-employee director compensation program on an annual basis. The Corporate Governance Committee last engaged an independent compensation consultant in 2011 to assist in the Committee’s review of director compensation amount and pay mix. As a result of that review, the Board, upon recommendation from the Corporate Governance Committee, approved the current director compensation program, effective January 2012. The Board has not increased compensation since that time. In 2017, the Board and the Corporate Governance Committee reviewed the director compensation program and did not make any changes. As part of this review, the Corporate Governance Committee reviewed benchmarking data from the Company’s compensation peer group (as described in “Executive Compensation Policies and Practices — 2017 Peer Groups” in the CD&A), as well as the top 200 companies of the S&P 500, to ensure that our pay practices were competitive and aligned with those companies. The following chart summarizes the retainer compensation provided to directors for their service on Cigna’s Board and its committees. A director who also is an employee of the Company does not receive payment for service as a director. The CEO is the only employee who currently serves as a director. There is no retainer for service on the Executive Committee. All retainer payments are made in equal, quarterly installments. RETAINER TYPE ANNUAL AMOUNT METHOD OF PAYMENT Cigna common stock ($180,000) Board $275,000 Cash ($95,000) Chairman of the Board $225,000 Cash Committee chair $ 15,000 Cash Committee member $ 10,000 Cash Deferral of Payments Under the Deferred Compensation Plan of 2005 for Directors of Cigna Corporation (Deferral Plan), directors may elect to defer the payment of the cash and/or common stock portion of their annual retainers. Deferred common stock compensation is credited to a director’s deferred compensation account as a number of shares of hypothetical common stock and ultimately paid in shares. Deferred cash compensation is ultimately paid in cash, and directors have a choice of hypothetical investment funds whose rates of return are credited to that account. These funds include a Cigna stock fund and several other funds selected from those offered to all Cigna employees under the Cigna 401(k) Plan. Directors may elect to receive payments under the Deferral Plan in a lump sum or installments. Lump sum payments are made, or payment installments begin, in January of the year following a director’s separation from service. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 25


  • Page 34

    CORPORATE GOVERNANCE MATTERS Stock Ownership Guidelines Cigna will make a matching charitable gift of up to $5,000 annually. In addition, upon a director’s retirement, in Cigna requires directors to maintain a stock ownership level recognition of the retiring director’s service, the Board of at least $500,000 in value of Cigna common stock, may make a donation in the amount of $10,000 to a which is more than five times the annual Board cash charitable organization of the director’s choice. retainer. Under the guidelines, directors have five years from their election to the Board to satisfy this ownership Insurance Coverage obligation. Common stock, deferred common stock, Cigna provides each director, on the same basis as restricted stock units and hypothetical shares of Cigna employees and at no cost to the director, group term life common stock held by a director count toward the stock insurance coverage equal to the annual Board retainer ownership guidelines for directors whose service started ($275,000 during 2017), and business travel accident before February 2014. Directors whose service started after insurance coverage equal to three times the annual Board February 2014 may only count common stock and deferred retainer ($825,000 during 2017). common stock for compliance with stock ownership guidelines. As of December 31, 2017, all of the directors are Directors also may purchase or participate in, by paying in compliance with the stock ownership guidelines and met premiums on an after-tax basis, additional life insurance, or exceeded their ownership requirement. medical care, long-term care, property/casualty personal lines and various other insurance programs available on a Financial Planning and Matching Charitable broad basis to Cigna employees. Directors also may elect Gift Programs to purchase worldwide emergency assistance coverage. Directors may participate in the same financial planning This program, which provides international emergency and tax preparation program available to Cigna executive medical, personal, travel and security assistance, also is officers. Under this program, Cigna will make direct available to Cigna executive officers and certain other payments or reimburse directors for financial planning Cigna employees who frequently travel abroad for services that are provided by firms designated by Cigna business. and for tax preparation services in the amount of up to Cigna provides each retired director whose service started $6,500 annually. Each director whose service started before 2006 and who has at least nine years of Board before 2006 and has at least nine years of board service service upon separation from service with $10,000 of upon separation from service also is eligible for direct group term life insurance coverage, with premiums paid by payments or reimbursement in the amount of up to $5,000 Cigna. In addition, these directors may also participate for for financial planning and tax preparation services during two years following separation from service in the medical the one-year period following separation from service. care programs currently offered by Cigna to retired Directors also may participate in the matching charitable employees, with premiums paid by the director on an gift program available to Cigna employees, under which after-tax basis. 26 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 35

    CORPORATE GOVERNANCE MATTERS DIRECTOR COMPENSATION TABLE FOR 2017 The table below includes information about the compensation paid to non-employee directors in 2017. Mr. Cordani, the only Company employee on the Board of Directors, does not receive any director compensation for his Board service. FEES EARNED ALL OTHER TOTAL OR PAID IN CASH STOCK AWARDS COMPENSATION COMPENSATION NAME ($) ($) ($) ($) (a) (b) (c) (d) (e) Eric J. Foss 115,000 180,000 365 295,365 Michelle D. Gass(1) 28,750 45,000 61 73,811 Isaiah Harris, Jr. 320,000 180,000 918 500,918 Jane E. Henney, M.D. 120,000 180,000 6,157 306,157 Roman Martinez IV 120,000 180,000 1,373 301,373 John M. Partridge 120,000 180,000 5,365 305,365 James E. Rogers 115,000 180,000 820 295,820 Eric C. Wiseman 115,000 180,000 820 295,820 Donna F. Zarcone 115,000 180,000 6,316 301,316 William D. Zollars 120,000 180,000 1,017 301,017 (1) Ms. Gass resigned from the Board of Directors on February 21, 2017. Fees Earned or Paid in Cash (Column (b)) • In addition to the annual cash retainer for Board service received by each director: • Dr. Henney and Messrs. Martinez, Partridge and Zollars each served as a committee chair and as a member of another committee. • Ms. Zarcone and Messrs. Foss, Rogers and Wiseman each served as a member of two committees. • Mr. Harris served as Chairman of the Board. • Director fees listed in this column may be deferred by directors under the Deferral Plan (see “Deferral of Payments” above). Stock Awards (Column (c)) Column (c) lists the aggregate grant date fair value of Cigna common stock awarded to directors as part of their Board retainer, computed in accordance with FASB Accounting Standards Codification (ASC) Topic 718, applying the same model and assumptions that Cigna applies for financial statement reporting purposes as described in Note 16 to Cigna’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (disregarding any estimates for forfeitures). Common stock awards listed in this column may be deferred by directors under the Deferral Plan. See “Director Ownership” below for amounts and a description of equity-based awards outstanding as of December 31, 2017. All Other Compensation (Column (d)) Column (d) includes: • reinvested dividends on certain share equivalent awards and on deferred Cigna common stock, and dividends paid in cash on restricted stock units, as described below under “Director Ownership;” • matching charitable awards made by Cigna as part of its matching gift program (also available on a broad basis to Cigna employees) in the amount of $5,000 each for Dr. Henney, Ms. Zarcone and Mr. Partridge; and • the dollar value of Company-paid life insurance premiums for all directors. There were no perquisites or personal benefits provided to non-employee directors that exceeded $10,000, as permitted by SEC rules. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 27


  • Page 36

    CORPORATE GOVERNANCE MATTERS DIRECTOR OWNERSHIP The table shows Cigna securities held by each non-employee director as of December 31, 2017. The value of these securities was calculated using $203.09, which was Cigna’s closing stock price on December 29, 2017, the last business day of the year. HYPOTHETICAL DEFERRED RESTRICTED SHARES OF TOTAL COMMON COMMON STOCK COMMON TOTAL OWNERSHIP STOCK STOCK UNITS STOCK OWNERSHIP VALUE NAME (a) (b) (c) (d) (e) (f) Eric J. Foss 13,413 — — — 13,413 $ 2,724,046 Isaiah Harris, Jr. 1,937 — 13,500 23,255 38,692 $ 7,857,958 Jane E. Henney, M.D. 1,836 — 13,500 19,024 34,360 $ 6,978,172 Roman Martinez IV 9,496 22,780 13,500 15,423 61,199 $12,428,905 John M. Partridge 33,267 — — — 33,267 $ 6,756,195 James E. Rogers — 37,520 — 11,299 48,819 $ 9,914,651 Eric C. Wiseman 4,200 12,117 — 3,652 19,969 $ 4,055,504 Donna F. Zarcone 5,971 8,230 13,500 2,797 30,498 $ 6,193,839 William D. Zollars 212 — 13,500 9,784 23,496 $ 4,771,803 Deferred Common Stock (Column (b)) Column (b) includes the equity portion of the 2017 and any previous year’s Board retainer granted in Cigna common stock or deferred stock units that have been deferred under the Deferral Plan. Restricted Stock Units (Column (c)) Column (c) includes restricted stock units that were issued in April 2014 upon the cancellation and exchange of 13,500 restricted share equivalents held by each of Dr. Henney, Ms. Zarcone and Messrs. Harris, Martinez and Zollars. The restricted share equivalents were originally granted pursuant to the terms of the compensation program in place at the times of the directors’ election to the Board between 2004 and 2006. The restricted share equivalents and the restricted stock units have the same terms and conditions, except that, upon separation of service, the restricted share equivalents would have settled in cash and the restricted stock units will settle in shares of Cigna common stock. The restricted stock units vest after nine years of service or upon reaching age 65. All of these restricted stock units are vested. Hypothetical Shares of Common Stock (Column (d)) Column (d) includes (1) share equivalents resulting from voluntary deferrals of cash compensation hypothetically invested in the Cigna stock fund; (2) hypothetical shares of Cigna common stock credited to directors’ restricted deferred compensation accounts under the terms of the retirement plan in effect between 1997 and 2005; and (3) hypothetical shares of Cigna common stock acquired pursuant to a pre-2006 requirement that directors invest or defer a portion of their Board retainer in shares of hypothetical Cigna common stock. Although these securities are not common stock, the value of the hypothetical shares of Cigna common stock credited to a director’s deferred compensation account is tied directly to the value of Cigna common stock. 28 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 37

    COMPENSATION MATTERS Advisory Approval of Executive Compensation (Proposal 2) Our Board is committed to strong governance and recognizes that Cigna shareholders have an interest in our executive compensation policies and practices. Section 14A of the Securities Exchange Act of 1934, as amended (the Exchange Act) requires that we provide our shareholders with the opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers (NEOs). In recognition of the preference of shareholders expressed at our 2011 annual meeting and reaffirmed at our 2017 annual meeting, the Board has held “say on pay” advisory votes on an annual basis. Consistent with this practice and SEC rules, we are asking you to approve the following advisory resolution: Resolved, that the shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the Company’s Proxy Statement for the 2018 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, Executive Compensation Tables and accompanying narrative disclosure. We believe that our executive compensation program design effectively aligns the interests of our executive officers with those of our shareholders by tying a significant portion of their compensation to Cigna’s performance and rewarding our executive officers for the creation of long-term shareholder value. In considering your vote, we encourage you to review the Proxy Statement Summary, the Compensation Discussion and Analysis and the Executive Compensation Tables. This advisory vote is intended to address our overall compensation policies and practices related to the NEOs rather than any specific element of compensation. Because your vote is advisory, it will not be binding upon the Board. However, the Board and People Resources Committee value your opinion and will review and consider the voting results when making future executive compensation decisions. The Board of Directors unanimously recommends that shareholders vote FOR the advisory approval of the Company’s executive compensation. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 29


  • Page 38

    COMPENSATION MATTERS Compensation Discussion and Analysis This Compensation Discussion and Analysis (CD&A) describes the compensation policies, programs and decisions regarding our named executive officers (NEOs) for 2017, who include our Chief Executive Officer, Chief Financial Officer, the three most highly-compensated executive officers as of the end of 2017, as well as our former Chief Financial Officer and one other executive officer who retired during 2017. The People Resources Committee (the Committee) is charged with oversight of the Company’s executive compensation policy and plans and makes all compensation decisions for our executive officers with the exception of our CEO, for whom the Committee makes recommendations to the Board of Directors. This section also describes why the Committee has chosen each element of compensation and how it made compensation decisions. For 2017, our NEOs are: NAME TITLE David M. Cordani President and Chief Executive Officer Eric P. Palmer(1) Executive Vice President and Chief Financial Officer Christopher J. Hocevar(2) President, Strategy, Segments and Solutions Nicole S. Jones Executive Vice President and General Counsel Jason D. Sadler(3) President, International Markets Thomas A. McCarthy(4) Retired Executive Vice President and Chief Financial Officer Matthew G. Manders(5) Retired President, Government & Individual Programs and Group Insurance (1) Mr. Palmer was appointed Executive Vice President and Chief Financial Officer effective June 16, 2017. (2) Mr. Hocevar was appointed President, Strategy, Segments and Solutions effective February 23, 2017. (3) Mr. Sadler is based in Hong Kong. His base salary and annual incentive award are paid in Hong Kong dollars and, throughout this CD&A, have been converted to U.S. dollars using an exchange rate of $1 Hong Kong dollar = $0.12799676 U.S. dollar, the average of the daily mid-points between the bid and the ask prices for each trading day in the month of December 2017. (4) Mr. McCarthy retired from the Company effective June 16, 2017. (5) Mr. Manders retired from the Company effective November 3, 2017. This CD&A is organized as follows: Executive Summary provides an overview of our compensation philosophy and our Pages 31 — 33 pay-for-performance alignment. Executive Compensation Policies and Practices describes our compensation objectives and practices, as well as how we set target total direct compensation and target pay Pages 33 — 36 mix. Elements of Compensation describes each form of compensation we pay and how our Pages 37 — 47 executive compensation program is tied strongly to performance. Employment Arrangements and Post-Termination Payments summarizes any employment agreements, our severance and other post-termination arrangements as Pages 48 — 49 well as our change of control arrangements. Processes and Procedures for Determining Executive Compensation provides an overview of the Committee’s role in executive compensation, the process for Pages 49 — 50 determining executive officer compensation and the compensation consultant’s role. Other Practices describes our stock ownership guidelines, our hedging and pledging restrictions, our clawback policy and the impact of tax and accounting treatment on our Pages 51 — 53 executive compensation program. 30 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 39

    COMPENSATION MATTERS EXECUTIVE SUMMARY Cigna’s executive compensation program is based on the philosophy that executive pay should strongly align with the interests of our shareholders, directly link to Company and individual performance and attract and retain executive talent. We believe the achievement of our enterprise goals will result in the creation of meaningful and sustained long- term value for our shareholders. Each of the measures in our performance-based plans are designed to align with and support our business strategy. We focus on driving enterprise profitability, growth and operating expense efficiency to support investment in innovation, customer loyalty and stock performance. The primary principles underlying our compensation philosophy are to: Motivate superior Align the interests of Emphasize Reward the Provide market- enterprise results the Company’s performance-based achievement of competitive with appropriate executives with short-term and favorable long- compensation consideration of risk those of its long-term term financial opportunities while maintaining a shareholders and compensation over results more designed to attract commitment to the reward the creation fixed heavily than the and retain highly Company’s ethics and of long-term value compensation. achievement of qualified values. for Cigna short-term results. executives. shareholders. Pay-for-Performance Alignment Cigna’s compensation program is heavily weighted to emphasize performance-based pay over fixed compensation. Our Management Incentive Plan (MIP) is a cash-based program designed to reward the achievement of annual enterprise results. Long-term performance is rewarded through annual long-term incentive (LTI) awards, including Strategic Performance Shares (SPSs), the payout of which is based upon performance over a three-year period. Financial measures within the MIP and SPS program, such as adjusted income from operations,(1) revenue and operating expense ratio improvement, are tied to the performance of Cigna’s three ongoing business segments — Global Health Care, Global Supplemental Benefits and Group Disability and Life. Our MIP and SPS plans are designed to reward our NEOs for the Company’s performance relative to pre-established enterprise goals. Short- and Long-Term Performance For 2017, adjusted income from operations(1) for Cigna’s ongoing business segments was $2.8 billion, compared to $2.3 billion in 2016, reflecting significantly increased earnings contributions across each of Global Health Care, Global Supplemental Benefits and Group Disability and Life. Revenue for the three ongoing business segments grew to $40.9 billion, reflecting continued growth in Cigna’s targeted customer segments. Our results included strong performance across each of our priority growth platforms — Commercial Employer, U.S. Seniors, Global Supplemental Benefits, and Group Disability and Life. These results provide us with momentum for continued growth in 2018. ADJUSTED INCOME FROM REVENUES(2) THREE-YEAR ANNUAL OPERATIONS(1)(2) (IN BILLIONS) COMPOUNDED TSR (IN BILLIONS) $50 30% $3.0 $2.8 25.5% $40.9 $37.4 $39.0 Cigna’s three- $2.4 $40 25% $2.5 $2.3 year TSR was at 20% the 78th percentile $2.0 $30 of its peers for the 2015–2017 $1.5 15% performance $20 period.(3) $1.0 10% $10 $0.5 5% $0.0 $0 0% 2015 2016 2017 2015 2016 2017 2015-2017 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 31


  • Page 40

    COMPENSATION MATTERS 2017 Management Incentive Plan Payouts under the 2017 Management Incentive Plan rewarded our NEOs for our strong performance in 2017, reflecting pay-for-performance alignment. MIP awards reward the achievement of annual enterprise results relative to pre-established goals, as well as individual performance, accomplishments and contributions. Measure Result Award Adjusted income from operations(1)(2) 24.5% growth was above target range Revenue(2) 4.9% growth was within target range Operating expense ratio improvement(2) 2.3% improvement was within target range Above target performance reflects: Individual payouts ranged from • Strong progress in community 130% to 155% of target for each health and client retention of the NEOs serving as executive officers at the end of 2017. • A higher NPS score relative to 2016 Strategic Priorities • Strong employee engagement results • Advancement of enterprise compliance initiatives 2015—2017 Strategic Performance Share Program Long-term performance was rewarded through the payout of our 2015—2017 SPSs. Our TSR over this three-year period, which accounts for 50% of the SPS payout, was 25.5%, placing Cigna at the 78th percentile relative to the SPS performance peer group for the period. Over the three-year performance period, adjusted income from operations,(1)(2) which accounts for 50% of the SPS payout, grew as described above. Measure Result ($ in million) Award Relative TSR(3) 78th percentile (183% of target) 2015—2017 SPSs were paid out at 139.8% of target. Adjusted income from operations(1)( 2) $7,532 (97.1% of target) (1) We encourage you to review our Annual Report on Form 10-K for the year ended December 31, 2017 for more complete financial information. Cigna uses adjusted income from operations as the principal financial measure for operating performance because management believes it presents the underlying results of our business operations and permits analysis of trends in underlying revenue, expenses and profitability. For a reconciliation of adjusted income from operations for the Global Health Care, Global Supplemental Benefits and Group Disability and Life segments to shareholders’ net income for each of the three businesses, see Annex A to this Proxy Statement. As appropriate, adjustments are made for acquisitions, dispositions and the implementation of accounting changes to ensure comparability of actual results and targets. (2) Reflects results for Cigna’s three ongoing business segments — Global Health Care, Global Supplemental Benefits and Group Disability and Life. (3) The peer group used to measure relative TSR is the SPS performance peer group which, at the time of the 2015—2017 SPS payout, included: Aetna, Inc., Aflac Incorporated, Anthem, Inc., The Hartford Financial Services Group, Inc., Humana, Inc., Manulife Financial Corporation, MetLife, Inc., UnitedHealth Group Incorporated and Unum Group. 2017 Long-Term Incentive Award In February 2017, the Committee (and, for Mr. Cordani, the Board, upon the recommendation of the Committee) approved the annual LTI award for each NEO, 50% of which was awarded in stock options and 50% of which was awarded in an SPS award with a 2017—2019 performance period. The exercise price of the stock options awarded was $149.135, which means our stock must trade above that price for the NEOs to realize value from these awards. The payout of the 2017—2019 SPS award will be based on the Company’s performance over the three-year period ending December 31, 2019. In determining the annual LTI award, the Committee primarily evaluates individual contributions, but also may consider the other factors described in “Elements of Compensation — Long-Term Incentives.” 32 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 41

    COMPENSATION MATTERS Shareholders Continue to Support our Executive Compensation Program The Committee and the Board consider the results of the Also, in 2017, shareholders recommended that Cigna hold annual shareholder executive compensation “say-on-pay” an annual advisory vote on executive compensation. In vote, as well as other compensation-related shareholder light of and consistent with the vote of Cigna shareholders, votes, in determining the ongoing design and the Board determined that Cigna will continue to hold administration of the Company’s executive compensation future “say-on-pay” votes on an annual basis until the next programs. Shareholders have expressed their strong required vote on the frequency of shareholder votes for support for our executive compensation program, with this purpose (which will occur no later than 2023). approximately 93% of votes cast at the 2017 annual The Committee also considers feedback on our executive meeting in favor of the advisory vote on executive compensation program received as part of our ongoing compensation. communications with shareholders. EXECUTIVE COMPENSATION POLICIES AND PRACTICES Compensation Objectives and Practices Cigna’s executive compensation program is based on the philosophy that executive pay should strongly align with the interests of our shareholders, directly link to Company and individual performance and attract and retain executive talent. By emphasizing performance-based awards over fixed compensation, we strive to motivate superior enterprise results that we believe will result in the creation of meaningful and sustained long-term value for our shareholders and exceptional service for our customers. To further our compensation philosophy, the Committee uses the following compensation practices, processes and instruments: • A regular and rigorous analysis of relevant market compensation data for each executive officer position. The analysis includes market data for competitors and the broad-based general industry based on companies of similar size and scope; • Annual pay-for-performance assessment of the degree of achievement of the Company’s short-term and long-term goals and an evaluation of each executive officer’s contribution to the Company’s performance; • A MIP designed to motivate executive officers to achieve the Company’s annual performance goals. No MIP awards are made unless the Company achieves a pre-defined minimum level of adjusted income from operations for the ongoing businesses; • An equity-based incentive plan (the Cigna Long-Term Incentive Plan or LTIP) focused on long-term shareholder value creation. We grant SPS awards and stock options to executives under the LTIP. SPS awards reward executives for relative TSR performance as compared to our competitors and the achievement of financial goals over a three- year performance period. Through stock options, executives have the potential to realize value as a result of stock price appreciation; • The retention of an independent compensation consultant to assist the Committee in its design and implementation of the Company’s executive compensation programs; and • Ongoing monitoring of compensation best practices and investors’ views on compensation and the modification of our compensation programs as appropriate to align with good governance standards. For information on the oversight of the executive compensation program, see “Processes and Procedures for Determining Executive Compensation” in this CD&A. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 33


  • Page 42

    COMPENSATION MATTERS Strong Compensation Governance and Controls • Strong alignment between pay and performance. • “Double trigger” requirement for change of control benefits. • Regular review of executive compensation governance market practices, particularly when considering the adoption of new practices or changes to existing programs or policies. • Robust stock ownership guidelines and shareholding requirements for equity awards to align executives’ interests with shareholders. • A disgorgement of awards (clawback) policy beyond the mandates of Sarbanes-Oxley. • Management of LTIP annual share usage (or burn rate) and total dilution by setting an What We Do annual share usage limit, which is below the maximum permitted under the plan. • Oversight of people development policies and processes, including consideration of assessments of executive officers and key senior management. • CEO and executive officer succession plans overseen by the Board of Directors, with assistance from the Committee. • An annual assessment by the Committee of any potential risks and associated internal controls in our incentive compensation programs and policies. • Minimum acceptable level of financial performance required in order for any payments under the MIP to be made. • Approximately 90% of our CEO’s target total direct compensation is performance based. • No tax gross-up of severance pay upon a change of control. • No excessive perquisites. • No hedging of Cigna stock by any directors, executive officers or employees, and no What We Don’t pledging of Cigna stock by directors or Section 16 officers unless approved in limited Do circumstances. • No discounting, reloading or repricing of stock options without shareholder approval. • No payment of dividends on unvested shares. Compensation Data The Committee establishes target compensation levels based on a variety of factors, including a rigorous analysis of relevant published market compensation data of the Company’s compensation peer group and a general industry peer group. 2017 Peer Groups Compensation Peer Group. The Committee periodically requests that its independent compensation consultant conduct a review of the composition of the Company’s compensation peer group and offer suggested modifications for benchmarking future executive pay decisions. The Committee’s consultant utilizes multiple sources to develop and recommend potential peer companies for the Committee to consider. Sources for possible peers include companies screened by industry and business focus, peer groups developed by proxy advisory firms, peers identified in various analyst reports, and peers of companies in Cigna’s compensation peer group. 34 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 43

    COMPENSATION MATTERS The table below lists the companies included in the 2017 compensation peer group. 2017 Compensation Peer Group Aetna, Inc. The Hartford Financial Services Group, Inc. Aflac Incorporated Humana, Inc. American International Group, Inc. Manulife Financial Corporation Anthem, Inc. MetLife, Inc. Centene Corp. Prudential Financial, Inc. Chubb Limited Unum Group A broader cut of survey data, representing size-adjusted health and life insurance companies, was used to benchmark Mr. Sadler’s compensation because peer group data were insufficient or unavailable for his specific role. A list of the companies used to determine Mr. Sadler’s 2017 target total direct compensation and target total pay mix is included on Annex B. General Industry Peer Group. The Committee also recognizes that Cigna often competes for talent from companies beyond that of its compensation peer group. As an additional reference to provide a broader perspective on market practices, particularly for those executive officers with job functions that could apply to a variety of industries, the Committee utilizes a general industry peer group. For 2017, the Committee, with the assistance of its independent compensation consultant, reviewed the companies included in its general industry peer group by screening publicly traded, U.S.-based companies within certain industry classifications, including insurance, banking and financial services, healthcare equipment and services, pharmaceutical, biotechnology and life sciences, household and personal products, software services and telecommunications. The list was then narrowed to companies whose revenues were within the range of 0.4 to 2.5 times that of Cigna and whose market capitalization was within the range of 0.25 to 4 times that of Cigna. The screening process resulted in a group of 35 companies, which are listed on Annex C. SPS Performance Peer Group. Before 2015, Cigna’s compensation peer group was used to track relative TSR for our long-term incentive program. In consultation with its compensation consultant, the Committee created a performance peer group to be used exclusively to track relative TSR within the SPS program, effective beginning with the 2015—2017 performance period. The Committee recognized that certain of our competitors were not included in the compensation peer group due to their size. While size is a relevant factor in determining a compensation peer group, it is less relevant when measuring relative performance. Other companies were included in the compensation peer group because Cigna competes with them for talent; however, because of significant differences in business focus, these companies do not make optimal comparators for performance purposes. For these reasons, the Committee created an SPS performance peer group comprising the same companies in its compensation peer group, but adding UnitedHealth Group Incorporated and removing Chubb Limited and Prudential Financial, Inc. Beginning with the 2017—2019 performance period, the Committee added Centene, Inc. to the SPS performance peer group. Updates to Peer Groups for 2018. The Committee removed MetLife, Inc. from the SPS performance peer group beginning in 2018. The Committee determined that, due to a major divestiture and changes in the business focus at MetLife, Inc., it was no longer an optimal comparator for performance purposes given industry differences and differences in business models. In order to keep the SPS performance peer group robust, the Committee added Prudential Financial Inc., which has overlap with the Company’s businesses and is of similar scope and complexity. The Committee did not make changes to the compensation peer group or general industry peer group for 2018. Tally Sheets The Committee reviews tally sheets for all of its executive officers as part of its annual compensation award determination process. The tally sheets summarize historical actual compensation and current target compensation for each officer. The Committee believes that tally sheets are a useful reference tool when considering whether compensation decisions reflect Cigna’s compensation philosophy and performance, but are not a determining factor when making executive compensation decisions. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 35


  • Page 44

    COMPENSATION MATTERS Target Total Direct Compensation and Target Pay Mix Emphasizes Performance-Based Compensation The Committee’s decisions regarding target total direct compensation and target pay mix are consistent with its principles that (1) performance-based compensation should be emphasized over fixed compensation; and (2) long-term incentives should be more heavily weighted than annual incentives. Target total direct compensation consists of base salary, the annual incentive target and the long-term incentive target. The Committee approves each of these amounts for each NEO on an annual basis, seeking to target an executive officer’s total direct compensation in a “competitive range” of within 15% of the 50th percentile of the relevant market data for the compensation peer group and the general industry peer group. When setting total target direct compensation, the Committee evaluates survey data and other public information, such as proxy data, available for both peer groups. While the Committee targets total direct compensation in the competitive range, there may be variation in the target pay mix such that target amounts for individual compensation elements may be above or below the competitive range for the individual element. Target total direct compensation for a NEO also may vary outside of the competitive range of the 50th percentile of the survey data for the compensation peer group or general industry peer group due to factors such as performance, tenure in role, range of data available and market and economic conditions. In general, compensation levels for an executive officer who is newer to a position tend to be at the lower end of the competitive range, while seasoned executive officers with strong performance are typically positioned at the higher end of the competitive range. Internal pay comparisons among the NEOs are not generally considered by the Committee for purposes of determining target pay mix and target total direct compensation. For 2017, target total direct compensation of our NEOs as a group resulted in a target compensation opportunity in the aggregate of within 15% of the 50th percentile of both our compensation peer group and our general industry peer group. As illustrated in the charts below, performance-based compensation represents approximately 90% of Mr. Cordani’s target total direct compensation, including 70% in long-term incentives and 20% in annual incentives. On average, performance-based compensation represents 79% of target total direct compensation for the other NEOs, including an average of 57% in long-term incentives and 22% in annual incentives. These percentages are targets only and will not match the percentages calculable from the actual compensation paid reflected in the Summary Compensation Table. CEO TARGET OTHER NEO AVERAGE PAY MIX TARGET PAY MIX 10% 21% 20% Salary Annual Incentive Long-Term Equity 22% 57% 70% Performance-Based Pay 36 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 45

    COMPENSATION MATTERS ELEMENTS OF COMPENSATION Cigna’s 2017 executive compensation program consists of the following elements: ELEMENT PURPOSE Base salary Fixed portion of total direct compensation, set with reference to competitive market data and designed to attract and retain key talent. Management Incentive Performance-based cash compensation designed to reward the achievement of Plan (MIP) annual enterprise results relative to pre-established goals, as well as individual performance, accomplishments and contributions. Long-Term Stock Options Performance-based compensation, the potential realized value of which is Incentives (LTI) determined by stock price appreciation from the date of grant through the date of exercise. Strategic Performance-based compensation, the payout of which is based upon the Performance achievement of pre-determined enterprise goals and the Company’s relative Shares TSR over a three-year performance period. Retirement and Deferred Savings-based component that is aligned to competitive market practice and Compensation includes 401(k) plans and a voluntary non-qualified deferred compensation program that does not have any Company contributions. U.S.-based NEOs hired before July 1, 2009 have accrued benefits from defined benefit pension plans that were frozen on July 1, 2009. Limited Perquisites and Other Limited perquisites that are designed to attract and retain key talent or to Benefits provide for the safety and security of executive officers. Actions Impacting 2017 Compensation compensation. The base salary increases were effective July 31, 2017 and are reflected in the table on page 38. The Promotions. In connection with Mr. Palmer’s promotion to 2017 MIP targets are reflected in the table on page 41. Executive Vice President, Chief Financial Officer in June 2017, the Committee reviewed and approved his base Base Salary salary, 2017 MIP target and LTI target. In addition, Mr. Palmer was awarded transitional SPSs for the 2017- 2019 performance period, as further described on page 44. In connection with Mr. Hocevar’s promotion to President, Base salary Strategy, Segments and Solutions in February 2017, the represents only 10% Committee reviewed and approved his base salary, 2017 of CEO target pay MIP target and LTI target. The Committee approved the and an average of 21% for base salaries, 2017 MIP targets and LTI targets for all other NEOs, with the Mr. Palmer and Mr. Hocevar following a review of the balance of target market data for both the compensation peer group and compensation being the general industry peer group. The base salaries, 2017 performance-based. MIP targets and LTI targets for Mr. Palmer and Mr. Hocevar are reflected in the tables on pages 38, 41 and 44, respectively. Market-Based Adjustments. Due to the operating Base salary is the only fixed portion of a NEO’s total target covenants in the merger agreement with Anthem that direct compensation and, consistent with the Committee’s restricted adjustments to executive officer compensation, philosophy that executive pay should strongly align with the Committee and, with respect to Mr. Cordani, the Board, the interests of our shareholders, represents a small had not approved increases to MIP targets since December portion of total target direct compensation. 2014 or base salaries since March 2015 for most executive officers. In July 2017, following termination of the merger Base salary levels are set with reference to both agreement, the Committee and, with respect to competitive market data and individual performance. Base Mr. Cordani, the Board reviewed and approved salaries are reviewed annually and may be adjusted as a adjustments to the base salary and 2017 MIP targets for result of updated market information and an assessment of Mr. Cordani, Ms. Jones and Mr. Sadler. The Committee an executive’s role and performance contributions, believed that these adjustments were necessary to including the executive’s demonstration of Cigna’s core maintain the competitive positioning of target total direct values and the achievement of the expectations associated Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 37


  • Page 46

    COMPENSATION MATTERS with his or her role. As further described above, the • Aggregate funding levels for actual MIP awards; and Committee, and with respect to Mr. Cordani, the Board, • Actual MIP awards for the NEOs, except for approved changes to Mr. Cordani’s, Ms. Jones’ and Mr. Cordani’s award, which is approved by the Board Mr. Sadler’s base salary to maintain the competitive upon the recommendation of the Committee. positioning of their target total direct compensation. The average base salary increase for these NEOs was 12%. Base Subject to certain limits described below, the actual annual salaries for these executive officers had not been incentive can range from 0% to 200% of the individual’s increased since March 2015 due to the operating target, allowing the Committee to differentiate awards covenants in the merger agreement with Anthem that based on an individual’s contributions and how those restricted adjustments to executive officer compensation. contributions impacted the attainment of enterprise goals. This includes factors such as the extent to which an The table below shows base salaries for each of the NEOs. executive delivers results that provide improved financial The base salaries for Mr. Cordani, Ms. Jones and Mr. Sadler performance, customer service or employee engagement reflect the increases approved in July 2017. The base and an executive’s level of innovation and thoughtful risk- salaries for Mr. Palmer and Mr. Hocevar reflect the base taking. At times, the Committee may also use this flexibility salary levels approved in connection with their promotions. to aid in the retention of select key talent. For 2017, MIP 2017 ANNUAL awards ranged from 130% to 155% of target for the NEOs NEO BASE SALARY ($) serving as executive officers at the end of 2017, based on David M. Cordani 1,400,000 Company results and individual contributions. Eric P. Palmer 675,000 MIP Performance Measures and Goals Christopher J. Hocevar 550,000 Each year, the Committee sets enterprise performance Nicole S. Jones 630,000 measures, weightings and goals for annual incentive Jason D. Sadler 648,837 awards based on Cigna’s business priorities and annual Thomas A. McCarthy 740,000 operating plan. The operating plan aligns with our strategy, long-term commitment to shareholders and Matthew G. Manders 750,000 expected performance in the industry. The Committee Annual Incentives works with its independent compensation consultant to evaluate the appropriateness of these measures and weightings and the degree of challenge in the MIP performance goals. The measures are designed to align Because profitability is with and drive execution of the Company’s business critical to the long-term strategy. For 2017, performance measures included success of the business, no adjusted income from operations, revenue, operating annual incentive award expense ratio improvement and strategic priorities. More payments are made to detailed information on these measures is included in the 2017 Performance Goals, Measures and Actual Results executive officers unless the table. Company achieves a pre-defined minimum level In past years, we have included net promoter score (NPS) of adjusted income from as a performance measure in the MIP. In 2017, we replaced operations. the former NPS measure with a “strategic priorities” measure to emphasize the importance of incentivizing and recognizing progress in certain areas beyond financial results that support our business strategy. The strategic Management Incentive Plan (MIP) Overview priorities measure, weighted 20% of the overall MIP value, Annual incentives are paid under the MIP. The MIP is measures the Company’s progress in three key strategic designed to reward executives for the achievement of categories: (1) customer, client and reputational focus short-term, or annual, performance goals. On an annual (which includes NPS); (2) employee engagement; and basis, the Committee approves: (3) enterprise focus on compliance. The operating expense • Enterprise performance measures and goals, which improvement ratio measure is now weighted 10%. The are designed to align with, and drive execution of, the weightings for the adjusted income from operations and Company’s business strategy; revenue measures, 50% and 20%, respectively, remain unchanged. • Individual targets for the NEOs, except for Mr. Cordani’s target, which is approved by the Board For each MIP goal other than strategic priorities, the upon the recommendation of the Committee; Committee specifies certain below target, target and 38 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 47

    COMPENSATION MATTERS above target levels of performance. For the strategic the Committee that evaluates Cigna’s historical priorities measure, the Committee evaluates the relationship between pay and performance in comparison Company’s progress among the three key strategic with Cigna’s compensation peer group. The compensation categories against the Company’s performance in the prior consultant also reviews performance goals determined by year. To aid the Committee in setting the financial the Committee in the context of historical performance performance targets, and to assess the reasonableness and analyst expectations of future performance for Cigna and rigor of those targets, the Committee’s compensation and Cigna’s SPS performance peer group. consultant annually presents a comprehensive report to Executive Officer MIP Funding and Award Determination Process The key considerations to funding the MIP and determining individual award amounts are discussed below. STEP 1 Achieve Earnings Minimum The Committee believes that achieving Cigna’s profitability goals is critically important to the long-term success of the business. In recognition of this importance, the Committee establishes a minimum level of adjusted income from operations that must be achieved for the year in order for any MIP award to be earned. If the Company does not meet that pre-defined minimum level, then no annual incentives will be paid to executive officers. STEP 2 Company Performance Drives Funding Level If the Company achieves the earnings minimum, the Committee may fund the executive officer MIP pool from 0% to 200% of the aggregate targets based upon whether each performance measure is below target, at target, or above target. The following table sets forth the ranges between which the MIP pool may be funded for each performance measure, in each case, assuming the earnings minimum has been achieved: Measure Performance Funding Range Adjusted income from Above target range Above 120% to 200% operations Revenue Within target range 80% to 120% Operating expense ratio Below target range Less than 80% improvement The Committee evaluates progress in the three key strategic Strategic Priorities categories year over year. The Company’s actual performance relative to each measure determines which funding range applies for purposes of that measure. However, the Committee maintains the discretion to determine at which point within that range the actual funding of the MIP pool will be set. In setting the actual funding percentage for each measure, the Committee considers Cigna’s performance as a whole (both in absolute terms and relative to competitors), as well as Cigna’s achievement of the goals within the performance measure. The MIP funding mechanisms ensure that a minimum level of performance is achieved and that NEOs’ MIP awards reflect the Company’s performance. STEP 3 Award Amounts Based on Individual Contributions to Company Performance Once MIP funding has been determined, the Committee (and for Mr. Cordani, the Board of Directors upon the recommendation of the Committee) assesses each named executive officer’s individual contributions and how such contributions impacted the achievement of the MIP goals to determine the actual award amounts for each NEO. Actual awards can range from 0% to 200% of a NEO’s MIP target, allowing the Committee to differentiate payouts based on each individual’s contributions. Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 39


  • Page 48

    COMPENSATION MATTERS 2017 Performance Goals, Measures and Actual Results The Committee considers the appropriate measures for the MIP program for the upcoming year at its October and December meetings, and then considers and approves the actual performance targets at its meetings in January and February. For 2017, the Committee established the performance measures, weightings and target performance goals below, which were used to determine the range of potential aggregate funding for MIP awards. ALIGNMENT WITH TARGET MEASURE BUSINESS STRATEGY WEIGHTING PERFORMANCE GOALS ACTUAL RESULT Adjusted Reinforces the importance 10.5% to 19.5% 24.5% growth was above income from of profitable growth 50% growth target range operations* across the enterprise. The target was set as a year-over-year growth goal for Cigna’s Global Health Care, Global Supplemental Benefits and Group Disability and Life segments. Focuses on enterprise growth, encourages business decisions that optimize results for the 0.0% to 6.0% 4.9% growth was within Revenue 20% enterprise, promotes growth target range collaboration across business units and drives customer focus. The target was set as a year-over-year growth goal for Cigna’s Global Health Care, Global Supplemental Benefits and Group Disability and Life segments. Drives continued focus on delivering ongoing Operating expense efficiency while 1.0% to 5.5% 2.3% improvement was expense ratio 10% furthering investment improvement within target range improvement capacity for ongoing innovation. The target was set as a composite objective, which measures operating expense improvement in Cigna’s Global Health Care, Global Supplemental Benefits and Group Disability and Life segments versus 2016. Operating expenses are expressed as a percent of revenue for each segment. Above target performance reflects: • Strong progress in Emphasizes the community health and importance of recognizing client retention progress in areas beyond The Committee evaluates • A higher NPS score Strategic financial results and of 20% progress in each category relative to 2016 Priorities aligning our goals, compared to 2016. • Strong employee contributions and rewards with our business engagement results strategy. • Advancement of enterprise compliance initiatives The categories for the strategic priorities measure for 2017 include (1) customer, client and reputational focus; (2) employee engagement; and (3) enterprise focus on compliance. * Cigna uses adjusted income from operations as the principal financial measure for operating performance because management believes it presents the underlying results of our business operations and permits analysis of trends in underlying revenue, expenses and profitability. For a reconciliation of adjusted income from operations for the Global Health Care, Global Supplemental Benefits and Group Disability and Life segments to shareholders’ net income for each of the three businesses, see Annex A to this Proxy Statement. As appropriate, adjustments are made for acquisitions, dispositions and the implementation of accounting changes to ensure comparability of actual results and targets. In setting the target performance goals for each measure in February 2017, the Committee considered Cigna’s publicly disclosed earnings estimates, historical Company and SPS performance peer company results, analyst commentary and the Company’s then-current expectations for the industry and economic environment. The Committee considered 40 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement


  • Page 49

    COMPENSATION MATTERS various market forces impacting the Company and related uncertainties, including the expectation that the industry would continue to face significant market changes and disruption in 2017 and initial reactions to the 2016 U.S. election, as well as uncertainty regarding the proposed merger with Anthem. The Committee believed that the target performance goals represented competitively attractive goals that would be challenging to achieve in light of the circumstances facing the Company in 2017. 2017 Individual MIP Targets and Awards MIP target levels for the 2017 performance year for the NEOs are set forth in the table below. As further described on page 37, the Committee, and with respect to Mr. Cordani, the Board, approved changes to Mr. Cordani’s, Ms. Jones’ and Mr. Sadler’s 2017 MIP targets to maintain the competitive positioning of their target total direct compensation. The average MIP target increase was 26%. MIP targets for these executive officers had not been increased since December 2014 due to the operating covenants in the merger agreement with Anthem that restricted adjustments to executive officer compensation. The 2017 MIP targets in the table below reflect the approved increases. The 2017 MIP targets for Mr. Palmer and Mr. Hocevar reflect the targets approved in connection with their promotions. In determining actual MIP awards, the Committee (and for Mr. Cordani, the Board of Directors upon the recommendation of the Committee) takes an integrated approach, assessing enterprise results together with each named executive officer’s individual contributions during 2017. Payouts under the 2017 Management Incentive Plan rewarded our NEOs for our strong performance in 2017, reflecting pay-for-performance alignment. 2017 ACTUAL PAYOUT MIP MIP AS A PERCENT TARGET PAYOUT OF TARGET NEO ($) ($) (%) David M. Cordani 2,800,000 4,000,000 143 Eric P. Palmer 750,000 975,000 130 Christopher J. Hocevar 500,000 775,000 155 Nicole S. Jones 680,000 1,054,000 155 Jason D. Sadler 648,837 908,371 140 Thomas A. McCarthy(1) 800,000 400,000 50 Matthew G. Manders(2) 900,000 900,000 100 (1) Mr. McCarthy’s Agreement and Release provided that he would receive a 2017 MIP payment of $400,000, or 50% of his target, subject to the Company’s attainment of 2017 MIP targets. (2) Mr. Manders’ Agreement and Release provided that he would receive a 2017 MIP payment of $900,000, or 100% of his target, subject to the Company’s attainment of 2017 MIP targets. Mr. Cordani In early 2018, the Committee, together with the independent Chairman of the Board, assessed the performance of Mr. Cordani in the context of the overall Company performance. This assessment included a review of the Company’s financial performance in 2017 as well as Mr. Cordani’s individual contributions. Following this review, the Committee made certain recommendations to the Board relating to Mr. Cordani’s MIP award for 2017. The Board considered these recommendations as part of its own independent review of Mr. Cordani’s performance. More specifically, the Board considered the following factors: Enterprise Performance. Cigna’s 2017 results included strong performance across each of our priority growth platforms – Commercial Employer, U.S. Seniors, Global Supplemental Benefits, and Group Disability and Life, providing Cigna with momentum for continued growth in 2018. Specifically, 2017 enterprise performance included: • Consolidated revenue of $41.6 billion, an increase of 5% over 2016; • Consolidated adjusted income from operations of $2.7 billion, compared to $2.1 billion in 2016, reflecting increased earnings contributions from each of our business segments; • Global medical customer growth of 700,000 customers during the year, totaling 15.9 million customers at year end, driven by strong growth across our Commercial market segments; and Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement 41


  • Page 50

    COMPENSATION MATTERS • An industry leading medical cost trend, reflecting benefits from increased alignment for our customers and clients, deeper collaborative relationships with providers and differentiated specialty integration models. Strategy Execution. During 2017, following termination of the merger with Anthem, Mr. Cordani led the evolution of Cigna’s Go strategy to Go Deeper, Go Local and Go Beyond and effectively communicated this evolved strategy to investors, clients, customers and partners. Highlights of the execution of the Company’s Go strategy, include: • Strategic investments through the acquisitions of Zurich Middle East, which enabled Cigna to provide more personalized products to individuals, employers and government entities in the Middle East, and Brighter, an innovative technology company working with leading health service and dental organizations to engage patients and providers in personalized and seamlessly integrated experiences to more efficiently deliver higher-value healthcare; • The increase in number of members using Cigna One Guide, a personalized multi-modal service experience that supports consumers consultatively at the point they choose a plan, find care and other “moments that matter,” to more than two million Cigna customers; and • Targeted initiatives and increased investments that benefit our customers and communities and further promote Cigna’s mission and global brand, including the TV Doctors of America campaign for preventive care, the creation of the Health Improvement Tours featuring health screening, opioid reduction initiatives and veterans support. Enterprise Leadership. The Board recognized Mr. Cordani’s leadership during a year of significant change and uncertainty, focusing on talent retention, employee development and engagement initiatives. Despite two key retirements, he ensured a strong leadership team remained in place through a number of internal promotions. Throughout 2017, Cigna continued the implementation and execution of the operating model announced in early 2017, which is designed to ensure the executional focus necessary to deliver greater choice, quality, affordability and personalization to Cigna’s customers and clients. In addition, the results of employee engagement efforts were positive and turnover, particularly among key employees, remained low. Cigna also delivered meaningful results on diversity and inclusion efforts. Regulatory Environment and Compliance. Mr. Cordani represented Cigna and the health care industry in a number of forums in Washington, D.C. and across the country to reinforce the needs of the Company’s customers and clients. In 2017, Cigna restructured the Enterprise Compliance team to further align with Cigna’s strategic plan and operating model. In June 2017, the CMS audit work was completed and Cigna resumed marketing its Medicare Advantage- Prescription Drug and Medicare Part D Plans and enrolling beneficiaries. Cigna’s Seniors business emerged from the audit with a strong operating model and a continued commitment to customer centricity and compliance. Based on these factors, and in particular given the Company’s strong 2017 financial performance, the positive momentum going into 2018 and Mr. Cordani’s continued focus on execution of the Company’s strategy and leading the organization during a challenging year, the Board awarded Mr. Cordani a MIP payout for 2017 of $4,000,000, or 143% of his 2017 MIP target. Other NEOs For all other NEOs, Mr. Cordani makes recommendations to the Committee regarding MIP awards based on his evaluation of each NEO’s performance and contributions to enterprise goals. The Committee considers Mr. Cordani’s recommendations when determining MIP awards. While not exhaustive, below are certain key factors the Committee considered when making award determinations. Mr. Palmer. Mr. Palmer was appointed Executive Vice President and Chief Financial Officer in June 2017. Since that time, he has led the partnership between the Company’s business teams and their financial counterparts and has provided critical guidance and leadership in support of the Company’s development and assessment of strategic paths. Through this leadership, Mr. Palmer supported the delivery of strong results in each of our ongoing businesses in 2017. In addition, he successfully executed on Cigna’s capital management objectives, including a $1.6 billion debt offering and a tender offer for $1 billion of outstanding debt. He also led the reorganization of the finance leadership team to align with and support the Company’s evolved operating model and initiated a process to streamline and improve efficiencies of the Company’s core finance and underwriting disciplines. As a result of Mr. Palmer’s contributions in 2017, Mr. Cordani recommended, and the Committee approved, a 2017 MIP payment of $975,000, or 130% of his target. 42 Cigna 2018 Notice of Annual Meeting of Shareholders and Proxy Statement

  • View More

Get the full picture and Receive alerts on lawsuits, news articles, publications and more!