|Doing it our way||Beyond a code||More than a cause||Lifelong learners|
|Vision and action||Doing the right things||Being flexible has its advantages|
Doing it our way
“Progressive is jazzing up another boring business practice . . . What I really like about Progressive's plan is that it treats shareholders as owners in the truest sense of the word.”
So said Washington Post reporter Alan Sloan, in an article he wrote in 2006 after we announced our new approach to paying dividends.
Five years later, we still do it our way: we pay an annual variable cash dividend based on company performance instead of the traditional business practice of a set quarterly dividend. We use the same core measures for our dividend calculations as we do for our employee cash incentive plan. This way stockholders and employees succeed together when we meet or exceed our profit and growth goal. In 2010 we had an exceedingly good year, which resulted in above target payouts of shareholder dividends and year-end employee bonuses.
Our approach to profit sets us apart, too. Insurers typically use total profit (underwriting profit/loss + net investment income) to evaluate performance. We aim for a tougher objective–produce an underwriting profit of 4 cents on the dollar. Investment income, while very important, is icing on the cake.
We also report financial results and operating information more frequently than any other publicly traded company. Reaching beyond quarterly reporting regulations, we share our numbers monthly. So, in good times and not-so-good, we know where we stand and so does everyone else.
While we can’t say we’ve “jazzed up” every boring business practice, we constantly look for ways to do things better: We do them our way.
You can learn more about our governance practices by visiting http://www.progressive.com/governance.
Having a work environment that prominently features our nationally recognized contemporary art collection encourages employees to find creative ways to do business.