Company: HUM
Filing Date: 2025-03-07
Form Type: DEF 14A
Source: 0001193125-25-048976
Chunk: 58

Company: HUMANA INC
Filing Date: 2025-03-07
Form: DEF 14A
Chunk 58
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                                                    |     | - 20%               |
| 45th – 55th Percentile:                                                                                                                                                                               |     | No Modifier Applied |
| > 75th Percentile:                                                                                                                                                                                    |     | + 20%               |

| (1) | For purposes of the 2022-2024 PSU Awards, we define Adjusted ROIC, which is a non-GAAP performance measure, as adjusted net operating profit after tax (Adjusted NOPAT) divided by average invested capital (AIC). Adjusted NOPAT, which is a non-GAAP financial |

| Compensation Discussion and Analysis • 2025 Proxy Statement | Humana |     | 59 |

| measure, is defined as GAAP net operating income as adjusted for non-GAAP items consistent with those reported in our public earnings release plus tax effected interest expense. AIC is defined as average shareholder’s equity plus average debt minus parent company cash (excluding $500 million for required reserves). The terms of the 2022-2024 PSU Awards further provide that for purposes of determining results under the awards for any individual fiscal year within the performance period, the applicable elements of Adjusted ROIC shall automatically adjust to reflect the impact of certain non-recurring events, including the impacts of merger, acquisition and disposition activity, changes in accounting standards, litigation or regulatory investigations outside of the ordinary course of business, restructuring activity outside of the ordinary course of business, business exit or disposal activities, and any extraordinary, natural disaster, unusual or infrequent event. However, the Committee retains the ability to exercise negative (but not positive) judgment with respect to any award, regardless of the impact of any automatic adjustments. |

Alignment of Strategic Measures In 2022, the Committee determined that our PSUs would continue to include strategic measures to drive management focus on the Company’s long-term transformation to become an integrated healthcare company and improve the quality of care delivered to our members, complimenting the long-term focus on delivering returns on invested capital through a focus on Adjusted ROIC. The strategic measures included in the 2022-2024 PSU Awards directly align to these long-term strategic priorities, as summarized below. Performance Achievement Results When determining the vesting value of the 2022-2024 PSU Awards, the Committee reviewed final Company results showing a three-year average Adjusted ROIC of 11.61% as determined under the terms of the 2022-2024 PSU Awards, reflecting both the financial and operational performance of the Company over