This Proxy Statement contains information about the 2007 Annual Meeting of MetLife, Inc. (“MetLife” or the “Company”), which will be held in the Versailles Room on the 2nd Floor of the St. Regis Hotel, Two East 55th Street, New York, New York on Tuesday, April 24, 2007 at 10:30 a.m., Eastern Daylight Time.

 

This Proxy Statement and the accompanying proxy card, which are furnished in connection with the solicitation of proxies by MetLife’s Board of Directors, are being mailed and made available electronically to shareholders on or about March 26, 2007.

 

Your vote is important.

 

Whether or not you plan to attend the 2007 Annual Meeting, please take the time to vote your shares as soon as possible. If you wish to return your completed proxy card by mail, the Company has included a postage-paid, pre-addressed envelope for your convenience. You may also vote your shares on the Internet or by using a toll-free telephone number (see the proxy card for complete instructions).

 

Matters to be voted on at the Annual Meeting.

 

MetLife intends to present the following two proposals for shareholder consideration and voting at the 2007 Annual Meeting:

 

 

The Board recommends voting FOR these proposals.

 

The Board of Directors did not receive any notice prior to the deadline for submission of additional business that any other matters might be presented for a vote at the 2007 Annual Meeting. However, if another matter were to be presented, the proxies

would use their own judgment in deciding whether to vote for or against it.

 

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

 

All holders of record of MetLife common stock at the close of business on March 1, 2007 (the “record date”) are entitled to vote at the 2007 Annual Meeting.

 

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

 

Voting your shares.

 

 

 

Attending the 2007 Annual Meeting.

 

MetLife shareholders of record or their duly appointed proxies are entitled to attend the 2007 Annual Meeting. If you are a MetLife shareholder of record and wish to attend the meeting, please so indicate on the proxy card or as prompted by the telephone or Internet voting systems and an admission card will be sent to you. On the day of the meeting, please bring your admission card with you to present at the entrance to the Versailles Room on the 2nd Floor of the St. Regis Hotel, Two East 55th Street, New York, New York.

 

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

 

Changing or revoking your proxy after it is submitted.

 

You may change your vote or revoke your proxy at any time before the polls close at the 2007 Annual Meeting. You may do this by:

 

 

 

Remember, your changed vote or revocation must be received before the polls close for voting.

 

Voting by MetLife employees who have invested in the Savings and Investment Plan for MetLife Employees.

 

Mellon Bank, N.A., as Trustee of the Savings and Investment Plan for Employees of Metropolitan Life and Participating Affiliates Trust, will vote the MetLife shares in the Plan in accordance with the voting instructions given by Plan participants to the Trustee. Instructions on voting appear on the voting instruction form distributed to Plan participants. The Trustee must receive the voting instructions of a Plan Participant no later than 5:59 p.m., Eastern Daylight Time, on April 20, 2007 to vote in accordance with the instructions. The Trustee will generally vote the Plan shares for which it does not receive voting instructions in the same proportion as the shares for which it does receive voting instructions.

 

Voting of shares held in the MetLife Policyholder Trust.

 

The policyholders who are beneficiaries of the MetLife Policyholder Trust may direct Wilmington Trust Company, as Trustee, to vote their shares held in the Trust on certain matters that are identified in the Trust Agreement governing the Trust, including approval of mergers and contested directors’ elections. On all other matters, which would include the two proposals described in this Proxy Statement that are to be voted on at the 2007 Annual Meeting, the Trust Agreement directs the Trustee to vote the shares held in the Trust as recommended or directed by the Company’s Board of Directors.

 

Shares of MetLife common stock outstanding and entitled to vote at the 2007 Annual Meeting.

 

There were 754,990,184 shares of MetLife common stock outstanding as of the March 1, 2007 record date. Each of those shares is entitled to one vote on each matter to be voted on at the 2007 Annual Meeting.

 

Quorum.

 

To conduct business at the 2007 Annual Meeting, a quorum must be present. A quorum will be present if shareholders of record of one-third or more of the shares of MetLife common stock entitled to vote at the meeting are present in person or are represented by proxies.

 

Vote required to elect Directors and to approve other proposals.

 

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

 

In addition, subject to exceptions set forth in the Company’s Certificate of Incorporation, a majority of the shares voting will be sufficient to approve any other matter properly brought before the meeting, including the ratification of the appointment of Deloitte & Touche LLP as MetLife’s independent auditor.

 

Majority voting standard in Director elections.

 

The Company’s By-Laws provide that in an uncontested election, such as the election of the Class II Directors at the 2007 Annual Meeting, any incumbent Director who is a nominee for election as Director who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will promptly tender his or her resignation. The Governance Committee of the Board will promptly consider the offer to resign and recommend to the Board whether to accept or reject it. The Board of Directors will decide within 90 days following certification of the shareholder

vote whether to accept or reject the tendered resignation. The Board’s decision and, if applicable, the reasons for rejecting the tendered resignation, will be disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”).

 

Tabulation of abstentions and broker non-votes.

 

If a shareholder abstains from voting as to a particular matter, the shareholder’s shares will not be counted as voting for or against that matter. If brokers or other record holders of shares return a proxy card indicating that they do not have discretionary authority to vote as to a particular matter (“broker non-votes”), those shares will not be counted as voting for or against that matter. Accordingly, abstentions and broker non-votes will have no effect on the outcome of a vote.

 

Abstentions and broker non-votes will be counted to determine whether a quorum is present.

 

Inspector of Election and confidential voting.

 

The Board of Directors has appointed Lawrence E. Dennedy, Senior Vice President, MacKenzie Partners, Inc., to act as Inspector of Election at the 2007 Annual Meeting. The Company’s By-Laws provide for confidential voting.

 

Directors’ attendance at annual meetings.

 

Directors are expected to attend annual meetings of shareholders, and all 15 Directors then serving on the Board attended the 2006 Annual Meeting.

 

Cost of soliciting proxies for the 2007 Annual Meeting.

 

The Company has retained Mellon Investor Services to assist with the solicitation of proxies from the Company’s shareholders of record. For these services, the Company will pay Mellon Investor Services a fee of approximately $8,500, plus expenses. The Company also will reimburse banks, brokers or other nominees for their costs of sending the Company’s proxy materials to beneficial owners. Directors, officers or other MetLife employees also may solicit proxies from shareholders in person, or by telephone, facsimile transmission or other electronic means of communication, but will not receive any additional compensation for such services.

 

Shareholder proposals — deadline for submission of shareholder proposals for the 2008 Annual Meeting.

 

Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), establishes the eligibility requirements and the procedures that must be followed for a shareholder’s proposal to be included in a public company’s proxy materials. Under the Rule, proposals submitted for inclusion in MetLife’s 2008 proxy materials must be received by MetLife, Inc. at One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, NY 11101-4007, Attention: Corporate Secretary, on or before the close of business on November 27, 2007. Proposals must comply with all the requirements of Rule 14a-8.

 

A shareholder who wishes to present a matter for action at MetLife’s 2008 Annual Meeting, but chooses not to do so under Rule 14a-8 under the Exchange Act, must deliver to the Corporate Secretary of MetLife on or before December 26, 2007, a notice containing the information required by the advance notice and other provisions of the Company’s By-Laws. A copy of the By-Laws may be obtained by directing a written request to MetLife, Inc., One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, NY 11101-4007, Attention: Corporate Secretary.

 

Where to find the voting results of the 2007 Annual Meeting.

 

The preliminary voting results will be announced at the 2007 Annual Meeting. The final voting results will be published in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.

 

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

 

This Proxy Statement and MetLife’s 2006 Annual Report to Shareholders may be viewed online at http://investor.metlife.com. If you are a shareholder of record, you may elect to receive future annual reports and proxy statements electronically by consenting to electronic delivery online at

https://vault.melloninvestor.com/isd. If you choose to receive your proxy materials electronically, your choice will remain in effect until you notify MetLife that you wish to discontinue electronic delivery of these documents. You may provide your notice to   MetLife via the Internet at https://vault.melloninvestor.com/isd or by writing to MetLife, Inc., c/o Mellon Investor Services, P.O. Box 3510, South Hackensack, NJ 07606-9210. In the United States, you also may provide such notice by calling toll free 1-800-649-3593.

 

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

 

In accordance with rules adopted by the SEC in December 2006, the Company may elect to furnish proxy materials to shareholders for the 2008 Annual Meeting by posting its materials on a publicly accessible Internet website and providing shareholders with a notice informing them that the materials are available and explaining how to access those materials. If the Company elects to furnish proxy materials in this manner, shareholders would be entitled to request a copy of the proxy materials in paper or by e-mail, at no charge, in accordance with the rules.

 

Principal executive offices.

 

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

 

MetLife’s Annual Report on Form 10-K.

 

To obtain without charge a copy of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, address your request to MetLife Investor Relations, MetLife, Inc., One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, New York 11101-4007 or, on the Internet, go to http://investor.metlife.com and submit your request by selecting “Information Requests,” or call 1-800-649-3593. The Annual Report on Form 10-K may also be accessed at http://investor.metlife.com and at the SEC’s website at http://www.sec.gov.

 

At the 2007 Annual Meeting, five Class II Directors will be elected for a term ending at the Company’s 2010 Annual Meeting. If elected, Charles M. Leighton, a Class II Nominee, will retire from the Board effective as of the 2008 Annual Meeting, in accordance with the Board’s retirement policy (see page 24 for a discussion of the Board’s retirement policy). For additional information about the classes of Directors, see “Information About the Board of Directors — Responsibilities, Independence and Composition of the Board of Directors” beginning on page 13.

 

Each Class II Nominee is currently serving as a Director of MetLife and has agreed to continue to serve if elected. The Board of Directors has no reason to believe that any Nominee would be unable to serve if elected; however, if for any reason a Nominee should become unable to serve at or before the 2007 Annual Meeting, the Board could reduce the size of the Board or nominate someone else for election. If the Board were to nominate someone else to stand for election at the 2007 Annual Meeting, the proxies could use their discretion to vote for that person.

 

Curtis H. Barnette and Harry P. Kamen, each a Class II Director, will retire from the Board of Directors effective as of the 2007 Annual Meeting and are not standing for election. As a result, the size of the Board has been reduced to 14 members effective as of the 2007 Annual Meeting.

 

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

 

Burton A. Dole, Jr., age 69, is Chairman of Dole/Neal, LLC, a privately-held energy management firm. Mr. Dole was a Partner and Chief Executive Officer of MedSouth Therapies, LLC, a rehabilitative health care company, from 2001 to 2003, and was Chairman of the Board of Nellcor Puritan Bennett, Incorporated, a medical equipment company, from 1995 until his retirement in 1997. He was Chairman of the Board, President and Chief Executive Officer of

Puritan Bennett, Incorporated from 1986 to 1995. Mr. Dole served as Chairman of the Board of Directors of the Kansas City Federal Reserve Bank and Federal Reserve Agent from 1992 through 1994. Mr. Dole was a Director of New England Mutual Life Insurance Company from 1994 to 1996, before it was acquired by Metropolitan Life Insurance Company. He served as Chairman of the Conference of Chairmen of the Federal Reserve System in 1994. He received both a bachelor’s degree in mechanical engineering and a master’s degree in business administration from Stanford University. Mr. Dole has been a Director of MetLife since August 1999 and a Director of Metropolitan Life Insurance Company since 1996.

 

R. Glenn Hubbard, Ph.D., age 48, has been the Dean of the Graduate School of Business at Columbia University since 2004 and the Russell L. Carson Professor of Finance and Economics since 1994. Dr. Hubbard has been a professor of the Graduate School of Business at Columbia University since 1988. He is also a visiting scholar and Director of the Tax Policy Program for the American Enterprise Institute, and was a member of the Panel of Economic Advisers for the Congressional Budget Office from 2004 to 2006. From 2001 to 2003, Dr. Hubbard served as Chairman of the U.S. Council of Economic Advisers and as Chairman of the Economic Policy Committee of the Organization for Economic Cooperation and Development. Dr. Hubbard is a member of the Board of Directors of Automatic Data Processing, Inc., BlackRock Closed-End Funds, Capmark Financial Corporation, Duke Realty Corporation, KKR Financial Corporation and Ripplewood Holdings. He is also a Trustee of the Economic Club of New York, Tax Foundation and Fifth Avenue Presbyterian Church, New York, and a member of the Advisory Board of the National Center on Addiction and Substance Abuse. Dr. Hubbard holds a Ph.D. and master’s degree in economics from Harvard University, and a bachelor of arts degree and a bachelor of sciences degree from the University of Central Florida. He

 

has been a Director of MetLife and Metropolitan Life Insurance Company since February 2007.

 

James M. Kilts, age 59, has been Founding Partner, Centerview Partners Management, LLC, a financial advisory firm, since October 2006. He had been Vice Chairman of the Board of The Procter & Gamble Company from October 2005, following the merger of The Gillette Company with Procter & Gamble, until October 2006. Previously and, until October 2005, he had served as Chairman of the Board, Chief Executive Officer and President of Gillette since January 2001, February 2001 and November 2003, respectively. Prior to joining Gillette, Mr. Kilts was President and Chief Executive Officer of Nabisco Group Holdings Corp. from December 1999 until it was acquired in December 2000 by Philip Morris Companies Inc., now Altria Group Inc. He was President and Chief Executive Officer of Nabisco Holdings Corp. and Nabisco Inc. from January 1998 to December 1999. Before that, he was an Executive Vice President, Worldwide Food, Philip Morris, from 1994 to 1997 and served as President of Kraft USA from 1989 to 1994. Previously, he served as President of Kraft Limited in Canada and as Senior Vice President of Kraft International. Mr. Kilts began his business career with General Foods Corporation in 1970. Mr. Kilts is a member of the Board of Directors of The New York Times Company and MeadWestvaco Corporation, and a member of the Supervisory Board of the Nielsen Company, a leading global and information media company. He also serves on the Board of the American Institute of Contemporary German Studies. A graduate of Knox College, Mr. Kilts serves on the College’s Board of Trustees, is Chairman of the Advisory Council of the University of Chicago Graduate School of Business and is a Trustee of the University of Chicago. He previously was Chairman of the Grocery Manufacturers of America. Mr. Kilts has been a Director of MetLife and Metropolitan Life Insurance Company since 2005.

 

Charles M. Leighton, age 71, is Executive Director, US SAILING. He was Chairman of the Board and Chief Executive Officer of the CML Group, Inc., a specialty retail company, from 1969 until his retirement in March 1998. Mr. Leighton is a Trustee of Lahey Clinic. Mr. Leighton received a

bachelor’s degree and an honorary law degree from Bowdoin College and a master’s degree in business administration from Harvard Business School. He has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1996.

 

David Satcher, M.D., Ph.D., age 66, is the Director of the Center of Excellence on Health Disparity at the Morehouse School of Medicine (MSM), where he also occupies the Poussaint-Satcher-Cosby Chair in Mental Health. From December 2004 to July 2006, Dr. Satcher served as the President of MSM. From September 2002 to December 2004, Dr. Satcher was the Director of the National Center for Primary Care at MSM. Dr. Satcher completed his four-year term as the 16th Surgeon General of the United States in February 2002, after which he served as a Senior Visiting Fellow with the Kaiser Family Foundation until he assumed the post of Director of the National Center for Primary Care. Dr. Satcher served as the U.S. Assistant Secretary for Health from 1998 to January 2001, and from 1993 to 1998, he was the Director of the Centers for Disease Control and Prevention and the administrator of the Agency for Toxic Substances and Disease Registry. Dr. Satcher is a member of the Board of Directors of Johnson & Johnson and the Kaiser Family Foundation and is Co-Chair of the Ad Council’s Advisory Committee on Public Issues. Dr. Satcher has been a Director of MetLife and Metropolitan Life Insurance Company since February 2007.

 

The following Class II Directors are continuing in office until the 2007 Annual Meeting:

 

Curtis H. Barnette, age 72, has been Of Counsel to the law firm of Skadden, Arps, Slate, Meagher & Flom LLP since 2000. He is also Chairman Emeritus of Bethlehem Steel Corporation and was a Director and its Chairman and Chief Executive Officer from November 1992 through April 2000. Mr. Barnette is a former Director of Owens Corning, and a former member of the Norfolk Southern Advisory Board. He is a member and former Chair of the Board of Governors of West Virginia University, a Director and former Chair of the West Virginia University Foundation, Chair of the Yale Law School Fund Board, a Director of the Ron Brown Award for Corporate Leadership Board, a Director of the Pennsylvania Parks and Forests Foundation, Chair

 

and Director of the National Museum of Industrial History and Comenius Professor and Executive in Residence at Moravian College, of which he is also a Trustee. Mr. Barnette served on the President’s Trade Advisory Committee from 1989 to 2002 and is a Director of the National Center for State Courts and the Pennsylvania Society. Mr. Barnette also was a member of The Business Council. Mr. Barnette received a bachelor’s degree from West Virginia University and a law degree from Yale Law School. He also attended the Advanced Management Program at Harvard Business School and Manchester University where he was a Fulbright Scholar. He has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1994.

 

Harry P. Kamen, age 73, was Chairman of the Board and Chief Executive Officer of Metropolitan Life Insurance Company from April 1993 until his retirement in July 1998 and, in addition, was its President from December 1995 to November 1997. Mr. Kamen began his career at Metropolitan Life Insurance Company in 1959. He is a Trustee of the Granum Series Trust Fund and the Cultural Institutions Retirement System. Mr. Kamen is a former director of Banco Santander Central Hispano SA (Spain), Bethlehem Steel Corporation and Pfizer Inc. He is a Director of the New York Botanical Garden and the Chamber Music Society of Lincoln Center and a member of the Board of Advisors of the Mailman School of Public Health at Columbia University. In addition, he is an Honorary Trustee of Smith College and The American Museum of Natural History. Mr. Kamen received a bachelor’s degree from the University of Pennsylvania and a law degree from Harvard Law School and attended the Senior Executive Program at M.I.T. He has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1992.

 

The following Class III Directors are continuing in office until the 2008 Annual Meeting:

 

Sylvia Mathews Burwell, age 41, is President of the Global Development Program at The Bill and Melinda Gates Foundation. Ms. Burwell joined the Foundation in 2001 as Executive Vice President and served as its Chief Operating Officer and Executive Director from 2002 to April 2006. Prior to joining the Foundation, she

served as Deputy Director of the Office of Management and Budget in Washington, D.C. from 1998. Ms. Burwell served as Deputy Chief of Staff to President Bill Clinton from 1997 to 1998, and was Chief of Staff to Treasury Secretary Robert Rubin from 1995 to 1997. She also served as Staff Director for the National Economic Council from 1993 to 1995. Ms. Burwell was Manager of President Clinton’s economic transition team. Prior to that, she was an Associate at McKinsey and Company from 1990 through 1992. She is a Chairman’s Advisory Council Member of the Council on Foreign Relations, and a member of the Pacific Council on International Policy, the Aspen Strategy Group and the Nike Foundation Advisory Group. In addition, Ms. Burwell is a Governing Council Member of the Miller Center of Public Affairs at the University of Virginia. Ms. Burwell received a bachelor’s degree in government, cum laude, from Harvard University in 1987 and a bachelor’s degree in philosophy, politics and economics from Oxford University, where she was a Rhodes Scholar. Ms. Burwell has been a Director of MetLife and Metropolitan Life Insurance Company since 2004.

 

Cheryl W. Grisé, age 54, has served as Executive Vice President of Northeast Utilities, a public utility holding company, since December 2005, Chief Executive Officer of its principal operating subsidiaries from September 2002 to January 2007, President of the Utility Group of Northeast Utilities Service Company from May 2001 to January 2007, President of the Utility Group of Northeast Utilities from May 2001 to December 2005, and Senior Vice President, Secretary and General Counsel of Northeast Utilities from 1998 to 2001. Ms. Grisé will retire from Northeast Utilities at the end of the second quarter of 2007. Ms. Grisé is a Director of Dana Corporation. She also serves on the Boards of the MetroHartford Alliance, Greater Hartford Arts Council, University of Connecticut Foundation, Business Council of Fairfield County, the New England Council and the American Gas Association. She received a bachelor of arts degree from the University of North Carolina at Chapel Hill and a law degree from Thomas Jefferson School of Law, and has completed the Yale Executive Management Program. Ms. Grisé has been a Director of MetLife

 

and Metropolitan Life Insurance Company since 2004.

 

James R. Houghton, age 70, has been Chairman of the Board of Corning Incorporated, a global technology company, since 2002 and was its Chief Executive Officer from April 2002 to April 2005. He also served as Chairman and Chief Executive Officer of Corning from 1983 to 1996, Chairman of the Board Emeritus of Corning from 1996 to June 2000 and Non-Executive Chairman of the Board of Corning from June 2000 to April 2002. Mr. Houghton is also a Director of ExxonMobil Corporation and Market Street Trust Company. Mr. Houghton is a Trustee of the Metropolitan Museum of Art, the Morgan Library and Museum, Hospital for Special Surgery and the Corning Foundation, and is a Fellow of the Harvard Corporation. He graduated from Harvard College and received a master’s degree from Harvard Business School. Mr. Houghton has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1975.

 

Helene L. Kaplan, age 73, has been Of Counsel to the law firm of Skadden, Arps, Slate, Meagher & Flom LLP since 1990. She is a former Director of J.P. Morgan Chase & Co., ExxonMobil Corporation, The May Department Stores and Verizon Communications, Inc. Mrs. Kaplan is a Member (and former Director) of the Council on Foreign Relations. She is serving her second term as Chair of Carnegie Corporation of New York, and is a Trustee and Vice-Chair of The American Museum of Natural History. She is Trustee Emerita and Chair Emerita of Barnard College and Trustee Emerita of The J. Paul Getty Trust and The Institute for Advanced Study. Mrs. Kaplan is a Fellow of the American Philosophical Society and a Member of the American Academy of Arts and Sciences. Mrs. Kaplan received a bachelor’s degree, cum laude, from Barnard College and a law degree from New York University Law School. She is the recipient of many honors, including honorary degrees from Columbia University and Mount Sinai School of Medicine. Mrs. Kaplan has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1987.

 

William C. Steere, Jr., age 70, was Chairman of the Board and Chief Executive Officer of Pfizer Inc., a research-based global pharmaceutical company,

from 1992 until his retirement in May 2001. Mr. Steere is a Director of Pfizer Inc. and Health Management Associates, Inc. and is a Director of the Naples Philharmonic Center for the Arts. Mr. Steere received a bachelor’s degree from Stanford University. He has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1997. Mr. Steere was appointed as Lead Director of MetLife’s Board of Directors on January 18, 2006.

 

The following Class I Directors are continuing in office until the 2009 Annual Meeting:

 

C. Robert Henrikson, age 59, has been Chairman, President and Chief Executive Officer of MetLife and Metropolitan Life Insurance Company since April 25, 2006. Previously, he was President and Chief Executive Officer of MetLife and Metropolitan Life Insurance Company from March 1, 2006, President and Chief Operating Officer of the Company from June 2004, and President of its U.S. Insurance and Financial Services businesses from July 2002 to June 2004. He served as President of Institutional Business of MetLife from September 1999 to July 2002 and President of Institutional Business of Metropolitan Life Insurance Company from May 1999 to June 2002. During his more than 30-year career with MetLife, Mr. Henrikson has held a number of senior positions in the Company’s Individual, Group and Pension businesses. Mr. Henrikson is a Director of the American Council of Life Insurers, a Director Emeritus of the American Benefits Council, Chairman of the Board of the Wharton School’s S.S. Huebner Foundation for Insurance Education, a member of the Financial Services Forum and a Trustee of the American Museum of Natural History. He also serves on the National Board of Advisors at the Morehouse School of Medicine and the Board of Directors of The New York Philharmonic and The New York Botanical Garden. Mr. Henrikson received a bachelor’s degree from the University of Pennsylvania and a law degree from Emory University School of Law. In addition, he is a graduate of the Wharton School’s Advanced Management Program. He has been a Director of MetLife since April 26, 2005 and a Director of Metropolitan Life Insurance Company since June 1, 2005.

 

John M. Keane, age 64, is the co-founder and Senior Managing Director of Keane Advisors, LLC, a private equity investment and consulting firm, President of GSI, LLC, an independent consulting firm, Senior Advisor to Kohlberg, Kravis, Roberts and Co., a private equity firm specializing in management buyouts, and an Advisor to the Chairman and Chief Executive Officer of URS Corporation, a global engineering design firm. General Keane served in the U.S. Army for 37 years. He was Vice Chief of Staff and Chief Operating Officer of the Army from 1999 until his retirement in October 2003. He is a Director of General Dynamics Corporation. He also is a military contributor and analyst with ABC News and is a member of the United States Department of Defense Policy Board. He also serves on the Boards of the Knollwood Foundation, the Pentagon Memorial Fund, the Army Heritage Foundation, the George C. Marshall Foundation and the Terry C. Maude Foundation. General Keane received a bachelor’s degree in accounting from Fordham University and a master’s degree in philosophy from Western Kentucky University. General Keane has received honorary doctorate degrees in law and public service from Fordham University and Eastern Kentucky University, respectively. General Keane has been a Director of MetLife and Metropolitan Life Insurance Company since 2003.

 

Hugh B. Price, age 65, has been a Senior Fellow at the Brookings Institution since February 2006. Previously, he was a Senior Advisor to the law firm of DLA Piper Rudnick Gray Cary US LLP from September 2003 until September 2005 and

served as President and Chief Executive Officer of the National Urban League, Inc. from 1994 to April 2003. Mr. Price is a Director of Verizon Communications, Inc. He is a Trustee of the Mayo Clinic and the Committee for Economic Development, and a director of the Jacob Burns Film Center. Mr. Price received a bachelor’s degree from Amherst College and received a law degree from Yale Law School. He has been a Director of MetLife since 1999 and a Director of Metropolitan Life Insurance Company since 1994.

 

Kenton J. Sicchitano, age 62, was a Global Managing Partner of PricewaterhouseCoopers LLP, an assurance, tax and advisory services company, until his retirement in June 2001. Mr. Sicchitano joined Price Waterhouse LLP, a predecessor firm of PricewaterhouseCoopers LLP, in 1970, and after becoming a partner in 1979, held various leadership positions within the firm until he retired in 2001. He is a Director of PerkinElmer, Inc. and Analog Devices, Inc. At various times from 1986 to 1995, he served as a Director and/or officer of a number of not-for-profit organizations, including as President of the Harvard Business School Association of Boston, Director of the Harvard Alumni Association and the Harvard Business School Alumni Association, Director and Chair of the Finance Committee of New England Deaconess Hospital and a Trustee of the New England Aquarium. Mr. Sicchitano received a bachelor’s degree from Harvard College and a master’s degree in business administration from Harvard Business School. Mr. Sicchitano has been a Director of MetLife and Metropolitan Insurance Company since 2003.

 

The Board of Directors recommends that you vote to ratify the appointment of Deloitte & Touche LLP as MetLife’s independent auditor for the fiscal year ending December 31, 2007.

 

The Audit Committee, which is solely responsible for appointing the independent auditor of the Company, subject to shareholder ratification, has appointed Deloitte & Touche LLP (“Deloitte”) as the Company’s independent auditor for the fiscal year ending December 31, 2007. Deloitte has served as independent auditor of MetLife and Metropolitan Life Insurance Company and most of its subsidiaries for many years, and its long term knowledge of the MetLife group of companies has enabled it to carry out its audits of the Company’s financial statements with effectiveness and efficiency. The Board of Directors has endorsed the appointment of Deloitte as MetLife’s independent auditor for 2007, subject to ratification by MetLife shareholders at the 2007 Annual Meeting.

 

In considering Deloitte’s appointment, the Audit Committee reviewed the firm’s relevant qualifications and competencies, including that Deloitte is a registered public accounting firm with the Public Company Accounting Oversight Board (United States) (“PCAOB”) as required by the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the Rules of the PCAOB, Deloitte’s independence and its processes for maintaining its independence, the results of the independent review of its quality control system, the key members of the engagement team for the audit of the Company’s financial statements, the firm’s approach to resolving significant accounting and auditing matters including consultation with the firm’s national office, as well as its reputation for integrity and competence in the fields of accounting and auditing. The Audit Committee assures the regular rotation of the audit engagement team partners as required by law.

 

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

Sarbanes-Oxley and SEC rules. Under procedures adopted by the Audit Committee, the Audit Committee reviews, on an annual basis, a schedule of particular audit services that the Company expects to be performed in the next fiscal year and an estimated amount of fees for each particular audit service. The Audit Committee also reviews a schedule of audit-related, tax and other permitted non-audit services that the Company may engage the independent auditor to perform during the next fiscal year and an estimated amount of fees for each of those services, as well as information on pre-approved services provided by the independent auditor in the current year.

 

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

 

If, during the course of the year, the audit, audit-related, tax and other permitted non-audit fees exceed the previous estimates provided to the Audit Committee, the Audit Committee determines whether or not to approve the additional fees. The Audit Committee or a designated member of the Audit Committee to whom authority has been delegated may, from time to time, pre-approve additional audit and non-audit services to be performed by the Company’s independent auditor.

 

Representatives of Deloitte will attend the 2007 Annual Meeting. They will have an opportunity to make a statement if they desire to do so, and they will be available to respond to appropriate questions.

 

The Board of Directors has adopted Corporate Governance Guidelines that set forth the Board’s policies regarding Director independence, the qualifications of Directors, the identification of candidates for Board positions, the responsibilities of Directors, the Committees of the Board, management succession, Director access to management and outside advisors, and Director compensation. The Guidelines also address the appointment of a Lead Director by the Independent Directors (as defined below), and the Board’s majority voting standard in uncontested Director elections, which is also reflected in the Company’s By-Laws. A printable version of the Corporate Governance Guidelines may be found on MetLife’s website at http://www.metlife.com/corporategovernance. A copy of the Corporate Governance Guidelines also may be obtained by any shareholder by submitting a written request to MetLife, Inc., One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, NY 11101-4007, Attention: Corporate Secretary.

 

 

Responsibilities, Independence and Composition of the Board of Directors.  The Directors of MetLife are individuals upon whose judgment, initiative and efforts the success and long-term value of the Company depend. As a Board, these individuals review MetLife’s business policies and strategies and oversee the management of the Company’s businesses by the Chief Executive Officer and the other executive officers. The Board currently consists of 16 Directors, 15 of whom are both Non-Management Directors and Independent Directors. Effective as of the 2007 Annual Meeting, the size of the Board has been reduced to 14 members, 13 of whom are both Non-Management Directors and Independent Directors. A “Non-Management Director” is a Director who is not an officer of the Company or of any entity in a consolidated group with the Company. An “Independent Director” is a Non-Management

Director who the Board of Directors has affirmatively determined has no material relationships with the Company or any of its consolidated subsidiaries and is independent within the meaning of the New York Stock Exchange Inc.’s Corporate Governance Standards (the “NYSE Governance Standards”). An Independent Director for Audit Committee purposes meets additional requirements of Rule 10A-3 under the Exchange Act.

 

As permitted by the NYSE Governance Standards, the Board of Directors has adopted Categorical Standards Regarding Director Independence (the “Categorical Standards”) to assist it in making determinations of independence. The Board has determined that the Independent Directors satisfy all applicable Categorical Standards. The Categorical Standards are set forth in Appendix A to this Proxy Statement. They are also included in the Corporate Governance Guidelines of the Company, which are available on MetLife’s website at http://www.metlife.com/corporategovernance under the link “Director Qualifications & Independence.”

 

The Board has affirmatively determined that Curtis H. Barnette, Sylvia Mathews Burwell, Burton A. Dole, Cheryl W. Grisé, James R. Houghton, R. Glenn Hubbard, Harry P. Kamen, Helene L. Kaplan, John M. Keane, James M. Kilts, Charles M. Leighton, Hugh B. Price, David Satcher, Kenton J. Sicchitano and William C. Steere, Jr. are all Independent Directors who do not have any material relationships with the Company or any of its consolidated subsidiaries.

 

Mr. Barnette and Mrs. Kaplan are each Of Counsel to the law firm of Skadden, Arps, Slate, Meagher & Flom, LLP (“Skadden”), which provides legal services to the Company and its affiliates. In determining that Mr. Barnette and Mrs. Kaplan are independent, the Board considered its Categorical Standards, which provide that a Director will not be deemed to have a material relationship with the Company that impairs the

 

Director’s independence because the Director is an officer or other person holding a salaried position at an entity (other than a principal, equity partner or member of such entity) that provides professional services to the Company and the amount of all payments from the Company to the entity during the most recently completed fiscal year was less than two percent of the other entity’s consolidated gross revenues. In their positions as Of Counsel to Skadden, which did not in 2006 receive payments in excess of two percent of its consolidated gross revenues from the Company, Mr. Barnette and Mrs. Kaplan are paid a salary and are not principals, equity partners or members of Skadden. Neither Mrs. Kaplan nor Mr. Barnette receives compensation from Skadden that is directly or indirectly related to fees that Skadden receives from MetLife. Neither has the right to vote in firm matters or participate in Skadden’s profits. Mr. Barnette will retire from the Board of Directors effective as of the 2007 Annual Meeting and Mrs. Kaplan will retire from the Board of Directors effective as of the 2008 Annual Meeting.

 

Ms. Grisé is an executive officer of Northeast Utilities, which has issued debt securities and commercial paper that is held by MetLife. In determining that Ms. Grisé is independent, the Board considered its Categorical Standards, which provide that a Director will not be deemed to have a material relationship with the Company that impairs the Director’s independence because the Director is an officer of an entity that is indebted to the Company, provided that the entity’s indebtedness is less than three percent of the total consolidated assets of that entity at the end of the previous fiscal year. MetLife’s holdings of Northeast Utilities securities constitute less than three percent of Northeast Utilities total consolidated assets at December 31, 2006, based on information available to the Company. In January 2007, Northeast Utilities announced that Ms. Grisé will retire at the end of the second quarter of 2007.

 

In determining that Ms. Burwell is independent, the Board considered that on December 1, 2006 Ms. Burwell’s sister became an executive officer of Local Initiatives Support Corporation (“LISC”), a not-for-profit corporation that provides financial and other support to resident-led community-based development organizations. Metropolitan

 

Life Insurance Company is a lender to LISC under its social investment program. LISC uses these funds to provide loans to eligible community-based organizations. The principal amount of these loans to LISC constitutes less than three percent of the total consolidated assets of LISC as of December 31, 2006, which is the threshold in the Categorical Standard that would apply if Ms. Burwell had a direct, rather than an indirect, relationship with LISC. In addition, The MetLife Foundation makes financial contributions to LISC, which LISC uses to fund a variety of community-based programs and organizations. In 2006, these grants constituted less than two percent of the consolidated gross revenues of LISC, which is the threshold in the Categorical Standard that would apply if Ms. Burwell had a direct, rather than an indirect, relationship with LISC. MetLife also holds equity investments in LISC-affiliated partnerships. The Board of Directors did not consider Ms. Burwell’s sister’s relationship with LISC to be material to Ms. Burwell’s independence because the LISC-related loans, grants and equity investments were each made in the ordinary course, and because Ms. Burwell’s sister was not, nor is, directly engaged in any of these transactions.

 

The Company’s Board of Directors is divided into three classes. One class is elected each year to hold office for a term of three years. Of the 16 current Directors, seven are Class II Directors with terms expiring at the 2007 Annual Meeting, five are Class III Directors with terms expiring at the 2008 Annual Meeting, and four are Class I Directors with terms expiring at the 2009 Annual Meeting. As a result of the reduction of the size of the Board to 14 members, effective as of the 2007 Annual Meeting, the size of Class II will be reduced to five Directors.

 

Executive Sessions of Non-Management Directors.  The Non-Management Directors of the Company (all of whom were also Independent Directors of the Company during 2006) meet in regularly scheduled executive sessions without the presence of the Company’s management. If the group of Non-Management Directors were to include Directors who were not also Independent Directors, the Independent Directors would meet, at least once a year, in an executive session that

 

included only Independent Directors. The Independent Directors annually appoint a Lead Director, who presides when the Non-Management Directors meet in executive session. Mr. Steere has served as Lead Director since January 2006.

 

Director Nomination Process.  Potential candidates for nomination as Directors are identified by the Board of Directors and the Governance Committee through a variety of means, including recommendations of search firms, Board members, executive officers and shareholders. Potential candidates for nomination as Director must provide written information about their qualifications and participate in interviews conducted by individual Board members, including the Chairs of the Audit, Compensation and Governance Committees. Candidates are evaluated based on the information supplied by the candidates and information obtained from other sources.

 

The Governance Committee will consider shareholder recommendations of candidates for nomination as Director. To be timely, a shareholder recommendation must be submitted to the Governance Committee, MetLife, Inc., One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, NY 11101-4007, Attention: Corporate Secretary, not later than 120 calendar days prior to the first anniversary of the previous year’s annual meeting. Recommendations for nominations of candidates for election at the 2008 Annual Meeting must be received by the Corporate Secretary no later than December 26, 2007.

 

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

 

The shareholder’s recommendation must set forth all the information regarding the person recommended that is required to be disclosed in solicitations of proxies for election of Directors pursuant to Regulation 14A under the Exchange Act, and must include the recommended nominee’s

 

written consent to being named in the Proxy Statement as a nominee and to serving as a Director if elected. In addition, the shareholder’s recommendation must include (i) the name and address of the recommending shareholder and the candidate being recommended; (ii) a description of all arrangements or understandings between the nominating shareholder and the person being recommended and any other persons (naming them) pursuant to which the nominations are to be made by the shareholder; (iii) a representation that the recommendation is being made by a beneficial owner of the Company’s stock; and (iv) if the recommending shareholder intends to solicit proxies, a statement to that effect.

 

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

 

 

 

 

In recommending candidates for election as Directors, the Governance Committee will take into consideration the need for the Board to have a majority of Directors that meet the independence requirements of the NYSE Governance Standards and such other criteria as shall be established from time to time by the Board of Directors.

 

Board Meetings and Director Attendance in 2006.  In 2006, there were 10 regular and special meetings of the Board of Directors. All Directors attended more than 75% of the aggregate number of meetings of the Board of Directors and the Committees on which they served during 2006.

 

 

The Company has established written procedures for the review, approval or ratification of related person transactions. A “related person transaction” includes certain financial transactions, arrangements or relationships in which the Company is or is proposed to be a participant and in which a Director, Director nominee or executive officer of the Company or any of their immediate family members has or will have a material interest. Related person transactions may include:

 

 

Under the procedures, Directors, Director nominees and executive officers of the Company report in writing to the Chief Executive Officer any related person transactions in which they, or any of their immediate family members, have or will have a material interest. The Chief Executive Officer is responsible for reviewing, approving or ratifying related person transactions involving executive officers of the Company (other than the Chief Executive Officer) or any of their immediate family members. The Chief Executive Officer may refer any such transaction to the Governance Committee if he believes that would be appropriate. The Governance Committee is responsible for reviewing, approving or ratifying related person transactions involving Directors, Director nominees and the Chief Executive Officer or any of their immediate family members, as well any transactions referred to the Committee by the Chief Executive Officer. A vote of a majority of disinterested Directors of the Governance Committee is required to approve or ratify any related person transaction subject to the Committee’s review.

 

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

 

 

MetLife’s Board of Directors has designated six Board Committees. These Committees perform essential functions on behalf of the Board. The Committee Chairs review and approve agendas for all meetings of their respective Committees. The responsibilities of each of the Committees are summarized below. Only Independent Directors may be members of the Audit, Compensation and Governance Committees. Metropolitan Life Insurance Company also has designated Board Committees, including an Investment Committee. Each Committee of the Board of Directors has a Charter that defines the Committee’s purposes and responsibilities. The Charters for the Audit, Compensation and Governance Committees incorporate the requirements of the SEC and the New York Stock Exchange (“NYSE”) to the extent applicable. Current, printable versions of the Charters are available on MetLife’s website at http://www.metlife.com/corporategovernance. Print copies of the Charters also may be obtained by submitting a written request to MetLife, Inc., One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, NY 11101-4007, Attention: Corporate Secretary.

 

The Audit Committee

 

The Audit Committee, which consists entirely of Independent Directors,

 

 

 

The Audit Committee met nine times during 2006. A more detailed description of the role and responsibilities of the Audit Committee is set forth in the Audit Committee Charter.

 

Financial Literacy and Audit Committee Financial Expert.  The Board of Directors has determined that the members of the Audit Committee are financially literate, as such qualification is interpreted by the Board of Directors. The Board of Directors has also determined that a majority of the members of the Audit Committee would qualify as “audit committee financial experts,” as such term is defined by the SEC, including James R. Houghton, the Chair of the Committee.

 

The Compensation Committee

 

The Compensation Committee, which consists entirely of Independent Directors,

 

 

 

 

A more detailed description of the role and responsibilities of the Compensation Committee is set forth in the Compensation Committee Charter. Under its Charter, the Compensation Committee may delegate to a subcommittee or to the Chief Executive Officer or other officer of the Company any portion of the Committee’s duties and responsibilities, if the Committee believes such delegation is in the best interests of the Company and the delegation is not prohibited by law, regulation or the NYSE Governance Standards.

 

The Compensation Committee has engaged an independent compensation consultant, Hewitt Associates, to assist the Committee in its review of executive compensation practices. Hewitt Associates advises the Committee on the competitiveness of pay levels, market trends in executive compensation and the effectiveness of the design and development of the Company’s compensation and benefit programs. It also provides competitive pay analyses to the Committee, including market data about total compensation for executives at comparable companies. In addition, Hewitt Associates provides ongoing advice to the Committee regarding regulatory, technical or accounting

considerations that affect the Company’s compensation and benefit programs and assists with the design of such programs. The Committee has not directed Hewitt Associates to perform its services in any particular manner or under any particular method. The Committee periodically evaluates Hewitt Associates’ services, and has the final authority to hire and terminate Hewitt Associates.

 

For information about the key factors that the Compensation Committee considers in determining the compensation of the members of the Company’s Executive Group (as defined on page 29), as well as the role of the Chief Executive Officer in setting such compensation, see “Compensation Discussion and Analysis” beginning on page 29. Also see the Compensation Discussion and Analysis for information about compensation paid to the Named Executive Officers for 2006 (as defined on page 29).

 

The Compensation Committee met six times during 2006.

 

Compensation Committee Interlocks and Insider Participation.  No member of the Compensation Committee has ever been an officer or employee of MetLife or any of its subsidiaries. During 2006, no executive officer of MetLife served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers is or has been a Director of MetLife or a member of MetLife’s Compensation Committee.

 

The Governance Committee

 

The Governance Committee, which consists entirely of Independent Directors,

 

 

 

 

A more detailed description of the role and responsibilities of the Governance Committee is set forth in the Governance Committee Charter. Under its Charter, the Governance Committee may delegate to a subcommittee any portion of its duties and responsibilities if the Committee believes such delegation is in the best interests of the Company and the delegation is not prohibited by law, regulation or the NYSE Governance Standards.

 

The Governance Committee from time to time reviews the compensation and benefits provided to Non-Management Directors, with the assistance of its independent compensation consultant, Hewitt Associates. The Committee engaged Hewitt Associates to advise it on the design and development of the current compensation program for Non-Management Directors, including the appropriateness of Director compensation levels and amounts paid to Directors for service as a Committee Chair or as the Lead Director. It also provided the Committee with market data on director compensation at comparator companies. For additional information about compensation paid to Non-Management Directors in 2006, see “Compensation of Non-Management Directors — 2006 Director Compensation Table” and the accompanying narrative beginning on page 22.

 

The Governance Committee met seven times during 2006.

 

The Executive Committee

 

The Executive Committee may exercise the powers and authority of the Board of Directors during intervals between meetings of the Board of Directors.

 

The Public Responsibility Committee

 

The Public Responsibility Committee

 

 

The Sales Practices Compliance Committee

 

The Sales Practices Compliance Committee

 

 

 

The Investment Committee of Metropolitan Life Insurance Company

 

The Investment Committee of Metropolitan Life Insurance Company

 

 

 

 

The following discussion will assist in understanding the information reported in the 2006 Director Compensation Table.

 

Directors’ Retainer and Attendance Fees.  The Annual Retainer for Non-Management Directors who serve on the Company’s Board of Directors is $225,000, 50% of which is paid in shares of the Company’s common stock and 50% of which is paid in cash. The retainer fee for Board service will be paid in advance at the time of the 2007 Annual Meeting. A Non-Management Director who serves

for only a portion of the year is paid a prorated retainer fee to reflect the period of such service.

 

The annual cash fee payable to Non-Management Directors who serve as Chairs of Board Committees is $25,000. The Company also pays an annual cash fee of $25,000 to the Company’s Lead Director. The Committee Chair and Lead Director retainer fees will be paid in advance at the time of the 2007 Annual Meeting. The Company pays a $25,000 annual fee to the Non-Management Director who serves as the Chair of the Metropolitan Life

 

Insurance Company Investment Committee. A Non-Management Director who serves for only a portion of the year would, in each case, be paid a prorated retainer fee to reflect the period of such service.

 

The MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan.  The MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan, which was approved by the Company’s shareholders in 2004, authorizes the Governance Committee to grant awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and stock-based awards to the Company’s Non-Management Directors. The plan provides that the exercise price of any stock option may be no less than the fair market value of a share of the Company’s common stock on the date the stock option is granted. No stock options, performance shares, restricted stock or restricted stock units have been awarded under the Plan; however, share awards with respect to the 50% stock component of the Annual Retainer paid to Non-Management Directors are being granted. See “Directors’ Retainer and Attendance Fees” above. The Board of Directors or the Governance Committee may terminate, modify or amend the Plan at any time, subject, in certain instances, to shareholder approval.

 

Director Fee Deferrals.  A Non-Management Director may defer the receipt of all or part of his or her fees payable in cash or shares (and any imputed dividends on those shares) until a later date or until after he or she ceases to serve as a Director. From 2000 to 2004, such deferrals could be made under the terms of the 2000 Directors Stock Plan (share awards) or the MetLife Deferred Compensation Plan for Outside Directors (cash awards). Since 2005, any such deferrals are made under the terms of the MetLife Non-Management Director Deferred Compensation Plan, which was adopted in 2004 and amended in 2005, and is intended to comply with Internal Revenue Code Section 409A.

 

Directors’ Benefit Programs.  Non-Management Directors who joined the Board on or after January 1, 2003 receive $200,000 of group life insurance. Non-Management Directors who joined the Board prior to January 1, 2003 are

 

eligible to continue to receive $200,000 of individual life insurance coverage under policies then in existence, for which MetLife would pay the Directors a cash amount sufficient to cover the cost of premiums (ranging up to approximately $20,000). MetLife provides each Non-Management Director with business travel accident insurance coverage for travel on MetLife business. Non-Management Directors are also eligible to participate in MetLife’s Long Term Care Insurance Program on a fully contributory basis.

 

Directors’ Retirement Policy.  The retirement policy adopted by the Board of Directors provides that no Director may stand for election as a member of MetLife’s Board after he or she reaches the age of 72, and that a Director may continue to serve until the Annual Meeting coincident with or immediately following his or her 72nd birthday. The Board of Directors has waived the provisions of its retirement policy that would have required Mrs. Kaplan and Mr. Kamen to serve only until the Annual Meeting coincident with or immediately following her or his 72nd birthday. Accordingly, Mrs. Kaplan will serve as a Director until her term expires in 2008 and Mr. Kamen will retire from the MetLife Board of Directors effective as of the 2007 Annual Meeting. In addition, no Director who is also an officer of MetLife may serve as a Director after he or she retires as an officer of MetLife or Metropolitan Life Insurance Company. In addition, each Director must offer to resign from the Board upon a change or discontinuance of his or her principal occupation or business responsibilities. The Director’s retirement policy is set forth in the Company’s Corporate Governance Guidelines.

 

Financial Management Code of Professional Conduct.  The Company has adopted the MetLife Financial Management Code of Professional Conduct, a “code of ethics” as defined under the rules of the SEC, that applies to the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Corporate Controller and all professionals in finance and finance-related departments. A current, printable version of the Financial

 

Management Code of Professional Conduct is available on the Company’s website at http://www.metlife.com/corporategovernance. A print copy also may be obtained without charge by submitting a written request to the Company at One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, NY 11101-4007, Attention: Corporate Secretary. No amendments to, or waivers from a provision of, the Financial Management Code of Professional Conduct that apply to the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or Corporate Controller were entered into or made in 2006. However, the Company would post information about any such waivers or amendments on the Company’s website at the address given above.

 

Employee Code of Business Conduct and Ethics and Directors’ Code of Business Conduct and Ethics.  The Company has adopted the Employee Code of Business Conduct and Ethics, which is applicable to all employees of the Company, including the executive officers of the Company, and the Directors’ Code of Business Conduct and Ethics, which is applicable to the Directors of the Company. A current, printable version of the Employee Code and the Directors’ Code is available on the Company’s website at http://www.metlife.com/corporategovernance. A print copy also may be obtained by submitting a written request to the Company at One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, NY 11101-4007, Attention: Corporate Secretary.

 

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

 

The Committee, on behalf of the Board, is responsible for overseeing management’s conduct of MetLife’s financial reporting and internal control processes. For more information on the Audit Committee, see “Board Committees — The Audit Committee” on page 17.

 

Management has the responsibility for the preparation of MetLife’s consolidated financial statements and the reporting process. Deloitte, as MetLife’s independent auditor, is responsible for auditing MetLife’s consolidated financial statements in accordance with auditing standards of the PCAOB.

 

Deloitte has discussed with the Committee those matters described in the PCAOB Statement on Auditing Standards (“SAS”) No. 61, as amended by SAS 89 and SAS 90, and Rule 2-07 of Regulation S-X promulgated by the SEC. Deloitte has also provided to the Committee the written disclosures and the letter required by Independence Standards Board Standard No. 1 regarding Deloitte’s independence, and the Audit Committee has discussed with Deloitte its independence from MetLife.

 

During 2006, management updated its internal control documentation for changes in internal control and completed its testing and evaluation of MetLife’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of Sarbanes-Oxley and related

 

regulations. The Audit Committee was kept apprised of the progress of the evaluation and provided oversight and advice to management during the process. In connection with this oversight, the Committee received updates provided by management and Deloitte at each regularly scheduled Committee meeting. The Committee also reviewed the report of management’s assessment of the effectiveness of internal control over financial reporting contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, which has been filed with the SEC (the “2006 10-K”). The Committee also reviewed Deloitte’s Report regarding its audit of management’s assessment of the effectiveness of the Company’s internal control over financial reporting, and the effectiveness of the Company’s internal control over financial reporting.

 

The Committee reviewed and discussed with management and with Deloitte MetLife’s audited consolidated financial statements for the periods ended December 31, 2006 (the “2006 audited consolidated financial statements”) and Deloitte’s Report of Independent Registered Public Accounting Firm dated March 1, 2007 (the “Deloitte Opinion”) regarding the 2006 audited consolidated financial statements included in the 2006 10-K, which states that MetLife’s 2006 audited consolidated financial statements present fairly, in all material respects, the consolidated financial position of MetLife and its subsidiaries as of December 31, 2006 and 2005 and the results of their operations and cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In reliance upon the reviews and discussions with management and Deloitte described in this Audit Committee Report, and the Board of Directors’ receipt of the Deloitte Opinion, the Committee recommended to the Board that MetLife’s 2006

audited consolidated financial statements be included in the 2006 10-K.

 

Respectfully,

 

James R. Houghton, Chair

Burton A. Dole, Jr.

John M. Keane

Hugh B. Price

Kenton J. Sicchitano

William C. Steere, Jr.

 

This report is furnished by the Compensation Committee of MetLife’s Board of Directors. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that is set forth on pages 29 through 38 of this Proxy Statement and, based on such review and discussion, the Committee has recommended to the Board of Directors that such Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

 

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

 

Respectfully,

 

William C. Steere, Jr., Chair

Cheryl W. Grisé

James R. Houghton

James M. Kilts

Charles M. Leighton

Kenton J. Sicchitano

This Compensation Discussion and Analysis describes the objectives and policies underlying MetLife’s executive compensation program. It also describes key factors that the Compensation Committee considers in determining the compensation of the members of the Company’s Executive Group, which is comprised of the most senior executives of the Company (the “Executive Group”). The Executive Group includes the active officers named in the Summary Compensation Table on page 39 (the “Named Executive Officers”), as well as other executive officers of the Company.

 

Overview of Compensation Program

 

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

 

The Compensation Committee reviews each Executive Group member’s Total Compensation and recommends Total Compensation amounts for approval by the Independent Directors. In formulating its recommendations, the Committee reviews Company, business unit and individual performance for the year measured against previously established goals. It also considers available competitive market data for positions of comparable scope and responsibility at other companies. The Committee ensures that the compensation program is competitive and designed to achieve the Company’s objectives.

 

The Compensation Committee also reviews and assesses other compensation and benefit programs, such as pension benefits, the Company’s deferred compensation contributions, and potential payments that would be made were

an Executive Group member’s employment to end. Generally, the forms of compensation and benefits provided to the Executive Group members are similar to those provided to other officers of the Company.

 

The Compensation Committee has engaged an independent compensation consultant, Hewitt Associates, to assist the Committee in its design and review of the Company’s compensation program. For more information on the role of Hewitt Associates regarding the Company’s executive compensation program, see “Board Committees — The Compensation Committee” beginning on page 17.

 

None of the Executive Group members are parties to any agreement with the Company that governs their employment, other than agreements that would govern upon a change-in-control.

 

Compensation Philosophy and Objectives

 

MetLife’s executive compensation program is designed to reward Executive Group members for superior Company, business unit, and individual performance. The program’s core objectives are to:

 

 

The Compensation Committee selects compensation elements that are designed to motivate Executive Group members to achieve

 

the Company’s business goals, and rewards such executives for achieving these goals. A substantial portion of each Executive Group member’s Total Compensation can vary based on Company and business unit performance and the executive’s contribution to that performance. The Executive Group members’ Total Compensation for 2006 performance consisted of base salary payments, annual incentive compensation for 2006, and stock options and stock awards granted in February 2007. Approximately 93% of the Chief Executive Officer’s Total Compensation, and approximately 86% of all other Executive Group members’ Total Compensation, was variable and dependent upon the attainment of Company, business unit, or individual performance objectives or the value of the Company’s common stock.

 

To align executive and shareholder interests, the Compensation Committee allocates a greater portion of each Executive Group member’s variable compensation to long-term equity-based incentives than it allocates to annual cash incentives. For 2006 performance, long-term equity incentive opportunities constituted approximately 64% of the Chief Executive Officer’s Total Compensation and approximately 50% of all active Executive Group members’ Total Compensation. By comparison, annual cash incentives constituted approximately 29% of the Chief Executive Officer’s Total Compensation and 36% of all other active Executive Group members’ Total Compensation. The remainder of the Chief Executive Officer’s Total Compensation (7%) and active Executive Group members’ Total Compensation (14%) was paid in base salary.

 

For purposes of the above calculations, stock awards (performance shares) were valued at the closing price of MetLife common stock on the date of the grants and each stock option was valued at one-third that price (the “Compensation Valuation Formula”).

Benchmarking Compensation

 

The Compensation Committee reviews the competitiveness of MetLife’s Total Compensation structure against a comparator group of companies in the insurance and broader financial services industries with whom MetLife competes for executive talent. The current comparator group consists of the 13 insurance companies and 12 financial services companies listed under “Comparator Group” below. These companies are similar to MetLife in size or business mix or, for certain companies in the comparator group that are publicly-traded companies, market capitalization.

 

The Compensation Committee has determined that Total Compensation opportunities are competitive if they fall between the 75th percentile of insurance companies in the comparator group and the 50th percentile of the entire comparator group. The target percentile for insurance companies is in recognition of MetLife’s size and market position in the insurance industry.

 

The Compensation Committee reviews the composition of the comparator group from time to time to assure that it remains an appropriate benchmark for the Company. The comparator group was last reviewed and approved in 2006.

 

In 2006, the Compensation Committee directed a comprehensive market assessment of the Company’s executive compensation program. The assessment demonstrated that the Company’s Total Compensation structure for Executive Group members was competitively positioned relative to the range of the 75th percentile of insurance companies and the 50th percentile of the entire comparator group. The assessment also confirmed that the Company’s severance program, change-in-control arrangements and stock ownership guidelines are also in line with competitive practice.

 

Setting Compensation

 

CEO Compensation.  At the beginning of each year, the Chief Executive Officer and the Compensation Committee establish quantitative and qualitative goals and objectives for the year. The Compensation Committee indicates the importance of each goal to the Company’s overall performance. Following the end of the year, the Compensation Committee reviews the Chief Executive Officer’s performance relative to his goals and objectives. The Compensation Committee also reviews competitive data on company performance and chief executive officer compensation at the Company’s comparator companies. It also considers Total Compensation alternatives, including base salary changes, annual incentive compensation, and long-term incentive awards, based on the Chief Executive Officer’s performance. Based upon its review, the Compensation Committee recommends to the Independent Directors the Total Compensation for the Chief Executive Officer, including the appropriate level and mix of annual and long-term incentive awards and any base salary adjustments.

 

This process was followed in consideration of Mr. Henrikson’s 2006 compensation. Mr. Henrikson’s 2006 performance goals and objectives as Chief Executive Officer were both quantitative and qualitative and included achievement of Company financial goals (measured by operating earnings, return on equity, earnings per share, assets under management and operating

revenue), strategic growth, ensuring that anticipated performance targets were achieved related to the Travelers acquisition, and non-financial goals in areas such as customer and external relations.

 

The Committee’s Total Compensation recommendations for 2006 reflected its assessment of Mr. Henrikson’s performance relative to his established goals and objectives in his new role as Chief Executive Officer, and took into account competitive market data provided by the Compensation Committee’s independent compensation consultant. This data compared and analyzed Mr. Henrikson’s compensation to chief executive officer compensation at comparator companies. The comparison included historical information on comparator companies’ market capitalization and performance (measured by 3-year and 1-year growth in earnings per share and revenue, 3-year and 1-year returns on equity and capital, and total shareholder return) compared to MetLife.

 

Compensation of Other Executive Group Members.  At the beginning of each year, the Chief Executive Officer and each Executive Group member agree on the executive’s quantitative and qualitative goals for the year. Following the end of the year, the Chief Executive Officer provides to the Compensation Committee an assessment of each other Executive Group members’ performance during that year. He also recommends to the Committee Total Compensation amounts for each Executive Group

 

member. These recommendations take into account individual performance as well as competitive data and compensation opportunities for each position. The Committee considers the recommendations in light of Company and business unit performance and each officer’s relative contribution to that performance. Based on its review, the Committee recommends to the Independent Directors the Total Compensation for each Executive Group member, including the appropriate level and mix of annual and long-term incentive awards and any base salary adjustments. Other than the Chief Executive Officer, no Executive Group member plays a role in determining the compensation of any of the other Executive Group members.

 

This process was followed in consideration of the 2006 compensation to the members of the Executive Group. Their 2006 performance goals and objectives were those of the Company, as reflected in Mr. Henrikson’s goals and objectives stated above, as they applied to their respective business units. For the performance goals and objectives that applied to Mr. Benmosche, see “Compensation of Mr. Benmosche” on page 37.

 

Components of Compensation and Benefits

 

For 2006, the principal components of the compensation and benefits for the Executive Group members were base salary, annual incentive awards, long-term incentive awards, and retirement and other benefits.

 

Base Salary.  The Company pays base salaries to the Executive Group members and other employees to compensate them for their services during the year. Salary rates are determined based on competitive data, the Executive Group member’s position and scope of responsibilities, and individual performance.

 

The base salaries paid to the Named Executive Officers in 2006 are reported in the Summary Compensation Table on page 39.

 

Annual Incentive Awards.  The MetLife Annual Variable Incentive Plan (the “AVIP”) provides eligible employees, including the Executive Group members, the opportunity to earn annual cash incentive awards. These awards are based on Company, business unit, and individual performance. Within the AVIP framework,

individual awards may vary from year to year based on individual performance. As a result, AVIP awards are the primary compensation vehicle for recognizing and differentiating individual performance each year. They are designed to motivate Executive Group members and other employees to achieve strong annual business results that will contribute to the Company’s long-term success.

 

Each year, the Compensation Committee approves the formula that will be used to determine the maximum dollar amount (the “Maximum Amount”) available for AVIP awards. The Committee bases this formula on the Company’s business plan for that year. The formula consists of two performance measures: operating earnings and return on equity. For this purpose for 2006, operating earnings was defined as net income excluding after-tax net investment gains or losses, the cumulative effect of accounting changes, and preferred stock dividends, determined according to GAAP. Settlement payments on derivative instruments not qualifying for hedge accounting treatment were included in operating earnings. Return on equity was defined for these purposes in 2006 as operating earnings available to common shareholders divided by common equity determined under GAAP, excluding accumulated other comprehensive income.

 

The formula establishes several threshold levels of operating earnings and return on equity. For each level of operating earnings and return on equity in the formula, an additional percentage of the earnings at that level is added to the Maximum Amount. The percentage of earnings at each level that is added to the Maximum Amount increases with each successively higher level of operating earnings and return on equity the Company achieves. As a result, AVIP links annual cash incentive awards to Company and business unit performance. The formula is structured so that there will be amounts available for distribution as long as the Company does not incur an operating loss for the year. AVIP awards, however, are entirely discretionary, and no employee is guaranteed an award. Additionally, if the Company’s operating earnings are zero, neither the Chief Executive Officer nor the other Executive Group members would be eligible for an AVIP award.

 

For 2006, the Maximum Amount reflected operating earnings and return on equity above the highest threshold. The AVIP awards to the Named Executive Officers for 2006 performance are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 39.

 

Long-Term Incentive Awards.  The Company’s long-term incentive program is designed to ensure that Executive Group members have a significant continuing stake in the long-term financial success of the Company. Since April 2005, the Company has awarded long-term incentives under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan (the “2005 Stock Plan”), which was approved by MetLife shareholders in 2004. Under the 2005 Stock Plan, the Compensation Committee has the latitude to recommend for Board approval grants of various equity- and cash-based awards. The Committee has awarded stock options and performance shares as part of the Company’s Total Compensation program. These awards balance the objectives of aligning Executive Group members’ interests with those of shareholders and achieving the Company’s operational goals (see “Stock Ownership” on page 34). They also facilitate Executive Group members’ achievement of a significant stock ownership position in the Company. Performance shares and stock options also provide an incentive for the Executive Group members to remain with the Company through the entire performance period or stock option vesting period, as they are normally forfeited if the executive leaves the Company voluntarily before the end of the performance period or vesting period and is not retirement eligible.

 

The total of long-term incentive awards to all senior officers are generally allocated 50% in performance shares and 50% in stock options, using the Compensation Valuation Formula. The amount of long-term incentives granted is based on a discretionary assessment of an individual’s level of responsibility, performance and relative contribution and potential for assuming increased responsibilities.

 

Stock Options.  Stock options are granted to Executive Group members and other key employees to directly align their interests with

the interests of MetLife’s shareholders. Stock options are granted at an exercise price equal to the closing price of a share of MetLife’s common stock on the date of grant. The ultimate value of stock options depends exclusively on increases in the price of MetLife’s common stock. One-third of each award of stock options vests on each of the first three anniversaries of the date of grant. In 2006, approximately 1,400 MetLife employees, including the Executive Group members and most officer-level employees, were granted stock options based on their position, responsibilities, and the long-term incentive award opportunities in the Total Compensation structure.

 

Performance Shares.  Performance shares are units that may become payable in shares of MetLife common stock at the end of a three-year performance period, depending on whether specified performance goals are met. They are granted to encourage decisions and reward performance that contribute to the long-term growth of the Company’s business and enhance shareholder value. Performance shares are designed to motivate Executive Group members to outperform MetLife’s competition in terms of key performance measures over a three-year period. MetLife’s competition is defined for this purpose as the companies in the Standard & Poor’s Insurance Index (the “Insurance Index”). The Insurance Index was chosen to measure MetLife’s performance because insurance is the predominant portion of the Company’s overall business mix. The final number of performance shares paid is determined by the Company’s performance in total shareholder return and operating earnings compared to the other companies in the Insurance Index. The amount paid can be as low as zero and as high as twice the number of performance shares granted. In 2006, 335 MetLife employees, including the Executive Group members and most other senior officers, were granted performance share awards based on their position in the Company and on the long-term incentive opportunities in the Total Compensation structure.

 

For information about the specific grants of stock options and performance shares to the Named Executive Officers in 2006, see the table entitled “Grants of Plan-Based Awards in 2006” on page 44.

 

Equity Award Timing Practices

 

The Committee grants stock options and performance shares to the Executive Group members at its regularly scheduled meeting in February of each year on the same day that the Compensation Committee and the Board of Directors approve annual incentive compensation awards and any base salary increases. The exercise price of such stock options is the closing price of a share of MetLife’s common stock on the day the stock options are granted. The Company has never granted, and has no plans to grant, performance shares or stock options to current or new employees in coordination with the release of non-public information about the Company or any other company. The Chief Executive Officer does not have any authority to grant equity awards of any kind to any Executive Group members or Directors of the Company.

 

Long-Term Plan Payouts

 

Prior to April 2005, the Company’s long-term incentive program consisted of stock options and opportunity awards under the Long Term Performance Compensation Plan (the “Long Term Plan”). Long Term Plan opportunity awards were granted for three-year performance periods beginning April 1 of each year. The final Long Term Plan opportunity awards were granted in 2004 for the April 1, 2004 to March 31, 2007 performance period.

 

The primary factor used in determining final amounts payable on opportunity awards is total shareholder return on the Company’s stock during the applicable performance period. In April 2006, Long Term Plan participants received payouts on their opportunity awards that were granted to them in 2003 for the April 1, 2003 to March 31, 2006 performance period. These opportunity awards had been approved by the Compensation Committee in 2003, and were based on each participant’s level of responsibility and potential impact on the Company’s long-term business results.

 

For additional information about Long Term Plan awards, see the tables entitled “Outstanding Equity Awards at 2006 Fiscal Year-End” and “Option Exercises and Stock Vested in 2006” on pages 46 and 48, respectively.

 

Tax and Accounting Implications of Compensation Awards

 

Section 162(m) of the Internal Revenue Code limits the amount of compensation paid to certain officers that the Company can deduct to $1 million per year. The Company may not deduct compensation above that amount unless it is “performance-based.” Base salary is not performance-based compensation. As a result, salary payments above $1 million are not deductible. To comply with the requirements for performance-based compensation, the Compensation Committee establishes maximum AVIP awards that may be paid to each of the Executive Group members. The Company has also designed performance shares and stock options to meet the Section 162(m) requirements for performance-based compensation. These awards qualify as equity-classified instruments under applicable accounting standards and, as a result, the fair value measurement of the awards are fixed on the date of grant.

 

Stock Ownership

 

To further promote an alignment of management’s interests with shareholders, the Company has established minimum stock ownership guidelines for approximately 600 MetLife employees, including the Executive Group members. Each is expected to own MetLife common stock in an amount that is equal to a percentage or multiple of annual base salary rate depending on position.

 

Employees may count toward these guidelines the value of shares they or their immediate family members own directly or in trust. They may also count shares, deferred shares, or deferred share equivalents held in the Company’s savings and investment or nonqualified deferred compensation programs.

 

Each employee subject to the guidelines is expected to retain the net stock acquired through the exercise of stock options or from long-term incentive plan award payments until they meet the guidelines. The Company prohibits all MetLife employees, including the Executive Group members, from engaging in short swing sales, hedging, and trading in put and call options, with respect to the Company’s securities.

 

 

Mr. Henrikson’s ownership guideline of 7 times annual base salary rate took effect when he became Chief Executive Officer on March 1, 2006. In his former position, Mr. Henrikson’s ownership requirement was 4 times annual base salary rate. As of December 31, 2005, Mr. Henrikson exceeded that guideline with ownership at 5.2 times annual base salary rate. Mr. Benmosche’s ownership guideline as Chief Executive Officer was 7 times annual base salary rate. As of June 30, 2006, Mr. Benmosche’s share ownership was 17 times his annual base salary rate.

 

Retirement and Other Benefits

 

Pension Program.  The Company sponsors a pension program for its employees in which each Executive Group member participates. The purpose of the program is to provide employees with post-retirement income.

 

The program rewards employees for the length of their service and, indirectly, for their job performance, because the amount of benefits increases with the length of employees’ service with the Company and the salary and annual bonuses they earn. The Company’s pension program consists of two separate benefit formulas. One is based on length of service and final average compensation, and is known as the “Traditional Formula.” The other is based on monthly contributions to an account for each employee based on the employee’s compensation, plus interest, and is known as the “Personal Retirement Account Formula.” For any given period of time, an employee participates in one or the other formula. In no event are benefits for the same period calculated under both formulas.

 

The Company pays all of the benefits under the program without any deductions from employee pay or other employee contributions. Executive

Group members and other senior-level employees may choose to receive some or all of their pension benefits in a variety of forms, including annuities or a lump sum, subject to the approval of the Compensation Committee or its designee.

 

Pension benefits are paid under two separate plans, primarily due to tax requirements. The Metropolitan Life Retirement Plan for United States Employees (the “Retirement Plan”) is a tax-qualified defined benefit pension plan that provides benefits for employees on the United States payroll. Since the Internal Revenue Code imposes limitations on the amounts that can be paid under the Retirement Plan, the Company also sponsors the MetLife Auxiliary Pension Plan (the “Auxiliary Plan”). The Auxiliary Plan provides benefits which eligible employees would have received under the Retirement Plan if these limitations were not imposed. Benefits under the Auxiliary Plan are calculated in substantially the same manner as they are under the Retirement Plan. The Auxiliary Plan is unfunded, and benefits under that plan are general promises of payment not secured by any rights to Company property.

 

The Company participates in an annual survey on retirement benefits that compares the value of pension plans among large financial and insurance companies. The Company generally intends, over the long-term and broadly across its pension and savings and investment programs, to offer benefits in the median range of survey participants. The survey’s participants, other than MetLife, are:

 

 

 

For additional information about pension benefits for the Named Executive Officers, see the table entitled “Pension Benefits” on page 49.

 

Savings and Investment Program.  The Company sponsors a savings and investment program for its employees, in which each Executive Group member participates. The program consists of the Savings and Investment Plan (“Savings and Investment Plan”), a tax-qualified defined contribution plan under Internal Revenue Code Section 401(k), and the Auxiliary Savings and Investment Plan (the “Auxiliary Savings and Investment Plan”), an unfunded nonqualified deferred compensation plan.

 

The purpose of the program is to provide Executive Group members and other employees the opportunity to save a portion of their eligible compensation through payroll deductions, primarily for retirement but also for other financial needs. Employee contributions may be made on a before-tax 401(k), Roth 401(k) or after-tax basis. The Company also provides a matching contribution in order to encourage and reward such savings. The Company sponsors the Auxiliary Savings and Investment Plan to provide additional contributions, beyond Internal Revenue Code limits, to employees who elect to contribute to the Savings and Investment Plan. These amounts for the Named Executive Officers are reported in the “All Other Compensation” column of the Summary Compensation Table on page 39. Because the Auxiliary Savings and Investment Plan is a nonqualified deferred compensation plan, the Company’s contributions to the Named Executive Officers’ accounts, and the Named Executive Officers’ accumulated account balances and any payouts made during 2006, are

reported in the table entitled “Nonqualified Deferred Compensation” on page 52.

 

Nonqualified Deferred Compensation.  The Company sponsors a nonqualified deferred compensation program for its officer-level employees, including each Executive Group member. The purpose of this program is to provide eligible employees the opportunity to enhance their financial planning options by deferring a portion of their compensation. See the table entitled “Nonqualified Deferred Compensation” on page 52 for amounts of nonqualified deferred compensation reported for the Named Executive Officers.

 

Employees choose in advance the date on which payment of their deferred compensation will begin, and whether they want to receive payment in a lump sum or in up to 15 annual payments. However, when an employees’ employment ends, the Company generally pays out in a single lump sum the compensation that the employee had previously chosen to defer, unless the employee is retirement eligible or qualifies for subsidized post-retirement benefits. This encourages employees to remain with the Company in order to continue to receive the deferral of income taxation and pre-tax simulated investment returns.

 

Perquisites

 

The Company provides its Executive Group members with perquisites that it believes are reasonable.

 

To help ensure his safety and security, the Board of Directors requires that the Chief Executive Officer use the Company’s aircraft for all travel, personal as well as business. To maximize the accessibility of Executive Group members, the Company makes leased vehicles and drivers and outside car services available to them for commuting and personal use.

 

The Company has established a medical examination program to promote the health of its Executive Group members through annual comprehensive preventative medical examinations. An Executive Group member may complete a medical examination using a physician affiliated with the program or his or her private physician. The Company pays the costs of the medical examinations and certain follow-up testing.

 

The Company makes available to its Executive Group members financial planning services provided by a third party consultant. This program is designed to keep Executive Group members focused on running the Company’s business rather than on financial planning matters that can be handled by outside professionals. For recordkeeping and administrative convenience of the Company, the Company also pays certain costs of travel and meals for family members accompanying Executive Group members on business functions.

 

The incremental cost of perquisites provided to the Named Executive Officers during 2006 is included in the “All Other Compensation” column of the Summary Compensation Table on page 39.

 

Compensation of Mr. Benmosche

 

Mr. Benmosche retired from the Company effective July 1, 2006. Before the beginning of 2006, Mr. Benmosche and the Compensation Committee agreed that his 2006 objective was to provide for a successful management transition. Based upon Mr. Benmosche’s 2006 individual performance and contribution to the Company, the Compensation Committee recommended to the Independent Directors in February 2007 that an AVIP award be approved for Mr. Benmosche. In addition, in 2006 the Compensation Committee recommended to the Independent Directors grants of stock options and performance shares for the January 1, 2006 to December 31, 2008 performance period to Mr. Benmosche in consideration of his contributions to the Company and the future impact of his business decisions. Mr. Benmosche’s AVIP award is reported in the Summary Compensation Table on page 39 and his 2006 grants of stock options and performance shares are reported in the table entitled “Grants of Plan-Based Awards in 2006” on page 44.

 

Severance Pay and Related Benefits

 

If an Executive Group member’s employment with the Company ends, he or she may be eligible for the Company’s severance program, which is available to substantially all salaried employees. The severance program encourages employees whose employment is ending to focus on their transition to other opportunities and allows the Company to

obtain a release of any employment-related claims. The program provides employees with severance pay, outplacement services and other benefits if their employment with the Company ends involuntarily due to job elimination or, in limited circumstances, due to performance. Employees terminated for cause are not eligible.

 

The amount of severance pay reflects the employees’ salary grade, base salary rate and length of service, with longer-service employees receiving greater payments and benefits than shorter-service employees given the same salary grade and base salary. The Company also may enter into severance agreements that can differ from the general terms of the program, where business circumstances warrant.

 

Change-in-Control Arrangements

 

The Company has adopted arrangements that would impact the Executive Group members’ compensation and benefits upon a change-in-control of MetLife. If a change-in-control of MetLife were to occur, the Company’s ability to maximize shareholder value could be hindered if Executive Group members leave the Company or are distracted by concerns over continued employment. The Company’s change-in-control arrangements enhance the Company’s ability to retain Executive Group members in such a situation. They also promote the unbiased and disinterested efforts of the Executive Group members to maximize shareholder value during and after a change-in-control.

 

Employment Continuation Agreements.  The Company has entered into employment continuation agreements with Executive Group members, including each of the Named Executive Officers. These agreements do not provide for any payments or benefits based solely on a change-in-control of MetLife. Rather, each agreement provides that, if a change-in-control of MetLife occurs while the Executive Group member is employed by the Company, the Executive Group member’s employment would continue for a period of three years and be governed by the agreement during that time. If the Executive Group member’s terms and conditions of employment during that three-year period do not satisfy specified standards,

 

the Executive Group member may terminate employment and receive severance pay and related benefits. In addition, the Executive Group member would receive severance pay and related benefits if the Company terminated his or her employment during the three-year period without cause. This approach allows the Company to retain the executive through the transition period, but provides compensation if the executive’s services are no longer required in the new organization. Having this assurance of financial security during a potential change-in-control also allows Executive Group members to fulfill their duties and to act in the best interests of shareholders without distractions due to concerns over personal circumstances.

 

Additional Change-in-Control Arrangements. The Executive Group members’ stock option agreements, performance share agreements and

Long Term Plan opportunity awards also include change-in-control arrangements. These arrangements generally provide that stock options and long-term incentive awards vest immediately upon a change-in-control. However, in each case, MetLife or its successor may substitute an alternative award of equivalent value and vesting provisions no less favorable than the award being replaced, rather than allow the immediate vesting to occur. This structure keeps executives whole in situations where MetLife equity may not exist following a change-in-control or awards otherwise cannot or will not be replaced.

 

For additional information about change-in-control arrangements, including the Company’s definition of change-in-control for these purposes, see “Potential Payments Upon Termination or Change-in-Control” beginning on page 55.

 

The amounts reported in the Total column do not represent only compensation paid and received by the Named Executive Officers in 2006. Rather, the Total column amounts also include items such as salary and cash incentive compensation that have been earned and paid (or earned and deferred), as well as the value of items such as performance shares and stock options which may never become payable or ultimately have a value that differs substantially from the values reported in this

 

table. The values reported for stock awards and option awards were calculated based on the accounting expense of all stock and stock option awards, including in some cases those made prior to 2006, under applicable accounting standards. In addition, the amounts reported in the Total column include changes in the value of pension benefits from year-end 2005 to year-end 2006, which will become payable only after the Named Executive Officer ends his or her employment.

 

The amounts in the Total column do not represent “total compensation” as defined for purposes of the Company’s compensation structure and philosophy. For additional information, see “Compensation Discussion and Analysis” beginning on page 29.

 

Stock Awards

 

The amounts reported in the Stock Awards column represent the Company’s accounting expense in 2006 for all outstanding opportunity awards under the Long Term Plan and awards of performance shares under Financial Accounting Standard 123 (Revised). The amounts include awards for performance periods that began in prior years (2003, 2004, and 2005), as well as in 2006.

 

For a description of the assumptions made in determining these expenses, see Notes 1 and 17 in the Notes to Consolidated Financial Statements in the 2006 10-K. In determining these expenses it was assumed that each Named Executive Officer would satisfy any service requirements for vesting or payment of the award. As a result, while a discount for the possibility of forfeiture of the award was applied to determine the expenses of these awards as reported in the 2006 10-K, no such discount was applied in determining the expenses reported in this table.

 

On February 28, 2006, the Compensation Committee awarded each Named Executive Officer performance shares, payable in shares of MetLife common stock after the end of the three-year performance period from January 1, 2006 to December 31, 2008. The award was made pursuant to the 2005 Stock Plan. For a description of the

material terms and performance conditions of the performance share awards in 2006, see the table entitled “Grants of Plan-Based Awards in 2006” on page 44. For a description of the effect on performance share awards of a termination of employment or change-in-control of MetLife, see “Potential Payments Upon Termination or Change-in-Control” beginning on page 55.

 

Awards made earlier than 2006 are also included in the 2006 accounting expense reflected in the Stock Awards column. Performance share awards made to the Named Executive Officers in 2005 were made pursuant to the 2005 Stock Plan, and had substantially the same terms as the performance share awards in 2006. Opportunity awards made to the Named Executive Officers in 2003 and 2004 were made under the Long Term Plan. For a description of the terms of the opportunity awards granted in 2004, see the table entitled “Outstanding Equity Awards at 2006 Fiscal Year-End” on page 46. For a description of the terms of the opportunity awards granted in 2003, which vested and were paid out in 2006, see the table entitled “Option Exercises and Stock Vested in 2006” on page 48.

 

Option Awards

 

The amounts reported in the Option Awards column represent the Company’s accounting expense in 2006 for all outstanding stock option awards under Financial Accounting Standard 123 (Revised). The amounts include awards made in 2003, 2004, and 2005, as well as 2006.

 

For a description of the assumptions made in determining these expenses, see Notes 1 and 17 of the Notes to Consolidated Financial Statements

 

in the 2006 10-K. In determining these expenses it was assumed that each Named Executive Officer would satisfy any service requirements for vesting or payment of the award. As a result, while a discount for the possibility of forfeiture of the award was applied to determine the costs of these awards as reported in the 10-K, no such discount was applied in determining the costs reported in this table.

 

On February 28, 2006, the Compensation Committee awarded each Named Executive Officer options to buy MetLife common stock at a per share exercise price equal to the closing price of MetLife common stock on that date. The options were awarded pursuant to the 2005 Stock Plan. For a description of the material terms and conditions of the stock option awards in 2006, see the table entitled “Grants of Plan-Based Awards in 2006” on page 44. For a description of the effect on this award of a termination of employment or change in control of the Company, see “Potential Payments Upon Termination or Change-in-Control” beginning on page 55.

 

Awards made earlier than 2006 also contributed to the 2006 accounting expense reflected in the Stock Awards column. Stock option awards made to the Named Executive Officers in 2005 were made pursuant to the 2005 Stock Plan, and had substantially the same terms as the stock options awarded in 2006, except for exercise price. Stock option awards made to the Named Executive Officers in 2003 and 2004 were made pursuant to the MetLife, Inc. 2000 Stock Incentive Plan and had substantially the same terms as the stock options awarded in 2006, except for exercise price. For a description of the terms of the stock option awards granted in 2003 and 2004, see the table entitled “Outstanding Equity Awards at 2006 Fiscal Year-End” on page 46.

 

Non-Equity Incentive Plan Compensation

 

The amounts reported in the Non-Equity Incentive Plan Compensation column are the awards made in February 2007 by the Compensation Committee to each of the Named Executive Officers under the AVIP based on 2006 performance. The awards were payable in cash as of March 13, 2007. The factors considered by the Compensation Committee in determining the awards are discussed in the

Compensation Discussion and Analysis. For a description of the performance goals that applied to the awards, see the table entitled “Grants of Plan-Based Awards in 2006” on page 44.

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings

 

The amounts reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column represent the aggregate increase during 2006 in the actuarial present value of accumulated pension benefits for each of the Named Executive Officers. This increase reflects additional service in 2006, any increase in base salary compensation rate in 2006, and any non-equity incentive compensation paid in March 2006 for services in 2005. For Mr. Henrikson, the increase reflects his status as a long-term employee with over 34 years of service and the effect of increases in his compensation in connection with his becoming Chief Executive Officer of the Company. Mr. Henrikson and the other Named Executive Officers participate in the same long-standing retirement program that applies to other Company employees. For all employees in the Traditional Formula for their entire career who reach full benefit status (as Mr. Henrikson will in 2009), the program will, when combined with social security benefits, generally pay 60% of final average cash compensation upon retirement. This is in line with the large financial and insurance companies with which the Company compares its pension plan (see “Retirement and Other Benefits — Pension Program” beginning on page 35). Mr. Benmosche’s non-equity incentive compensation did not change the present value of his pension benefits. For a description of pension benefits, see the table entitled “Pension Benefits” on page 49.

 

The Named Executive Officers’ earnings on their nonqualified deferred compensation in 2006 were not above-market or preferential. As a result, earnings credited on their nonqualified deferred compensation are not required to be, nor are they, reflected in this column. For a description of the Company’s nonqualified deferred compensation plans and the simulated investments used to determine earnings, see the table entitled “Nonqualified Deferred Compensation” on page 52.

 

Auxiliary Savings and Investment Plan Contributions

 

The Company’s contributions to a nonqualified deferred compensation program, the Auxiliary Savings and Investment Plan, are made according to the same formula as the matching contributions to the tax-qualified savings and investment program (which includes a 401(k) plan). The contributions are made to the nonqualified program due to Internal Revenue Code limits on the amount of contributions to the tax qualified program.

 

Perquisites and Other Personal Benefits

 

The Company’s aggregate incremental cost to provide perquisites or other personal benefits to each Named Executive Officer is included in this column. Goods or services provided to the Named Executive Officers are perquisites or personal benefits only if they confer a personal benefit on the executive. However, goods or services that are directly and integrally related to the executive’s job duties, or are offered generally to all employees, or for which the executive fully reimbursed the Company are not perquisites or personal benefits. Each type of perquisite or other personal benefit is identified below. The amount associated with each perquisite is identified in the discussion below to the extent the amount exceeded $25,000.

 

Car Service.  These amounts include the cost paid by the Company for car service provided by vendors for personal travel. Where the Company used its own vehicles, the cost of tolls, fuel, and driver overtime compensation is included.

 

Aircraft Use.  These amounts include the variable costs for personal use of aircraft that was charged to the Company by the vendor that operates the Company’s leased aircraft for trip-related crew hotels and meals, landing and ground handling fees, hangar and parking costs, in-flight catering and telephone usage, and similar items. Fuel costs were calculated based on average fuel cost per flight hour for each hour of personal use. Because the aircraft is leased primarily for business use, fixed costs such as lease payments are not included in these amounts. The cost of personal aircraft use by Mr. Henrikson was $51,245 and by Mr. Benmosche was $69,110.

 

Financial Counseling Services.  These amounts include the cost paid by the Company for personal financial counseling services provided by vendors to each of the Named Executive Officers.

 

Medical Examinations.  These amounts include the Company’s costs to provide annual medical examinations and follow-up testing to the Named Executive Officers. The executives may use their own health care provider or a provider affiliated with a Company vendor.

 

Personal Expenses and Guest Accommodations at Company Conferences.  These amounts include the costs incurred by the Company for the spouses, family members, or other personal guests of the Named Executive Officer to attend a Company business conference or other event. They also reflect the cost of accommodations provided to the Named Executive Officer for

 

personal purposes in connection with a business conference or other event, such as on-site lodging prior to or after the conclusion of the conference or other event, and personal hotel charges during the event.

 

Travel Reservations Services.  These amounts include the costs paid by the Company to a vendor to make personal travel reservations for the Named Executive Officers.

 

Non-Equity Incentive Plan Awards

 

In December 2005, the Compensation Committee made Mr. Henrikson and Mr. Benmosche each eligible for an annual incentive payment for 2006 performance under AVIP in an amount of up to 1% of the Company’s net operating income, but not more than $10 million, which is the maximum award under AVIP. For 2006, each other Named Executive Officer was eligible for an AVIP award in an amount up to 0.5% of the Company’s net operating income, but not more than the $10 million maximum award under AVIP. Ten million dollars was less than 0.5% of the Company’s net operating income. As a result, the $10 million figure is reflected in the Non-Equity Incentive Plan column for each Named Executive Officer. This maximum amount must be labeled “target” in this table because no other amounts were established as minimum or target awards.

 

In February 2007, the Compensation Committee granted the Named Executive Officers awards under AVIP for 2006 performance. The amounts

of the awards are reported in the Summary Compensation Table and, in each case, is less than the amount reflected in the Estimated Possible Payouts Under Non-Equity Incentive Plan Awards column of this table. The factors considered by the Compensation Committee in determining the awards are discussed in the Compensation Discussion and Analysis.

 

Equity Incentive Plan Awards

 

The performance share awards reflected in the Equity Incentive Plan Awards column were awarded under the 2005 Stock Plan and cover the performance period January 1, 2006 to December 31, 2008. The grant date was February 28, 2006, the date that the Compensation Committee approved these awards.

 

Shares of MetLife common stock are payable to eligible award recipients following the completion of the performance period. The number of shares payable at the end of the performance period is calculated by multiplying the number of

 

performance shares by a performance factor (from 0% to 200%). This factor is determined by comparing the Company’s performance for the performance period with that of other companies in the Insurance Index, as measured by (i) change in net operating earnings per share, and (ii) proportionate total shareholder return. Net operating earnings will be determined using income net of income taxes, but subtracting investment gains and losses and dividends paid on preferred shares, and excluding charges or

benefits due to accounting changes. Proportionate total shareholder return will be determined using the change (plus or minus) in the initial closing price of a share of MetLife’s common stock to the final closing price of a share, plus reinvested dividends, for the performance period, divided by the initial closing price of a share. For this purpose, the initial and final closing prices are the average closing prices for 20-day periods at the beginning and end, respectively, of the performance period.

 

If the Company’s performance results in a total performance factor of 25%, each Named Executive Officer would receive the number of performance shares reflected in the Threshold column above for that officer. This is the lowest level of performance for which any performance shares would be payable. If the Company’s performance results in a total performance factor of 100%, the Named Executive Officer would receive the number of performance shares reflected in the Target column above. If the Company’s performance results in a total performance factor of 200%, the Named Executive Officer would receive the number of performance shares reflected in the Maximum column above. No dividends or dividend equivalents are earned on performance shares. No monetary consideration was paid by a Named Executive Officer for any performance shares. For a further discussion of the performance goals applicable to the performance share awards reflected in the table entitled “Grants of Plan-Based Awards in 2006,” see “Compensation Discussion and Analysis” beginning on page 29.

 

All Other Option Awards

 

The awards reported in the All Other Option Awards column were awarded under the 2005

Stock Plan. The exercise price of the stock option awards ($50.12) was the closing price of MetLife common stock on the grant date of the options, February 28, 2006. The grant date is the date that the Compensation Committee approved these awards. The stock options become exercisable at the rate of one-third of each grant on each of the first three anniversaries of that grant date, and expire on the day before the tenth anniversary of that grant date. No monetary consideration was paid by a Named Executive Officer for the award of any stock options.

 

Grant Date Fair Value of Stock and Option Awards

 

These amounts reported in the Grant Date Fair Value of Stock and Option Awards column were calculated by multiplying the number of performance shares by a grant date fair value per share of $48.40 and multiplying the number of options by a grant date fair value per share of $13.82. For a description of the assumptions made in determining these values, see Notes 1 and 17 of the Notes to Consolidated Financial Statements in the 2006 10-K.