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April 14, 2016 Dear Stockholder: You are cordially invited to attend the 2016 Annual Meeting of Stockholders of Employers Holdings, Inc. The meeting will be held on Tuesday, May 24, 2016, beginning at
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April 14, 2016 Dear Stockholder: You are cordially invited to attend the 2016 Annual Meeting of Stockholders of Employers Holdings, Inc. The meeting will be held on Tuesday, May 24, 2016, beginning at 9:00 a.m. Pacific Daylight Time at the Hilton Garden Inn Reno located at 9920 Double R Blvd., Reno, Nevada. All stockholders of record of Employers Holdings, Inc. as of the close of business on March 28, 2016 are entitled to vote at the 2016 Annual Meeting of Stockholders. As described in the accompanying Notice and Proxy Statement, you will be asked to (i) elect three Directors for a three-year term expiring in 2019, (ii) vote on a non-binding resolution to approve the compensation paid to the Company's Named Executive Officers, and (iii) ratify the appointment of Ernst & Young LLP as the Company's independent accounting firm for Employers Holdings, Inc.'s Annual Report for the year ended December 31, 2015 is available at eig. We are pleased to continue to furnish proxy materials to our stockholders electronically over the Internet. We believe that this e-proxy process expedites stockholder receipt of proxy materials, lowers our costs associated with the production and distribution of proxy materials, and reduces the environmental impact of our Annual Meeting. Your vote is very important to us. Whether or not you plan to attend the meeting, we hope that you will vote as soon as possible. You may vote over the Internet, by telephone or, if you received printed proxy materials, by signing, dating, and returning a proxy card. You can revoke your proxy any time prior to the Annual Meeting and submit a new proxy as you deem necessary. I look forward to seeing you at the Annual Meeting on May 24, Sincerely, Robert J. Kolesar Chairman of the Board America's small business insurance specialist. tel PROFESSIONAL CIRCLE RENO, NV EMPLOYERS HOLDINGS, INC Professional Circle Reno, Nevada NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To be held on Tuesday, May 24, 2016 The 2016 Annual Meeting of Stockholders of Employers Holdings, Inc. (the Company ) will be held on Tuesday, May 24, 2016, beginning at 9:00 a.m. Pacific Daylight Time at the Hilton Garden Inn Reno located at 9920 Double R Blvd., Reno, Nevada for the following purposes: 1. To elect three Class I Directors to serve until the 2019 Annual Meeting of Stockholders; 2. To hold an advisory (non-binding) vote to approve the compensation paid to the Company's Named Executive Officers; 3. To ratify the appointment of Ernst & Young LLP as the Company's independent accounting firm for the fiscal year ending December 31, 2016; and 4. To transact such other business as may properly come before the meeting or any postponement or adjournment thereof. Only holders of the Company's common stock as of the close of business on March 28, 2016 have the right to receive notice of and to vote at the 2016 Annual Meeting of Stockholders and any postponement, adjournment or other delay thereof. By Order of the Board of Directors, Lenard T. Ormsby Executive Vice President, Secretary and Chief Legal Officer April 14, 2016 YOUR VOTE IS IMPORTANT. YOU MAY VOTE YOUR SHARES IN PERSON BY BALLOT AT THE ANNUAL MEETING, OVER THE INTERNET, BY TELEPHONE, OR BY RETURNING A SIGNED AND DATED PROXY CARD. America's small business insurance specialist. tel PROFESSIONAL CIRCLE RENO, NV TABLE OF CONTENTS Page PROXY STATEMENT PROPOSAL ONE NOMINEES FOR ELECTION AS CLASS I DIRECTORS WITH TERMS EXPIRING AT THE 2019 ANNUAL MEETING CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE 2017 ANNUAL MEETING CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE 2018 ANNUAL MEETING THE BOARD OF DIRECTORS AND ITS COMMITTEES CORPORATE GOVERNANCE DIRECTOR INDEPENDENCE RISK OVERSIGHT SPECIFIC CONSIDERATIONS REGARDING 2016 DIRECTORS AND NOMINEES COMMUNICATIONS WITH THE BOARD OF DIRECTORS PROPOSAL TWO PROPOSAL THREE COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION COMMITTEE REPORT EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE GRANTS OF PLAN-BASED AWARDS DIRECTOR COMPENSATION COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE AUDIT MATTERS PRE-APPROVAL POLICIES AND PROCEDURES GOVERNANCE DOCUMENT INFORMATION SUBMISSION OF STOCKHOLDER PROPOSALS DISTRIBUTION INFORMATION GENERAL i 2016 PROXY STATEMENT SUMMARY This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. Annual Meeting of Stockholders Time and Date 9:00 a.m. Pacific Daylight Time on Tuesday, May 24, 2016 Place Hilton Garden Inn Reno 9920 Double R Blvd. Reno, Nevada Record date March 28, 2016 Voting Ways to Vote Meeting Agenda and Voting Matters Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. You may vote your shares in person by ballot at the annual meeting, over the Internet, by telephone, or by returning a signed and dated proxy card. Election of Directors Board Vote Recommendation FOR THE DIRECTOR NOMINEES Other Management Proposals: Advisory (non-binding) vote to approve executive compensation FOR Ratification of Ernst & Young LLP as independent auditor for 2016 FOR Transact other business that properly comes before the meeting Page Reference (for more detail) Board Nominees Name Age Committee Memberships Director Since Principal Occupation Independent AC BGNC FC CC EC Michael D. Rumbolz Senior Executive Yes James R. Kroner Director and Consultant Yes Michael J. McSally Non-executive Chairman Yes AC Audit Committee CC Compensation Committee FC Finance Committee EC Executive Committee BGNC Board Governance & Nominating Committee ii Attendance Director Elections In 2015, each of our directors attended at least 75% of the Board of Directors (the Board ) and committee meetings on which he or she sits. Each director nominee is elected by a plurality of votes cast. Management Proposals 1. Advisory Resolution to Approve Named Executive Officer Compensation. We are asking stockholders to approve, on an advisory (non-binding) basis, our named executive officer ( NEO ) compensation. The Board recommends a FOR vote because it believes that our compensation program is one that rewards the achievement of specific financial goals, aligns executive officers' interests with those of our stockholders by rewarding performance for achievement of financial goals, and motivates our executives to increase stockholder value without encouraging excessive risk-taking. 2. Ratification of Selection of Independent Registered Public Accounting Firm. As a matter of good governance, we are asking stockholders to ratify the selection of Ernst & Young LLP as our independent auditors for The Board recommends a FOR vote ratifying the selection of Ernst & Young LLP as our independent auditors for Compensation Actions Continued Emphasis on Performance Shares: To align a significant portion of our compensation with performance, our long-term incentive program is heavily weighted toward performance shares and weighted less toward stock options and restricted stock units ( RSUs ). We revised the structure of our long-term incentive program in 2015 by introducing a new performance metric for our performance shares, operating return on adjusted shareholders equity ( OROE ). OROE performance is measured relative to a preestablished performance goal. Previously, performance shares were based on the Company s combined ratio compared to that of a group of private carriers. The new metric was chosen because we believe that (1) it will encourage management to focus on multiple performance objectives, including operating performance and capital management, that are critical to creating shareholder value over a sustained period of time, and (2) it is readily understood by management and is simpler and more transparent than many other commonly used performance goals, and therefore it will more effectively motivate our executives and will help us retain them. Performance shares are earned after three years: a two-year performance period for OROE (one year shorter than in prior years), plus a one-year vesting requirement which follows the two-year performance period. As in 2014, performance shares represented 55% of the target equity value granted to our NEOs under our longterm incentive program. Used a More Diversified Mix of Performance Metrics: As mentioned above, we introduced a new metric, OROE, replacing combined ratio for our performance shares, so that our performance shares now use a different metric from our annual cash bonus, which has a metric of Adjusted GAAP Combined Ratio. Executive Compensation Elements Base salary Annual cash bonuses Long-term incentives (performance shares, stock options and RSUs) Benefits and perquisites Employment agreements and compensation payable upon termination of employment Other Key Compensation Features Gross-Ups: We have no tax gross-up provisions related to change-in-control. iii Reasonable Perquisites and Benefits: We continue to provide a program that follows good compensation governance by providing our NEOs with limited perquisites and benefits consistent with our peer group. Clawback ( Incentive Recovery ) Policy: We have a policy to recapture (or clawback ) incentive compensation paid to our NEOs. Regular Annual Equity Grants: We have a policy of awarding equity grants during a regularly scheduled Compensation Committee meeting. Long-term Vesting and Performance Requirements: Our 2015 awards of stock options and RSUs were granted with annual vesting over a four-year period, and our 2015 performance share awards cover a two-year performance period plus an additional one-year vesting period. Stock Ownership Guidelines: We require our NEOs to attain and maintain competitive levels of Company stock ownership. Hedging and Pledging Restrictions: We have policies restricting our NEOs from hedging or pledging Company equity securities, including securities granted under the Equity Plan (as defined below) Named Executive Officers Douglas D. Dirks, President & Chief Executive Officer ( CEO ) Terry Eleftheriou, Executive Vice President ( EVP ) & Chief Financial Officer ( CFO ) Lenard T. Ormsby, EVP, Chief Legal Officer ( CLO ) Stephen V. Festa, EVP, Chief Operating Officer ( COO ) John P. Nelson, EVP, Chief Administrative Officer ( CAO ) 2015 Summary Compensation Name and Principal Position Salary Bonus Stock Awards Option Awards Non-Equity Incentive Plan Compensation Change in Pension Value and Non-Qualified Deferred Compensation Earnings All Other Compensation Douglas D. Dirks President and Chief Executive Officer 927,569 2,013, ,906 1,368,000 63,777 4,572,740 Terry Eleftheriou Executive Vice President and Chief Financial Officer 466, ,600 59, ,000 93,412 1,671,116 Lenard T. Ormsby Executive Vice President and Chief Legal Officer 485, ,600 59, ,500 40,301 1,642,623 Stephen V. Festa Executive Vice President and Chief Operating Officer 488, ,860 60, ,500 36,471 1,649,407 John P. Nelson Executive Vice President and Chief Administrative Officer 354, ,580 51, ,000 46,631 1,289,596 Total iv EMPLOYERS HOLDINGS, INC Professional Circle Reno, Nevada PROXY STATEMENT This Proxy Statement, the accompanying proxy card and the 2015 Annual Report to stockholders of Employers Holdings, Inc. (the Company or Employers Holdings ) are being made available on or about April 14, 2016 in connection with the solicitation on behalf of the Board of Directors of Employers Holdings of proxies to be voted at the 2016 Annual Meeting of Stockholders to be held on Tuesday, May 24, 2016, and any postponement(s), adjournment(s), or other delay(s) thereof (the Annual Meeting ). All holders of Employers Holdings common stock, par value $0.01 per share (the common stock ), as of the close of business on March 28, 2016 (the Record Date ) are entitled to vote at the Annual Meeting. Each stockholder on the Record Date is entitled to one vote at the Annual Meeting for each share of common stock held. On the Record Date, there were 32,449,617 shares of common stock outstanding and entitled to vote at the Annual Meeting. Pursuant to rules adopted by the Securities and Exchange Commission (the SEC ), we are providing access to our proxy materials over the Internet. On or about April 14, 2016, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the Notice ), which tells stockholders how to access and review the information contained in the proxy materials and how to submit their proxies over the Internet or by telephone. We believe that utilizing this e-proxy process expedites stockholder receipt of proxy materials, lowers the costs associated with the production and distribution of proxy materials, and reduces the environmental impact of our Annual Meeting. You may not receive a printed copy of the proxy materials unless you request the materials by following the instructions included in the Notice. In addition, by following the instructions included in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by on an ongoing basis. Your election to receive proxy materials in printed form by mail or by will remain in effect until you terminate such election. Unless otherwise required by applicable law or the Company's Articles of Incorporation or Bylaws, both as amended and restated, a majority of the voting power of the issued and outstanding common stock entitled to vote, including the voting power that is represented in person or by proxy, regardless of whether any such proxy has the authority to vote on all matters, shall constitute a quorum for the transaction of business at the Annual Meeting. Shares of common stock represented in person or by proxy (including broker non-votes and shares that abstain or do not vote with respect to one or more of the proposals to be voted upon) will be counted for the purpose of determining whether a quorum exists. There are no cumulative voting rights. If you own shares of common stock held in street name by a bank or brokerage firm and you do not instruct your bank or broker how to vote your shares using the instructions that your bank or broker provides to you, your bank or broker may not be able to vote your shares. If you give your bank or broker instructions, your shares will be voted as you direct. If you do not give instructions, whether the bank or broker can vote your shares depends on whether the proposal is considered routine or non-routine under New York Stock Exchange ( NYSE ) rules. If a proposal is routine, a bank or broker holding shares for a beneficial owner in street name may vote on the proposal without voting instructions from the beneficial owner. If a proposal is non-routine, the bank or broker may vote on the proposal only if the beneficial owner of the shares has provided voting instructions. A broker non-vote occurs when the bank or broker is unable to vote on a proposal because the proposal is non-routine and the beneficial owner does not provide instructions. The proposal to ratify the appointment of Ernst & Young LLP as the Company's independent accounting firm is the only proposal at the Annual Meeting that is considered routine. If your shares are held in street name and you wish to attend the Annual Meeting in person, you must bring an account statement or letter from your bank or broker showing that you are the beneficial owner of your shares as of the Record Date in order to be admitted to the Annual Meeting. If you hold your shares in street name and wish to vote by ballot at the Annual Meeting, you must bring a legal proxy from your bank or broker. Directors are elected by a plurality of the votes cast. In the election of Directors, broker non-votes will be disregarded and have no effect on the outcome of the vote. 1 Approval of the non-binding vote to approve the compensation paid to the Company's Named Executive Officers requires the number of votes cast in favor of the proposal to exceed the number of votes cast in opposition to the proposal. The results of this vote are not binding on the Board of Directors. For the non-binding vote to approve the compensation paid to the Company's Named Executive Officers, abstentions from voting and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote. Approval of the proposal to ratify the appointment of Ernst & Young LLP as the Company's independent accounting firm requires the number of votes cast in favor of the proposal to exceed the number of votes cast in opposition to the proposal. Abstentions from voting and broker non-votes, if any, will be disregarded and have no effect on the outcome of the vote. You may vote your shares in any of the following ways: by telephone at anytime before 11:59 p.m., Central Daylight Time, on Monday, May 23, 2016; by the Internet at anytime before 11:59 p.m., Central Daylight Time, on Monday, May 23, 2016; by signing and dating the enclosed proxy card and returning it to the Company as soon as possible in the enclosed postage prepaid envelope; or in person by ballot at the Annual Meeting. If you vote by proxy, you may revoke your proxy at any time before it is voted at the Annual Meeting. You may do this by: delivering a written notice (before the Annual Meeting) revoking your proxy to the Secretary of the Company at the above address; delivering a new proxy (before the Annual Meeting) bearing a date after the date of the proxy being revoked; or voting in person by ballot at the Annual Meeting. All properly executed proxies, unless revoked as described above, will be voted at the Annual Meeting in accordance with your directions on the proxy. If a properly executed proxy gives no specific instructions, the shares of common stock represented by that proxy will be voted: FOR the election of three Director nominees to serve three-year terms expiring at the 2019 Annual Meeting of Stockholders; FOR approval of the compensation paid to the Company's Named Executive Officers; FOR ratification of the appointment of Ernst & Young LLP as the Company's independent accounting firm for 2016; and at the discretion of the proxyholders with regard to any other matter that is properly presented at the Annual Meeting. In accordance with the Company's Bylaws, Robert Kolesar, Chairman of the Board, has appointed Kevin Kelly of Morrow & Co., LLC, or his designee, and Pamela Herlich of Wells Fargo Shareowner Services, or her designee, to be the inspectors of election at the Annual Meeting. The inspectors of election are not officers or Directors of the Company. They will receive and canvass the votes given at the Annual Meeting and certify the results. You may contact Tanya Yamagata at (775) for directions to the Hilton Garden Inn Reno, 9920 Double R Blvd., Reno, Nevada, the site of the Annual Meeting. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 24, The Proxy Statement and Annual Report to stockholders are available at 2 PROPOSAL ONE ELECTION OF DIRECTORS The Company's full Board consists of ten directors. The Board is divided into three classes, two having three Directors and one having four Directors. The Directors in each class serve for a three-year term and until their successors are duly elected and qualified. The terms of each class expire at successive annual meetings so that the stockholders elect one class of Directors at each annual meeting. Currently, Class I, Class II and Class III terms expire in 2016, 2017, and 2018, respectively. The election of the Class I Directors will take place at the Annual Me
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